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Pent up demand fuels resurgence in the rental market

Lettings market activity in June was significantly higher than the same month last year, the Rental Index from Goodlord has shown.

After number of new tenancy applications were received during May, June saw that demand translate into completed lets.

The number of completed lets stayed above 2019 averages for all but six days of June, marking an extremely busy month for the industry.

The cost of renting rose by 3% across the England and Wales between May and June.

Void periods also dropped in five out of eight regions.

Tom Mundy, chief operating officer at Goodlord, said: “If May was characterised by a release of pent up market demand, then June was that demand translating into action.

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“The numbers throughout the month were incredibly impressive and show how hard the industry has been working to serve as many tenants and landlords as possible.

“We saw an unprecedented number of lets completed each day in June. It’s therefore no surprise to see those levels of demand starting to affect average rental costs and void periods.”

The biggest rent rise was seen in the South West, which saw average prices increase by 11% – from £859 per month to £965.

Wales wasn’t far behind, posting a 9% rise in average rental costs.

The average salary of a UK renter dipped slightly month-on-month, from £25,068 to £24,613.

BY RYAN BEMBRIDGE

Source: Property Wire

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Wales and Cornwall are most popular UK holiday home locations

Wales is the top holiday home location in the UK for 2020/21, research from holiday home insurance company Schofields Ltd has revealed.

Some 15.35% of UK holiday homes are located in the UK, followed by Cornwall (12.82%), Scotland (9.30%), Devon (8.39%) and North Yorkshire (8.13%).

Renewed holiday home contracts were also compared to new contracts taken out between January and June 2020, to calculate the top up and coming locations.

County Durham came top of this list, with a 36% increase in the number of contracts, followed by Wiltshire (36%), East Yorkshire (35%), Cumbria (35%), and Suffolk (28%).

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Phil Schofield, head of inbound marketing, said: “Getting away from home safely once restrictions have been lifted is something that’s on everyone’s minds.

“Holiday homes and holiday cottages are top of people’s lists due to their privacy and ease.

“Data suggests that people in the UK take breaks of 2-3 days more frequently than any other length of holiday, so being able to make a short journey with less stress to a holiday cottage or holiday home is really important.

“The top locations for holiday homes in 2020 aren’t a surprise to us, but the up and coming locations are interesting.

“It seems that people are wanting to find destinations that are off the usual beaten track in the UK and won’t be quite so crowded as the hotspots.

“Hopefully our data will help tourists choose destinations for short breaks in the UK where they can easily find holiday cottage accommodation but will have plenty to see and do.”

BY RYAN BEMBRIDGE

Source: Property Wire

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Housing market starts to reopen in Scotland as lockdown eases

From Monday 29 June, restrictions on housing moves will be eased in Scotland as part of the easing of its lockdown measures.

This will allow valuations and viewings to take place, and marks the initial stage in the reopening of the Scottish housing market.

This development in Scotland follows a similar move to ease lockdown on 19 June in Wales, which saw the government allow viewings to take place in vacant properties, and to ease restrictions on house moves where a sale has been agreed, but not yet completed.

In England, it has been more than a month since equivalent changes were made on 13 May.

First Minister Nicola Sturgeon, said: “The sacrifices that have been made – and I know how hard and at times painful they have been – have suppressed the virus.

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“They have also protected the NHS, and have undoubtedly saved a significant number of lives.

“They have also brought us to the position where we can now look ahead with a bit more clarity to our path out of lockdown, and I hope details announced today will provide people and businesses with more certainty in their forward planning.

“But let me be clear that each step on this path depends on us continuing to beat the virus back. That is why we must do everything in our power to avoid steps being reversed.

“The central point in all of this is the virus has not – and it will not – go away of its own accord. It will pose a real and significant threat to us for some time to come.

“Maintaining our progress also means all of us abiding by public health guidance.

“Wearing face coverings in enclosed spaces, avoiding crowded places, washing our hands and cleaning surfaces regularly, maintaining physical distancing, agreeing to immediately self-isolate and get a test if we have symptoms – all of these basic protections matter now more than ever as we all get out and about a bit more.”

