Here are some of the latest snippets of news from the property world …
Demand for rental property increase
The housing market as a whole – along with practically every other sector of the economy – has been knocked sideways by the coronavirus lockdown.
An article in Landlord Today on the 21st of April, however, identified signs of a bounce-back by the private rented sector in particular.
Demand for private rented accommodation effective crashed during the first two weeks of March. But in the initial weeks of April, it has bounced back with a 30% increase in demand.
During the pandemic, uncertainty and wariness have held back sales in the housing market. Demand in the private rented sector, by comparison, appears to have been more resilient – although demand is still not expected to achieve the levels that existed before the current crisis began. Indeed, commentators predict that 2020 could see an overall reduction of 25% in the 1.2 million moves that were made in the private rented sector in 2019.
Virtual viewings for homebuyers
In an attempt to breathe life into an almost moribund housing market, on the 13th of April, online agents Zoopla reported an increase in virtual property viewings.
According to the article, sellers have not been abandoning the market in droves. Since the 7th of March, there has been only a 1% reduction in the listings of homes for sale. As far as Zoopla is concerned, this may be thanks in part to the availability of its virtual video tours of properties.
Indeed, the online agents say that some buyers have been prepared to make an offer on a property on the strength of their video tour alone – with similarly positive moves also being made by prospective tenants of rented property.
Some virtual tours are made all the more realistic by having an agent talking about the property as they guide a potential buyer through the viewing.
Lenders loosen restrictions as more mortgages are reintroduced
The immediate reaction of the majority of mortgage lenders to the bank base rate cut at the beginning of the Covid-19 emergency was to withdraw products from the market. Some sources say that as many as 40% of all mortgage products were withdrawn.
In a story on the 18th of April, however, the Express newspaper revealed signs that the market may be opening up once again as somewhat more new mortgages are granted, the requirement for large deposits is eased, higher loan to value (LTV) ratios are entertained, and the balance is restored between new mortgage applications compared to remortgage applications.
The article explains that during the initial response to the pandemic, lenders were demanding higher deposits, loan to value (LTV) ratios were lower, and the maximum lending on new mortgages was capped. Whereas the normal balance of new mortgages to remortgages is typically 55% to 45%, applications for the former fell to just 30% and remortgages up to 70%.
Coronavirus: Welsh landlords ask for ‘level playing field’
The Residential Landlords’ Association (RLA) has reacted with some ambivalence to the Welsh Assembly’s decision to make grants of up to £10,000 available to owners of holiday let accommodation throughout the principality.
In a response published on the 21st of April, the RLA welcomed the support given to this sector of the rental market but at the same time expressed concern that it risks being favoured over the regular private rented sector – which faces an equally rough ride during the coronavirus pandemic.
The grants are out of reach for regular landlords, who still have to maintain their properties even when vacancies are impossible to fill during the lockdown and rental income, therefore, dries up. Even when their property is unoccupied, some residential landlords have to pay up to 200% in council tax, says the RLA – a tax which the owners of holiday lets avoid.
The pressure group is lobbying for a level playing field for landlords of both long-term accommodation and holiday lets.