It really does feel like springtime now in the UK, as the weather warms up a little and the imminent lifting of Plan B restrictions seems to be giving everyone a new sense of freedom and energy.
Here at Track Capital, the office is full of zest as we expand our client base like never before, helping more people across the world make the absolute most of their property investment journey.
Now, let’s take a look at all 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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Property News This Week
- West Midland House Prices Growing Fast – The most recent e.surv Acadata house price index has shown a house price rise average of 7.7% throughout England and Wales in January. However, this does not mean an even rise in all areas. In fact, the chartered surveyor’s report reveals a substantial variation region-to-region. In the past three months, the West Midlands has experienced the most prominent growth rate, with its average property price growing by 12% year on year. This has been followed closely by the South East which grew by 10.3% in the same time frame. Growth in the North East, North West and East Midlands has been comparatively slow, with prices rises between 1.1 and 4.4% respectively. The supply shortage in the UK market combined with a lack of good stock available has hampered the ability of many who are keen to enter the market. In the meantime, housing developers are struggling to recover from the labour and material shortage brought on by the pandemic, putting even more pressure on the lack of supply of new housing for buyers and renters.
- Are Things Finally Looking Up for the Construction Sector? – The founding partner at cost consultant Alinea Materials has commented that supply pressures have eased off as they were forecast to do in Q1 2022, despite material and workforce shortages continuing to cause havoc in many areas of the property development sector. There are still issues with undersupply of workers in construction as a result of the pandemic and Brexit, which in turn is driving up wages and making it more difficult for developers to claw back the money they lost throughout the pandemic. Although there has been an increase in construction over the past couple of months, the output is still lower than it had been before the covid outbreak, which put the brakes on all areas of the economy. Conversations with some contractors indicate that labour is starting to come back to the UK from Europe, and this is something hopeful to keep an eye on going forward.
- Average UK Rents Reach 13-Year High – Data from Zoopla has revealed a worrying trend in the UK which seems to come as good news for many landlords: The average UK rent has now hit a 13-year high, with rents increasing to almost £1,000 per month as tenants struggle to meet ever-increasing price hikes, not just in rent but in energy prices, interest rate rises and national insurance increases. By the end of 2021, rents had grown by 8.3%. This has now resulted in renters spending £969pcm on average just to keep a roof over their heads and paying approximately £62 per month more than they had in pre-pandemic times. This fierce trend is actually symptomatic of a wider problem; the drastic supply-demand imbalance currently rife in the UK real estate sector which is putting pressure on all aspects of housing, from development right through to homeownership and rentals.
Mortgage Trade Experts Predict a Busy Year – Two mortgage trade experts have teamed up once again to discuss their predictions from last year and their forecasts for the year ahead. Despite having differing views on various aspects of the market, both anticipate a healthy average lending figure for 2022, suggesting that brokers and lenders will be kept on their toes this year with a constant influx of remortgages and product transfer activities. The experts anticipate a 5% increase in remortgage applications this year and almost the same rate for product transfers. This will come as lenders and brokers become more able to get on with work, unhampered by covid restrictions. This will enable them to catch up on much of the work put on the back-burner during last year’s stamp duty holiday frenzy.
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.