LANDLORD NEWS
Tenants leave capital in record numbers
Almost 100,000 tenants left London last year, as the costs of their rents rose to unsustainable levels. Four in every ten renters whose tenancies ended in 2022 chose to leave the city, compared with only 28% ten years earlier, according to an analysis by Hamptons. In London’s most deprived 50% of areas, 68% of renters whose tenancies ended last year had chosen to leave. Separate figures from Hamptons show monthly rents in Greater London last month were an average £179, or 9.1%, higher than in January 2022, at £2,141. Nationally, they are £93, or 8.2%, extra per month, rising to £1,222. Analysis found tenants were heading overwhelmingly for the commuter suburbs. Fifty-two per cent of new tenants in Tandridge, east Surrey, came from London last year, while that figure was 46% in Epping Forest and Sevenoaks, 43% in Broxbourne and 40% in Welwyn Hatfield and Dartford. Hamptons’ figures show rents rising even more sharply in the Midlands and the north, at 11.2%and 11%, respectively, suggesting a similar pattern may be affecting cities elsewhere.
Daily Mail The Times
Soaring rental income boosts Grainger
Grainger has reported like-for-like rental growth of 6.1% for the four months ending January, nearly double the rate for the equivalent period last year. The company revealed its private rented sector property portfolio achieved record occupancy levels of 98.7%, 1.7 percentage points higher than in February 2022, as customer enquiries nearing unprecedented levels. The company is now to invest a record £300m to deliver 1,640 build-to-rent homes across seven English and Welsh cities. The investment is part of a £1.8bn pipeline to provide approximately 7,000 extra rental houses, of which more than 3,600 are fully funded, to its existing portfolio of 10,000 properties. Under a joint venture partnership struck with Transport for London in 2019, the firm is set to develop more than 3,000 homes across eight sites in the capital, some of them at existing tube stations.
Daily Mail
BUY TO LET
BTL landlords not intending to sell up amid uncertain market
New research from Landbay has revealed that seven out of 10 buy-to-let landlords do not intend to sell any of their properties in the next 12 months. The strongest sentiment came from those with smaller portfolios of between one and three (78%) and four and 10 properties (76%). However, 69% of landlords with more than 20 properties shared the same view as did 59% of those with 11-20 properties. Many respondents pointed to a potential downturn in house prices and strong rental yields as their main reason not to sell. Others said they were waiting to see what happens to mortgage rates in the coming months before making any decisions. Among those landlords planning to sell properties, 20% said they intend to sell up to a quarter of their portfolio. Just 2% plan to sell all their properties, while 8% intend to cut between 25 and 50% of their housing stock. The deciding factor for 45% of landlords intending to sell is rising interest rates, while 22% said rent doesn’t cover their mortgage costs. Respondents also listed house prices (16%) and the changing thresholds of Capital Gains Tax announced in the Autumn Statement (14%).
Property Industry Eye
COMMERCIAL
Lack of laboratory space in Oxford and Cambridge
A lack of laboratory space in Oxford and Cambridge threatens growth of life sciences industry. Bidwells, the commercial property agent, estimates that there is 10,000 sq ft of space available in Cambridge, compared with two million sq ft of demand. In Oxford, there is about 25,000 sq ft available compared with requirements from businesses of 845,000 sq ft. Developers have blamed the planning system, as well as rising build costs, for not being able to put up new laboratories quickly enough. The supply squeeze has pushed up lab rents to record highs. Before the pandemic, a decent laboratory in Cambridge would rent out for about £42 per sq ft, but this is set to exceed £60 per sq ft this year. Similarly, rents for purpose-built labs in Oxford rose 25% in 2022 to £75 per sq ft, a new record.
The Times
Landsec begins major office refurbishment project
Landsec has started a major revamp of Portland House in London’s Victoria, in a vote of confidence in the post-pandemic office market. Planning permission is in place for a 300,000 square feet Buckley Gray Yeoman-designed scheme which includes a new double height reception on Bressenden Place, a refurbished façade, new windows throughout and a level 30 rooftop extension. The estimated total development cost of the latest project is £380m. Oliver Knight, the firm’s head of workplace, said: “We’ve seen clear demand for high quality office space in prime London locations which have great transport links and easy access to retail, leisure and entertainment.”
London Evening Standard
AUCTION NEWS
How will technology evolve in the auction sector?
With many business owners now acknowledging that face-to-face auctions are sometimes irrelevant, the auction sector has undergone a significant transformation. But how and to what extent will technology develop in the future, and will business models keep evolving? Estate Agent Today investigates. David Leary, one of Propertymark’s Advisory Panel Members for the firm’s auctioneering arm, NAVA Propertymark, provided his insight from the Essential Information Group as its director. The group recently released figures stating that pre-pandemic in Q1 of 2018 only 65 out of 6,762 lots were offered online, this is compared to the staggering increase of Q4 in 2022 where 7,417 lots were offered online of a total of 9,166. Commenting on the technological changes in the auctioneering arena, Mr Leary said: “We don’t expect this trend to go away any time soon. We would now expect a rise in the quantity and quality of what’s currently being offered in terms of technology for the auctioneering sector as seen across all sectors especially after the COVID-19 pandemic. Auctions are no longer what they used to be. They’re savvy and moving with the times, and we’re excited to see where this change in technological advances takes us.”
