CategoriesWeekly News

Weekly Property News Round Up – 10.04.21

It is the end of the week and the Track Capital team have finally recovered from eating too much chocolate over Easter. This week, the UK has had some good news that summer holidays abroad this year may be possible with countries being put on a traffic light system which will see countries graded on their risk.

If you haven’t listened to this week’s podcast episode yet where we speak with a development company called Prosperity Wealth then I strongly recommend checking it out. It is really interesting to hear how they operate and to get a developers prospective as well.

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 20: Meet The Developer – Prosperity Wealth – The latest episode 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 weeks 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
  • UK construction sector activity showed a strong recovery in March – It has been reported that UK construction activity expanded at the fastest pace in more than six years in March. The IHS Markit / Cips UK Construction and Purchasing Managers Index rose from 53.3 in February to 61.7 in March which was much higher than Reuters polled economists’ forecast of 54.6. Home construction was the highest performing category at 64.0 which ties in with the stamp duty holiday and flying property market. Further good news that commercial construction and civil engineering also reported expansion after a long recession.
  • House Prices Reach New Record High – Is Another Property Market Boom on The Way? – We have had the latest Halifax house price index report released this week and it seems like the property market just continues to go from strength to strength with house prices up 6.5% year on year in March. The average house price is now at £254,606, a new record high. UK seasonally adjusted residential transactions in February 2021 were 147,050 – up by 23.0% from January. Russell Galley, Managing Director, Halifax, said “Overall we expect elevated levels of activity to be maintained in the coming months, with consumer confidence spurred on by the successful vaccine rollout, and buyer demand still fuelled by a desire for larger properties and more outdoor space, as work-life priorities have shifted during the pandemic. A shortage of homes for sale will also support prices in the short term, as lower availability always favours sellers.”
  • Proposed rent controls ‘would be a disaster’ – The current London Mayor is being urged to forget about his plans to introduce rent controls in the capital and to instead focus on increasing the supply of much needed rental accommodation by enticing more people to invest in the PRS. The Mayor and his party would be doing the exact opposite by introducing such controls. The National Residential Landlords Association (NRLA) is warning that plans for rent controls, which are at the heart of Khan’s re-election bid, would be a disaster for aspiring tenants. The Treasury published a report in 2010 under the last Labour government that assessed the impact of rent controls before they were abolished in 1988 with the report concluding that they had been a major factor in the “decay of much of the inner city housing stock.” My opinion is that rent controls would be a disaster for London and more focus should be on enticing more landlords/investors to the PRS sector to provide good rental properties to tenants. The main driving factor for rental prices in London is supply and demand which has been clearly demonstrated during the pandemic. We saw supply increase and demand decrease leading to a drop in rental prices so that should be a clear indicator to the Mayor that more stock is needed, not measures that would lead to reducing stock.
  • Surveyors launch Home Review concept to cut fall-throughs – Fall throughs are a big problem within the property market and are an estate agents worst nightmare. A surveyors group has launched a new ‘Home Review’ service which it claims will identify structural problems which create an immediate obstacle to sale and is being described as “a snapshot analysis of key structural risks to provide buyers, sellers and agents with advanced warning of any major issues which might jeopardise the sale of a property” by the Residential Property Surveyors Association. The survey would help sellers identify potential issues that could arise when the buyer has their survey and enable them to address known issues before going to market. This is a good idea and will be a helping hand in the fall through problem but other aspects of the buying/selling process also need to be looked at to help as well, such as the long conveyancing timeframes.

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.

CategoriesWeekly News

Weekly Property News Round Up – 03.04.21

Spring is here and it is the end of our first quarter of 2021 which has proved to be a very busy one. The general property market has remained buoyant and we foresee this carrying over into the next quarter as well.

Restrictions have begun their first phase of easing and the vaccine continues to rollout positively so hopes of going back to some form of normality remain strong.

