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Rental Market Buoyant Except In London

Rents in London have fallen during the Coronavirus pandemic, property portal Zoopla has reported. However, London is the exception and rents risen in a buoyant rental market across the UK as a whole, it said.

‘Average rents in London have fallen by 5.2 per cent over the last 12 months, reaching levels last seen in 2014’, Zoopla found. It puts this down to ‘new working patterns and lack of tourism during pandemic’.

In contrast, rents increased outside London by 1.7 per cent and rental has increased by a fifth over last year – strong demand that is being driven by a squeeze on lending to potential first-time buyers, said Zoopla.

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‘At the same time, supply remains constrained with levels of investment in buy to let still reduced following the changes to Stamp Duty (the additional 3 per cent surcharge on second properties) and the wider tax regime introduced from 2016 onwards’.

Renters are showing increasing interest in larger properties, especially those that may have access to outside space.

‘The search for space, first seen in the sales market, is now being firmly replicated by renters. Zoopla’s top searches for rental properties include the terms gardens, parking, garages, balconies and pets, reflecting a need for outdoor space and freedom necessary to cope with lockdown. There is also evidence that while the market as a whole is moving more quickly, the market for rented houses is moving more quickly than that for rented flats, reflecting this desire for more space among renters’.

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‘For most of the UK, the demand/supply gap is underpinning moderate levels of rental growth’, said Zoopla head of research Gráinne Gilmore.

‘The split in the rental market caused by COVID-19 has now crystallised and we are seeing the two-speed market firmly entrenched.

‘We haven’t seen the exodus of students from cities and, as more people are staying in the rental market given the squeeze on mortgage lending, higher levels of demand will continue to underpin rents. At the same time however, muted earnings growth will start to limit the headroom for rental growth in some markets.

‘The search for additional space, both indoor and outdoor, within the rental sector is also set to continue as the country goes through additional periods of lockdown’

Source: Residential Landlord

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Mortgage searches on the rise as second lockdown began

Twenty7Tec has released figures on the state of the mortgage market one week after the second UK lockdown began.

The findings showed that weekly mortgage search volumes are currently at 87.79% of the year’s highest figure, up 6.8% on the week before.

Weekly buy-to-let (BTL) mortgage search volumes are at 92.09% of the year’s high, up 8.0% on last week.

Weekly residential mortgage search volumes are at 87.56% of the year’s high, up 6.8% on last week.

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In regard to ESIS documents, weekly mortgage ESIS documentation figures are currently at 91.42% of the year’s highest figure, up 7.5% on the week before.

Weekly BTL mortgage ESIS documentation figures are currently at 89.75% of the year’s highest figure, up 7.8% on the week before.

Weekly residential mortgage ESIS documentation figures are currently at 90.13% of the year’s highest figure, up 7.4% on the week before.

James Tucker, chief executive of Twenty7Tec, said: “Each time we go into a lockdown, regional or national, there is a drop-off in the volume of mortgage searches that takes place, and also a drop-off in the number of ESIS documents prepared.

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“The dip in volumes actually happens in the few days before the lockdown begins as customers focus on dealing with the practical elements of a lockdown.

“Then, immediately as the lockdown starts, mortgage search volumes begin to rise again.

“We’ve seen it again and again this year on a UK-wide, home nation and regional level before and just after we enter lockdown.

“Any drop is then is consistently mirrored by a spike of mortgage search volumes within a day or two of the lockdown beginning.

“There was a definite blip in activity last week as people mentally prepared for lockdown 2.0.

“For context, last week’s drops were less than we’d expect in a bank holiday week.

“In lockdown 2.0, we are still seeing search volumes higher than we did in pre-lockdown Spring.

“That feels like a world away now, but was, at the time, incredibly busy for all our clients.

“BTL currently forms 19.11% of all searches in the past week and 20.87% of all documents prepared against in the past week.

“BTL searches volumes have been relatively steady all year and those searches are converted into ESIS documents more often than residential searches.”

By Jessica Nangle

Source: Mortgage Introducer

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Properties in Glasgow are selling faster than any other UK city

Residential properties in Glasgow are currently selling faster than anywhere else in the UK, fresh figures show.

The latest findings from Savills Home Truths Research on the Glasgow and the West of Scotland property market shows that Greater Glasgow’s housing market has seen significant growth in activity since it reopened in July following a six-week Scotland-wide lockdown, with a 44% increase in agreed sales, compared to the same period last year.

Cameron Ewer, Savills head of residential in Scotland, said: “The housing market in Glasgow is busier than we’ve ever seen it. Many people are looking to shake up how they live and are prioritising a new lifestyle over the cost of securing it. As a result, the right properties are attracting multiple offers and selling quickly.

