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Is the UK property market ready for a land value tax?

For years, there’s been growing talk in politics of introducing a new land value tax to replace the old system of council tax and business rates. It even featured in the Labour party’s manifesto at the 2017 general election.

The principle is self explanatory: A land value tax is a tax on the value of land. That’s different to the current system because it only taxes the land and doesn’t take into consideration the value of the buildings that sit on it, whereas council tax and business rates both do.

This makes the current system a particularly acute problem for businesses because it disincentivises productive investment in improving property or buying heavy machinery, for example. If you make any improvements to your business’s commercial buildings, it will lead to higher rates.

It’s a similar argument with council tax, which is banded by property value. In theory, making home improvements and adding value to your property should lead to higher council tax. However, in practice, council tax bandings have not changed in nearly three decades — though a revaluation is often mooted.

A land value tax theoretically removes this problem of taxing productive investment, which could result in greater economic activity, more jobs, and wealth creation. Another advantage is that because there is essentially a fixed supply of land, taxing it does not mean you get less as a consequence, unlike, say, taxing the production of manufactured goods.

Campaigners for a land value tax say it would result in more efficient use of the land by removing the current penalties for development. They also argue this tax would help deter speculators from hanging on to land because they would face a regular levy, encouraging them to develop it or sell it.

This is how the system would work in practice: an assessment of a land’s market value then a tax levied on the landowner calculated as a percentage of that value, perhaps annually.

“Properly applied, land value tax would support a whole range of social and economic initiatives, including housing, transport, and other infrastructural investments,” according to LandValueTax.org. “It is an elementary fiscal measure that would go far towards correcting fundamental economic and social ills.”

Not everyone agrees. In a critique of the land value tax, the pro-market think tank Adam Smith Institute wrote that opportunity cost is already a significant incentive for owners to use their land productively.

“If you choose to use your land as a garden instead of a block of flats to rent out, you are ‘paying’ the cost of doing so in the rent you’re forgoing,” the ASI wrote. “Adding an additional tax to that would make things less efficient even if it raised GDP numbers — a bit like taxing leisure time, it would increase cash output at the cost of actual wellbeing.”

The debate will continue. But it’s worth understanding the land value tax and the arguments around it because it is now on the table in British politics. After the next election, you might find yourself paying it.

Source: Yahoo Finance UK

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Mortgage approvals increase but gross lending falls

The number of mortgage approvals for home purchases and remortgages increased in April, according to new figures from UK Finance.

Data published today revealed approvals by the main high street banks were 5.4% higher in April 2019 than in the same month of the previous year.

For home purchases, this figure was 8.6% more year-on-year and for remortgages it was 2.2% higher than in April 2018.

In the same period gross mortgage lending in the residential market was £20.3 billion, which was a fall of 1.4% year-on-year.

John Goodall, CEO of Landbay, said: “Mortgage lending remained subdued, and reflected the wider challenges facing the housing market.

“Lenders are having to push down mortgage rates for customers even as funding costs begin to rise, which has led to banks like Tesco bowing out of the market altogether.”

He added that while prices had started to stabilise, until there was clarity on the current political situation it was unlikely there would be any drastic rise in confidence, and subsequently, lending.

Meanwhile, Richard Pike, sales and marketing director of Phoebus Software, said the correlation between the gross mortgage lending figures, which were down, and the number of approvals, which were up across the board, was quite telling.

He added: “As house prices fall, especially in London and the south east, and house buyers also look farther afield into more affordable areas, this gap is only likely to widen.

It is, however, encouraging to see the increase in approvals for home purchase, which does show that people have had enough of sitting on their hands and are making their move.”

Product transfers

UK Finance also revealed 290,000 homeowners switched product with their existing provider in the first quarter of 2019, a decrease of 1.7% year-on-year.

In terms of value, it said this represented £39.2 billion of mortgage debt refinanced internally, which was an increase of 2.1% compared to the same quarter last year.