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 19: Freehold vs Leasehold – The latest episode 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 weeks 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
  • Demand for rentals grows as number of prospective tenants continues to rise – Demand from prospective new tenants rose in February for the second month in a row, according to new figures from ARLA Propertymark. On top of this, half of lettings agents saw landlords increasing rent in February. Regionally, the West Midlands had the highest number of new tenants per branch with an average of 126, with the East Midlands having the second highest at 123 new tenants. Contrastingly, the number of properties managed per letting agent branch fell for the third month in a row from 196 in January to 195 in February. Mark Hayward, chief policy advisor at ARLA Propertymark, said: “Today’s report demonstrates that the rental market continues to show no sign of slowing down, as demand for rental properties rose yet again in February”. This clearly demonstrates that the problem of high demand and low rental supply remains unchanged and there is still a huge need for more private landlords to provide more quality rental properties.
  • Stamp duty surcharge won’t hurt foreign buyer market – This month saw the introduction of the new 2% stamp duty surcharge being imposed on most overseas buyers and a prominent London agency says that it will not dampen their enthusiasm for investment. Ludlowthompson has made the prediction after reporting that the number of overseas landlords owning property in the UK has hit a five-year high – despite Brexit, the pandemic and earlier tax changes. They have reported a 19% increase in foreign landlords in the UK over the last 5 years. They note the rise in Hong Kong buyers and they say a key attraction is education, noting that many overseas landlords who have purchased property have done so to provide accommodation for their children who were studying in the UK. The new surcharge applies to buyers of residential property in England and Northern Ireland who are not UK residents.
  • What 175 years of data tell us about house price affordability in the UK – This is a really interesting article from Duncan Lamont, head of research and analytics at Schroders, where they have dug into nearly 200 years of housing data from the Bank of England’s Millennium of data resource to analyse the history of house prices. They found that the average house in the UK currently costs more than eight times average earnings, based on data as of 31 December 2020 and the eight-times-earnings level has only been breached twice previously in the past 120 years – once just prior to the start of the financial crisis and once around the start of the 20th century. Interestingly, house prices were even more expensive in the latter half of the nineteenth century. They then went on a multi-decade downtrend relative to earnings. This only bottomed out after World War I. There are three important drivers of this: more houses, smaller houses, and rising incomes. It concludes that in order to improve affordability, a period of stronger pay growth could be very helpful. There is a lot of interesting data in this article and it would be impossible for me to sum it all up here so, if you are a property nerd like me, I highly recommend checking the full article out.
  • Real estate is key to the UK’s recovery from COVID-19 – We have had a turbulent year with the coronavirus pandemic and we have light at the end of the tunnel with the success of the UK vaccine rollout the road map to normality that the government has set out and started. We still need to be vigilant with concerns Europe might be about to experience a 3rd wave of coronavirus cases and on top of this, the UK’s transition out of lockdown could be delayed if the relaxing of certain restrictions leads to a spike in new infections. With all of this in mind, the main focus is to get the country’s economy back on track with the property market looking to be a key part of this. With the government introducing the stamp duty holiday and 95% mortgages shows that they understand just how important the real estate sector will be in bringing about the post-pandemic recovery of the economy. All this encouragement for buyers will in turn encourage investment activity which will drive national productivity and ultimately contribute to GDP growth.

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.

CategoriesWeekly News

Weekly Property News Round Up – 27.03.21

Last week I was hoping we would get the latest Hometrack house price index report released this week and we did. I also said I had a feeling it would be another positive one and it is, house price inflation is at +4.1% which marks the fourth consecutive month price growth has been above 4%, matching levels last seen in summer 2017. The recent Budget stimulated an +80% spike in buyer demand for property compared to the four-year average while supply still lags.

Looking at this data, it looks like we will continue to see upwards pressure on property prices.

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 18: Top 10 Property Jargons Explained – The latest episode 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 weeks 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
  • Private Equity Thinks Student Property Is a Post-Covid Winner – The UK student accommodation market is getting increased demand from private equity firms as they increase their investments pumping hundreds of millions of pounds into the resilient sector with their view being on high rental returns post-Brexit and post-Covid. More than one-third of deals for student property in 2021 so far have been financed by private equity, compared to about 15% in total between 2016 and 2019, according to data compiled by real estate advisers JLL. Student application numbers are forecast to rise by 8.5% this year and with purpose-built accommodation oversubscribed private equity firms find these investments very attractive. In the 12 months to September 2020 student property returns totalled 4.9%, outperformed over 5 and 10 years only by industrial property, according to Tim Pankhust, a senior director at CBRE, who oversees student accommodation services. The sector still requires a further 310,000 beds to cater to all first-year and international university students, who typically live in purpose-built accommodation, according to student accommodation provider Unite Group and construction is currently failing to make a significant dent in that gap.
  • London flex office sector poised to recover from Covid slump – Colliers, leading professional services and investment management company, has predicted that London’s flexible office space providers will bounce back this year after the massive downturn they experienced last year. In 2020, London saw approximately 217,000 sq ft of office take-up by flex providers which is a stark contrast when compared to 2019 which saw a take-up of more than 1.7m sq ft as Covid-19 put the brakes on demand for space. Mark Bott, head of serviced offices at Colliers, says that the flex market is poised to take off again “but in two slightly different ways”. He says the sector can expect to see more “localised suburban hubs that reduce the commute time but provide a more professional and social environment for staff than a home office” as well as “a reduction of operators within city centre locations as landlords adapt and become involved in designing, delivering and, in some instances, managing offices that are hospitality-led”. This is positive news for this sector and it will be good to see workers start to return to the capital as they have been missed.
  • Everton’s £550m stadium gets green light – More positive news for Liverpool as further regeneration and development has been confirmed. Construction of Everton Football Club’s new stadium can finally proceed after communities secretary Robert Jenrick gave the project the go-ahead. The application that has been approved is to build a 52,888-seater stadium at Bramley-Moore Dock and the £82.5m redevelopment of Everton’s current home, Goodison Park, for a mixed-use project including residential, commercial and community facilities, has also been approved.
  • Going Up! House price forecast for 2021 revised upwards by agency – Ok, so this article slipped my radar the previous week and only came to my attention this week but it made it to my list this week as it is another example of a well-known property company changing their house price forecast to be more positive. We have recently seen Savills increase their forecast, along with Halifax and Nationwide giving a more positive outlook and now Knight Frank have followed suit. They have increased their UK house price forecast to 5% which is up from their forecast of zero at the start of this year. Their forecast for Greater London has increased to 4% from 1% and their Prime Outer London and Prime Regional markets forecasts remain unchanged. It will be interesting to see where we actually end up at the end of this year, Nick and I are looking forward to looking back at the original forecasts we made in December to see who is the closest to being right (hopefully me!).

