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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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Covid-19 has changed what buyers and renters find essential

More than a quarter of the UK’s renters and homeowners (26%) have found their property needs have changed since the outbreak of Covid-19, according to new research from Gradual Homeownership provider, Wayhome.

After more than a year of remote working and months of non-essential shops and eateries being closed to the public, previously “high-valued” property amenities have slid far down the priority list. Indeed, among the renters and homeowners whose property requirements changed amid the pandemic, the least important features are now having an easy commute to work (17%), being close to shops and restaurants (17%) and living near public transport (14%).

Wayhome’s research indicates a new set of property amenities will take precedence once lockdown lifts, given the prolonged time spent at home and likelihood of hybrid working for office-workers going forward.

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Indeed, when asked which property features had become more important since March 2020, more than a quarter (26%) said having the space for a proper home office was increasingly critical. And, given the fact so many working parents have had to juggle work and childcare commitments, the need for decent office space rose to 30% for parents, compared to 22% of non-parents.

As well as specific space for a home office, lockdown has caused a general desire for more space, be it for work or leisure. Almost a third (30%) of all homeowners and renters wanted more space in general, and a quarter (24%) said having a bigger bedroom was necessary.

And as more of us have spent time indoors, having access to a private garden has become increasingly important. 36% said this had become more important over the past year – a more popular desire among older people, especially 55-73 year olds at 52%, falling to 43% of 43-54 year olds and 35% of 24-42 year olds.

Similarly, a fifth (21%) of all respondents felt living near a public garden or green space was important to them, and the same number prioritised being near friends and family – a feature that resonated higher among women (25%) than it did for men (17%).

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Features which have become more important post-CovidFeatures which have become less important post-Covid
Garden (36%)Having an easy commute to your workplace (17%)
More space (square footage) (30%)Being close to local shops/pubs/bars and restaurants (17%)
A home office (26%)Being near public transport (14%)
Bigger bedrooms (24%)Balcony (13%)
Being near my friends/ family/ support network (21%)A home office (13%)
Being near public garden/ green space/ woodlands (21%)Off-street parking (13%)
Having an easy commute to your workplace (17%)Playroom for children (12%)
Being close to local shops/pubs/bars and restaurants (17%)Bigger bedrooms (12%)
Playroom for children (15%)Being near my friends/ family/ support network (12%)
Off-street parking (15%)More space (square footage) (12%)

This research looking at the impact of the pandemic on people’s changing property needs comes ahead of the launch of a report by Wayhome on the challenges facing the UK’s renters and homeowners.

Nigel Purves, CEO of Wayhome commented: “When you’re narrowing down your search for the perfect home to rent or buy, most of us will have a wish-list, usually split into the “essentials” and “nice-to-haves”. Our upcoming report makes it clear just how far these wish-lists have changed as the pandemic rolled on. In most cases, we’ve seen a complete reversal, with potential renters and homeowners prioritising the things that would make living and working in that space the most comfortable and fit for purpose.

“While having the flexibility to pick and choose a desired property based on its amenities and special features doesn’t seem too much to ask – for a lot of people it’s near impossible. Far too often renters are being driven into buying smaller first-homes or properties in locations that aren’t suitable. Despite earning a good income, affording a deposit big enough to secure a suitable home and hitting the affordability criteria set by mortgage lenders is unsurmountable – as evidenced by the fact full-time workers would need to spend at least 7.8 times their annual earnings to be able to afford a home in England*.

“With the end of lockdown in sight, now would be an opportune time for the industry to reassess the actual needs of renters and homeowners post-pandemic and support innovative and alternative routes that get more people onto the property ladder.”

BY MARCO CALLEGARI

Source: Property Wire

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West Midlands house prices up 7.6pc in a year

Across the UK, the average house price was £232,134, Nationwide Building Society said.

This was a 5.7 per cent increase compared with a year earlier.

The West Midlands saw the second highest rise of any region in England at 7.6 per cent to £208,806.

Robert Gardner, Nationwide’s chief economist, said: “The slowdown in March probably reflects a softening of demand ahead of the original end of the stamp duty holiday before the Chancellor announced the extension in the Budget.”

The stamp duty holiday had been due to end on March 31, but was extended in the recent Budget.

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Mr Gardner continued: “The longer-term outlook remains highly uncertain. It may be that the recovery continues to gather momentum and that shifts in housing demand resulting from the pandemic continue to lift the market.