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“We tend to see an increase in new instructions at this time of year, but this year it’s off the charts. The number of people registering to buy with us in the last week of August was 100% higher than during the first 12 weeks of the year, and we’ve seen an 80% increase in the number of viewings.

“Off-market sales have also increased by around 50% – a good indication that buyers are committed and willing to pay at or close to the valuation.”

In Savills’ latest buyer survey, 55% of Scottish respondents said that a village location had become more attractive due to the experience of lockdown. Savills research reveals a growth of 2% in prime values in areas surrounding Glasgow in the year to the end of September, as a result of a fresh focus on room to work from home and to access outdoor space.

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Faisal Choudhry, head of Savills Residential Research in Scotland, said: “The number of new buyers who registered with us between July and September to buy a property across Greater Glasgow and the West of Scotland was 103% higher than the same period in 2020.

“Last year over 60% of our buyers were families, attracted by the area’s good schools and the exceptional quality of life on offer. However, our latest data suggest that a renewed appreciation of space, the ability to work for home and access to outdoor space are perhaps becoming even more important drivers of demand.”

Meanwhile, demand has remained strong in Glasgow City where a lack of supply has driven a 6.8% rise in values in the year to the end of September.

Despite delays in completions as a result of lockdown, £1m-plus activity in 2020 has remained the same as the 10-year average, which demonstrates top-end market expansion in recent years. This includes a sale at £2.9m in Glasgow’s West End, a record for the city.

Choudhry added: “We have seen a 46% increase in the number of sales agreed for properties above £1m across Scotland between July and September compared with the same period a year ago.”

By MARC DA SILVA

Source: Property Industry Eye

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House Prices At Record High But Headwinds Expected

Average UK house price reached new record high in October although the market looks set to slow in the coming months, reported Halifax in its latest House Price Index, published this week

‘The average UK house price now tops a quarter of a million pounds (£250,457) for the first time in history, as annual house price inflation rose to 7.5 per cent in October, its highest rate since mid-2016’, said Halifax, said Halifax managing director Russell Galley. ‘Underlying the pace of recent price growth in the market is the 5.3 per cent gain over the past four months, the strongest since 2006. However, month-on-month price growth slowed considerably, down to just 0.3 per cent compared to 1.5 per cent in September.

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‘Overall we saw a broad continuation of recent trends with the market still predominantly being driven by home-mover demand for larger houses. Since March flat prices are up by 2.0 per cent compared to a 6.0 per cent increase for a typical detached property. In cash terms that equates to a £2,883 increase for flats compared to a £27,371 rise for detached houses’.

Latest figures put home-buyer mortgage approvals at their highest level since 2007, ‘as transaction levels continue to be supercharged by pent-up demand’, said Galley.

Government support measures have helped to delay an expected downturn in the housing market but ‘they will not continue indefinitely’.

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The macroeconomic landscape in the UK remains highly uncertain, said Galley. ‘With a number of clear headwinds facing the housing market, we expect to see greater downward pressure on house prices as we move into 2021’.

Halifax figures mirror those of Nationwide which put October house price growth at 5.8 per cent, and monthly rises of 0.8 per cent.

The annual rate of increase was the highest recorded by Nationwide since January 2015, said its chief economist Robert Gardner.

But, he added, ‘data suggests that the economic recovery has lost momentum in recent months with economic growth slowing sharply to 2.1 per cent in August, down from 6.4 per cent in July.

‘The outlook remains highly uncertain and will depend heavily on how the pandemic and the measures to contain it evolve as well as the efficacy of policy measures implemented to limit the damage to the wider economy’.

Source: Residential Landlord

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More landlords look to expand outside London and the South East

One in 10 landlords plan to purchase buy-to-let properties this year, up from 3% at the end last year, Source Business research shows.

The rise in landlord confidence and a change in tenant priorities following the lockdowns is leading investors to a move away from London and the South East, to less built-up areas.

Increasingly tenants want greater home working space and leisure time, resulting into a spike in demand for larger properties.

Mish Liyanage, managing director of The Mistoria Group, said: “We are seeing a rise in professional landlords looking to acquire affordable terraced properties with gardens and apartments in the North West. Lower prices, high yields, expanding population and Northern Power house initiative/HS2 have contributed to this interest.

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“A significant proportion of the professional landlords that we work with are located in the Midlands and the South, but want to invest in the North West, because of the attractive property prices, high yields and occupancy rates. Many investors are moving away from London and the South East and are searching for regions that give them exceptional returns.”

