Weekly Property News Round Up – 03.09.22

Weekly Property News Round Up – 03.09.22

Hello,

I hope you have had a productive week. Here at Track Capital, we have been discussing the proposed changes to rules for renters currently under review and what they could mean for UK landlords.

Investing in a fully-managed property can reduce the stress of keeping on top of the latest regulatory changes.

If you want to learn more about fully-managed investment options, reply to this article today.

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.

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Property News This Week

  • Refund Due for Thousands of Leaseholders Across the UK – Positive action taken by the Competition & Markets Authority has resulted in refunds due for over 5,000 people for ground rent charges they were forced to pay for their leasehold properties. The organisation has also succeeded in having ‘unfair’ terms regarding ground rent removed from leaseholders’ contracts. One such term involved the stipulation that ground rent would double every decade, creating unaffordable charges for long-term homebuyers and making it near-impossible to sell their property. Many of these rules came in after housing developers sold the freehold to other companies, which have then used the exponential ground rent charges as a form of income at the great expense of the leaseholder. One study from NAEA Propertymark suggests that leasehold owners in the UK have been paying nearly £450 million in ground rent per year and many homeowners have admitted that any further rise will make their property unaffordable to live in.

 

  • Rising Mortgage Rates to Crush Demand by 2023 – Estate agent Hamptons has reported that 1.25m property transactions have already take place this year, with property prices expected to rise 5% year-on-year in the final quarter of 2022. While this is evidence of a strong market and is in line with the exponential market growth seen since the onset of the pandemic, experts at Hamptons have also predicted that a slow-down may be on the cards in 2023 as economic pressures and interest rate rises begin to show their true impact on buyers’ appetites. The company has projected that early 2023 will see the Bank of England base rate peak at 2.5%, finally dropping somewhere between Q4 2023 and early 2024, when pressure on household incomes is expected to draw average house prices to a standstill. In the meantime, the agency has suggested that any further interest rate hikes this year will likely result in falling house prices as people can no longer afford to keep up.

 

  • Experts Predict House Prices to Rise a Further £14K This Year – According to lettings and estate agent Benham & Reeves, property prices are continuing to rise despite the pressure on households as the cost of living crisis continues to impact the UK economy. The London-based agent has predicted a further 5% increase before the year ends which will add over £14,000 to the average property. This will bring the national property value to £300,717. This may appear to be positive news for sellers hoping to get as much profit as possible from their property sale, the rising prices are expected to dampen buyer demand. Coupled with rising mortgage rates, this could result in a drop in property values. However, while demand remains high and supply remains low, prices are expected to continue driving property value averages up. Perhaps this winter will be the time we finally see a drop, especially if the energy crunch hits UK residents as hard as the news is currently predicting it will.

 

  • New Standards for Renters Now Under Consideration – A host of new proposals have been put forward by the Department for Levelling up, Housing & Communities and this week consultation has called for views from councils, housing groups, landlords and renters regarding the introduction of the new Decent Homes Standard to the private rented sector. The new proposals will see landlords under a strict duty to meet reasonable living standards for their tenants or facing criminal charges and fines for a failure to comply. The Decent Homes Standard aims to provide all renters with a decent and well-maintained home to live in. It will also strengthen tenants’ right to take action when this standard is not upheld. It is important that all those included in the consultation, which closes on 14th October, take part in order to fully voice their opinion on the changes. Private landlords have been feeling the pressure for quite some time now and the government must strike the correct balance between improving the lives of renters and ensuring that landlords are fully supported and acknowledged for the crucial role they play in housing UK residents amid the perennial lack of social housing available.

 

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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