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Number of UK Second Homes Climbs to 495,000

The number of second homes in the UK has risen by 30% over the last five years, to a record high of 495,000 in 2018/19, up from 382,000 in 2013/14, shows an analysis of the latest available MHCLG data by Houst. 451,000 of the 495,000, or 91%, of those second homes are located in England.

Houst co-founder and chief commercial officer Tom Jones said: “The likes of Airbnb and other platforms have revolutionised second home ownership and have certainly been one of the main driving forces behind second home ownership. Owners are now able to generate income from their second home extremely easily, almost all year round.”

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He added that rising incomes, property’s continued draw as an asset class due to steadily rising house prices, and the shift to more flexible and remote working, are likely to have been the main reasons behind the rise in second home ownership over the period. The rise could also have been driven in part by the reduced value of the pound, making it more cost-effective to purchase property in the UK rather than in Europe, for example, that acts primarily as a holiday home.

Houst also explains that the last decade has seen a boom in the use of technology-driven property lettings companies that have made it more attractive and far easier for second home owners to generate income from second residences.

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

He said: “One of the things, however, that second home owners still struggle with is the administration behind second homes. With staycations on the rise – even pre-pandemic – it’s almost like a second full-time job. Owners are constantly checking emails and enquiries from all the different platforms, ensuring the property is clean and ready for renters, and always looking ahead for opportunities to let out their properties.”

Houst says that the coronavirus pandemic, the time period of which the latest data from the MHCLG does not cover, presents some interesting questions for the future of second home ownership in the UK.

Jones added: “The restrictions on travel over the past year will have seen many second home owners debate the next steps for their second homes. Those that decide to continue letting properties – rather than selling or moving into them on a more permanent basis – will need to ensure they’re squeezing every pound out of their property.”

BY PETE CARVILL

Source: Property Wire

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Stamp duty extension sees the property sales spike in March

The extension of the stamp duty holiday saw the property sales market spike in March with the renewed momentum looking likely to be sustained over the near term, the latest RICS Residential Market Survey has found.

The survey posted the strongest results in some months and those surveyed anticipated a busy three months ahead for the market.

Indeed, the month saw agreed sales hit the strongest level since August 2020 whilst new buyer enquiries were at a high last seen in September 2020.

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The report read: “The March 2021 RICS UK Residential Survey results show sales market activity picking up sharply over the month, with indicators on enquiries, sales and new instructions all improving noticeably compared to last time out.

“Survey participants highlight the extension of the stamp duty holiday as a significant driving force behind this renewed momentum, while a gradual loosening in lockdown restrictions is also said to be contributing to the rise in activity.”

Nigel Purves, CEO of Wayhome, added: “Demand clearly continued to outstrip supply in March, with a net balance of +59% of respondents citing a rise in house prices across the country.

“New buyer enquiries rose +42% – the strongest return since September 2020 and sales also spiked last month. This helped create a constant drumbeat of activity as we edged closer to the start of the traditionally busier springtime period.

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“While we are seeing a new-found confidence among many buyers and sellers, sadly this just isn’t the case for a large proportion of aspiring homeowners across the UK.

“Even with the stamp duty extension for an extra three months spurring on hopeful home buyers, there are many who find themselves overlooked and ignored due to their household income not meeting a mortgage lender’s criteria.

“This is despite them already having a deposit saved and being able to afford the equivalent of mortgage repayments in rent each month. More needs to be done to level the playing field and provide people with alternative routes into homeownership.”

By Ryan Fowler

Source: Mortgage Introducer

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Investors to inject tens of thousands into property

Investors are sitting on an average of more than £37,000 each in investment capital that they are poised to inject into property, according to a study by property investment platform Brickowner.

The property investment platform polled 126 investors about their investment intentions as the national COVID-19 vaccine, which is set to be the UK’s roadmap out of lockdown, continued. Asked how much money they had “allocated to invest into property via platforms or direct”, the average response was £37,345.

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Users were also asked to state what type of investment would interest them, with the most popular emerging as residential (67%), followed by commercial (48%) and care homes (42%). The average annual return they were looking for was 8.4% and the average most desired fixed term was two years and eight months.

