In this weeks Uk property news recap, Westminster continues to leak news. Renters disperse out of the city to cheaper pastures and lenders hold a finger aloft to predict the property wind.
Section 21 – stay of execution
Section 21 was served notice back in 2019, four years and counting and it’s still on hold. In an effort to appease both landlords and tenants the Government made noises about serving time only to conclude that this wasn’t in fact possible till the justice system could cope. Recent reforms, which the government had years to implement but did nothing about include:
-Digitising more of the court process
-Prioritising certain cases
-Bailiff recruitment
-Early legal advice & mediation
This attempt at reform is all in the hope of an election pass. Though it will please landlords it will also further ostracise voting tenants.
Rents and Benefit Squeeze
As supply buckles under the strain of increasing demand, rent increases are becoming unsustainable for many. Driving many out of city centres, to cheaper more suburban areas. According to the ONS, lower income households were being hit the hardest, with low priced rent exceeding the affordability threshold in most regions in England in 2022. The North East coming in just below the threshold whilst Londoners rent took a 46% chunk out of their pay.
However for those who’ve seen their housing benefits frozen whilst their rent payments swell , affordable accommodation has become increasingly scarce.
A study by the University of Glasgow found that by 2020, only 9% of UK privately rented homes were affordable for households in receipt of housing benefits, a 11% drop on a decade ago.
Whilst Higher rents had resulted in 1 in 9 renters in the UK’s 10 biggest cities being displaced to suburban areas during an 8 year period to 2020.
Political whispers
Further whispers from the Government to bait voters leaked out onto the broadsheets this week for public consumption.
On the specials menu:
Extending the mortgage scheme for another year, which only helps a select few and is pointless unless prices and rates come down.
Upping the Lifetime ISA limit, which frankly should have happened long ago.
But it was dessert that had the critics salivating. The flambe trolley wheeled out, offering either Stamp duty or Inheritance tax to become toast.
Chestertons is sold
Estate Agency Chestertons found itself with a just SOLD sign this week.
The Mercantile Group who had transformed the business over the course of two decades, selling up to Emeria
Developer woes continue
The absence of cheap money continues to hit Developers’ bottom line. This week, Vistry was in the spotlight, as company profits were sliced by £40m leading to a 5.5% share price drop. The actioned survival plan involving 200 job cuts and renewed focus on affordable housing.
UK Property Forecasts
Finally, the stars were aligned this week as both Lloyds and Santander released their predictions for this year and the next. To summarise:
Lloyds – House prices will have fallen 5% over 2023, decreasing by another 2.4% in 2024. Increasing 2.3% in 2025
Santander – 7% fall in house prices over 2023, followed by a 2% fall in 2024. Increasing 2% in 2025
Keen not to miss an opportunity Knight Frank jumped on the bandwagon forecasting a 7% drop in prices across the UK this year.
Whoever is right or wrong, somethings are a given. Transaction volumes and prices are down. The stubborn elephant in the room is inflation.
And that concluded another UK Property news recap.
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