“However, if the labour market weakens towards the end of the year as policy support is withdrawn, as most analysts expect, then activity is likely to slow nearer the end of 2021, perhaps sharply.”

Nationwide also released figures showing house price growth across the UK’s nations and regions in the first quarter of 2021.

Mr Gardner said: “The North West was the strongest-performing region, with prices up 8.2 per cent year on year. This is the strongest price growth seen in the region since 2005 and average prices reached a record high of £181,999.”

London was the weakest-performing region in the first quarter of 2021, with house prices increasing by 4.8 per cent, softening from 6.2 per cent annual growth in the previous quarter.

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Mr Gardner added: “The South West was the only southern region to see an acceleration in annual price growth, which picked up to 7.2 per cent in quarter one, from 6.6 per cent in quarter four of 2020.”

Tomer Aboody, director of property lender MT Finance, said: “The continued shift in buyers’ demands for more space meant London saw the slowest growth, with prices still very high compared to the rest of the country and space more limited.

“Gardens, communities, green spaces and easy commutes are increasing demand for the outer regions, with prices continuing to rise to reflect this.”

By John Corser

Source: Express & Star

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Value of UK’s housing stock hits record high after strong year

In 2020, the total value of the UK’s housing stock reached £7.56trn, a new record high. And the north of England saw its strongest rise in housing value since 2005.

The value of the UK’s housing stock has hit the highest value on record, rising by £380bn in 2020. This is the fastest increase since 2015. And the £7.56trn equates to over four times the value of all FTSE100 companies. This is according to research by Savills, using data from ONS, Land Registry, MHCLG and UK Finance.

In the last five years, the UK’s housing stock increased by £1.33trn. This equates to an average of £266bn a year, which is some £114bn below the total for 2020. This growth is especially impressive with the recession backdrop and the prevailing economic uncertainty.

Additionally, for the first time, the value of mortgaged owner occupied homes surpassed £2.5trn. This was driven by longer mortgage terms and Help to Buy. The mortgage guarantee scheme is expected to boost this figure even further.

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A rapid increase in house prices

UK house prices increased by an average of 7.3% in 2020, despite the challenging and uncertain year due to the COVID-19 pandemic. People’s desire to move and the stamp duty holiday caused a surge in property transactions, pushing prices up and outweighing job and financial uncertainty.

After successive lockdowns and the rise in remote working, people’s property priorities changed. Many have been looking for more space. Some are also looking for dedicated home office space, high speed internet and access to a garden or balcony.

Lawrence Bowles from Savills says: “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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The north is seeing strong growth

The north of England, including the north-west, north-east and Yorkshire and the Humber, saw the largest annual increase in housing value since 2005, rising by £59bn. This is up from 1.07trn in 2019 to £1.13trn in 2020 which is a 5.5% increase.

The north-west and south-west are tied for the highest percentage growth in 2020 at 6.2%. The north-west’s housing stock is worth £561bn, rising by an impressive £33bn last year alone. And with major investment and development coming to the north-west, this will likely bring further growth to this region.

According to recent data from Zoopla, the north-west of England is currently leading regional house price growth, and Liverpool and Manchester is seeing the strongest property price increases on a city level.

Savills believes the north-west will be home to the strongest house price growth during the five years to 2025 with a 28.8% projected increase. Home to Manchester, Liverpool and Preston, the north-west is expected to continue leading house price growth with demand remaining high.

By Kaylene Isherwood

Source: Buy Association

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Super-prime tenancies rebound in the second half of 2020

Super-prime tenancies, that’s tenancies with a £5k+ pw rent, have seen a resurgence during the COVID-19 pandemic with the period between July and December 2020 being the most active in the past seven years.

In total there were 137 such tenancies taken out in London during 2020 – this was down 11% on the 154 taken out in 2019. However, following the onset of the pandemic this changed with 87 tenancies agreed in the last six months of the year.

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It underlines how demand has not been dented by the pandemic, according to Tom Smith, head of super-prime lettings at Knight Frank.

He said: “A big driver in recent years has been the rates of stamp duty in the sales market and it is still a big motivation for tenants.

“That rationale is still there and will arguably grow with the extra 2% surcharge that overseas buyers will have to pay from April.”

