Category: Weekly News

CategoriesWeekly News

Weekly Property News Round Up – 30.01.21

By Tobi Mancuso,

This week we have had our first Hometrack report of 2021 released and it seems that the property market is showing no signs of slowing down with Lockdown 3.0 adding more fuel to the fire. The data shows that annual UK house price inflation grew +4.3% with Wales and the North West having the highest increase at +5.4%. Liverpool has jumped to the top of the city rankings coming in at +6.3% over the last 12 months and Manchester was close behind with +6.0%.

The North of England really is flying at the moment and the growth rate hit a 10 year high in northern English regions. The growth is running at the highest rate since before the global financial crash.

It looks like the latest lockdown is causing even more of a supply issue which is increasing the imbalance between supply and demand. Demand for homes is up 13% on this time last year, with new sales agreed also up 8%, however, the flow of new supply onto the market is down 12% on last year. London is the only region to register more supply.

With the supply down and demand up, this year seems to look as if it will carry on where we left off in 2020.

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 11 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
  • Government changes model tenancy agreement to help renters with pets – It is official, the government have now updated their standard tenancy agreement template to enable renters to keep pets as default. Under this new Model Tenancy Agreement (which is the recommended contract), landlords are no longer able to issue blanket bans on pets. Landlords will have to object in writing within 28 days of a written pet request from a tenant and provide a good reason as to why owning a pet could be impractical eg smaller property, flats etc. To ensure landlords are protected, tenants will continue to have a legal duty to repair or cover the cost of any damage to the property. Of course, to what extent this contract will actually be implemented is unknown as it is of course only ‘recommended’ and not requisite.
  • A third of agents saw rents increase in December – ARLA Propertymark’s Private Rented Sector (PRS) Report has revealed that circa 30% of tenants experienced rent increases in December. Similar to the sales market, demand was up and supply was down in December in comparison to the previous year. It is the first time that this figure has risen in four months. With a supply and demand imbalance, it is imperative that property market conditions are not worsened for investors because if more landlords leave the market and fewer investors are buying then that puts a strain on supply even more which won’t be good as a lot more PRS homes are needed.
  • Half of conveyancers want SDLT scrapped – It looks like the majority of conveyancers aren’t fans of the stamp duty land tax and want it scrapped on property purchases under £500,000 if the government ends the SDLT holiday on 31st March. A poll carried out by Index West Midlands revealed that 51% feel this way and around a quarter of conveyancers believe a gradual reintroduction of stamp duty is preferable to an overnight return to the stamp duty charges if the government sticks to its plan to end the holiday on the 31st March. If you read these weekly newsletters frequently then you will know a call for an extension has been happening for a long time because some people in the industry feel sales will slow down or even come to a standstill completely. While I am all for a review and change to the archaic tax that is stamp duty, I don’t feel not having an extension or immediate change to stamp duty will cause the market to crumble. However, I do think an extension and/or a change (for good) would only benefit the property market as a whole going forward. But, if you were the government trying to recoup the deficit they find themselves in trying to keep the economy afloat, would you want to get rid of the tax that brings them in £11.6 billion a year?
  • Five most common problems of why UK property purchases fall through – I chose this article this week as it is informative and a great one to read if you aren’t too familiar with the buying process. With the English property buying process, until you exchange contracts there are multiple reasons why a property can fall through i.e the sale or purchase does not happen. This can mean people lose money and it can be very stressful. According to property platform WiggyWam, a quarter of house sales fall through every year in the UK – an estimated 225,000. This costs UK home-buyers £607m every year. This article highlights the top 5 reasons why that might happen which are: difficulties with the mortgage, delays in the legal process, home survey discovers problems with the property, gazumping (seller takes a higher offer from someone else) and if a property sale is part of a chain. So what is the point of highlighting this? Well if you get to know what the most common issues are then you can plan ahead, get your self in a position where these are unlikely to happen or reduced and therefore help mitigate the risk of a fall through as much as possible. As we always point out at Track Capital, with any property investment (or investment in general) there is risk and it is best to reduce that risk as much as possible. One risk with property is a fall through. Luckily, with most of the property investments we market to investors, these top 5 fall through issues are minimised. Gazumping can’t really happen as the properties are off-plan and you pay a reservation fee to secure the property. The home survey discovering problems is massively unlikely to happen as they are new builds. The property sale being part of a chain won’t happen as the property is new so will be empty. Delays in the legal process are minimal as they are new so pretty straightforward. The only one that is likely would be difficulties with the mortgage and this is something you can help reduce beforehand by seeking good advice prior to purchasing.

