Weekly Property News Round Up – 27.08.22

Weekly Property News Round Up – 27.08.22

Hello,

I hope you have had a wonderful week. Despite the notorious “summer slump” in property sales encountered in the UK each year, we have been experiencing an increase in demand for our off-plan property investment opportunities.

In line with current demand, we have also now widened our portfolio to incorporate an excellent selection of Complete HMOs with guaranteed rental income for between 5-10 years. These properties are all high-quality and can be found in a variety of prime locations across the UK.

Reply to this article for more information.

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.

Episode 45: Property & the Human Battery Charger – Jo Lightfoot – The latest episode of the Pure Property Podcast is out now. You can listen to it on Apple Podcasts and all other major platforms.

Remember, you can also listen to this week’s newsletter on the podcast as well.

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Property News This Week

  • Records Show House UK Prices Fall for the First Time This Year – August has been the first month this year to evidence a drop in average property prices across the UK. The height of Summer is well-known for being a time for buyers to put their property dreams on hold as they focus their thoughts and finances on holiday time instead. In line with this annual trend, the drop in average asking price this month came in at 1.3% – equal to approximately £5,000 – which has been the standard national average drop for this time each year since 2012. For this reason, many sellers are encouraged to hold off putting their property on the market until September. Although the BoE has raised interest rates yet again, it is likely that the effect of this on property purchases will be seen later on in the year, with price growth expected to dwindle slowly rather than experience any sudden crash.

 

  • Average Rental Rises Hit 8.3% Year-to-Date Across the UK – Over the past year, the average rental price across the UK has risen by 8.3%, bringing the average rent nearly 16% higher than it was pre-pandemic. Dataloft has recently published figures showing that 40% of Brits under 30 are now spending over 30% of their monthly income to cover the rent alone. Factoring this in with the rising energy prices and the cost of living crisis pushing expenditure up, renters are in for a struggle simply to keep their current standard of living. Inner London rental prices are even higher than the national average, with renters paying around 35% of their wages to keep the roof over their heads. At the same time, house prices have also continued to rise, shooting up by an average of £3,000 in June alone. It is unclear what the true effect of the interest rate and cost of living rises will be on house prices as the lack of affordability increasingly wars with the persistent supply-demand imbalance that has held the housing market hostage over the past 3 years.

 

  • British New Home Listings Drop By 40% in One Year Alone – The question on everyone’s mind for a while now must be whether the supply-demand housing imbalance will ever cease to dominate house prices. Back in January 2020, 48,752 new-build homes were listed for sale across the UK. Fast-forward to this year and data shows only 25,468 new-build listings are currently on the market. This marks a national annual decrease of -47.8% in housing supply since the beginning of the pandemic. No area in Britain has experienced an increase in new-build sales listings since the recorded number registered in 2020, showing the breadth of the supply crisis. It is understandable that throughout this time of shortage, more people in the past 18 months have been turning to off-plan developments, hoping to get ahead of the competition and capitalise on the discounts and money incentives that come with buying properties that are still at the planning stage.

 

  • House Price & Growth Now Being Affected by Economic Pressures – Autumn is expected to be the season where the mountain of adverse economical pressures faced by homebuyers start to take their toll on the so-far unstoppable momentum of the UK real estate market. Up until this point, the market has shown incredible resilience throughout the course of the pandemic and beyond, but lower-income households are already feeling the pinch of the rising cost of living crisis, which means it is only a matter of time before the impact hits those on the middle-to-upper-income ranges who account for the vast majority of house purchases. The ONS has already reported a curb in unnecessary expenditure among households which is set to filter through the classes over the next 12-24 months. Of those looking to buy, first-time buyers make up the largest proportion, responsible for 35% of all sales transactions recorded. BTL landlords are also on the increase, offering renters much-needed rental stock to keep prices competitive.

 

That is all we have for you this week. If you have any comments or questions on this week’s news summary, please feel free to email us at [email protected]  – if not, see you next week.

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