Happy Halloween! Even though it is supposed to be the scariest time of the year, the new Hometrack House Price Index report is far from it. You will have seen our blog post earlier on in the week reporting that UK growth rate is +3.0%, up from +1.1% a year ago – the highest rate for over 2 years (April 2018). The report demonstrates how demand is still strong meaning house prices carry on creeping up (Halloween pun intended).
If you follow us on social media then you would have seen we have some exciting news, we are going to be launching our very own property Podcast. Nick, the founder of Track Capital, and I will be talking about everything property and property investment to give you inside industry knowledge, hints, tips, and property-related added value. So keep an eye out as we will announce the official launch very soon.
Now, let’s take a look at the property headlines that caught my attention this week, I always try to summarise the links to save you having to click through.
Property news this week
- London house price forecast: 20% growth looking beyond coronavirus and Brexit to 2025 – Yes, you read that correctly, London prices are predicted to rise by 20% over the next 5 years. According to a new paper by JLL, the capital will lead the UK housing market in the post-pandemic recovery, with Londoners expected to see their house prices rise by a fifth (21%) over the next five years. They predict the recovery will start in prime, central London areas where the ultra-rich will trigger recovery and overseas investors will return to the exclusive districts such as Mayfair and Kensington. The report suggests that another main driver behind the growth will be the growing housing shortage as demand outstrips supply and housebuilders falling behind during the pandemic. JLL’s head of research, Nick Whitten, predicts a boom in shared owner ownership (part buy part rent) which, I suppose, would naturally happen should prices rise making buying unattainable for some and as shared ownership can work out cheaper than renting in some areas, there would be a natural shift towards the scheme. Whitten and JLL pinpoint London’s half-built regeneration zones as the savvy buy over the next year and encourages first-time buyers to want to stay as close to the center of London as possible, regardless of the Covid-19 crisis.
- Stamp duty holiday cut-off could ruin 325,000 home moves – A concern that many are having in the industry is that many buyers could miss out completing on a home purchase before the stamp duty holiday ends due to delays in the buying process. Due to such overwhelming demand, delays to the mortgage process, conveyancing, and surveying have meant it can take 5 months to complete (on a simple transaction) which means a lot of sales agreed recently and going forward would be in jeopardy of missing the deadline. There has been a widespread cry for the government to stop the end of the holiday being a ‘cliff-edge’. It would be much more beneficial if they could introduce a phasing out the structure so transaction levels would gradually reduce rather than completely drop off. If nothing is done then there is a very high chance that many buyers and sellers will just pull out of transactions if the deadline is missed leaving people out of pocket and out of homes. I hope the government listens and takes action.
- National licensing of landlords “on the horizon” says regulation expert – Well it is Halloween week so there had to be something scary for landlords and investors! Mark Hayward, chief executive of the National Association of Estate Agents Propertymark organization, says the licensing of private landlords is “on the horizon” but remains a vast piece of work before it can take effect. I really struggle to see how the logistics of setting this up will work as they would have to be able to find out who private landlords are, how to locate them, and also how it would actually be regulated. I think this is a bit farfetched and might not come to fruition, but who knows. The property industry will be regulated at some point, that I’m sure of, and this should be sufficient enough, adding landlords into the mix has no massive benefit. Yes, there are some bad/rogue landlords but it is a very small percentage meaning the rest of the good ones get penalized. It would also push a lot of landlords out of the market meaning fewer homes for tenants. Local councils already have the means and powers to deal with rogue landlords so not sure how adding a landlord license will massively help.
- One in 10 BTL landlords plan to add to portfolios – This headline comes to no surprise as we have many investors wanting to add to their portfolios as they see buy-to-let continuing to deliver solid returns even with a challenging time for the market, investment in buy-to-let continues to outperform most major asset classes, as demand from private renters grows. Simply Business shows that 10% of buy-to-let landlords are planning to add to their portfolio in the near term, compared to just 3% at the end of last year. Savers are receiving little returns from the banks and with negative interest rates potentially on the horizon, thousands of people continue to turn to residential property as a means of supplementing their income. If you are one of the 10% then you know where we are if you want some advice and options.
Get in touch with the team anytime to discuss your UK property investment plans through [email protected] or on +44(0)203 627 3987.