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At the end of 2019, 82% of landlords claimed that they had no plans to acquire another property in 2020, while just 3% were intending to add more than a single property to their portfolio.

Soon after the stamp duty holiday was implemented, 10% of landlords said they are now planning to purchase more properties and build on their portfolio, while just 5% said they had any intention to sell any existing properties.

BY RYAN BEMBRIDGE

Source: Property Wire

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House price inflation surges to 7.5% in October

House prices rose by 7.5% year-on-year in October due to strong demand for higher value homes, Halifax’s House Price Index has found.

Quarterly prices increased by a substantial 4.0%, bringing the average price to £250,457 across the UK.

However, month-on-month price growth slowed considerably, down to 0.3% compared to 1.5% in September.

Russell Galley, managing director, Halifax, said: “Overall we saw a broad continuation of recent trends with the market still predominantly being driven by home-mover demand for larger houses.

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“Since March flat prices are up by 2.0% compared to a 6.0% increase for a typical detached property. In cash terms that equates to a £2,883 increase for flats compared to a £27,371 rise for detached houses.

“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.

“While government support measures have undoubtedly helped to delay the expected downturn in the housing market, they will not continue indefinitely and, as we move through autumn and into winter, the macroeconomic landscape in the UK remains highly uncertain.

“Though the renewed lockdown is set to be less restrictive than earlier this year, it bears out that the country’s struggle with COVID-19 is far from over.

“With a number of clear headwinds facing the housing market, we expect to see greater downward pressure on house prices as we move into 2021.”

Jamie Johnson, chief executive of FJP Investment, said: “The property market is moving from strength to strength. Amidst the uncertainty, buyer demand for bricks and mortar is pushing prices to record highs.

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“Yet with the country now in a second lockdown, is this momentum about to suddenly run out? I don’t believe so. After all, the stamp duty holiday is still in play and the government has confirmed buyers and renters can still move houses throughout November. Clearly, it understands the importance of the property market in supporting the economy.

“I anticipate the rate of house price growth to slow down in November, however it will no doubt continue to remain in positive territory. People are clearly looking to invest in safe and secure assets during in this uncertain climate, and real estate has a proven track record of being resilient and quickly recovering from period of market volatility.”

BY RYAN BEMBRIDGE

Source: Property Wire

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Housing market to remain open despite national lockdown

Housing Secretary Robert Jenrick has confirmed that the housing market will remain open despite the looming national lockdown.

On Saturday Prime Minister Boris Johnson confirmed a new month-long lockdown for England beginning on November 5 and ending on December 2.

Information regarding the fate of the housing market during the lockdown was initially scarce between, however Housing Secretary Robert Jenrick has taken to Twitter over the weekend to confirm that the market will remain open.

On Sunday evening Jenrick confirmed that property moves would still be allowed and that tradespeople would still be able to enter properties.

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The residential property surveying industry has also received confirmation from the Ministry of Housing, Communities & Local Government that physical property inspections can continue to be provided.

Additionally the Prime Minister confirmed that mortgage repayment holidays will no longer be ending with further information published set to be published today.

Kate Davies, executive director of IMLA, praised the government for keeping the market open in challenging times.

She said: “While the country faces a second national lockdown, the government has rightly decided to keep Britain’s housing market open.

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“Lenders, advisers, surveyors, and conveyancers are already experiencing unprecedented levels of demand from consumers eager to take advantage of the government’s Stamp Duty holiday, which is due to end on 31 March 2021, and also the Help to Buy scheme, which will be available only to first-time buyers from 1 April 2021.

“They now face the task of helping thousands more consumers potentially requesting payment deferrals as borrowers struggle to meet their mortgage repayments during the lockdown.

“Closing the housing market at this time would have only added to this pressure on the sector by creating yet another backlog of demand once lockdown ends.”

By Ryan Fowler

Source: Mortgage Introducer

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Property Transactions Are Back To Pre-Covid Levels

There were just over 98,000 residential property transactions in September, 0.7 per cent lower than in September 2019 but 20.3 per cent higher than in August this year.

The figures come from the Inland Revenue which logs monthly property transactions completed in the UK with value of £40,000 or above for Stamp Duty Land Tax purposes.

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‘Provisional residential transactions estimates in September 2020 have noticeably increased compared to August 2020, likely due to the continued release of pent-up demand within the property market since March 2020 and early impacts from the temporarily increased nil rate band of SDLT’, said the Revenue.

Residential transactions decreased significantly in April 2020, reflecting the impact of the Coronavirus and public health measures taken in response.

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Between 2005 and 2020, monthly transactions have varied between 160,000 (the height hit in 2006) and a low of 40,000 in August this year. At close to 100,000, the number of transactions is back up to levels seen consistently since 2013.

