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Reduce energy and save, low-EPC buy to let, to rent or not to rent, 2023 house prices, record high for Stamp Duty receipts and other UK property news

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UK property news headlines naturally reflect the wide-ranging impacts of inflation and the rising cost of living on the housing market.

Energy matters – and the cost savings through energy efficiencies – are prominent as is the forecast movement in house prices. Although the tax thresholds were raised on the 23rd of September, the end of the previous Stamp Duty holiday in September last year has led to record receipts from this source of public revenue.

German-style energy reduction drive could save £400 for families

A posting by the Social Market Foundation (SMF) on the 7th of November argued that campaigns promoting a reduction in householders’ consumption of energy – similar to those introduced in Germany – could result in significant savings both for consumers and the public purse.

The article claimed that an energy-saving campaign – involving such simple measures as lowering the central heating and turning off unused lights – could save the average household up to £400 on their bills.

Moreover, the savings would not stop there. Lower energy consumption and lower energy bills would mean that government would need to pay out less in the recently agreed Energy Price Guarantee. Those savings alone could achieve savings for the Treasury of as much as £9.3 billion, according to the SMF.

Would you pay a 15% premium for a high-EPC buy to let?

Staying with energy-saving themes, Landlord Today on the 9th of November commented on the recent upsurge in interest among property buyers – including buy to let investors – in homes with energy-efficient high (that is “good”) EPC ratings.

The escalating cost of energy, an increase in the number of “green” mortgage loans, and a general awareness of the need for improved sustainability have all contributed to this keener interest in the energy efficiency of homes.

The interest is so keen, in fact, that buyers have already been seen to pay up to 15.5% more for a property with that prized EPC rating – a premium that many property investors consider well worth making.

With house prices tipped to fall, is renting between selling and buying a risky move?

If you are selling your home in preparation for the purchase of a new one, timing is everything the Daily Mail reminds its readers.

If you accurately read the market and play your cards right, you will sell your current home as quickly as possible while prices are high and then rent for six months or so – or however long it might take for average house prices to fall – so that you can buy a better and more competitively priced home in a falling market.

Whether that pays off, of course, is whether you have timed your transactions perfectly – to maximise the sale price of your current home and buy its replacement once prices have fallen.

Although there is a risk and the strategy calls for especially fine timing, all the signs are that the housing market will be characterised by falling prices – a fall by as much as 15% according to some analysts. In that case, it might – says the article - make sense to sell your home now while prices remain high and then rent somewhere before buying once prices have fallen.

Zoopla: Higher mortgage rates could take up to 5% off 2023 house prices

As if to lend (cautious) weight to such a strategy, online listings website Zoopla on the 31st of October published its forecast for the movement in average house prices during the course of the coming new year.

The forecast points to the fact that mortgage rates have suffered what has been the biggest shock since the end of the 1980s with the prevailing rate likely to settle around 4% to 5%.

Even so, fuelled by the constant demand, those transactions already agreed, and an ongoing shortage of supply, house prices continue to grow at the rate of around 8.1%.

Although higher mortgage rates – sustained over a lengthy period – could result in the fall in house prices reaching double digits, the more likely outcome is a reduction in average prices nationwide of around 5% during 2023.

Stamp Duty receipts hit a record high

Booming demand and record house prices in England and Northern Ireland, together with the end of the Stamp Duty holiday in September 2021, have resulted in house buyers contributing a record sum to the Treasury, according to a story in the Financial Times on the 6th of November.

The newspaper revealed that the government collected a total of £3.59 billion from the tax on residential property purchases in the third quarter of this year. This outstrips by some 21% the previous record – set in the second quarter of this year.