According to UK Finance, of the total number of product transfers in Q1 of 2019, 161,100 were on an advised basis – a rise of 8.6% year-on-year. These were worth £22.7 billion, an increase 15.3% year-on-year.

Execution-only product transfers went down by 12.1% year-on-year, to 128,900. These were worth £16.5 billion, a decrease of 11.8% compared to the same period last year.

By Kate Saines

Source: Mortgage Finance Gazette

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Properties selling at slowest rate for five years as market slump continues

The property market is moving at its slowest rate for five years, Home.co.uk claims.

Analysis of listings data from the property website found the median time on the market for May is 89 days – 11 days longer than the same month last year and the slowest rate for this time of year since 2014.

Time on the market – defined as the period between listing and sold subject to contract – is now at its slowest rate in ten years for London at 96 days.

Supply continues to fall, with new instructions down 9% year-on-year across the UK and down 28% in the capital, while total stock levels are up just 1.7%.

This malaise has seen asking prices increase just 0.5% on a monthly basis but fall 0.2% annually to £307,521.

Doug Shephard, director of Home.co.uk, said: “Uncertainty is a highly corrosive factor for the economy. Decisions are postponed indefinitely, projects put on hold and normally bold actors become cautious in the midst of the unknown.

“The Brexit mess may not hamper the purchase of a pair of jeans, but the housing market is severely affected because the stakes are so high.

“Key factors such as cost, importance of timing and the irreversible commitment involved in a home purchase make the current economic environment almost unbearable for the average buyer or seller.

“Uncertainty in the market moves the ‘invisible hand’, a term coined by Adam Smith to describe the unobservable market force that helps the supply and demand of goods in a free market to reach equilibrium.

“That equilibrium is vital for price recovery but is currently being undermined by a growing crisis of confidence in the housing market, especially in Greater London.

“While evidence of falling demand is widespread across the UK, in London both supply and demand are collapsing, and this is causing an acute distortion of the market.

“Price fluctuations during such episodes are to be taken with a pinch of salt. Low volumes lead to extreme volatility in several key market price indicators.

“Take the Halifax and Rightmove indices, which are showing wild variations from month to month and adding to confusion in the marketplace.”

By MARC SHOFFMAN

Source: Property Industry Eye

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Brexit calls for landlord flexibility

Brexit is having an impact in the rental as well as the for-sale market. Concerns are growing over changes to regulation; dips in property value; possible interest rate hikes meaning rents will have to increase, affecting affordability for tenants; and the ambiguity around having EU nationals as tenants.

But amidst this turbulence is an opportunity for landlords to bring some stability to the rental sector and move forward with the evolving tenant. While the waiting game on Brexit continues, we can look at how to be more effective and responsible as landlords overall.

PPP Capital has been developing and renting property for over 15 years, but in the past few years we have had to think more creatively in the face of Brexit uncertainty about our approach to the evolving tenant. Below is a list of suggestions we have found effective in attracting and retaining good tenants and we are confident this approach will help our portfolio weather whatever Brexit brings.

Move forward with tenants’ changing profile: For example, many tenants are now pet owners. Landlords are often reluctant to accept pets, but we give applying tenants the chance to describe their pet before we decide whether to accept. We also suggest putting a clause in the contract about having pets in the property. In our experience, if we show flexibility and care as a landlord, we receive the same respect in return.

Engage in efficient two-way conversations with tenants: One way to do this is to use property maintenance software that updates tenants in real time. Making them feel connected to their landlord eliminates rounds of calls or emails and speeds up simple maintenance requests, but also builds trust between both parties.

Enabling your company, tenants, contractors and tradespeople to access it separately and simultaneously makes things easier for all involved. A digital maintenance log also helps you to see if properties are costing more than was forecasted.

