The property news headlines for many of this week’s stories underscore the already high – and escalating - cost of housing in the UK.
This has led to the keenest competition among buyers prepared to pay record prices and a huge gap between average prices in one part of the country compared with another. It has catapulted the cost of housing in the UK to among the top ten most expensive countries in the world.
Landlords renew call for help after benefit and furlough cuts
The first of the stories, though, voices an appeal from landlords for government help. This is for tenants who will be struggling to meet rent commitments once the support of paid furlough and after cuts have been made to Universal Credit payments by the removal of the £20 supplement granted during the Covid crisis.
In a story on the 21st of September, Landlord Today echoed calls from the National Residential Landlords’ Association (NRLA) to save tenants from falling over the “cliff-edge”.
Figures compiled by the NRLA show that during the period from 2019 until the end of last year, the number of private renters already in rent arrears had tripled from 3% to 9% of all tenants.
Hottest ever competition to buy a home and highest ever prices
Figures compiled by the online listings website Rightmove reveal that average house prices across the whole of the UK have recorded yet another all-time high of £338,462 – a 0.3% increase in September when the average price rose by £1,091.
Since these figures increase the average house price by only £15 on the previous record reached in July, the upward trend seems now to be stabilising.
Nevertheless, it remains very much a buyers’ market. House hunters who have sold a previous home have a more than healthy bank balance, ready access to affordable mortgages, and continue to ensure that housing demand remains double what it was before the pandemic.
With new listings in the first half of September some 14% higher than in the last two weeks of August, it is evident that more homes are being advertised for sale. By reducing some of the intensity of the competition for the available homes for sale, more sellers will help to rebalance supply and demand.
One square foot of property in parts of the UK can cost up to TWELVE TIMES more than in others
Another online listings site, Zoopla, on the 16th of September, however, drew attention to the very wide disparity between some of the most expensive and the cheapest properties in terms of their prices per square foot.
Across the UK as a whole, the average cost per square foot is currently £282. But this tends to hide a range so wide that the highest prices per square foot are a staggering £1,491 while in other places they fall to as little as just £123.
What this means in practice is that the floor area that would be taken up by your double bed alone in London’s borough of Kensington and Chelsea would set you back an astonishing £43,951.
In terms of space per pound, one-bed apartments and flats offer the poorest value for money. The best value for money is currently found in the overall floor area of a three-bedroom house – although rising prices may soon undermine this price advantage.
UK makes top 10 for least affordable countries in the world to buy a home
Against this background of escalating house prices, it probably comes as no surprise that the UK now features among the top ten least affordable countries in the world in which to buy a home.
A story in the Express newspaper on the 20th of September noted that house prices in many parts of the world have climbed rapidly during the Covid pandemic. Indeed, in only three of the 40 OECD countries have property values fallen during this period.
According to the report, the least affordable country in which to buy a home is currently Luxembourg, followed closely by Switzerland and then South Korea.
Occupying the middle ground of the ten least affordable countries are Japan, Israel, Norway, Germany, Austria, and Australia.
But the UK has now made it onto the bottom rung of this somewhat dubious ladder in tenth place.
House prices to rocket in areas around new Northern line extension
The 20th of September saw the opening of the first major extension of London’s underground since the 1990s – and with that opening a surge in property prices around the new underground stations.
A story in the London Evening Standard on the day of the opening of the extension to the Northern Line revealed that property prices around the new underground stations of Nine Elms and Battersea Power Station have been tipped to rocket by up to 25% in the next five years. Rents in these areas are forecast to rise by some 14%.
The extension of the Northern Line opens up already popular areas of the very central (Zone 1) location in the capital where further developments such as a new shopping centre and a 14-acre linear park are also promised.