Category: Weekly News

The property purchasing surge continues this week with more than half of mortgage brokers seeing an increase in buy-to-let purchase business in recent weeks. With this rise in activity it seems that landlords are staging a comeback.

We have seen signs that the Prime Central London property market is bucking the trend of the more negative press London property has been receiving lately as it has been reported by the estate agency Dexters that the number of sales agreed for properties priced over £2 million between mid-June and mid-August was 85% higher than the same period last year. Meanwhile, lettings transactions for properties costing over £1,250 per week were also up 41% compared to the same period in 2019.

It would also seem that as a result of the government introducing more quarantine measures for holidaymakers a ‘Staycation Nation’ seems to be emerging with more and more people opting to holiday in the UK.

Property News this week

• Coronaphobia fuelled property slump: UK house prices fell by 0.2% in March and April– In this article from the Daily Mail Online, the new ONS figures show the impact of the property market shutdown that happened in March. Our very own Director Nick was on hand to give his insight to these figures stating, ‘The April figures don’t tell the full picture, as the data includes transactions that completed before the lockdown took effect, but numbers are down on where we would expect them to be at this time of year, with the impact greater among new-build properties. We know that sales that were put on hold in April have mostly been relocated by a few months, which explains the pent-up demand that was released last month. Consumer confidence is slowly recovering from the dark days of lockdown, and buyers clearly see property as a safe investment.’
• Eviction U-turn: ban stays for another four weeks– It seems the government have given in to the pressure and made a last-minute U-turn on the eviction ban, extending it by four weeks. This is an action that has frustrated many landlords that were hoping to have their repossession cases heard in court once the ban lapsed this Sunday. The government has also announced that six month notice periods must be given to tenants which could massively affect some landlords that want to sell or get their property back.
• The UK property market – A viable investment alternative in 2020– This article caught our attention as it is from Fintech Zoom which is a news platform for investors exploring cryptocurrencies and digital assets. They give a list of reasons why investors should shift their assets into an investment in the property market for more long-term, secure growth. The list of reasons comprises of stability, longevity and secondary income. If you were questioning whether property investing was the investment for you at the moment, then this article should help.
• Pandemic could accelerate UK retail property investment shift– Not residential property related but commercial property related and very interesting none the less as this could be a trend that we see accelerated as a result of the pandemic. It seems that a growing number of retail landlords are now considering converting their leases to replace the traditional upwards-only rent review mechanism with rent based on turnover meaning that effectively, the landlord would be sharing the operational risk. This could also be advantageous for landlords because leases would include a turnover break, allowing the landlord to remove an underperforming tenant to make way for another occupier or to find an alternative use for the space giving flexibility. It will be interesting to see how this plays out.

A little added extra for our readers this week is a piece in Property Investor Today about ‘Manchester’s ever-changing skyline‘ where it takes a detailed look back at the rapid growth of Manchester in recent decades and offers a sneak peek into the future of the city’s high-rising horizon.

Get in touch with the team anytime to discuss your UK property investment plans through [email protected] or on +44(0)203 627 3987.

The weather this week has been hot, hot, hot and as a rarity, we have had many days where we have been hoping for the normal English rain to cool us down.

There has been a lot of commotion with quarantine measures for people returning from other countries causing a bit of havoc for holidayers. On the plus side, the government has reviewed the easing of lockdown measures which they put on hold a couple of weeks ago and have given the green light to go ahead which is good news.

We also had confirmation that the UK has ‘technically’ gone into a recession. However, what the media isn’t focusing on is the fact that month on month UK GDP is up 8.7%. Also, on a side note, recession does not mean property prices ‘crashing’.

Now onto the headlines that have caught our eye this week.