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 – 23.01.21

By Tobi Mancuso,

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.

Episode 10 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
  • Stamp duty holiday extension – MP calls for action after debate is postponed – There have been growing concerns that the abrupt end of the stamp duty holiday could see property transactions nose dive and an online petition passed the 100,000 signature threshold to trigger a discussion in the House of Commons. However, sittings in Westminster Hall, where petitions debates take place, will be suspended until further notice, due to the Covid-19 outbreak and the chair of the Petitions Committee Catherine McKinnell has called on the government to urgently make plans to restart petitions debates. Rishi Sunak is coming under constant pressure to extend the deadline and avoid a stressful house moving “completion chaos” frenzy. With the debate postponed and no real signs of Rishi succumbing to the mounting pressure, it is hard to see this changing. If it doesn’t, will it really cause chaos? I am not totally convinced, yes there will be clients trying to get transactions completed, but based on monetary reasons, I don’t think the majority of buyers are going to sacrifice a sale or purchase for stamp duty unless you are saving the highest amount of £15,000. We will see.
  • Government unveils green standards – The government is definitely taking climate change very seriously and by 2025 new builds will be expected to produce 75-80% lower carbon emissions compared to current levels. Existing properties will also be subject to higher standards such as a significant improvement on the standard for extensions, making homes warmer and reducing bills along with the requirement for replacement, repairs and parts to be more energy efficient. Christopher Pincher, housing minister, said “The radical new standards announced today will not only improve energy efficiency of existing homes and other buildings, but will also ensure our new homes are fit for the future, by reducing emissions from new homes by at least 75%. This will help deliver greener homes and buildings, as well as reducing energy bills for hard-working families and businesses”. It is great to see this enthusiasm and action being taken which is a step towards their aim of achieving net-zero emissions by 2050.
  • One in five landlords unprepared for end of interest tax relief – Since April 2020, landlords are no longer able to deduct any of their mortgage expenses from rental income to reduce their tax bills and Instead, landlords will receive only a tax-credit, based on 20% of their mortgage interest payments. It is a tax change that caused the seismic shift to more investors purchasing properties using a limited company. The major detrimental effect with this tax change is that it will push some landlords into the higher tax bracket because they now have to include income money they have actually paid out in interest payments as part of their earnings. Also, since April 6, 2020 there have been changes to how landlords need to declare and pay Capital Gains Tax meaning anyone who disposes of a UK residential property that is not their main home and make a capital gain where there is tax to pay, now need to inform HMRC and pay the tax due within 30 days of completion. According to the Property Master survey, over 40% of landlords were unaware of this. If you are a landlord unsure of these new changes then we strongly recommend speaking to an accountant to know where you stand.
  • Boost for investors as mortgage choice improves across Buy To Let – Moneyfacts, who is an independent financial service market monitor, have found that after two months of small increases, investors now have the highest number of deals to choose from since March 2020. This will be encouraging news with 1,976 BTL products now on offer. Investors with lower deposits will also be pleased to hear of the return of the higher-risk 80% LTV bracket. Moneyfacts did encourage an air of caution with in-house finance expert Eleanor Williams saying their “data reflects the fact that the market remains volatile since the start of the New Year. Lenders have been adjusting their offerings and consequently, availability continues to fluctuate”. It would also transpire that average rates across the LTV tiers are all currently in excess of their equivalents year-on-year. Williams also thinks that the recent research from Hamptons reporting prospective tenant numbers in December 2020 outstripping 2019 levels while the number of available rental homes dropped everywhere outside of London may lead to a rise in rental growth that may outstrip house price growth. She goes on to say “This seems to confirm that there is cause for optimism and that despite the knocks of recent years the BTL sector has a vital place in our recovery”.

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 – 16.01.21

By Tobi Mancuso,

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.