A statement from the Welsh First Minister, Mark Drakeford MS, said: “This package marks a significant unlocking of the regulations and, for many aspects of daily life in Wales, we are moving into the amber phase of our traffic light system.

“We have been able to do this because of the actions everyone in Wales has taken to date in complying with the stay-at-home and stay local rules.

“We need everyone to continue to take steps to protect themselves and their loved ones as we find a way to live and work alongside coronavirus.

“This means working from home wherever possible, maintaining social distancing and frequent handwashing.

“For some people it may mean wearing a face covering in certain situations, for others it will mean continuing to shield.

“I want to thank everyone for everything they have done so far. Together we can keep Wales safe.”

Mark Hayward, chief executive at NAEA Propertymark and David Cox, chief executive of ARLA Propertymark, said: “It’s great news for consumers and the industry in Scotland that the property market is reopening on Monday.

“Whilst it is not a return to normal, the new guidelines will allow members of the public to view, purchase, rent and move into new properties…reinvigorating the housing market and boosting the economy.

“Of course, safety is paramount, and we encourage all agents to follow the Propertymark guidelines on property viewings and moves closely to protect themselves and others.”

By Jessica Bird

Source: Mortgage Introducer

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HMRC: Property transactions up 16% month-on-month

Residential property transactions were up 16% on a monthly basis in May as the UK eased its way out of lockdown.

HMRC figures revealed that there were 48,450 residential transactions during the month, but that is still 49.6% lower than in May 2019.

Non -residential property transactions stood at 5,880, 42.2% lower than May 2019 and 14.1% higher than April 2020.

Andrea Olivari, co-founder at digital lender Selina Finance, said: “On the whole, there are gradual signs that the property market is moving, with the latest industry figures revealing an average house price increase of 1.9%.

“So the rise in property transactions is reassuring, particularly given the figures are taken from May and the market wasn’t officially re-opened until mid-way through the month.

“It will be interesting to see if this trend continues throughout June or whether these figures are down to a release of pent up demand from the lockdown period.

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“Whether the increase continues in the long term is dependent on an array of factors, particularly the “new normal” of homeworking post-COVID and how this influences homebuying decisions.”

Anna Clare Harper, author of Strategic Property Investing and co-founder of property fund Anglo Residential, added: “Recent events and practical restrictions such as physical valuations and obtaining finance mean it is hardly a surprise that property transactions have fallen dramatically year-on-year.

“However, what we can see from the HMRC data and from what we are hearing from investors, appetite is responding quickly.

“We are seeing the signs of strong appetite to move forward with investments in the UK residential market in particular.”

By Ryan Fowler

Source: Mortgage Introducer

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Affordable housing progress made but statistics hit by coronavirus

The number of affordable housing approvals and starts in Scotland has increased compared to a year ago while affordable home completions have fallen, new figures have shown.

The housing statistics quarterly update for June 2020 found that in the year to end March 2020, there were a total of 12,886 homes approved through the Scottish Government affordable housing supply programme, which includes off-the-shelf purchases and rehabilitations as well as new builds. This is an increase of 1,756 homes (16%) on the previous year, and an increase of 62% compared with the year to end March 2016.

In the same period, 12,045 affordable homes were started, an increase of 1,173 homes (11%) on the previous year, and an increase of 57% compared with the year to end March 2016.

There were 9,286 homes delivered in the year to end March 2020, a decrease of 282 homes (3%) on the previous year, but an increase of 42% compared with the year to end March 2016.

It should be noted that the amount of affordable housing supply activity recorded in the most recent quarter January to March 2020 will have been impacted on by the introduction of government advice and measures to reduce the spread of the coronavirus (COVID-19) from mid-March onwards, in which non-essential construction activity stopped, and home buyers were advised to delay moving to a new home where possible.

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This has lowered the total amount of activity recorded for this quarter compared to what would otherwise have been the case. Year to date totals to end March 2020 will also have been affected.

Figures for the next quarter April to June 2020, which are due to be reported on in the quarterly housing statistics update in September 2020, are likely to see an even greater impact due to COVID measures continuing throughout April and May, and into June 2020.

