We have Boris Johnson back at the helm and he has said that the UK has ‘past the peak of the outbreak’ which is great news. Following this announcement, we are now shortly due to get the government’s comprehensive plan for easing lockdown and restarting the economy which will no doubt have a positive impact on the property investment market.
We also had Hometrack’s most recent report this week that has some interesting data which you will see below. We really recommend taking a look at the full report as there is some excellent information which is impossible to summarise in this email.
So let’s take a look at the media headlines that we have found insightful this week:
Property news this week
Hometrack Report: March 2020
The latest Hometrack report helps to give us a good insight into the early impact of COVID-19 on the property market. It explains that there is a huge pause on property transactions with a combined estimated value of £82bn. Demand fell over March (which is to be expected) but has begun to increase over recent weeks. Annual house price growth actually increased 1.8%, this may of course change in the April report so this will be interesting to see. We feel that if house prices do go down in April then it won’t be by very much and we would be surprised if it surpassed 1%, let’s check the next report and see.
This is a great article that looks at and compares the current mortgage rates on the market. The 70% LTV 2 year average fixed rate is the only rate to actually decrease since 1st April and stands at 2.78%. The most appealing average rate is still the 2 year fixed 60% LTV mortgage at 2.39%. The Mortage Works offers the lowest rate with their 65% LTV 2 year fixed product offering 1.19%. This article is definitely worth a look, especially if you are currently looking at purchasing a property investment with a mortgage or a remortgage.
ARLA’s CEO David Cox is predicting that once the lockdown is eased, we will see a major release of pent-up demand in the rental sector. They are foreseeing that the first Friday out of lockdown will be one of the biggest moving days in the lettings industry’s history. We have been hinting for a while that there will be a surge in demand for rental properties post lockdown and it will be interesting to see if this has an upward effect on rental prices.
The Royal Institute of Chartered Surveyors (RICS) has confirmed that it is preparing a new set of guidelines for valuers across the UK to enable home valuations to restart safely meaning that the secondary housing market could be back up and running in just a few weeks. The government advice still remains that you should not move unless it is into an empty home but this is a step in the right direction and could see more mortgage products come back to the market with lenders being able to carry out physical valuations.
Knight Frank has reported that COVID-19 and lockdown will result in 56,000 fewer homes being delivered in the UK this year. The UK has struggled with a shortage in supply of new homes for numerous consecutive years now, always missing the government’s target of 240,000 new homes per year. This is going to put even more strain on the supply and demand problem and while supply is considerably lower than demand, we might see house prices remain strong and even increase. The lack of new housing being built won’t be great news for the government as they are constantly under pressure to deliver the quota of new homes needed.
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Team Track Capital