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Effects of Autumn Budget Statement 2023 on UK Property Investors

It’s been a tough year for the property sector. Thankfully there were certain measures in the Autumn Budget Statement, announced recently, to swell the heart of property investors. But there were many omissions to moan about too. 

One of the biggest boosts to developers was the consultation into permitted development rights which could make it possible to divide one house into two flats. The only stipulation being that the exterior of the property doesn’t change. This could mean big profits for those investors prepared to get their hands dirty and do the development work themselves.

Private rental sector still hugely relevant

The huge demand for private rental properties will continue too, thanks to the chancellor doing nothing to cut Stamp Duty. This fact and the current high mortgage rates make it impossible for many couples to buy their own home. 

Jonathan Stinton, Head of Intermediary Relationships at the Coventry Building Society, pointed out that failing to do anything about Stamp Duty changes could result in homebuyers having to fork out an additional £2,500 on an average priced home by March 2025.

Mortgage guarantee scheme extension

First time buyers and current home owners though were thrown a lifeline in the form of an 18-month extension to the Mortgage Guarantee Scheme. This allows them to buy property worth £600,000 with just a five per cent mortgage. And that property doesn’t have to be a New Build. 

Having said that, not all mortgage companies were impressed. 

Rachael Sinclair, Director of Mortgages and Financial Wellbeing at Nationwide Building Society said she was disappointed that the scheme continues to restrict qualifying loans to 4.5 times income. “Research shows that most homes remain unaffordable through the scheme,” she added.

A plus for property investors is they can now feel more reassured when renting to individuals and couples in receipt of Local Housing Allowance (LHA). That’s because, in the Budget, the Chancellor announced a £1 billion investment into the sector, designed to cover market rents for the bottom 30 per cent.

Cut in self-employed landlord NI

Self-employed landlords – along with much of the population – will benefit from the abolishment of class 2 national insurance. That’s to the tune of £192 per year. Class 4 national insurance is to be cut from nine per cent to eight per cent on profits between £12,570 and £50,270, resulting in a saving of around £350 a year.

One of the big omissions in the budget according to Maria Harris, Chair of the Open Property Data Association (OPDA), was Jeremy Hunt’s failure to implement any real measures to speed up the way homes are bought and sold in the UK today. He ordered just £3 million for pilots to look at proptech development and digitising local council property stats – which compared unfavourably to the £500 million for developing Artificial Intelligence.

Harris added: “The Chancellor stated that the UK’s tech sector has grown to become the third largest in the world, this needs to filter through urgently into the tech and digitisation of the home buying and selling process where all key data is held centrally and can be accessed easily and quickly by every relevant party.”

It currently takes an average of 19 weeks to buy and sell in the UK – that’s 77 per cent longer than back in 2007 according to data from The Landmark Information Group.

Get in touch 

Keep up to date with property market news by subscribing to a free trial of Blue Bricks magazine here today. You can cancel after the trial and it costs nothing, or it’s just £9.99 if you like it and want to continue (which we’re sure you will).

Cashflow Leasing: The Secret Way to Cut Upfront Costs on High-Cashflow Deals

Cashflow Leasing: The Secret Way to Cut Upfront Costs on High-Cashflow Deals

Cashflow leasing introduces an innovative approach for property investors to reduce upfront costs on property purchases. This method is particularly relevant for investment strategies with strong cashflow, like houses in multiple occupation (HMO) or Serviced Accommodation (SA) properties.

In this article, I’ll explain cashflow leasing and how you can use it in your own business to save money on taxes, increase rental income and spread your capital across multiple property deals.

What is Cashflow Leasing?

Cashflow leasing works similarly to a conventional lease arrangement. Instead of an upfront lump sum, expenses are distributed across several months, typically spanning up to three years. However, the distinction lies in its application – rather than financing a car or a new watch, it serves as a funding mechanism for furniture acquisition.

Furniture comes with a substantial price tag; a single sofa alone can range from £1,500 to £2,000. When combined with dining tables, beds, wardrobes, and other household essentials, the investment required to get a property photoshoot ready can easily exceed £10,000.

