2021 budget housing

The Budget 2021 – What Could this mean for the housing market?

The Chancellor Rishi Sunak is set to announce the budget for the 21-22 financial year on March 3rd. Here we discuss what this may mean for the housing market.

 

Stamp Duty Tax – The Stamp Duty Tax relief was implemented in July 2020 with the aim to make it more achievable for homeowners to move house. This has come as a relief to many and resulted in an unexpected ‘Housing Boom’ with transactions and house prices increasing throughout.

This relief is due to end on 31st March and during the budget, the chancellor will announce whether this will still be the case. Many companies and home owners have called for a 6-week extension to help the hundreds of thousands who are likely to fail to complete before the deadline.

 

Rental Help and The Eviction Ban – The current eviction ban is still in place, forbidding landlords from evicting tenants during the pandemic. The chancellor may well announce plans for how this ban will slowly ease out but more importantly, about any help that may be given to tenants who find themselves in rent arrears. Scotland and Wales have both already provided details of grants to help those with rent arrears and homeless charities in England have called for similar measures.

Failure of suitable help for tenants is likely to result in mass evictions and a rise in homelessness once the ban is lifted.

 

Capital Gains Tax – Hiking capital gains tax may be seen as a good way for the government to claw back some funds needed after a year of spending. It has been reported they could make over £14billion extra revenue by increasing capital gains tax.  However, the knock-on effect that this may have on the private rented sector is also a fear, by discouraging investment in property, supply will inevitably dwindle too.

 

The announcement will come on March 3rd and this year, any announcement is a possibility!

Elementor #1775

The Chancellor Rishi Sunak is set to announce the budget for the 21-22 financial year on March 3rd. Here we discuss what this may mean for the housing market.

 

Stamp Duty Tax – The Stamp Duty Tax relief was implemented in July 2020 with the aim to make it more achievable for homeowners to move house. This has come as a relief to many and resulted in an unexpected ‘Housing Boom’ with transactions and house prices increasing throughout.

This relief is due to end on 31st March and during the budget, the chancellor will announce whether this will still be the case. Many companies and home owners have called for a 6-week extension to help the hundreds of thousands who are likely to fail to complete before the deadline.

 

Rental Help and The Eviction Ban – The current eviction ban is still in place, forbidding landlords from evicting tenants during the pandemic. The chancellor may well announce plans for how this ban will slowly ease out but more importantly, about any help that may be given to tenants who find themselves in rent arrears. Scotland and Wales have both already provided details of grants to help those with rent arrears and homeless charities in England have called for similar measures.

Failure of suitable help for tenants is likely to result in mass evictions and a rise in homelessness once the ban is lifted.

 

Capital Gains Tax – Hiking capital gains tax may be seen as a good way for the government to claw back some funds needed after a year of spending. It has been reported they could make over £14billion extra revenue by increasing capital gains tax.  However, the knock-on effect that this may have on the private rented sector is also a fear, by discouraging investment in property, supply will inevitably dwindle too.

 

The announcement will come on March 3rd and this year, any announcement is a possibility!

HMO - Post Covid

Making a HMO more attractive to those worried about Covid-19

The HMO market has remained buoyant and fairly resilient throughout the pandemic but the fact remains that some tenants and landlords are worried about what the pandemic will mean for demand for those in shared accommodation.

The demand will always be there in some form, single professionals and students will often prefer a HMO over a studio flat as they get to enjoy the additional space that comes with it such as a semi-private garden, living spaces, large kitchens and bigger bathrooms.

We’ve come up with some top tips to help landlords who are considering renting out a HMO during the pandemic and beyond:

  1. Cleanliness – This is important, whilst properties should always be kept to a good standard, it is more important than ever that this is adhered to now. Either encouraging tenants to come up with a cleaning rota or pitching in for a cleaner should be top priority at the moment.
  2. Condition – Ensuring the property is kept in good condition gives prospective tenants greater peace of mind. Mid-term inspections are vital with a HMO as a property can quickly fall into a bad state.
  3. Location – This is vital for HMO’s at all times but even more so now, if the location is good (such as near a university, train station, commuting spot) then the demand will be too.
  4. Focus on the positives and maximise them – Is there good storage space? A large dining table? A garden? Parking? These are all reasons that people may choose a HMO over a self-contained property and you need to highlight this and maximise it. If the garden needs a bit of a tidy up then its well worth sorting it to get tenants in situ.

HMO management agency have a wealth of experience in letting out and managing HMO properties, so for more helpful tips simply get in touch today and we would be happy to help!

2020 house prices

2020 House Prices Finished on a 6% High!

2020 was a roller coaster of a year when it came to house prices. It got off to a strong start and then slumped in the spring and summer as the first national lockdown took their toll on prices. This didn’t last long though and prices shot up again shortly afterwards.

The rise in house prices is due to a combination of several factors including the pent-up demand combined with people spending more time at home. Buyers craved a change with rural areas seeing the highest demand, more space to work and live were also high on priority lists. The ‘Stamp Duty Holiday’ announcement also prompted people to make the change and get moving. The holiday has seen people save thousands on house purchases and has propped the market up as people take advantage of massive savings.

Halifax has reported that prices were up 6% in December when compared to December 2019, with a slight increase from the month before.

December’s price increase brings us to the sixth consecutive month that prices have risen and finishes 2020 on a high that people may not have expected.  This has bought the average house price up to £253,374.

