international-travel-affect-property

How Will The Return Of International Travel Affect UK Property

Pfizer took the world by storm with the announcement that they have a vaccine in the works with BioNTech that is more than 90 per cent effective. Economic forecasts have since been enhanced and the FTSE 100 has seen several gains. Extraordinarily, the GDP is speculated to recover to levels from before the pandemic by the middle of 2021. As a promising vaccine makes its way around Europe and the rest of the world, international travel is beginning to resume. 

With the return of international travel, so too comes the international buyer - one of the most significant sectors in our cosmopolitan city. In areas such as Knightbridge and Belgravia, some estate agents report up to 70% of properties sold in the last ten years has been to international buyers. 

The coronavirus pandemic drew international travel to a near halt, stifling the property trade. In September, Heathrow arrivals were down 81 per cent on the previous year. The market so regularly accustomed to an onslaught of international buyers began to dry up. As a result, house prices in central London, usually safely afloat, decreased in value by 1.6 per cent compared to last year. 

While house prices seemingly plateaued, a newfound optimism has supplemented demand. According to London estate agents, the vaccine announcement has led to a spike in enquiries from international buyers. Despite questions still remaining on the efficacy of the vaccine out-rolling, the sense of hope is palpable. Discovering the light at the end of the tunnel has made its impression on buyers. The scale of the sudden restoration of interest has been likened to that generally reserved for a popular election result or influential budget announcement. The question remains whether this reinvigoration will last long enough to dispel the predictions of momentum loss in the housing market in 2021.

"Most people are taking a long-term view. There's an expectation that London will return, it's a question of when not if," says Ashley Wilsdon of buying agents Middleton Advisors.


central-london-property

Will A Covid Vaccine Bring Back Central London Property Prices?

During the coronavirus pandemic, house prices in central London challenged expectations by declining in value. House prices in the prime location fell 1.6 per cent compared to last year. This is partially due to decreased demand with post-lockdown buyers fleeing urban metropoles in search of the countryside, larger properties for home working, and gardens. City-lovers continue to question the advantages of living in the heart of a city where the buzz is on pause. Theatres, galleries, restaurants, clubs and bars have not been in normal practise for close to a year. A swift commute to work is not the luxury it used to be when you're working from home 80% of the year. A central studio flat is also not an ideal space to act like a home, office, cinema, gym and more.

What difference could a vaccine make?

The City Buzz

The announced vaccine has the power to restore the London buzz and vibrancy that allures people to the city in the first place. As entertainment industries reopen, the hope is that the bustle will return perhaps with a new-found vigour in its revitalisation. 

"The real challenge for London's prime market is supporting buyer demand and attracting buyers willing to pay more to be in a buzzing city full of all the entertainment venues, restaurants, theatres, etc. that they have come to expect. It's difficult to put a number on it but prices are definitely looking rosier with a vaccine than without next year and beyond," says Marcus Dixon of LonRes.

The Workplace Commute

As workplaces get back to normal without the fear of infection, the commute will return and boost the city centre housing market. Knight Frank's Tom Bill thinks that the one-bedroom city-centre flat which has fallen out of favour, could then be revitalised.

"If you look at one-bedroom flats in urban locations that have perhaps fallen out of favour in the past months, it's quite a good time if you're a buyer or investor to look at those. These are the types of early signifiers that smart money reacts to and further down the line rest of the market following suit."

Pied-a-Terre Properties

The central one-bed properties are likely to be snapped up by a growing group of buyers who have recently left London. Those who headed for nature are likely to find themselves needing to commute more often than expected from their country homes. These now comparatively good-value properties will serve buyers looking for a temporary place to rest their head, according to Central London agents. With a tidy sum left over from the move from the capital to the country, the pied-a-terre market is expected to grow. 


emissions-uk-home

Housing Emissions Crisis To Intensify From The Coronavirus

The Royal Institute of British Architects (RIBA) has published a report warning that UK housing emissions will be skyrocketed as a result of the coronavirus pandemic.