These costs rise even further when furnishing high-end holiday homes or an HMO with a large number of rooms. For many investors, venturing into Rent2SA (R2SA) or Rent2HMO (R2HMO) scenarios, limited capital poses a challenge. This means that the idea of investing in furniture has the potential to break what initially seemed like a lucrative deal.

What Are the Benefits of Cashflow Leasing for Your Property Business?

It is no secret that both the HMO and SA strategies have become increasingly competitive. It seems that many more people are investing in this strategy every month, which makes it harder for established properties to stand out against the crowd and attract more guests or tenants.

One of the main ways to distinguish yourself, is to provide an experience rather than a property that looks like it’s been furnished on a budget. Higher-end furniture attracts higher-class tenants and guests. If you’re investing in HMOs, then a nicely refurbished room means you can demand more rent and lower your void periods. If the SA strategy is more your thing, then you can charge more for your property per night and long-term guests will be more attracted to staying with you.

But the problem with this is that it can be expensive. Nice furniture rarely comes cheap, unless it’s second-hand. Cashflow leasing allows you to buy the furniture your heart desires and split the cost over three years, meaning there is no upfront, blow to your bank balance and you can pay the finance off through the profits of your rental/nightly income.

An additional benefit to this strategy is that all payments are tax-deductible, offering further savings for your business.

Saving your capital also means that you can spread your money across multiple projects, rather than having one deal sap most of your savings.

Example Costs

Let’s say that you want to buy a brand-new sofa. You’re going high-end and the one you have your eye on costs £6,000. You’ve already paid a fortune in purchasing fees, renovation costs and bridging finance repayments. Spending another £6,000, that could instead be invested into another deal, just isn’t feasible.

If you were to lease this sofa, then the costs could look something like the below. However, it is worth noting that this price can vary and homeowners tend to get better rates than those who don’t own a property.

Value:                                             £6,000 – Lease Value £5,000

Repayment Terms:                     3 years

Monthly Premium:                    £201.02

Overall Cost:                                £7,236.90

Interest Paid:                                £2,236.90

Corporation Tax Relief:             £1,375.01

Nett Cost of Finance:                 £861.89

Cost Per Year:                               £287.30

Supplier Gets Paid:                     £6,000 (£5000 + VAT)

Financing Refurbishments

As an added bonus that lies outside of furniture, you can lease materials for your refurbishments. This is another great way of lowering upfront costs and can also be used to protect large blows to your capital, if an unexpected problem arises when you commence work. The leased payments can then be paid off through your rental income or, can be paid off in one lump sum after sale or refinance.

Here to Help You Scale Your Portfolio, On a Budget

I hope that you have found this article useful and that it has opened your eyes to other finance options available to you, when you’re faced with the daunting cost of furniture. I hope that, by lowering the barrier to entry, more people can begin to invest in property and create beautiful places for people to live, work and raise families.

If you want to explore how cashflow leasing can help you to grow your property portfolio, without needing to invest tens of thousands of pounds in furniture, then get in touch using the information below.

Website: https://cashflowleasing.co.uk/other-partners/

Email: sales@cashflowleasing.co.uk

Scotland Fares Best in Unsettled Property Market

When it comes to the three nations, Scotland’s property market is faring far better than south of the border. 

Homes aren’t only selling quicker in Scotland – twice as fast as London, in fact – but the country also has the highest year-on-year growth. 

Scottish owners receive highest financial boost

The news, from Rightmove’s latest survey is in contrast with much of the rest of the UK. To the extent house prices fell by 0.4 per cent last month across Scotland, England and Wales together. Taken individually though, property owners in Scotland enjoyed a 2.6 per cent increase in the value of their homes compared to the same month in 2022. Property was selling in 32 days on average. This compared favourably to 63 days in London and 64 days in Wales.

Second fastest-selling market is the North East where property is taking 49 days to sell, followed by the South West with 54 days. 

In terms of prices, property went up in only four other areas overall – by 2.6 per cent in the North East, 1.2 per cent in Yorkshire and the Humber, 1 per cent in the North West and 0.7 per cent in London. The biggest drop in prices was in Wales where property was worth 1.5 per cent less. Next was the East of England where sellers received 1.4 per cent less and the South West, with a fall of 1.3 per cent.

