I hope you are having fun as we head into the festive season to end 2022! We have had an exceptional year and are still helping investors get their deals over the line before the year comes to a close.
If you have been thinking that December may not be the best time to invest, you might change your mind when you discover the mind-blowing range of festive discounts and incentives we have in store this month only!
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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
- Inflation Causes Significant Drop in Social Housing New Builds – Industry tracker Glenigan has reported that social housing new build starts dropped by 29% in the three months to November this year. Residential project starts as a whole dropped 1% from the previous three months and the company believes that the drop in social housing projects commencing onsite was the driving factor behind this overall loss. Autumn had been rough for new project starts in general, but Glenigan suggested that a slew of negative events had been to blame for the downturn witnessed in the three months to November, including the cost-of-living crisis and September’s disastrous mini-budget announcement. Spiralling costs for materials, labour, energy and fuel were also cited as having a limiting effect on construction activity. Non-residential builds have also struggled, with hotel and leisure construction starts falling by 40% from 2021.
- House Prices Increased by £33,000 Within Just 12 months – The HM Land registry has recently published figures showing the average house price in the UK rose 12.6% annually in October, with the average price for property in the UK reaching £296,422 in that month. In real terms, this means that the majority of houses in the UK gained £33,000 in estimated value in the 12 months leading up to October. England set the pace for growth with a 13.2% rise, followed by Wales at 11.8%, Northern Ireland at 10.7% and Scotland at 8.5%. The ONS has stated that the perceived increase in the annual percentage change was actually a result of the swift drop in transaction prices triggered by last year’s Stamp Duty holiday. While at first, the market may appear to be steamrollering on with continued growth, the truth is that the price rise is inflated, as it compares to the market anomaly of the SDLT holiday last year. In truth, the majority of agents and brokers are now seeing a slowing of demand as the cost-of-living crisis begins to show its teeth.
- Ninth Consecutive Hike Brings BoE Base Rate to 3.5% – The Bank of England has now implemented this year’s 9th consecutive hike to the base rate, with its latest addition of 50 basis points now bringing the rate to 3.5%. Despite this being its highest level since 2008, LMS chief executive Nick Chadbourne is confident that there shouldn’t be any practical impact on new mortgage products which have already had the rise factored in. However, it is expected that many potential buyers will be holding off on applying for a mortgage in anticipation of the interest rates going back down in 2023. Homebuyers who are likely to feel this latest change most acutely are those on a Standard Variable Rate. It is important that new buyers understand that there are still products available that will suit their needs and provide stability over the coming years. It is always worth speaking with an experienced mortgage broker in order to find the most affordable options for your circumstances.
- Overseas Entities Must Register Ownership of UK Property by 2023 – The deadline is looming for all overseas entities owning UK property to submit their details to the Register of Overseas Entities. Time is running out for the vast majority who still have not done so, with January 31 2023 fast approaching. Although the system is a daunting one and this procrastination is understandable, it is important to know that there are penalties for those who fail to comply within the specified time frame, up to and including prosecution for criminal offences. To date, less than 7% of all those known to be overseas owners of UK property have successfully registered. The Register of Overseas Entities is an attempt to improve transaction clarity and to identify instances where money laundering may be a factor. One of the most attractive qualities of the UK property market for overseas buyers is its relatively secure purchase process. It is hoped that registers such as this will further bolster international confidence in the UK market and root out transactions that are not legally compliant.