The RIBA has cautioned that responses to the virus include changes in behaviour that will turbocharge the UK housing emissions crisis unless the Government urgently intervenes.

The coronavirus pandemic has seen a surge in people working from home, creating a shift in UK emissions contributions. There has been an immense growth in the proportion of emissions coming from the housing stock. Within Europe, the UK has one of the most inefficient housing stocks and the RIBA's 'Greener Homes' report urges the Government to enforce less wasteful strategies. The report suggests bringing forward a National Retrofit Strategy to make UK homes more energy efficient.

What is the National Retrofit Strategy?

As a part of the National Retrofit strategy, a sliding scale of stamp duty would be introduced with the most energy-efficient homes accruing significantly less tax than the least. The tax would have a cap of £25,000, 

A tax rebate may be made available for a period after purchase, encouraging homeowners to tackle their own energy-efficiency developments. The suggested improvements include insulating lofts and walls, switching to double or triple glazed windows, draught-proofing doors, windows and floors and adopting smarter heating systems.

What Does RIBA Recommend?

RIBA has outlined in the report a list of suggestions that the National Retrofit Strategy should incorporate. These include:

  • A commitment to front-load money by the Government bound to be given to energy-efficient strategies over the next ten years spent throughout this Parliament. This aims to 'address the shift in the balance of emissions and assist with the coronavirus economic recovery'.
  • More deliberate targeting of existing income support payments, including the Warm Homes Discount and the Winter Fuel Payment.
  • A distinct long-term timeline for improving the Minimum Energy Efficiency Standards in both the private and social rented sectors
  • More robust performance standards for new homes
  • Further regulation of the quality of building work to make energy efficiency improvements making energy efficiency improvements conducted by tradespeople.

President of the RIBA, Alan Jones, said: "When it comes to energy efficiency, our homes are fundamentally below the mark. Our housing stock sits shamefully behind most European neighbours, and this will only be made more obvious by the changes in working habits brought about by the Covid-19 pandemic.

"We need urgent government action – a National Retrofit Strategy – with front-loaded spending that would double as a fiscal stimulus and a new stamp duty policy to encourage homeowners to think twice about opting for sub-standard homes.

"As the Committee on Climate Change has made clear, we need the near-total elimination of housing stock emissions to reach net-zero by 2050. It's quite clear we need to start now."

The report will be included as part of a submission by the RIBA to Her Majesty's Treasury that currently evaluates how public finances can be distributed to aid in the passage to reaching net-zero


House Prices 155% Higher In British Areas Of Military Importance

A new study shows houses in postcodes belonging to significant military buildings, such as the Churchill War Rooms and Bletchley Park, tend to have higher prices.

Analysis by estate agent Benham and Reeves sees UK postcodes of military importance command higher house prices compared to the general area. The new study analysed house price data in ten military locations. On average, property prices were £618,225, which is vastly higher than the UK average. Houses in postcodes of significant military buildings are 155% more expensive than the current average in Great Britain.

The most significant price rise is in the area of Hampshire’s Beaulieu Palace - a former finishing school for special ops agents. The New Forest location has the postcode S042, in which house prices are currently 107% higher than the wider area.

military-sginifance-higher-house-prices
Birds-eye-view of the New Forest S042 postcode.

The study revealed the second-highest house price postcode is that of The Frythe in Hertfordshire. The Frythe was used during the war as a secret research factory which manufactured army vehicles and camouflage equipment. Today, house prices in the postcode area 69% costlier than its neighbouring postcodes.

military-sginifance-higher-house-prices
The average price for the MK3 postcode in which Bletchley Park is located is £291,274.

We, of course, cannot fail to mention the iconic Churchill War Rooms - an underground complex that housed the government command centre during World War II. House prices in the local of the Churchill War Rooms run in around £1.4 million, 49% higher than average in the SW1 postcode in Westminster. 

military-sginifance-higher-house-prices
House prices in the postcode of the War Rooms are nearly twice as high as the surrounding Westminster area.

