Category: Weekly News

The property market is still in a flurry with some buyers still trying to rush and beat the stamp duty holiday deadline that is looming. Rightmove are saying that potentially 100,000 buyers will miss it and face an unexpected tax bill with a mammoth 613,000 sold subject to contract properties still awaiting legal completion. It is crazy to think that there is still an influx of buyers trying to buy now to beat the deadline and if you look back, we did warn of this happening back in November.

Now, let’s take a look at the headlines that caught our attention this week, I always try to summarise the links to save you having to click through.

Our second full week of 2021 has proven a busy one for us at Track Capital HQ with the release of two new exciting property investment opportunities. There have also been some positive reports from the construction industry with the Office for National Statistics reporting construction output in Great Britain rose past pre-pandemic levels in November 2020 for the first time and in the three months to November 2020 construction output grew by 12.4% compared with the previous three-month period due to growth in both new work (11.9%) and repair and maintenance (13.2%) which is great to hear.

Now, let’s take a look at the headlines that caught our attention this week, I always try to summarise the links to save you having to click through.

Episode 8 of the Pure Property Podcast is out now. You can listen to it on Apple Podcasts and all other major platforms.

Remember, you can also listen to this week’s newsletter on the podcast as well.We would really appreciate it if you could subscribe and leave feedback for our Podcast on Apple.

That is all we have for you this week. If you have any comments or questions on this week’s news summary then please feel free to send us an email at [email protected]  – if not, see you next week.

First of all, happy new year!

I hope you all stayed safe and had a chance to relax. 2021 didn’t start how we were hoping with the announcement of the 3rd lockdown, however, we are still very optimistic for this year with the Brexit deal being agreed and the roll-out of the vaccine going forward. The property market has definitely started very strongly with some exciting projects on the horizon for this year.

That said, let’s take a look at the first property headlines of 2021 that caught our attention this week, I always try to summarise the links to save you having to click through.

Well before we know it, we have reached the last weekly newsletter of the year! Do not fear though, as we will be back in January to bring you all the ‘need to know’ property headlines.

This year has been an unusual one, to say the least, and has had plenty of ups and downs. That said, the UK property market, overall, has stayed resilient and strong which has been really amazing to see. Fingers crossed that it continues throughout 2021.

The office will be shut until January 4th but if you do need a member of the team for anything then it is best to email them directly or send your enquiry to [email protected].

Thank you for being with us this year and we look forward to seeing you next year as well.

Now, let’s take a look at the property headlines that caught our attention this week, I always try to summarise the links to save you having to click through.

The headlines this week have been shifted back to Brexit as we see deadline day looming and we wait in anticipation to see if the UK leaves with a ‘deal’ or ‘no deal’ scenario. With all that talk in the media, the latest Halifax House Price Index report has slipped under the radar. The new data shows that house price growth is on its strongest run since 2004 and prices are up 1.2% in October. House prices in November were 7.6% higher than in the same month a year earlier which is the strongest growth since June 2016. Very strong results here for the UK property market and we will probably see this continue into next year. It will be interesting to see if the Brexit news we are waiting for has an impact on the market.

Now, let’s take a look at the property headlines that caught our attention this week, I always try to summarise the links to save you having to click through.

Property news this week

Do we want Flood Certificates as well as EPCs? – A not-for-profit group of government and insurance industry representatives call Floor Re wants a Flood Performance Certificate to be issued for every home. They think that the certificates could encourage more people to install property flood resilience measures and mitigate against future flood risk and would need to be provided at the point of sale or rental of a property. I know that in property sale transactions, during the conveyancing process, flood risk reports are done and if it comes up as high-risk solicitors will advise their clients accordingly and some lenders may not lend on the property so this could help high prevent and/or highlight the problem in the beginning. However, if you then ‘ok’ this, where does it end? Do you then ask that every property has a full structural survey before it goes to market? Mainly property sale-related, but if we start going down this route we would have to change the whole buying and selling process. We would be heading to a Scottish style where all reports etc are done before you put the property on the market and presented to buyers beforehand. I can sense the talk of ‘HIPS’ making a return……and we all know how that turned out.