Property news this week

  • Gatehouse Bank sells property portfolio to Goldman Sachs for £150m – It seems that one of the leading global investment banks has seen the strength and potential in the UK’s private rented sector. Goldman Sachs sealed the deal on Gatehouse’s Thistle Build to Rent property portfolio comprising of 918 units across 15 sites, predominantly two-and-three-bedroom homes across North-West England in Greater Manchester and Liverpool. Charles Haresnape, chief executive of Gatehouse Bank, said: “Thistle has not only been a high performing investment throughout, it has also proved resilient during the Covid-19 pandemic, which is a key consideration in this market”. Gatehouse now plans to go again with the creation of another fund in 2021 to grow its single-family PRS portfolio to more than 3,000 units over the next five years which demonstrates their confidence in the market.
  • Scrapping of S21 and new transferable deposits likely “very soon” – Kelly Tolhurst, a minister at the Ministry of Housing, Communities and Local Government, has announced that the long-awaited Renters’ Reform Bill is likely to be introduced to the House of Commons “very soon”. The Bill was announced in the Queen’s Speech of December 2019 and is set to include the scrapping of Section 21 which will abolish no-fault evictions and the start of the concept of lifetime deposits transferable from one property to another when a tenant moves. This is one of many Bills pushed back as Parliamentary and civil service time was occupied by Coronavirus and, until recently, Brexit.
  • London office market sees strong end to 2020 with close to £5bn of transactions in Q4 – Although the London residential market has had a tough time lately, the city’s office market has seen a strong end to 2020 with momentum predicted to continue into this year. Knight Frank say that the London Office market’s strong underlying fundamentals along with pent up investor demand resulted in the strong end to the year with several deals closing in December resulting in £2 billion worth of transactions in that month alone. One of those deals was Allianz’s £400m purchase of a 75% stake in a British Land portfolio. Knight Frank suggest that opportunistic investors will target assets in the City and West End given that London’s office yields outstrip most major European gateway cities. Faisal Durrani, Head of London Commercial Research at Knight Frank said, “Following news that the UK has secured a deal with the EU and as the UK’s vaccination programme gathers pace, we expect even greater confidence to return to the market. In fact, the heightened demand for London assets has prompted yields to tighten in the City by 25 basis points to 4%, while the West End and Docklands remain stable at 3.5% and 4.75%, respectively”. This once again shows London’s resilience and versatility in times of uncertainty.
  • PBSA operators must provide a student-first solution to match soaring demand – The purpose-built student accommodation (PBSA) market is one that had faced uncertainty with the COVID-19 pandemic but it seems that this is one sector which has seen outsized recognition from global investors throughout. PBSA investment volumes have fared better than other established real estate asset classes and the appetite to increase investment shows no signs of slowing. The underlying fundamentals of the PBSA market have highlighted the stability of the sector against all odds. UCAS data showed, in spite of the pandemic, applications in October 2020 from non-EU international students increased by 20% compared with last year, and the UK now also offers one of the longest post-study work visa systems in the world so international students can remain in the country for two years after graduating. It is the international students that really add strength to this market with their high demand and as they often possess greater accommodation budgets. While the student experience has taken a hard hit with students having to quickly adapt to being taught and socializing almost entirely online, demand has continued to soar. A recent Unite Students and Opinium survey showed that 93% of students would continue to live in student accommodation rather than at home (if allowed) from January. Covid-19 has shifted the priorities of students, combined with a high quality of service and flexibility, PBSA models are fast emerging to be the accommodation of choice and offer clear advantages over houses in multiple occupation (HMO) style accommodations. If you would like to know more about PBSA and the investment opportunities that it offers then please feel free to get in touch with a member of the team who will be happy to run through it all.

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 – 09.01.21

By Tobi Mancuso,

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.

pure property podcast

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.