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However the market is now being hit with a lack of supply in areas such as Chelsea, Notting Hill and St Johns Wood.

Smith said that this may improve in the coming weeks as lockdown restrictions continue to ease.

He added: “We are now having conversations with owners who say they would be open to either a sale or a letting and some strong offers are coming through in the sales market now.”

By Ryan Fowler

Source: Mortgage Introducer

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Number of prospective tenants continued to rise in February

In February, the number of new prospective tenants in the UK rose for the second consecutive month according to the latest Private Rented Sector report by ARLA Propertymark.

The data showed that the average number of new prospective tenants registered per branch continued to rise in February to 82, from January’s figure of 81. Year-on-year this remains the same as February 2020 but is a huge leap from the previous February figure of 65 in 2019.

Regionally, the West Midlands had the highest number of new tenants registered per branch with an average of 126, with the East Midlands having the second highest of 123 new tenants. Northern Ireland and The Isle of Wight both recorded the lowest number of new prospective tenants, with an average of 26 registered per branch in February.

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The number of tenants experiencing rent increases jumped in February as half (49%) of agents saw landlords increasing rent compared to 39% in January. Year-on-year this figure is also up from 40% in February 2020. The number of tenants successfully negotiating rent reductions remained the same at 2% in February. Year-on-year, this is the same as during February 2020.

The number of properties managed per letting agent branch fell for the third month in a row from 196 in January to 195 in February. Regionally, the North East had the highest number of properties managed per letting agent branch with a figure of 284. Rental stock was the lowest in London, with an average of 94 properties managed per branch.

The number of landlords selling their buy-to-let properties remained the same for the fifth month in a row, at four per branch in February. Year-on-year, this figure is slightly lower than the February 2020 figure of five.

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Mark Hayward, chief Policy Advisor at Propertymark, said: “Today’s report demonstrates that the rental market continues to show no sign of slowing down, as demand for rental properties rose yet again in February.

“Letting agents have continued to support landlords and their tenants throughout the ongoing COVID-19 difficulties, and it is essential that tenancies are maintained wherever possible to ensure rent keeps flowing.”

Source: Property Wire

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Lockdown helped third of homebuyers get onto the property ladder

A third of UK homebuyers have been helped onto the property ladder due to lockdown according to new research by Yes Homebuyers.

The research found that for 27% of recent homebuyers say the restrictions of the lockdown due to the COVID-19 pandemic meant they were able to save to get a property, with 46% of those asked stating that the drastically reduced spend across their social life helped them to get a foot on the ladder.

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A further 33% said working from home and a lack of commuting helped their savings, a reduction in family costs helped 10%, while 6% received an inheritance due to bereavement and 5% saved on rent due to moving back home with their parents.

Matthew Cooper, founder and managing director of Yes Homebuyers, commented: “There’s no-one on the planet who wouldn’t like to erase the last year from history and lockdown has been hard for so many people for a whole variety of reasons.

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“At the same time, there have been some great stories of resolve, survival and adaptation emerging across all areas of life and this is indicative of our nation and how we come together when times are tough.

“While we’re all chomping at the bit to get back to some form of normality, it’s also great to see that for a third of homebuyers lockdown has, at least, helped them to achieve their goals of homeownership.

“With little else to spend our money on and a further saving due to the stamp duty holiday, there’s never been a better time to get a foot on the ladder and hopefully, many more will continue to benefit.”

Source: Property Wire

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House prices increased 7.5% in the year to January 2021

Average UK house prices increased by 7.5% in the year to January 2021, according to the latest House Price Index by the Office for National Statistics (ONS).

Prices rose by the greatest margin in Wales, increasing by 9.6% to £179,000, this was followed by England, where prices rose by 7.5% to £267,000.

Prices in Scotland increased by 6.9% to £164,000, and in Northern Ireland to £148,000, up 5.3%.

The North West was the English region, which saw the highest annual growth in average house prices up 12.0%.

In contrast, the West Midlands noted the lowest at 4.7%.

Tahir Farooqui, chief executive of Canopy, said: “With a further increase to house prices comes an even bigger gap between hopeful first-time buyers and their new home.

“While the government is promoting a range of incentives such as 95% mortgages and a tapered end to the stamp duty holiday, it’s not addressing the true problem.

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“House prices are too high and securing an affordable mortgage is a pipe-dream for many.