Property news this week

• University operators hoping for flurry of leasing deals as students get their results– This article highlights that there are signs that activity is picking up in the student market with students looking at returning to university. It reports that JLL have noted 70% of private beds are already let for September 2020 which is a great sign. Knight Frank have also carried out research and Neil Armstrong, joint head of student property at Knight Frank, said: “The results of Knight Frank’s snapshot poll demonstrate students’ ongoing commitment to go to university this year, despite the challenges of the Coronavirus pandemic. PBSA operators have seen higher levels of demand than first anticipated, and are going into the ‘clearing’ process with an average occupancy rate of 77%”.
• Optimistic outlook for buy to let…except for one location– The website Homes has produced a house price index which reports an optimistic outlook for landlords and investors except for those in London. They have reported strong figures in the rest of the UK with strong rents and declining supply with the north and west rising around the 10% level. However, London (as we know from previous weeks’ articles) has declined with Greater London down 5.2% annually. Homes also makes the point that with Sterling still relatively low and the stamp duty holiday now a significant draw to investors, the UK property sector has become particularly attractive for expats and non-British investors.
• Harlow and Reading are commuter towns offering best yields– Lettings management platform Howsy have found the two headline towns as having the best rental yields among commuter towns to London with annual yields at 4.6% in Harlow and 4.5% in Reading, while there are also strong yields in Luton (4.2%) and Crawley (4.2%). It seems that this commuter belt is popular among tenants that want affordable rental prices still in touching distance of the capital. This is something worth considering when looking at other city centre investments that have cheaper options slightly further out. As long as the amenities are there along with transport links, it can prove very profitable.
• Top 10 property features to attract tenants in London – With the London rental market in a bit of trouble at the moment, London-based Benham and Reeves surveyed more than 1,700 tenants asking them to rank several rental property features on their importance to see what landlords should be taking into consideration. Number 1 was ‘fast broadband’ and then jumping up from 7th last year to 2nd this year was ‘outside space’. These results indicate the impact that COVID-19 has had in changing trends with how people now work and live which could be more permanent than we first thought. Although this survey was done for London, it is still something that can be taken into consideration for other areas of the country.

Get in touch with the team anytime to discuss your UK property investment plans through [email protected] or on +44(0)203 627 3987.

It seems that while there is still a lot of uncertainty in the majority of the world due to COVID-19, here at Track Capital HQ we are in a positive property bubble which seems unaffected and busier than ever. In the midst of the all the busyness, this week we are got a chance to look over the Q2 2020 rental market report from Hometrack which was interesting.

Hometrack are reporting a ‘two-speed’ rental market emerging in the UK which is being guided by differing trends in supply and demand between London and the rest of the country.

Taking London out of the equation, rental growth across the regions and counties remains positive seeing a 2.2% increase as demand continues to outstrip supply in many markets.

If we then look at London, a different picture emerges. Rising supply and weaker demand (particularly in inner London) is resulting in negative rental growth. There are a number of factors that have potentially contributed to this with one being the decline in international travel and tourism leading to landlords shifting away from short lets, therefore, increasing the supply on the long lets. We see many of the factors affecting the London rental market being temporary meaning there shouldn’t be any cause for major concern at this moment in time.

This is just a brief overview so if you would like to view the whole report please click here.

Property news this week

• Property market bounces back with ‘highest house prices ever’ after stamp duty freeze– This article from The Express sees our very own Director, Tobi Mancuso, providing industry insight to report on Halifax’s House Price Index that was released today. It revealed that the housing market saw its “highest prices ever” in July. Tobi stated that “June saw the average UK house prices decrease by 0.1 percent followed by a 1.6 percent increase in July as chancellor Rishi Sunak’s move sent buyers into a purchasing frenzy causing a mini-boom.”
• Foreign investors eye UK property ahead of stamp duty surcharge– This is something that we have been noticing a lot recently and we have mentioned it previously. It seems that many foreign investors are looking to snap up property before the 2% stamp duty surcharge is introduced in April 2021 while also capitalising on the current stamp duty holiday. Data from the SmartrCriteria tool shows that searches related to applicants on a visa have risen by 146% since the announcement in May of a stamp duty surcharge for overseas buyers. Recent industry data has shown a surge in demand from Hong Kong based buyers and this could grow further following the Government’s announcement of a new route to citizenship for 300,000 British National Overseas (BNO) passport holders.
• Housebuilding leads strongest construction growth in five years– The latest PMI data has reported that UK construction companies signalled a sharp and accelerated expansion of business activity in July which was led by another strong increase in Housebuilding. Tim Moore, Economics Director at IHS Markit, said: “Construction companies took another stride along the path to recovery in July as a rebound in housebuilding helped to deliver the strongest overall growth across the sector for nearly five years. More housebuilding is needed so we hope we can see this trend continue.
• Try Adviser Network to offer Shariah-compliant home purchase plan advice – This article shares the great news that the Try Adviser Network of mortgage brokers has been given the green light by the FCA to advise on Shariah-compliant home purchase plans. This is a great step forward and could open the market to some buyers that may not have been able to get on the property ladder previously. The home purchase plan (HPP) differs slightly to that of a traditional mortgage where borrowers pay a fixed amount back to the lender with interest added on top. Instead, the bank charges rent on the part of the property that the customer doesn’t yet own. The customer also pays an additional amount each month to gradually purchase the bank’s share of the property over a set period. If this sort of purchase structure could benefit you then I strongly recommend checking out the article.