Brickowner’s co-founder and chief executive Fred Bristol said: “The pandemic is very likely to have had a chilling effect on the enthusiasm of property investors over the last year – but there are real reasons for optimism.

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“First, it’s clear from surveys like ours that investors have not lost their love of property and want to invest. And, second, we are already seeing early signs of a turnaround that may be linked in part to the successful vaccine roll-out, a key precondition for the re-opening of the UK economy.

“Activity on Brickowner’s platform has risen dramatically since New Year. In fact, the amount invested in first two months of 2021 was almost double that of the last two months of 2020.”

Source: Property Wire

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Property industry has a new spring in its step

The property sector has a renewed sense of optimism a year after the country was put into its first lockdown, with more than 75% of people reporting they feel more positive about the sector’s future than three months ago, the latest Property Week sentiment survey reveals.

Some 42.5% of respondents said they felt slightly more optimistic about the future of UK real estate, and 36.7% much more optimistic, than the previous quarterly survey in December. Some 14.2% felt the same and just 6.4% felt more pessimistic.

In the previous survey at the end of December, just 53% were more optimistic about the future, compared with 23% that were more pessimistic and 24% whose views had not changed since September.

More than half of respondents expected to return to offices ahead of the official projected end to working from home guidance on 21 June if they had not already. Some 26.7% said they were already fully or partly back in the office and a further 29.2% expect to return before the June date. While 33.3% said they expected to return after June this year, 10.8% said they did not expect to return to the office.

Retail was resoundingly forecast as the sector that would be hardest hit by the pandemic in the long term, (62.5%) followed by restaurants and pubs (18.3%). But property experts are nevertheless optimistic about the sectors’ futures.

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Sovereign Centros chief executive Chris Geaves said apart from areas overexposed to it, there remained a “very strong” future for bricks-and-mortar retail.

“We’ve got a very strong future for one simple reason: the UK is a nation of shoppers,” he said. “You can’t paint all retail with the same brush, you’ve got to look at every location differently.”

He added that the eight super regional shopping centres, which include the likes of Trafford, Metrocentre and Meadowhall, were “irreplaceable stock” and would only “expand and get bigger”.

Ted Schama, joint managing partner at leisure and hospitality agency Shelley Sandzer, told Property Week: “The market has been more active than we might have anticipated at the start to the middle of the pandemic. There are more experiential leisure opportunities than ever due to vacancies of retail space on the high street.”

Jonny Perkins, retail asset manager at LabTech, agreed there is a “positive sentiment in the air” for the leisure sector.

“It has undoubtedly been a difficult time for retail, leisure and restaurant occupiers in the current climate. However, with the positive sentiment in the air from the vaccine and a reduction in cases, we have experienced a noticeable increase in occupier enquiries and interest for the first part of 2021.”

He added: “Demand has appeared to be focused on the food and beverage and leisure sectors, with retail being more measured.”

Quintain chief executive James Saunders said the Wembley Park developer was optimistic that large hospitality venues would also be able to reopen this year as planned.

“We are cautiously confident that our major venues including the SSE Arena and Troubadour Theatre will adapt and find a way to welcome back audiences later this year,” he said.

The hotel sector also has a positive outlook on the coming months. “There is a huge amount of pent-up demand and we are seeing real appetite for growth, as well as people being desperate to travel,” said IHG UK&I managing director Karen Khanna.

Some 15% of survey respondents thought offices would be the hardest hit sector coming out of the pandemic.

Martin Lay, head of central London offices at Cushman & Wakefield, said: “The start of lockdown in January was a backwards step coming off a strong Q4 in 2020, which dampened optimism.”

He added that international investors were circling the London market ahead of travel restrictions lifting, but that activity was “likely to be held back” by lower levels of available stock.

“While the breadth and depth of international capital focused on London remains strong, activity is more likely to be held back by the lack of available investment stock, with 2021 seeing a 40% reduction in new stock being launched to the market compared with last year,” he said, adding that “the ESG agenda is becoming an increasingly important driver to investors’ decision-making, which we expect to translate into a significant focus on assets that are best in class”.

