Like all good series, a recap is never a bad thing. Welcome to my new weekly UK PROPERTY NEWS RECAP. This will be released every Friday but to kick start this Monday, l thought I’d run through everything property related that was circulating in the news last week to clear the decks for this week!
Tax Evasion
Unsurprisingly Kleptomaniacs have found various ways to elude detection.
These vary from: Family (share ownership under 25%) an Offshore trust company or Partnership. Overseas company owned by a UK company or neglecting Companies house for registering as a Foreign company.
The hope of these leaks being fixed quickly are in line with Thames Water’s leaky sewage agenda.
Social and Private Rental Housing
Unsurprisingly, social housing is buckling under the strain of unprecedented demand. Many are facing homelessness due to the Government’s ineptitude to build new housing at the time, after stock was sold off at a discount without being replenished.
Now we are in the situation where Newham Council is announcing it is setting aside £2m of taxpayers money to buy up existing Landlord stock to keep tenants housed.
As an aside, Birmingham council also declared itself inept, sorry bankrupt as it raids, yet again, tax payers money to bail out their IT and equality invoices.
In the private rental sector, the current rental crisis has escalated due to the absence of cheap money. This has resulted in a reduction in building, buyers buying and overleveraged Landlords abandoning ship. Add in increased migration and Government policy which has further ostracised landlords and you have the perfect rental storm, leaving many to approach renting as if diving for a try with the scrum determined to hold you back.
Mortgage Rates
For those with a mortgage, who have smugly sat on the sidelines watching the interest rate fallout, it’s reported 90% of mortgage holders will face a rate increase before the next general election. According to the Resolution Foundation this is expected to result in a £3,000 annual average increase, wiping away many saving reserves.
However recent hints by Huw Pill and Bank of England Governor, Andrew Bailey, that interest rates might be close to their peak will provide some relief. Yet the alternative of switching to cruise control for a prolonged time will cause anxiety for those on trackers rates who hoped for a speedy descent in the New Year.
After the summer slump though Lenders aren’t keen to wait, instead opting to entice buyers back to the market by trimming mortgage rates. The problem is there is still a lot of fat to shed before buyers can afford what was once within their reach.
Developers
For developers there was further bad news as Barratt homes reported a near 10% drop on last year’s pre-tax profits to June 30th and a 3.8% drop in operating margin. Completions were also down 3.9% year on year as inflation fuelled rates dampen buyers plans.
Berkeley homes have also suffered, this time with a 35% drop in the value of new home reservations. They chose to blame ongoing issues in the planning system, persistent inflation & high interest rates. As if to reprimand the Government, they wanted everyone to know that they had not acquired any land from May to Aug as a result. In addition, they warned that without housing targets to incentivise local authorities, the number of homes they will build over the next 3 years is set to halve.
Halifax HPI Results for August 2023
The mortgage lender released its latest average house price data which showed average house prices fell -1.9% in a month & -4.6% annually, making the typical home now worth £279,569. This peeled back prices by £14,000 on last year but left them still up £40,000 on pre-pandemic levels. Despite seeming dramatic this drop is potentially less so as it is pitched against last year’s peak in house prices and a summer of 2023 doubt. Prices are without question retracting but at what speed is in question. I also must add that this is only one mortgage lender’s data and never a clear reflection of any mico market. It merely serves as a guide to the current zeiguist.
Labour Housing Policiy
Lastly, Labour set out its election stall for next week, promising first time buyers 1st dibs & more houses. It would be nice to be given first choice on a Ferrari too but it means nothing if you can’t afford it. I wonder how long it’ll be before the help to buy extras are thrown in….
And that concludes this first edition of Brickweavers’ UK Property Recap. Any comments or suggestions moving forward, do please get in touch
