Here’s this week’s round-up of some of the latest property news stories …
Number of landlords cashing out hits a seven-year low
The tide finally seems to be turning in the recently sustained exodus of landlords from the private rented sector, according to a story in Landlord Today on the 12th of April.
This revealed that during the course of 2020 landlords sold a combined total of 131,900 buy to let properties. This is the lowest number of sales since 2013 and probably the most marked indication so far that there is a sufficient volume of landlords determined to stay in this particular sector of the property market. As recently as last November, we were reporting the continued exodus of landlords from the buy to let sector.
For those landlords deciding to up and sell their buy to let property, an average sale price 42% greater (£82,450) than the original purchase price was achieved. Those capital gains were achieved after the landlord had owned the property for an average of 9.1 years.
According to Landlord Today, these figures represent an average £3,390 gain – or around 4% last year – which marks the first annual increase in more than five years.
For those landlords selling up, the biggest capital gains were made in London and the smallest by landlords in the North East of England (where there were, nevertheless, the highest proportion of landlords deciding to quit this sector of the property market).
House prices hit record high in March
The coronavirus pandemic and its successive lockdowns might have knocked back multiple sectors of the UK economy – but the property has more than bucked that trend by bouncing back with house prices at a record 6.5% higher this March than they were the same time last year.
With average house prices now some £15,000 higher than before the pandemic, a story by Sky News on the 9th of April suggested that the resurgent performance was the result of:
- a release of pent up demand from buyers; and
- the Stamp Duty holiday that was brought into effect last July and will now continue until the end of June – and at a reduced rate until the end of September.
Analysts expect the current wave of activity to be maintained as more potential buyers protect themselves with the vaccine and look to satisfy their demand for larger properties with space for home working and a larger garden.
This at a time when there continues to be a shortage of such properties for sale – leading to an inevitable surge in prices.
Homeowners look to second-charge mortgages to raise money for buy-to-let properties
Further evidence that investors might once again be turning to the buy to let sector of the property market came in a report by Property Wire on the 12th of April.
The story revealed the principal reasons given by borrowers for raising additional funds by raising second-charge mortgages:
- in first place were homeowners’ requirements for funds to purchase buy to let investment properties;
- in second place, the reason given was to pay for home improvements; and
- in third place was a desire to consolidate debt.
Commentators remark that the interest in second-charge mortgages reflects a bifurcated economy in which people in secure jobs have been able to save and invest (for example, with money no longer spent on foreign holidays) while those in less stable employment have been hit financially and must now secure new debt.
What’s hot in the housing market right now
A special report by online property listings site Zoopla on the 14th of April offered a wealth of data about the current state of the market and its hotspots.
Rounding up Zoopla’s key findings, what’s hot in the housing market right now is:
- the search for domestic space and room to breathe continues – with houses selling three weeks faster than flats;
- the average house spends 42 days listed for sale before a sale is agreed – while for flats that interval is 62 days;
- homes are selling fastest in the North East of England, Yorkshire, and the Humber;
- family homes are the most sought-after properties – their prices have risen by 4.9% in the past 12 months, compared to an increase of 1.9% for flats;
- in the North East, North West, Yorkshire, and the Humber some two-thirds of homes are for sale at less than £250,000 – so will still qualify for zero-rated Stamp Duty even at the reduced rate between June until the end of September; and
- the recent house hunting surge has been driven by lifestyle changes made in the wake of successive lockdowns – the search for more space at home and the encouragement given to buyers through the Stamp Duty holiday.
The bottom line makes for especially good news for those looking to sell their home – demand is strong indeed. If you are looking to buy, though, expect to encounter some stiff competition.