Be open to installing high quality finishes and extras: More tenants than ever envisage themselves as long-term tenants rather than homeowners. For a landlord, this means tenants will give extra care to the property, treat it more like their own home and stay for years. So it is often worth investing in some ‘extras’ such as smart home systems, underfloor heating or safety features such as alarm systems and great outdoor lighting.

Give back to the community: One way to do this is sponsor a local community initiative or help to create an outdoor communal area or park nearby. This is an idea we have started exploring but not yet implemented. We have donated to national charities but also want to identify projects in communities where we have developments.

Our priority is to identify opportunities that support a greener, brighter future for the communities we are present in.

Renters’ needs are evolving. Property selection and the decision to stay for the long-term are not only determined by the basics but by a landlords’ attitude to diverse tenants and how responsible they are as a landlord. There are ambiguous times ahead, but private and corporate landlords with mid-to long-term buy-to-let and build-to-rent properties should remain very optimistic about the future.

Let’s focus on the long-term yield while doing our best to be responsible landlords with solid portfolios occupied by respectful tenants.

By Sanjeev Patel

Source: Property Week

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The best and worst places to sell your home in Britain

Scotland is the best place to sell your home quickly in Britain, with homes in some parts of the country taking less than four weeks to go under offer, according to a new report.

Zoopla found Edinburgh and Falkirk have the fastest-moving property markets in Britain, with homes in the two locations getting snapped up in just 27 days.

This is against Scotland’s average of 42 days and a nationwide average of 56 days.

Across the UK, average selling times by region are:

  1. Scotland, 42 days
  2. West Midlands, 46 days
  3. East Midlands, 47 days
  4. Yorkshire and the Humber, 54 days
  5. South-west England, 56 days
  6. North-west England, 57 days
  7. East of England, 59 days
  8. Wales, 60 days
  9. South-east England, 61 days
  10. North-east England, 67 days
  11. London, 70 days

Scotland, where the average home costs £192,147, dominated the fast movers, taking the top four spots. Glasgow, where properties sell in about 31 days, and Stirling, where they go in 32, come in second and third, respectively.

And in Cardiff and Coventry, sellers manage to get rid of their homes in about 37 days.

The fastest-moving towns and cities in Britain are:

  1. Edinburgh and Falkirk (tied), 27 days
  2. Glasgow, 31 days
  3. Stirling, 32 days
  4. Cardiff and Coventry (tied), 37 days
  5. Newport, 40 days
  6. Nottingham and Birmingham (tied), 41 days
  7. Birmingham, 41 days
  8. Mansfield, 42 days

“The key is to get your pricing correct, meaning the best way to sell your home quickly is to ask for its true value given the current market,” Annabel Dixon, a spokesperson for Zoopla, said. “Over-priced homes won’t shift and may have to be discounted and on the flip side nobody wants to sell for less than their property is worth.”

At the other end of the scale, Blackpool has the slowest property market in Britain. Homes in Blackpool typically take 71 days to go under offer, Zoopla found.

However, London was hot on its heels. Properties in the capital remain listed for about 70 days before an offer is made, reflecting the subdued state of its housing market and stretched affordability, with the typical property costing £659,660.

Newcastle has the third-slowest property market, with homes taking an average of 68 days to sell, followed by Hemel Hempstead at 65 days. Homes in Bradford and Reading both took 64 days to sell.

The slowest moving towns and cities:

  1. Blackpool, 71 days
  2. London, 70 days
  3. Newcastle-upon-Tyne, 68 days
  4. Hemel Hempstead, 65 days
  5. Bradford and Reading (tied), 64 days
  6. Preston, 63 days
  7. Telford, 62 days
  8. Doncaster, 60 days
  9. Swansea, 59 days

By  Abigail Fenton

Source: Yahoo Finance UK

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More properties coming onto the market

The number of properties coming onto the market this month rose by 12.3% and by 1.9% on the year, estate agent haart has found.