First-time buyer landlords remain buoyant despite pandemic – It is interesting to see this article report that instead of some first-time buyers trying to purchase their first home to live in, these borrowers are choosing a buy-to-let investment as their first purchase. The prominent type of this buyer seems to be purchasers who are living in London or the South East where it’s tougher for salaries to meet higher purchase costs so instead of these borrowers buying where they live, they can an buy a property in other parts of the country where prices are lower, and yields are favourable such as northern cities like Leeds, Manchester or York. The article points to the fact that with savings rates so low, someone who isn’t ready to buy a home may still want to put money into property as people want to invest in something tangible with bricks and mortar being a great example of this. There is a myth that you can’t buy an investment property unless you own your own home, this article proves that this is definitely not the case.

UK takes top-spot in European property investment market – International law firm DLA Piper undertook a recent global survey which surveyed 500 investors, developers, and asset managers from across Europe, China and the US where they ranked the UK highest for future residential property investment. Additionally, nearly one third (29%) expect to invest more in 2021 than they did in 2020. Behind the UK were France and Germany. It would seem that despite Covid-19 and uncertainty over long-term recovery from the pandemic, investors continue to feel positive about the European residential property market. Olaf Schmidt, managing director of practice groups at DLA Piper, put this down to the European real estate market having “strong fundamentals, low interest rates, and high potential yield returns compared to equity markets” and that the “UK remains an attractive market for investment also post-Brexit which should provide confirmation and reassurance that the UK is a vital hub for activity and growth”.

One-off tax grab on property values proposed – More taxation speculation and this time experts have warned that millions of people could see their main homes, not just additional properties, taxed as part of a one-off “wealth tax”. So, rather than increasing income tax or VAT, the government would instead look at a tax on people who who have assets worth £500,000 or £1m for a married couple and taxing those households an extra 1% on their assets could raise £260bn over five years according to a report from the Wealth Tax Commission. The concern for this would be that it would target thousands of people and households that are not particularly wealthy causing them to struggle and even find themselves in debt as they are asset rich but not cash rich. Nimesh Shah, CEO at tax and advisory firm Blick Rothenberg, commented: “Pensioners who fund their living costs through savings, farmers owning agricultural land and private business owners will all be concerned by the proposals and how they will feasibly fund the tax – these groups may need to burden themselves with debt to pay the tax, although this may not be an option or cost-effective for everyone e.g., the elderly”. According to Nimesh, recent tensions around future tax rises, in particular capital gains tax, risk damaging the UK’s reputation as a centre for international business at a time when the government should be doing all it can to keep the UK competitive under the backdrop of Brexit. Let’s hope this idea doesn’t get any traction and we don’t see it come to fruition.

That is all we have for you this week. If you have any comments or questions on this week’s news summary, please feel free to send us an email at [email protected]

Episode 7 of the Pure Property Podcast is out now. You can listen to it on Apple Podcasts and all other major platforms.

Remember, you can also listen to this week’s newsletter on the podcast as well.

It’s officially December and Christmas is fast approaching. The UK has had an early Christmas present with the COVID-19 vaccine being approved and beginning to be rolled out. This has increased confidence and activity in the market as people begin to see a potential light at the end of the long, hard tunnel that is this pandemic.

Now, let’s take a look at the property headlines that caught our attention this week, I always try to summarise the links to save you having to click through.

