This was the week that we saw PM Boris Johnson announce that Britain must ‘build, build, build’ to bounce back from the coronavirus crisis. The property industry can definitely have a skip in its step knowing that the PM is fully behind it as he sets out his recovery plan with building homes and infrastructure at the forefront of his operation. These plans and the promised £5bn for it will no doubt have a positive impact on the overall property market and hopefully help generate jobs and money for the economy along with new homes to help ease the ever building demand.
The reforms that the PM announced are the most radical to the planning system since the Second World War which will make it easier to build better homes where people want to live. New regulations will give greater freedom for buildings and land in our town centres to change use without planning permission and create new homes from the regeneration of vacant and redundant buildings.
Overall, removing a lot of the frustrating and sometimes unnecessary red tape will be great news for builders and developers alike.
So let’s take a look at the media headlines that we have caught our eye this week:
- Buy-to-let landlords shift from risk management to portfolio expansion – It seems that landlords/investors are getting more confident and rather than scaling back or risk managing, they are actually building a war chest for expansion. According to this article, 30% are creating a war chest. It seems that they are looking to capitalise on an uncertain market for sellers and see if they can pick up some good deals. That said, landlords are still being cautious as lowering monthly payments is now the second most important concern when remortgaging.
- Residential purchase activity rises above pre-pandemic levels – More good news for the property market as Mortgage Brain has seen the amount of ESIS (European Standardised Information Sheet) increase and surpass pre-pandemic levels. Thus showing activity in the property market being very buoyant. Home mover ESIS generated is now 8.5% higher than before the COVID-19 outbreak and buy-to-let is 4.8% higher. This shows that activity and confidence are very much apparent.
- The top three trends in the housing market right now – Zoopla’s head of research has highlighted three main factors that are present in the UK market. 1) Demand is moderating, but still strong. This was going to happen after the immediate pent up demand was released following the property market opening back up. That said, buyer demand is still 40% higher than they were in March before the effects of COVID-19. 2) Supply is constrained. Overall supply is 15% down year on year which will likely lead to an uplift on UK prices, potentially seeing a 2%-3% increase during the summer. 3) Post-COVID moves. Lockdown has led to many homeowners or tenants reevaluating their current home situation meaning we could have a pipeline of new movers coming to the market later on down the line. This could help keep the momentum of the market going on longer than some are anticipating.
- Mortgage searches in June exceed pre-lockdown levels – This week, the mortgage market has been a great barometer for market activity with data from Twenty7Tec suggesting that there were 1.2 million mortgage searches in June exceeding the year high numbers seen in January and February that we saw as a result of the ‘Boris Bounce’. It is even more promising to see that the majority of these were for purchase mortgages which accounted for around 63% of the interest. Fixed-rate mortgages accounted for nearly all the searches, 1.16 million out of the 1.2 million, showing that people are clearly trying to take advantage and fix in the very low-interest rates on offer.
Team Track Capital