In March, there were 12 buyers chasing every property across England and Wales. House prices across England and Wales fell by 0.6% on the month and by 5% on the year. The average house price now sits at £218,556. New buyer registrations rose by 23.2% on the month and by 7.8% annually.

Paul Smith, chief executive of haart, said: “Three years on from George Osborne introducing the 3% hike in stamp duty surcharges on second homes, landlords are beginning to come to terms with the additional costs and are cautiously entering the market again.

“Our branches saw a monthly uptick of 7.9% in the number of landlords registering to buy, a figure which has been continuing to grow since the start of 2019.

“Interestingly, sale prices to landlords are down by nearly 12% which may be spurring on this activity, these price decreases could be causing the available stock to fall within lower stamp duty thresholds, making the stamp duty levy a little easier to stomach.

“Despite this, landlords are not back in their hundreds, the number of registrations is still down 22% on the year. Whilst some brave souls are re-entering the market, the hammering buy to let investors received in terms of various tax changes is still fresh in many of their minds.

“Clearly investors are recognising the value that can still be found in buy-to-let property, especially in comparison to the overvalued and faltering stock market.

“Although the property market hinges on confidence, the FTSE 100, gold and cash are far more volatile to socioeconomic impact, so investors are increasingly returning to property where they deem their money safest, and where the yields are highest.

“The market as a whole continued to gain momentum in March as the pent-up demand from a delayed Brexit continued to drive transactions. Transactions are up 11% on the year whilst new buyer registrations boomed by 23%.”

The market has become less efficient this month, as the number of transactions has fallen by 2.9%, whilst the number of viewings has increased by 19.5%.

This indicates there is pent-up demand in the market. The average purchase price for first-time buyers has fallen by 2.5% on the month and by 2.2% on the year.

This comes as the number of first-time buyers registering has risen by 19.2% on the month, but fallen by 15.6% on the year. The average amount first-time buyers are paying for a deposit has risen by 0.8% but fallen by 5.7% on the year.

Clearly, first-time buyers are capitalising on low prices and are putting down larger deposits than needed to own more of their own homes this month.

The average property price in London has fallen by 0.8% on the month and by 2.5% on the year. The number of new buyers entering the market has risen by 22% on the month, and by 17% on the year.

The number of new instructions has risen by 7.5% on the month, but fallen by 18% on the year. Sale transactions decreased by 10% on the month and by 20% on the year.

The number of tenants entering the market across England and Wales has risen by 14% on the month and by 25% on the year.

The average rent is down 0.3% on the month, and by 4.2% on the year. The average rent now sits at £1,293 per month  across England and Wales. Tenant demand in London has increased by 11.7% on the month, and by 52% on the year.

London rents are up 1.1% on the month and have risen by 4.2% on the year. The average rent now sits at £1,941 per month.

By Michael Lloyd

Source: Mortgage Inteoducer

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UK property: why house prices are so high

House prices across the UK have risen substantially over the past quarter-century. In some parts of the country it is now a real struggle for first-time buyers to step onto the property ladder.

UK house prices grew faster on average over the 40 years from 1971 to 2011 than any other OECD country. But prices really took off in the mid-1990s.

Land Registry data shows that the average UK house price in January 1995 was £55,437, a similar level to the beginning of the 1990s.

By March 2019, the average price was £223,610, a 303% increase over that period.

To give a sense of just how large that number is relative to the cost of living, if the average house price in 1995 had risen by the rate of inflation each year, it would only be around £105,000 today.

So why exactly have things gotten so out of control? Well, there are two parts to the housing market story: supply and demand.

Easy mortgages and booming demand
Let’s start with demand. Over the past few decades, demand for house purchases was supported by a booming economy and easy access to mortgages.

People had well-paying jobs and, up until the financial crash in 2008, banks were very keen to approve mortgages to both homebuyers and buy-to-let investors — too eager, in fact, which contributed to the economic crisis.