 

The director of estate agents Benham and Reeves, who conducted this study, is Marc von Grundherr. He emphasised that these costlier prices “aren’t so much an indicator of buyer demand, but more a demonstration of the pride taken in maintaining these locations and remembering the significant roles they played in their day.”

 

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A chart published by Benham and Reeves displaying the results of the analysis.

The average overall UK house price is forecast to hit £362,350 by 2045, if the market is to continue to see property prices rise at the same rate, according to new research by estate agent Barrows and Forrester. Despite the coronavirus pandemic putting a short halt to the market, it has returned with a boom and shows no signs of slowing. Estate agents predict hose prices will continue to rise, and figures suggest that Britain’s property boom will progress. 

 


housing-market-second-lockdown

Can The Property Market Handle The Second Lockdown?

The property market has not shut in England despite restrictions of the second lockdown. The property market can continue to run, with viewings and valuations allowed throughout lockdown, the secretary of state for housing, Robert Jenrick, has confirmed. Renters, homeowners and buyers still able to view and move houses and construction sites remain open with tradespeople allowed to enter homes. Removal firms are also operating as usual, albeit while adhering to covid safety guidelines. The Welsh government, however, has paused all viewings.

The decision to remain open has been received well across the country. Many are eager to get on with their property exchanges and were relieved to hear that the government's approach had changed compared to the first lockdown. Back in March, all activities within the property industry were suspended for seven weeks, and estate agents were forced to shut their doors. In-person viewings were halted and builders forced to close construction sites. Surveying firms were also unable to perform on-site valuations. As a result, many home exchanges were put on hold.

Zoopla-housing-sales
Zoopla research shows the property market sales plummet over the lockdown market freeze and then rebound strongly.

As of yet, the property market is displaying flexibility and strength in the face of the second national lockdown. In fact, in the week following Boris Johnson's Saturday announcement of the lockdown, the number of pre-sale home valuations went up by 38 per cent. Many estate agents reported no difference in the number of viewing from one week to the next. Yet, the number of new viewings did fall by 15 per cent, according to Knight Frank. The number of buyers reaching out about properties also dropped, likely due in part to uncertainty on whether the property market would remain open. Nevertheless, the number of exchanges was 11 per cent higher in the week following the announcement, with the boom showing assured resilience to the lockdown. The number of sales agreed continues to grow, spurred, in part, by the stamp duty holiday.

Guy Robinson, head of residential agency at Strutt and Parker, stated: "Over the summer the industry has witnessed what can only be described as a 'mini-boom', with unexpectedly high activity levels across the UK, driven by pent-up demand after the property market was shut down for nearly three months… Usually, the market naturally starts to slow down at this time of year, but after the busiest summer that we can remember, there are a huge number of transactions in the pipeline for the coming weeks – so it is important that the market is kept moving from now until the spring when the Stamp Duty holiday is due to come to an end."


affordable-housing-prices-rise

Average UK house prices see a 51% rise by 2045

Study shows UK house prices potential rise by 51% as government fails to act on affordable housing crisis.

A new study has found that the average UK house price could hit £362,350 by 2045. This number is based on the market's current growth, with property values continuing to increase at this rate. This could see a 51% increase from the current average of £239,196. The average homebuyer would also see their 10% mortgage deposit climb to £36,235 - that's an increase of £12,315 from the average initial cost currently required.

The study by estate agent Barrows and Forrester also reveals that property prices in London could reach £789,531. The research looked into analysing historic data on housing prices and their rate of growth over the last 25 years to determine potential figures that could be actualised by 2045. For buyers in the South East of England, average house prices could rise to a predicted £524,726. This means that buyers would require £19,258 extra to afford a deposit for a property in this region, on top of the current average of £33,215. According to the research, those looking for property in the East of England could see the average house price rise by £167,135. House prices in South West could increase by £151,255, while homes in the West Midlands could go up by more than £100,000. House prices in the North East are predicted to climb by as much as £70,041. This would bring the average to £201,742, requiring a 10% mortgage deposit in excess of £20,000 from home buyers.