Mortgage interest rate rises together the increases in the cost of living, have slowed down the market as many would-be buyers began to re-assess their moving options.

Property transactions down by one fifth

Certainly, according to HMRC figures, the number of properties changing hands in July this year, fell by more than one fifth (22 per cent) compared to the same period in 2022. 

And, with many more fixed rate deals coming to an end over the following months, together with no indication of mortgage rate drops, the status quo is expected to remain for some time yet. Especially when you consider that the average two-year fixed rate mortgage has gone from 2.3 per cent to 6.56 per cent over the past two years. This is due to the Bank of England increasing its base rate on 14 occasions since the end of 2021.

Fewer properties for first-time buyers

In terms of available housing, there are 10 per cent less properties than four years ago. And this figure doesn’t look like improving any time soon – certainly in terms of New Builds. That’s because planning approval for new housing in England is the lowest it’s been for 15 years. The Home Builders Federation revealed the number of new homes approved for building in England, in the second quarter this year is 54,200. The total for the past four quarters is 265,223. This is despite the government’s promise to build 300,000 new properties a year by the middle of the decade.

Developers are less inclined to build since the mortgage interest rises, as well as the withdrawal of the government’s scheme to help first-time buyers get on the property market.

How to Use Furniture to Get More Airbnb Bookings at a Higher Value

How to Use Furniture to Get More Airbnb Bookings at a Higher Value

Serviced accommodation is becoming a highly competitive strategy in the property sphere. More and more people are letting out properties to holiday-goers or contractors in exchange for nightly income.

While it is nice to see more people making money through property, it does mean that running a successful serviced accommodation business is becoming more difficult than ever due to a saturated market.

If you go to Airbnb and search for any popular town or city, you’ll see an abundance of properties available under short-term let, each one looking the same, or very similar. The key to succeeding in this competitive market is to stand out, and in this article, I’m going to show you how to do just that using the power of furniture.

Know Your Guest- How to Increase Nightly Values

Think of your SA property like a magnet. You want to attract the right guests. For you, the right guest might be a wealthy individual who’s looking for a high-end break that they’re happy to pay top price for. Alternatively, it could be a contractor who’s looking for a comfortable place to call home for a few months.

The point is, that if you fill your property with high-end furniture, you’ll attract high-end guests. Whereas if you fill your property with the first piece of furniture you find at IKEA, you’re unlikely to attract the demographic you are aiming for.

Think about the demographics that are likely to visit your investment area, and then think about which of them will be the most profitable guest for your business. Then, when you’re looking for furniture, you’ll have a clearer idea of what will be appealing to them.

Where to Save Money When Furnishing Your Property

The mistake that a lot of investors make is that they try to cut costs in the wrong areas. So, they get the cheapest furniture they can find. While there is nothing wrong with this, it does mean you’re negatively impacting your nightly value, and repelling long-stay guests.

The main thing to spend your money on is the main features, like your sofa and beds. These are the things that people will be sitting/sleeping on and being comfortable is vital if you want to keep someone in your property for a long time.

The next key is to be clever with your interior design. You can buy cost-effective items to go around your property that make it feel ‘homely’. For example, candles, bookshelves and stands. These will prevent your photos from looking empty on Booking.com and Airbnb, and they also allow you to style your property in a way that is more attractive to guests.

Companies like ours even offer furniture packs. These packs have been designed to include everything you need, all at a reduced price. Not only do furniture packs save you money, but they also save you time, as you don’t have to shop around for each individual item.

Here to Increase Your Nightly Values

Our role is simple: we’re here to increase the value of your SAs and help you attract long-stay bookings. We do this with a variety of furniture packs fit for all budgets and guest demographics.

To discover more about how we help you, check out our website here. To speak with us directly for a free consultation, get in touch by clicking here.

What Do Architects Do- The Art of Architecture Demystified

What Do Architects Do- The Art of Architecture Demystified

Architecture is one of those black magic jobs. We know it’s important, and we know it’s impressive, but to many people, outside of ‘drawing pretty pictures’, it’s not very clear what architects actually do. Perhaps it’s my own ignorance, but I’ve always held this view. I could never fully wrap my head around what the practice entails and, more importantly, the role they play in property development, apart from drawings and CGIs.