The number of mortgage approvals for house purchases peaked in December 2003 at 132,737. Some buyers were able to secure 100% mortgages at the time and borrowed debt that was a substantial multiple of their income, much higher than the four or five times available today.

Irresponsible lending to both homebuyers and buy-to-let investors fuelled a demand boom in the housing market.

Even today, in the aftermath of the crisis, mortgage approvals still hit 64,337 in February 2019, despite affordability issues for young house hunters. While the number is well down from the peak, it’s still buoyant.

Demand is currently supported by ultra-low interest rates and schemes such as Help to Buy and shared ownership, though buy-to-let investor demand is curbed by a number of tax rises, including higher stamp duty on additional property purchases.

Severe housing supply shortage
But the bigger problem in the housing market is supply.

Set against hot demand for property over the past two decades is an ongoing and severe shortage of housing supply across the UK. This shortage is most acute in London and south-east England, but also affects other areas, particularly urban centres.

“Estimates have put the number of new homes needed in England at between 240,000 and 340,000 per year, accounting for new household formation and a backlog of existing need for suitable housing,” according to a House of Commons briefing paper.

“In 2017/18, the total housing stock in England increased by around 222,000 homes. This was 2% higher than the year before — and the amount of new homes supplied annually has been growing for several years — but is still lower than estimated need.”

The number of homes built has consistently fallen substantially short of demand for a while, a problem that deepens each passing year. So why can’t we build enough homes?

The most fundamental problem is the country’s strict planning laws, particularly in England, where a tangle of complex regulations hinder development. Planning laws have a bias against development and put a lot of power in the hands of local communities to block construction.

Local planners are at the mercy of the communities they serve. The politics of planning make it hard for them to approve developments without facing a substantial backlash. Councillors on planning committees are keen not to upset their voters.

One example is the “green belt” protections. It is incredibly hard to build housing within green belt areas, even if some of the land within them is not considered “green,” such as fields used for environmentally-damaging intensive farming.

Planning restrictions limit the supply of land available for developers to build on and increase the building cost even on land where housing is permitted. This drives up the price of land for developers, so they build fewer homes.

House prices would be 35% lower on average if all regulatory constraints on housebuilding were removed, according to a 2013 academic study titled “The Impact of Supply Constraints on House Prices in England.”

“Our findings point to the English planning system as an important causal factor behind this ‘affordability crisis,’” the study’s authors Christian A. L. Hilber and Wouter Vermeulen wrote.

In short, a boom in housing demand fuelled by loose lenders and severe constraints on supply have pushed house prices higher and higher.

Source: Yahoo Finance UK

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Analysts Expect Summer ‘Brexit Relief Rally’ to Lift the UK Property Market

Irrespective of personal or political views, frustrations regarding the lingering uncertainty of Brexit have united the country. Whether you’re an ardent Remainer or an active Brexiteer, an amicable resolution to the mess the UK is currently in is undoubtedly your priority.

By this stage, it’s evident that whichever way Brexit goes, there will be political and economic damage to recover from. Nevertheless, there are some who expect the most recent extension of the Brexit deadline to actually have a beneficial impact on part of the UK’s economy.

Following an extended period of turbulent unpredictability, Britain’s housing market could see solid gains over the next few months.

That’s according to analysts at the real estate group Rightmove, who’ve reported welcome signs of property value gains over recent weeks. Specifically, the organisation stated that average property prices within its own portfolio had increased by 1.1 per cent on average in the four weeks running up to April 6. That’s still a fall of 0.1 per cent from the same month last year, but could nonetheless represent the start of a summer “relief rally”.

Responding to On-going Uncertainty

Paradoxically, the prediction of a summer uptick in property prices is directly attributed to the on-going uncertainty surrounding Brexit. The March 29 deadline for the UK’s EU departure had prompted movers, investors and property buyers in general to sit tight, watch the markets closely and wait to see what happened next.

The deadline came and went – the UK remained in the EU.

