Supply and demand outstripping Brexit concerns

In this month's edition, alongside our normal mixture of news and helpful information, we're showcasing a selection of our sales properties for you to view. For more information on any of these homes,
please don't hesitate to contact us!

31 Perry Vale, London, SE23

Excellently located for transport and amenities, this gorgeous one bedroom flats is set within a wonderful development.

 

£340,000

Click here to read 31 Perry Vale, London, SE23.

Havanna Drive, London, NW11

Spectacular six bedroom five bathroom villa situated in Carmel Gate, NW11, all set within a beautifully landscaped exclusive gated development. 

 

£4,250,000

Click here to read Havanna Drive, London, NW11.

One in six parents remortgaging to help their children

 

With interest rates remaining incredibly low and competition amongst lenders producing some of the most favourable finance options ever seen, many are remortgaging in order to benefit from cost savings. Rather than simply easing the financial burden, however, recent research has shown that many parents are remortgaging in order to gift the extra money to their children.

Price comparison website MoneySuperMarket has found that one in six parents who remortgage their home then gift some of that extra cash to their children, with the average financial contribution standing at £9,050 per child and nearly 10% of parents giving over £20,000.

More than a third of the children who receive the financial gift utilise it as a deposit for a property, whilst others use it to go travelling (11%), buy a new car (11%) or pay for ‘everyday essentials’ (9%).

Rachel Wait, consumer affairs spokesperson at MoneySuperMarket, commented: “Our research found that 15% of parents released equity when they remortgaged to help their children. However, you’ll only be able to do this if your property has gone up in value and you’ll need to be sure you can afford to keep up with your new repayments.

“It’s also important to factor in the costs associated with remortgaging, such as arrangement fees which can be as much as £2,000, as well as legal, admin and valuation fees. Try to be realistic – only release equity to help your children with life events if you can really afford to do so.

“Also keep in mind that because a mortgage takes so long to pay back, remortgaging may not be the right option for everyone – there may be cheaper ways of getting a cash sum. It’s important to look at all options and shop around before making a decision.”

Kennington Road, London, SE11

A rare 5 bedroom Georgian house in Kennington located in zone 1 within the House of Parliament division bell is for sale.

 

£1,699,000

Click here to read Kennington Road, London, SE11.

Property prices saw an increase during April

 

Recent research from mortgage lender Nationwide has shown that house prices picked up in April, with the average asking price for homes now standing at £305,449. This is a jump of £3,500 from the previous month, marking the largest month-on-month increase for over a year and indicating that the market is now experiencing some uplift from the delayed Brexit outcome.

There is some sentiment in the market that buyers and sellers are now fed up with all things Brexit, hence the uptick in market activity following the delay of Brexit which had previously been scheduled for March 29th.

Robert Gardner, an economist with Nationwide, said first-time buyers appeared to be defying the jitters around Britain’s still uncertain departure from the European Union, helped by low interest rates and the lowest unemployment rate in more than 40 years.

“While the ongoing economic uncertainties have clearly been weighing on consumer sentiment, this hasn’t prevented further steady gains in the number of first-time buyers entering the housing market in recent quarters,” he said.

Estate agents often note a ‘spring bounce’ at this time of year thanks to the market entering a period of buoyancy, but the increase seen this year is still the biggest increase for the month of April for three years.

Brian Murphy, Head of Lending for Mortgage Advice Bureau, said: “It's not exactly surprising to see that according to this set of data, the family homes market remains resilient.

“After all, for those who need more room to accommodate growing offspring, or indeed have to relocate due to schooling, the decision to move is rarely a discretionary one.

“Regardless of any ongoing Brexit uncertainty, today's report points to the right time being now for these particular purchasers. This is, of course understandable, as, if you ask most parents, there comes a point when the quality of life becomes the priority, rather than the consideration of political headlines.

“The good news is that in areas of the country where asking prices appear to have remained steady - or as the Rightmove report suggests, vendors are pricing keenly in order to attract a buyer - the competitive lending market continues to provide support.'

