Property News Round-up 8/6/16

Property News All The Latest Updates

 

Hi guys and welcome to another property news round-up this week we start off by focusing on the EU referendum and look at whether house prices will go down if we have a Brexit vote. We end our round-up in France for the Euros and take a look at the winners and losers of the tournament if it was based on property. Missed our last property news round-up? If so, catch up here.

 

Will Property Prices Go Down If There’s Brexit?

Property News Brexit

With less than three weeks to go until we cast our votes at our local polling stations on whether we should leave or stay in the European Union, one question that stands out in the property industry is whether property prices will go down if we leave.

So will it? Well, not exactly. Recent stats from National Statistics indicate that house prices are still rising fast. They increased at a rate of 9 per cent a year in the year to March 2016.Prices are predicted to increase by roughly a further 10 per cent by the end of 2018.

In addition the treasury have mentioned that the Brexit would bring about an increase in the general cost of borrowing across the economy. This, in turn, would crush demand for housing and lead to fewer transactions. (The Independent, June 2016). This would therefore have a negative effect on price growth. Some analysts have even said that leaving the EU would also have a negative effect on foreign investment – this causes problems for the top end of property investments in London and the ramifications would lead to reduced investments.

But we all want cheaper homes right? Some have argued that we should welcome lower prices because that will help make homes more affordable, especially for first time buyers. Pro-Brexit Tory Lead of the House of Commons Chris Grayling, has tried to expand on this topic, and mentioned that staying in Europe will make it even harder for young people to buy a house due to immigration from the Continent which, he claims, is driving up domestic demand for housing (as mentioned in a recent article by The Independent).

 

London Property : Prices Rise 432% In Two Decades

Property News London Property

Property prices per square metre have risen by 432 per cent in Greater London over the past two decades. This compares to a national average increase of 251 per cent, or £2,216 per square mile according to data that was conducted by Halifax.

In addition, Land Registry data indicates Greater London has gone past the £600,000 milestone for the first time.

Moreover, property investment firm London Central Portfolio [LCP] have said that this new London average price (£600,076 to be precise) is 14 per cent higher than a year ago. This has been linked to low mortgage rates and the falling cost of stamp duty on properties costing less than £937,000.

 

Survey Claims Student BTL Investment Due For Major Expansion

Property News - HMO

Research from Mistoria Group found that one in 10 student property landlords say their HMOs enable them to offset the new tax rules and remain profitable, while a further 50 per cent do not believe any other asset class offers the same yields and return on investment as student property. (Letting Agent Today, June 2016)

The Mistoria Group’s report which was based on a survey of 500 landlords last month – reveals that 35 per cent of student landlords purchased HMO properties in the first quarter of this year to beat the new stamp duty rise, moreover, a further 43 per cent of landlords plan to acquire between two and three new student properties in the next 18 months.

Student accommodation has been the strongest growing investment property market in the UK and the north west has attracted many investors. For example, a HMO that houses four students, can be purchased for just £160,000.

Want know more about HMOs? Check out our handy infographic.

 

The North-West Has UK’s Highest Property Yields

Property News North West

According to research from LendInvest, the north-west of England produces the best average rental yields over the past five years. In addition, it is estimated that investors could achieve yields some 200% higher with property outside of the capital.

Manchester and Liverpool were top with regards to yields, Manchester producing yields of 6.02% whilst Liverpool saw yields of 5.15% respectively.

Manchester has Europe’s largest student population and a graduation retention rate of 58%, demand for rental accommodation within the northern city continues to outpace supply and continues to attract a wealth of investors.

Interested in the Northern Powerhouse city? Check out our Manchester guides for more info, (North and Central).

 

Euro 16 : Winners & Losers Of The Property Championship

Property News - Euro 16

Property prices have changed a lot since the last the Euros in Poland and Ukraine.

Just like the property market in England, in Europe there is also a north-south divide.

Turkey, Iceland, Sweden, and Ireland had the biggest rises, though not all for the same reasons.