So, rather than remaining in blissful ignorance, I decided to fill a gap in my knowledge and hopefully discover something that will benefit your property business.

A couple of weeks ago, I spent the day with MAC Architects in Harrogate. This included shadowing them on existing projects going through planning and even attending a site visit to a large and impressive private home.

Let’s put an end to this black magic once and for all and uncover what architects really do and why they’re more important than you might think.

The Finer Details

Even for someone who struggles to sketch stick men, I was impressed by the effort that goes into an architect’s drawings. You see, every line (or wall) has to be drawn to scale. If that wall is a millimetre off on paper, it could be a metre off when the builder comes to create it in real life.

These drawings, which are basically floor plans, are then plugged into an incredible system that brings them to life. Small lines suddenly become rendered walls. Windows, doors, and furniture are added. You essentially get a 3D model of what the property will look like. You can even change the time of day to analyse how the sun and shadows will affect the property.

But what really surprised me was the knowledge that an architect must have. Certain minerals react differently with other stones or materials when exposed to moisture. So, if you build with stone or brick and use two types of stone that have this problem, then the property can become structurally unsafe when it rains.

It was at this point that it struck me that building a home isn’t as simple as four walls and a roof. You have to take into account sunlight, building materials, parking, and how the new property interacts with the environment. This knowledge, which architects have to train for seven years to acquire, is vital to the build process. Trying to build a property without it would be like performing surgery with your eyes closed.

‘Millionaire Row’

Next up was a site visit to a lovely place referred to as ‘millionaire row’. It’s rightly earned this title since you won’t get much change from £3 million if you buy a house there. Mind you, you get a lot of property for your pound, with huge mansions that would take you half a day to walk around!

One of the properties on this row has recently been purchased and is undergoing refurbishment. It’s a dream home. The kind of property you put on your vision board. It has a garden so big that you could open a campsite and still have room to mow the lawn!

Now, this is a sticking point because many people pay architects for designs and then bid them farewell. But watching Kate, the lead architect, walk around a site full of builders pointing out snags and picking up on the occasional cut corner showed me why this was a bad idea. And it’s not just trades that architects manage. Many of them will also coordinate other professionals, like structural engineers and surveyors.

Managing trades is a skill, and most architects have it in abundance. They know how things SHOULD look, and they can point out things that would otherwise go unnoticed. In essence, architects are part designers, part planning consultants, and part project managers. If you hire the right firm, you really need very little involvement in your own project.

My Views on The Practice

I am sure that, like me, you have heard the occasional negative grumbling about architects. Maybe you have had a bad experience with one. I suppose that it all comes down to the adage of ‘they’re not all bad’.

What I’m trying to say is that, after getting a peek behind the curtain, the way I view architecture has completely changed. I thought that architects were a “nice thing to have if you’ve got the budget”. Now, I think they’re a must-have. They’re seasoned professionals who will save you headaches and lost money by managing the project effectively and making sure the I’s are dotted and the t’s are crossed.

If you’re looking to save money, then don’t do it here. Maybe lay some cheaper carpets instead!

Finally, thank you to the team at MAC Architects for the opportunity to grow my knowledge. If anyone wants to speak with an architect you can trust, then you can contact the team using the details below.

Tel: 01423 528999

Email: info@macarchitects.co.uk

Handing over the keys to the new owners of a home

Bungalows Becoming Best Sellers

Bungalows are getting bigger – in popularity that is, according to new research. 

To the extent that the price of a bungalow has soared by 17 per cent over the past two years (between May 2021 to May 2023). It compares to a jump of just five per cent for flats between the same period, and 13 per cent for houses. 

Research by the estate agency Knight Frank shows the cost of a typical bungalow was £349,127 in May, compared to £362,915 for the average house and £281,526 for a flat. 

