LANDLORD NEWS
18% of renters ‘would have bought a home already if they could’
Just under a fifth (18%) of private renters in England and Wales would have ideally bought a home already if they could, according to a survey. Around three-quarters (76%) want to buy at some point in the future, the research for the National Residential Landlords Association (NRLA) found. One in 10 private renters surveyed said they had bought a home previously. Some 29% of private renters said they wanted to remain in the sector, when thinking about the next 12 months. One in eight (12%) want to buy a home during the next 12 months and believe they are in a position to do this, the survey found. More than two-fifths (45%) of private renters want to buy their own home during the next 12 months but believe they cannot do so.
Daily Mail London Evening Standard
BUY TO LET
Sales of second homes and BTLs surge in 2022
New data from HMRC has revealed that sales of second homes and but-to-lets increased by 20% last year, boosted by a boom in staycations and the stamp duty holiday. An extra 46,900 of these homes were sold in 2021-22, the last tax year, taking the total to 284,100, according to the figures. Second homes and buy-to-lets accounted for a quarter of residential property sales and 45% of the Treasury’s stamp duty receipts. HMRC found that properties worth above £2m and below £250,000 were the most popular among those buying additional homes. More than half (57%) of second homes were purchased for less than £250,000.
The Daily Telegraph
More BTL setting up businesses to maximise profits
More landlords are establishing businesses in an effort to increase their earnings. Research by Hamptons found that by the end of 2022 there were 309,643 buy-to-let companies in the UK, up from 228,743 at the end of 2020. Due to new tax regulations introduced in 2020, landlords are no longer able to deduct mortgage interest payments from their rental income before disclosing it for tax purposes. Instead, they receive a tax credit equal to 20% of their mortgage interest, which is just half of what a higher rate taxpayer would have previously been able to claim. This change, coupled with a stamp duty surcharge on the purchase of additional homes and tighter regulations around the energy efficiency of properties, prompted many landlords to quit the market. However, other landlords opted to hold properties through a limited company so that they can still deduct mortgage interest from their rental income before paying tax on it.
The Times
COMMERCIAL
Barclay raises funds for green property
Andrew Barclay, a grandson of the late Sir David Barclay, has raised £100m to buy up tired London offices and turn them into modern, green blocks in line with the Government’s forthcoming changes to energy-efficiency standards. Barclay’s Dashwood Properties company purchased its first building at the end of last year – a four-storey office block in King’s Cross, central London, for which he is reported to have paid £18.7m. It comes after JLL said last month that office occupiers were now happy to pay a “clear premium” for green offices. Its data showed that rents for offices with any Breeam (Building Research Establishment Environmental Assessment Method) rating, which range from “pass” to “outstanding”, typically are 11.6% higher than for similar buildings without one. Barclay is now targeting “outstanding” or “excellent” ratings for his buildings. He estimates that there are 50,000 office buildings in London and that only 10% of those will meet the new standards, which come into force in 2030. Most of the compliant buildings will be the huge towers let to big corporations. The smaller blocks are more likely to be owned by landlords that may not be able to afford the renovation required, Barclay said.
The Times
Private equity and hedge funds lead surge in top London office deals
Hedge funds and private equity firms led a surge in the most expensive London office deals last year. Leasing in the West End, home to the Mayfair and St. James’s districts favoured by hedge funds, was at its strongest since 2000, according to data compiled by broker CBRE, which said more than 1.3 million sq ft of office space in the capital was leased at rents higher than £100 ($123) a sq ft last year. “This data shows that there is still appetite for good-quality office space in London’s West End, even in the face of strong economic headwinds,” CBRE executive Director Rob Madden said.
Bloomberg
Tesco buys Paperchase brand – but not shops
Tesco has bought the brand and intellectual property of Paperchase, hours after it fell into administration. But the grocer has not acquired the stationery chain’s 106 shops in the UK and Ireland, leaving the future of 820 staff in doubt. All stores will remain open for now with two weeks to redeem gift cards. Tesco will now sell the stationer’s goods in its stores across the UK. Jan Marchant, managing director of home and clothing at Tesco, said: “Paperchase is a well-loved brand by so many, and we’re proud to bring it to Tesco stores across the UK.”
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AUCTION NEWS
Bond Wolfe enjoys record revenues
Bond Wolfe posted record revenues for 2022, finishing the year on over £210m, a 20% increase on the 2021 result. The property firm also set a new high, agreeing £60m worth of deals across the UK, with auction sales totalling £150m. James Mattin, managing director agency, said: “Retail investment sales were the real driver for us in 2022, coupled with notable sales like Douper Hall in the student investment sector. It was pleasing to note the volume of activity despite the turbulent economic climate and the signs remain strong for 2023 so far.” The auctions division sold 972 lots from the 1,100 offered in 2022, representing a success rate of 88% and raising £150m in sales. This brings the total sales raised since the relaunch of the auctions division in January 2019 to nearly £518m.
