Property News Round-up 25/10/16

Property News All The Latest Updates


Hi guys and welcome to our property news round-up, as usual we give you a quick snapshot of the latest goings-on in the property world. This week we start by looking at property rentals will outstrip property sales in 2017 to focusing on planning approvals in the Northern Powerhouse and London. Missed our last blog news round-ups? If so, catch up here.


Property Rentals Will Outstrip Property Sales in 2017

Property Money

Forecasts have suggested that 2017 might be the first year in eight decades where property rentals will outstrip property sales.

Johnny Morris, research director at Countrywide, mentioned in a recent Guardian article : “As some would-be buyers and sellers sit on their hands, Brexit-induced uncertainty has continued to boost the rental market … September saw record activity, with increasing numbers of lets agreed and tenants choosing to renew their contracts. On current trends 2017 could be the first time since the 1930s that more homes are let than sold.”

A sobering thought – homeownership levels had fallen to their lowest levels in 30 years at the start of 2016, although recent figures from mortgage lenders showed a pick-up in the number of loans taken out for house purchases, the number of homes for sale remains near a record low and prices are rising. Recent events such as Brexit uncertainty as well as a lack of supply has also contributed to the dip.

Being able to get onto the property ladder is becoming even more difficult for first time buyers with prices going up steadily.

However, that’s only the beginning.The 3% stamp duty surcharge that the government introduced back in April has led to a boom in buy-to-let purchase, the ramifications have led to a bigger amount of rental properties available to tenants.

The rental market has grown at such a rapid rate that the property industry needs to start focusing on offering the right kind of property for an array of people from millennials to retirees. Many commentators have mentioned that the industry needs to move away from traditional small portfolio landlords renting out their old home to a more professional approach offering tenants the best value and services available.


UK Rents Growing Fastest in Manchester

Manchester Property

Rental rates have risen by 7.1% in the north-west city over the last 12 months, as more investors turn to Manchester in search of the highest yields. (Select Property Group, October 2016)

The Northern Powerhouse city was named last year by HSBC as the city with the highest yields in the country. A recent report from Countrywide outlines that rents in the UK are now rising the fastest in Manchester.

At a national level, the rate of growth in the 12 months to September 2016 was 2.2% (last year it was at 2.8%). However,in Manchester, the rent growth rose by 7.1%, more than any other city in the UK. In addition, it’s also worth noting, of the 20 largest cities in the UK, the five which recorded the largest rental rate rises were in the north and Scotland, including York, Glasgow and Liverpool.

In contrast, the south paints a different picture, for example, London and Cambridge had the highest proportion of landlords cutting monthly rates in the last year.

Both domestic and international investors are turning to Manchester to find a property asset that can deliver a strong and sustainable income.

Johnny Morris, research director at Countrywide (who we mentioned in the previous news item) mentioned that there’s a different type of two speed rental market that’s emerging, with falling stock and growing demand driving rental growth in many northern cities at a higher rate than those in the south.


Reasons Why Build-To-Rent is The Future of Rented Living

build to rent

This news item links with the first – in a nutshell, a new sector and product that’s on the horizon and one that syncs very well with a tenant’s lifestyle and eliminates compromise – I’m of course referring to build-to-rent.

So why is build to rent the future of renting? Firstly, build-to-rent has been constructed with today’s end-user in mind. Ideal amenities such as gyms and communal cinema rooms in the same building. Locations in the city centre close to friends and employment hubs are ideal for the likes of millennials.

A key point about build to rent that it creates a community. Having these build-to-rent apartments slap bang in the city attracts people with similar jobs and interests, with friendships and an array of activities, tenants will want to rent for a longer period.

To simply put it, it just makes sense. Tenants want it, the government agrees with the build-to-rent idea, and investors too want a slice of the share too.

Demand for rental accommodation has increased by over 17k per month over the last decade, as more people move away from homeownership and turn to the private rented sector instead. As mentioned in the first news item, with property rentals looking to outstrip property sales next year, build-to-rent is more than likely to become the number one rental product in the UK. It’s therefore an investment opportunity that cannot be ignored.


A Brief Look At China’s Passion For Foreign Property

China P2P

Many real-estate agents and property experts in east Asia believe a new wave of investment is just getting under way, as mainland investors develop a taste for international real estate, including postcodes up and down the UK. (The Guardian, September 2016)

When it comes to buying property, Chinese investors look at four main motivations: investment, lifestyle, emigration and education. Many seek a foothold in the UK and hope their children will go on to study at university.

In addition, cities such as London are seen as a secure place to store money that investors want to move out of China, to guard against the devaluation of the Yuan. It’s known that people in mainland China want to get their money out. They therefore use cities such as London as a safe-haven to store their hard earned cash.

However, it’s not just London, investment is now heading north and Chinese investors and hungry to invest in the likes of Manchester and Liverpool.

Manchester for example has had a lot of interest from China when president Xi Jinping visited the city last year to lend his support to George Osborne’s “northern powerhouse” project during his first state visit to the UK.

Since 2014, Chinese investors have been rushing to buy houses in the UK, the high rental yields and stable property prices have been key driving factors.

Also, the UK is very attractive to Chinese property investors because it does not have the high duties that have been introduced in countries such as Canada and Australia for foreign buyers.

