LANDLORD NEWS
Wales considers rent controls amid second homes crackdown
The Welsh Government is considering rent controls in the private rental market to make them affordable for local people on local incomes. The government is looking at German-style rent controls and systems already in use in Scotland and Ireland to inform its proposals. The Welsh Government is also considering a certain proportion of new builds to be secured for affordable rent and linking rents to energy performance ratings. The ratio of local incomes to rents could be used to determine areas where affordability is an issue and allow for a “targeted intervention of rent control measures in a specific geographical location”. The Welsh Government pointed out that rent caps could also be based on the value of the home.
The Daily Telegraph
BUY TO LET
Holiday lets more profitable than buy-to-let investments
The number of people making money from holiday lets has increased by almost 40% in the past decade, with 63,000 individuals receiving income from 65,000 furnished holiday let properties in the UK. This is up from 46,000 people making money from 50,000 properties in 2011-12. Holiday let income has risen by an average of 63% in the past decade, compared to just 5% for buy-to-let investments. The average annual holiday let income exceeded buy-to-let income for the first time in 2020-21, reaching £15,600 compared to £13,400 for buy-to-let. Critics argue that tax rules incentivising holiday let investment are driving up prices in rural areas and creating a shortage of rental properties in cities. David Fell, a senior analyst at Hamptons, says the numbers investing in holiday lets rose dramatically during the pandemic due to travel restrictions.
The Times
COMMERCIAL
Companies aim to reduce office space in era of hybrid working
About half of the world’s largest companies plan to reduce their office space in the coming years as they adapt to the era of hybrid working, according to a survey by property agent Knight Frank. While smaller companies expect to add to their offices, the largest firms are split, with most looking to shed between 10% and 20% of their space by 2026. The trend among the biggest businesses is to take less, but better, space, said Lee Elliott, Knight Frank’s global head of occupier research. Separate data from Cushman & Wakefield showed that in London more companies moved offices than ever before in 2022, taking less space than before the pandemic, on average.
Financial Times The Times
Edinburgh and Glasgow among UK’s highest-growth cities in property sectors
Edinburgh and Glasgow are among the UK’s highest-growth cities in multiple property sectors over the next decade, according to a report by CBRE. The report analysed 12 property sectors across the 50 largest regional towns and cities in the UK outside London, examining economic drivers such as GDP, employment and income growth, demographic trends, and property market data. Edinburgh and Glasgow ranked third and fifth respectively for growth in the student accommodation sector, while both cities were ranked in the top five for hotels and offices. The report also highlighted the potential for growth in the life sciences sector. David Smith, MD of CBRE Scotland, said there was a “real opportunity for investors looking at opportunities in Scotland”.
The Scotsman
AUCTION NEWS
North West auction firms to combine lots
From this month, two of the north’s major property auction firms, Pugh in the North West and Mark Jenkinson in South Yorkshire, will combine their online property auction listings. Mark Jenkinson was acquired by Eddisons earlier this year, joining Pugh which was bought by Eddisons in 2016. Between them the two firms have sold a wide range of commercial, residential and land assets worth £94m in the last year. A statement said that combining the lots of both auction houses, under the Pugh brand and as part of Eddisons, will provide a more extensive list of investment opportunities across the regions.
Estate Agent Today
iamproperty grows partner network
Over the last year, iamproperty has seen a 40% increase in its partner agency network. It now collaborates with over 6,000 estate agency branches across the UK, including Clee Tompkinson Francis in South Wales, Bond Oxborough Philips in the South West, and Arden Estates in the West Midlands. This expansion comes on the heels of a record-breaking year for the company, which saw more than £1.25bn in property sold through its auction service, as well as other product launches via its movebutler platform, which launched two new modules – better legal preparation and surveys.
Estate Agency Today
PROPERTY FINANCE
House prices drop for first time since 2012
House prices have dropped 1% year-on-year, the first such drop since 2012, according to the latest Halifax House Price Index. The cost of a typical UK property is now £286,532, down from £286,662 in April, while property prices have fallen by about £3,000 over the last 12 months and by around £7,500 since the peak in August. Kim Kinnaird, the director at Halifax Mortgages, said: “As expected, the brief upturn we saw in the housing market in the first quarter of this year has faded, with the impact of higher interest rates gradually feeding through to household budgets, and in particular those with fixed-rate mortgage deals coming to an end.” She added: “This will inevitably impact confidence in the housing market as buyers and sellers adjust their expectations.”
Financial Times The Daily Telegraph The Times The Guardian
Fresh homes flood market
The Royal Institution of Chartered Surveyors (Rics) has reported that the flow of fresh homes coming on the market reached its strongest level in nearly two years in May. A net balance of 14% of property professionals reported seeing new instructions to sell rising rather than falling in May, marking the best reading for new property listings since March 2021. The latest survey result also broke 13 months in a row of new instructions falling rather than rising. Housing market demand was also at its least negative level in a year in May. However, Tarrant Parsons, Rics senior economist, warned that the UK’s stubbornly high inflation is likely to undermine the recent improvement in activity. A net balance of 7% of surveyors reported a drop-off in sales rather than a rise in May, Rics said. In London a balance of 3% of surveyors reported prices falling rather than rising, and in Scotland and Northern Ireland the survey indicated prices were heading upwards. By contrast, in the the East Midlands and the South East, property professionals were particularly likely to report prices heading downwards.
Daily Mail The Independent UK
LENDING CONDITIONS
Record number of first-time buyers opt for 35-year mortgages
A record 19% of first-time buyers in the UK took out mortgages lasting at least 35 years in March, according to UK Finance. This is the highest proportion since records began in 2005. The proportion of first-time buyers taking out such mortgages was 9% in March 2017 and 2% in 2005. UK Finance suggested customers might be choosing this option “in order to lower monthly payments and, thereby, improve their affordability calculations”. UK Finance also said 1.5m people are scheduled to end their fixed-rate deals this year. Of those, 800,000 are scheduled to come off their deals in the second half of this year. Sarah Coles, head of personal finance at Hargreaves Lansdown, said those people were now facing a “remortgage nightmare”.
London Evening Standard The Independent
Mortgage market facing complete reset
Figures indicate that only a third of borrowers on cheap fixed-term mortgage deals have come off them so far. According to analysis by Capital Economics, a third of those households – equivalent to 3.2m – are paying interest rates of 3% or more. By the end of next year that will have risen to 5.8m households. On average, mortgage repayments for borrowers coming off existing deals are about 26% a month higher, according to broker London Money. The Centre for Economics and Business Research is now expecting the average two-year fixed mortgage rate to reach 5.1% this year. Nationally, homeowners will have to spend nearly an extra £9bn in interest over 2023 and 2024 as they are forced to refinance at rates that are double what they are used to, according to the CEBR. The average homeowner will have to pay £3,900 a year more in interest when they refinance this year compared to their previous deal. Those refinancing in 2024 will have to pay an extra £3,200 per year.
The Times Daily Mirror The Daily Telegraph
ECONOMY
UK dodges recession but only weak growth forecast
A new report by KPMG has found that the economy has enjoyed a better start to the year than expected and is now predicted to grow by 0.3% this year, compared with its previous forecast of an uplift of just 0.1%. “The UK economy has so far avoided a technical recession. But risks are still elevated. A stickier inflation will see monetary policy tightening even further, increasing the risk of unwelcome side effects, among other potential headwinds.” Meanwhile, the CBI, which previously projected a decline of 0.4% in GDP, now expects it to expand by 0.4%. Both expect growth to pick up next year, with KPMG forecasting a 1.1% rise in GDP and the CBI projecting an increase of 1.8%.
The Times The Guardian