The Business Desk
PROPERTY FINANCE
House prices fall for a fifth month in a row
Data from Nationwide shows that house prices fell for the fifth consecutive month in January. The price of the average property was £258,297 last month, with this down by 0.6% on December. Year-on-year price growth slowed to 1.1%, down from 2.8% in December. Robert Gardner, chief economist at Nationwide, said the affordability of mortgages is set to “remain challenging” in the short term due to higher interest rates. “Affordability pressures remain particularly acute in London and the south of England, where mortgage servicing costs have risen sharply compared with a year ago,” Gardner said. “Scotland and the north continue to be the most affordable regions but, even there, mortgage payments as a share of take-home pay are at their highest level for over a decade.” “Nationwide’s data show that house prices are continuing to buckle under the pressure of elevated mortgage rates, squeezed real incomes and weak consumers’ confidence,” Gabriella Dickens, senior UK economist at Pantheon Macroeconomics, added.
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Most affordable places to buy property in the UK
Property loan company Buzz Capital has analysed every metropolitan county across England and Wales to find out which is the most affordable borough to buy a property. When it comes to the average house price, Gateshead came out on top as the most affordable. Properties in Gateshead cost an average of £155,375 which is £120,000 than the average UK house price. Sunderland came in second, South Tyneside third, Wigan fourth, St Helens in fifth and Rotherham in sixth. The study also ranked UK areas based on the disparity between average property prices and average annual salary. The research highlighted the average salary as a proportion of the average house price across all the areas, which is around 16.6%.
Daily Express
North-South house price divide is closing, experts say
Research by independent estate agent eXp UK shows the North-South gap in property values has reached 93.3%. This has widened from 79% in 2012, after adjusting for inflation. But since November 2020, values in the North have risen by an average of 8%, driven largely by the North-west with an 11% increase and Wales by 10%. In comparison, the South has averaged 6%, with the South-west seeing the highest rate of growth at 10%. London only managed a 2% decline. Adam Day, head of eXp UK, said: “The ongoing regeneration and investment of the North should help to further close the North-South divide going forward. Although with the gap remaining vast, it’s unlikely to tip the scales completely.”
Daily Express
Wealthy foreigners are using the weak pound to snap up London homes
Half of the homes sold in “prime” central London in January were bought without a mortgage, up from 42% in the same month in 2022 and 38% in January 2021, according to analysis by Hamptons. Demand from international buyers, especially those with currencies pegged to the US dollar, surged in the wake of the mini-Budget last year as the pound dropped to a record low. The pound has since recovered to the level seen in August last year, but buyers who exchanged funds during the market dip are now reaping the rewards. Victoria Allner, of BNP Paribas Real Estate, said foreign cash buyers were effectively securing a “double discount” on London homes, as some people were buying in cash and then taking mortgages out later.
The Daily Telegraph
LENDING CONDITIONS
New mortgage lending falls
Mortgage lending fell by over a fifth in December, figures from the Bank of England show, with this the fourth consecutive month that the number of borrowers has declined. The data reveals that 35,600 mortgages were approved in December, compared with 46,186 in November, and the lowest level since May 2020. The total amount borrowed fell by a quarter, from £4.3bn in November to £3.2bn in December. The report also shows that the average interest rate paid on new mortgages in December increased by 0.32% to 3.67% – the largest monthly increase since December 2021. Gross repayments were broadly unchanged at £2bn. Approvals for re-mortgaging, which only capture re-mortgaging with a different lender, fell to 26,100 in December, marking the lowest monthly total since January 2013. Samuel Tombs, chief UK economist at Pantheon Macroeconomics, said: “House purchase mortgage approvals continued to fall sharply in December, despite more lenders returning to the market after they ran scared in the immediate aftermath of the mini-Budget.”
Financial Times
ECONOMY Services sector declines to two-year lows, but optimism shines through
The UK’s services sector began 2023 with its weakest performance in two years, according to the latest S&P/CIPS UK services PMI survey. Fears over a looming recession left businesses struggling to place new orders while labour shortages pushed up costs and consumers tightened their belts. The PMI showed a reading of 48.7 in January, down from 49.9 in December, with any reading below 50 considered a decline. Tim Moore, economics director at S&P Global Market Intelligence, which compiles the survey said: “January data pointed to the weakest service sector performance for two years as cutbacks to business and consumer spending resulted in a fourth consecutively monthly reduction in output levels.” However, businesses reported feeling the most optimistic they had been since April last year, amid “tentative signs” of a turnaround in the global economic outlook.
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