A short extension was then granted, resulting in much of the same. With just a matter of weeks to wait for an apparent resolution, the time hadn’t come to commit to anything significant. Nevertheless, the deadline once again passed with no outcome of any kind.

Today, we’re looking at a significantly extended deadline of October 31. The possible implications of Brexit remain unchanged and there’s as much uncertainty as ever before, but we’re also now looking at a period of six months of at least relative certainty.

Hence, the prediction by some that confidence in the British property market will experience a significant boost over the summer. Particularly among those on the verge of making a move but unwilling to do so at such a close juncture to the prior deadlines, now could be the time to go ahead.

Buyers and sellers alike are expected to take advantage of this finite “window of relative certainty”, providing at least temporary relief in the most uncertain of times.

Affordable Fixed-Rate Mortgages

One additional way Brexit uncertainty is playing into the hands of would-be buyers is in the form of affordable fixed-rate mortgages. Property prices have remained relatively static for some time, which combined with the availability of cheap mortgages adds up to an appealing prospect for movers and investors alike.

Evidence also suggests a significant increase in general secured loan application volumes, along with more specialist property funding solutions like a bridging loan.

It’s acknowledged that the outcome of Brexit could have a dramatic impact on mortgage rates in either direction, or little to no effect whatsoever.

Nevertheless, the prospect of locking in a great deal while the opportunity exists is convincing many to do precisely that.

Economists have also suggested that much of the predicted summer uptick will be attributed to parents and families being unwilling and unable to further delay their relocation plans due to Brexit. With the UK no closer to reaching an amicable deal with the EU, there’s still a strong chance of an even more extensive delay to Britain’s departure.

That is, assuming Brexit goes ahead at all.

Should the findings and predictions of Rightmove prove accurate, they’d map out a summer that contrasts sharply with the most recent forecast from The Royal Institution of Chartered Surveyors. Quite the contrary, Britain’s surveyors spoke of the likelihood of property values across the UK decreasing consistently for at least the next six consecutive months.

For London and the south east, they predicted at least a year of steady declines.

This was around the same time the Halifax reported an astonishing 5.9% per cent improvement on property prices in February alone. Followed by a somewhat less inspiring 1.6 per cent decrease in property prices for March, highlighting the turbulence that’s become the norm for the market since the EU referendum.

Source: FinSMEs

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UK lenders see big drag from house prices on mortgages: BoE

UK lenders think a slowdown in house prices will exert the biggest drag since 2012 on how many mortgages they offer, a Bank of England survey showed on Thursday, as Brexit uncertainty continues to depress the market.

Lenders surveyed by the central bank last month expected to provide around as many mortgages in the second quarter as in the first three months of the year.

But they predicted that expectations for house prices would be the biggest drag on mortgage supply, rather than the economic outlook or financial conditions.

Expectations for demand for mortgages in the prime market — dominated by London which has been hardest hit by the chaos surrounding Britain’s exit from the European Union — fell to their lowest level since late 2010, the BoE said.

Other surveys have shown Brexit to be a major drag on the property market in the capital, which is sensitive to flows of migrant workers from the European Union. A surge in prices in London in previous years has also stretched affordability.

Official data on Wednesday showed British house prices rose at the weakest rate in six-and-a-half years in February, dragged down by London’s biggest price fall in a decade.

The BoE’s survey took place between March 4 and 22.

Reporting by Andy Bruce, editing by William Schomberg

Source: Reuters

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How has the UK property market reacted to Brexit?

Jamie Johnson, CEO and co-founder of FJP Investment, takes a look at what leaving the EU – when we eventually do – will mean for the UK property market.

If we are to reflect on the current state of the Brexit negotiations – which have made very little progress in the last few months – it would be easy to assume that the UK is in a state of disarray. But while this may be somewhat descriptive of the current political deadlock in Westminster, we must be careful not to paint all sectors of the economy with the same brush. After all, many of the UK’s leading industries are striding forward.