Property news this week

• Buy to Let Watch: Digitisation is starting to happen – Digitalisation has been talked about for many years and as we have come to realize, this pandemic has accelerated the speed at which many industries have had to become more digitalized and tech-savvy. Over the years, it is not something we have massively seen in sections of the mortgage process especially in comparison to other sectors across the financial services industry. So is now the time that the mortgage industry is forced to adapt quicker than anticipated? Well, it was always on the cards as we have seen the emergence of challenger banks and digital lenders in recent years. But the pandemic has definitely forced the mortgage industry’s hand and it has been interesting to see how different types of BTL lenders are utilizing tech to meet the demands of borrowers and adapting to the current environment. One way has been the increased reliance on AVM’s (Automated Valuation Model) meaning no need for a physical survey. There has also been a progression in how different data types are electronically transferred and verified. This will improve how lenders and advisers access and analyse relevant information which will lead to a large timesaving. It will be interesting to see how this continues to progress and will surely be beneficial for the industry as a whole moving forward.
• Don’t write off student rental market, warns PropTech platform – Tenants software supplier Bunk conducted a survey of students last month and the results would indicate that the student accommodation rental market remains strong despite the coronavirus. A massive 85% of current students surveyed said that they would return to rent a property in their university town for the next academic year, despite the ongoing pandemic. 4 out 5 students said that even though this university experience isn’t what they had expected, they would still prefer to be enrolled and living at university rather than at home. 78% said their disappointment was with the university rather than their living situation. The PropTech firm says that on the basis of the survey it was “clear” that the student property market would continue to thrive in 2021.
• Couple loses life savings as buyer’s lender withdraws post-contract – This article highlights the potential rare risk to any buyer purchasing a property with a mortgage and can be an even bigger risk where a chain is involved. A Reading couple with a young baby is faced with a bill of at least £33,000 plus ‘damages’ following the collapse of their housing chain after an exchange of contracts – despite having a secure mortgage themselves. Mr & Mrs. Saboor were left devastated when their buyer was told by lender Santander that their mortgage offer was being withdrawn in the period between exchange and completion. It was actually withdrawn on completion day and the Saboors have tried to raise the issue with Santander, but so far have been offered no explanation as to why the bank took the decision to withdraw their buyer’s mortgage offer. It has mostly been the assumption that a mortgage deal in place at the exchange cannot be withdrawn before completion so this case has massive implications for every homebuyer and mortgage broker in the UK and the 1-2 weeks between exchange and completion are now at the mercy of every lender involved in the chain. It would seem that while this is a potential risk, brokers should advise their clients to take extra care, and perhaps try to get contracts worded so that they are not liable if they lose their buyer post-exchange. As scary as this scenario is, just bear in mind that this is a massive rarity, but something still to bear in mind.
• Petitiion Calling for evictions after two weeks’ rent arrears hits 10,000 signatures – Property investor Ranjan Bhattacharya launched the petition in early October calling on the government to enable landlords to start evictions once a tenant falls more than two weeks behind in their rent and it has attracted 10,000 signatures. The government has been under pressure to protect tenants from the threat of being evicted and losing their home during the pandemic but Mr. Bhattacharya wants to see more done to help landlords who could be facing up to two years without rent due to the government’s decision to introduce a six-month eviction ban. Bhattacharya said: “There are laws in place to protect shop keepers large and small. Not paying rent is also theft with the landlord being the victim.

“In Australia, tenants can be evicted for being 14 days in arrears with rent. Let’s have that system here [in the UK].”

He added: “The current system is unfair to landlords.”

I see where he is coming from and we know there has been frustration amongst the industry around this topic but I do not think this is the solution. I keep saying that genuine struggling tenants need protection and help and the same goes for landlords as well.

That is all we have for you this week. If you have any comments or questions on this weeks news summary then please send us an email at [email protected]

Episode 6 of the Pure Property Podcast is out now. You can listen to it on Apple Podcasts and all other major platforms.

Remember, you can also listen to this week’s newsletter on the podcast as well.

We would really appreciate it if you could subscribe and leave feedback for our Podcast on Apple.

Property news this week

Welcome to another weekly news round-up.

If you missed our Pure Property Podcast episode this week where we talked about the advantages of purchasing off-plan, then please check it out on Apple and all other Major Platforms.

Now, let’s take a look at the property headlines that caught our attention this week, I always try to summarise the links to save you having to click through.