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.

CategoriesWeekly News

Weekly Property News Round Up – 20.03.21

If you have been listening to our recent podcasts and following these weekly newsletters then you will know we are experiencing a lot of activity in the property market at the moment and we are hoping that next week the latest Hometrack house price index report will be released to provide the data and insight on how the property market is performing. My feeling is that it will be another positive one. Fingers crossed, it is released next week and I can give you the overview in next weeks newsletter.

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 17: How To Choose An Investment Company? – The latest episode 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 weeks 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
  • Agents need to prepare for imminent EICR changes – Although the headline is aimed at estate agents, it is also landlords that need to know this, whether they have a managing agent or not. I have been contacted already by my managing agents to undertake the Electrical Inspection Condition Report which becomes a legal requirement on 1st April. David Cox, former ARLA Propertymark chief executive and current legal and compliance director at Rightmove, has warned agents that there will be no extension or grace period in place for the Electrical Safety Standards Regulations, and all tenancies in England will need to meet the new requirements by 1 April. If you own a property that you rent out via a letting agency and have not been made of this then I would contact them as soon as you can.
  • Fury over Knightsbridge flat on sale for £150,000 – without a bedroom or bathroom – Yes you did read that headline right and not only does it not have a bedroom or bathroom but it is only 89 sq ft. Regulations were changed in 2011 to ban property developers from building homes smaller than 400sqft (37sqm) but this flat does not break any current laws because it was first leased in 1976. It is being advertised as a “blank canvas” and is being sold by Knight Frank. Thangam Debbonaire, Labour’s shadow housing secretary, said “This outrageous advert is evidence of a broken housing market and shows why we need more truly affordable homes”. You can view the listing here.
  • John Lewis says house rental to provide growing share of profits – Last year we covered John Lewis’ plans to turn some of their sites into housing to boost revenue and they now say they are expecting 40% of its profits to come from non-retail activities such as housing over the next decade. The residential properties will fall under the Build To Rent category and are likely to be managed by an established lettings company. The furniture in the properties will come from John Lewis stores; food delivery options for tenants will be from Waitrose so they are truly trying to utilise their brands and keep as much in house as possible which I think is a great idea.
  • Liverpool’s £100m waterfront project & new BTR scheme in Sheffield – This article is a further demonstration of the positive activity in the property market where regeneration and developments are taking place. Although the headline highlights Liverpool and Sheffield, it also lists a scheme in Northampton where we will see a shoe factory converted into 68 apartments and Unite Students opening a well needed £82.5m purpose-built student accommodation (PBSA) development in Manchester. We know Sheffield has high demand but a short supply of student accommodation and plans have been submitted for a ‘gateway’ 336-apartment Build to Rent (BTR) scheme on the edge of Sheffield city centre which will be a massive boost to the student’s homes needed. Liverpool is a city we are talking a lot about at the moment and one I think will be spoken about for many years to come when it comes to property investing. There is so much going on in this great city and Liverpool-based global property developer Romal Capital has reinforced its commitment to Liverpool’s Central Docks by committing £100 million to transform the derelict brownfield area and realise its vision of Sydney in Liverpool’s city centre. The new £100 million scheme is set to include 330 sustainable, ‘smart’ homes, retail space, other amenities and public realm, as well as investment in the surrounding infrastructure to help regenerate the waterfront. The project is also going to include a ‘vitally important’ pedestrian link in the development of this dockside area, from the Three Graces landmark and Princes Dock to the proposed site of Everton FC’s new stadium at Bramley-Moore Dock. I am really interested to see where Liverpool will be in 5 years time and far it will have come by then. I think it is one where we simply look back and say, ‘wow’.