The property market, for instance, has shown itself to be a beacon of strength and resilience in the face of economic and political turmoil. Initial fears about the future of the market post-EU referendum were quickly dismissed; since the vote, house prices have been steadily rising, new construction projects are taking place up and down the country, and property continues to attract strong levels of domestic and international investment.

So, while it is easy to let Brexit cast a dominating shadow over the economy, it is important to step back and note the positive long-term developments we are seeing in the real estate market. At the same time, we must also consider the challenges currently facing the market notwithstanding the political standoff – obstacles which should be a priority in months and years to come.

What do recent house price trends tell us?

If we are to look back on the headlines that followed in the wake of the EU referendum, the UK was presented with a cascade of doom and gloom predictions. And while there have naturally been some knock-on effects stemming from the vote – most notably houses prices in the capital stagnating – there have also been noticeable advancements that have strengthened the market. For one, the Midlands and North of England have championed house price growth over the past few years, driving up the national average house price.

Since the 2016 vote, house prices have risen at double-digit rates in many areas; by 16% in Birmingham, followed closely by Manchester and Leicester (both up 15%). The growth in property values can in part be attributed to the influx of investment into regeneration projects, which are reviving housebuilding efforts and supporting the improvement of infrastructure and transport links.

Meanwhile, domestic and foreign levels of investment into UK property have also remained strong. With just weeks to go until the (then) 29 March Brexit deadline, the number of transactions recorded in January 2019 for residential properties was 1.3% more than 12 months prior.

These figures just go to show that, while there is some hesitancy, real estate as a traditional asset class continues to offer attractive investment options for prospective homebuyers. After all, it has demonstrated time and time again that it is able to withstand difficult times with confidence and offer strong returns on investment.

Key priorities for the UK property market

As house prices continue to climb and transactions pick up, the challenge becomes to provide enough suitable housing to meet the needs of the population.

Yet, while construction efforts have been bolstered across the country, the currently imbalance between supply and demand remains a top priority. The Conservative government has long touted addressing the national housing shortage as a key policy agenda; in the summer of 2018, Prime Minister Theresa May reaffirmed this mission by pledging to put 300,000 new homes on the market by the middle of the next decade.

There is no doubt that progress has been made in this sphere. Multi-billion pound funding has been committed to construction efforts, planning reforms have been put in place and councils have been given the freedom to borrow more in order to build homes. As a result, in 2017-18, 220,000 homes were constructed – a number that is higher than in all but one of the last 31 years.

That is not to say that the housing crisis deserves any less attention now, however. The reality is that there are still not enough homes to meet the growing demand for accommodation, while construction efforts are progressing slower than necessary to reach the ambitious 300,000 target.

A recent study by Lichfields found that in 2020, about 50% of local authorities are likely to fail the test for building enough homes – the report revealed that only 44.1% of local authorities had up-to-date plans setting out how they could meet the need for new homes. Meanwhile, SME developers are also struggling, particularly when it comes to sourcing funds; 57% cited access to finance as their biggest obstacle.

Irrespective of the eventual outcome of Brexit, speeding up housebuilding efforts across the country must remain a national priority. Creative reforms are certainly needed, and there are some positive steps that can be taken to ensure that housebuilders and developers have access to the funding they need to continue delivering homes. Debt investment products such as loan notes, for instance – which are issued by private investors to the firms constructing a property – are one such measure that could support construction efforts.

Considering recent property trends demonstrates the resilience of UK bricks and mortar. Looking beyond the initial fears posed by Brexit, real estate continues to offer strong returns for buy-to-let investors and has proven its value as an asset class. So, while we can expect some hesitancy from the market as the details of the final EU withdrawal deal are unveiled, there is little evidence to suggest that Brexit will ultimately dampen foreign and domestic investor sentiment towards property.

By Jamie Johnson 

Source: Accountancy Age