Get in touch with the team anytime to discuss your UK property investment plans through [email protected] or on +44(0)203 627 3987.

This week we saw a positive report from Rightmove which is one of the UK’s leading property portals. There are some very encouraging figures which help solidify our recent views that the property market is incredibly strong at the moment. The average asking price of property coming to the market in Britain hit a record this month with a 2.4% (£7,640) increase in comparison to March pre-lockdown and a 3.7% annual rate of increase is the highest since December 2016. Buyer enquires are up 75% year-on-year in Britain since the start of July and Rightmove reports that 44% of new properties that came on the market in May after the English market re-opened are now ‘sale agreed’.

Miles Shipside, Rightmove director and housing market analyst comments: “The busy until interrupted spring market has now picked up where it left off and has been accelerated by both time-limited stamp duty holidays and by homeowners reappraising their homes and lifestyles because of the lockdown.

These figures are the earliest indicator of house price trends. They show on average prices gently rising not falling, and this will be reflected in the coming months in other house price reports.”

Overall, it seems that the property market is fully moving again and the future trend looks promising so far. You can view the data and report here.

Property news this week

• New tenancies are now almost back to pre-pandemic levels– Due to the pandemic we saw Q2 2020 figures for tenants moving drop by 32%. However, according to the Deposit Protection Service (The DPS) June saw a swift recovery which means tenants are on the move again. Good news for landlords that are purchasing a buy-to-let and/or looking to list their property for rent.
• What do you need to think about when analysing a new property deal?– This is a brilliant article and is something we like to run through with all our clients. We think it is very important to do this so you can mitigate risk as much as possible. A lot of people think that you just look at the cost of the deposit or the cost of the property as a whole but there is so much more. Check this article out so you can give yourself a great understanding of what to look for. We like to do this for our clients but there may be some investments you might source on your own or there may be some companies that do not cover this for you and expect you to do it all yourself.
• Boost for London tenants as rental prices nosedive– It seems that an oversupply of properties and reduced demand may have caused a dip in rental prices in London. The recent data released by Rightmove shows London’s rental asking prices drop 2.8% between April and June. Interestingly, Rightmove suggests that the reason for this is an oversupply of long-term rental properties diluting the market. The surge in long-term rental supply seems to be because landlords using their properties for short-term holiday lets via Airbnb have had to make the temporary switch to finding long-term tenants. So not as doom and gloom as the title may indicate as the data would suggest that this is just temporary until short-term lets get back on track.
• New figures offer hope to UK construction – Positivity for the construction industry following the impact that COVID-19 initially looked to take on it. The industry analyst Barbour ABI reports that the number of construction contracts awarded in the UK rose by over 81% in June with contractors signing contracts amounting to €2.42 billion based on a 3-month rolling average. The report shows London leading the way with 21.6% of all contracts in June followed by the South East with 16.4% and then the North West with 13.6%. The single largest contract went the infrastructure sector with Gatwick Airport’s railway station refurbishment valued at approximately €165 million. Barbour ABI said the growth in contract numbers represents an improvement in conditions, as the UK emerges from its coronavirus lockdown status.

Get in touch with the team anytime to discuss your UK property investment plans through [email protected] or on +44(0)203 627 3987.

That’s it for this week, get in touch with the team anytime to discuss your UK property investment plans through [email protected] or on +44(0)203 627 3987.

This was the week that we saw PM Boris Johnson announce that Britain must ‘build, build, build’ to bounce back from the coronavirus crisis. The property industry can definitely have a skip in its step knowing that the PM is fully behind it as he sets out his recovery plan with building homes and infrastructure at the forefront of his operation. These plans and the promised £5bn for it will no doubt have a positive impact on the overall property market and hopefully help generate jobs and money for the economy along with new homes to help ease the ever building demand.

The reforms that the PM announced are the most radical to the planning system since the Second World War which will make it easier to build better homes where people want to live. New regulations will give greater freedom for buildings and land in our town centres to change use without planning permission and create new homes from the regeneration of vacant and redundant buildings.

Overall, removing a lot of the frustrating and sometimes unnecessary red tape will be great news for builders and developers alike.

So let’s take a look at the media headlines that we have caught our eye this week:

It’s that time of the month when the latest Hometrack UK report is released showing property values and data from the UK’s largest 20 cities. We have been waiting in anticipation to see how the market has settled since May’s report and the reopening of the property market.

