This week has been a tough pill to swallow for many of us. While the extension of lockdown measures to at least July came as a somewhat predictable move, it still landed a blow to those of us looking forward to gaining more freedom in what has been a glorious start to the Summer months.
However, there is a lot to enjoy regardless. The current outdoor sports and gathering regulations still provide plenty of scope for making the most of our leisure time, so it’s our duty to make sure we do just that!
In football news, England gained another point last night against Scotland meaning that a win against Czech Republic would lead to a top of the group finish.
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.
- ONS Reports that House Prices Increased by Almost 9% in April – The Office for National Statistics has published data that shows house prices in the UK rose 8.9% in April, year on year. This now puts the average house price in the UK at £256,000. Cheap borrowing rates and an increase in house demand have resulted in this overall growth, and it begs the question; is this growth sustainable? Rising house prices with no marked increase in wages further widens the gap between those who would like to enter the market and those who can afford to do so. For this reason, it is crucial that landlords and investors place their focus on providing high-quality rentals to fulfil the ever-increasing demand from tenants who are simply unable to purchase a property of their own.
- Bank of England Frets that the House-Price Boom Won’t Cool – This past year has seen a dramatic explosion of the UK house market, with prices in some areas rising up by an impressive 18.4%. The market has been predicted to dip as both the furlough scheme and stamp duty relief draw to a close. Experts believe both factors should play a role in dropping house prices and cooling the market. However, comments from the Bank of England’s Chief Economist, who noted the “significant imbalance” between supply and demand, indicate that this tremendous market growth could continue for some time. A recent nationwide survey of homeowners in April seemed to corroborate this, with three-quarters of its participants remarking that their intentions to buy property or move would not be impacted by the removal of incentives. Indeed, Scotland has already demonstrated that those desiring to move or enter the market have done so regardless of the removal of tax relief and other perks.
UK commercial Property Deals More Than Double Year on Year – In May, approximately £2.6bn of investment was injected into the UK commercial property market. This was over double the amount transacted in May of last year and although new figures from Colliers suggest a slight fall in activity month on month in May, yields were still going strong. That, combined with steady property prices, indicates a sustained high level of investor interest in UK properties. Many individual property markets have climbed, with £918m of Industrial assets and £677m of Office assets exchanging in May alone. The Student sector in Birmingham also saw its share of investment, with £494m worth of deals. With only one of the ten biggest single-asset deals coming from London though, it does appear that local and international investors are now looking to expand their search into other fast-growing areas of the UK.
London rental market shows strong signs of recovery – Despite average rents in London being down year on year, the Home website has released data showing a steady increase in rental prices for most boroughs over the last 3 months. This is a very hopeful step in bringing the London market back up from its crash during the pandemic, which saw the majority of the boroughs struggle. The City, Wandsworth and Westminster have seen the greatest rises in asking rents as they enter recovery, backed by an overall scarcity of rental properties which is further driving demand. Buyer interest is also expected to rise as the London house market comes back to life and confidence in the rental market returns. This gives a very positive outlook for the future growth of one of the most important and prolific markets of the UK.
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.