The Turks win the property championship with a 65.6% increase, Istanbul has helped The Crescent Stars in the tournament as there is burgeoning young population who are new to housing investment and eager to buy in the city that stretches across two continents.

Other successful nations such as the Republic of Ireland, benefited from a booming economy, with GDP expanding 7.8% in 2015 thanks to huge capital investments from abroad. Moving further north, Iceland has enjoyed a nice recovery since the 2008 financial crisis, with demand for high-end properties since 2013.

The Swede’s property boom was down to negative interest rates, many in the Scandinavian country are concerned that high household debt and low-interest rates could lead to a crash.

The home nations also saw property prices increase. As mentioned previously about London property, The average house price in the capital passed £600,000 mark.

Host nation France and one of the favourites to win the tournament, has experienced negative property price growth between 2012 and 2016. This could be inferred to a decrease in household income and stricter mortgage conditions.

See how other European countries did at the Euro 16 property championship below.

Property News Euro 16 Property

Image Source : Yahoo

 

What Are Your Thoughts?

Which of our chosen property stories has interested you the most? We would love to hear from you, feel free to leave us a comment on our Facebook and Google Plus pages. If you prefer to tweet us, tweet @TheHouseCrowd.

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Property News Round-up 4/5/16

Property News All The Latest Updates

 

Hi guys welcome to our fortnightly property blog, today we once again look at the latest goings-on in the UK property market from looking at the ‘Bank of mum and dad’ to examining the tough buy-to-let rules that could backfire for first-time buyers and movers. If you missed our last property news round-up, catch up here.

 

‘Bank of Mum and Dad’ Lends £5bn a Year in UK

Bank of Mum and Dad

 

Lending from parents to help their children get on the UK property ladder will amount to £5bn in 2016, according to data from Legal & General (L&G). (BBC News, May, 2016)

The ‘Bank of mum and dad’ will help to finance 25% of all UK mortgage transactions this year – at an average amount of £17,500 as the BBC’s Bill Wilson mentions.

L&G’s chief executive Nigel Wilson told the BBC : “The Bank of Mum and Dad plays a vital role in helping young people to take their early steps on to the housing ladder.”

He stressed a whole range of issues, including house prices which are out of sync with what Generation Y are currently earning.

Millennials that are accepting property funds from their parents are receiving substantial amounts.

Dan Howdle (a millennial featured in the BBC article) bought a three-bedroom semi-detached property in Rugeley, in the West Midlands, thanks to his parents giving him £50,000.

Mr. Howdle said that if it wasn’t for his parents, he would have expected to be a renter for the rest of his life.

Research conducted from L&G and economics consultancy Cebr suggests the ‘Bank of Mum and Dad’ will provide deposits for more than 300,000 mortgages, purchasing homes worth £77bn this year.

If you would like to know more about millennials check out our research that we conducted back in October last year, view here.

 

Is This Greater Manchester’s Most Expensive Garage?

Manchester Garage

The region is no stranger to luxury homes and high property prices, but you wouldn’t normally associate a garage with luxury.

However, a property in Salford Quays which is very close to MediaCityUK is featured on property portal site Rightmove.

The advert mentions that the Salford Quays garage is : “Ideal for those requiring additional garages for storage or the housing of a vehicle etc.” (MEN, May 2016)

Although the 16’2 x 7’9 unit has enough space to suit every need, as mentioned in MEN, at almost £156 per sq ft, the space is coming at a premium.

The irony is that once you’ve saved your hard earned cash you might not be able to afford to put anything in it!

If you’re looking at getting involved in property crowdfunding (no expensive garages included!) why not take a look at our latest investments here.

Image source : MEN

 

Surprising Things That Affect The Value Of A Property

Messy Child's Room

There are many factors that come into play when it comes to property values, some much more obvious than others. From the quality of your local to the sea of toys on a kid’s bedroom floor, issues that may seem insignificant can have a shocking impact on the value of a property.

