UK Budget Fails to Address Housing Shortage

The government has not recently made mention of the 300,000 annual new home target it set some time ago and the recent budget was again silent on this topic. The UK has a chronic housing shortage which is getting worse each year with nowhere near 300,000 new homes being built in any year since the target was first talked about. With the Help-to-Buy initiative coming to an end last year, builders also slowed down as they feared a fall in demand, further exacerbating the shortage. According to well-known agency Hamptons, rentals increased by 13.8% in London in the 12 months to February 2023 as employers limit work from home dispensation forcing workers to move closer to their place of employment. Whilst the government is doing what it can to reduce energy bills and is contributing more to child care, industry experts are calling on it to do more to reduce housing costs for cash strapped consumers.

Posted by: Kelvin Tayfield, Sun, Mar 19th 2023

Sanctions have not affected the London Luxury Property Market

Sanctions against Russian nationals since the Ukraine war have obviously resulted in a halt in Russian buyers of London property.

However, this has not impacted the luxury end of the market. London prime property prices have held steady and are even rising due to the supply constrains in the market and the fact that there are still many UHNW individuals who still see London property as a great investment.

Posted by: Kelvin Tayfield, Sun, Mar 12th 2023

Don’t Hold Your Breath for Huge UK Property Discounts

According to the latest report by property portal Zoopla, UK house buyers are seeing an average 4.5% discount on asking prices. Given the increase in interest rates and the pressure on the economy, this level is manageable particularly when one considers the huge increase in 2022. Whilst the acid test will be during the spring buying season, there is some reason for optimism with mortgage offerings on the increase. Recent comments by Bank of England economist Huw Pill that the BOE is mindful of not raising interest rates too quickly giving themselves time for the already drastic increases to have their full effect on inflation. This stance has given some reassurance to the market and should result in a ‘steady as she goes’ path for the remainder of the year.

Posted by: Kelvin Tayfield, Sun, Mar 5th 2023

UK Property Outperforms Most International Peers

Rising interest rates have severely impacted property prices in major cities around the world resulting in significant declines in the last few months. According to Capital Economics which tracks house prices Stockholm is down 20% from its 2022 peaks whilst Sydney and Toronto have seen a 14% and 16% decline respectively. San Francisco which is suffering from a double whammy with big tech job losses fell 15%.

On the other hand, UK house prices are down a relatively modest 3.2% since during the same period with London average prices almost unchanged from December 2022. According to the CEO of the Guild of Property Professionals this indicates that the risk of the rapid decline many expected has passed and the demand for good quality housing will remain high.

Posted by: Kelvin Tayfield, Sun, Feb 26th 2023

UK Rental Rates Continue to Rise

According to a recent survey by specialist property finance broker Finbri, 76% of tenants don’t believe they will be able to buy a property in 2023. At the same time renters are struggling to find suitable homes with 62% of landlords surveyed experiencing an increase in demand for their properties. Consequently, most landlords can pass on the increased cost of borrowing resulting in nearly 50% of tenants experiencing an increase in rental rates with London seeing the most upward pressure. According to Finbri rental rates increased by 12.1% in 2022 and more than half of landlords are planning to increase rates further in 2023.

Posted by: Kelvin Tayfield, Mon, Feb 20th 2023