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House prices in London and the Midlands may be heading for a fall because of a "mass exodus" of foreign workers since the pandemic. The UK population may have dropped by up to 2% in the past year as work dried up and foreigners left, with most of the outward migration going from the capital and the Midlands, according to Capital Economics. Andrew Wishart at the consultancy said: "Our analysis suggests that the sudden drop in the population has led to a huge rise in vacancy rates in the London and Midlands rental markets. House prices in those regions are also most at risk, both from the direct reduction in demand from foreign citizens and the risk that landlords respond to higher vacancy rates and lower rents by selling up."
The Times (08/02/2021)
COVID-related construction delays and Brexit red tape mean that thousands of first-time buyers could miss out on the Help to Buy loan scheme, the Times reports. Buyers hoping to use the government programme that gives a 20% interest-free loan to add to their 5% deposit have been told that their homes will not be finished by March 31st. After that date the scheme in England will become tougher with restrictions on who can use it and lower price caps on qualifying properties. Without the 20% loan many buyers will have their mortgage offers withdrawn and could lose thousands of pounds in solicitors' and brokers' fees. Last week the Builders Merchants Federation said that the construction industry was facing a damaging shortage of materials at a time of record demand from buyers before the Help to Buy deadline.
The Times (05/02/2021)
The choice of mortgages increased for the fourth month in a row in February, with the number of deals on the market reaching an 11-month high. Moneyfacts said the 10% deposit bracket experienced the biggest monthly increase in mortgage availability in February. The average “shelf life” that products are remaining on the market for is now 40 days, up from 28 days for the previous three months. Moneyfacts found that 3,215 mortgage deals were available in February – marking the highest number since March 2020. Since October 2020, total product choice has increased by 42% – the largest four-month increase Moneyfacts has recorded since 2007.
The I (08/02/2021)
Nationwide has reported a fall in UK house prices last month, with demand declining before the end of the stamp duty holiday on 31 March. Figures from the building society show that the average price of a house was down 0.3% to £229,748 between December and January, while the annual growth rate eased to 6.4% from 7.3%. Nationwide chief economist Robert Gardner commented: “To a large extent, the slowdown probably reflects a tapering of demand ahead of the end of the stamp duty holiday, which prompted many people considering a house move to bring forward their purchase. While the stamp duty holiday is not due to expire until the end of March, activity would be expected to weaken well before that, given that the purchase process typically takes several months”.
The Guardian (02/02/2021) Financial Times (02/02/2021) The Daily Telegraph (02/02/2021) City AM (02/02/2021)
While pandemic has disproportionately hit younger potential homeowners, it has also accelerated a surge in million-pound first-time buyers, with the share of such purchasers doubling in 2020. One in 50 British first-time buyers spent £1m or more on their property in 2020, according to Hamptons International– double the 2019 share. All of the 10 local authorities with the highest share of million-spending first-time buyers were in the south of England. Overall in 2020, the average first-time buyer in Britain spent £253,700, £33,410 more than in 2019, and a year-on-year jump of 15% - more than double the 7.3% annual house price growth rate recorded in December. Hamptons suggested that low mortgage rates and a new desire for space, combined with concerned parents, a temporary tax break and a trend to move less often to avoid costs, mean those who can still afford to buy are paying far more money.
The Daily Telegraph (30/01/2021)
Writing in the Times, Housing Secretary Robert Jenrick has revealed plans to give local communities the power to set design standards for all new housing developments. The aim is to improve the look and quality of housing, with developers obliged to adhere to the character of the areas where they are built. Any planning proposal that does not meet the new criteria will be automatically rejected by councils. The Government is publishing a draft national design code which provides a checklist of design principles that councils should consider for new developments. Local residents must be consulted, and they will be supported by a new national Office for Place.
The Times (30/01/2021) The Daily Telegraph (30/01/2021) Daily Mirror (30/01/2021) The Sun (30/01/2021)