It is the end of the week and the Track Capital team have finally recovered from eating too much chocolate over Easter. This week, the UK has had some good news that summer holidays abroad this year may be possible with countries being put on a traffic light system which will see countries graded on their risk.
If you haven’t listened to this week’s podcast episode yet where we speak with a development company called Prosperity Wealth then I strongly recommend checking it out. It is really interesting to hear how they operate and to get a developers prospective as well.
Now, let’s take a look at the headlines that caught our attention this week, I always try to summarise the links to save you having to click through.
- UK construction sector activity showed a strong recovery in March – It has been reported that UK construction activity expanded at the fastest pace in more than six years in March. The IHS Markit / Cips UK Construction and Purchasing Managers Index rose from 53.3 in February to 61.7 in March which was much higher than Reuters polled economists’ forecast of 54.6. Home construction was the highest performing category at 64.0 which ties in with the stamp duty holiday and flying property market. Further good news that commercial construction and civil engineering also reported expansion after a long recession.
- House Prices Reach New Record High – Is Another Property Market Boom on The Way? – We have had the latest Halifax house price index report released this week and it seems like the property market just continues to go from strength to strength with house prices up 6.5% year on year in March. The average house price is now at £254,606, a new record high. UK seasonally adjusted residential transactions in February 2021 were 147,050 – up by 23.0% from January. Russell Galley, Managing Director, Halifax, said “Overall we expect elevated levels of activity to be maintained in the coming months, with consumer confidence spurred on by the successful vaccine rollout, and buyer demand still fuelled by a desire for larger properties and more outdoor space, as work-life priorities have shifted during the pandemic. A shortage of homes for sale will also support prices in the short term, as lower availability always favours sellers.”
- Proposed rent controls ‘would be a disaster’ – The current London Mayor is being urged to forget about his plans to introduce rent controls in the capital and to instead focus on increasing the supply of much needed rental accommodation by enticing more people to invest in the PRS. The Mayor and his party would be doing the exact opposite by introducing such controls. The National Residential Landlords Association (NRLA) is warning that plans for rent controls, which are at the heart of Khan’s re-election bid, would be a disaster for aspiring tenants. The Treasury published a report in 2010 under the last Labour government that assessed the impact of rent controls before they were abolished in 1988 with the report concluding that they had been a major factor in the “decay of much of the inner city housing stock.” My opinion is that rent controls would be a disaster for London and more focus should be on enticing more landlords/investors to the PRS sector to provide good rental properties to tenants. The main driving factor for rental prices in London is supply and demand which has been clearly demonstrated during the pandemic. We saw supply increase and demand decrease leading to a drop in rental prices so that should be a clear indicator to the Mayor that more stock is needed, not measures that would lead to reducing stock.
- Surveyors launch Home Review concept to cut fall-throughs – Fall throughs are a big problem within the property market and are an estate agents worst nightmare. A surveyors group has launched a new ‘Home Review’ service which it claims will identify structural problems which create an immediate obstacle to sale and is being described as “a snapshot analysis of key structural risks to provide buyers, sellers and agents with advanced warning of any major issues which might jeopardise the sale of a property” by the Residential Property Surveyors Association. The survey would help sellers identify potential issues that could arise when the buyer has their survey and enable them to address known issues before going to market. This is a good idea and will be a helping hand in the fall through problem but other aspects of the buying/selling process also need to be looked at to help as well, such as the long conveyancing timeframes.
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.