Bungalows best sellers in certain communities

In certain areas, where there is a large community of retired people, bungalows can fetch more than houses. A spokesman for upmarket estate agency Hamptons said this wasn’t uncommon, referencing Bassetlaw, Nottinghamshire where bungalows are selling at more than 51 per cent more than three to four bedrooms home, coming in at 51 per cent (or around £135,680) more expensive than the average family home. 

Other areas where bungalows are becoming the property of choice include South Staffordshire (49 per cent or £185,110 pricier and North Ayrshire (48 per cent or £100,740 more expensive). In already sought-after locations, such as Cornwall and Bournemouth, a bungalow can set potential house owners back by as much as £450,000 or even £1 million in a particularly desirous locale.

Only 10 per cent of listings are bungalows

A spokesman for Knight Frank explained the fact there weren’t that many bungalows listed on estate agents’ books, put the price up too. 

“Bungalows made up less than 10 per cent of the total new listings of houses, flats and bungalows in the year to May 2023,” said Chris Druce, the company’s senior research analyst.

There are many reasons why bungalows have appeared on the radar of so many people in recent years, say economists. And it’s not just down to an aging population. There’s also the fact that the humble – and traditionally small bungalow with just one or two bedrooms – doesn’t cost much to heat. And with the shock of rising utility bills last year, that’s a big reduction for retired couples who until recently were living in underused three or four-bedroom homes.

Families favouring bungalows too

And it’s not just the elderly who are snapping up bungalows. Families struggling to cope with rising mortgage rates are also downsizing. The fact bungalows tend to have large gardens that children can play in doesn’t hurt the bungalow’s popularity with families either.

One local estate agent in Cornwall is so adamant bungalows are the ‘next big thing’ for his community that he’s urging developers to build more. But not just any bungalow. He knows too that many homeowners in their 50s, 60s and 70s are also interested in sustainability.

“I have even advised local developers to consider making bungalows a greater part of development plans. Due to the scarcity of new bungalows, along with an ageing population, there is a real opportunity and demand for future-proof properties that boast modern tech and contemporary design,” says Ben Standen, director of Truro’s Jackson-Stops estate agency.

By that he means ‘green energy’ initiatives such as ground source heat pumps, solar panels, and EV charging points.

Get in touch 

Keep up to date with property market news by subscribing to a free trial of Blue Bricks magazine here today. You can cancel after the trial and it costs nothing, or it’s just £9.99 if you like it and want to continue (which we’re sure you will).

Property Market Picking Up Nicely

More properties are coming on the market for sale with agents reporting an increase in supply. At the same time the countryside and ‘quieter living’ is still proving popular for buyers. Meanwhile, more people are looking to rent.

The estate agents’ professional body PropertyMark showed in its recent Housing Insight Report that there were 70 per cent more homes for sale in April than the same period last year. It brought the average amount of stock available per branch to 34. That’s a big increase of 14 properties more than in April 2022. 

At the same time, the property market is once again similar to pre-pandemic figures in terms of sales, with an average of eight properties sold per branch. The majority of homes – around 75 per cent – are selling at sums below the asking price.

‘Escape to the countryside’ still going strong

Meanwhile, lockdowns may be over but the rush to the countryside is far from nearing its end. Hybrid working has meant many house buyers are still looking for quieter spots in which to reside. And they want bigger homes too. 

At least that’s the findings from the latest Halifax report which says detached homes are by far the most popular category for today’s buyers. To the extent we’re buying seven per cent more than we were a decade ago. That’s a rise from 25 per cent to 32 per cent.

Analysts believe many older people who have built up large amounts of equity in their homes are downsizing. The reason for this is to help children and grandchildren get on the property ladder themselves.

The loser in the property stakes is terraced homes, which have fallen from 26 per cent popularity to 21 per cent over the same period. More of these are now being snapped up by first-time buyers.

At present, the number of detached homes in England and Wales – 4.21 million – makes up 16 per cent of all available homes. That compares to 6.93 million terraced houses (26 per cent) and 1.10 million flats (23 per cent).

More renters than property available

The number of people looking to rent in April was 24 per cent higher than the same time last year, the same Propertymark report we mentioned earlier showed. That worked out at around 118 prospective tenants registered per agency branch. And yet, there are only around nine properties to rent per agency. Despite this, the average rent is 75 per cent less than in April 2022.