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Most respondents believed industrial would come out of the crisis the strongest in the long term (56.7%), followed by residential at 29.2%.

AXA Investment Managers head of residential and student accommodation Joe Persechino told Property Week that growth in the number of young professionals supported by a burgeoning student population and the gradual recovery of the labour market would drive “modest” demand for private rental housing in the coming years.

He added: “The weight of capital seeking stable income returns together with the relative lack of depth in institutional standing stock, is driving significant investment into development. Strong occupancy and collection rates are reinforcing investor conviction, and a relatively attractive spread to comparative opportunities elsewhere in Europe is supporting pricing at today’s yields.”

By Emma Shone, Jessica Newman

Source: Property Week

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UK housing stock now worth a record £7.56trn

The total value of the UK’s housing stock has hit a record high of £7.56trn despite the pandemic and prevailing economic uncertainty, according to Savills.

The total UK housing value, which rose £380bn compared to 2019, now stands at four times the value of all companies in the FTSE 100.

The value of housing in the North of England saw its strongest growth since 2005 with a £59bn gain, while London and SE account for around £1.8trn and £1.4trn respectively, an increase of 23% and 18% of the total.

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The value of mortgaged owner occupied homes passed £2.5 trillion for the first time, driven by support from the Bank of Mum and Dad, longer mortgage terms, and the support of Help to Buy, Savills reported.

The mortgage guarantee scheme announced in this month’s Budget will boost this figure further.

Lawrence Bowles, a director in Savills residential research team, said: “People reassessed their housing needs and preferences as a result of the pandemic and that drove a surge in transaction activity in the second half of last year.

“This triggered rapid price growth as many buyers who felt secure in their finances looked for larger homes to accommodate the multiple demands of home working and home schooling, as well as extra space for living and leisure.  It also meant that the total value of properties held with a mortgage rose by 6.9% as people stretched their borrowing to accommodate lifestyle demands.”

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Total value% growthIn 2020Value gainIn 2020
London£1,765bn6.1%£101bn
South East£1,420bn4.9%£66bn
East of England£855bn4.7%£39bn
South West£706bn6.2%£41bn
North West£561bn6.2%£33bn
West Midlands£508bn4.9%£24bn
East Midlands£418bn5.5%£22bn
Yorkshire and the Humber£411bn5.0%£20bn
Scotland£390bn4.5%£17bn
Wales£245bn3.8%£9bn
North East£158bn4.4%£7bn
Northern Ireland£117bn3.2%£4bn
United Kingdom£7,555bn5.3%£380bn
Source Savills Research using ONS, Land Registry, MHCLG, UK Finance

By MARC DA SILVA

Source: Property Industry Eye

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London house prices to boom over the next five years

London house prices are set to boom over the next five years, estate agent Savills said as it upped its UK property market forecasts for 2021.

House prices in London’s mainstream market are expected to rise 12.6 per cent in the five years ended 2025, the real estate firm said.

Meanwhile prime central London house prices are rated a “buy” as they are down 21 per cent from peak, and are expected to “rebound strongly”.

Prime central London prices will rise three per cent this year, seven per cent next year and total 21.6 per cent by 2025.

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Savills upgraded its UK house price forecasts for this year to growth of four per cent, compared to its previous expectation that property values would remain flat in 2021.

Over the five years to the end of 2025, it anticipates UK-wide house price growth with total 21.1 per cent.

Housing transactions are expected to reach highs of 1.4m this year before falling back to pre-Covid levels in 2023.

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However, markets furthest from the capital are expected to see the strongest growth, with the north west and Yorkshire and The Humber leading the way.

“2021 is going to be a complex and uneven year, with competing forces impacting the housing market at different points,” Lucian Cook, Savills head of residential research, said.

“But the outlook has improved since the beginning of the year given the speed of the vaccination programme, the expected relaxation of social distancing measures and government support for both jobs and the housing market.

By Jessica Clark

Source: City AM

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Average house prices up 8.7% in England and Wales

Average house prices increased by 8.7% across England and Wales in the year to January 2021, according to e.surv Chartered Surveyors’ House Price Index.

On a monthly basis, average house prices rose by 1.2% between between December 2020 and January 2021.

