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HMRC: November residential transactions up 19.3% on last year

UK residential transactions in November 2020 stood at 115,190, 19.3% higher than November 2019 and 8.6% higher than October 2020, according to the latest stats from HMRC.

On the non-residential front transactions stood at 9,970, 6.9% higher than November 2019 and 10.3% higher than October 2020.

Jeremy Leaf, north London estate agent and a former RICS residential chairman, said: “Transactions are always a better indicator of market health than more volatile house prices.

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“However, despite these numbers showing a still-accelerating trend, they reflect sales which were agreed several months previously. Since then, the market has been moving closer to hibernation as is traditional at this time of year.

“It will be a few months at least before transactions fall in line with the reduced activity that we have been seeing on the ground over the past few weeks. Nevertheless, prospects for 2021 remain relatively positive bearing in mind the determination of the overwhelming majority of buyers and sellers to complete their moves even if inevitably some will miss the stamp duty deadline.”

Paul Stockwell of Gatehouse Bank added “The UK property market has undergone an incredible turnaround this year. In the space of seven months, sales volumes have rebounded from the lowest level since records began to a five-year high in November.

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“The latest data shows mortgage approvals still running at a 13-year-high so, while it’s widely accepted that the bumper house price growth we’ve seen this year must cool as we enter 2021, a decline in the number of transactions is by no means assured. Annual growth in sales volumes has actually accelerated, more than doubling in the space of a month, which is excellent news for the property market as a whole.

“It is entirely possible that volumes hold up next year, even as valuations cool after a glut of activity fuelled by the stamp duty holiday and a widespread desire to move to larger homes after repeated lockdowns.”

Source: Mortgage Introducer

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The Scottish property market tipped to fly in 2021

THE logistics and residential real estate sectors of the property market in Scotland have been forecast to “dramatically outperform” in 2021, when Brexit will quickly fade as a major issue after five fractious years, a new report declares.

The dramatic shift to online shopping during the pandemic has led to investors flocking to put money into property in the logistics sector.

Property firm CBRE expects that trend to continue next year, when it predicts that funding will become available in Scotland for investment in additional warehouse space.

According to CBRE, the pandemic has underlined the essential role of the logistics sector in sustaining the flow of goods. It anticipates that the year ahead will see occupiers focus on building more resilient supply chains, increasing capacity and diversifying suppliers to safeguard against future disruptions.

CBRE says £174 million has been invested in industrial and logistics property in Scotland so far this year. While this is currently down on the £185m invested last year, it is expected the 2020 total will reach the five-year average of £200m if deals under offer and likely to conclude before the end of the year are taken into account.

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David Reid, associate director of CBRE Scotland’s industrial and logistics team, said: “We expect 2021 to be another strong year for our market in Scotland. The incredible take-up during 2020 has resulted in critically low stock levels and with continued strong demand we urgently need new speculative development to meet the future needs of occupier requirements. We are working with a number of developers to plug this shortfall in supply.”

CBRE’s 2021 UK Real Estate Market Outlook forecasts that the logistics and residential sectors will achieve significant growth next year, although it notes that a weaker economy will lead to lower and even negative rental growth.

The agent says there has been a reduction in overall real estate investment in Scotland of around 50 per cent this year so far, dipping to £1.06bn from £1.99bn in 2019 amid continuing Brexit uncertainty. Next year, though, it expects investment to rebound to £1.5bn, taking it closer to the five-year average of £2.1bn.

Steven Newlands, executive director in CBRE’s investment team, said: “Demand is expected to come from a wide variety of sources, including sovereign wealth funds, overseas institutions and European funds. Overseas private investors are also expected to be particularly active. “For now, investors are focusing on the winners from the pandemic: the logistics and residential sectors and core assets with near-guaranteed income. In 2021 we expect this to continue until the vaccine is rolled out.”

The report flags expectations of a gradual recovery in the office market, with investment and take-up expected to steadily recover after a difficult start to the year. CBRE notes that UK office yields will remain stable despite capital values falling by around 11 per cent over 2020 and 2021.

