I hope you’ve had a productive week. Here at Track Capital, we have been celebrating a truly fantastic start to the month, with new purchases being secured for clients already, and the anticipation of a strong month ahead as investor interest in property continues to stay at an all-time high.
If you are wondering where the next up-and-coming areas are across the UK for significant regeneration and a mountain of capital growth potential, reply to this email.
We have been widening our portfolio to incorporate regions and cities that are expected to become new hotspots for investor interest in 2022.
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.
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Property News This Week
- Nationwide House Price Index Reports High Levels of Growth – The latest House Price Index report has revealed the largest house price increase in over 30 years, as growth rose to 12.6% in February, from 11.2% in January, accelerating at the fastest rate since June last year.
February 22 also saw the average UK house price surpass £260,000, which was an almost £30,000 increase year-on-year from 2021.
In comparison to pre-pandemic prices, the average UK house price has grown by 20% – a cash value of £44,138. Considering the huge increase in energy costs, National Insurance hikes and the exponential rate of inflation that UK residents are currently experiencing, combined with growing mortgage rates, there is much on the horizon to challenge the ostensible buoyancy of the housing market.
- UK Mortgages Hit Six-Month High – The Bank of England has released official data showing that approvals for British mortgages in January reached a six-month high, showing that even though the emergency measures put in place during the pandemic have now ended, there remains strong demand in the UK housing market. According to the Bank of England, just under 74,000 mortgages were granted in January alone, showing that the desire for property purchasing is still going strong. The market has been experiencing exponential growth since Q2 2020 as WFH rules and lockdowns pushed more people to search for a decent space to call their own. Coupled with some attractive tax relief incentives, it is easy to see how the market received such a substantial boost. However, it is now far less obvious to understand why that boost has continued for so long, through the onslaught of cost-of-living raises that are currently putting the majority of UK households under significant pressure.
- Oligarchs under EU and US sanctions linked to £200m in UK property – With Russia at war with Ukraine, Britain, the EU and the US have turned to sanctions as a non-violent means to hold Russia accountable for its actions and provide a hard-hitting deterrent to the Russian government, sending a strong message to remove its troops from Ukrainian soil and agree to a ceasefire. These sanctions have drastically impacted the real estate security of a number of hyper-wealthy Oligarchs who have been linked to almost £200m of property in the UK. According to the UK government, seizing or freezing of assets in these situations is for the purposes of gaining transparency and ensuring that owners of such wealth are not able to fund the war in any capacity. However, this clampdown has not gone unchallenged. A spokesperson for some of those under sanction spoke of the “simply and demonstrably false” justifications provided by the EU for these measures.
UK Capital Appreciation Triggers £16K Boost in BTL Returns -The online rental portal Rentd has uncovered some hope for UK landlords that despite the government’s sustained attempts at making property investment less lucrative, the current BTL return is now £16,311 per annum – that’s an increase of over £10,000 since 2019. The reason for this gain does not lie in the monthly rental yield, where increased charges and outgoings for landlords have resulted in an average yearly loss of around £400, but in capital appreciation which has risen by approximately 6.45% since 2012. This is great news for private UK landlords who, despite the government’s best efforts to thin the herd, are still responsible for providing accommodation to over 4.5 million UK households.
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.