The statistics were due to include an update on all-sector new house building starts and completions to end December 2019, with more recent figures on social sector new builds to end March 2020.

However, due to the impacts of COVID-19, some local authorities have been unable to provide new build data to the usual timescales. The government said it is working with local authorities to agree reasonable extensions to submission deadlines, and is aiming to publish this new build housing data as soon as possible.

Commenting on the statistics, the Scottish Federation of Housing Associations (SFHA) repeated its call for housing to be at heart of Scotland’s economic recovery.

Head of policy and innovation, Lorna Wilson, said: “The Scottish Government has made progress into tackling housing need in Scotland since 2016, and it looks likely that it was on track to meet its 50,000 affordable homes target, before the programme was paused due to the coronavirus pandemic. The government must be given credit for this, and it’s vital this progress – and the ambition behind it – is maintained and not lost.

“SFHA recently released research with CIH Scotland and Shelter Scotland which found that we need 53,000 affordable homes to be delivered between 2021–2026. By committing to this new target, the government can reduce housing need, tackle child poverty and kick-start Scotland’s economic recovery from the coronavirus crisis.”

The SFHA also welcomed this week’s report by the Advisory Group on Economic Recovery which also called for the Scottish Government to invest in affordable housing as part of its recommendations.

Housing minister Kevin Stewart said: “I am proud that we have now delivered over 95,000 affordable homes since 2007 with more than 66,000 of these for social rent. We were on track to deliver our target of 50,000 affordable homes by the end of March 2021, but the impact of COVID-19 has caused a necessary pause to activity.

“We will continue to work with partners across the housing sector to deliver the remainder of these homes, as quickly as it is safe to do so and I look forward to construction resuming in a new safe way.”

Source: Scottish Construction Now

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UK house price growth to remain positive over the next quarter – Zoopla

The latest Zoopla House Price Index has been published, with the bulk of new pricing evidence coming from sales agreed before the lockdown.

Data on pricing for new sales agreed in the last four weeks is starting to feed through and points to a resumption in the upward pressure on house prices seen at the start of the year.

As an example, average asking prices for properties marked as sold on Zoopla, which were rising at 7% in the first three months of the year, have returned to registering a similar growth rate over the first two weeks of June.

Near-term outlook for house prices

Most of these new sales agreed are likely to complete between August and October 2020, which Zoopla expects will show sustained UK house price growth of between +2% to +3% over the next quarter, once they feed into the index.

While some have forecast annual house price falls over calendar year 2020, the portal expects any price falls in the house price indices only to crystallise in the final months of the year.

Economic impacts of COVID-19 to hit home in H2 2020

After an initial rebound, demand is expected to weaken over the summer months as the economic impact of COVID starts to materialise, with figures reported last week by the ONS indicating an acceleration in unemployment.

Caution amongst lenders and more limited availability of 90% loan to value (LTV) mortgages will reduce demand, particularly amongst first-time buyers who, over recent years, have been the engine of the housing market.

In 2019, a fifth of all homebuyers purchased a home with a deposit of 10% or less, so a decrease in the availability of 90%+ LTV mortgages could preclude this cohort of would-be buyers from entering the market, effectively reducing demand.

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Government and central bank support will continue to play an important role in how the economy fares with a knock-on impact for the strength of consumer sentiment.

Retail sales, for example, rebounded more than many expected in May.

While almost a fifth of mortgage holders have taken payment holidays, borrowers are able to take these up until the end of October 2020, meaning support is extended for the rest of the mortgaged sector up until April 2021.

Further support and innovation to support the economy and the housing market cannot be ruled out in these unprecedented times, which will limit the downside, albeit not completely.

Strongest sales rebound in northern cities

New sales agreed, subject to contract, have grown the most in England where the market is open for business.

The rebound in sales has been strongest in northern England, led by Leeds, Sheffield and Manchester where sales are up to 20% higher than in February 2020.

In cities where sales are not keeping pace with pre-COVID levels, including Glasgow, Newcastle and Cambridge, this is down to a lower supply of homes for sale.