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While significant doubts remain as to whether the UK and European Union will agree a trade deal before December 31, CBRE expects the Brexit issue to gradually fade. It said next year will see a recovery in the commercial property investment market because of record low interest rates and an “abundance of capital looking for a return”. This year the market has stalled amid the uncertainty caused by the pandemic, as restrictions have limited the ability of investors to travel to inspect sites. But Mr Newlands said: “These concerns, as well as the restrictions, will ease over time for some asset types as the occupier market recovers.”

CBRE hailed the resilience of the residential market, and expects it to perform strongly in 2021, supported by “tax incentives, resilient demand and lagging supply.” Mr Newlands said: “Despite Covid-19 restrictions, investment into the residential sector was strong in 2020. There is a high level of equity targeting the build-to-rent sector and lending also remains highly competitive.”

Miller Mathieson, managing director of CBRE Scotland and Northern Ireland, said: “In Scotland we will have many opportunities and challenges in common with the rest of the UK. In particular we will see significant activity in the logistics sector as values improve and new speculative development becomes viable. This is the favoured sector of investors and Scotland still has major growth potential. Similarly, I think we will, at last, see Scotland embrace all the different forms of residential investment around affordable housing, build-to-rent and co-living.

“Our biggest challenge will undoubtedly be in the retail sector with the continued growth of online sales and the increasing number of CVAs and administrations.”

By Scott Wright

Source: Herald Scotland

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Sales agreed on £62bn more homes in 2020 than 2019

More activity at higher price points means the value of homes selling is 26% higher than in 2019, with the value of sales agreed in 2020 up £62bn on the previous year, the latest Zoopla House Price Index shows.

Zoopla found that the pandemic has driven a seismic search for space and quality of location, with 40% more buyers across the whole of 2020 compared to 2019 – despite 2+ month closure of UK housing market.

The highest rates of price inflation are in regional housing markets, but greatest increase in market activity has been concentrated in London, the South East and Eastern England.

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Richard Donnell, director of research & insight, Zoopla, said: “The housing market is ending 2020 strongly with more buyers looking for a home than this time last year. More sales at higher prices have boosted the value of homes selling in 2020, led by a strong rebound in southern England.

“The ‘once in a lifetime re-assessment of housing’ kick-started by the pandemic has further to run in our view and this will support demand into 2021. With a long Christmas weekend, and many households isolating in smaller groups, we expect interest in housing to be stronger than usual ahead of the traditional Boxing Day bounce when interest in housing jumps and the next tranche of would-be buyers.

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“While market activity is being boosted by latent demand unlocked by the pandemic, the housing market is not immune to economic forces and rising unemployment. Economic pressures are already impacting in parts of the market, reducing the volume and share of sales in less wealthy areas, for example.

“Looking ahead to 2021 we expect house price growth to reach 5% by mid Q1 and then slow to +1% by the end of the year as demand starts to weaken over 2021 H2. The number of completed housing transactions will be buoyed by a strong Q1 with sales agreed over 2020 Q4 completing early next year.

“Overall, we expect the number of completed housing transactions to match 2020 levels at 1.1m.”

By Ryan Fowler

Source: Mortgage Introducer

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London leavers bought 73,950 homes outside the capital in 2020

In 2020 London leavers purchased 73,950 homes outside the capital, the highest number in four years, Hamptons research has found.

There has been a clear increase in the popularity of London outmigration since the onset of Covid-19.

In the first half of 2020, London leavers bought 6.9% of homes sold outside the capital, equating to 24,480 sales.

However, in the second half of 2020, this figure rose to 7.8% and twice as many sales (49,470).

Aneisha Beveridge, head of research at Hamptons, said: “Despite Covid-19 closing the housing market for seven weeks, the number of homes bought by Londoners outside the capital has risen to the highest level in four years.

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“While leaving London has been a rite of passage for many, often families reaching life stage milestones, the effects of lockdown and the desire for space seems to have heightened this drift.

