LATEST: House prices 15% higher than before Covid, says Nationwide

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House prices are now almost 15% higher than when the pandemic struck, with only a slight slowing expected into the new year.

Annual house price growth increased slightly to 10% in November, pushing prices up by 0.9% to an average of £252,687, according to Nationwide’s latest House Price Index.

Despite some inevitable cooling off in October following the stamp duty holiday – with the number of housing transactions down almost 30% year-on-year – activity has been extremely buoyant in 2021, says chief economist Robert Gardner (pictured).

The number of housing transactions so far this year is actually tracking close to the number seen at the same stage in 2007, before the global financial crisis struck, he adds.

Buoyant market

Robust labour conditions suggest a fairly buoyant market in the coming months, says Gardner, but the outlook remains uncertain. “While consumer confidence stabilised in November, sentiment remains well below the levels seen during the summer, partly as a result of a sharp increase in the cost of living. Moreover, inflation is set to rise further, probably towards 5% in the coming quarters.”

Many estate agents and financial experts believe that house prices are likely to continue to rise in 2022 due to demand, but at a slower rate.

Rate rise

With an expected 0.25% rise in interest rates next month, mortgage lenders have already factored a rise into their own pricing, with mortgage interest rates increasing slightly ahead of this. Some report that their re-mortgage business is particularly brisk as homeowners make the most of very low interest rates.

Andrew Simmonds, director at Bristol-based Parker’s Estate Agents, believes that although it won’t scupper the market, a rise in rates will marginally impact sentiment. He adds: “It’s certainly likely to cool the enthusiasm and excitement of many buyers to pay top dollar for their next home, but that might not be a bad thing. If I am being frank, we could do with something that takes a bit of fizz out of the housing market.”

Read the index data in full.

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If I put my houses in my tenants name would I be exempt from onerous retrospective legislation?

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Yes, I know this may be the most ridiculous question. But I ain’t Einstein even though I have 27,000 times more common sense than the Govt and Nottingham City Council.

You only know the answer if someone tells you.

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Annual house price growth back into double digits but outlook still uncertain

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The Nationwide House Price Index for November is indicating that annual growth has recovered back to 10.0% and up 0.9% month-on-month with the average house price now standing at £252,687.

Commenting on the figures, Robert Gardner, Nationwide’s Chief Economist

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Time to cut and run?

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Like many we were attracted to the idea of property ownership, ‘another way of hedging’ was our MO, we could keep the property for 10 years and then sell make a few bob, pay some tax and all’s well that ends well.

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BTR firm makes ill-advised bid to promote site using Shelter’s mental health data

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A build-to-rent development is trying to sell its properties on the back of research about renting in the traditional PRS causing poor mental health.

A press release from The Keel in Liverpool cites recent research by housing charity Shelter that revealed how one in five people in privately-rented properties suffer from poor mental and physical health.

It claims the build-up of damp and mould are cited as the most common problem, with many landlords ignoring the plights of their tenants.

“Whilst living in poor conditions can affect our physical health, the toll and stress this causes can also cause severe mental health issues,” the promotional material explains helpfully.

Stress toll

“[The Keel] is helping to show how this new sector is building trust between tenants and landlords in a bid to ward off poor mental health due to living conditions and the toll of resulting stress.”

In a shameless plug for its facilities, the release boasts about its dedicated on-site team, regular socials, and communal areas, which help to boost the wellbeing of residents, and it adds: “Having a healthy social life is also crucial to help maintain your mental health.”

It believes the development on the city’s Queen’s Dock is helping to show how important it is to care for tenants, “prioritising their health to make for an all-round better rental experience” – showing just what a caring and compassionate bunch BTR landlords are.

Read more about BTR.

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LATEST: Welsh government offers private landlords £30m to house homeless

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The Welsh government is to pump in more cash to help end homelessness in the country including a new £30 million funding pot for local authorities, housing minister Julie James (pictured, above) has announced.

It will be used primarily to support the Welsh Private Rented Sector Leasing Scheme, which effectively underwrites the risks and costs of persuading private landlords to rent their properties to local authorities in return for a rent guarantee and additional funding to improve the condition of their property.

Local authorities can then use these properties to provide affordable and good quality homes for people who are at risk of or experiencing homelessness.

Tenants will benefit from the security of long-term tenures of between five to 20 years and help to maintain their stay in a long-term home, such as mental health support or debt and money management advice.

£30m initiative

This £30 million initiative is part of the Welsh government’s Homelessness Action Plan, which is a cross-sector and multi-faceted attempt to house homeless people and prevent them losing their homes in the first place.

As part of housing minister Julie James’ promotional efforts for the initiative, she met 42-year-old Jonathan Lewis (pictured, above) from Swansea.

He has overcome huge challenges throughout his childhood, teenage and adult life and has finally been able to find and thrive in a secure home after years spent sofa surfing or sleeping in his car.

