I hope you have had a wonderful winter break and are raring to go in 2023! At Track Capital we are already in the full swing of business, with brand-new investment opportunities and an incredible range of new incentives for investors.
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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
- Top Four UK Luxury Property Trends to Look Out For in 2023 – Inflation may be putting a squeeze on the market right now, but the luxury real estate sector is continuing to go from strength to strength. Although the entire UK housing market has enjoyed massive growth in the past two years, the luxury property sector in particular has raced ahead, with more people being drawn to the freedom of high-end living in the wake of the pandemic. It seems that buyers feel the extra space and pleasant interiors are well worth paying extra for, with penthouses and mansions selling particularly fast. One reason the luxury market has been less affected by economic pressures in recent months is that many high-end buyers and investors don’t require a mortgage, so rising mortgage rates have failed to deter high net wealth individuals from acquiring more upmarket brick-and-mortar. Devon and Cornwall have seen a massive 25% surge in asking prices in the past year, and London’s prime neighbourhoods such as Chelsea, Kensington and Notting Hill have also enjoyed continued interest from cash-rich buyers.
- Estate Agent Says Demand in North East Still Strong Despite Inflation – Despite November’s house price reduction of 2.3%, Estate agents at My Property Box are confident that real estate in North Yorkshire and the North East will continue to be one of the best investment options for BTL landlords. In agreement with the Halifax House Index, My Property Box managing director Ben Quaintrell has remarked that inflationary pressures are responsible for the slowdown but is adamant that the supply-demand imbalance will keep the market conditions healthy. Although the annual house price growth rate in the UK has dropped from 8.2 to 4.7%, it is important to understand that this is merely an expected re-stabilisation after a period of over-inflated price rises. Small percentage drops to asking prices should therefore be put in perspective against the overall price increases seen in the last decade.
- Mortgage Rates Finally Easing After Hitting 14-Year High – Moneyfacts Group Plc has revealed that the average rate for a two-year fixed rate mortgage reached 5.79% on Friday; a value held relatively stable now for the past three weeks. This is a significant drop from the rates seen in October 2020, when Liz Truss’s disastrous mini-budget sent the pound crashing and resulted in mortgage rates reaching 6.65% – a staggering 14-year high. 2023 is expected to be a critical year for landlords and homeowners who are already preparing for a struggle amid growing inflation and a lack of supply. Landlords in particular are expected to feel the effects of the past twelve months, with many expected to exit the Private Rented Sector, further reducing rental stock. The Office for Budget Responsibility suggested last month that mortgage costs are likely to stay high for the next few years, which could result in re-mortgage rates doubling.
- UK Renters Set for More Agony as 13% Rent Rise Predicted – Specialist broker Finanze has projected further price increases for renters in 2023 after a record-breaking year for rental growth in 2022. Citing continued difficulties for first-time buyers, sky-rocketing inflation and the critical supply-demand imbalance that has increasingly plagued the UK market for the past decade, Finanze has projected an average price rise of 12.91% in 2023 for rented properties. In the firm’s annual research report, the first quarter of 2023 will see the steepest climb in rental prices, with London being hit the hardest with a 4.3% rise in Q1 alone. The report noted that the removal of the government guarantee scheme, which allowed first-time buyers to buy with a 5% deposit, will make it more difficult for prospective buyers to step onto the property ladder. Firmer stress tests for mortgage lending will also play a part in keeping people out of the mortgage market.