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.

 

CategoriesWeekly News

Weekly Property News Round Up – 13.03.21

I hope you have all had a great week. The office and phones remain busy which shows confidence and positivity in the property market. We are also seeing some people looking to take advantage of the extended stamp duty holiday with some of our property investments which was bound to happen.

We have a good episode on the podcast this week where we go over the risks of property investing and you can use the links below to check it out.

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 16: What Are The Risks Of Property Investing? – The latest episode 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
  • Corporation tax hike not ‘massively important’ to BTL investors – When I read that corporation tax was going to be increased following the Chancellor’s spring budget, my heart sank for a minute. I was thinking that I had invested in property using a limited company to be more tax-efficient and now they are coming for that. Luckily, when I read through it in detail, I soon realised that I (along with many other landlords) am unlikely to be affected. The rate will taper up to £250,000, and only at that point will corporation tax kick-in at the full 25% which Elise Coole, managing director at buy-to-let lender Keystone Property Finance said would potentially only “hit one in every 25 buy-to-let investors”. HM Treasury has said that the rate for small profits under £50,000 would remain at 19% and that there would be a relief for businesses with profits under £250,000 so that they pay less than the main rate.
  • London landlords have good news – renters are on the way back – We recently said this may happen on one of our podcast episodes and it seems that London is showing signs of renters wanting to come back to the capital. New data from Rightmove has shown an increase in portal enquiries for Zones 1 and 2 rising significantly, with areas like Nine Elms and Battersea the most popular. It has analysed over 23 million London searches and says searches for rental homes in areas of Zones 1 and 2 have jumped significantly. Letting agents in London are also experiencing more interest from prospective tenants now the vaccine and Coronavirus roadmap suggest that the city may get back to some form of normality in the coming months. Glynis Frew, chief executive of Hunters, adds: “Despite short term uncertainty and some people moving out of London temporarily, the fact is that most young professionals want to be amongst the buzz of the city – it’s the reason they moved here in the first place. With the vaccine providing light at the end of the tunnel now, many will be planning their next move as life starts to return to normal and their places of work start to open up again”. Savills recently upgraded its house price and transaction forecasts following the Budget and tipped prime central London to bounce back after a torrid performance in recent years with a 21.6% increase by 2025. I am hopeful that this positive trend will continue and it won’t be long before London is back how it was pre-pandemic.
  • Lloyds Bank plans to become a large private landlord – It seems Lloyds, which is Britain’s biggest mortgage lender, are putting their money where their mouth is and want to cash in on the property market like many of the landlords they are providing mortgages to. Under the plan, called “Project Generation”, Britain’s biggest retail bank will buy and rent out new and existing properties across the UK, as it looks to boost profits. This is encouraging to see because if Britain’s biggest mortgage lender sees the property market as profitable and a good investment then landlords should have confidence as well.
  • Habito to launch ‘lifetime’ fixed-rate mortgage that lets you lock in for up to 40 years – I had to read this twice to make sure I was reading it correctly, Habito is offering Homebuyers and movers in England and Wales the chance to fix their mortgage rate ‘for life’ later this month as Habito has revealed it will allow borrowers to lock in mortgages for up to 40 years with no early repayment charges. The online broker, lender and home-buying service Habito claims its new range includes the UK’s ‘longest ever’ fixed deal with interest rates from 2.99% to 5.35%. You can take these long-term fixed mortgages with you if you move and you can repay them early without incurring extra fees. The deals will be available from 60% loan-to-value (LTV) all the way up to 90% LTV. This is potentially a game-changer and will be especially good for those that prefer stability and certainty or are worried about interest rates rising. Just bear in mind you are gambling that you won’t be able to save more in the long run by switching to cheaper rates in the meantime.

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.

CategoriesWeekly News

Weekly Property News Round Up – 06.03.21

As you can probably imagine, this week has mainly been focused on the Chancellor’s Spring Budget and in case you missed it, you can catch the key points here. I won’t go over what was announced for the property market here as it will be covered in one of the articles below.

If you do have any questions about what the Spring Budget means for the property market then please send us an email at [email protected] and a member of the team will get in touch to go over it all.