James said: “Meeting Jonathan today – who really is an inspiration – just shows the importance to everyone of a decent, affordable and stable home.”

Read more about the millions the Welsh government is spending supporting tenants.

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PRS pandemic impact report

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As 2021 draws to a close, Belvoir’s pandemic report reveals the impact of the Coronavirus pandemic on the UK rental market.

“Earlier this year Belvoir commissioned property expert Kate Faulkner to review data from the Belvoir rental index as well as quarterly surveys of offices during the pandemic and beyond.

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Welsh government to encourage PRS to lease to local authorities to prevent homelessness

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The Welsh Government will announce a new £30million funding pot over five years for local authorities. Under the Private Rented Sector Leasing Scheme, private property owners will be encouraged to lease their properties to local authorities in return for a rent guarantee and additional funding to improve the condition of their property.

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‘Let’s not forget property remains the best performing investment’

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I’ve been in the property investment business for almost 30 years and during this period opportunities have come and gone but I’ve yet to discover an asset class that performs better.

Gold, silver, crypto (gambling in my opinion) and stocks and shares have yet to outperform the results I’ve generated from property, and will continue to do so.

Let me explain: As at Sept 2021 the average house price in Scotland is £180,334¹. In2000 it was £51,587² meaning house prices have grown around 250% in 21 years.

But take the £51,587figure and apply inflation since 2000 (average of 2.8%p.a¹.) then today’s house price should be £88,799. And yet it’s £91,535 more, which is 177% of the original investment over inflation.

Now I have never been one to invest in property at those high prices, but my property values have risen just the same.

You can invest in lower value property and spread your risk as it’s always a numbers game at its core. If you understand the dynamics, it’s like the McDonald’s of property investing. Just keep duplicating it.

What do I mean? If you get the rental charge per month, occupancy rate, loan to value, interest rates and overheads right you’ll always be guaranteed to make money.

Hassle?

Most people say, “I can’t be bothered as I don’t want the hassle.” What hassle? If you have a managing agent looking after it or you’ve invested in a property fund, then you are literally paid to wait.

What do I mean ‘paid to wait’? Most investors like myself offer different levels of service depending on how hands on or hands off you want to be and remember the property is generating income every month in rent while it appreciates, and you can either draw down or reinvest that income.

Let me give you an example. I bought a property (I’ve bought several over the years and another 17 this year so far) in July 1999 for £10,000. It’s a one-bedroom flat and since then I’ve generated a top-line rent of around £80,000 against it to offset against overheads (i.e. interest costs, insurance, repairs, managing agent etc).

At some point before the credit crunch, I got a re-mortgage of £27,695 (a lifetime tracker at base plus 1.15%) which means I have none of my own money in and got cashback (tax free as you don’t get taxed on re-mortgaging property, only selling) from the bank to invest in more property.

This is an infinite return on my investment as I have no money in it anymore and I still earn money every month.

As I said at the beginning… “it’s probably the best performing asset class’ I meant it. As for the value? Well, I’m paid to wait on it going up.

About the author

Jim Parker is a leading Scottish landlord and also runs multi-branch East Coast lettings agency Fife Properties.

Data sources: 1 Bank of England and Scottish Land Registry details 2 Homelet

Jim Parker

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Labour reshuffle: Shadow housing secretary Lucy Powell replaced by Lisa Nandy

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Labour leader Kier Starmer’s chaotic reshuffle has included giving housing spokesperson Lucy Powell the new job of shadow Digital, Culture, Media and Sport brief, it has been announced.

Lisa Nandy, who has been demoted from shadow Foreign Secretary, has been given the job of scrutinising the Department of Levelling Up, Housing and Communities, taking over Powell’s former role.

The reshuffle, which had been expected, took place yesterday, kicking off while the party’s deputy leader Angela Rayner was giving a key speech on parliamentary sleaze, apparently catching her by surprise.

Other departures include Nick Thomas-Symonds, the shadow home secretary who is replaced by Yvette Cooper, Kate Green, the shadow education secretary and Jo Stevens, the shadow culture secretary.

The reshuffle has been reported as Starmer’s attempt to both keep Rayner at arm’s length and reduce the number of left-wingers within the shadow cabinet.

Powell, the MP for Manchester Central since 2012, was appointed to the shadow Housing role in May, taking over from Thangam Debbonaire, who became shadow leader of the House of Commons.

But Powell’s tenure heading up the housing brief has been both brief and relatively unremarkable.

Landlords attacked

Her high point was a keynote speech in September during Labour’s conference in Brighton, during which, as LandordZONE reported, she attacked landlords and holiday homeowners.

“I see no contradiction in us also promoting home-ownership – not for more landlords or second homes, but for ordinary working people – nurses, electricians, delivery drivers and care workers – currently priced out,” she said.

She also said a Labour government would link housing costs to wages and “tackle the thorny issues of quality, affordability and security in private rentals”.

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