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October housing demand still very high

The average number of prospective buyers registered per estate agent branch reached 451 in October, the highest number ever recorded for that month, NAEA Propertymark’s October Housing Report found.

In October last year there were 341 house hunters on average per branch.

However there were still fewer than the 525 recorded in September.

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Mark Hayward, chief executive, NAEA Propertymark, said: “Typically, we see the property market slow down as we approach the festive period and people put their sale on hold until the New Year.

“However, the pressure of completing sales ahead of the Stamp Duty holiday ending means that we have seen the number of potential buyers and the number of sales completed remain unusually high for this time of year.

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“This boom has been hugely beneficial for the housing market; however, we are increasingly concerned about the impact of the stamp duty cliff edge on 31st March 2021.

“This cliff edge has already increased pressure on service providers within the industry, causing delays for buyers and sellers, and could cause thousands of sales to fall through at the final hurdle as buyers realise their sale will not be completed ahead of the deadline.”

The number of properties available stood at 39 per branch in October, falling from 41 in September.

BY RYAN BEMBRIDGE

Source: Property Wire

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Number of residential transactions up by 8.1%

The provisional seasonally adjusted estimate of UK residential transactions in October 2020 was 105,630, 8.1% higher than October 2019, according to data from the HMRC.

On a monthly basis, the number of UK residential transactions saw a 9.8% uplift.

Looking to non-residential transactions in October 2020, this figure stood at 9,140, which was 5.1% higher year-on-year, and up 6.2% on September 2020.

In addition, on a non-seasonally adjusted basis, there were 121,740 residential transactions in October 2020 which is a year-on-year increase of 13.7% and 23.7% higher than in September 2020.

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There were 9,840 non-residential transactions in October 2020, non-seasonally adjusted, which was down 6.1% on October 2019 however, up 12.8% month-on-month.

Sam Mitchell, chief executive of Strike, said: “October was another busy month for the housing market, with transactions still rising despite the tougher lockdown restrictions.

“The government’s stamp duty holiday has created such a strong pipeline of activity that we believe this pattern could continue right up until the end of March.

“It’s shaping up to be a phenomenal end to the year for the UK property market.

“News of a vaccine has boosted confidence, and people are still rushing to benefit from the stamp duty holiday incentive – both contributing to us having a record-breaking day for offers just last Monday.

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“Regardless, we don’t expect any change in the rising number of people looking to move in light of changing circumstances, with the lockdown baby boom and flexible working being two of the many reasons we’ve had more sellers than ever knocking at our door.”

Nigel Purves, chief executive of Wayhome, added: “The HMRC has reported a continued rise in the number of transactions in the residential property market, likely as buyers rush to complete before the stamp duty cut ends in March.

“The property boom is so far showing no signs of slowing down, and there is a risk of a two-track market emerging, where those who can afford to buy are accounting for the increase in property transactions and the reluctant renters and first time buyers are left behind.

“It’s time we address how to even the playing field when it comes to homeownership.”

Paul Stockwell, chief commercial officer at Gatehouse Bank, said: “The pent-up energy buyers have brought to the housing market since the end of the first national lockdown hasn’t abated and transaction volumes continue to climb.

“Deal levels have recovered from the April slump and are now higher than last year’s figures and, with data from the Bank of England showing mortgage approvals in September represented the highest levels of agreed borrowing since before the Global Financial Crisis, this trend looks likely to continue over the coming months.

“However, with the stamp duty discount deadline looming in March, sellers and buyers alike will feel the pressure to get the deal over-the-line as soon as possible, heaping pressure on the property industry as we close out the year.”

By Jake Carter

Source: Mortgage Introducer

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Housing market stabilising during second lockdown

The housing market in England and Wales is displaying signs of stabilising, according to analysis of web traffic from property advice website Property Price Advice.

Valuation requests on the website have broadly returned to their four-year average, representing a significant fall from the immediate post-lockdown spike.

Requests in June were almost 70% above the four-year average, the highest ever recorded on the website.