“One way to put to good use the £64,000 of rental payments that the average tenant spends before buying their first home, is rent tracking.

“This means each monthly payment builds up their credit score, ensuring they have better access to financial products when the time comes to secure a mortgage. A strong credit score is a foundation for financial freedom.”

Rich Horner, head of individual protection at MetLife, added: “The market is finally breathing a sigh of relief with today’s data showing strong house price growth, that will only continue to be fuelled by the Chancellor’s move to extend the stamp duty holiday.

“For the next few months, at least, buyers will be encouraged to continue their property search and make moves before June.

“There still remains an element of worry around what the second half of the year looks like as the property market, and society more broadly, returns to a level of normality after more than a year of lockdown.

“But pent up demand and a supply shortfall will work in the favour of sellers to buoy property prices.

“However, at the lower end of the market a level of reservation could move in. For a significant number the events of the past 12 months have left them in an ambiguous financial position.”

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Miles Robinson, head of mortgages at Trussle, said: “Despite a slight fall in house prices month-on-month from December 2020 to January 2021, it’s important to note that house prices are still significantly higher than the same period last year.

“Traditionally, the property market is quieter at the beginning of the year and it’s Spring that tends to spark a change in buyer momentum.

“However, buyer demand has remained strong throughout 2021.

“At Trussle we saw a 15% increase in mortgage applications in January and a 17% increase in February, when comparing the same periods year-on year.

“The recent Budget announcement confirming an extension to the stamp duty holiday, as well as a 95% mortgage guarantee scheme is likely to continue to boost buyer demand.

“This in turn could elevate house prices even further.”

By Jake Carter

Source: Mortgage Introducer

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Sales of holiday homes on the coast surge

Sales of holiday homes near the coast have surged over the past six months, with holiday let mortgages for properties in Wales almost doubling since September 2020.

Figures from Hodge Bank has revealed the most popular destination for holiday let buyers is the South West at 39%, followed by Wales at 19% and the North West at 12%.

Welsh purchases have almost doubled since September 2020, increasing from 10% to 19%, with coastlines around the North, including Pwllheli, Holyhead and Llandudno proving hugely popular for holiday homes.

The data also shows that the average age of a holiday let mortgage customer is 51.

Hodge customers are willing to spend on average £403,143 on a holiday home – nearly two thirds higher than the average house price in the UK of £252,000.

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Of those purchasing a holiday home, 35% remortgage their existing home to finance their holiday home while 65% take out a new holiday let specific mortgage.

With travel hugely restricted and people re-evaluating their holiday plans during the COVID-19 pandemic, the data shows that customers clearly want to head to the coast, with beach resorts in the South West proving hugely popular.

Newquay, St Ives and Penzance in Cornwall are real hotspots as are Wadebridge, Padstow and Port Isaac.

Over the past six months, Wales has also soared in popularity, especially around the North West in Pwllheli, Holyhead and Rhosneigr.

Devon also holds a lot of appeal, with the likes of Bideford, Ilfracombe and Barnstaple proving popular.

The least popular regions with only 1% of purchases are Greater London and the East Midlands, with West Midlands and the South East at 2% for those buying holiday lets.

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Emma Graham, business development director at Hodge, said: “Many people have not been able to holiday abroad for more than a year now and staycations have therefore become hugely popular.

“We think this has almost certainly led to people re-evaluating their finances, as well as holiday plans and the holiday let market is looking very healthy.

“Given the appetite for a holiday by the sea, it’s no surprise that homes near the beach or coast are the most popular for holiday homes.

“In 2019, Hodge launched a mortgage designed for those wanting to own a holiday let property in the UK after seeing an increase in enquiries.

“We saw a gap in the holiday let mortgage market for a customer-friendly product that allows owners to stay at the property for a longer period, as well as the ability to use letting sites.

“Customers can borrow up to £1m and there is a maximum lending age of 95.

“In addition, we have the unique Hodge Early Repayment Promise, which means if the customer sells their home and moves out, and pays off their mortgage completely, we’ll waive the Early Repayment Charges – giving them one less thing to worry about.

“Following Brexit and the COVID-19 pandemic, we think staycationing is here to stay and we want to help would-be holiday homeowners make that all-important purchase.

“We are able to offer customers up to three holiday let mortgages too, so if they want to purchase a property in more than one location, we can help.”

By Jessica Nangle

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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