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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
- SDLT Holiday on Additional Homes Suggested by Industry Trade Body – On the 3rd of November, the head of policy and campaigns for Propertymark called on the UK government to boost rental property supply with a year-long BTL stamp duty holiday. The Westminster Social Policy Forum discussed the recent publication of the white paper titled ‘A Fairer Private Rented Sector’ and included local MPs, real estate sector stakeholders and senior government officials. Evidence presented by Propertymark showed the shrinkage of the UK PRS and the impact seen by landlords following reforms and tax changes. The agency trade body approved the revised Stamp Duty thresholds. It encouraged the government to consider offering a 12-month additional Stamp Duty exemption on purchases of buy-to-let properties to combat the undersupply rental crisis gripping the UK.
- Where Are Rents Rising the Most in Greater Manchester? – Data published by Rightmove has pinpointed three areas in Greater Manchester where rental increases have exploded in the past year. Greater Manchester has experienced rapid rent growth and sales price increases, particularly over the past three months. This growth is largely a result of the chronic undersupply of BTL accommodation and properties for sale in the area. Year-on-year, tenant demand has increased by a staggering 20% in the region, and the number of available homes to rent has dropped by 9%. With an average monthly rent increase of 20.5% by Q3 2022, Manchester is the area where rent costs have risen at the fastest rate, with fierce competition among renters and a shocking lack of available homes to rent on the market. Sale and Salford have followed close behind Manchester, with annual rental increases of 18.8% and 17.6% respectively.
- Real Estate Industry Reacts to Base Rate Rise to 3% – For property experts, the latest BoE interest hike to 3% has come as no surprise. After the past few years of unprecedented borrowing, the Bank of England has been forced to raise interest rates eight consecutive times in order to combat the effect of rising inflation and curb spending. This has steeply increased the cost of borrowing, spoiling the chances of many to get onto or move up the property ladder. Rightmove has noted that the time for historically low-interest rates is now over. Still, although this latest rise will challenge potential buyers, the widely anticipated hike should not affect new fixed-deal mortgages. Knight Frank Finance agrees with this and anticipates that swap rates for mortgage pricing will continue to trend down as the market re-adjusts after Truss’s disastrous mini-budget announcement rocked the economy. The Director of UK Residential Research at JLL forecasts that higher interest rates and the closing of the Help to Buy scheme will reduce transactions by 30% next year. fall in transactions in 2023 compared with 2022. JLL also predict the average UK house price to fall by 6% in 2023.
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What Are the Help-to-Buy Alternatives for First-Time Buyers? – A mortgage lender executive from property specialist Even has spurred on the real estate industry to provide more options to first-time homebuyers trying to get on the ladder. With the Help-to-Buy scheme closing to new applicants, first-time homebuyers will be looking for other ways to boost their buying budget and secure favourable lending options. In the current market conditions, money-saving options are becoming increasingly scarce, and Even has called for the property industry to work collectively to keep the door open for new buyers, especially as renting has become a trap for the younger generation, with rising rents, inflated bills and wages falling drastically out of line of the rising cost-of-living. Despite having its own flaws, such as only being available on new builds, the Help-to-Buy scheme has helped over 360,000 more people get on the property ladder. The market now needs a fresh offering to give the next generation of buyers hopes for the future.
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.