“Meanwhile the lure of a stamp duty holiday acted as an impetus for more buyers to bring future planned moves forward.

“The prospect of homeworking more regularly has also meant that London leavers are moving further than ever before. The average London leaver moved 10 miles further than in 2019 as buyers’ favour space over commutability.”

The average London leaver spent £372,860 on their home outside the capital.

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The typical person leaving London from May onwards travels as far as Cambridge to the north, Colchester to the east, Brighton to the south or Didcot to the west.

It seems this is a trend that’s likely to stay, as we head into 2021.

Beveridge added: “We expect this outmigration trend to continue into the first half of next year too.

“But usually as prices in the capital begin to flatline, which we forecast to happen in the second half of 2021, more Londoners decide stay put.

“Even so, given the housing market has been anything but normal since the onset of Covid, we expect to see the total number of homes bought by London leavers next year hit 2016 levels.”

BY RYAN BEMBRIDGE

Source: Property Wire

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NatWest to reintroduce 90% LTV mortgages

NatWest is reintroducing a range of 90% LTV residential purchase mortgages to enable customers with smaller deposits to own their own home.

From 16 December, the bank will be reintroducing 90% LTV products for its NatWest and Royal Bank brands.

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The bank will be one of the first lenders to offer this for both first-time buyers and existing homeowners.

There are four new products, across the purchase range which will benefit customers looking to take a 2 or 5-year purchase deal with an LTV of 90%.

Gary Sutherland, head of mortgages and protection at NatWest, said:“We are committed to helping people through the home buying journey, whether that’s customers’ moving house or taking their first step on to the property ladder.

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“For first-time buyers, raising a deposit is still the biggest challenge.

“By reintroducing our 90% offering, we are pleased to be able to expand our support for the market to include both home movers and first-time buyers, making it easier to take their first step onto the housing ladder.”

This follows the announcement of NatWest’s first ever green mortgage, which offers a discounted interest rate to customers purchasing a property with an energy efficiency rating of A or B.

By Jessica Nangle

Source: Mortgage Introducer

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2021 house price growth to reach 4%

House prices should inflate by 4% in 2021, Rightmove’s House Price Index found.

The firm said housing will be a high priority for people but price rises for newly marketed properties should be more modest than this year.

Prices this year have jumped by 6.6%, while the first quarter of next year is expected to be very busy due to the stamp duty deadline.

After that however it’s expected that things slow down, though cheap mortgage rates should continue to support the market.

Jeremy Leaf, north London estate agent and a former RICS residential chairman, said: “Interestingly, Rightmove is forecasting solid price growth for 2021, despite activity clearly slowing as 2020 draws to a close.

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“At the coalface, we are experiencing much the same but expecting a busy first quarter as buyers and sellers rush to take advantage of the stamp duty concession. However, we don’t anticipate a cliff-edge scenario at present.

“Nearly all sales agreed seem to be proceeding to exchange of contract, unless exceptional circumstances prevail and prices are not being widely renegotiated in anticipation of a market fall due to Brexit, the pandemic or potentially worsening economic news.”

The possibility of the stamp duty holiday being extended was discussed once again.

Sam Mitchell, chief executive of online estate agent Strike, said: “It’s hard to predict what will happen in the next few months, particularly with so much uncertainty around Brexit deal talks and rising unemployment levels as a result of the pandemic.

“However, people’s increased home working flexibility and desires for more space and rural locations is likely to keep demand ticking by. Plus, the recent breakthrough with the vaccine news has injected a newfound confidence in those who might have been on the fence about buying or selling.

“There’s no doubt that the government will also continue its commitment to the country’s economic recovery with continued support for the UK property market included.

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“Who knows, maybe they’ll consider an extension to the stamp duty scheme or turn their focus back to helping first time buyers get a foot onto the property ladder.”

