Weekly Property News Round Up – 17.06.23

Hello,

I hope you have had an enjoyable week. This week we have been discussing proposed rental reforms in the UK and the impact they could have on investors, both domestic and overseas.

Despite rising interest rates and the push for tighter regulations for landlords, rising rents across the UK are currently offering some phenomenal yields for the savvy investor.

If you are interested in finding a strong investment property, reply to us today to find out the many ways we can help to make it happen.

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.

Episode 63: A Pulse Check on the UK’s Property Market Rollercoaster! – The latest episode of the Pure Property Podcast is out now. You can listen to it on Apple Podcasts and all other major platforms.

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Property News This Week

• Will Rent Control in Wales Have its Intended Effect? – The cost of living crisis in Wales is causing increasing hardship for renters. With a surge in contacts to homelessness teams, this crisis has been exasperated by a rise in interest rates pushing landlords to inflate prices or sell properties. In response, the Welsh government is considering implementing rent controls. However, the landscape is complex as there’s a significant difference between landlords exploiting local market rates and those struggling with higher interest on buy-to-let mortgages.

 

• Young Renters Unable to Leave the Nest Due to Rising Costs –
  Rising rents in Great Britain have led to a drop in first-time renters, who now make up only 4.6% of new tenancies in the first five months of 2023, compared to 6.1% in 2015. As monthly rents surpass £1,000, many young adults are choosing to save money by staying with their parents, often skipping the rental market altogether to buy homes. As a result, fewer are moving into one-bedroom or studio flats, with a growing proportion renting larger properties. Rental growth, however, is beginning to slow, which may offer some relief for potential tenants.

 

• Construction Activity Impacted By Private Housing Slump – UK construction output has declined by a seasonally-adjusted 0.6% in April due to a sharp fall in private housing work, reaching a 17-month low, according to the Office for National Statistics (ONS). This drop follows two months of growth and is partly attributed to economic worries causing hesitancy in customers to request work. Despite this, infrastructure and industrial workloads saw an increase. Overall, construction work valued at £17.5bn was carried out in April, down from £19.9bn in March.

 

• Investors Rush to Buy and Convert Empty London Office Space – As the work-from-home trend solidifies, investors have poured around £2bn into repurposing underused London office spaces, reports the Financial Times. CBRE reports about £1.3bn of office space was purchased for conversion into alternative uses over the last 12-18 months. While the UK commercial property market has slowed due to higher interest rates, there’s new investor interest in converting office and retail space into student accommodation, labs, hotels, and leisure facilities. Demand for prime office space remains strong. Despite this, average commercial property values are expected to fall in 2023 due to anticipated interest rate rises.