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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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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

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Britain’s housing market may avoid a nasty crash

There is a general presumption that the reopening of the UK housing market following the pandemic freeze must be negative for house prices. But it is too early to be sure. Lucian Cook, the head of residential research at Savills, warns against jumping to any conclusions until data on transactions is available.

In March, new buyers’ enquiries and new instructions collapsed “like never before”, making it “difficult to get an indication of the impact on prices for a while”. Generally, economic downturns coincide with falling house prices. In recent years, however, house prices have been falling in inflation-adjusted terms. The absence of a run-up in house prices before the virus “should insulate the market from significant house-price falls”, reckons Cook. In the short term, sentiment will be a factor, but “in the long term, it will come back to economic fundamentals”.

The first of those is affordability. With interest rates at 0.1%, the cost of mortgage debt is very low, despite more limited availability. Unemployment, however, could be a more serious problem, bringing some forced sales and making people cautious about moving up the housing ladder. Savills uses the forecasts of Oxford Economics. It predicts a 15% drop in GDP in the second quarter followed by an 8% rebound in the third and slowing growth thereafter. A downside scenario has a further 2.5% drop in the third quarter, but higher subsequent growth. The baseline forecast results in unemployment rising from 4% to 6%, not enough to have a significant lasting impact on the housing market, but the downside scenario has unemployment reaching 10%.

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These factors, together with government action to support jobs and a benevolent approach to arrears by lenders should temper the impact on housing. Nonetheless, the number of transactions will take several years to recover to the pre-pandemic level of 300,000 a quarter, owing to a lack of confidence by both buyers and sellers. Savills’ central expectation is that prices will rise 15% over the next five years, with a 5% decline this year followed by steady increases in subsequent years. Its more pessimistic scenario sees a 10% fall this year, but faster growth thereafter.

Will the southeast keep lagging?

Savills expects a continuation of the recent trend – perhaps interrupted by an uptick in regional unemployment in the short term – of London and the southeast underperforming the Midlands and north, given how extended house prices relative to the national average became, particularly in London. Prime central London prices, however, are 20% below 2014 levels, while prime London properties and those in other regions worth more than £2m are 5% below, having been heavily affected by tax changes and political uncertainty. So these markets “were looking pretty good value” going into the downturn. Savills reports higher unprompted web traffic than before the pandemic, while new buyer registrations, both from British and overseas buyers, have risen strongly.

In a survey of 600 clients, 37% of respondents have become less committed to moving over the next six months, but 27% more inclined to do so. Over 12 and 24 months, that negative balance reverses to +9% and +29% more committed to moving. “Spending much more time at home has made the quirks and idiosyncrasies of home more apparent, which may act as a spur to moving.” Covid-19 has also made rural properties much more appealing, especially for those with school-age children, offering the prospect of a renaissance for those locations. This preference extends to suburban London; people want larger houses with gardens.

This is not necessarily negative for central London or other urban locations. For international buyers, total buy, sell and hold costs are competitive with other major cities worldwide and they will have noted the comparative leniency of the UK’s lockdown. Younger people will still want to live in cities and those now hankering for village and country life may come to miss the vast array of restaurants and entertainment facilities. The cost and convenience of travel will favour city living, especially as roads become more congested and public transport returns to normal. “Further price softening in London will offer a compelling buying opportunity,” says Savills.

Undoubtedly, there will be more working from home. This will increase the space requirement at home, favouring houses over flats and properties with even modest gardens to those without. Demand for second homes will probably increase; the government’s advice to stay away from them in the lockdown was widely ignored. Price expectations in the Savills survey show nearly half expecting no change and half expecting price falls. But buyers are more negative than sellers, so may have to adjust their expectations. Though Cook didn’t give explicit advice to those thinking of moving, the message between-the-lines was “get on with it and don’t expect any bargains”.

By Max King

Source: Money Week

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House Prices Fall But Signs Of New Interest

Amid mixed messages about the current state of the housing market, Nationwide has reported a sharp fall in house prices.

Its latest house price index fell by 1.7 per cent in May, the largest monthly fall since February 2009. As a result, the annual rate of house price growth slowed to 1.8 per cent, down from 3.7 per cent in April.

This put the current average price of a house at just under £219,000, £4,000 down on April.

‘Housing market activity has slowed sharply as a result of the measures implemented to control the spread of the virus’, commented Nationwide’s chief economist Robert Gardner.

‘Our recent market research survey suggested that around 12 per cent of the population had put off moving as a result of the lockdown. Most viewed the current situation as a temporary pause in the market, with would-be buyers now planning to wait six months on average before looking to enter the market’.

House buyers’ housing preferences may also have been changed by the lockdown, noted Gardner. Around 15 per cent of people surveyed said they were considering moving as a result of life in lockdown, with a third saying they thought differently about their home as result of the Covid-19 outbreak, especially the importance of a garden and the need for more indoor space.

Meanwhile online property companies such as Zoopla have reported a surge in online house searches, with growing demand for rural properties offering additional garden space.