Overall, the average price of a house in England and Wales was £330,958 at the end of January.

Richard Sexton, director at e.surv, said: “2020 proved an exceptional year in almost every way and many of the changes it ushered in won’t be easily swept aside.

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“Indeed, our data shows that the remarkable growth in property prices we saw in the second half of last year has continued into 2021.

“Rapid growth in the South West, East Midlands and the North West means that average property prices have started the year up close to 9% on January 2020.

“There are, as always, a number of factors at play, but we may well have moved beyond the release of the demand that was pent-up at the start of 2020 and into a new phase for the market.

“For many, the pandemic has proved very financially trying, but this hasn’t been universal. For some households, where people have kept their jobs and transitioned totally to home-working, the pandemic has provided an opportunity to cut spending and build their savings.

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“For these consumers in a more fortunate financial position, the combination of low mortgage rates and the stamp duty holiday have made entering (or often re-entering) the property market an attractive prospect.

“Many buyers have made the decision to make a move in the last year and the popularity of larger properties with more outdoor space has increased greatly, as buyers have reevaluated their current living situation.

“That activity in the property market has been able to continue at all over the last year, is due in a large part to the industry’s willingness to embrace technology and work innovatively.

“From remote valuations to virtual house viewings, the industry has shown that it is able to adapt and change to meet extraordinary circumstances – a positive sign for the future.”

By Jake Carter

Source: Mortgage Introducer

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Housing market experiences busier than usual December

A major estate agency experienced a busy December, despite activity dropping off from November.

NAEA Propertymark found there were eight sales per branch in December, the highest since 2006.

Meanwhile there were an average of 348 prospective buyers per branch, the most since December 2016.

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NAEA PropertyWire attributed the busy December to the stamp duty holiday.

Despite the market being stronger than normal, the number of buyers registered per branch actually fell by 41% from 580 in November.

Meanwhile the number of sales agreed fell from 13 in November.

Mark Hayward, chief policy advisor, Propertymark, said: “The number of potential buyers in the market fell significantly in December after Novembers’ record high.

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

“While we would ordinarily expect to see a lull over the festive period, these numbers show that the tightening of lockdown restrictions, coupled with the reality that many individuals would no longer meet the stamp duty deadline, has exacerbated this.

“As we approach the stamp duty, LTT and LBTT cliff edges on the 31 March, we are increasingly concerned about the pressure this is placing on the property industry with more than two-thirds (69%) of estate agents expecting to see an increase in failed sales due to buyers realising their sales will not complete ahead of the deadline. It’s important that action is taken now to prevent this and support the property sector.”

BY RYAN BEMBRIDGE

Source: Property Wire

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What will the property sector look like in 2021?

After the property sector was forced to halt everything during the first lockdown, the second half of the year saw demand for online conveyancing services bounce back dramatically.

We expect this surge to continue throughout Q1, due to a number of reasons.

For starters, the huge back up of prospective buyers and sellers after the spring 2020 market cut-off should keep demand going through early 2021.

Buyers have now had months more to save up a viable house deposit, and both sellers and buyers will want to get the ball rolling.

What’s more, low interest rates, resulting in cheaper mortgages for some, are spurring things on.

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Couple this with the stamp duty holiday continuing up until 31 March 2021, demand is still soaring.

After these incentives diminish come Q3 and 4, we forecast a plateau later in the year.

House Prices to Increase

Many believe that the end of the stamp duty holiday, combined with the end of the Furlough Scheme on 31 March 2021, will cause house prices to decrease.

That said, some think the increase in prices will continue into early 2021, and decrease come 2022. They believe that the peak in pricing will coincide with the usual spring boom in house sales, and continued growth will simply be subdued.

We are more inclined to agree with the latter. Low interest rates, as well as cheaper mortgages available for some people, will prop everything up until Q3 and 4.

Then, after this initial demand, and the stabilisation of the market post-COVID, we can see a decrease potentially following suit from 2022 onwards.

Continued Struggles for First-Time Buyers

Statistics show that home movers are set to overtake first-time buyers with home purchases once again. As the year moves to 2021, we can only predict that these struggles will continue for a number of reasons.