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Peter Sherrard, founder of Property Price Advice, said: “Activity from our web users (via natural searches) in October was closer to what we’ve been seeing over the last few years, and shows that the buzz of the post-lockdown summer market is certainly cooling off.

“We will be monitoring activity with a close eye and it will be interesting to see if the second lockdown will see a repeat of house-hunter activity from the first.

“Clearly the dynamics of unemployment, mortgage lending criteria, general housing supply for sale, all coupled with a potential covid vaccine, will have a profound effect on transaction levels and potentially price.”

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Property Price Advice also has a computer model designed by economic consultants Pragmatix Advisory, which translates this web activity into housing price and transaction forecasts for the next eight weeks.

Given the level of activity, average house prices for November and December are expected to be 3.3% ahead of the same months in 2019.

BY RYAN BEMBRIDGE

Source: Property Wire

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Rents Are Rising In Rural Areas

Rents for new lets increased in the year to October, but only in rural locations, Hamptons International has reported.

Its November Monthly Lettings Index put the annual rise across the whole of Great Britain at 1.4 per cent, and the average monthly rent for newly let residential properties at £1,041. The increase was the first annual rise indicated by the index since March 2020.

But the figure masks sharp differences between rural areas, where rents were 5.5 per cent higher in October than a year ago, and cities, where they were 5.3 per cent lower.

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‘This is due to a shift in tenant demand, with more renters looking to live in the country rather than cities’, said Hamptons. ‘As a result, there were 29 per cent more homes available to rent in cities and 48 per cent fewer to rent in the country during October than at the same time last year’.

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Rental growth accelerated across Great Britain in all regions apart from London, down 0.6 per cent, and Wales, down 4 per cent, Hamptons reported. ‘Rents in London fell for the eighth consecutive month in October as the gap between rental growth in Inner London, down 14.9 per cent, and Outer London, up 3.3 per cent, widened to the largest differential on record’.

The biggest rental growth was seen in the North of England and the South West where rent were up by 5.9 per cent year-on-year. Rents in the North reached a record high of £689 per calendar month.

Source: Residential Landlord

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Manchester is top UK location for buy-to-let investment

Manchester has been revealed as the top location for buy-to-let investment, according to Aldermore’s Buy-to-Let City Tracker.

Cambridge was noted as the second best location for BTL investment and London as the third.

The tracker analysed 50 cities from across the UK and assessed the best location based on average total rent, the best short-term returns through yield, long-term return through house price growth over the past decade, the lowest number of vacancies as a proportion of total housing stock, and percentage of the city population in the rental market.

According to the lender, significant investment in commercial and residential developments over the past five years in Manchester contributed to it being the top BTL investment location.

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The cities main selling points for private landlords include rental returns and long-term house price growth, but more importantly it has one of the biggest rental markets in the UK, with 31% of Manchester’s population being private renters.

In addition, it has low vacancy rates, above average rental prices and property prices increased by 4.1% annually.

Jon Cooper, head of mortgage distribution at Aldermore, said: “There has been a high level of uncertainty for landlords since the COVID-19 outbreak and they have had to continuously adapt to a raft of challenges but, with so many working from home right now, it reinforces the importance of a robust and diverse private rented sector.

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“The changing needs of renters, whether to move to a new location or a different type of property to fit flexible working demands, has created investment opportunities for landlords.

“The private rented sector is vital to the economy right now and its recovery from the pandemic so landlords should seek portfolio advice from their lenders to see how they can look at new ways to support the sector.”

By Jake Carter

Source: Mortgage Introducer

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Demand for homes in rural areas rises due to the pandemic

London firm Urbanist Architecture has seen a 65% increase in enquiries for homes in the countryside since Q4 2019, research from architecture and planning firm Urbanist Architecture has found.

With the UK population confined to their homes for the majority of 2020, lockdown has caused an increasing number of city dwellers to rethink their current surroundings and yearn for greener pastures and open spaces.

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Ufuk Bahar, managing director at Urbanist Architecture, said: “Prior to COVID-19, around two-thirds of our projects were focused in highly desirable London boroughs such as Westminster, Islington, Camden and Greenwich, with work ranging from extensions to new build homes and flat conversions.

