I hope you have had an enjoyable week. This week we have been finalising the arrangements for our appearance at The Landlord Investment Show.
Held on 5th July 2022 at the stunning venue of Old Billingsgate on the bank of the London Thames, the event will showcase an incredible range of exhibitors, plus expert seminars hosted by top UK property sector experts.
If you have an interest in buy-to-let or property investment then come along to this free event and meet us in person to discuss how we can help you on your property journey. We would love to see you there.
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 from having to click through.
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Property News This Week
- Reversing Economy Causes UK Housebuilding to Stagnate – In a report released by S&P Global’s PM Index, construction businesses across the UK have halted activity as the cost of inflation skyrocketed, making it impossible to continue with projects. Between April and May 22, output in the sector dropped 1.8 to where its current figure sits at 56.4. In the report, around three-quarters of firms surveyed reported an input price climb in May. The increasing costs of raw materials and labour are expected to cause further disruption over the coming months. According to the report, investors had been expecting a slightly higher output reading of 56.6, but a dimming of consumer confidence and anticipation that an economical depression will lower housing market demand have worked against them.
- Platinum Jubilee City Status to Boost Property Prices by £37K – Looking back on similar events such as the Golden & Diamond Jubilees and the Millenium competition, we can see a very clear positive trend emerge. Each of these celebrations saw towns in the UK upgraded to city status, which then resulted in marked capital growth for properties within every area affected. For example, Newport and Preston were previously gifted with city status as part of the Golden Jubilee celebrations and had subsequent capital growth of 26% and 29% respectively. When Brighton became a city as part of the Millenium competition, property appreciation jumped by 19% in a single year. Of all nine towns analysed, an average price increase of 12% was experienced overall and this is also expected for recipients of the recent Platinum Jubilee’s city status upgrades. Milton Keynes could see the biggest jump in property values on becoming a city. While the average house price currently sits at just over £315K, a city status boost could add £36,875 to the average homeowner’s capital.
- Will Benefits Be Allowed to Count Toward Mortgage Payments? – The question we never thought we would be asking under a conservative government, but here it is. Boris Johnson has pledged a review and reform of the mortgage market, with housing benefit rule changes set to help more people own their own homes. The Prime Minister promised these changes in a recent speech in Blackpool, voicing strong support for UK constituents and businesses with the cost of living crisis currently rocking the nation. The passionate speech did not go into policy, leaving listeners with a lot of questions on how it would actually work. In the speech, Boris hinted at changes to several areas of policy that are long overdue an overhaul, such as allowing leaseholders to buy their freehold at a heavily discounted rate. He also suggested that housing association tenants may become entitled to take part in the Right to Buy scheme.
How Much Have UK House Prices Really Gone Up Since 1952? – Nationwide recently reported that house prices have risen 11.2% year-on-year, though the growth rate may be slowing as inflation and rising mortgage rates begin to take effect. As it stands, the average UK home is now £27,000 more than it was last year. This year marks both the Queen’s Platinum Jubilee and 70 years since Nationwide first started collating its house price data. The average UK house price in 1952 when it first began was £1,891. In perspective, this was just over double the average UK full-time salary. Nowadays, we have to make payments on mortgages around 8.7 times the average salary for a home. Halifax also examined UK property market data from the past 70 years and revealed that UK house prices have risen 300% when measured above inflation, with house prices in the capital growing by 400%.
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.