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It seems that while there is still a lot of uncertainty in the majority of the world due to COVID-19, here at Track Capital HQ we are in a positive property bubble which seems unaffected and busier than ever. In the midst of the all the busyness, this week we are got a chance to look over the Q2 2020 rental market report from Hometrack which was interesting.

Hometrack are reporting a ‘two-speed’ rental market emerging in the UK which is being guided by differing trends in supply and demand between London and the rest of the country.

Taking London out of the equation, rental growth across the regions and counties remains positive seeing a 2.2% increase as demand continues to outstrip supply in many markets.

If we then look at London, a different picture emerges. Rising supply and weaker demand (particularly in inner London) is resulting in negative rental growth. There are a number of factors that have potentially contributed to this with one being the decline in international travel and tourism leading to landlords shifting away from short lets, therefore, increasing the supply on the long lets. We see many of the factors affecting the London rental market being temporary meaning there shouldn’t be any cause for major concern at this moment in time.

This is just a brief overview so if you would like to view the whole report please click here.

Property news this week

  • Property market bounces back with ‘highest house prices ever’ after stamp duty freeze– This article from The Express sees our very own Director, Tobi Mancuso, providing industry insight to report on Halifax’s House Price Index that was released today. It revealed that the housing market saw its “highest prices ever” in July. Tobi stated that “June saw the average UK house prices decrease by 0.1 percent followed by a 1.6 percent increase in July as chancellor Rishi Sunak’s move sent buyers into a purchasing frenzy causing a mini-boom.”
  • Foreign investors eye UK property ahead of stamp duty surcharge– This is something that we have been noticing a lot recently and we have mentioned it previously. It seems that many foreign investors are looking to snap up property before the 2% stamp duty surcharge is introduced in April 2021 while also capitalising on the current stamp duty holiday. Data from the SmartrCriteria tool shows that searches related to applicants on a visa have risen by 146% since the announcement in May of a stamp duty surcharge for overseas buyers. Recent industry data has shown a surge in demand from Hong Kong based buyers and this could grow further following the Government’s announcement of a new route to citizenship for 300,000 British National Overseas (BNO) passport holders.
  • Housebuilding leads strongest construction growth in five years– The latest PMI data has reported that UK construction companies signalled a sharp and accelerated expansion of business activity in July which was led by another strong increase in Housebuilding. Tim Moore, Economics Director at IHS Markit, said: “Construction companies took another stride along the path to recovery in July as a rebound in housebuilding helped to deliver the strongest overall growth across the sector for nearly five years. More housebuilding is needed so we hope we can see this trend continue.
  • Try Adviser Network to offer Shariah-compliant home purchase plan advice – This article shares the great news that the Try Adviser Network of mortgage brokers has been given the green light by the FCA to advise on Shariah-compliant home purchase plans. This is a great step forward and could open the market to some buyers that may not have been able to get on the property ladder previously. The home purchase plan (HPP) differs slightly to that of a traditional mortgage where borrowers pay a fixed amount back to the lender with interest added on top. Instead, the bank charges rent on the part of the property that the customer doesn’t yet own. The customer also pays an additional amount each month to gradually purchase the bank’s share of the property over a set period. If this sort of purchase structure could benefit you then I strongly recommend checking out the article.

Get in touch with the team anytime to discuss your UK property investment plans through [email protected] or on +44(0)203 627 3987.

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