Source: Residential Landlord

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Lockdown Easing Releases Burst In Housing Demand

Re-opening of the housing market in England following the coronavirus lockdown, led to a burst of enthusiasm from would–be buyers and a small increase in sales agreed. But, reported online property portal Zoopla, the starting point for renewed activity is a market bumping along at sales levels 90 per cent down on this time last year.

The firm’s latest UK Cities House Price Index found buyer demand across England shooting up by 88 per cent after the market reopened, exceeding pre-lockdown levels. But, said Zoopla, this jump in demand ‘is temporary and expected to moderate in the coming weeks’.

There was less of a bounce in cities in Scotland, Wales and Northern Ireland registered where housing markets remain closed.

Continued Government support for the economy and the availability of higher loan-to-value mortgages will shape the market outlook for the second half of the year, Zoopla concluded.

Although 60 per cent of would-be home movers across Britain said they plan to go ahead with their property plans, 40 per cent have put their plans on hold.

‘After the market was suspended for 15 per cent of the year at one of the busiest times for market activity, a return of pent-up demand was to be expected, especially given the strong start to the year.

‘The scale of the bounce back in demand over the last week (to 17 May) varies across cities depending upon the country in which they are located. Despite a large rise in demand, London’s recovery is lagging behind, alongside cities in countries where the housing market is yet to reopen. Scotland, Wales and Northern Ireland have not recorded any major rebound in demand like that seen across English cities. Demand for homes in London has been partly diluted as would-be buyers look to commuter towns outside the capital in response to COVID’.

Zoopla’s latest data shows that demand has rebounded faster in cities along the south coast and in northern England. Portsmouth and Southampton are registering demand some 40 per cent higher than in February this year with strong growth also recorded in Newcastle and Leeds’.

Zoopla estimates there are currently 373,000 pre-lockdown house sales in progress. By reopening the market, the Government has improved the chances of a higher proportion of these stalled transactions completing.

‘That said, latest data suggests a small pick-up in the rate of fall-throughs since 12 May, but at levels well below the average for this time of year’, said Zoopla.

‘We currently expect a significant proportion of agreed sales to continue, but increased uncertainty over the economic outlook will see housing chains tested in the coming weeks’.

The coronavirus lockdown has created an unexpected boost to housing demand, said Zoopla director of research and insight, Richard Donnell.

‘The economic impacts of COVID will grow in the coming months and uncertainty is building. The majority of would-be movers plan to continue their search, encouraged by low mortgage rates and continued Government support for the economy.

‘However, we expect the latest rebound in demand to moderate in the coming weeks as buyers and sellers start to exert greater caution. Further support from the Government can’t be discounted and would help limit the scale of the downside risks’.

Source: Residential Landlord

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Leicester rated the best city for investors

Leicester is the best city in the UK to invest in property and start a new business, a report by savings marketplace Raisin claimed.

The business survival rate in the city is over 91% and house prices have risen by 28.3% in the past two years,

The average house price in Leicester is £246,000, which has increased from £176,382 in the past two years – a rise of over £69,000.

Kevin Mountford, co-founder of Raisin UK, said: “Whether you’re buying a house, you have to weigh up the pros and cons, and the location is a key factor in that.

“Using the Raisin UK city investment index you can find the most practical and profitable location for your business and property needs, encouraging the most successful outcome of your investment and hard-earned savings.”

The second and third best cities were Bristol and Coventry, as both have high rates for business survival (88.7% and 90.6%) and house price increases of 26% & 28%.

BY RYAN BEMBRIDGE

Source: Property Wire

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Zoopla: Demand for housing in England surpasses pre-lockdown levels

Two weeks after the government reopened the property market, demand for housing in England has exceeded levels recorded at the start of March, according to the latest UK Cities House Price Index by Zoopla.

Zoopla found that demand for housing across England rose by 88% after the market reopened in the week to 19 May, exceeding pre-lockdown levels by 20%; this jump in demand in England is expected to moderate in the coming weeks.

Six in 10 (60%) buyers in the UK are planning to continue with their search for their next home.

Of that cohort, 22% said that they have not been impacted by COVID-19 and expect to continue unaffected.

Meanwhile, 37% said that while they had been impacted to some extent, they were looking to continue with their purchase as soon as possible.

By contrast, 41% had put their plans on hold, citing market uncertainty, loss of income, and diminished confidence in future finances as deterrents.

Demand rebounded faster in cities along the south coast and in northern England.

Portsmouth and Southampton have registered demand 40% higher than in February this year, with strong growth also recorded in Newcastle and Leeds.

While demand for homes has grown, harder measures of market activity are increasing more slowly.

New sales agreed, sold subject to contract, were running at 10% of normal levels over the lockdown period and have now started to increase off a low base, based on viewings from before the lockdown.

Zoopla expects sales volumes to increase further, but at a more moderate pace given the typical two month lag between new demand entering the market and sales being agreed.

Moreover, if available supply does not increase, then not all demand will be satisfied.

The annual rate of house price growth fell from 2% to 1.9% from March to April, representing the lowest month-on-month change since January 2019, and prices were unchanged in April.

