The coronavirus pandemic and successive national and local lockdowns all continue to have an impact on the re-emerging property market.
It may be too early to say just how that market will have shaped up once the pandemic subsides, but the following property news headlines might offer some clues.
Demand for London commuter towns increases
Properties in London’s commuter-belt have gained an extra boost thanks to the work-life changes brought about by the pandemic, according to a story in Property Wire recently.
Indeed, because many people are now also working from home and do not have to go into the office every day, they can afford to consider a longer commute when they do need to travel.
With that new-found sense of freedom, house hunters can now look for homes with larger gardens, space for a home office, and quietly bustling high streets of independent shops.
CGT: Rate should double says government review
Property owners with any exposure to liability for Capital Gains Tax (CGT) are likely to be worried by proposals from the Office for Tax Simplification (OTS) that CGT could be doubled to bring in much-needed revenue for the Exchequer, according to a report by the BBC on the 12th of November.
The principle behind such a move would be to bring CGT in line with income tax. Currently, CGT is levied at a rate of 10% for those paying income tax at the basic rate and 20% for higher-rate taxpayers. The disparity, according to the OTS, is that many people arrange their tax affairs so that CGT becomes an alternative to more onerous income tax. The latest proposals from the OTS, therefore, seek to redress that balance.
Although the doubling of any tax might immediately raise alarm bells, the BBC explains that CGT is, in fact, paid by relatively few – wealthy – individuals.
Nevertheless, if the rate of CGT is doubled, this could significantly increase the number of those liable for the tax – especially those selling second homes or investment properties.
Advice for landlords: Green Homes Grant
An article in Landlord Today on the 12th of November offered tips to landlords on making the most of the government’s Green Homes Grants scheme.
The article reminds landlords that they are eligible to apply for grants of up to two-thirds of the costs, up to a maximum of £5,000, for improvements they make to their let accommodation in respect of low-carbon heating.
The type of work eligible for such grants is divided into primary and secondary improvements – and at least one of the primary measures. Primary improvements include works such as comprehensive insulation or the installation of low-carbon heating through an air source heat pump, solar thermal device, or ground source heat pump.
Examples of secondary improvements include draught-proofing, updating heating controls and installing secondary double-glazing.
To qualify for a grant, the improvement works must be carried out by an approved installer. A story in the Guardian newspaper on the 14th of November expressed concern about the number of installers so far accredited – 36,000 property owners have applied for a Green Homes Grant, but only 1,174 installers have so far been approved.
Rent in London drops but the rest of the UK shows 1.7% rental growth
As the country enters its second national lockdown, online listings site Zoopla has identified a “two-speed” private rental market.
In a posting on the 10th of November, the site revealed that average rents across the whole of the country except for London had risen by 0.7% in the three months ending in September – taking the annual average increase these past 12 months to 1.7%.
The fate of rent levels in London, on the other hand, is to the contrary. In the capital, rents fell by 3.2% during the third quarter of this year – taking the anticipated annual average decline in rent levels to 5.2% by the end of this December.
Will Covid-19 change how residential property is used and located?
The coronavirus pandemic is making changes to individuals’ aspirations for the homes and communities in which they want to live, according to an article by Property Investor Today on the 11th of November.
Households will be looking for adaptable homes that offer flexibility in the way the living space may be used, there is a heightened awareness of where the home is located and the community which supports it, while more people will be looking for homes built to environmentally-friendly and sustainable methods.
Homes in the future will be expected to fulfil not only home and social needs but work requirements too. The exodus from city-life is expected to continue as homeowners look for more laid-back and tranquil communities, surrounded by plenty of green space.
Nevertheless, the continued demand for amenities, infrastructure and recreational variety may also see a revival or reinvention of concepts of suburbia.