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 15: Why Invest In Manchester? – The latest episode 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 weeks 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
  • What does the Spring Budget mean for the property market? – I thought it would be best to start with the most talked-about thing this week, the Spring Budget. This article is from Rightmove and outlines the stamp duty extension and the 95% mortgage guarantee scheme along with what some industry experts say. Firstly, the stamp duty holiday extension has been extended by three months if buying a home up to the value of £500,000 and then the extension is applicable until the end of September 2021 when purchasing a property with a value up to £250,000. This will be a relief to some buyers and sellers that were at risk of missing the original deadline date of 31st March. This is a boost for the property market and is sure to keep prices moving in a positive direction. Next, the mortgage guarantee scheme is a 95% loan to value (LTV) mortgage guarantee scheme to help buyers with small deposits get on the property ladder. Due to low-deposit mortgages largely being withdrawn by lenders during the coronavirus pandemic many first-time buyers have faced raising deposits of 15-20% in order to secure a loan so the Treasury has said it will guarantee parts of the loans on properties worth up to £600,000 in order to encourage lenders to reintroduce low-deposit mortgages and make it easier for buyers with low deposit levels to buy. The Chancellor said many of the big lenders, including Santander, Lloyds, Barclays and HSBC are backing the scheme and will be offering “government guaranteed” mortgages from next month. This is going to help the property market continue its momentum but I do wonder if it will cause prices to ultimately creep up and continue to still keep some buyers out of the market.
  • More Student Accommodation May Be Needed as University Numbers up 200,000 Over the Last Five Years – The UK’s leading student accommodation platform, UniHomes, has revealed that an increasing amount of people are choosing to go to university which means the demand for student accommodation is higher than ever. The total number of students across the UK opting to pursue higher education has increased by 9% with nearly 200,000 more heading to university each year. With 107,000 less rental homes across the UK market since 2016 and only 660,000 purpose-built student accommodation homes available, there is a clear need for more PBSA. Co-Founder of UniHomes, Phil Greaves, said: “Rental affordability is already an issue for many at university and the cost of renting is the largest outgoing that many students struggle to cover. Should stock levels continue to decline while demand increases, the cost of renting is likely to climb higher, causing rents to increase as well”. So effectively, we desperately need more PBSA schemes to be built to help keep up with demand.
  • Nationwide: Average house prices reach highest on record – Last week we had Hometrack’s house price index report that showed annual UK prices were up +4.3% and now it looks like Nationwide are singing a similar tune by reporting that average house prices in February have reached the highest figure on record at £231,061. Their latest figures show that house prices have risen by 6.9% year on year. That is a stark contrast to their prediction back in December that the property market would slow “sharply” over the next few months. Robert Gardner, the chief economist at Nationwide has said: “This increase is a surprise”. With the Chancellor’s Spring Budget announcement extending the stamp duty holiday and announcing 95% government-backed mortgages, I can see prices remaining strong and further proving their December predictions wrong.
  • Rent slump in London sees ‘record drops’ says latest HomeLet report – There are always two sides to every story and in the case of how the Covid pandemic has affected the rental market this is certainly the case. HomeLet, which says its index is the most comprehensive measure of rents in the UK, says rents outside London have shot up by 6.2% pushing the average rent up by £151 a month to £840 per tenancy however rents in the capital dropped by 4.7% over the same period which is the highest rate of decline ever seen. With the city partly shut down due to the pandemic, there has been a mass exodus of the 20-something-year-olds from the capital, many of whom has chosen to return to their parents to work from home which is a big factor driving down rents rapidly. One tenant that The Negotiator talked to, who wished to remain anonymous, said they had secured a two-bedroom flat in North London for £1,650 a month that had previously been rented for just shy of £2,000. Worrying as this sounds for London landlords, I personally believe that once the capital gets back to full normality there will be a surge of demand back into the city and the rental market will pick back up.

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.

CategoriesWeekly News

Weekly Property News Round Up – 27.02.21

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.

