Busy Spring in store for the property market

In this month's edition, we're looking forward to another typically busy Spring in the property market, alongside the news that first-time buyer activity has hit its highest level for over ten years. 

Elsewhere, property investors are remaining unfazed when it comes to investing in the UK, despite the prospect of Brexit and we reveal which perks tenants are happy to pay their landlords a little extra for. 

Busy Spring in store for the property market

 

Spring has always been a popular time of the year for buying and selling properties, with the change from the colder months of winter to the warmer spring temperatures often galvanizing people to make a change. This year is forecast to be no different and spring 2019 is set to be a busy time for estate agents across the UK…

Recent analysis from The Advisory, an independent advice service for house sellers, has shown that March is statistically the best month to sell. The average amount of time taken to sell in March stands at 57 days, compared to other months later in the year at 79 days. With gardens starting to bloom, the weather becoming fairer and properties looking at their best, it is no surprise that spring is at the top of the list for when to sell a property.

Of course, spring 2019 is a little different than any of those prior due to the uncertainty that lies around Brexit. Although it may seem like the political climate could be a hindrance to property sales, there are many indicators which would suggest quite the opposite, with spring 2019 actually buoyed by Brexit.

There could indeed be somewhat of a surge after 29th March from potential buyers and sellers who have waited for the Brexit date to pass before they enter the market, and with supply and demand already at their highest levels for over a decade, this would see the property market in a particularly strong period.

Twinned with the historically low-interest rates, and the most flexible mortgage offerings ever provided by the banks, buying a property this spring will be on the minds of many and could indicate something of a renaissance for the property market, which has proven to be stable rather than spectacular in the last few months.

 

First-time buyer activity at its highest level for over a decade

 

The number of first-time buyer mortgages has reached its highest level for 13 years, with some 370,000 new first-time buyer mortgages completed in 2018. Official trade body UK Finance has released data which shows that the highest number of first-time buyer mortgages since 2006 was reached last year, underlining the fiscal viability of purchasing a home for first-time buyers.

This consistent increase in the number of first-time buyers entering the property market can be seen as a result of; government schemes, greater mortgage availability and fewer rental properties on the market. Government policy has consistently targeted buyers who are keen to enter the property market primarily through their Help-to-Buy scheme and financial aid to first-time buyers, whilst competition amongst mortgage providers has brought a greater variety of finance options to the market. Amongst these mortgage varieties, we have seen more providers offering the 100% mortgage (or Loan-to-Value) and variations thereof, thereby opening up property to more people than ever before.

Richard Campo, managing director of Rose Capital Partners, said: “Lenders have been making it easy for first-time buyers over the last couple of months, with several providers announcing reduced rates on high loan-to-value mortgages.

“There are currently over 17,000 products available for first-time buyers.”

Twinned with the influx of mortgage varieties, and mortgages demanding a lower deposit value, is the reduced cost of these lower-deposit mortgages. The average two-year fixed rate LTV mortgage has fallen by over half a percent since last August, and big brands are also reflecting the consumer desire for LTV mortgages with Barclays, HSBC, Lloyds Bank, NatWest and Santander all cutting their rates.

Yopa chief property analyst Mike Scott agrees: “Since FTBs drive the whole housing market, allowing home movers to find a buyer and take the next step on the ladder, this is good news for the whole market,” he says.

In fact, the Halifax bank has recently found that first-time buyers are now so active in the marketplace that they make up the majority of home purchases bought with a mortgage in the United Kingdom. Based around the same UK Finance statistics, Halifax has found that the average price of a typical first home has jumped by 39%, from £153,030 in 2008 to £212,473 in 2018 with terraced houses and semi-detached remaining the most popular choices for first-time buyers.

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Property investors remain unfazed at prospect of Brexit

 

As we’re now finally closing in on 29th March, our scheduled departure date from the European Union, there is anticipation as to what Brexit will look like. In terms of property development, however, a recent study has shown that the majority of property investors are unfazed by the political upheaval and remain steadfast in their faith in the British property market.

A recent global survey carried out by SevenCapital, a leading property developer, has found that 85% of individuals who are currently investing in property around the world are investing in the UK’s property market, in spite of the Brexit furore whipped up by news headlines.

Andy Foote, director at SevenCapital, said: “These figures demonstrate that people generally recognise that there are bigger factors to consider over Brexit when it comes to the overall trends in the UK property market. Realistically, it’s the fear and the perception of Brexit that will have any effect, rather than the physical act of leaving the EU.”

“Ultimately, if the market were to take a dip after Brexit, seasoned investors will know that this would more likely be a catalyst for the inevitable swing back. The property market is a prime example of well-known cyclical patterns, growing through recovery and emerging stronger than previous peaks. In other words, if it takes a dip, as it did 10 years ago, it will recover and come back stronger.”

The survey of “High Net Worth Individuals” (HNWIs) – defined as earning more than £100,000 per year – has shown that property remains as popular as ever for global investors, with 59% investing in property, second only to stocks and shares. Out of those who responded, more than 30% of those from within the United Kingdom confirmed they were investing in UK property and, furthermore, almost a quarter actually cited Brexit as one of their reasons to invest.

With cities such as Birmingham performing impressively well post-Brexit vote, with property prices growing 16%, the investment possibilities remain strong. Moreover, the rental yields being posted by the likes of Birmingham, Manchester and Liverpool are amongst some of the highest around the country at between 5 – 10%.

Overall, the sensational headlines which Brexit has provided have been utilised well by the media as a means to engage people. However, when we look at the statistics it is evident that there are further far-reaching events which weigh more heavily on the property market, such as interest rates. With property investment remaining encouragingly high across the United Kingdom, first-time buyer activity at unprecedented levels and the pound being predicted by Goldman Sachs to be the highest-performing G-10 exchange rate this year, the property market is set for a strong and stable year ahead.

Which perks are tenants happy to pay a little extra for?

 

When it comes to letting a property, most landlords would probably remain quite conservative in terms of perks included with the home to avoid pricing themselves out of the market.

Whilst the property will need to be competitively priced to get the most out of your investment, there are some perks that tenants are happy to pay a little extra for.

A new survey has questioned tenants in the UK on what features and extras they’d most like in their homes and how much they’d be willing to pay for them.

Unsurprisingly, one of the most popular choices for tenants was the inclusion of pets, with 28% of the 3,290 tenants surveyed, willing to pay an average of £24 a month to have their furry friends stay with them in rented accommodation. This figure only increases for the up-and-coming generation, with 31% of 18-35-year olds willing to pay an extra £25.55 a month.

Also high on the list of wants is high-speed internet, with 21% happy to pay £19 more a month for a home located in an area that has a strong internet speed, which is understandable with today’s world of smart gadgets and streaming.

In some rented spaces, a bit of greenery can go a long way. Properties that come with a garden, even a communal one, are in high demand with 32% of tenants willing to pay extra for a home that has access to an outdoor space. Gardens are even more valuable in some of the larger cities, as houses with gardens in the capital command up to 20% more when put up for sale.

Staying in shape is clearly a priority for a good proportion of renters today, as 41% of those surveyed said that they would be happy to pay up to £20 more a month for accommodation that comes with an on-site gym. This also means that if your buy-to-let property is located close to good leisure facilities, it could fetch a higher price.

It was also found that tenants are willing to pay more for cleaning services. There were reports last year that due to lack of time, half of millennials are paying a professional to keep their homes and 13% of participants in this survey said that they would pay an average of £28 a month more to free themselves of some of their weekly chores.

While some of these perks may not apply to every property, it is clear that landlords and developers should take a closer look at what their property has to offer, as your home may be in more demand than you think.