It’s good news, UK house price growth is +2.4% year on year and up from 1.4% at the start of the year. Manchester has also moved up from 3rd place into 2nd, just behind Nottingham (+4.3%), with a year on year increase of 3.9%. The English market has also seen agreed sales surge to being 4% higher than pre-COVID levels, asking prices for sold homes are also 7% higher than last year. These positive reports could be due to low supply which is 15% lower than a year ago.

There are more interesting stats and perspectives so it is well worth a read. To view the latest Hometrack UK report please click here.

Property news this week

• Why landlords could be keen to expand their portfolios in 2020– This is an insightful article which highlights how the fundamentals of property investing have potentially been strengthened over the course of the past few months. It seems that landlords may currently be keen to add to their portfolios and are utilising existing property portfolio equity to do so. Again, it all comes down to the resilient and strong bounce-back that the rental market has had coupled with the continued strength of property prices.
• London is still calling to international investors– According to property consulting firm PSS London, despite the fallout from COVID-19 and flights grounded, overseas investors are still very active in the London and regional property markets. It would seem that for overseas investors, London’s fundamentals are still as strong as ever and it appears there has never been a better time for buyers. They can also take some positivity from JLL’s new report which predicts a 17.1% increase in London prices over the next 5 years.
• New research highlights why and where to invest in new-build homes– Some very interesting stats and insights here. One that caught our attention was the fact that new-builds house price growth has increased 6-8% across the UK whereas the existing property market has only seen growth of 3%. Surprisingly, London has performed strongly with 7.6% increase for new-builds and existing properties experiencing only 1.2%. So the benefits of buying new-builds (such as easy/chain free purchase, better incentives, better energy efficiency and little initial maintenance for a number of years) have now been improved with better capital growth being added to the equation.
• How to avoid unwarranted suspicion when applying for a mortgage– This is a great guide for making sure you apply for your mortgage in a correct and efficient way to avoid unnecessary suspicion from the lender. This article can help get you prepared for when looking to apply for your next mortgage enabling you to know how to do it well with guidance on topics such as deposits. We always recommend obtaining your mortgage through a broker so they can advise you while also searching for the best deal from a variety of lenders.

In summary, the UK market is still riding the wave of the post-lockdown surge, our enquiries on various property investment projects have been the highest in a while, with confidence returning to traditional residential projects and off-plan schemes due to construction being back on track, rather than the fixed-income assets which saw strong demand over the past few months.

Team Track Capital

The main talk this week in the general news has been the latest figures that show in April the UK economy shrunk by 20.4%. These figures are stark but not a surprise. it needs to be taken into consideration that the majority of the country was fully locked down along with businesses unable to operate so there was bound to be a big impact. The Bank of England has come out to say that they are ‘ready to act’ to help the UK economy weather the coronavirus storm. There have been reports that interest rates could drop to 0 or below. This would be good news for property investors that would look to utilise the unprecedented and even lower cost of borrowing in the UK.

In more positive news, the lettings market seems to have rebounded very well and seen a surge in demand. Plus, the Government has indicated that in response to the coronavirus pandemic, Stamp Duty could be reformed as part of tax changes. When questioned about considering the merits of introducing a Stamp Duty holiday, the financial secretary to the Treasury,  Jesse Norman, answered on behalf of the chancellor and stopped short of ruling out such change.

Further property news from this week:

• Lettings demand 40 per cent higher than five-year average – According to Knight Frank, the lettings market has bounced back to life in the four weeks since the property market was opened back up for business. Demand from new prospective tenants was 40% above the five-year average and the second-highest in 2020. They anticipate the demand to continue getting stronger once there is more certainty over how universities will be teaching next year. Tenant viewings were also 1% higher than the five-year average and Knight Frank reports that the sales market is taking longer to rebound with buyer viewings 26% lower than the five-year average.
• The rise and rise of PBSA – growth continues despite Covid-19 – StuRent says Private PBSA is currently anticipated to grow by 5.7% year-on-year whilst university accommodation is set to only increase by 1.1%. It seems that investors are increasingly looking at more stable investments by looking at alternative sectors such as purpose-built student accommodation. Mistoria Group has seen demand for student property in the North West rise by 8% year on year. Investors that purchase PBSA units can benefit from assured net returns between 8-10%. The high demand for student accommodation has been consistent and continually increasing with constant shortages of bed spaces which have made it a stable investment for companies and thus investors as well.
• Investec funds £12.3m acquisition of Clapham Junction Buy-to-Rent scheme – The strength of the UK property market is further highlighted in this recent acquisition by Investec. A purchase of this magnitude in the current economic circumstances shows that domestic and international investors recognise the strong fundamentals of the UK property market.
• How much does it cost to rent in London’s ‘walk to work’ hotspots? – They say when it comes to property that it’s all about ‘location, location, location’ and in the new research from Howsy this is definitely the case for London. The firm looked at the cost of renting across 20 areas of London that offer a stroll into the City of London taking an hour or less and found that across these 20 locations the average cost of renting is £2,001; 18% higher than the current London average. The current tenant demographic for city rentals continue to show that they want amenities and work locations on their doorstep and will certainly pay more for the luxury. This is why we have seen the emergence of new developments offering luxury facilities such as gymnasiums, rooftop terraces, concierges and cafes to entice buyers and tenants alike.