For many, these figures are a frightening reminder of the government's stagnant approach to the affordable housing crisis. Year after year, the government has consistently failed to act upon the call for affordable housing. The UK housing market bounced back from the pandemic market pause, and house prices are climbing once again. This rising trend has been maintained for the last quarter of a century and continues to increase to an unprecedented high. Promises to address the nationwide housing crisis have been made on multiple occasions, yet the government continues to neglect its responsibility with very few new builds being provided. In 2019, the BBC reported that yet another government plan to create new homes in England had resulted in no homes being built, the National Audit Office has found. A government plan to create 200,000 new homes in England for first-time buyers has resulted in no homes being built, the National Audit Office has found. None of 200,000 starter homes pledged five years prior had been built, according to watchdog

Barrows and Forrester hope that the study will act as a call to action for the government. They say this should be a warning to "refocus their attention on the delivery of affordable housing stock for the masses" to address "the spiralling issue of affordability for many homebuyers.


stamp-duty-renoavtion-jobs

Stamp Duty Holiday Protects Hundreds Of Thousands Of Jobs 

The introduction of the Stamp duty holiday helped to secure a 21.3% boost in house sales in September, helping to protect hundreds of thousands of jobs in the housing sector. Figures from HM Treasury reveal the effect this has had on housing businesses and the wider supply chain. 

Residential property transactions rose 21.3% in September following a 15.6% rise in August. The surge in sales supports hundreds of thousands of jobs in the sector. With more people deciding to buy a new home or move house, there are many more new homeowners ready to spend money on decorating and new furniture or appliances. 33% of buyers are planning to put savings from the tax break towards renovations or home improvements, supporting a wide range of businesses and jobs. The increased house sales will also be sure to support housebuilders and estate agents, among others across the housing supply chain and beyond.

As renovations ensue on thousands of newly purchased properties,  tradespeople, DIY stores, moving companies and cleaning businesses are all likely to benefit. The Bank of England estimates that those who move house are much more likely to purchase a variety of long-lasting items including furniture, carpets or electrical appliances. Chancellor Rishi Sunak said: "With a third of Brits planning to spend savings from the tax break on home improvements and renovations, the temporary stamp duty cut is boosting business and protecting jobs. This ranges from carpenters to cleaners, brickies and decorators, they can all benefit from each sale – helping us to further deliver on our Plan for Jobs."

Chancellor Rishi Sunak announced the stamp duty holiday which began at the beginning of July and will end in March. The government imposed a temporary stamp duty holiday for residential properties up to £500,000 as part of their Plan for Jobs. It allows nine out of ten people purchasing a property to pay no SDLT at all, saving an average of £4,500. The government aimed for people to feel more confident in getting on the property ladder, moving house, selling, renovating and undergoing home improvements. 

Figures from the Building Societies Association show that there has been a considerable boost in the number of people who say that now is a good time to buy a property. 37% are confident in September, while only 25% believed so in June. It is clear that the confidence boost given to the property market through the Stamp Duty Holiday is impactful with a successful outcome of driving growth and supporting jobs.


government-supported-housing

New Funding To Improve Housing Support For Vulnerable People

The Government has set out clear expectations on supported housing standards. The new measures set out to ensure that vulnerable people have safe, good quality homes. £3 million has been pledged towards testing approaches for high-quality support and accommodation. 

Today, new funding for supported housing pilots in priority areas has been announced. The Minister for Rough Sleeping and Housing, Kelly Tolhurst, imposes the plans to improve standards and quality in supported housing.

The Government published a new National Statement of Expectations (NSE), which defines the expectations of guidelines, high-quality and good value for money in supported housing and explains how this can be realized by bringing best practice across the sector together. 

What Is The National Statement Of Expectations?