Property news this week

• Overseas interest in UK real estate and construction through the roof – According to EY’s latest UK Attractiveness Survey, the number of overseas investors who consider real estate and construction to be a key driver of future UK growth has more than tripled since last year. Real estate and construction is now in the top-three most attractive sectors for overseas investors. A factor contributed to this attraction could be the government stated infrastructure plans (such as HS2) with the National Infrastructure Strategy expected to provide a clear, long-term framework, and will be an essential catalyst to attracting investors. The survey found that the UK was seen as the second most attractive European destination for foreign investment in 2021 with 40% of respondents choosing it slightly behind Germany (43%). So, it is good to see that with everything currently going on, the UK is still held in high regard from overseas investors.
• Landlords launch legal action against the government over lockdown evictions – So it seems a brave bunch of landlords are standing up to the government and seeking legal action for the courts to review the actions the government has taken during the pandemic to try and get back their properties from tenants who have huge arrears of rent. The solicitor representing the landlords, David Smith – partner at JMW Solicitors, states in the letter why the property investors have been left with no alternative but to take action, as they struggle to get their properties back following the tenant eviction ban. Smiths says “Such an important decision cannot simply be made by writing a letter on a whim. Many cases of rent arrears were in place before Covid-19 hit – and landlords must be able to tackle the most serious cases. This letter from the Lord Chancellor does not constitute a legal framework and has breached the landlords’ civil and human rights. This must be corrected, and quickly”. It is a very valiant act and many landlords long with industry professionals will be watching this closely as it is a dilemma affecting many. I understand that in such times we currently face ourselves in, protection is needed for tenants that are genuinely adversely affected by COVID-19 but it would seem there are a very small few that are exploiting the governments help and it is leaving many landlords stuck in a very bad position. I feel that it’s these minor few that need to be looked at and some sort of solution thought of, especially if this is going to carry on for longer. Landlords need protection as well.
• Conveyancer attacks “outdated” and “age old processes” – This problem is one that I share the frustration of. Andy Sommerville, director of Search Acumen, a conveyancing technology company, has hit out at what he calls “an over-reliance on outdated processes” and “age-old search delays” for hold-ups in processing transactions in the housing market. As we have documented previously, there has long been an issue with the delays that we usually face with conveyancing and this has been further highlighted with the surge in demand that we have seen post the first lockdown and the introduction of the SDLT Holiday. Most conveyancers just can’t cope at the moment and it is partly down to organisations including local councils and HM Land Registry struggling to keep up. The industry has long cried out for digitalization to speed up the process and while this won’t be resolved by March 31 2021 (SDLT Holiday deadline) we need, as Sommerville puts it, “an industry-wide change in mindset is required now – not to mention a new approach to leveraging the available technology to harness the data at our fingertips”. In my opinion, the system is dated, just not good enough and needs to be looked at sooner rather than later.
• How is the mortgage market faring in Lockdown 2 – Last week we heard about how the housing market was doing and a great way to follow that up this week is looking at the mortgage market. Twenty7Tec, a mortgage technology platform, has released their latest figures on the state of the mortgage market one week after Lockdown 2 began and it shows a rise in searches across the board. Search volumes for buy-to-let (BTL) mortgages were also up, reaching 92.09% – an 8% rise on the week before and weekly residential mortgage search volumes were at 87.57%, up 6.8% on the last week. It would seem that there was a slight dip leading up to Lockdown 2 and then a spike within a day or two of lockdown beginning. This slight dip is probably where people’s attention goes elsewhere preparing for the lockdown and then once it begins their focus returns. It would seem their data shows a steady volume of BTL mortgage searches all year, showing that investor demand and confidence has remained strong throughout.

This week has brought us some positive COVID-19 related news as we had the announcement of a vaccine where preliminary findings show a 90% success rate. It is reported that the UK should get 10 million doses by the end of 2020, with a further 30 million doses already ordered. Fingers crossed, these are encouraging steps to help fight this virus and get people back to some sort of normality in the near future.