The nil rate band for residential SDLT was increased to £500,000 from 8 July 2020 to 31 March 2021 for transactions in England and Northern Ireland.

Source: Residential Landlord

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UK house price growth rises to highest rate in five years

UK house price growth jumped to the highest rate in five years this month, as the market continued to experience a post-lockdown bounce.

Annual UK house price growth rose to 5.8 per cent in October, the highest level since January 2015.

Property prices were up 0.8 per cent month-on-month compared to growth of 0.9 per cent in September, according to the latest Nationwide analysis.

Nationwide chief economist Robert Gardner said: “The outlook remains highly uncertain and will depend heavily on how the pandemic and the measures to contain it evolve as well as the efficacy of policy measures implemented to limit the damage to the wider economy.

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“Behavioural shifts as a result of Covid-19 may provide support for housing market activity, while the stamp duty holiday will continue to provide a near term boost by bringing purchases forward.

“However, activity is likely to slow in the coming quarters, perhaps sharply, if the labour market weakens as most analysts expect, especially once the stamp duty holiday expires at the end of March.”

Garrington Property finders chief executive Jonathan Hopper warned that the “momentum can not last forever”.

“The demand is real but it’s being underpinned by two finite, and probably fleeting, factors,” Hopper said.

“The first is that many buyers want to move for chiefly emotional rather than financial reasons – typically the desire for more space, and a better lifestyle, away from the big cities.

“The second is the Stamp Duty holiday. Like all holidays, it will come to an end. And with the tax break due to close at the end of March, we’re now seeing a stampede of buyers trying to get their purchases in train so they will complete in time.

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London market remains “robust”

“The housing market has ploughed into the usually quieter autumn period and not even touched the brakes,” said Lucy Pendleton, property expert at estate agent James Pendleton.

“Rumoured trouble in the London market has not materialised. All the major indicators that started punching the top of the dial in late summer are still showing very strongly that a post-lockdown feast in demand is continuing.”

Lockdown sparks surge in home hunters

Dan Leather, real estate partner at law firm Gowling WLG, said:”This spike is undoubtedly supplemented by the stamp duty holiday, but is also symbolic of a more enduring lift in the market as the effects of lockdown come to bear on people’s long-term planning and increased demands on their living space.

“We already know that the house builders and developers are working really hard on design and delivery, to identify and serve the adjusted demands of the purchaser.

“This continues to transition and evolve at pace. This sure makes the new build housing product more attractive than ever before, serving as a further incentive to move and generating activities throughout the new and used housing market.”

By Jessica Clark

Source: City AM

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Mortgage approvals hit 13-year high as UK housing market booms

Mortgage approvals last month reached their highest number since September 2007 amid pent-up demand in the housing market, the latest figures from the Bank of England show.

The number of mortgage approvals for house purchases increased to a 13-year high of 91,500 in September from 85,500 in August.

The September approval figures were 24% higher than approvals in February, before the coronavirus pandemic.

Households borrowed heavily to purchase property in September, with net mortgage borrowing at £4.8bn, up from £3bn in August.

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It is the latest evidence that the recovery of the housing market post-lockdown is continuing, with the average asking price of homes coming on to the market in Britain now at a record high, supported in part by the existing stamp duty holiday.

Craig McKinlay, new business director at Kensington Mortgages, commented: “The temporary reform of stamp duty and pent up demand has provided a boost for the property market. Despite there being less product choice available, September is traditionally a busy month of activity for the market, and mortgage approvals have shot up to their highest rate since September 2007.”

But McKinlay says that these results do not reflect the fact that many first-time buyers and self-employed borrowers are being left behind “in this mini-market boom – unable to take advantage of the stamp duty holiday”.

He added: “Mortgage lenders need to be as flexible as possible to accommodate these individuals and use manual underwriting approaches to assess an individual’s affordability on a case by case basis.”

With payment holidays and the government’s furlough scheme coming to an end, lenders will be faced with another priority – supporting borrowers who continue to face financial hardship beyond October, according to Steve Seal, managing director at Bluestone Mortgages.

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He said: “While additional support will be crucial for many households, the harsh reality is that this will impact people’s credit scores and, as a result, they may not be eligible for mainstream lending later on.

“Therefore, it is likely that many borrowers will need extra support in the future when it comes to securing financing, and the specialist market will be essential for providing these individuals with the lifeline they need.

“This is why it is important that specialist lenders work closely with brokers to prepare for the long-term implications of Covid-19, so they can meet the heightened demand from consumers expected over the coming years with efficiency.”

By MARC DA SILVA

Source: Property Industry Eye

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