The National Statement of Expectations (NSE) is created in collaboration with the Ministry of Housing, Communities, Local Governments and the Department for Work and Pensions. Local councils and the supported housing sector also provide input.

The Government first announced its intention to improve oversight of supported housing in 2018, hoping to ensure good quality and value for money. The NSE acts as a first step towards establishing its endeavours for high standards, quality and value in supported housing.

The NSE defines only the accommodation component of supported housing but encourages organisations to pursue high standards in accompanying support services for the residents.

What Will New Funding And Guidance Do?

£3 million will be put towards funding pilots in 5 key areas – Birmingham, Hull, Blackpool, Bristol and Blackburn. This is aimed at improving quality, enforcement, oversight and value for money in supported housing, with a focus on short-term supported housing. The pilots will be carried out until the end of March 2021.

Kelly Tolhurst, Minister for Rough Sleeping and Housing, says: "Providing good quality homes to people who have been homeless, or who are unable to live independently, is fundamental to our support for vulnerable people... My statement today sends a strong message to providers that don't meet our benchmark that they need to shape up. The pilots we are funding will explore different approaches to supported housing, to further raise the quality of service across the country."

The housing pilots will collaborate with local partners to carefully test different approaches for the benefit of the sector to uncover how higher standards could be enforced all round. The pilots are intended to significantly improve the quality of non-commissioned provision in the high-priority areas.

Baroness Stedman-Scott, Lords Minister for the Department for Work and Pensions, explains how vital this funding will be. "Supported housing has the power to change the lives of the most vulnerable people in our communities for the better. Backed by £3 million, we will work with experienced partners to make sure that, across the board, this vital support is up to scratch."

What Is Supported Housing?

Supported housing provides acommodation for some of the most vulnerable people in the UK. In supported housing, care, support and supervision are available as necessary to help people live as independently as possible within the community. The majority is catering towards older residents but also has an essential role in supporting people from other vulnerable groups.

During the coronavirus pandemic, the Government has worked closely with the housing sector and local councils to provide safe accommodation and support for vulnerable people. In September, the Government had supported over 29,000 people, providing 10,000 emergency accommodation and nearly 19,000 other support.

Who Does Supported Housing Help?

According to the Government's press release, those who might live in supported housing include:

  • older people with support needs
  • people with a learning disability
  • people with a physical disability
  • autistic people with a support need
  • individuals and families at risk of or who have experienced homelessness
  • people recovering from drug or alcohol dependence
  • people with experience of the criminal justice system
  • young people with a support need (such as care leavers or teenage parents)
  • people with mental ill-health
  • people fleeing domestic abuse and their children

10-million-plus-properties

Increase In Money Spent On London's £10m-Plus Properties

This year, the amount of money has been spent on London's "super-prime" housing market has increased. Analysis sees a rise in sales of £10 million-plus homes in 2020, in comparison with the same period in 2019. This is in spite of the coronavirus lockdown which paused the market. A study found that £1.13 billion was spent on the capital's super-prime property between January and August 2020. In comparison, only £977.5 million was recorded in the same span of time last year. 30 transactions above £10 million were made in the first three months of 2020 compared with 18 in 2019. 

 

How Has COVID19 Affected The Sale Of Super-Prime Properties?

Although coronavirus brought about tight restrictions on the housing market in the second quarter of the year, there were still 56 super prime sales throughout the first eight months of the year. This was only one less deal, with 57 recorded deals during the same period in 2019. Another effect of the coronavirus has been the surge of British buyers involved in super-prime property exchanges. The restrictions on overseas travel have caused the highest proportion of exchanges to involve British buyers seen over the past decade, according to numbers from the first eight months of the year. This sits at around 40%.  

 

Where Are 10m+ Properties Being Sold?

