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Lockdown 2.0 has begun in England and although it is not great, we are lucky that the property market is able to stay open. Construction has also been unaffected meaning it is business as usual for us.

This week has seen history being made when Halifax announced a 7.5% increase in house prices for October taking the average UK house price up to a quarter of a million pounds (£250,457) for the first time in history! Russell Galley, Managing Director, Halifax, said: “This level of price inflation is underpinned by unusually high levels of demand, with latest industry figures showing home-buyer mortgage approvals at their highest level since 2007, as transaction levels continue to be supercharged by pent-up demand as a result of the spring/summer lockdown, as well as the Chancellor’s waiver on stamp duty for properties up to £500,000.”

Demand remains strong and that does not seem to be subsiding anytime soon so it will be interesting to see if we experience the normal Christmas/Winter slowdown that we usually do. I think we will see a slight slowdown but it won’t be as slow as we are used to.

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Now, let’s take a look at the property headlines that caught our attention this week, I always try to summarise the links to save you having to click through.

Property news this week

  • Retiree & Upper-Middle Aged Renters: Fastest Growing Tenant Segment of Private Rented Sector – Do we need to start considering our investments to suit an emerging new tenant demographic? According to Paragon, retiree renters and those in the upper-middle age category are the fastest growing tenant groups in the private rented sector. Since the turn of the decade, there has been an increase of 118% in 55-64 year-olds renting in the PRS sector and those aged over 65 growing 93%. Paragon’s research also reveals that later life tenants are generally happier in private rented accommodation with 22% saying said they didn’t want the responsibility of owning a home and 15% stated it gave them more flexibility. Looking at property that would suit this demographic and adapting is certainly something to keep in mind because population forecasts show that by 2043, the proportion of the UK population aged over 55 will increase from 30% to 36% (26 million people).
  • Mortgage payment holidays to be extended for up to six months – In such uncertain times that we find ourselves in, it has been great to hear that the mortgage payment holiday scheme will be extended for up to six months following the news that England will go back into national lockdown from 5 November until 2 December. The scheme had originally been due to end on 31st October but borrowers who have not yet had a mortgage holiday can request a pause in repayments from their lender that can last up to six months. Plus, for those who currently have an initial payment deferral or had one and have restarted repayments, will be eligible for another payment deferral of up to three months. If this is something that might benefit you then please click the link to view the article for more information and to see if you might be eligible. Just bear in mind that any payment holidays taken may potentially effect your ability to borrow in the future so should only be taken if absolutely necessary.
  • Will Lockdown 2 produce another surge in tenancies? – In the first lockdown we saw a surge in tenancies and according to Ome, the three months following the first lockdown, new tenancies on private rented properties were up by 22% on the previous year. This may have been down to the pent-up interest in moving to a new home and some tenants re-evaluating their housing needs for storage, outdoor space and working from home. My personal opinion is that there will not be a surge like this because you have Christmas coming up and there will also be less pent-up demand because the property market remains open so people can still move.
  • Rise in construction sector brightens UK economic gloom – In this piece from The Guardian, we see more shining hope for the property sector as they report that home builders pushed ahead with new projects during October. Even though the services and manufacturing sector is suffering a sharp slowdown, building firms continued to bounce back from a contraction in spring that followed the UK coronavirus lockdown. It would seem that the government’s cut in stamp duty on the sale of new homes has been a positive catalyst seeing new orders increase at the fastest pace for almost five years. Tim Moore, the economics director at IHS Markit, said: “The strength of the pipeline of new work especially from a robust housing market means the sector is moving in the right direction and hopeful of getting through the winter unscathed”. Let’s hope this continues as the property and construction market are such a big part of the UK economy.

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