Level of homes for sale (inventory) in these cities is significantly lower than last year.

While the new flow of homes for sale is back to pre-COVID levels, the number of homes for sale per estate agency branch is 15% lower than a year ago.

This is a result of the market closure at what is a busy time of year.

Stock levels in Cambridge, for example, are up to 40% lower year-on-year.

Zoopla says that the lack of supply supports their view of house price growth holding steady in the short term.

House price growth

UK house price growth is up 2.4% on the year, and has increased from 1.6% at the start of 2020.

The 20 city index registered slower growth over May, slowing to +2.1% from 2.4% in April as less pricing evidence dragged the growth rate lower.

The city with the highest rate of house price growth over the past 12 months is Nottingham (4.3%), followed by Manchester (3.9%).

Meanwhile, Oxford (-0.6%) and Aberdeen (-2%) have recorded modest price falls.

Regional momentum

Activity levels are expected to rebound in Scotland, Wales and Northern Ireland as these markets reopen and pent up demand is released.

These countries account for less than a fifth of UK housing sales but more activity will support headline measures of demand and market activity in the immediate term.

The Welsh market opened on Monday but demand for homes has been building since the English market reopened, gaining momentum over the last two weeks.

Demand for housing in Wales has now rebounded close to what has been recorded in England.

Sales agreed, however, remain 65% lower than pre-COVID levels in Wales as the physical viewing of property has not been permitted.

Zoopla expects sales volumes to increase over the rest of June and into July, mirroring the rebound in England.

Scotland’s market, which reopens later in June, has seen a similar trend with demand recently returning to pre-COVID levels, but with sales volumes lagging well behind.

Commenting on the findings Richard Donnell, Director of Research & Insight, said:

“The rebound in housing market activity has taken many in the industry by surprise.

“It is welcome news given the projections for falling economic growth and rising unemployment.

“Estate agents and developers are responding and using the upsurge in demand to rebuild their sales pipelines and open up their developments.

“We see returning pent up demand and new buyers entering the market creating upward pressure on prices in the face of a lower supply of homes for sale which has been exacerbated by the lockdown.

“House price growth is set to hold up in the near term and we expect the downward pressure on prices to come in the final months of the year as demand weakens.

“While the average asking price for homes marked as sold on Zoopla are 7% higher than a year ago this is down to an increase in sales in higher value markets where activity has remained subdued in recent years.

“We do not expect the rate of growth in the Zoopla House Price Index to reach this level, rather it is expected to hold steady at 2%.

“The Welsh housing market opened this week and levels of demand have already returned close to the levels seen in England in anticipation of the market reopening. Scotland, where the market reopens on 29 June has also seen demand rise back to pre-COVID levels but sales remain more than two thirds lower and are expected to rebound in the coming weeks.”

Source: Property Industry Eye

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Welsh housing market reopens

Welsh housing market reopens – The housing market in Wales will partially reopen from today, as home moves can go ahead providing the residential property has been vacant for at least 72 hours.

People can move whereby a sale has been agreed but not yet completed, while the marketing and viewing of unoccupied residential properties can once again take place.

Property valuations and inspections are allowed provided they are done in line with social distancing measures.

Mark Drakeford, first minister of Wales, said: “The threat of coronavirus hasn’t gone away but thanks to the efforts we have all made over the last few months, the number of people contracting coronavirus each day in Wales is falling, so too is the risk of meeting somebody with virus.

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“Given the progress we have made, we are able to take some additional cautious steps to further unlock our society and economy. This includes more retailers being able re-open their businesses, as long as they take measures to minimise the risk to their staff and to the customers who visit their stores.

“Our focus continues to be on the health risks of the outbreak, but we can now begin to cautiously focus much more squarely on the wider economic and societal impact the virus is having.

“We have provided a huge amount of support to businesses and jobs as they hibernated during the pandemic – now we start to take these careful steps to restart our economy.”

Mark Hayward, chief executive, NAEA Propertymark and David Cox, chief executive, ARLA Propertymark, said: “We welcome today’s announcement reopening the housing market in Wales.