“Those working in London wanted to build a life in the city and its sought-after Zone 2/3 suburbs, and a fast commute into Zone 1 was, more often than not, a deciding factor when our clients were deciding where to live.

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“Although our team has strong experience in delivering countryside and green belt projects, we could have never predicted the demand we’re seeing now.

“More and more clients are coming to us looking for large plots of land in truly rural locations, with many deciding to ditch city life and the daily commute for good in the wake of the pandemic.”

BY RYAN BEMBRIDGE

Source: Property Wire

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Mortgage payment holidays extended until July next year

Mortgage lenders have extended mortgage payment holidays until 31st July 2021 for those whose finances have been affected by the pandemic.

People have until 31st March 2021 to apply, while they need to do so before 31st January to get a six-month deferral.

Those who have already taken a six month payment holiday are ineligible, and will need to contact their lender for “tailored support” instead.

Eric Leenders, managing director of personal finance at UK Finance, said: “Lenders are continuing to provide unprecedented levels of support to help customers through the Covid-19 crisis, with over 2.6 million mortgage payment deferrals already granted.

“As the impact of the pandemic continues to be felt across the country, the banking and finance industry stands ready to deliver ongoing assistance to those in need.

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“While it will always be in the long-term interest of customers who are able to do so to resume making payments, all lenders will be providing tailored support for anyone who is still struggling.

“There are a range of different ways to get in touch, including through online chat, social media and mobile and banking apps.

“As you will appreciate, phone lines are very busy at this time and we would encourage only those customers who are facing an immediate issue with their finances to call their provider in the first instance.”

Lenders will not enforce repossessions, or attempt to get a warrant for possession before 31 January 2021.

Robin Fieth, chief executive of the Building Societies Association (BSA), said: “Whilst the best advice is always to pay your mortgage if you are able to, anyone who is struggling to do this could benefit from the extension to the mortgage payment deferral scheme or other tailored support that is available from lenders.

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“It’s important that customers discuss their situation with their lender as soon as they become concerned, and before they miss a mortgage payment. Lenders will do everything in their power to help borrowers in financial difficulty at this challenging time – keeping people in their homes is the objective.

“The FCA has been in listening mode throughout the pandemic and their final guidance includes industry suggestions, specifically the ability to top up to six months even if a borrower has had two shorter deferral periods already and not excluding borrowers who have missed a payment after a deferral period from the scheme.”

BY RYAN BEMBRIDGE

Source: Property Wire

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Prime London activity rises

Property instructions in Prime London rose by 68% year-on-year in October, suggesting there will be more completions in the months ahead.

The analysis, from LonRes, also found that transaction levels crept by 4% annually in October, with 25% more houses being sold.

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Marcus Dixon, head of research at LonRes, said: “As England enters its second, hopefully short-lived lockdown, the property market has been spared any significant restrictions. Indeed, viewings, negotiations and progression of property transactions are one of the few things which can continue under current rules.

“Nationally agents are reporting significant increases in sales, and while activity levels across prime London are more subdued, they are starting to translate into in sales (exchanges). That said, buyers remain cautious, with prices at or slightly below levels seen a year ago.

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“Like those moving out of the capital, it’s space that buyers across prime London are looking for. More expensive homes, particularly family houses, are in demand and have seen the strongest growth – both in terms of achieved prices and volumes sold.”

While the jump in instructions is significant, last year was a particularly slow year for Prime London. Indeed, instructions are 37% higher than the 5-year average.

BY RYAN BEMBRIDGE

Source: Property Wire

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Rightmove reports strong demand despite lockdown 2

The first six days of the second lockdown have seen demand climb by 49% year-on-year, as buyers push forward to make purchases before the March stamp duty deadline.

Rightmove’s House Price Index found that national sales agreed were up 50% on October last year.

It’s estimated that here’s 650,000 sales going through the buying and selling process, 67% more than at the same time in 2019.

Tomer Aboody, director of property lender MT Finance, said: ‘The mini-boom has been given a further shot in the arm with Lockdown 2.0.