Ep 14: Rental Market Outlook and Predictions – The latest episode 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 weeks 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
  • Tenant demand hits a five-year high, but regional disparity grows – Paragon Bank’s latest research has found that the level of tenant demand is up from 29% on the previous quarter and has reached a 5 year high making it reach the highest level since Q1 2016. Even though there is clear tenant demand across the country, the levels vary regionally. 58% of landlords in the South West reported growth in tenant demand, compared to just 10% in central London. Other strong regions included the West Midlands (48%), Wales (44%) and the South East (42%). Homelet’s latest Rental Index data shows that the average rent in the UK is now sitting at £981, up by 0.2% from last month, and up 2.9% on last year. These figures suggest that there is clearly a need for more rental properties and extra supply is required to help stabilize the rental market.
  • Hongkongers snapping up homes in the UK to lease out – We have talked often about the surge of buyers from Hong Kong and we saw Hongkongers became the fifth-largest foreign investor in central London as of last August. However, it seems that there is now a new wave of Hong Kong buyers who are pooling money to invest, a trend property agents expect to continue as more middle-class Hong Kong residents consider leaving for Britain and look to establish a source of revenue in advance. Guy Bradshaw, head of London Residential at Sotheby’s International Realty said, “It’s become much more of a trend in the past six months or so”. With the UK government now offering a new visa to Hong Kong holders of British National Overseas (BNO) passports that give them a chance to become British citizens so a steady rental income would be useful in applying for citizenship, as the BNO holders need to prove they can provide financial support for themselves for at least six months. It is estimated that 300,000 Hong Kong residents could emigrate over the next five years, and Bank of America expects Hong Kong residents moving to Britain could trigger capital outflows of US$36 billion in 2021.
  • Mohamed Salah copying fellow hero Robbie Fowler with property investment – As I am a Liverpool FC fan, it was only right that I highlighted this article that references two Liverpool legends investing in property. It is renowned that ex-Liverpool footballer Robbie Fowler has done very well by investing in property and he owns a multi-million-pound property portfolio. It looks like Salah has seen the lucrative potential of the property and has launched two real estate companies and has £2million invested in bricks and mortar in a separate holding company. Being the competitive player that he is, Salah has set out to splash out on a portfolio to rival Fowler’s after launching MOS Real Estate and lettings business Trinity Kensington within the past 12 months. As a property investor and Liverpool fan, I wish him the best of luck.
  • Stamp Duty Holiday extension agreed – but is it a new cliff edge? – According to The Times, Chancellor Rishi Sunak will extend the stamp duty holiday deadline until the end of June which will be a three-month extension. The finer details have not been provided and it isn’t clear whether the extension is three months for all current and new buyers of properties up to £500,000, which would just create a new cliff edge, or whether it would be a ‘tapered’ extension only for current buyers. There are mixed responses to this news, some in the industry are happy as it could help another 300,000 deals go through and some think it is a bad idea that will just lead to delaying the pain to a new batch of buyers. Until we hear it come from Rishi’s mouth and know how the extension is going to work, I am reserved to pass judgment at this stage.

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.

CategoriesWeekly News

Weekly Property News Round Up – 20.02.21

We hope you have all had a good week and are looking forward to the weekend, I know we are. This week has been a very busy one and flown by.

It’s not long now until Boris Johnson delivers his roadmap leading us out of Lockdown 3.0. Hopefully, we have a clear and positive outlook after his announcement. We will be tuning in to it next week for sure.

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.

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Ep 14: Rental Market Outlook and Predictions – The latest episode 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 weeks 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

  • Landlords back call for funds to help tenants with arrears – Well something must be in the air at the moment as this is the second positive landlord article that we have had recently. This time, landlords are backing a call by the Resolution Foundation think tank for tenant hardship loans for renters impacted by the COVID-19 pandemic. I think this is a very good idea as banning repossessions is not fixing the problem, it is just temporarily plugging a hole. It is a problem that is effecting both landlords and renters. Landlords are not going to receive rent and potentially land themselves in financial difficulty and some tenants are going to end up without a roof over their head and bad credit scores. Resolution Foundation is calling for an urgent financial package to pay off arrears since lockdown measures started last year. Fingers crossed, this can get some traction to help the tenants in need.
  • New lender EPC requirements could create ‘new cohort of mortgage prisoners’, IMLA warns – Sometimes, just sometimes, the government have ideas that make you think, do they have any idea what they are doing? A new government consultation has proposed that lenders should annually disclose the average EPC rating of all properties they lend against. The Government hopes that the measures could allow comparisons to be made between lenders and provide a picture of how energy performance could influence lending decisions. Without going into too much detail, in short, I don’t believe this will have the desired effect they are hoping for and would cause more issues than good. The Intermediary Mortgage Lenders Association (IMLA) say the proposals risk creating a “time-wasting paperchase” that will not achieve the desired results and could create a new cohort of mortgage prisoners trapped in less efficient homes. In its response to BEIS, IMLA said it was concerned that the compilation of an energy efficiency “league table” could cause lenders to base their lending decisions on a property’s energy efficiency, rather than on a borrower’s needs. Let’s hope the government sees sense in that idea and put it back in their box of ‘bad ideas’.
  • This year the property market will once again confound the doubters – This article is a piece from Russell Quirk who is a quite well-known figure in the property industry and here he gives his opinion on what the property market may do this year. Last year, he was one of very few that said the housing market would not go down when the pandemic really took off in the UK (for the record, I also said the same). This year, he is backing the housing market again and he thinks that “Prices will continue to rise during February and March. The stamp duty holiday will ensure this and, if Rishi does indeed extend the relief by six weeks this will further sure-up values for longer. But when, ultimately, the tax is fully reinstated there will be a stumble in price growth and in transactions – quite obviously. But this will be very short-lived”. His reasons as to why a slight dip will be short-lived are very similar to what Nick and I have been saying. It is an interesting article so I recommend giving it a read and making your own conclusion and prediction. We love having these discussions so always feel free to reach out to us and let us know what you think.
  • TSB and Vida slash buy-to-let rates – It is often a positive sign when lenders begin to start reducing their rates and becoming more competitive as it can give an indication that they are confident in the market. TSB have made multiple changes and reductions, for example, the two-year fixes in its 60% and 75% loan to value (LTV) tiers have been cut by 30bps. Vida has also reduced its Vida 1 range of buy-to-let products by up to 50bps with two-year fixes now at 2.99% for 70% LTV. This highlights confidence coming back to the market from lenders along with the fact that if you are due a remortgage or buying with a mortgage, it is a good time to shop around for good rates and offers.