The largest proportion of London's super-prime deals were found in Kensington, based on figures of this year up until August.  The fashionable residential district in central London accounted for 14.3 percent of all deals over £10 million during the period. In 2019, Mayfair had the highest number of super-prime transactions during this time. Marylebone has shot to second place as the most expensive area of London (based on pound-per-square-foot). These properties are situated at the very top of the market, with at least 17 homes valued at more than £30 million. Other than Kensington, luxury homes are being exchanged in wealthy districts in SW1 and SW3 including Mayfair, Belgravia, Sloane Square. Demand for super-prime properties has also increased in Notting Hill, St Johns Wood, Hampstead, and Belgravia.

 

This home located on Lichester Place in Kensington is on the market for more than £30 million

Why Has Money Spent On Super-Prime Properties Increased?

Some of the key motivators for top tier property purchase has not changed. These include capital preservation, the UK education system, and cheap debt. Additionally, the current situation arising from the coronavirus pandemic sees cheap debt readily available with banks being lenient on calling in loans. While there has been a surge in buyers moving away from the UK's big cities, there is a definite desire more the uber-wealthy to keep old of a residence in the capital to retain London investment long-term. Despite the short-term pause on the housing market, prices do not feel as though they will fall at any time soon. The pandemic has not provided any large discounts with vendors remaining resilient. 


planning-permission

Brits Waste £64 Million On Denied Planning Permission

Planning permission is a requirement in the UK if you are looking to renovate your home. Since the onset of the coronavirus, Britons have been planning more home updates as we all spend more time at home. Many are looking at the possibility of adding extensions or loft conversions to their home to create offices or more comfortable living spaces. To do this, you have to obtain planning permission - an approval on your renovations. 

Why Are People Losing Money?

The cost of planning permission can vary depending on how big the project is and different types of permissions have different fees.  There can also be unexpected additional costs such as extra surveys.  If you end up being denied, the money is wasted. In just the last three years, Brits have wasted £64 million on unsuccessful planning permission applications.

Moreover, a frequent mistake of those applying for planning permission is that they underestimate how long it will take. If your plans are not approved as quickly as you imagined home improvement projects can be delayed by weeks or even months. This can affect costs as you may lose deposits you already held with contractors.  If you are denied permission you will also incur extra costs when having to change plans, particularly if the work has already started.

 

Will Your Planning Permission Be Denied?

Whether you are likely to be successful when applying for planning permission depends on where you are based. Research by Roofing Megastore has revealed where applicants are more likely to be denied.

Using planning application data from the Ministry of Housing, the research uncovers the most and least successful areas to be granted planning permission in England. The success standard for a local area fluctuates from as low as 65 per cent, up to 99 per cent. However, for the country as a whole, the rate of success is 91 per cent.

 

Where Is It Hardest To Get Planning Permission in England?

Londoner's seem to have the most challenging time acquiring planning permission, with property owners in London spending a massive £21 million over the past three years on unsuccessful applications. The number one most challenging area in England is Enfield, London, with a success rate of 65.13 per cent. In fact, eight of the top ten most challenging locations are in London: Hillingdon at 66.01 per cent, Harrow at 69.56 per cent, Hounslow at 71.24 per cent, Greenwich at 71.47 per cent, Lambeth at 73.55 per cent, Newham at 76.02 per cent and Bromley at 76.82 per cent. Rochdale in Greater Manchester at 74.03 per cent and Southend-on-Sea in Essex at 74.46 per cent also rank in the top ten.

Where Is It Easiest to Get Planning Permission?

Based on the percentage of applications granted, Carlisle, Cumbria is the most convenient place to granted planning permission at 98.90 per cent success. Copeland, Cumbria follows closely with 98.72 per cent acceptance. The top ten most accessible locations are all boasting a percentage of 97 upwards, giving applicants peace of mind that they won't be wasting their time and money. These include Richmondshire, North Yorkshire (98.17%), Vale of White Horse, Oxfordshire (97.89%), County Durham, North East (97.82%), Fareham, Hampshire (97.79%), Cornwall, South West (97.39%), Eden, Cumbria (97.38%), North West Leicestershire, Midlands (97.36%), Rushmoor, Hampshire (97.36) and Darlington, County Durham (97.29%).