Market Pulse – Page 13 – Blue Bricks Magazine

July 2020, Lettings Update, Market Pulse

9 July 2020

Coronavirus results in countrywide cash-in

Vendors of countryside properties are ‘cashing in’ on the coronavirus rush to get away from busy cities – and London in particular.

That’s according to several big estate agencies dealing with such rural retreats. Frank Knight reports that their more expensive country properties are selling for as much as 17 per cent over the asking price.

Panic buying for rural idylls

The rush by wealthy city dwellers to leave the capital has seen ‘frenzied activity’ in southern rural idylls, especially in locations such as the Cotswolds.

Jonathan Bramwell, of The Buying Solution, said he witnessed a buyer instruct his solicitor after just one viewing and exchange contracts within a week. Countryside estate agents said 15 per cent of registered buyers between April and May were from London – double the number than usual.

Properties priced between £2.5m and £3.5m in both Suffolk and Sussex are now regularly getting up to 10 per cent over the asking price. The number of buyers for such properties has jumped from four to 10 year-on-year.

Even wealthy buyers hit by restrictions

Strutt & Parker estate agents in Salisbury recently sold a £2m property for £200,000 over the asking price. But analysts warn the mass exodus of wealthier couples and families from London can’t continue. The stock market is expected to be badly hit when the government furlough scheme ends in October. At the same time finance lender restrictions will get even tighter.

The value of homes valued at £5m and upwards has increased by 1.2 per cent between May and June, says Frank Knight. At the same time, offers on countryside properties within travelling distance of London, priced between £5m and £10m, is 182 per cent higher than the five-year average.

Jill Stevenson

Finance, July 2020, Market Pulse

6 July 2020

Sunak to slash stamp duty for 6 months

The Chancellor of the Exchequer is expected to deliver an economic update on Wednesday as he outlines plans to increase the stamp duty threshold up to £500,000 for the Autumn Budget.

Sunak is expected to announce a 6-month stamp duty holiday to facilitate Britain’s flailing housing sector, according to source reports.

He is understood to be drawing up plans to raise the tax threshold as high as £500,000 to remove most home buyers from the scope of stamp duty to try and help the UK economy.

He will reportedly reveal plans this week to increase the threshold at which people start paying stamp duty on house transactions. This new threshold will he put in place for 6 months and is expected to be set between £300,000 and £500,000.

First time buyers are already exempt from paying stamp duty up to £500,000 in London, and £300,000 in the rest of the UK.

Property sales in April fell to their lowest levels since records began, according to HM Revenue & Customs figures.

A 0.2% month-on-month decline in May followed a 0.6% drop in April and 0.3% fall in March – seeing the average house price stand at £237,808.

Mr Sunak is set to give an economic update to MPs on Wednesday but it is understood the stamp duty holiday will not be announced until the next Budget.

Jill Stevenson

Finance, July 2020, Market Pulse

2 July 2020

Bank of England reports huge fall in mortgage lending

There may have been a surge in English house transactions after lockdown restrictions were lifted on May 13, but the pent-up activity hasn’t translated to mortgage approvals. Far from it.

Latest figures from the Bank of England show that lending for house purchases was 9,300 in May – a drop of 6,500 less than in April when the full force of the shutdown was felt. That figure was 90 per cent less than in February this year. At the time around 140,000 new loans had been approved between January 1 and February 29, indicating a growing and healthy UK property market.

Fear lenders will ask for bigger deposits across board

Last month the majority of lenders pulled 95 per cent mortgage deals. That effectively freezes the majority of first-time buyers out of the market.

Now analysts are worried that lenders will start asking for bigger deposits across the board, causing the market to stall, rather than re-assert itself by the end of the year.

Meanwhile, lending for re-mortgages is also down with a drop of 40 per cent since February this year to 30,400 approvals. According to the Bank it’s the lowest since their records began, back in 1993.

Uncertain economy putting off home buyers

But it’s not only the reluctance of lenders that is holding back buyers. Understandably, uncertainty over potential job losses is also a big stumbling block for many individuals who had planned to move before the coronavirus pandemic hit.