We have also had the release of Hometracks quarterly UK rental market report which shows a ‘two-speed market’ between London and the rest of the UK. They reported a 1.7% increase in rental prices excluding London and a 5.2% decrease in London’s. It seems that a supply/demand imbalance is supporting positive rental growth across most regions and the majority of cities outside London. However, London is experiencing a further decline from Q2 as supply continues to overtake demand due to changing working practices, commuting patterns and weaker tourism.

Lockdown 2.0 has begun in England and although it is not great, we are lucky that the property market is able to stay open. Construction has also been unaffected meaning it is business as usual for us.

This week has seen history being made when Halifax announced a 7.5% increase in house prices for October taking the average UK house price up to a quarter of a million pounds (£250,457) for the first time in history! Russell Galley, Managing Director, Halifax, said: “This level of price inflation is underpinned by unusually high levels of demand, with latest industry figures showing home-buyer mortgage approvals at their highest level since 2007, as transaction levels continue to be supercharged by pent-up demand as a result of the spring/summer lockdown, as well as the Chancellor’s waiver on stamp duty for properties up to £500,000.”

Demand remains strong and that does not seem to be subsiding anytime soon so it will be interesting to see if we experience the normal Christmas/Winter slowdown that we usually do. I think we will see a slight slowdown but it won’t be as slow as we are used to.

Exciting News

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Now, let’s take a look at the property headlines that caught our attention this week, I always try to summarise the links to save you having to click through.

Property news this week

• Retiree & Upper-Middle Aged Renters: Fastest Growing Tenant Segment of Private Rented Sector – Do we need to start considering our investments to suit an emerging new tenant demographic? According to Paragon, retiree renters and those in the upper-middle age category are the fastest growing tenant groups in the private rented sector. Since the turn of the decade, there has been an increase of 118% in 55-64 year-olds renting in the PRS sector and those aged over 65 growing 93%. Paragon’s research also reveals that later life tenants are generally happier in private rented accommodation with 22% saying said they didn’t want the responsibility of owning a home and 15% stated it gave them more flexibility. Looking at property that would suit this demographic and adapting is certainly something to keep in mind because population forecasts show that by 2043, the proportion of the UK population aged over 55 will increase from 30% to 36% (26 million people).
• Mortgage payment holidays to be extended for up to six months – In such uncertain times that we find ourselves in, it has been great to hear that the mortgage payment holiday scheme will be extended for up to six months following the news that England will go back into national lockdown from 5 November until 2 December. The scheme had originally been due to end on 31st October but borrowers who have not yet had a mortgage holiday can request a pause in repayments from their lender that can last up to six months. Plus, for those who currently have an initial payment deferral or had one and have restarted repayments, will be eligible for another payment deferral of up to three months. If this is something that might benefit you then please click the link to view the article for more information and to see if you might be eligible. Just bear in mind that any payment holidays taken may potentially effect your ability to borrow in the future so should only be taken if absolutely necessary.
• Will Lockdown 2 produce another surge in tenancies? – In the first lockdown we saw a surge in tenancies and according to Ome, the three months following the first lockdown, new tenancies on private rented properties were up by 22% on the previous year. This may have been down to the pent-up interest in moving to a new home and some tenants re-evaluating their housing needs for storage, outdoor space and working from home. My personal opinion is that there will not be a surge like this because you have Christmas coming up and there will also be less pent-up demand because the property market remains open so people can still move.
• Rise in construction sector brightens UK economic gloom – In this piece from The Guardian, we see more shining hope for the property sector as they report that home builders pushed ahead with new projects during October. Even though the services and manufacturing sector is suffering a sharp slowdown, building firms continued to bounce back from a contraction in spring that followed the UK coronavirus lockdown. It would seem that the government’s cut in stamp duty on the sale of new homes has been a positive catalyst seeing new orders increase at the fastest pace for almost five years. Tim Moore, the economics director at IHS Markit, said: “The strength of the pipeline of new work especially from a robust housing market means the sector is moving in the right direction and hopeful of getting through the winter unscathed”. Let’s hope this continues as the property and construction market are such a big part of the UK economy.

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