As previously mentioned, A messy kid’s bedroom is one factor that might shock you. According to ING Direct, a messy kid’s bedroom can knock £8,000 off the value of the average house.

Street names also comes into play, kings are 20 per cent costlier than queens. Rude names also sell for less – fancy living in Bell End? Thought not!

So what also affects property values? Some other factors include numbers, if you own a number 13 home, it’s likely the property will sell for £6,500 less than its neighbours according to a Zoopla study. Another surprising factor is the local pub. If the local is known for having rowdy regulars it can really put potential buyers off and have a negative impact on the property price. In contrast, a lovely local pub that serves craft ale and has a delectable line in homemade pies is a major plus for property buyers and prices.

 

New-build Homes Aren’t The Answer To Rising House Prices, According to Academic

UK Property

New-build homes make property even more unaffordable, according to research from a leading academic.

The finding of Dr Alla Koblyakova, of the real estate economics and investment research group at Nottingham Trent University, dispels the assumption that the supply of new-build properties alone helps to stem unsustainable growth in house prices. (This is Money, April 2016)

Dr Koblyakova mentions in This is Money that The Government thinks that by increasing the supply of new homes, the overall cost of owning a property will come down.

However, research indicates that the mortgage market behaves differently. For example, when new housing comes on to the market, lenders relax their conditions and lend more money. When consumers are more able to buy a property for a higher price, the price of property doesn’t come down.

Dr Koblyakova stressed the biggest issue was that property values in the UK go up faster than wages.

In addition, she states : “It’s not possible for the Government to control house prices. But it is possible for politicians to motivate lenders to offer longer mortgage contracts to reduce the size of monthly mortgage payments.”

Her recommendation is to increase the duration of a mortgage to 30 years, in order to make it possible those on average incomes.

Alistair Hargreaves from mortgage broker John Charcol shares the same view with Dr Koblyakova on the housing issue. He mentions in the This is Money article that in Britain there is a perception that we are full. In reality, there’s loads of space, Britain is just badly designed. What is lacking is infrastructure as well as the fact there aren’t enough, or good enough, jobs and schools nearby to make people want to relocate.

You can read more about Dr Koblyakova’s and Alistair Hargreaves’ views here.

 

Tougher Buy-To-Let Rules Could Backfire According To Expert

House Buyers UK

 

Tougher conditions for the buy-to-let market could backfire and result in amateur landlords selling their properties on to bigger players – reducing properties available to homemovers and first timers. (Daily Mail, May, 2016)

John Charcol mortgage broker Alistair Hargreaves (who also gave his views on the matter in the Daily Mail) states : “I think it’s likely that the changes to the [stamp duty] tax regime will allow the larger, already incorporated landlords to buy more BTL properties, buying from smaller amateur landlords.”

The ramifications could be that there are fewer houses on the market for the likes of first-time buyers and owner occupiers.

Last month the government put a 3 per cent stamp duty surcharge for every additional property landlords purchase. The increase in stamp duty has hit many who were considering the buy-to-let approach and was aimed at loosening some of the demand from the market.

Hargreaves mentions in the Daily Mail that with restrictions (stamp duty, personal lending etc), who else will be able to buy the properties offered for sale by amateur landlords being pushed out of the market? Areas such as London where property prices are astronomical and yields are low, amateur landlords are bound to struggle unless a first timer has an inheritance, parental support or a large income.

He wholeheartedly believes that expert mortgage brokers need to support the little guy – the landlord with one or two but to lets – and make sure that they are holding the properties in the most efficient way possible. If not, the sector will be dominated by the 1 per cent (the rich investors).

You can read more about this topic here.

 

What Are Your Thoughts?

Which of our chosen property stories has interested you the most? We would love to hear from you, feel free to leave us a comment on our Facebook and Google Plus pages. If you prefer to tweet us, tweet @TheHouseCrowd.

In the meantime if you want to know more about Property Crowdfunding do register for our Information Pack which will tell you all about it. 

Register Now For More Information