Finn's Newsletter: Autumn 2020, Issue No.13

Why property is the best investment avenue in 2020 for landlords

The rental market has been extremely active this year, bouncing back from its temporary closure in record speed.

Could now be a good time to invest and grow your portfolio as a landlord?

Rental prices are up

In the past month, UK rental prices have increased by 2.1%, now standing at £987 PCM on average – up 1.5% from last year.*

Following analysis taken across the country, it was found that ten out of twelve regions have shown an increase in rental prices since 2019, with two of those areas showing an increase of over 5%.

The South West has demonstrated the strongest increase, with an average 6.6% boost.

Whilst London’s rental market does not show an increase, at an average rental value of £1,653 per month, landlords based in the capital should still expect healthy returns from their investments this year.

Enquiries from tenants at their highest

Recent analysis from ARLA Propertymark has revealed that registrations from new tenants have shot up to 101 per lettings branch last month, breaking July’s record of 97 newly registered applicants.

We’re simultaneously seeing average tenancy lengths at an all-time high for August, with tenants staying put for 21 months.

One reason behind these figures is that nearly half of first-time buyers are deferring their plans to buy; either due to financial difficulties (41%) or because lockdown has prompted them to reconsider their priorities (42%).**

Mortgage rates remain incredibly low, with high demand and savings making it an opportune moment to consider your first or next step as a buy-to-let investor.

Contact us for more information.

*Source: HomeLet Rental Index, Estate Agent Today

**Source: Aldermore

Properties priced correctly sell in half the time

Rightmove have done extensive research into the effect that asking prices have on a property’s likeliness to sell.

Approximately 300,000 properties were brought onto the market this summer.

By September, 63% of properties that remained at the same price and hadn’t been reduced had reached Sold Subject to Contract (SSTC).

Whereas out of the 300,000 properties, only 32% of those that had come down in value had reached SSTC within that same timeframe.

This study confirms what we’ve long since known, that the asking price set for your home is a key determining factor in how it performs on the market.

When priced right the first time, Rightmove’s findings were that a house sold 26 days faster, on average.

As your leading local agents, we can ensure that your home is competitively priced.

Resident data expert at Rightmove – Tim Bannister – had the following to add: “This analysis shows just how vital it is that sellers listen to their agent when they recommend the asking price that the property should be listed at.

“If sellers are serious about selling, then starting with too high an asking price can cause unnecessary delays, and also make it a lot less likely they will actually find a buyer in the end.

“The temporary stamp duty holiday means more sellers are in a hurry to get a sale through conveyancing, and with this also taking longer at the minute a realistic asking price could soon end up being the difference between completing in time or losing out on the savings.”

Book your valuation today

We appreciate how demotivating it can be to experience delays when you’re excited to progress your property move.

That’s why our valuations take into consideration a number of different variables, such as the condition of your home and properties in your area, making us the experts who can confidently evaluate your home’s worth the first time.

House price growth hits four-year high

Nationwide’s most recent House Price Index has uncovered a four-year high price growth in the UK – meaning that your home could be worth more than ever.

Analysis from their report shows that average property values grew by 5% annually in September and 0.9% monthly, taking the national average to £226,129.

This is the highest annual price growth we’ve seen since September 2016.

The South West was the strongest performing region (5.5%), closely followed by Outer Metropolitan (5%),

Outer South East (4.8%), Yorkshire and Humberside (4.6%) and London (4.4%) – which all made the top five in terms of price growth.

Average prices in the capital have now hit a record high of £480,857, which is 57% above their 2007 levels.

Meanwhile in the rest of the UK, price growth has been reported as follows: North (4.2%), East Midlands (4%), Wales (3.8%), West Midlands (3.1%), North West (3%) and East Anglia (2.7%).

Whilst all regions have shown an annual increase, the areas demonstrating the smallest growth percentage are Scotland and Northern Ireland at 2% and 1.5%, respectively.

What can we take away from these findings?

“Housing market activity has recovered strongly in recent months,” comments chief economist at Nationwide – Robert Gardner – who suggests that behavioural shifts are a key contributing factor as people reassess their housing needs in 2020.

Whilst Iain McKenzie, chief executive of The Guild of Property Professionals, claims that: “the current rise in housing prices shows a short-term spike with it returning to a more fluid marketplace in the next two or three months.

“The housing market has been resistant for a number of years despite having to contend with things such as Brexit and now the pandemic.”

For this reason, McKenzie predicts that although there will be bumps down the road, he suggest that “if there is a decline in the future, it will be a short decline and the market should bounce back very quickly because of positive consumer sentiment and pent-up demand."

Have you made the decision to sell your house this year?

During an updated market appraisal, we will assess how your home will perform on market, as well as what price you can realistically expect to achieve in light of recent demand and price growth.

For the full report, visit: www.nationwide.co.uk/about/house-price-index/headlines

Green Homes Grant Applications Open

Two-thirds of UK households fail to meet long-term efficiency targets, meaning that Brits are spending more on energy bills whilst unknowingly raising their carbon footprint.

The BBC has recently revealed that up to 12 million properties fall below the C grade on Energy Performance Certificates (EPCs), which are graded A-G.

With applications now open for the green homes grant, homeowners and landlords based in England can apply for vouchers to install energy efficiency improvements – with a government contribution of £5,000 making it a cost-effective way to update your property.

Have you considered applying this October?

If you’re a homeowner or residential landlord, you now have the opportunity to make crucial eco-friendly changes at a fraction of the price.

In total, £2 billion has been allocated to the green homes grant, with participants having until 31st March 2021 to redeem their vouchers and receive future annual savings of £600 – on average – from their eco-friendly home improvements.

What can the vouchers be spent on?

With the vouchers covering at least two-thirds of the cost – up to £5,000 per household – there are a wide number of energy-saving features to choose from, including at least one of these primary measures:

Insulation

solid wall
under floor
cavity wall
loft
flat roof
room in roof

Low-carbon heating

air source heat pump
ground source heat pump
solar thermal (liquid filled flat plate or evacuated tube collectors)
biomass boilers

It’s important to bear in mind that there are certain conditions determining how your vouchers can be used.

For instance, you can only use the grant for the installation of new measures that weren’t previously there, not to replace or repair existing insulation or low-carbon heating features.

Lower income households can apply for a higher grant value, up to £10,000. Whilst landlords are limited to receiving the base £5,000.

For more information or to apply for the grant, please visit: https://www.gov.uk/check-eligible-green-homes-grant