Firstly, continually rising house prices, as well as sky rocketing rent, low wages, and unemployment, makes it near impossible for first-time buyers to save a deposit.

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What’s more, despite low interest rates, a withdrawal of high loan-to-value mortgage products disproportionately affected first-timers, who typically require bigger mortgages to cover the lack of a hefty deposit.

We can expect this struggle to continue if the picture isn’t changed.

What’s more, new equity loan scheme, which is aimed at supporting first-time buyers with new-build purchases, may not have the intended effect.

It certainly seems like a great opportunity, but the country is still lacking affordable housing for many, so we doubt it’ll help.

Then, we have the stamp duty holiday, which has only really benefitted those already on the ladder, further increasing the disparity between first-time buyers and others.

Finally, young people have been affected most dramatically by unemployment this year, further compounding the issue.

What Are Your Predictions for the 2021 Property Market?

Evidently, there’s no clear picture of how the property market will look in 2021. It all depends on how the government deals with the pandemic in the new year, as well as the success of the vaccine.

It’ll also depend on how quickly unemployment rates get back on track.

By Daniel Chard

Source: Mortgage Introducer

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Housing market remains open during new national lockdown

The housing market will remain open during the new lockdown in England.

Boris Johnson has announced a set of new national restrictions for England, similar to the March lockdown.

But unlike the first lockdown, the housing market is to remain open for business.

Government advice on home moving during the coronavirus remains unchanged. Consequently, people in England will be able to move and removal firms, tradespeople, and estate agents can still operate by going inside homes. Adherence to safety and social distancing remains crucial.

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Government advice on moving home: 

You can still move home. People outside your household or support
bubble should not help with moving house unless absolutely necessary.

Estate and letting agents and removals firms can continue to work. If you
are looking to move, you can go to property viewings.

Follow the national guidance on moving home safely, which includes
advice on social distancing, letting fresh air in, and wearing a face
covering.

Industry reaction: 

Ben Taylor, CEO of Keller Williams UK, said: “With immense caution I welcome the fact that the property market remains open albeit that viewings and the physical moving process itself must be met with extreme diligence. Why have the government chosen to ‘exempt’ the UK housing market and estate agents?

“Think of it as a string to the broader economy rather than it doing us estate agents a particular favour especially with billions of pounds in accelerated property transactions currently competing to complete by the end of the stamp duty deadline on March 31st.”

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The managing director of Enness Global Mortgages, Hugh Wade-Jones, commented: “It remains business as usual for the UK property market and as a result, it’s unlikely we will see any decline in the huge levels of buyer activity seen since last year, nor should we see property prices detract from their current upward trend.

“Billions of pounds in property transactions are also currently waiting to be dragged through the system prior to the stamp duty holiday ending. It would have been a disastrous move for the government to have slammed the door in the face of these aspirational homebuyers so close to the finish line and would have no doubt caused a landslide of property transaction fall throughs and a drop in values.

“Of course, the industry must continue to operate with immense caution and all physical aspects of the home buying journey itself must be treated with kid-gloves. Literally.”

Mark Hayward, chief policy adviser, Propertymark, said: “We welcome the news that the housing market is to remain open throughout this new lockdown period, but it is essential that all agents continue to play their part in reducing the spread of the virus through following all relevant guidance on how to safely conduct viewings.

“It is vital that agents operate in accordance with government and Propertymark guidelines to help prevent the spread of Covid-19, keep movers and buyers safe and keep the housing market moving through these uncertain times.”

Director of Behnham and Reeves, Marc von Grundherr, commented: “The latest news of another national lockdown should do little to slow the momentum of the UK property market, given that official government advice still deems it ok to transact and move home.

“As a result, the industry will continue to service the vast number of homebuyers who have entered the market since last spring and this will ensure that many more will benefit from the current stamp duty holiday.

“With no speed bumps in sight for the time being, the market is now clear to accelerate through the gears throughout the coming year and we should see a healthy increase in transactions and price growth over the coming months, if not, across the remainder of the year.”

You can view the full government guidance for the lockdown in England by clicking here.

By MARC DA SILVA

Source: Property Industry Eye

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