Propertymark CEO Nathan Emerson said: “We are still seeing the demand for property grow but no increase in homes. This means that pressure on rent prices is remaining, whilst new legislation will undoubtedly have a knock-on effect, we desperately need more homes for renters.”

Get in touch 

Keep up to date with property market news by subscribing to a free trial of Blue Bricks magazine here today. You can cancel after the trial and it costs nothing, or it’s just £9.99 if you like it and want to continue (which we’re sure you will).

Buyers Want Smaller Homes and Eco-Builds

House prices are teetering on the edge of a fall, while the cost of a mortgage in the UK is increasing. 

The most recent figures from the Halifax show property price increases are flatlining; April’s increase for the average property was a mere 0.1 per cent compared to the same time in 2022. And, with the rapid rise of inflation in comparison, it means prices are, in reality, much lower. 

Cost of New Builds up 3.5 per cent

Looking at individual sectors, the cost of a New Build has actually risen over the past 12 months, by 3.5 per cent. Another positive figure is for property in the West Midlands, which has seen a jump of 3.1 per cent. 

Yesterday’s rise in interest rates, by 0.25 per cent, bringing the figure to 4.5 per cent, is exacerbating the issue of falling property costs. That’s because higher interest rates make buying less palatable. At the same time re-mortgaging becomes far more expensive. 

This is evidenced by the recent RICS survey which showed estate agents have more properties on their books. The average estate agent had 36 homes in April, compared to 35 for the previous two months. The reason being less buyer demand.

Buyers looking for smaller homes 

A squeezing of household finances has also led to a trend in people looking for smaller homes (ie with one bedroom less than in the past). Energy efficient New Builds are also featuring highly on buyers’ ‘want lists.’ 

Simon Rubinsohn, RICS chief economist, said: “Buyer demand still appears to be subdued in the face of relatively high borrowing costs… and ongoing affordability challenges.”

Although Tom Bill, head of UK residential research at Knight Frank, said he expected prices to fall this year, it wouldn’t be by much. He quoted a figure of around three per cent, saying the market would be buoyed by plenty of employment, large amounts of housing equity and people still sitting on impressive savings they garnered during lockdown.

Stammer to hit foreign buyers 

Labour’s Keir Stammer meanwhile threw a spanner into the works of property buying strategies of overseas buyers, this week. He announced that were his party to gain control of government he would impose new restrictions on foreign investors. This includes raising foreign buyer Stamp Duty yet again (it’s currently at two per cent) and curbing the number of properties they can buy on a development. 

Stammer says he also wants to give priority to first-time buyers. He would achieve this, he said, by allowing them a ‘buyers window’ for up to six months (or a time agreed by individual local authorities). In other words, only first-time buyers would be allowed to purchase for a set time. 

Rishi Sunak has already been criticised by some of his party for dropping national house-building targets – especially in light of the poor Conservative election results last week.

Get in touch 

Keep up to date with property market news by subscribing to a free trial of Blue Bricks magazine here today. You can cancel after the trial and it costs nothing, or it’s just £9.99 if you like it and want to continue (which we’re sure you will).

First-time Buyers Face Uphill Struggle

UK property prices are on the rise again – albeit on a monthly basis and by just 0.2 per cent.

The increase was from March to April, reports Rightmove. And, although positive for homeowners, is still 1.7 per cent lower than in the same period last year. The cost of the average property overall in the UK is now around £366,247.

It’s all about competitive pricing for spring, insists Rightmove’s Tim Bannister.

The property portal director said: “Many sellers have transitioned out of the frenzied multi-bid market mindset of recent years and understand the new need to tempt spring buyers with a competitive price.”

The pace of the property market, he says, is similar to that pre-pandemic. In fact, sales were 18 per cent lower than in spring 2022.

First-time buyers face price hikes

Meanwhile, one sector of the property market where prices aren’t particularly competitive, is the first-time buyer market. That’s because the price of one to two-bedroom properties has jumped two per cent compared to spring last year. It brings the asking price for the average first-time buyer home (ie those with one and two bedrooms) to £224,963.

