Finn's Festive Newsletter: Winter, Issue No.12

Property prices likely to continue rising

After the rollercoster year of 2020, 2021 was a difficult year to predict in the housing sector. With a return of stability to the market, we can look at the forecast for the new year.

More than 22% of homeowners plan to move in the next 18 months, due to direct results of the pandemic. In a recent survey, it has been revealed that those most likely to move were younger people who live in cities, suburbs or large towns, and those who have had working patterns shift from COVID-19.*

According to Zoopla, the main drivers for the sector will be “an ongoing re-evaluation of housing needs, increased housing equity and moves in parts of the labour force to more hybrid working.”

The portal forecast a 3% increase in house prices across the UK in the next 12 months, which is predicted to affect around 1.2 million property transactions.

With the expected house price gains, it is likely that we are going to see more sellers coming to market in the coming months, but a continued low supply will support price inflation.

Housing remains affordable in many markets and competition with mortgage lenders will keep rates low, leading to a sturdy appetite in the sector for 2022.

There will always be waves of demand across the country, with the biggest price increase expected to continue in the North West’s flourishing market at +4%.

Zoopla has also suggested that because mortgage rates are at a record low of 0.1%, buyers are becoming accustomed to these low rates. It has been predicted that rates will reach an average of 3% by the end of 2022, giving buyers a push to act sooner rather than later to secure cheaper borrowing conditions.

If you are looking to take advantage of current property conditions, book your valuation now and put yourself in a good position for 2022.

*Zoopla

Property market predictions for the new year

Market predictions for the new year

The trio of low mortgage rates, the stamp duty holiday and changes in buyers’ priorities have all contributed to the incredible demand within the housing market in 2021. That is why we’ve managed to see an incredible leap of 30% in buyer interest across the five-year average.*

As the new year draws closer, we explore a few factors that are in store for the property market for 2022.

1. The return of first-time buyers

Whilst the demand is there, the range of buyers has changed.

At the start of the pandemic, most buyers were in the wealthier bracket of society and owned higher valued properties. Now that we’re seeing an improvement in mortgage affordability, the door has opened back up to first-time buyers!

If you’re a first-time buyer, we don’t expect the market to slow down anytime soon, so you’ll need to ensure you’re prepared to move quicker than normal when you find a property you like.

A good way to stay ahead of the game is by getting a mortgage in principle before you start house hunting.

Mortgage in principle (MIP) = this is a statement from a lender that they would lend you a certain amount and can assure a seller of your financial standing.

2. Race for space continues

Another domino effect from the pandemic is how homeowners began to prioritise space as one of their main needs in a property.

The combination of being cooped up inside, as well as businesses moving to remote working meant that people naturally discovered how much they valued space.

If you’re thinking of moving to find a property with more room, the time is now to get a move on with the process – especially with demand being high and surpassing supply.

Stay one step ahead of the game and book your up-to-date property valuation with us this month.

One in five landlords are making EPC improvements

With new rules coming into force from 2025 for rental properties, landlords must make sure their property’s EPC rating is C or above, or risk not being able to take on new tenants.

As a result, around 17% of landlords have made a conscious effort to improve the energy efficiency of their property. With a further 23% of portfolio landlords also taking action to ensure their properties meet the criteria.*

Changes by landlords include: 22% that had replaced their boiler and heating system, 23% looked to replace windows and 18% had installed new white goods.

Common green home improvements also include improving insulation, fitting solar panels and replacing gas boilers with a more sustainable alternative.

With such changes being implemented to properties, many tenants have stated they would pay more if this was the case for their rental property.

One in 10 private renters have also said they would stay in their current property longer if their landlord made changes that would benefit the environment – a popular consideration now emerging in the lettings market.

However, the main concern is that for many older properties, updates like changing the boiler simply won’t be enough. As a result, more serious changes may need to be made, making the entire undertaking a costly job.

In some cases, landlords can look to gain support from both lenders and the government to make the changes financially feasible. The hope is that with landlords making the effort to better improve the EPC of their properties, more favourable terms on mortgages will become available to them.

This has caused several lenders to introduce ‘green’ mortgages, rewarding those landlords that have an EPC rating of ‘A’ or ‘B’.

Landlords already making changes have been welcomed by many in the industry, as a positive step towards making sure properties are compliant from 2025.

Are you a landlord and needing to make changes to your property ahead of 2025? Get in touch with us today to discuss your portfolio needs further.

*Shawbrook Bank

Surge in parents acquiring buy-to-lets for students

Going to university is a big step and the hardest part can be finding the right accommodation. It was very popular at one time for parents to buy property for their children to use whilst studying away from home.

Over time, this became less common as more student accommodation blocks were built and heavy-duty buy-to-let regulations and reductions in tax breaks came into play.

What’s interesting is that we are now seeing a resurgence, with 66% of parents thinking of purchasing a buy-to-let property to help their children financially.*

Is it reliable to purchase a buy-to-let right now?

Yes! Whilst there are changes to the stamp duty tax, it’s an effective way of pulling through some extra income throughout the year.

Rent collection is an example of the short-term benefit, but the long-term benefit is the potential to gain further profit from your investment over time.

However, not all households have the disposable income to acquire a new property, which is why 53% of the 2,000 homeowners who took place in the survey said they’d consider downsizing to help their children at university.

What sort of property should I choose?

It’s entirely dependent on your financial situation, as well as what you think will pay off in the long run.

Location is also paramount. Choosing somewhere that’s near the campus as well as local amenities such as shops and bars will mean that your child’s quality of life won’t suffer.

When it comes to buy-to-let properties, there are some rules and restrictions to keep a close eye on.

If you’re reading this and thinking of going down this route, please get in contact with our team so we can make sure you’re fully informed before making any decisions.

*Letting Agent Today