In the meantime, the resurgence of buyer interest is expected to boost lending figures next month. Whether those levels will be even half of the pre-lockdown figure remains to be seen.

Jill Stevenson

July 2020, Market Pulse

2 July 2020

A return to normality… maybe

A return to normality (if there ever was such a thing) – well, not quite, but we are getting there… slowly. Social distancing will stay in place for some time and will have an adverse effect on the property market. The inability of valuers to visit property has either slowed some deals or killed them off […]

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Tony Pomphrett

Architecture & Design, July 2020, Market Pulse

1 July 2020

Johnson frees-up town centre planning restrictions for ‘change of use’

Developers will be able to change more High Street offices, large retail units and other town centre commercial premises into apartments with less hassle in future.

That’s because, in many instances, a planning application won’t be needed, Boris Johnson assured today.

In his ‘build, build, build’ speech the Prime Minister also insisted developers will no longer need the green light from Planners to demolish and rebuild vacant and disused property. This is provided the end result is residential housing.

And there was also good planning news for property owners intent on building second and third floor extensions: their application will be fast-tracked.

Easing of planning rules to help with housing crisis

The effective ‘tearing up’ of many existing government and local authority Planning rules is in a bid to boost the economy post-coronavirus and, at the same time, house more people. All the new Planning regulations are due to come into force in September.

Boost to infrastructure and ‘connectivity’

Johnson also pledged £5bn for a series of infrastructure projects and create jobs. He said this meant more schools, hospitals, roads and railways.

Self-billing his planning reforms the “most radical ” since the Second World War, he insisted they will help both UK companies and the government to build “faster, greener and better.”

He added: “I fully accept that there are going to be economic aftershocks, but there are also big opportunities now to take this country forward, to make investments, to make big changes.”

Critics are speculating that the money for the infrastructure projects will be funded via an increase in tax.

Meanwhile Chancellor Rishi Sunak will give more detail on the first phase of the UK economy recovery plans next week.

Jill Stevenson

June 2020, Lettings Update, Market Pulse

29 June 2020

Tenants demand bike storage

Forget super-fast broadband and space for an office, bike storage is the latest ‘must-have’ for rental properties post-lockdown.

This is according to data from executives at leading online rental app Movebubble. They report a huge shift in searches for flats with bike storage – or at least space where cycles can be stored – compared to three months ago. They also note a 193 per cent increase in demand for properties with a garden or any kind of outdoor space.

Meanwhile, property portal RightMove say 40,000 properties deals have been concluded since lockdown restrictions were lifted in England during the third week in May.

Aidan Rushby, CEO of Movebubble, said that the desire to travel safely and avoid public transport had led to lots of renters requesting “additional space in the form of bike storage” – regardless of whether they had a bike at present. This chimed with a recent Mintel survey which showed we were becoming a nation of cyclists even pre-lockdown, with e-bike sales rising by 40 per cent last year.

This potential change in behaviour lockdown has brought about also means more individuals becoming comfortable walk-through viewing videos, say Movebubble.

Jill Stevenson

June 2020, Lettings Update, Market Pulse

26 June 2020

New tenancy electrical safety checks add to Landlord burden

New legislation for landlords to carry out electrical safety checks is due to come into force on July 1.

The Electrical Safety Standards in the Private Rented Sector (England) Regulations 2020 means landlords will have to provide an EICR report for all new tenancies. A copy of the report should then be passed on to tenants within 28 days of their moving in. After that the electrical installations will have to be professionally tested at least every five years.

The law will be extended to existing tenancies from April 1, 2021.

Right now, tenancy demand is at a premium. Goodlord reported an increase of 122 per cent on June 2 compared to the same day last year, meaning many landlords will already have their hands full dealing with paperwork.

Tom Harrington, Managing Director of property services assessment provider PropCert warned landlords and estate agents should make sure they have access to electricians in time.

He added: “If electricians are unable to meet demand and checks are not carried out, this backlog could lead to tenancies being delayed or falling through, which would be highly counter-productive as the market continues to recover from the effects of Covid-19.” Failure to comply with the regulations could result in a financial penalty of a maximum of £30,000.

