It’s been a busy time for writers of UK property news headlines. Landlords have been warned about the rising costs of mortgages. Short-term lets seem forever under the spotlight. Hotspots are identified for house prices. Plus, the overall volume of property transactions has taken a dive.
Let’s take a closer look …
Bank of England forecasts major rise in landlord mortgage costs
Quoting the latest report from the Bank of England, the National Residential Landlords Association (NRLA) on the 12th of July warned that landlords face hefty increases in what they must pay for their buy to let mortgages.
The financial pressures – including higher interest rates – mean that landlords will be paying an average of around £275 a month more in two and a half years’ time.
A challenging market also means that landlords face changes to income tax, capital gains tax, tenancy protection rules, and increasingly strict rules on energy efficiency.
The NRLA complains that landlords are left in an impossible situation. Some will simply sell up and leave the market (just when there is a glaring shortage of affordable rental accommodation). Others will have to increase the rents they charge, while the remainder will face the impossibility of covering costs they can no longer afford.
Short-term lets in Devon to be probed
The rapid growth of short-term and holiday lets has driven many locals from the – mainly coastal – towns where they come from. Especially hard hit have been towns in Devon.
On the 12th of July, the county’s Midweek Herald reported that a special Housing Commission has been set up by Devon County Council to study the issues and report back.
The story was picked up by Landlord Today the following day together with an explanation that the Commission – of councillors, members of parliament, and experts – will focus on the growth in second homes throughout Devon and issues such as affordability and homelessness.
The Commission’s brief is to understand the pressures caused by the explosion in the number of short-term lets – Airbnb is under a particular spotlight – and to come up with solutions appropriate for action locally or at a national policy level.
Councils throughout Devon are already preparing to shoulder new weapons in the management of short-term lets and second homes in the county. As from next year, they will be authorised to double the rate of council tax charged on holiday and empty homes.
Where are house prices going up?
Recent news about the state of the housing market has focussed on falling property prices. The truth uncovered by the online listings website Zoopla on the 6th of July is that roughly two out of every three homes in the UK have actually increased in value over the last 12 months.
Indeed, around 9.2 million homes – that’s about a third of the housing stock – increased in price in the last 6 months alone. Another third of homes held a steady price.
The result is that the value of the average home in the UK has gone up by £19 a day – or some £7,000 – in the last year.
Areas where those increases are most marked include Halifax, Derby, and Wakefield while homes in London, the Southeast, and East of the country have increased at a generally more modest rate.
Property transactions fall sharply despite hike in new listings
A story by Property Industry Eye on the 11th of July was somewhat more downbeat.
The number of homes up for sale has grown yet the volume of property transactions has continued to fall, said the journal.
Both gross sales and completions are down. Whereas net sales during April and May achieved a weekly average of 18,541, by the beginning of July this weekly average had fallen to 17,122. The following week it was down again to 16,572 and at the time of the story had fallen as low as just 14,813 in that week.