Property industry commentators argue that foreign investment from countries such as China is helping to transform urban centres around the globe, they mention that it’s the only way to finance affordable new homes in cities such as London.

They also see foreign investment beneficial for helping to create jobs, improve infrastructure, and in general making the quality of life better.

However, London mayor Sadiq Khan has warned against the capital’s homes being used “as gold bricks for investment”, and has spoken out over how some new developments are given to foreign investors before locals.

Khan mentioned back in May that he sees no point in building homes in the capital if they are bought by investors from the Middle East and Asia.

He stressed that he didn’t want homes being left empty. He emphasized that he doesn’t want London to be the world’s capital for money laundering and wants to give first dibs to people who live in the capital.


Northern Powerhouse Outstrips London for Planning Decisions

northern powerhouse

New research shows that local planning authorities in the Northern Powerhouse deliver 22% more planning decisions per resident than those in Greater London.

Research published by the British Property Federation and GL Hearn revealed that 25 boroughs in the Northern Powerhouse made 11 major planning application decisions per 100,000 residents in comparison to nine decisions per 100,000 residents in the Greater London area.

Melanie Leech, chief executive of the British Property Federation, said: ‘It is really encouraging to see the North live up to its ‘powerhouse’ moniker, and to be powering ahead with its development pipeline. The development industry has an important part to play in ensuring growth across the country, and it is good to see that there is lots of activity in the North West. (LocalGov, October 2016)

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Property News Round-up 22/9/16

Property News All The Latest Updates


Hi guys and welcome to our September property news round-up. As usual, we will be taking a look at the latest goings-on in the UK property market with five short stories. Today, we start our property news round-up by looking at the new housing minister’s views on ‘build to rent’ to focusing on the amount of rent that millennials will spend before they are 30. Missed our previous blog entries? If so, feel free to catch up here.

New Housing Minister Backs Build To Rent


Housing minister Gavin Barwell backed the build to rent sector in his first speech since being appointed.

His first speech took place at Property Week’s RESI 2016 conference in Newport and a key takeaway was Mr. Barwell stressing to delegates that there is a need to build more homes of every single type and not focus on one single tenure.

Barwell, who is also the minister for London, said that a growing number of people and families are now preferring to rent, so the build to rent sector will therefore play an important role in providing for changing attitudes.

The recently elected housing minister concluded that in the UK we need to have a thriving private rented sector in place.

He praised Essential Living’s Vantage Point scheme in Archway, north London, the office conversion which has 118 homes has opened for lettings. The housing minister said this was a much needed start for the sector.


Manchester Property Prices Continued To Grow in August

Manchester Property

Reeds Rains and Your Move, released their monthly house price index a few weeks ago, and recorded an increase in both prices and transactions for August.

According to their research, the average house price in the north west had risen to £178,423, up from £178,089 in July.

Other commentators mentioned that the UK housing market is settling down from June’s Brexit vote and confidence has emerged from the Bank of England cutting interest rates.

Transactions across the country were also up, rising by 2.6 pc on the previous month, with over 70,000 sales going through.


Manchester and Liverpool Join Forces For Global Property Expo

Liverpool Property

Manchester and Liverpool will join forces to sell the region to a global audience of investors in October.

Both will send a combined delegation to London for MIPIM UK (the UK’s largest property and investment expo).

Filippo Rean, director of MIPIM UK organiser Reed MIDEM’s real estate division told the Liverpool Echo : Manchester, Liverpool and Leeds provide incredible investment opportunities and their presence at MIPIM UK will provide investors with a unique opportunity to see what these northern giants have to offer.

Mr. Rean added : “As the largest event for real estate in the country, we offer incredible opportunities for investors, developers and representatives from city regions across the UK.”


UK Property Remains The Highest Yielding Investment

Property Money

Despite the uncertainties of the Brexit vote, investors are choosing to invest in property, including investing in sectors such build to rent.

So why have these investors chosen property? The main reason is that they can outperform the likes of government bonds and stocks and shares.

There are still quite a few investors out there who remain very cautious about the ramifications of life outside of the European Union, however, there are many investors out there who feel confident that investing property in the current climate is an opportunity.

Quite a few European based investors have now started to take an interest due to the fall of the pound. The North West in particular has become even more attractive because of this reason, and investors are hungry to invest into a very appetising region.

If this is a topic that interests you we recommend reading our “Is Property Investment Really Better Than Pensions?” blog post and also “Why The UK Rental Market Is Surging“.


Millennials Will Spend £53,000 on Rent Before Age of 30


A combination of falling homeownership levels and the rising cost of renting meant that people born between 1981 and 2000 would pay £53,000 in rent before their 30th birthday (Guardian, July 2016)

The Resolution Foundation mentioned in The Guardian article that this country’s housing crisis is one of the most visible examples of inequality between the generations.

Our very own research from last October found that a quarter of under 30’s say they need someone to die before they can afford to buy a property.

In addition, 36% of those surveyed said they felt they’d have to rent forever.

So while young people are spending more of their hard earned income on rent and finding it harder to save for a deposit, the baby boomer generation are the most likely to be landlords and benefit from the strong rental market, according to The Resolution Foundation.

However, it has been highlighted that the older generations are just as concerned about Generation Y’s struggle to own their home, and support for housebuilding is growing across a variety of age groups.

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