“Sellers are being more realistic in their pricing and taking advantage of the demand.

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“Some sellers were guilty of unrealistic pricing, believing buyers would pay through the roof but now, with the clock ticking before the stamp duty holiday ends in March, they’ve had to become more realistic and accept lower offers or reduce their pricing.”

“Prices and volume levels are astronomically higher than this time last year, when we were facing the general election. Now, with the election long over, Brexit brewing and a possible vaccine for Covid-19, we are hoping for a strong end to the year, before the economic reality of the pandemic really hits.”

Despite this strong activity, surprisingly the average property price coming to market has dropped by -0.5% between September and October.

Jeremy Leaf, north London estate agent and a former RICS residential chairman, said: “Although, of course, only reflecting ‘asking’ not ‘selling’ prices, the Rightmove figures confirm what we’ve been seeing on the ground for several weeks.

“History is repeating itself. Additional restrictions and the threat of another lockdown have delayed – not halted – property moves as buyers and sellers once again demonstrate their determination to negotiate hard and take maximum advantage of the stamp duty holiday.

“Nearly all are acutely aware that delays in arranging mortgages, valuations and conveyancing will mean meeting the 31 March deadline won’t be easy, even if deals are agreed in the next few weeks.

Read about the UK Housing Market via our Specialist Residential & Buy to Let Division

“We have also noticed that the prospect of a vaccine has given an extra boost to viewings this week, even though it is still very early days. But on the other hand, this may make some sellers less likely to accept what they regard as unrealistic offers.”

Aboody reckons it’s likely there will be extension to the stamp duty holiday deadline.

He added: “It would be surprising if the government didn’t extend stamp duty relief beyond March, so as not to coincide with the extended furlough scheme finishing.

“This would significantly help in propping up the market, and needs to be coupled with continued cheap borrowing and the return of higher loan-to-values, to ensure the housing market doesn’t take a huge hit.”

BY RYAN BEMBRIDGE

Source: Property Wire

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Arrears and possessions low amid continued Covid-19 support

Homeowner mortgage arrears remained at historically low levels in Q3, while buy-to-let arrears rose slightly from a low base, figures from UK Finance has shown.

In the third quarter of the year, there were 74,850 homeowner mortgages in arrears of 2.5% or more of the outstanding balance, a 5% increase on the same period last year.

Of those, 24,860 mortgages were in significant arrears of 10% or more of the outstanding balance.

The payment holiday granted to borrowers due to the pandemic helped those in early arrears – falling less than 5% behind payments – to catch up with commitments resulting in a 5% decline in the number of borrowers in debt.

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As of October, 140,000 borrowers were still on a mortgage payment holiday.

Meanwhile, there was an 8% increase in borrowers who were behind payments by at least 7.5% of the outstanding balance, showing a rise in those who were missing payments for longer periods.

Overall, UK Finance said the levels of homeowner arrears this year were historically low compared to the last three years.

Buy-to-let arrears

There were 5,400 buy-to-let mortgages in arrears of 2.5% or more of the outstanding balance in the Q3, a 19% rise on last year.

However, with the number of buy-to-let arrears staying below 5,000 for the last three years, this increase is coming from a low base and numbers were still lower than previous years.

Of the indebted buy-to-let mortgages, 1,350 were in significant arrears of 10% or more of the outstanding balance.

Due to the ban on involuntary repossessions because of the pandemic, there were just 160 homeowner and 230 buy-to-let possessions during the quarter, an annual decline of 88 and 71% respectively.

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Stifled by borrower support

Jeremy Leaf, estate agent and a former RICS residential chairman, said: “Mortgage arrears and possessions are always a key indicator of market strength as many will not be activated unless lenders believe there is a good chance of selling.

“Over the past year or so, lenders have been reluctant to enforce proceedings, but mortgage holidays won’t last indefinitely and particularly if debts can’t be serviced.”

“As a result, we are likely to see an increase in possessions and for that matter, arrears as government support falls away, which will inevitably have an impact on housing supply and will help to keep rising prices in check,” he added.

Written by: Shekina Tuahene

Source: Your Money

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