UK House Prices Rise by £10,000

We are currently experiencing a period of exceptionally high demand for houses in the UK – and with a shortage of homes available, this has pushed up prices and made it the fastest-moving housing market in five years.

According to the latest Zoopla House Price Index, house prices have soared by more than £10,000 since March 2020 and the scramble for homes is only slightly easing.

This increase has resulted in the sharpest rise in house prices since October 2016 with the average home costing £229,300 in May. This has pushed 1.8 million properties into a higher stamp duty bracket. What’s more, high demand for homes with more space has meant that the average time to sell a property is just 22 days – almost half the number of days in May 2019.

House prices are up by 3% in Glasgow and 2.9% in Edinburgh – the UK average was 4.7% – last year this was 2.2%. House prices are rising fastest in the most affordable markets.

The demand is being driven by a combination of a re-evaluation of priorities and people wanting more inside and outside space. In addition, there is greater mortgage availability for first-time buyers with the re-introduction of 90% and 95% mortgages after the widespread withdrawal of these mortgage products last summer.

Unfortunately, these first time buyers are flocking to the housing market without having a home to sell, meaning that stock levels aren’t being replenished.

With competition for the homes that are available exceptionally high, many people are missing out. That’s why it’s important to be in a strong position to make an offer – this includes having a mortgage offer in place, your deposit easily accessible with proof of its origin, your credit score in good order and all paperwork such as tax returns and payslips available.

If you’re looking to sell – now is a great time to maximise your sale price and you’ll be in a particularly strong position if you don’t have a property to sell.

 

Property Renovation Advice – Replacement Windows

New windows can not only improve the appearance of your property, they also add value, make it more appealing to renters and buyers alike. It will make the property quieter, lower your carbon footprint and improve the energy efficiency – helping your tenants to keep utilities bill down.

Choosing new windows and finding a trustworthy company to supply and fit them can be a minefield. The first thing to do is to assess whether you really need new windows or if painting the window frames will suffice.

Wood windows

Do your research into which type of windows are best for your home as this can have a significant effect on the value. If you have an older property such as a tenement flat or listed building, it could be better to buy wood windows. Wood-window manufacturing has come on leaps and bounds in recent years. You can now buy windows made from wood that has been impregnated with preservatives and factory finished to a high standard. This will reduce the maintenance required and prevent water penetration and you will only need to repaint them every eight to 10 years. Find out if the window company is a member of the Wood Window Alliance and choose fully factory-finished wood windows. Good quality wooden windows can be much more aesthetically pleasing and blend in with the style of your property and should last up to 60 years. However, wooden windows are more expensive than their PVC counterparts.

Aluminium windows

If you have a modern contemporary home, you might prefer a more industrial appearance. Aluminium windows are often used on homes built in the 1930s, warehouse conversions and extensions. It’s worth noting that metal frames can be colder than wood or plastic but many providers use a‘ thermal break’, which improves insulation and prevents condensation. It is a very strong material, and the slim frames can maximise the light. You can also have them made in various colours.

PU and PVC windows

This is the most popular and cost-effective choice, and you can choose from various different opening styles and even simulated wooden sash windows. PU and PVC windows cost around 20% less than timber. With so many different options available you can find a style that will perfectly match your property. PVC windows are extremely low maintenance.

Glazing

Choosing the glass is just as important as the frame. There are several types of glass available, and a reputable window company should talk you through the options and the pros and cons of each. As a general guide, the window’s energy rating which must be between A and C to comply with current regulations – more information can be found at the British Fenestration Rating Council.

You can choose a glass which has an invisible coating that reflects heat back into the room while letting in free heat from the sun. This is known as passive solar gain. You could also opt for triple glazing – this retains heat better than double glazing. However, this is expensive, and it may not be cost effective when looking at the energy savings.

Unless your property is in a conservation area, your windows must be at least double glazed to comply with building regulations. If it is a listed building, there may be exemptions so it’s worth checking with your local council. If your period property isn’t allowed double glazing then consider secondary glazing. This means that an additional pane of glass or polyester film is fitted inside single glazing.

