I hope you have had a pleasant week. Across the UK, this has been a week of reflection as the Nation sits in mourning for Queen Elizabeth II.
We are proud to have had one of the most beloved British monarchs at the helm of the Royal Family for so long and hope to honour her memory here, by expressing our gratitude for her long and dignified rule.
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.
Remember, you can also listen to this week’s newsletter on the podcast as well.
We would really appreciate it if you could subscribe and leave feedback for our Podcast on Apple.
Property News This Week
- Liz Truss Reveals Emergency Budget to Be Set Next Week – There is talk that an Emergency Budget may be set next week, which would be announced by the new Chancellor Kwasi Kwarteng and is expected to include the reversal of the recent national insurance contribution increase and the temporary removal of green levies from energy bills. The government may also scrap plans to increase corporation tax. The announcement of an Emergency Budget is generally not protocol during a time of national mourning. However, Westminster commentators have noted that between Monday’s Bank Holiday, Truss’s appearance at the United Nations shortly after and Parliament recess from September 22nd, there is only a limited time frame for such an announcement to be made.
- £150M Loan to Fund the Build of 5,500 Affordable New Homes – Currently, there are 1.4 million UK households that remain on social housing waiting lists, which signifies a national housing crisis of epic proportions that has been worsened by the pandemic, where supply chain disruptions to home building hit the industry particularly hard. In 2018, the Legal & General Affordable Homes initiative was introduced to combat this huge deficit. Recently, Legal & General has signed a £150m Social Loan in order to finance the building of 5,500 affordable new homes across England. The LGAH has been responsible for bringing over 2,500 affordable homes into circulation across the country since its inception and has plans for a further 6,500 in its pipeline. With even this number barely making a dent in the shortfall, it is clear that there are still major challenges to overcome to match the needs of the nation.
Strong Rental Performance & Healthy Market Conditions Reported – The Newcastle-based residential property developer Grainger PLC has reported a like-for-like 4.5% rental growth in the past 11 months to end of August, marking a stable and strong performance in 2022. The company has attributed this performance to good market conditions and strong, sustained momentum. Despite this growth being good for investors and developers, it is important that rent is tempered reasonably to ensure that tenants are not being put under undue strain during a time of national financial crisis. While it is tempting for landlords to raise rents in order to increase or keep their profit margins intact, it is worth considering that higher rents often mean more void periods and shorter tenancies. Grainger PLC has confirmed that they are taking a responsible and sustainable approach to rental increases, in order to make sure that customer care remains at the centre of their operations and ethos.
UK Market Sees Biggest House Price Jump in 19 Years – According to official figures from the Office of National Statistics, the year to July has seen UK house prices grow by 15.5%, where the average house price now currently sits at £292,000. This marks the highest annual inflation rate since 2003. With the supply-demand imbalance still rife in the UK, the average cost of a UK home has continued to rise exponentially despite the cost-of-living crisis currently gripping the nation. In the past year alone, property prices have risen by a staggering £39,000, which is now several thousand pounds above the average annual wage. It appears that the chronic under-supply of properties is the only thing keeping house prices from falling across the UK as rising mortgage rates reduce the budget of potential buyers. We are left to wonder whether Liz Truss’s reign will see any easing on the situation as we go into the next financial year.
That is all we have for you this week. If you have any comments or questions on this week’s news summary, please feel free to email us at [email protected] – if not, see you next week.