“However, the guidance issued will have a greater impact on the sales market as there still are some significant restrictions in place meaning the market will not be able to fully open.”

BY RYAN BEMBRIDGE

Source: Property Wire

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Support from letting agents will be crucial for landlords affected by rent arrears

Landlords will need the support of letting agencies to ensure they have a comprehensive record of all arrears and communications with tenants, according to rental platform PayProp.

Four in five agencies have seen the share of tenants in arrears grow since March.

Following a big jump in April, the percentage of tenants in arrears has climbed to over 15%.

The average amount owed by tenants in arrears has also grown in relation to their monthly rent, although around a third of agencies actually saw arrears reduce as tenants began repaying the amount owed by them.

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Neil Cobbold, chief sales officer at PayProp, said: “After an initial surge in March when Covid-19 started to spread rapidly across the UK, heightened levels of rent arrears could persist for many months to come, despite many tenants settling some of their debt.

“Measures like the furlough scheme and Universal Credit increases have helped tenants to continue paying their rent, but payments are still less predictable than usual, and the furlough scheme is almost at an end.

“It’s therefore hugely important that letting agencies are on hand to help their landlords deal with rent arrears and associated issues.”

Digital record-keeping provided by letting agencies can help landlords to stay on top of rent arrears, allowing them to see how much is owed and by which tenants.

Agencies can also help landlords to create payment plans for tenants to pay back arrears over a manageable period of time.

BY RYAN BEMBRIDGE

Source: Property Wire

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Hereford sees a surge in buyer demand as housing market reopens

HEREFORD has been named as the city leading a bounce back in buyer demand following the reopening of England’s housing market, analysis has found.

Property website Rightmove based its findings on the volumes of house hunters phoning and emailing estate agents about properties for sale in the first two weeks of June, compared with before the lockdown in the first two weeks in March.

Across England generally, buyer demand was up by nearly a third (32%).

The housing market in England started to reopen from May 13, with serious buyers now able to undertake physical viewings once more.

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Hereford topped the list, with demand surging by 77% when comparing the first two weeks of March with the same period this month. The average asking price in June, according to RightMove, was £244,440.

It was followed by the North West towns of Wigan, with a 71% uplift and an average asking price of £165,448, and Rochdale, where the average asking price was £179,329, with a 66% increase.

Steven Thomas, Director of Watkins Thomas in Hereford, said: “Our market has been very busy since we were able to reopen in May.

“There’s been a shift in the type of buyer since before lockdown. We were dealing with a lot of first-time buyers with limited deposits in March, but now it’s families looking for more space.

“It’s a bit like what we see in January – families spend Christmas sitting down and talking about their next move and they get going in January. We’re now seeing people, having sat down during lockdown and reviewed what they’re looking for, jumping into action in June.

“June and July is often quieter for us because this group of buyers are usually away, so that’s why we’re seeing a surge of late spring buyers.

“There’s also a lot of real interest coming from the South East, from people in their 50s and 60s realising they can get a lot more for their money and can live in an area with acres of open countryside.”

By James Thomas

Source: Hereford Times

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Northern Ireland dealing with pent up demand after reopening

Northern Ireland dealing with pent up demand after reopening – The Northern Ireland housing market is dealing with a flurry of activity after reopening on Monday 15th June.

The Guild of Property Professionals said a significant number of enquiries usually occur at this time of year – and losing March to June to the lockdown is only exacerbating this process.

Art O’Hagan, managing director of CPS Property, said: “As expected from the enquiries we received over the past few months, we are currently dealing with the pent-up demand that has built up over the lockdown period.

“With demand for houses is currently at a premium, there is no time like the present for vendors to get their homes valued and get their home listed.”

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O’Hagan saw over 140 viewers booked in for the first week of trading as a result of the pent-up demand.

Similarly, Daniel Henry, partner at Bensons, said: “When we returned on the 15th we had to deal with a surge of pent up demand. There were a large number of viewings needing to be organised and a significant number of new listings to be measured and inspected.”

Henry added that the office has been adapted to facilitate social distancing, while access is currently by invitation only.

BY RYAN BEMBRIDGE

Source: Property Wire