Conversely, sales for ‘second stepper’ homes ie those with three to four bedrooms and a garden and four per cent less their pre-pandemic figure. 

City living is becoming appealing again

And talking of lockdown, now that more people are going back into the office, the yearning for city living is becoming ‘a thing’ once again. Property researchers TwentyCi say sales in cities, particularly inner London, are on the rise. In fact, it’s 5.8 per cent more than in 2019. The prices are rising due to investment from foreign buyers. 

Meanwhile, London lettings and estate agent Benham and Reeves has identified a gap of more than 34 per cent between seller expectations and what buyers are prepared to pay. The average approval price being around £271,098 compared to the seller’s asking price of £363,416. It’s the biggest gap since the market was in full flourish during the height of pandemic in autumn 2020.

North East sees most UK property sales

Most property sales over the last quarter have been in the North East of England (an increase of seven per cent). Scotland was the only other area to experience an increase in sales numbers. The biggest drop in sales was in the East Midlands, at 15.3 per cent. The previously popular South East saw sales drop six per cent.

The North East saw the biggest uplift in agreed sales at seven per cent, while Scotland saw a small increase at 1.4 per cent. 

Other regions recorded by TwentyCi reported a decline in sales agreed when compared to 2019, ranging from a drop of six per cent in the South East to a fall of 15.3 per cent in the East Midlands. The figures, a spokesman for TwentyCi said, pointed to a recalibration in the market, rather than an all-round freefall. 

Get in touch 

Keep up to date with property market news by subscribing to a free trial of Blue Bricks magazine here today. You can cancel after the trial and it costs nothing, or it’s just £9.99 if you like it and want to continue (which we’re sure you will).

Use Classes and Permitted Development Rights for Short-Term Lets- What it Means for You

There have been recent grumblings from the government to introduce a use class for short-term lets. This legislation will cover England only, and if it’s put into place, then it means that rent-to-rent and rent-to-serviced accommodation units will have to go through the planning process for approval.

This new change also includes the potential introduction of permitted development rights for the change of use from a dwellinghouse to a short-term let and the potential for change of use rights from a short-term let to a dwelling house. It is likely that this will only apply to properties that are rented out as a short-term let above a certain number of nights in a calendar year.

Although nothing is set in stone at the moment, it is important to know what conversations are being had so that you can prepare your business in advance. There are pros and cons to this change coming into play, and we’ll cover these later in the article.

Why Is This Happening?

It is becoming a matter of concern that the rise of short-term accommodation in certain areas may be having an adverse effect on the availability and affordability of housing for the local population.

The legislation will likely be flexible in less-popular areas where short-term lets are uncommon. At a guess, it will be these areas where permitted development rights are introduced, so full planning permission isn’t required. The government are also discussing what the application fee will be where planning permission is required for new build short-term lets.

When Will This Happen?

Right now, it’s all just speculation. An open conversation on the introduction of a use class and permitted development rights for short-term lets will be happening between the 12th of April 2023 and the 7th of June 2023. You can view the discussion and submit your thoughts on the Gov.uk website here.

After this, a decision will be made, and it is expected that a date will then be given for this use class to be put in place if the government decide to go ahead.

Is it a Bad Thing?

For rent-to-rent and rent-to-SA providers, the new use class will make life more difficult. In short, it’s another hoop that you must jump through, and it might make the idea less enticing to landlords/ letting agents.

On the bright side, it will reduce competition, as the people looking for a ‘get-rich-quick’ scheme will likely be put off by the process. It will hopefully raise standards in the industry and keep more people accountable. If you’re an established business that has been doing this for a while, then you’ll probably have fewer issues going through the process than someone with no experience.

It is both good and bad depending on how you want to look at it. In our opinion, you should expect these changes to take place and prepare your property business for them. Then, even if the government scraps the idea, you haven’t lost anything. But if they do go ahead, you’re ready, and your business won’t come to a grinding halt.

This isn’t certain, but it’s highly likely that the change will only apply to new short-term lets. So, if you already have a portfolio full of them, then your existing investments shouldn’t be affected.

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