Estate Agent Today
SDL enjoys record January
SDL Property Auctions enjoyed its best ever January. Selling more than 110 residential, commercial and development land lots via its live streamed and online Timed Auctions, the auctioneer raised £13m for its sellers – including the sale of a portfolio of 33 properties for £2m. Andrew Parker, auctioneer and MD, commented: “We were expecting, like many were, that January would be a quiet month and that sellers would be concerned about disposing of property amidst unsettled market conditions. However, we’ve been proved very wrong with a record number of properties being offered and posting our best ever January live-streamed auction results.”
Property Investor Today
PROPERTY FINANCE
House prices unchanged in January
The latest figures from Halifax show house price growth in January was unchanged month-on-month, following monthly decreases of 1.3% in December and 2.4% in November. The annual rate of house price growth slowed to 1.9% last month, the weakest increase in three years. The average UK house price is now more than £12,000 below a peak in August, though it still remains some £5,000 higher than in January 2022. Kim Kinnaird, at Halifax Mortgages, said the trend of higher borrowing costs hitting demand was likely to continue in 2023. “For those looking to get on or up the housing ladder, confidence may improve beyond the near term,” she said. Tom Bill, head of UK residential research at Knight Frank, commented: “As budgets adjust to higher rates, we think prices will fall by 5% this year but offers are still exceeding the asking price in some areas. Unemployment remains low and inflation appears to have peaked, so you wouldn’t rule out the housing market surprising on the upside as it did during the pandemic.”
Estate Agent Today The Independent
One in 40 homeowners are now property millionaires
Savills has revealed that one in 40 homeowners are now property millionaires after price growth pushed more than 41,200 properties over the £1m threshold in 2022. Analysis by estate agency found there are 730,390 homes valued at £1m or more, an increase of 40% compared with the beginning of 2020. It was also revealed that the share of homes valued at £1m-plus outside of London has reached the highest ever recorded level since Savills began tracking the data in 2007. In 2022, 53% of high value properties were located outside the capital, up from 51.8% in 2021 and 45.5% in 2020. Wales recorded the biggest rise, with the number of prime properties increasing by 146% over the three-year period to 4,899 in 2022. In the south west of England properties worth more than £1m more than doubled, rising by 104% to almost 52,000.
The Daily Telegraph
LENDING CONDITIONS
Mortgage deal numbers hit six-month high
Mortgage availability has hit a six-month high, with data from Moneyfacts showing that the number of residential mortgages on the market surged to 4,341 at the start of February. Data shows that the total has since climbed by a further 150 to hit 4,491. This marks a high not seen since August, with September’s controversial mini-Budget having unsettled markets and seen the withdrawal of many deals. While the average rate for a two-year fixed-rate mortgage surged from 4.7% to a peak of 6.65% in October, some lenders are now offering fixed-rate mortgages at rates lower than the 4% Bank Rate. On February 10, the average two-year fixed rate dropped to 5.36%. The average five-year fix has fallen from 6.51% in October to 5.08%. But many first-time buyers will not benefit from the price war. Falling prices mean lenders are holding back from re-entering the market for those with small deposits, who are most at risk of getting into negative equity.
The Daily Telegraph
Half of Londoners depending on parents to get or stay on the property ladder
Over half of the Londoners who took part in a Zoopla survey admitted they were relying on their parents’ wealth to get them on the property ladder or pay off their mortgage. The online estate agent found that seven in ten of those it spoke to planned to pay off their mortgage and move home using inheritance from their parents. Zoopla, which has launched a property inheritance calculator, found the average amount children expected to receive in inheritance was just over £195,00, increasing to £246,000 in London. Over 60% of those surveyed admitted checking the value of their parents’ house without telling them to estimate what they may inherit. Daniel Copley, consumer expert at Zoopla said it may seem a “little cheeky”, to expect to inherit but it was “actually really important to have an idea of what may be coming your way in future, so you can plan financially for the long-term, especially with regards to property decisions.”
City A.M.
ECONOMY Business pessimism persists
Businesses remain pessimistic about the outlook for the economy, with BDO’s optimism index stuck in negative territory for a fourth consecutive month. The index, on which anything below 95 is considered negative, logged a reading of 91.88 in January, with this slightly worse than the 91.89 recorded in December. January marked the third time in six months that BDO saw all four of its measures – optimism, output, inflation and employment – fall at the same time. Companies in the services sector, including retailers, restaurants and accountants, were especially downbeat in January. Reporting its findings, BDO noted a “sharp decline” in the number of goods and services that British companies sold last month, with its output reading sliding almost 3.5 points to 89.15.
The Times