See you next week.

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Team Track Capital

Welcome to the latest weekly news insight from Track Capital.

We have had a great week here at Track Capital HQ and confidence is definitely apparent in the market with developers starting to bring new property launches to us. Including new Manchester and Birmingham projects launching next week.

The property news this week has been positive overall, with a balance of the shock tactics we usually see from the media to gain clicks. Nationwide reported house price growth ‘slows sharply’. We encourage you to conduct independent due diligence, when you look at the stats, they focus on prices being down -1.7% month on month but prices annually have increased 1.8% showing the resilience of the UK market.

Either way, we are cautious not to always present the ‘everything is perfect’ picture but more so in our conversations with investors we try to put things into perspective, all we need to do is look at the big picture, example below of the average property values from Nationwide shown below.

Lenders are coming back to the market, activity is apparent and the market is moving but data is very premature so keep checking in with us to see how it progresses. But as far as we can see, it looks promising. We are advising our investors to capitalise on a market where there is uncertainty to get the best possible deals because once certainty/confidence creeps back into the market, sellers and developers will not be so lenient and willing to negotiate.

Property news this week

• Kensington ups LTV to 80% and resumes HTB & BTL – The is really promising news to see a mortgage company such as Kensington introduce higher loan-to-values and Help To Buy lending. This would indicate that lenders are feeling more confident about the property market. Companies such as Barclays and TMW are all slowly bringing back more products. The confidence has definitely been helped with the reinstating of physical valuations. Let’s hope that this continues as it can be an indication of the property market being in a good position.
• Liverpool named UK’s best buy-to-let area to invest in – We have been singing Liverpool’s praises for quite some time at Track Capital and have always said it is a great investment area with great fundamentals. Previously, Totally Money’s BTL Yield Map 19/120 had Liverpool at the top with the L1 postcode averaging a 10% yield. Now, Mojo Mortgages have reiterated this with L7 coming out on top with a very attractive 10.30% yield and five more Liverpool postcodes in the top 20 with yields ranging from 7.40% to 10.30%. If you haven’t researched Liverpool as a buy-to-let area for you to consider already then we recommend you do so. Great entry prices and yields make it a hotspot with room to grow.
• BTL house purchases up 7% during Q1 – The drop in first-time buyers seemed to have been made up by investors in Q1 this year according to UK Finance’s latest figures. Purchases of buy-to-let properties increased by 7% and while the Coronavirus lockdown may have temporarily hampered this incline we can be optimistic by the positive signal’s since the property market reopened and believe that investors will still remain active in the market, which is something that is needed to keep it strong.
• Will surveyors apply a Covid-19 ‘haircut’ to property values? – A very interesting article from Bob Young of Fleet Mortgages. This demonstrates the pressure that will be on the head of surveyors going out for mortgage companies and it is going to be interesting to see of they down value properties in a cautioned way. Are they going to cover their backs and include a post-coronavirus price drop in anticipation. With surveyors being back for not very long, the main data they have for comparable evidence will be property completions pre-coronavirus so this may lead to them applying a slight ‘haircut’ to the price to prevent them being pressed by lenders if the market fall slightly (this happened with the financial crash). I (Tobi) will be a test dummy as I have a mortgage valuation going ahead on an investment property I am currently purchasing and I had a pre-coronavirus mortgage valuation done but then the mortgage company pulled the original product so I had to start the process again with another lender. Let’s see what the surveyor says this time and if they give it a ‘haircut’.

New Manchester Launch – 20% Below Market Value

As well as the pay monthly Birmingham launch coming next week, just this afternoon we have finalised discussions on a new Manchester scheme. Whilst we don’t like to use the phrase to often, this scheme merits it, it’s offered at 20% below market value and approved for short-term lets, meaning investors can expect projected yields of 10% net.

This is a genuinely rare opportunity, we challenge you to find a development for sale in Manchester today at this value, from £135,000, that allows for short-term lets. If interested email [email protected] and we will send you the details, alternatively, you can call the team on +44(0)203 627 3987.

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Team Track Capital