Activity in the housing market gathers pace for both homeowners and tenants.
Keeping track of that activity is this week’s news round-up, highlighting the following snippets.
First Time Buyers unable to get on the property ladder
Many would think that falling house prices and a stamp duty holiday will be a welcome boon to first-time buyers. A story by Estate Agent Today recently explains why this is unlikely to be the good news it appears to be.
The article cites official figures suggesting that a combination of the coronavirus pandemic, economic recession, and plummeting interest rates will provoke a sharp decline in house prices – by as much as 22% towards the end of next year – before the market makes a long and painful recovery.
It is that slump in house prices that might be expected to give hope to first-time buyers – surely no bad thing that the price of their first home should become so much cheaper.
However, the very economic forces which will have driven down house prices are also likely to be responsible for widespread unemployment and falling incomes among those very youngsters who are first-time buyers. In the event, first-time buyers will probably have to save for just as long a time for the necessary deposit whatever the average fall in house prices.
Loans for tenants with debts in Wales because of Covid
The Welsh Government has introduced a scheme to help tenants pay back rent arrears that have accumulated during the coronavirus lockdown, explained an article in Letting Agent Today on the 12th of August.
The loans scheme – called Tenancy Saver Loans – provides whatever loan is necessary to let tenants repay their arrears. Payments from the scheme are made directly to the landlord or his agent and tenants then have up to five years’ to pay back the advance at a 1% rate of interest.
The scheme, which has the full backing and support of the National Residential Landlords Association (NRLA), is administered by the Welsh Council for Voluntary Action, which coordinates the activities of all the charities in the Principality.
RICS warns that housing market recovery could be short-lived
Amid the first green shoots of recovery, the Royal Institute of Chartered Surveyors (RICS) has warned that the current boom in the housing market may be short-lived and a flattening off is on the cards in a year from now.
An article in Landlord Today echoed the warning from RICS and charted the many mainly positive signs of a rebounding housing market at the moment.
As the recent lockdown has lifted, so pent up demand has been released with new buyers flooding the housing market. New instructions advertising homes for sale have increased by 59%. Agreed sales have also increased – by 57%. Property investors are making the most of the stamp duty holiday recently announced by the Chancellor of the Exchequer and remain keen to buy before the holiday comes to an end next March.
Despite all these positive signs for the immediate future, RICS suggests that the bonanza is likely to be short-lived and that a year from now – when unemployment is likely to be a problem and the economy still in recovery – activity will have tailed off, with many people deciding to stay in their present homes and first-time buyers instead continuing to rent.
Taken over the year as a whole any increase in house prices is predicted to be flat to marginally positive, concluded RICS.
Sellers can boost home value by £23,000 as recession hits
Noting admissions by the Government that the country has entered a recession for the first time in eleven years, on the 13th of August the Express newspaper nevertheless argued that homeowners will still want to get the best price possible when they plan to sell. The article went on to offer some tips and suggestions on how they can boost the value of their property:
- during times of recession, those looking to sell tend to be less flexible on price – and may even withdraw their home from the market rather than be forced into selling at a discount;
- homes with gardens and home office space command a premium these days, especially in suburban or country settings with a greater sense of space;
- sellers might want to commission a property survey to find out what their home might be lacking or what might need to be altered to attract the right buyer;
- a kitchen makeover – especially if it featured a breakfast bar, new lighting, and doors opening up to the outside – is likely to attract more buyers; and
- buyers might also be prepared to pay more if the bathroom has high-quality tiling, underfloor heating, and a power shower.
By paying attention to marketing ideas such as these, homeowners might be able to increase the value of their home by as much as £23,000, said the Express.