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.

CategoriesWeekly News

Weekly Property News Round Up – 13.02.21

The latest quarterly rental market Hometrack report shows that average UK rents (excluding London) have jumped up by 2.3% in 2020 which is up from 1.6% annual growth in the previous quarter. The rental growth is underpinned by the continued rise in demand and constrained supply. Demand is up 21% year on year in January and at the same time, the supply of homes available to let fell by 11% over the same period.

We are going to be talking about the rental market next week on our podcast so tune in if you want to hear more about how it is currently performing and our predictions on what the landscape might look like in the future rental market.

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 13 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 weeks 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
  • ‘Largest-ever’ investment announced to remove unsafe cladding – On Wednesday, Housing Minister Robert Jenrick provided some positive news for the cladding saga by announcing the UK Government’s further plans to remove unsafe cladding by investing an additional £3.5 billion. He has promised that the funding will ensure leaseholders in England in high-rise buildings above 18 metres will bear no costs in order to make them safe. With the cost to leaseholders in lower and medium-rise blocks of flats potentially still being significant, he announced the UK Government will develop a long-term low-interest scheme to protect leaseholders for cladding remediation in buildings between four and six stories high to help tackle this issue so leaseholders will not pay more than £50 a month towards the removal of unsafe cladding. In November 2020, the government announced that the EWS1 form is no longer required for owners of flats in buildings without cladding to sell, rent, or re-mortgage a property and they are asking lenders to strongly support this and Wednesdays decision to help the market move forward. There are many people that have been affected by this at no fault of their own and I am really pleased to see this moving forward in the right direction.
  • UK new build house prices surge 48% since 2015 – According to HouseScan, new build homes continue to be seen as a good investment opportunity. HouseScan founder Harry Yates noted that “despite the problematic landscape created due to COVID-19, the new build market remains a strong investment for UK homeowners, with values continuing to not only climb but doing so at a far greater rate than existing bricks and mortar”. Their research found that new build property prices overall across the UK have jumped 27% since 2015, outpacing the 20% increase seen across the regular market. Yates went on to say that “While an initial investment in a new build property will require homebuyers to pay a premium, it’s worth every penny in the long term”.
  • Two new property taxes announced by Housing Secretary – The first article was about how the government is going to financially support those affected by the cladding issue and this article is about how they are aiming to pay for it. The government has given details of two new taxes to provide funds to address the cladding problem with the first being called a Gateway 2 developer levy. This will be targeted and apply when developers seek permission to develop certain high-rise buildings in England. The second will be a new tax for the entire UK residential property development sector and will raise at least £2 billion over a decade. A statement from the Ministry of Housing Communities and Local Government said “The tax will ensure that the largest property developers make a fair contribution to the remediation programme, reflecting the benefit they will derive from restoring confidence to the UK housing market. The government will consult on the policy design in due course”. This is good that the developers are going to be taxed and not purchasers but the question will be if the developer will then pass this cost on to them in some shape or form?
  • Britain losing reputation as home-owning nation as more than third of population renting – This is something I mentioned last week in the BTR article as I said it seemed the trend was switching to a more European style of renting over buying. The number of owner-occupied properties has fallen from 66% to 64% of the market in the past 10 years with rising prices being one of the reasons as people (mainly young adults) struggle to get on the housing ladder. You might think 2% is not a massive drop but to put that into context, that is around 2.3 million people renting rather than owning their home. It would also seem the trend is shifting to people preferring the freedom that renting provides as it enables them to live in areas they could not otherwise afford to live in and they are not stuck in one place either giving more flexibility. It also means that more rental stock is going to be needed to meet the demand which I suppose is good news for landlords and investors.