Cobalt Point, London, E14

Coldwell Banker are delighted to offer this spacious 1 bedroom apartment in Cobalt Point, located minutes from Canary Wharf station.

 

£450,000

Click here to read Cobalt Point, London, E14.

84 Alie Street, London, E1

Stunning two bedroom two bathroom (en suite) apartment located within Meranti House in E1 is now available for sale.

 

£930,000

Click here to read 84 Alie Street, London, E1.

55 Upper Ground, London, SE1

A luxurious 2 bedroom, 2 bathroom apartment is now available for sale on the 15th floor in the iconic Southbank Tower.

 

£1,660,000

Click here to read 55 Upper Ground, London, SE1.

Supply and demand outstripping Brexit concerns

 

With the Brexit date being pushed back once more, it would appear that supply and demand for property is now the driving factor in the market, with Brexit taking the back seat in terms of market-driving factors.

In a recent survey from property investment company SevenCapital, nearly 69.5% of investors continued to invest in the United Kingdom despite the spectre of Brexit. Indeed, this confidence in the United Kingdom property market is echoed by international investors, with nearly 95% of the Hong Kong respondents believing that Brexit isn’t a critical factor in their investment decision.

SevenCapital points out that the Sterling has risen in value – a better indicator of fiscal stability – and this outweighs any potential impact that Brexit may have levied upon the market. With the average price of properties increasing last month by over 1% or £3,347, according to Rightmove, then house prices are also reflecting this upturn in the market.

In terms of the rental market, rental yields have also grown in recent months with the best performing areas in Birmingham and Manchester seeing yields driven up as much as 10%. With new changes in the rental sector such as the Tenant Fee Ban and Section 21 changes, tenants and potential tenants should be feeling more empowered in terms of their rights which should encourage more renters into the market.

Despite the headlines that Brexit has provided of late, it is evident that other factors are driving the property market, both sales and lettings. A key point to note is the lack of housing supply and increased demand of late with this duality keeping the market buoyant, despite any political uncertainties. With first-time buyers now at record levels and keen to buy, there is a whole new swathe of potential buyers entering the market which is creating an extremely competitive sales environment.

What does the abolition of Section 21 mean for landlords?

 

With the recent reforms taking place in the lettings market with regards to the Tenant Fee Ban and the Fitness For Human Habitation Act, you would be forgiven for missing the recent news from the Government that will make it more difficult to evict tenants.

Plans to abolish Section 21 – the right for landlords to evict tenants from their property after their fixed-term contract has come to an end, and with no need for a reason to be given (as long as eight weeks’ notice is allowed) – have caused some uproar in the lettings community with landlords concerned and tenant campaign groups hailing it as a “massive victory.”

The main concern highlighted by landlords have been around difficult tenants in their property and how they will now be able to evict them. The short answer is that once Section 21 is abolished, landlords will have to enact Section 8, which has more stringent rules with regards to evictions, as highlighted below.

A tenant can only be evicted with Section 8 should they:
Fall into rental arrears
Are involved in criminal behaviour
Are involved in antisocial behaviour
Have broken terms of the rental agreement (such as damaging the rental property)

The Government intends to add some caveats to Section 8 in order to make it more fit-for-purpose in the absence of Section 21, such as the fact that landlords will also be able to evict tenants should they wish to sell the property or move back into the dwelling themselves.

Of course, despite the news that this Government proposal has created, the actual likelihood of a landlord evicting a tenant is low as that is counterproductive. Landlords do not evict tenants for no good reason as that is simply not good business; instead, the motivation to find and retain tenants is the modus operandi for every landlord in order to get some returns on their investment. So, if you are worried about the potential changes which the abolition of Section 21 evictions could cause, then rest assured that should the genuine need to evict a tenant arise, you will still have the power to do so.

55 Upper Ground, London, SE1

A spectacular luxury 1 bedroom, 1 bathroom apartment located within this superb development is situated on the 12th floor. 

 

£900,000

Click here to read 55 Upper Ground, London, SE1.