I hope you have had a great week and are not feeling too sluggish recovering from celebrating our much-loved St.Patrick’s Day!
This week, we are travelling back up to Manchester for another exploration of some of our fresh new projects soon to hit our portfolio. We are looking forward to sharing our findings with you and giving you a real feeling for the areas we believe have the best potential for yield and capital appreciation.
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 having to click through.
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Property News This Week
- London Rent Hike Pushes National Growth to 10% – According to the property analyst website Home, the mix-adjusted average rent for UK properties has now hit 10.1%. The website, which combines the data from a variety of real estate portals to provide a cross-section view of the sales market, also reported less than half the number of properties are available to let in London than were available last year. The effect of this drastic undersupply on the overall UK housing market has seen rents in the capital shoot up by over 23%, causing a ripple felt across the UK. Despite this, demand in other areas has slowly been approaching more ‘normal’ levels since the pandemic-induced market explosion. Combined with the possibility of government-initiated rent control, fewer rent increases over the coming year seems a real prospect.
- Chancellor Told to Abolish Second Home Stamp Duty Surcharge – Following an analysis of the property market, Capital Economics has recommended that the UK government drop the 3% stamp duty surcharge currently applied to additional homes in order to promote the supply of new houses and increase market activity. According to Capital Economics, this move would bring nearly 900,000 new homes to the private rental sector across the UK in the next decade. In recent years, private UK landlords have been put under sustained pressure from the government and many have been forced out of the market, worsening the undersupply now rocking the UK and leaving renters with no alternative but to compete against one another for the few remaining homes available. In order for the situation to stop spiralling further out of control, the government needs to acknowledge the importance of the PRS and take proactive measures to support this struggling sector.
- Central London House Prices Rise at Fastest Rate Since 2015 – Property expert Knight Frank has revealed that London house prices are experiencing their steepest price increase in almost 7 years, after the 10th month running of annual house price increases. It is widely accepted that the reopening of offices, the reinstatement of open events and a fresh influx of overseas students have brought life back to the capital. The luxury London real estate niche has particularly reaped the benefits of this new activity, with the most popular areas still reflecting the growing post-lockdown trend for space and closer proximity to areas of natural beauty. However, there is still a slew of potential sellers hesitating to put their properties on the market, as long-term economic instability triggered by the pandemic and general financial pressure is still rife. Because of this, any perceived increase in supply is being repeatedly swamped out by rampant demand.
Bank of England Confirms Third Base Rate Rise in Three Months – The Bank of England has now confirmed the prediction made by many market analysts that the BoE base rate is indeed going to rise again, for the third time in three months. The new level will bring the base rate to 0.75%. The reason for this rise is, of course, an attempt to bring the UK’s increasingly-wild inflation rate back under control. Those in charge of the decision have tried to come to some compromise with the rate. Although it is still lower than would be truly needed to neutralise inflation, economists fear the UK population will not be able to withstand a higher rise, since the cost of living in many core areas has been rising exponentially in the past year. Despite the latest rise, it is not anticipated that the buyer/seller market will be significantly affected in the short term, as the overall interest rate is still comparatively low.
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.