I hope you have had a great week. At Track Capital, we have been celebrating the commencement of work onsite at several of our most promising off-plan developments.
It is crucial that investors interested in buying off-plan have access to everything they need to perform due diligence on every aspect of their chosen development. If you are interested to learn more about buying off-plan responsibly, click here for more information or reply to this email to connect with us.
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
- Nearly 50% of UK Property Transactions Under-Valued in Pandemic – Of the 1.95 million property transactions that took place over the course of the pandemic, 866,906 may have been down-valued. This revelation forms part of a report from HBB Solutions that analysed data from the UK House Price Index published by the HM Land Registry. Wales was hit hardest, but the trend has been seen across all areas of the UK, with London properties down-valued by an average of 59%. Although a valuation below the asking price doesn’t necessarily mean the buyer is not willing to pay the higher price, it can mean a longer search to find a tenant and a potential issue for any buyer looking to secure a mortgage on the property. The best practice when navigating this tricky issue is for the buyer and vendor to work together and re-negotiate an acceptable compromise.
- Savills Release Five-Year House Price Prediction – With affordability being an increasingly thorny issue, the latest 5-year report from Savills has echoed the sentiments of the majority of home buyers and those working in the real estate sector. Savills have predicted a 13.1% price growth by 2026 – a slow-down of 7.4% when compared to the massive 20.5% increase UK house prices have undergone in the past five years to November 2021. Although this slow-down will be welcomed by many prospective buyers, there will still be steady pressure on the real estate sector with build prices going up and new regulations making it harder for developers to build residential estates and maintain viable profits, resulting in both higher asking prices and a continued lack of supply driving competition among buyers.
- Up to 114% Price Increase for Prime London Properties – Analysis by debt advisory specialists at Henry Dannell on premium London property has revealed a massive revival in upmarket sales across 51 of the city’s most sought-after boroughs. The prime Camden postcode of WC1A has achieved a shocking price increase of 114%, with 25 other prestigious areas enjoying the wave of renewed interest from overseas investors looking for luxury property in the capital. However, some parts of London are still suffering from the effect of the pandemic and are waiting to hit the recovery phase seen in prime London areas, with declines at the lower end of the market resulting in a significant amount of value being lost from the average home.
55% Increase in Real Estate Activity in March 2022 – GlobalData’s deals database has suggested that March 2022 saw a significant uptick in the property construction and real estate industry, which is a long-awaited sign of progress. Throughout the pandemic, UK real estate development suffered heavy setbacks with the supply chain and manpower dwindling, combined with lengthier wait times for planning approvals, site visits and surveys. The latest data shows 31 deals worth a collective $2.1bn were announced in March 2022, 11 more than the 20-deal 12-month average. Since the onset of the pandemic, a critical supply and demand imbalance in available properties has caused difficulty for many homebuyers and investors, with a lack of housing, land and materials driving prices far beyond what many could afford. This latest data holds hope that things are once again starting to move, loosening the stranglehold inflation has had on both households and businesses across 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.