I hope you’ve had a relaxing week and managed to enjoy some of the lovely warm spring weather we’ve been having!
With so much going on with the UK economy right now, you may be wondering whether now is the right time to buy property. Despite the recent average house price rise, there are still many areas of the UK perfectly priced and well-positioned to give investors great returns and a healthy amount of capital appreciation.
We have recently expanded our portfolio to include some brand new up-and-coming areas that we believe will skyrocket over the next few years.
Enquire on this post if you would like to find out more.
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.
Remember, you can also listen to this week’s newsletter on the podcast as well.
We would really appreciate it if you could subscribe and leave feedback for our Podcast on Apple.
Property News This Week
- UK Housing Crisis in Desperate Need of Private Investment – It wasn’t too long ago that the government first set its sights on delivering 300,000 new homes annually across the UK. Fast-forward to 2022 and this overly-optimistic target has aged very badly indeed. We are in the middle of a drastic undersupply crisis of new houses, and potential buyers of the stock available are being deterred from entering the market due to a lack of capital to invest. As a result, from Sept 2020 to Sept 2021, less than two-thirds of the homes required to meet the government’s ambitious goal were built. The lack of supply has not only prevented many first-time buyers from getting started but has no doubt contributed to the national average age for a homeowner in the UK rising from 28 to 34 years old in the last 15 years. This brings the stark reality of the housing crisis to light, with many real estate institutions calling on the government to finally support the Private Rental Sector, welcome outside investment and offer practical support for landlords to help the ever-increasing rental sector who may never be able to get their own feet on the ladder.
- The UK’s North-South Divide Explained – Many people are aware that the has always been a historical divide between the North and South of England in terms of both job opportunities and house price growth. However, along with the government’s plan to “Level Up” the country, the great potential in the North is really starting to show. Property investors are turning their eye to the North in search of new opportunities that are becoming rarer in other areas of the UK closer to the Capital. The iONS UK House Price Index has revealed that from Sept 2020 – Sept 2021, house prices in the North West grew by an impressive 16.8%, compared with London’s modest growth of 2.8%. The pandemic was highly influential in triggering demand for more space and closer proximity to areas of natural beauty, while cities in the North West also offered people the same living standard as London, but at a fraction of the cost. With house prices further down in England becoming largely unaffordable for new buyers, combined with the North’s exceptional regeneration projects, it is projected that popularity for both buying and renting in this region will continue to grow.
- Average UK House Price Rises by £24,000 in One Year – The ONS has released the latest data for house price inflation and the results paint a clear picture already acknowledged by buyers, sellers and estate agents across the country: Year to date January 2022, the average house price in the UK rose to £274,000. This is just under £25,000 more than it had been just one year previous and puts the national figure of growth at 9.6%. The supply-demand crisis in both the house-build sector and the seller’s market is responsible for this exponential growth. While homeowners looking to sell have enjoyed being able to “set the price tag” and make huge capital gains, first-time buyers have struggled to establish themselves and many are being outpriced from the market before they even get their foot in the door. With the overall cost of living exploding, many potential buyers have simply opted to wait and continue saving instead of making a move.
- Property Industry Reacts 2022 Spring Statement from Sunak – Rishi Sunak’s latest statement has been met with general approval from leaders of the property industry as he revealed plans to bring the cost of living crisis under control. This was a timely announcement, as reports suggest that inflation will hit an average of over 7.4% in 2022 alone. Despite avoiding the most thorny issues surrounding housing, such as the undersupply crippling the country and unattainable house prices up and down the UK, Sunak proposed a 5-Year Zero VAT scheme for the installation of energy-saving materials in residential properties. He also promised another £500m toward the Household Support Fund. In another welcome move, he has also reduced the cost of fuel duty and raised the threshold for National Insurance contributions by £2,970. However, he would not back down from his plan to increase National Insurance contributions by 1.25p in the pound, starting in April. Property leaders widely agreed that buyers should feel some relief at Rishi’s money-saving proposals, but while the supply-demand imbalance continues to influence house prices, people will continue to struggle in the current market.
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.