Property news this week

  • Government introduces first leasehold reforms – I am really pleased about this and I hope that is the first of more to come. These new reforms mean that millions of leaseholders will be given the right to extend their lease by a maximum term of 990 years at zero ground rent. Under current rules, leaseholders can only extend their lease once for 50 years with a ground rent whereas leaseholders with zero ‘peppercorn’ rent can extend as often as they like for 90 years. Today’s changes mean both house and flat leaseholders will now be able to extend their lease to a new standard 990 years. What does this mean for leaseholders? Well, it means that any leaseholder who chooses to extend their lease on their home will no longer pay any ground rent to the freeholder and for some leaseholders, these changes could save them tens of thousands of pounds. A cap will also be introduced on ground rent payable when a leaseholder chooses to either extend their lease or become the freeholder. This is the first part of a package of reforms recommended by the Law Commission of England and Wales last summer. In a statement, the government says it will bring forward a response to the remaining Law Commission recommendations, including commonhold, in due course.
  • Eviction ban extended in England and Wales – The ban on bailiff-enforced evictions for private renters has been extended in England and Wales and will now be until February 21st “at least” according to Housing Secretary Robert Jenrick. Landlords or agents acting on their behalf will still be able to enforce possession orders if tenants are more than six months in arrears irrespective of when the arrears accrued and therefore no longer have to pre-date Covid; however, these will go to court but cannot be enforced by bailiffs. There are still exceptions to the ban such as cases of domestic violence and anti-social behavior where bailiff-enforced evictions can take place. The government has also announced a further initiative for the private rental sector whereby they will introduce a new mediation pilot which will offer mediation as part of the possession process to try and help landlords and tenants to reach a mutual agreement and keep people in their homes. They hope this will enable the courts to not be clogged up and prioritize urgent cases.
  • Almost half of BTL landlords remain optimistic despite potential tax hikes – So it seems with everything that has been thrown at landlords, tax hikes, and global pandemics, they are still wanting more with almost half of those who invest in the private rented sector remaining optimistic going into 2021. In a recent survey released by Property Master, 45% of landlords are confident about the buy-to-let market and only 10% of the landlords surveyed by Property Master planned to exit the buy-to-let market in 2021 and almost 70% said they were not about to sell any of their properties in the new year. Around 43% of landlords said they planned to buy more property in 2021 which further cements how the buy-to-let sector as a whole is resilient and those that came out the other side of a turbulent 2020 year may well be stronger and more confident going into this year.
  • Rents shoot up in South of England – Research from Homlet shows the cost of renting has risen in the South of England which could be a sign of more people moving out of the city of London with the cost of renting there down by 4.5% to £1,556. Rents have risen by 10% to £942 in the South West, by 7.7% in the East of England to £983, and by 6.1% in the South East to £1,085. Andy Halstead, chief executive of HomeLet, said: “At a national level the latest data shows a continuation of the trends we’ve seen emerging since the national lockdown ended, with rents for new tenancies increasing across the UK, with the exception of London”. Renters seem to be moving out to commuter towns looking for more space both inside and outside the property.

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 – 20.12.20

By Tobi Mancuso,

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.

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.