Jill Stevenson

Finance, June 2020, Market Pulse

21 June 2020

Fears over first-time buyer market

The Coventry Building Society this week became the latest lender to dash the hopes of first-time buyers with small deposits. Although it said it was offering a 10 per cent deposit deal – it would only be for four days.

The list of other lenders who are no longer offering ‘first time buyer 10 per cent deposit deals’ has grown phenomenally since March. They include Clydesdale, Virgin Money and Accord. Pre-lockdown, first-time buyers could choose from 294 total 90 per cent loan to value deals with a fixed rate of two years. For a fixed rate of five years there were 137 deals on offer. By May there were only 24 and 11 deals respectively.

Only HSBC continues to offer 85 to 95 per cent deals – although these are ‘sold out’ after 30 minutes each morning. Nationwide continues to offer a 95 per cent deal (via its branches – not a broker).

The fear is that effectively shutting out first-time buyers will prevent the property market from bouncing back quickly post-lockdown.

Reasons for withdrawing the 90 per cent deposit deals were put down to the inability to provide physical valuations for properties. They also cited worries over negative equity in the event property prices didn’t pick up after lockdown. Reduced staff resources was also cited as a reason.

Jill Stevenson

June 2020, Lettings Update, Market Pulse

19 June 2020

Landlords feel lighter after Letting Index results

Landlords in England can relax after it was confirmed the lettings market hasn’t suffered from the inactivity of the past couple of months.

On the contrary, pent-up demand caused by the coronavirus lockdown, has seen record number of enquiries in the sector compared to similar years. According to Proptech firm Goodlord’s Letting Activity Tracker the number of rental applications and completed lettings have far surpassed last year’s figures for the same period.

On June 2, for instance, the number of new rental applications were 112 per cent up on the same day in 2019, while completed lettings reached an increase of 124 per cent on June 10 compared to the same day in 2019.

Social distancing measures are still in place for viewing due to the coronavirus pandemic and video technology is increasingly being employed. But, unlike in Scotland and Wales, leases are being signed. Scotland is expected to open its property market again tomorrow (June 18) and Wales on Friday (June 19).

Jill Stevenson

June 2020, Lettings Update, Market Pulse

17 June 2020

Build-to-rent popularity grows day by day

The number of Build to Rent (BTR) homes in the UK is now sitting at around 157,512.

This is according to the latest figures from the British Property Federation (BPF). A breakdown shows that of the total, 43,236 units are finished, 33,505 still being built and 80,771 still in the planning stage.

London has the biggest number of BTR units with 74,892. But other areas with high concentrations of the rental units are Manchester and Salford. More homes too are sprouting in the Midlands and, in fact, most UK cities have at least some form of BTR – whether under construction or still ‘on paper’ for the time being.

Giant investors plough money into BTR

The BTR sector currently accounts for around three per cent of the property market, but a recent influx of major players – attracted by the low risk the sector represents – means that number will only grow. The investors to note include Goldman Sachs, Legal & General and Aberdeen Standard Investments.

Goldman Sachs, in conjunction with developer Quintain, are building several hundred BTR units near Wembley Stadium, at a cost of £150.0 million. The banking giant last year spent £184 million for a BTR skyscraper in Birmingham.

Legal & General own 4,600 BTR units worth £1.7 billion and has many more in the planning stages, including Glasgow, Brighton, Woolwich and Croydon. Existing homes are in Manchester, Birmingham and Walthamstow.

Continuing interest north of the border has seen Aberdeen Standard Investments contribute to BTR schemes in Edinburgh. Leeds and Stratford are other locations the group is focusing on, while they recently gave £50 million for a 170-unit project in Barking in East London.

BTR the home model of the future?

Meanwhile, property analysts believe that the new ways of working for many home-owners post-coronavirus means BTR units will only grow in popularity. That’s because they tend to be in large apartment-like complexes, with facilities such as purpose-built remote working areas, onsite. Other ‘more social’ areas include entertainment rooms and rooftop gardens. These would provide the opportunity to ‘mingle’ and avoid going out in large crowds.

Jill Stevenson

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