I hope you have had a relaxing week. As the sun continues to shine on many of us in the UK, Track Capital would like to wish a blessed Eid-Al-Adha to all those celebrating this week.
We would love to know what your property investment plans are this summer. Are you looking for an easygoing hands-free style investment to make the most of your leisure time? Or maybe you are looking to kickstart your summer with excellent rental yields?
Whatever your plans, reply to this article and see how we can help.
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
- Experts Say Government is Failing to Handle Housing Issues – According to the Association of Mortgage Intermediaries, the Government has lost sight of its core goals and urgently needs to re-focus. While the government is busy distracting homebuyers with the prospect of cross-generational 50-year mortgages, the association believes they ought to be taking a hard look at their unfulfilled promises instead. Commitments to the construction of new houses meeting targets for the critically undersupplied social housing and improvement of infrastructure have all been ignored – a decision that the next generation will continue to pay for as we descend into a mire of unaffordable homes in both the homebuyers market and the rental market alike. For every home sold, more needs to be built if we have any hope of combating this systemic issue caused by a lack of funding and clear planning for the future.
- BLME Predicts That Gulf Investment in UK Stock Will Increase – After conducting in-depth interviews with leading real estate service experts, the BLME has reported that pandemic restrictions did little to slow investment in UK properties from Gulf Corporation Council countries. The Bank anticipates that UK property investment from Gulf nationals will continue to rise steadily now that the pandemic has passed its peak. The majority of experts interviewed identified three primary factors for this interest: the unique cultural characteristics of the UK; its policy & regulatory framework; and the steep upward trend of regional growth outside of London. 50% of interviewees felt that the UK’s ‘cultural capital’ was an attractive draw for their investment. As interest rate rises are likely to curb activity from UK-based investors, there will be less competition for overseas investors and more stock available for them to choose from. Sectors that experienced reduced levels of investor interest throughout the pandemic are now recovering, with commercial and residential London properties being prime examples.
- ONS Reports 1.5% Spike in May Construction Activity – Throughout the pandemic, real estate construction was a core sector that took a severe beating and the effect of this drastic slowdown in output has had untold consequences, not only for homebuyers but also for those looking to rent – not to mention all those in jobs connected to, or affected by, the disruption. So it is with much relief that construction output in May rose by 1.5% compared to the previous month, which marks the seventh consecutive month of volume growth, totalling a record high of £15.1bn. The headline cash value for May was the highest since records began in January 2010 and construction output for May 2022 was 4.1%. Considering pressure from inflation, cost of living rises and global unrest as the war in Ukraine continues, these figures are a very welcome sign of hope. This is reflected in renewed investor confidence as significant increases in private commercial new work and private new housing have both been registered.
UK Rental Price Rises Hit Record-Breaking Pace – Recent research published by Halifax reveals that house prices have shot up by almost 17% since the beginning of the pandemic. It is not only the house prices going up either; rental prices across the UK have also increased by a staggering 12% year-to-date alone, with prices rising 19% since 2020. The result is that the average UK rental property is now being let at £1,126 per calendar month. Data from Rightmove equates this to a monthly increase of nearly £180. This will have a devastating effect on thousands of UK families who are already struggling to make ends meet. The supply-demand imbalance exacerbated by the pandemic and the reduction of social housing can only be rectified in time. Until it is, further rent growth is predicted over the coming years. Rightmove predicts rental prices will increase another 8% before 2023.
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.