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.

CategoriesWeekly News

Weekly Property News Round Up – 06.02.21

We have made it through our first full month of 2021 and the year is now well and truly underway. With the stamp duty holiday nearly a month away from ending we expect to see the rush to purchase slow down as people realise that they are highly likely to miss it.

You may have seen that MP’s debated a stamp duty holiday extension in the House of Commons this week. However, no decision was made and as it stands, the date it ends is still March 31st so it seems that property buyers may have to wait until the next Budget to find out if there will be an extension or any changes.

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 12 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 weeks 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
  • Prime property remains robust throughout pandemic – New client-data data from Coutts (wealth manager and private bank) shows that the UK’s prime property market is evolving rather than suffering through the pandemic and there has been a rise in buying activity in main homes, second homes and investment properties. Outside of London, which remains the UK’s largest prime market, the south east was the most popular for new mortgages for main homes, particularly Kingston upon Thames, Guildford and Oxford. The data also suggests that demand for staycations is increasing with more people most likely to be looking for a ‘home away from home’ to provide a change of scenery during the lockdown. Holiday homes saw the biggest increase in purchases during 2020 with an increase of 43% with the south east, south west, West Cornwall and Gloucester being the most popular places. Again, we can see another example of buyer trends changing due to the pandemic. Long-term, the bank believes the momentum seen towards the end of 2020 will continue throughout the year ahead, largely down to social changes and a favourable macroeconomic environment. Alan Higgins, chief investment officer at Coutts said: “Firstly, the uncertainty with respect to Brexit is largely in the past. Secondly, we expect a V-shaped economic recovery as the vaccine distribution progresses. And thirdly, we should see the release of pent-up demand from buyers and sellers who put plans aside during lockdown.”
  • Build to Rent building momentum – You may have seen us talk about the emergence of the Build to Rent sector in the past and it isn’t slowing down. BTR remains the fastest growing sector with thousands of developments currently under construction across the country, and this trend looks set to continue in 2021 and beyond. BTR completions are estimated to double by 2025, according to a forecast from BTR specialist agency, Ascend Properties. Landlords and Investors may be thinking, ‘I can’t buy these properties so what has it got to do with me?’. Well, this surge in BTR shows that there is a clear demand for rental properties otherwise these big institutions and developers would not be pumping a lot of money into building these schemes. It also shows how the trend from owning a home is switching to a more European trend of renting. We have also seen a shift to developments including desirable amenities for tenants such as gyms and concierge services. So this should give confidence to investors that there is going to be demand for high-quality rental properties for many years to come.
  • Generous landlords praised for discounting rent to tenants – It’s not often that landlords receive praise in the press so it has been nice to hear a heartwarming story like this. Many people are struggling at the moment and it is nice gestures like this that go a long way and mean so much to people. Sulets in Leicester announced on January 21 that it would give “a substantial rent discount” to all student tenants, equivalent to roughly four weeks rent and they proposed that the discount would be funded from its own surplus but numerous landlords have now contributed to the scheme out of their own generosity. A statement from Sulets says: “This is welcome news for all stakeholders and promotes landlords in a more positive light, particularly with endless negative press regarding landlords over the years. Sulets would like to thank all landlords who have been in touch and donated to the discount scheme. It goes hand in hand with the Sulets mission and values to raise student housing standards while being fair and transparent”. Also, Unite Students, the UK’s largest manager and developer of purpose-built accommodation for the student sector, is extending its 50 per cent rent discount scheme across the country until March 8.
  • New build delivery tumbles – 30,000 fewer homes built last year – Property developer StripeHomes has revealed the level of new homes reaching the market has fallen by more than 32,000 across England year-on-year. This decline in delivery has been seen across the whole of the UK, with all regions seeing a lower level of new homes completed compared to the previous 12 months. The South East has seen the largest year-on-year reduction in new housing stock with 7,170 fewer than the year before. The pandemic can’t be solely blamed for this shortage as we have been missing the quota needed for numerous years. James Forrester, managing director of StripeHomes, says “there are many that believe the big housebuilders have used the pandemic as a smokescreen, to detract from their usual practices of land banking in order to increase profits. Having drip-fed stock to the market for many years now, there’s no reason to believe this practice would have changed in the last year and the issues that have faced the sector provide them with the perfect excuse to continue”. Estimates have put the number of new homes needed in England at up to 345,000 per year and to put into context how much we keep missing these targets, In 2019/20, the total housing stock in England increased by only circa  244,000 homes. It is a near-impossible task to fix this crisis and one of the main reasons that the property prices are likely to continue rising.

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.

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