Creating a Lush Garden in a Small Space

If you’re renting a property with a balcony, roof terrace or small garden, you might want to consider a vertical garden to help your walls come alive with greenery.

Living walls are one of the hottest gardening trends to emerge in recent years, increasingly making their way into residential gardens. Living walls are vertical gardens, where plants are rooted into a structure that is attached to a wall – creating a lush wall of foliage. What’s more, if you install it in the right way, you can take it with you when you move.

A living wall is fantastic for transforming any limited area outside – a balcony, terrace or patio garden. It also looks great when creating a more secluded area in a larger garden.

If you have a small garden, it’s an ideal space for a living wall making it appear more ambient, covering up unsightly walls or fencing. Greens and soft floral colours can make a limited outdoor space feel enriched and closer to nature.

Ideally you want to keep the area looking unstructured and as natural as possible. Use long grasses to add depth, ivy to provide coverage and foliage plants and annuals to create an abundance of green. Incorporate colourful bedding plants will provide an array of colour. Make sure you deadhead flowers to encourage new blooms and keep the colours thriving. When planting up the side of a wall of the home, make sure you use a waterproof membrane first to prevent damp.

If you want a simple solution choose pre-planted panels with living wall planters. This requires minimal effort as all the hard work is done for you. As an alternative, you don’t have to fill an entire wall – you could create a gallery wall with hanging baskets and pots attached – this will provide coverage and greenery without the commitment, and you can pots and baskets with you should you move home. However, check with your landlord if you will need to drill any holes as you may need to make them good before you move.

A living wall is easy maintain and simply requires watering around every two- three days in the summer.

No garden? A living wall isn’t just for outside – you can also achieve this look inside too.

Avoiding Potential Void Periods

One of the most crucial elements of your buy to let property is the rental income. Not only can it cover your costs including your mortgage repayments, but it can also provide a source of income and the ability to scale your portfolio.

At present, the UK average void period at the start of your investment is 20 days (Goodlord’s rental index). That’s why it may be worth exploring two options – choosing a property with tenants and choosing a new, pre-tenanted property.

A property with a tenant in-situ

According to recent research by Howsy, less than 1% of properties currently listed for sale across the UK have a tenant in situ, so they are a rare find. However, if you do manage to find the right one it can be extremely beneficial. By choosing a property that already has a tenant who is in a rental contract enables you to have immediate rental history which means you can better predict the return on your investment in the future. In addition, it means that the property will already have furnishings with no extras to pay for. Make sure you check how long the tenant has been paying the rent but also how long it has been since it was increased. With the current COVID situation you may choose to keep the rental fee the same depending on your tenants circumstances, but it will indicate whether they are paying the current market rate. If they are a good tenant and you want to keep them, it may be worth fixing the rent for a period of time.

Remember a good tenant is worth its weight in gold – you’ll have regular income, paid on time and a property that is well taken care of.

Pre-tenanted

This means that the property is newly built and the developer or agent has already agreed on the tenancies ahead of completion. Although a new property won’t have a rental track record, you can still do your due diligence to find out what the rental income will be and can predict how well it’s likely to perform.

One of the benefits of a pre tenanted property is that you have control over the rental income you will earn from the off. As a new property, the agents responsible for agreeing on pre-rentals will have marketed the property at the full market rate, so from the very start you should be able to make a great return.

If you want to avoid the initial void period, or want to guarantee a good tenant, buying with a tenant in place can prove to be a viable solution.

Average Rents on the Rise

According to the latest research* published this week, the average rent across the UK has risen by 5.9% over the past 12 months reaching £1,007 per month – a record high.

Every region in the UK reported an increase in rents. When London is excluded, the average UK rent is currently 8% higher than this time last year and 10% higher than pre-covid levels in 2019.

Here in Scotland, we saw the most significant month-on-month growth in rents with an increase of 4.4% to £738 from May to June this year.  With tenants looking for more space and access to a garden or balcony/roof terrace, the average rents have been pushed up.

