Last week we had Rightmove’s house price index and this week we have Hometrack’s and the positive theme is the same.
In short, supply has decreased and demand has increased causing large upward pressure on property prices as demonstrated below. The top 4 cities for house price growth remain unchanged and what is interesting to see is out of the top 4, Liverpool is still showing as the most affordable to buy on average, To view the full report please click here.
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.
- Zoopla: £149bn worth of homes sold in the first 15 weeks of 2021 – This article just demonstrates how busy the property market has been and how strong prices are. The £149bn worth of property sales in the first 15 weeks of 2021 equates to almost double the value of homes sold in the same period in 2020 and 2019. April has also seen the number of homes available to buy drop nearly 30% in the first half of the month compared to average levels in the same period during 2017-19 which is not good news for the increasing number of buyers looking for property. Buyer demand is currently up 27% in the year to date compared to the average levels in 2020, despite the acceleration of demand recorded during the pandemic.
- Spike recorded in number of international landlords purchasing BTL properties via limited companies – Limited companies are becoming the preferred option for many UK landlords and it seems to be the same story for international landlords as well with a 62% year on year rise. The attraction of higher levels of tax relief and personal tax saving seems to be proving very popular in general and research shows that there were a record number of new limited companies set up, with 228,743 buy-to-let firms up and running. Last year, there were a total of 41,700 buy-to-let incorporations, an increase of 23% on 2019. We are noticing more and more international landlords asking us about investing using a limited company and have seen an uptick in them going on to purchase using one. Remember, buying property in a limited company won’t be for absolutely everyone so make sure you seek expert advice before doing so.
- Liverpool leads in PBSA beds race – This is great news for Liverpool students. Across the country, we are seeing a lack of supply of purpose-built student accommodation and Liverpool is leading the way in trying to tackle the problem. StuRents research shows that Liverpool’s PBSA bed supply has increased by 1,544 in the 2021-22 academic year to date, with a 5.8% year-on-year uplift. Manchester has also seen an increase with 1,095 new beds. These figures show that investors are still attracted to the UK PBSA sector and with growth in the 18-year-old population and continued growth in international students, Britain remains a highly attractive destination for the PBSA sector. Richard Ward, head of research at StuRents, said: “In the right location, there remain opportunities for investors to deploy capital into long-term income-generating assets that are countercyclical.”
- New proposed property tax represents ‘a fair contribution‘ – Before you panic, this tax won’t effect landlords and investors, it is aimed at housebuilders/developers. The HM Treasury has launched a consultation on the design of a new tax on housebuilders designed to raise at least £2bn over 10 years to help pay for the cost of cladding remediation work and is due to be introduced in 2022. The levy would apply only to developers’ profits over £25m. Housing secretary Robert Jenrick said, “We’re making the biggest improvements to building safety standards in a generation, investing over £5bn helping to protect leaseholders from the cost of replacing unsafe cladding on their homes and ensuring industry is held to account for the wrongs of the past. This tax will strike the right balance between developers making a contribution and ensuring fairness for the taxpayer.”
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.