Property news this week

  • UK Property Boom Will Last Another Year, Rightmove Says – Rightmove, one of the UK’s biggest property portals, are being very optimistic when it comes to their prediction for the 2021 UK property market. They believe that the surge in prices will continue into next year as housing needs outweigh economic uncertainty. They predict a 4% increase in house price growth in 2021. Currently, there is a logjam of 650,000 properties in the market, with prices up 6.6% compared to this time last year, the property website said. They see Q1 being busy as people hurry to take advantage of the stamp duty holiday that ends in March and that cheap mortgage rates will attract first-time buyers and fuel activity. Tim Bannister, a director at Rightmove said, “Pandemic-related uncertainties have been around for nearly a year, and Brexit uncertainties for far longer, and record activity month after month has proved that movers are willing and able to act on their new or existing housing priorities”. Let’s hope their prediction is right. Nick and I have made our own predictions so if you want to see what we said then tune into our podcast episode next Wednesday 23rd December.
  • UK homebuyers looking for ‘fancier’ amenities amid COVID-19 – Research from Good Move has highlighted that Brits are now turning away from practical home features and towards more lavish amenities as a result of the COVID-19 pandemic. They reported that searches for apartments with a balcony shot up 147% compared to 2019 (the highest increase for any property feature) suggesting that buyers are looking for more outdoor space brought on by the impact of the pandemic. In addition to balconies, apartments with hot tubs (139%), and houses with tennis courts (127%) or swimming pools (109%) saw the biggest increase in searches. Meanwhile, driveways (up 106%), conservatories (101%) and double garages (77%) saw smaller increases. In terms of the type of houses, the most popular searches with the biggest year on year growth were two-bed houses and the cities with the biggest growth of homebuyers searching are Bradford (up 52%), Liverpool (51%), Sunderland (48%), Preston (45%) and Newcastle (42%). Good Move director Nima Ghasri said, “Against all odds, this year has positively impacted the UK housing market and completely transformed the way buyers and sellers look at properties”. I find it very interesting to see just how quickly this pandemic has caused consumers/buyers behaviour and trends to change. So if you are selling property next year and what to get the most interest, make sure you have a balcony or a hot tub….or both!
  • Madness! Government refusal to extend SDLT holiday provokes anger – Well, Bah Humbug! The government has taken on the role of Scrouge this year and refused to extend the stamp duty holiday leaving agents and property experts very angry. The government has told campaigners that it “does not plan to extend the relief” beyond March 31 next year. Even TV property expert Phil Spencer expressed complete exasperation at the government’s refusal tweeting “The stamp duty holiday has been successful in activating the market. Ending on a cliff edge will create utter chaos! Surely it can be phased out? Timescales on deals slip more often than they don’t. The motivation behind people moving could disappear in a single day. Utter madness!”. This is not ideal, however, it is not the complete end of the world. Yes, some transactions may fall through because of it but I think closer to the time, the majority of people that might miss the deadline will swallow it and carry on.
  • Landlords urged to ‘come clean’ with undeclared rental income as HMRC scrutiny rises – Shenward, a Yorkshire-based firm of chartered accountants and business advisors, has noticed that HMRC officials are increasingly pursuing individuals they believe may be underpaying income tax. They have seen an increase in enquiries from landlords who have received warning letters from HMRC. The HMRC has previously estimated there are 1.63 million private landlords in the UK but only around 500,000 regularly file tax returns. In 2019, HMRC found 11,129 landlords either under-paid or failed to pay income tax on rental income compared to 8,704 in 2018. HMRC has the power to collect information from estate agents, mortgage lenders and local authorities and can use this to pursue those they suspect of avoiding tax. Tax officials can launch a financial investigation going back 20 years and impose substantial penalties and back-dated interest on the tax owed. Sherad Dewedi, a managing partner at Shenward, said “We understand that in recent years some families may have become buy-to-let landlords almost by default due to bereavements or children going off to university but even though they may not consider their rental property a business as such doesn’t mean this shouldn’t be declared and any taxes paid. Our advice is: ‘Act now’.”

Have a merry Christmas and a Happy New Year! I’ll see you in 2021.

CategoriesWeekly News

Weekly Property News Round Up – 13.12.20

By Tobi Mancuso,

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.

CategoriesWeekly News

Weekly Property News Round Up – 05.12.20

By Tobi Mancuso,

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.

 

 

 

 

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CategoriesWeekly News

Weekly Property News Round Up – 28.11.20

By Tobi Mancuso,

Property news this week

  • Landlords excelling as buy-to-let payment holidays in the minority – Only 8% of landlords have applied for a ‘mortgage holiday’ with 94% saying they have no plans to apply for one either which is great to hear, especially when you consider the millions of people that have taken residential deferrals during COVID-19. This article also highlights that the Financial Conduct Authority (FCA) has outlined additional support for borrowers with the payment deferral scheme extended for a further six months for buy-to-let and residential mortgage holders which is going to be great news going into the winter months.
  • Stamp duty holidays don’t help the market, claims tax expert – This is an interesting piece from EAT covering the opinion of David Hannah, a tax expert. He refers to previous times of economic crisis where stamp duty holidays have not done much to get the market moving again and he sees it as a poor tool for managing market behavior. I get what he is saying but I think he is missing the point that the stamp duty holiday is only a piece of a larger puzzle that is used to help the housing market and has been used in this instance to help keep it going due to the severity of what the government saw us facing. In hindsight, it probably wasn’t needed as demand has played a pivotal role in keeping the housing market strong but if the government had a crystal ball, the whole COVID-19 fiasco wouldn’t be as bad as it has been. A good point David does make is that more needs to be done by the government to help get people on the property ladder. He also highlights that it is important that the government reviews this stamp duty holiday and either announces an extension or amends the tax payment date.
  • Government Steps in To Help Homeowners Caught up In ‘EWS1’ Process – Long-awaited good news has finally come for some of the property owners trapped in the ‘EWS1’ dilemma. An agreement has been reached between the Government and the Royal Institution of Chartered Surveyors (RICS), UK Finance and the Building Societies Association (BSA) so owners of flats in buildings without cladding will no longer need an EWS1 form to sell or re-mortgage their property. This will give the green light for 450,000 flat owners to sell, move or remortgage their homes. This is part of a wider government-led solution to support those homeowners who have unsafe cladding on their buildings and there is definitely still a lot more to do.
  • Will the 2020 housing market boom continue? – Probably my favourite article this week as it dives into what the current data is indicating and why along with Harvey Raybould’s (a property developer and investor) predictions for next year. Prices have been increasing and we know that demand, the stamp duty holiday along with a shift in buyers needs and wants have all been the driving force. We see Halifax managing director Russell Galley’s prediction that the price rise is a short-term phenomenon and that the bubble will burst soon. Nationwide also shared this view. These two tend to air on the side of caution and I can see why in this instance. In the article, a few other industry professionals are more optimistic but still predict a slowdown. Harvey’s opinion is “the over-inflated house prices cannot continue indefinitely and so at some point, around the second quarter of 2021, I believe that house prices will start to fall” which is mainly due to unemployment levels. I share the view that post stamp duty holiday and the furlough scheme, house prices will slow down, but do I think they will drop? No, not overall. Some places such as London and the South East may take more of a hit as affordability levels are already low, but in areas where affordability levels are good and the hyper-local economy is strong, I think demand will help keep prices strong. These are all, of course, opinions so it is always important to do your own research and due diligence to make up your own mind. My prediction was right about the property market when we went into the first lockdown so let’s hope I am right again.

