Weekly Property News Round Up – 23.10.22

Weekly Property News Round Up – 23.10.22

Hello,

I hope you have had a productive week. This has been another week of swift changes to the UK government as Prime Minister Liz Truss has resigned from office, prompting other parties to call for a general election.

On the back of this, the pound has rallied, much to the relief of domestic property investors,  and brings with it hope for the entire UK economy.

If you are interested in discussing your prospects for maximising your budget and increasing your yield potential, reply to this post.

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 47: Is the Property Market Crashing???  – The latest episode of the Pure Property Podcast is out now. You can listen to it on Apple Podcasts and all other major platforms.

Remember, you can also listen to this week’s newsletter on the podcast as well.

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Property News This Week

  • General Election or Proper Leadership: Real Estate Sector Speaks – After a failed mini-budget sent the British pound spiralling, prompting a slew of u-turns and a Tory revolt in parliament, Liz Truss has finally succumbed to pressure and officially resigned this week, making her the shortest-serving UK Prime Minister in history. The move has prompted a new Conservative Party leadership election, but is that really what the public wants? According to several recent social media polls by Estate Agent Today, between two-thirds and just over one-half of property sector respondents preferred a General Election rather than another Conservative leadership race. As first-time buyers are left unable to afford loans and homeowners brace themselves for a difficult remortgage, the results from these polls demonstrate an underlying mistrust in our current government that the majority believe can only be rectified by putting the party vote back to the public.

 

  • Stock Undersupply Causing Manchester Rents to Skyrocket – Recent data published by Urbanbubble has revealed that rising rents are still putting pressure on private tenants in Manchester despite 5,545 new home developments being implemented thus far in 2022. Although this is the highest number of new residential developments seen in Manchester in the past 10 years, undersupply is still rife and the new developments are still falling short of the number of homes ultimately required in the city. Q3 2022 showed just 360 available homes to rent in Manchester; the lowest number in recorded history. This has caused rents in Manchester to explode, reaching 38% annual growth in some areas, with an average increase of 20% across Manchester, Salford and Trafford. With a massively growing population and persistent construction issues, rents are predicted to continue to rise for the foreseeable future.

 

  • Vida Homeloans Relaunches Residential & BTL Mortgages – Buy-to-Let landlords have been on a rollercoaster recently as they attempt to expand their portfolio and remortgage properties with lenders pulling their products from the market at every turn, as the UK economy faces widespread uncertainty. Vida Homeloans has now announced its relaunch of a range of buy-to-let and residential products to the market after being forced to pull their products amid interest rate changes. The specialist lender will offer a selection of BTL loans for landlords, SPVs and individual buyers, along with ex-pats and first-time buyers, with financing available from £100,000 to £1m. A wide range of property types will be eligible for these lending facilities, such as flats, flats above commercial units, ex-local authority, HMOs and multi-unit blocks. The maximum LTV amount will be set at 80% individual units, HMOs and multi-unit blocks, with 75% LTV available for ex-pats. There will be zero charges for early repayment within the first 2 years of the variable term, and rates will range from 5.9% to 6.24%.

 

  • Second-Charge Popularity Grows as Buyers Navigate Affordability – In a difficult climate for the buy-to-let market as mortgage rates climb, many landlords are wondering how they can continue to finance their expanding portfolios. Many potential BTL investors are finding it difficult to prove the necessary rental yields to qualify for further borrowing, and are hesitant about remortgaging their properties to raise capital due to fears of high-interest rates and early repayment charges. Remortgaging is also out of the question if the initial rate period is still active. However, a little-known alternative to buy-to-let remortgaging can be used to unlock cash from your property. With enough equity in your property, you may qualify for a second charge mortgage with a different lender. In this way, you may be able to take a lump sum of equity out and then pay the second charge back as soon as it is time to remortgage. It is worth noting though, that product fees, legal fees and higher interest rates are all common with second charges. Speak to your advisor or broker before opting for this method of raising capital.


    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.

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