Tomer Aboody, director of property lender MT Finance, said: “What a crazy year it has been for the property market, one which has to go down on record as the biggest rollercoaster in terms of market sentiment, transaction numbers and even a complete standstill.

“Whether we ever see this again, who knows but what is for sure is that buyers’ demands and priorities have changed. Space is at a premium, with families especially prioritising the commuter belt and local village amenities.

“Confidence is set to continue for the first quarter of next year until the furlough scheme ends and possibly stamp duty relief at the end of March. Thereafter, we are at the government’s mercy – will it extend the stamp duty holiday and extend the feel-good factor for the market?”

BY RYAN BEMBRIDGE

Source: Property Wire

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Number of UK buy-to-let landlords has increased by 49% in five years

The number of UK buy-to-let landlords has risen 49% in the last five years to an all-time high of 2.7 million, research from ludlowthompson estate agents found.

The residential market has stayed relatively strong during the coronavirus pandemic, though the commercial property market has fared poorly, as 54% of tenants have held discussions with their landlords about taking a rent holiday.

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Stephen Ludlow, chairman of ludlowthompson, said: “The buy-to-let market has continued to provide a reliable return on investment for landlords, even during the worst of the pandemic when other forms of investments went through a period of intense volatility.”

“The historic resilience of residential property means many private investors are still looking to add to their holdings, particularly before March 2021 when the stamp duty holiday ends.”

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“We would advise existing and prospective landlords to consider re-purposing their properties to meet the changing needs of tenants.

“With people spending more time at home, having extra space both in and outdoors has become more important than ever. Outdoor areas and home offices are both in very high in demand, as is accessibility to high-speed WiFi.”

BY RYAN BEMBRIDGE

Source: Property Wire

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Bank of England: Loan values rise by 2.9% annually in Q3

Despite a decreasing share of high loan-to-value (LTV) borrowing, mortgage lending remained strong in Q3 with the outstanding value of residential loans up 2.9% compared to a year earlier.

The Bank of England’s (BoE) latest quarterly mortgage lending data revealed there were £1,527.3 billion of mortgages outstanding at the end of Q3.

Meanwhile the value of new mortgage commitments – which is lending which has been agreed to be advanced in coming months – went up by 6.8% when compared to the same quarter in 2019. It reached £78.9 billion, according to the BoE, which is the highest level since 2007.

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The value of gross mortgage advances during the quarter was down 14.7% on Q3 2019 at £62.5 billion.

What’s more the proportion of mortgages advanced during the quarter with LTVs of 90% or more were 3.5% which is 2.4 percentage points lower than a year ago.

Mark Harris, chief executive of mortgage broker SPF Private Clients, said: “This is no real surprise with many lenders pulling back from this market, and it is only just starting to recover, which is good news for first-time buyers in particular.”

Commenting on the rest of the data he added: “The Bank of England figures show a strong lending market, as we have seen on the ground, with new commitments for the coming months some 6.8% higher than a year earlier.

“There is plenty of business in the pipeline which is working its way through as buyers try to take advantage of the stamp duty holiday. As long as they use good advisers – a mortgage broker and a switched-on solicitor – this should be possible, despite some scaremongering that they are already too late.”

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A ‘precarious’ market

But Karen Noye, mortgage expert at Quilter, thought today’s data painted a ‘precarious’ picture of the housing market at the moment.

“The market is clearly burning bright thanks to the fuel poured on it as a result of stamp duty cut but whether the fire can keep blazing is yet to be seen,” she said.

“The continued increase in house prices is likely to be unsustainable and if the stamp duty holiday is dropped in March and significant economic headwinds as a result of the pandemic start to bite, we may see a very different picture with borrowing and lending being significantly curtailed.”

Noye thought the fact the value of new commitments had increased by as much as 6.8% was ‘worrying’ and ‘should ring alarm bells’.

“While it would be foolish to draw comparisons between the mortgage market now and the one back when the financial crash hit in 2008, we are dealing with unchartered waters and it is worth proceeding with caution,” she said.

