Recent announcements by leading house builder Taylor Wimpey that they will build fewer homes next year and Persimmon confirming that land additions will be significantly down in 2023 serve to provide some support to experts who believe that a price crash is unlikely. Respondents to a recent Reuters poll agreed that 2023 will see a price correction rather than a crash with Knight Frank referring to the supply shortage as the major factor underpinning the market. Other analysts noted that positive post Brexit job numbers are another favourable factor preventing a price crash.
Posted by: Kelvin Tayfield, Sun, Nov 27th 2022
Despite a few shocks such as the 2008 housing crisis and Brexit, London property has rewarded long term owners as demonstrated by the below graph.
Average prices are up approximately 116% over the 16-year period on average which underlines the safe haven status of UK property in general. As we stand today the UK, like most countries, is facing a recession which will impact the housing market in the short term and experts agree it will be a turbulent time. However, not all properties are created equal and some will withstand these headwinds and continue to reward savvy investors. Older less energy efficient properties in need of repair will certainly see substantial price drops while new builds in areas with limited supply will be resilient.
Posted by: Kelvin Tayfield, Sun, Nov 20th 2022
Competition among tenants in some parts of the UK is leading to landlords being inundated with enquiries as soon as they list a property available.
With early reports of a cooling off in the country’s housing market as people pause to reassess their situations amid higher borrowing rates and cost of living difficulties, the rental market is proving to be more in demand than ever. This is in addition to the fact that huge numbers of people, particularly young professionals but increasingly older generations too, opt for the flexibility and lifestyle benefits that renting can offer, adding to the rise of ‘generation rent‘.
In new data released by lettingaproperty.com, an online lettings platform, the extent to which landlords are being flooded with interest from tenants has been revealed. It shows that the average number of viewing requests per rental property increased by more than 25% between Q2 2022 and Q3 2022.
Posted by: Martin Ashkuri, Sun, Nov 13th 2022
A recent analysis by JLL led the real estate specialist to conclude that a property crash is unlikely whilst acknowledging a significant slowdown is imminent. Comparing fundamentals to previous crashes JLL noted that the 1990s whilst inflation was high and GDP fell into negative territory similar to what we have today, unemployment was at 10% versus 3.5% today and expected to peak at 4.9%, way below the 1990 figure. With regard to the 2008 Global Financial Crisis, JLL pointed out that this was a credit crisis caused by poor lending practices by banks which led to the collapse of many lenders and the loss of millions of jobs. Since then, lending criteria have been tightened significantly thereby strengthening the foundations of the industry. Furthermore, banks are not as quick to repossess properties and are willing to work with borrowers to avoid going the foreclosure route.
Posted by: Kelvin Tayfield, Sun, Nov 6th 2022
Despite the gloomy economic outlook, leading UK banks HSBC, Barclays and Santander believe the property market will maintain some level of growth over the next two years. Santander’s CFO referred to the reliance on a strong jobs market which is likely to maintain its resilience as vacancies are still high. Furthermore with Rishi Sunak and Jeremy Hunt in place, the cost of government debt has eased slightly which will reduce the cost of funding for banks and in turn help mortgage rates.
Posted by: Kelvin Tayfield, Sun, Oct 30th 2022