UK Construction Costs to Continue to Climb
Whilst inflation in general is a huge concern for worldwide economies UK house builders are seeing large increases in building costs. The invasion of Ukraine is another negative factor the industry already seeing post-Covid supply issues did not need. Since the invasion, construction economist Arcadis increased their forecasts for 2022 growth for building projects from 5% to 8-10%. The company also noted that the rapid increases as well as the uncertain future have resulted in delays in closing tenders as bidders and project owners struggle to agree terms thereby delaying many new projects. This scenario will further increase the supply shortage so buyers will be looking at limited choices and significantly increased prices.
Posted by: Kelvin Tayfield, Sun, Jul 24th 2022
UK Residential Rents to Continue to Rise
The latest monthly report by the Royal Institute of Chartered Surveyors (RICS) indicates that although house price growth is cooling slightly, prices continue to grow. RICS members surveyed revealed a fall off in sales enquiries but 65% of respondents saw prices increase mostly due to the supply shortage. Regarding rentals, more than half of respondents predicted prices to continue rising over the next quarter at least. At the same time, property website Rightmove reported that rental prices in London have increased by 15.8% in a year. The highest annual increase was in Manchester at 23.4% followed by Chatham in Kent with a 21.4% increase.
Posted by: Kelvin Tayfield, Sun, Jul 17th 2022
Housing Shortage and Short-Term Lets Impacting UK Business Owners
The acute and growing UK housing shortage as well as the lure of short term let profits are forcing many business owners to become residential landlords in order to house key staff close to their place of work. Numerous such stories are emerging across the country such as that of business owner, Tomas Eriksson in Margate in South-East England. The owner of a restaurant and events space points to the rise in short term demand which is enticing landlords in cities and towns to the likes of Airbnb leaving renters who work in these locations with little option but to move far out with long commuting times. Like many others, Tomas has rented one of his short-term let apartments to key staff members at rates well below what he was earning on Airbnb.
Posted by: Kelvin Tayfield, Sun, Jul 10th 2022
A Review of UK Property’s Safe Haven Status Since Brexit
During the referendum the UK government warned that property prices could fall 18%, instead they continued to rise. Enter the Covid pandemic and economists saw fit to warn of a 20% decline. Swift government action, increased liquidity and low interest rates saw prices record their highest growth since 2007. Now we are faced with more uncertainty in terms of economic pressures. These uncertain times are exactly when safe haven assets come to the fore and industry experts expect the UK property market to underline its proven status as supply continues to lag demand. Government figures for May showed that transactions increased month on month and brokers expect this to continue as we enter the traditional peak buying season. They do however, acknowledge that there will be a slow down in growth going into winter but don’t expect a fall prices.
Posted by: Kelvin Tayfield, Sun, Jun 26th 2022
UK Leasehold Reform Act Comes into Effect on 30 June
In order to make home ownership cheaper and more secure, the UK Government has effectively banned landlords from charging ground rent. From the end of the month, the rate leaseholders may charge on new leases will be reduced to zero. For those lessees who have seen large increases over the years, the rate must be reduced to the original annual charge. Most major developers have already begun to comply with this reduction whilst some are being investigated by the Competition Market Authority (CMA). Future legislative changes will allow for lessees to extend their leases to 990 years at zero ground rent with the cost of the extension being determined by a transparent government calculator.
Posted by: Kelvin Tayfield, Sun, Jun 19th 2022