Many industry experts believe that even though measures were put in place during the pandemic to help tenants, there wasn’t enough help and protection for landlords. However, increased costs for landlords led to increased costs for tenants and the stock level has been impacted by landlords exiting the market.

The private rented sector is critical to the UK’s housing market and it’s essential that affordable housing is available for tenants. This is the first time that the average UK rental price has topped the £1,000 mark – but supply and demand has continued to drive prices upward and this trend looks set to continue.

*Homelet

What is Happening in the Property Market?

Property Prices are Still Rising

At the start of last year, no one could have anticipated that we would live through a global pandemic that would turn our world and way of life upside down. What’s more, no one could have predicted the effect that the pandemic has had on house prices.

When the property market effectively shut down, there were reports of people pulling out of their property purchase fearing that house prices would crash. However, since the market re-opened last June, house prices have continued to rise with a buoyant market, record selling times and asking prices at a record high in all countries and regions across the UK.

According to Rightmove, for the third month in a row, the national average house price has risen to a record high of £336,073. See the latest House Price Index.

The demand for property isn’t limited to those purchasing – the rental market has been equally busy as people have reassessed where and how they want to live.

If you’re thinking of investing in property the market can be overwhelming given the competitive nature of purchasing property at present, especially when you are trying to maximise your profits. But it helps to understand why the market is so busy and why demand doesn’t look to ease up any time soon.

Interest rates

According to Moneyfacts, buy-to-let product choice has steadily increased and the average two- and five-year fixed rates have fallen.  In fact, the average two-year fixed rate is lower now than it was in 2019. In addition, the largest number of products available has been seen at the start of July 2021 with 971 more products on the market now compared to the same time last year.

Landlords with 40% equity or deposit would be able to secure a competitive deal as the average two and five-year fixed rates in this bracket remained 0.03% lower year-on-year.

For those buying a new home, low interest rates have helped more people to purchase their first home or move up the property ladder. The Mortgage Guarantee Scheme was launched in March this year, offering buyers access to 95% mortgage loans in a bid to tackle the widespread withdrawal of high loan-to-value mortgages. Although not all lenders have signed up to the scheme, it has prompted a most lenders to offer 90% or 95% mortgages independently of this scheme.

A record number of movers

Demand for homes is outweighing supply. According to Rightmove, more than 180,000 new properties were listed on the portal at the start of June 2021, but this is not meeting the current demand. Homes are selling and renting faster than ever before and for those buying a new home, a record number are being sold over or at asking price.

Most in demand are large, detached homes with gardens or city apartments with access to outside space by way of a balcony or terrace as many people are working remotely and commuting less. This trend looks set to continue.

The sale of large family homes at the top end of the market are contributing to the biggest rise in asking prices this time of the year in six years.

Relocations

There has been a marked increase in people moving from more expensive cities and towns to more rural areas. The result is that prices in towns and villages in the most in-demand regions have risen at an incredible rate.

The value of homes have risen by 8% in Scotland in the last year and it is the UK’s fastest selling region at just 24 days – the next fastest region is the south west at 38 days.

LBTT

The LBTT break that ended in March along with low record interest rates have helped many people in being able to afford higher prices. The temporary reduction of LBTT offered buyers a potential saving of thousands and this contributed to the spike.

What is the outlook?

According to Rightmove’s early indication of prices and levels of buyer demand, the number of people sending enquiries to estate agents is still up by almost 40% compared to the same time last year despite the end of the stamp duty (LBTT) holiday.

However, there are early signs of the market cooling as the number of sales agreed is still growing, but available properties are in short supply.

High prices paired with the lack of supply is starting to impact buyers’ ability or inclination to move. The super charged activity cannot last forever but many commentators including those at Rightmove believe that the market will remain vigorous for the remainder of the year.

If you are renting out or selling a property, you can be confident that you will attract a large number of enquiries, and this looks set to continue for the rest of the year.