I hope you have had an enjoyable week. This week has marked the 52nd Anniversary of National Earth Day, a global event where billions of people around the world join together to raise awareness about environmental protection.
First introduced in 1970, the event now has some 1 billion followers across 193 countries who are committed to protecting the environment and building sustainable biodiversity. This is a great opportunity to think about the power we have when united for a single purpose – to build a better world.
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
- House Prices Are Set to Hit Record New Highs – According to the March House Price Forecast released from Reallymoving, the average house price in England and Wales is on track to keep rising steadily throughout the next quarter, set to reach a record-busting £389,712 by June 2022. Compiled by the home-moving experts, the comprehensive index points to the significant supply-demand imbalance that has been affecting homebuyers for the past two years as one of the major factors that will push prices higher throughout Q1. In spite of the increasing financial burden on household income with the rising cost of living and borrowing, it is still projected that the UK will see house price growth of +6.0% in May, followed by a slower growth margin of +1.3% in June. This potential change in growth would suggest an inevitable cooldown of the housing market as people start to feel the pinch. Future growth will largely depend on the number of new listings (or lack of them) being added to the market, as well as the aggressiveness of lenders to increase the price of fixed-rate mortgages.
- The Benefits & Perks of Investing in UK Property – With so much instability on the world scene, investors are keener than ever to find a safe place to store their wealth that also offers a reliable return on investment. As stock markets have moved into a downward trend this year, investors are now looking at other ways to hold onto their capital. The UK property market is now outperforming all major stock exchanges for growth, offering investors that golden opportunity for stable growth and secure income. In particular, The UK Build to Rent property market offers one of the best opportunities to increase savings in the coming 2 to 5 years. With a staggering unit shortfall of two million and heavy demand for housing, this real estate market niche is primed for future growth. The UK remains one of the most popular markets in the world for both domestic and overseas investors as its national housing shortage and lack of land result in high average rental yields for available properties. Now, with the value of the GBP at a low ebb, there has never been a better time to take advantage of UK real estate for growth.
- Major Rule Change Will Unlock Cheaper Mortgages for Millions – There is set to be a much-needed shake-up for small challenger banks as Boris Johnson unveils his plans to change the rules on how they can operate their mortgage lending. Currently, small banks are finding it nearly impossible to profit under the same rules that apply to larger financial establishments, threatening to drive their services out of existence. This threat has resulted in many challenger and specialist banks being forced to offer mortgages on higher risk products that are poised to deliver a higher return in order to make a profit. This would include BTL, higher LTV and mortgages designed for those who would usually be turned down. With new plans in place, Boris Johnson aims to take on a more “British style” of rule-making, removing those rules that impair the ability of smaller banks to offer cheaper loans. By doing so, it is hoped to create an easier system for smaller banks, which will be good for both them and their customers.
- Overseas & Expats Benefiting from Post-Covid Rent Increases – Those using a UK expat or foreign national mortgage are currently enjoying huge profits from the buoyant property market, as the UK enters recovery from the pandemic. The lack of supply to meet demand has created the perfect storm for rental increases, with data from Zoopla suggesting that current demand is 43% higher than the 5-year national average as the number of available homes drops to 43% lower. The result of this see-saw is that rental prices have reached a record 13-year high, with monthly rental averages outside of London now sitting at £809pcm. It won’t stop there, either. In 2022 alone, rents are set to rise another 4.5%. Part of the increasing demand comes from a growing desire to rent across a broad age demographic. Prospective first-time buyers are finding it difficult to get on the ladder, keeping them locked into renting. Likewise, the rising cost of living and hiked energy prices, combined with higher interest rates, mean older people are more likely to rent now too.
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.