I hope you’ve had a productive week. At Track Capital, we are very excited for the festive season approaching. For any buyers who are looking for the hottest deals, now is the very best time to buy, as the winter season is bringing with it some incredible money-saving discounts and incentives across all developments.
If you have had your eye on a particular development, or have been considering searching for a property investment deal that really stands out, get in touch with us today to find out more and beat the January rush.
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
- Housebuilder Confident That Housing Market is Still Going Strong – The managing director of Genesis Homes has recently described the widespread panic surrounding the housing market and its imminent future as unnecessarily spread and “way wide of the mark.” This opinion comes as reports show continued stability within the housing market and reduced mortgage interest rates, despite apparent fear-mongering by various media outlets. If analysed with a broader view of the UK property market history, interest rates are sitting at the 70-year average, suggesting that we have simply been spoiled in recent years by historically low interest levels. In fact, despite this rebalancing of the market which has come as an unpleasant shock to many, some rates are still predicted to fall to under 4% next year. Although next year will likely see a moderation of housing prices, the upward trajectory is anticipated to continue in the foreseeable future.
- Rental Prices Skyrocket and Londoners Fight for Flats – The rental landscape has changed rapidly since the onset of the pandemic and nowhere has felt this more keenly than London. With demand for rental properties flooding back to the city and the undersupply of housing reaching crisis point, prospective tenants have tripled since early 2021, with over seven people now actively searching per one property listed. Horror stories abound of exorbitant rents, barely-legal accommodation standards and excessive hoop-jumping for tenants to even be in with a fighting chance of getting a viewing, let alone securing a tenancy. Those already fortunate enough to have a home in the city plan to keep their place for the long-haul, since the scarcity of properties available and huge rent hikes have made affording a new rental property in London highly unlikely. There have been calls for rental caps to control the spread of unscrupulous landlords who are looking to cash in on the supply-demand imbalance, leaving many renters unable to afford to stay in the city.
- HMRC Reports an October Increase in House Transactions – It may seem that the number of UK house transactions increased by 2% in October when looking a the recently published seasonally-adjusted HMRC report, but a closer look will reveal a different story. Since the estimate only covers transactions that took place in October after having been arranged weeks or even months earlier, this estimate does not reflect the chaos caused in the market by the government’s catastrophic mini-budget which sent the economy into widespread panic and temporarily crashed the pound, from which it still has not made a full recovery. In order to see the true extent of the damage caused to property sales transactions as a result of this failure, we will have to wait for the next report to be published. Sales agents, mortgage advisors and brokers have all reported a noticeable drop in buyer demand during October as consumer confidence fell to an all-time low and mortgage products were pulled from the market as providers struggled to keep them accurately priced.
- Material Supply for Construction Finally Gets Back to Normal – In what will come as a massive relief to all members of the UK property sector, a report from the Construction Leadership Council has stated that both the availability and supply of construction products and materials have finally recovered to its 2019 pre-pandemic levels. The inability of housebuilders to simply get on with the job has drastically impacted the housing supply chain, affecting every single aspect of the property sector. However, there are still supply issues remaining with global semiconductor shortages and a persistent lack of electro-technical products and gas boilers, which is likely to be felt well into 2023. Sanctions on Russia are also continuing to put a strain on the supply of birch plywood, although Finnish and Latvian producers are attempting to make up the shortfall. The effect of inflation is also a limiting factor on housebuilding as material costs are continuing to climb and eat into both budgets and profit margins across the board.