 

Episode 5 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.

CategoriesWeekly News

Weekly Property News Round Up – 21.11.20

By Tobi Mancuso,

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.

Ep4 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.

CategoriesWeekly News

Weekly Property News Round Up – 14.11.20

By Tobi Mancuso,

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.

Ep3 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.

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

  • So Far, So Good, for Housing in the Lockdown – This article would suggest that looking at current data available, it would seem the property market holds itself in good stead and suggests that the market has plenty of momentum. The latest RICS (Royal Institution of Chartered Surveyors) survey released on 12th November showed that buyers are still keen to buy and sellers are keen to sell. RICS have eased their expectations for house-price inflation from 22% to 13%, which is still very promising. The survey was carried before the second lockdown announcement. But unlike the spring lockdown, the housing market is staying open and from my own current purchasing experience, is remaining very buoyant
  • Capital Gains Tax hike risks mass exodus from buy to let – Would the Chancellor targeting the PRS, which is the second largest provider of homes in the UK, be the smartest idea? In short, no. The Chancellor has been told that he could raise more revenue by doubling CGT and this is very alarming as it would risk forcing yet more investors to quit the buy to let sector. Can you imagine if this happened and landlords upped and left the market, flooding it with homes which would ultimately push prices downward at a time when the property sector is in desperate need of support. Ultimately, this would not be good news and as David Alexander says in the article, CGT increases would “stifle growth, discourage investment, and depress the housing market”. We await the Chancellor’s Budget announcement in March 2021 on tenterhooks.
  • Arrears and possessions low amid continued Covid-19 support – YourMoney reports that figures from UK Finance show homeowner mortgage arrears remained at historically low levels in Q3, while buy-to-let arrears rose slightly from a low base. It seems the payment holiday granted to borrowers due to the pandemic helped those in early arrears – falling less than 5% behind payments – to catch up with commitments resulting in a 5% decline in the number of borrowers in debt. Once financial support starts to phase out we may see these numbers creep up and potentially more repossessions that would lead to a bit more housing stock on the market which would then keep excessive rising prices in check.
  • Property investors plan to invest an additional £42bn by 2025 – In this piece from Property Industry Eye, they look over new research published by Knight Frank which reports that investors plan to invest an additional £42bn in the residential investment industry, including student, senior living and PRS, over the next five years, having already committed a combined investment value of £62bn across the sectors. It would seem that the appetite from investors is showing no signs of slowing and the current crisis is expected to be a catalyst for this growth. The research highlights that the residential investment sector will outperform all other real estate sectors in 2021 with 44% of survey respondents saying it will. Oliver Knight, head of residential development research at Knight Frank, commented: “The survey results echo our expectations for increased diversification within the residential investment market, with investors spreading their exposure across age groups”. Out of the respondents surveyed, only 13% currently invest across all three residential investment asset classes – student, senior living and PRS and this is set to rise to 38% by 2024 which shows that a lot of investors see diversification as key.

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

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