By Kate Saines

Source: Mortgage Finance Gazette

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House hunters race to beat stamp duty deadline

In the Chancellor’s spending review yesterday, it was revealed that the stamp duty holiday would not be extended and will come to an end on 31 March next year. New data from online mortgage broker Trussle shows where in the UK house hunters can still begin a property purchase and make the stamp duty deadline.

These areas include West Midlands, South West and North East.

The median number of days from starting a mortgage application to completing a property purchase is around 115 days.

This means that the 6 December 2020 marks 115 days before the stamp duty holiday deadline.

As a result of the coronavirus pandemic, there have been significant delays to mortgage applications and the average time from mortgage submission to approval has increased by 50% since this time last year (from 16 days to 24 days).

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The data by Trussle also shows that average time from application to completion differs by property type depending on detached, semi-detached, terraced or flat.

Currently they are faster in Scotland and the South East and slower in the East Midlands and East of England.

According to the data, flats take an average of 120 days to complete whilst semi-detached properties take 108 days on average.

Trussle has also identified the top five fastest lenders in the UK based on its data, finding that on average lenders take around 20 days to approve new mortgage submissions.

These lenders were Barclays (10 days), Halifax (14.5 days), BM Solutions (17 days), Coventry Building Society (18 days) and HSBC (19 days).

The time to approve mortgages has increased significantly since the start of the coronavirus pandemic.

The average was closer to 10 days in 2019 and up until June 2020.

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Miles Robinson, head of mortgages at Trussle, said: “The stamp duty holiday deadline is looming, which is understandably causing concern.

“There are delays across the market and we are urging buyers not to delay their mortgage application if they want to take advantage of the stamp duty holiday before the holiday ends on the 31 March next year.

“We hope that this guidance provides helpful timelines for those in different regions across the UK.

“We must also advise that those looking to buy a new home should make sure they budget enough to pay the stamp duty land tax, just in case the purchase does not complete before the deadline.

“If a buyer were to pull out after they’ve already exchanged, sellers may be in a position to sue for consequential loss at this point, and buyers may lose their deposits.

“This is going to cause a lot of stress and uncertainty for customers over the coming months, and we’re urging all buyers to take the necessary preparations.”

By Jessica Nangle

Source: Mortgage Introducer

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Property market expected to start 2021 with a bang

With pent-up demand after lockdown and news of a Covid-19 vaccine, the UK property market should expect a promising start in 2021, property developer GRE Assets has predicted

With offices in the UK, Spain and the Middle East, GRE Assets has an international perspective of the impact the global Covid-19 crisis has had on the UK property market.

Michael El-Kassir, managing director of GRE Assets, explains what the company has experienced in the latter half of 2020 and how he believes this will inform the market as we approach 2021.

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He said: “With the imposed lockdown restrictions meaning people have spent much more time at home this year, we believe this has led to a distinct rise in the number of people seriously considering their next property move. Low interest rates, the existing Help to Buy scheme and stamp duty incentives, have also created a sense of urgency.

“The pandemic has been a wakeup call for prospective buyers and renters, who have reassessed their priorities when looking for their next home. Not only are they spurred on to make the leap from London, they also recognise the importance of having access to green space, whether that is nearby parks, balconies, terraces, and gardens.

“The working world has also seen a vast shift, as employees and companies have adapted to working from home. While people will return to the office as the latest restrictions ease, we strongly believe businesses will continue to work flexibly moving forward, meaning adaptable space and connectivity at home is of high importance for new homeowners.”

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El-Kassir said the South East is the region to watch in 2021.

He added: “With the constraints experienced within the housing market earlier this year, we saw increased demand and lack of supply post lockdown. While UK wide we have seen a rise in house prices and activity, it is the South East that really stands out.

“The region offers the near-perfect package of high-quality, affordable homes in popular regeneration areas with excellent connectivity to London.

“Demand here is currently outstripping supply, which is something we intend to continue to address as we head into 2021.”

BY RYAN BEMBRIDGE

Source: Property Wire

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