Richard Donnell, director of research and insight at Zoopla, said: “The scale of the rebound in demand for housing is welcome news for estate agents and developers, but it is also surprising given projections for a sharp rise in unemployment and a major decline in economic growth.

“The COVID crisis and 50-day lockdown have created an unexpected one-off boost to housing demand.

“Millions of UK households have spent a considerable amount of time in their homes over the lockdown period and missed out on hours of commuting.

“Many households are likely to have re-evaluated what they want from their home.

“This could well explain the scale of the demand returning to the market.

“We need to see more supply come to the market to satisfy this demand.

“The economic impacts of COVID will grow in the coming months and uncertainty is building.

“The majority of would-be movers plan to continue their search, encouraged by low mortgage rates and continued government support for the economy.

“However, we expect the latest rebound in demand to moderate in the coming weeks as buyers and sellers start to exert greater caution.

“Further support from the government can’t be discounted and would help limit the scale of the downside risks.”

James Forrester, managing director of Barrows and Forrester, said: “You only have to look at the miles of queues approaching your local drive-through takeaway of late to see what happens to demand levels when you deprive the nation of something.

“This is certainly no different when it comes to the appetite for homeownership and a huge uplift was always on the cards following the reopening of the property market.

“This will level out as estate agents begin to facilitate this activity on both the side of buyers and sellers and it will certainly help to quell the huge uplift seen in recent weeks.

“However, this trend is unlikely to subside altogether and this ongoing demand will help to stabilise the market from a price point of view over the coming months.”

Colby Short, founder and CEO of GetAgent.co.uk, commented: “We’ve seen market sentiment strengthen as uncertainty has evaporated and market restrictions have been lifted and while this will no doubt be more pronounced to begin with, it’s unlikely to fade over time.

“Given that the market has also returned before any momentary price impact has come to the surface, it’s unlikely that sellers will budge when it comes to asking price and any long-term price reductions will be non-existent.”

By Jessica Bird

Source: Mortgage Introducer

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House buyer demand surges after government lifts property market restrictions

Demand from potential house buyers spiked 88 per cent after lockdown restrictions on England’s property market eased earlier this month, according to the latest research.

However, the pent-up demand varied between cities, according to the latest research by Zoopla, and the rebound in London has been less pronounced than other English cities.

The research found that some potential buyers could be looking to move to commuter towns outside of the capital after working from home during the coronavirus lockdown. It also said affordability of housing could have slowed down the bounce back in London.

Demand has bounced back strongly in northern England and cities along the south coast since the government gave the go-ahead for the housing market to reopen.

The surge in demand is expected to be temporary and slow in the coming weeks.

The Zoopla Cities Index found that 60 per cent of potential homemovers across Britain were planning to go ahead with their plans, however 40 per cent had put potential moves on hold due to the pandemic.

Meanwhile, new sales agreed in England increased 12 per cent since the market reopened two weeks ago.

Zoopla director of research and insight Richard Donnell said: “The scale of rebound in demand for housing is welcome news for estate agents and developers, but it is also surprising given projections for a sharp rise in unemployment and a major decline in economic growth.

“The Covid crisis and 50 day lockdown have created an unexpected one-off boost to housing demand. Millions of UK households have spent a considerable amount of time in their homes over the lockdown period and missed out on hours of committing. Many households are likely to have re-evaluated what they want from their home.

“This could well explain the scale of the demand returning to the market.”

However, he added that uncertainty will build as the economic impact of the pandemic becomes clearer over the coming months.

“The majority of would-be movers plan to continue their search, encouraged by low mortgage rates and continued Government support for the economy,” Donnell added.

“However, we expect the latest rebound in demand to moderate in the coming weeks as buyers and sellers start to exert greater caution. Further support from the Government can’t be discounted and would help limit the scale of the downside risks.”

By Jessica Clark

Source: City AM

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‘Landlords should get stamp duty surcharge exemption’

The government should make landlords exempt from the 3% stamp duty surcharge on second homes, argued Mary-Anne Bowring, managing director at property management firm Ringley Group.

She added that a rise in buy-to-let investment could also support housebuilding, as landlords are an important source of development finance through off-plan sales that are necessary to get debt funding for construction.

Bowring said: “There is a huge opportunity still for buy-to-let investors in the UK rental market, which is only predicted to grow in size.

“That’s why institutional investors such as pension funds and insurers are investing billions in building homes for rent, as they see an opportunity to secure income-producing investments that hold up well during a downturn.

“Government efforts to restart the housing market should reflect long term pre-existing trends and that includes the continued growth in private renting.

“If the government wants to kill two birds with one stone – boost activity in the housing market and provide much needed rental homes – it should exempt landlords from the second home stamp duty surcharge immediately.”

She added that rental housing is likely to prove more resilient during this downturn than other real estate sectors such as retail and offices, as people are more likely to rent rather than buy during a recession.

The number of renters was predicted to increase before the virus, as housing affordability and changes in lifestyle and the jobs market mean more people are renting and for longer. Bowring said these fundamentals should remain post-virus.

BY RYAN BEMBRIDGE

Source: Property Wire