Mortgage approvals are also sitting at a 13-year high meaning more and more people are able to make that first or second step on the property ladder.

Options on what the 2021 market will hold remains divided, with the stamp duty holiday still in play until the end of March there are currently no signs of a slowdown.

2020 House Prices Finished on a 6% High! HMO Management Agency
House Prices 2021

Housing Prices to Rise 4% in 2021 say Rightmove

The UK’s biggest property portal ‘Rightmove’ have weighed in with their opinions on the 2021 Housing Market, predicting a 4% rise next year.

Experts have been divided on how the market will go in the coming 12 months, with 2020 seeing an incredible 7% rise in prices despite the coronavirus pandemic. The Stamp Duty Holiday has undoubtedly contributed to this rise, with prices and sales soaring as people make the most of the savings which can be as much as £15,000.

With the stamp duty holiday due to end in March 2021, buyers hopes of purchasing property within the deadline are dwindling quickly. However the property portal claims demand is still as strong, proving that the demand for new homes is there whether they receive the savings or not.

Rightmove claimed buyers will continue searching for new homes as the pandemic has unleased demand for more space and rural locations.

‘Pandemic related uncertainties have been around for nearly a year, and Brexit uncertainties for far longer, and record activity month after month has proved that movers are willing and able to act on their new or existing housing priorities,’ Rightmove said.

This is despite the stark warning by some property agents that the Stamp Duty Holiday must be extended to avoid a dramatic end to the housing demand. Coupled with Brexit and the end of the furlough scheme, the timing could be unfavourable.

However despite these hurdles, Rightmove, like many others, believe the 2021 housing market will far outperform expectations in a similar fashion to 2020. Some 650,000 are still in the process of changing hands so the beginning of the year is sure to start of on a strong footing.

Stamp Duty Holiday Explained

The Stamp Duty Holiday

The Stamp Duty Holiday - What you need to know

What is The Stamp Duty Holiday?

Usually Stamp Duty tax is payable on property transactions worth more than £125,000 (£300,000 for first time buyers), however on the 8th July 2020 The Chancellor of the Exchequer announced a temporary break from this, reducing Stamp Duty Tax down to 0% for all transactions below £500,000. This has saved purchasers thousands over the last few months and propped up the housing market throughout the pandemic. For example, on a property worth £400,000, a purchaser will have saved £10,000 in stamp duty that they would previously have been liable to pay.

 

Is it too late to take advantage of this offer?

If you are looking to buy a property, now is the perfect time with the potential savings running into the tens of thousands. With the average property purchase taking 12 weeks to go through and the deadline for the holiday coming on 31st March 2020, potential buyers should hope to be in the purchasing process by the start of January.

What if I have a property to sell too?

This can take longer, with the average property taking 6 months to sell from putting on the market, which takes us past the 31st March deadline. That doesn’t mean its impossible though. If you use a proactive estate agent and get your property on the market quickly, with a realistic valuation as well as ensuring all paperwork is in place for the conveyancing team – you stand a reasonable chance of being able to take advantage of this saving, especially with the added interest from your potential purchasers wanting to work to this deadline too.

Property Transactions up 8%!

Property Transactions up 8%!

According to data published by HMRC yesterday (24.11.20), UK monthly property transactions are up by 8.1% year-on-year in October, as well as being 9% higher than September’s figures. There were 105,630 transactions in October 2020, which is over 8% higher than October 2019 and is diminishing fears that the housing boom was slowing.

Residential property transactions have increased each month since the first government lockdown in April and May, showing buyer confidence is returning. HMRC believe the rise was impacted by purchases going through that may have stalled since March as well as the Stamp Duty Holiday meaning purchasers can save tens of thousands of pounds on their purchase.

Industry experts have echoed HMRC’s comment’s and added the demand for homes has remained high since the reopening of the Housing Market. Whilst the Stamp Duty holiday has contributed to the boom, buyers need to be quick if they wish to take advantage as it is due to end on 31st March 2020.

Property Transactions up 8%! HMO Management Agency

Demand rises for HMO properties

Mortgage lenders are reporting a rise in demand for HMO properties as the housing market starts to recover.

 

Demand for HMO properties appears to be rising amongst Landlords as the sector takes off again after a pause due to the coronavirus pandemic.

Mortgage lender Landbay have reported a rise in interest for mortgages in this sector. This increase in demand is leading to more specialist HMO loan options becoming available, as more lenders enter the market.  

Paul Brett of Lendbay said recently: “Demand for HMOs is growing from both tenants and landlords so this is definitely a market for brokers to take an interest in. Not only will HMO properties typically require larger mortgages resulting in higher proc fees for those placing the mortgage, most people investing in HMOs will be professional landlords, which means they are likely to be business minded and open to your advice.”

‘While HMOs are increasingly popular with young professionals, they are also a common property type for students. It offers more affordable accommodation, and the social aspect of shared facilities and space. Even with the current pandemic, many people are happy to be “locked down” with their fellow housemates, rather than live alone’ says Brett.

Overall in the UK Housing Market, sales are continuing to climb, , with the sector seeing particular interest from investors at the moment. According to data published by Hamptons International, rental prices also rose in October for the first time since the coronavirus pandemic began. 

Tenant demand is high and as more people choose to rent and HMO’s continue to provide a good option for young professionals and students alike. 

Mortgage lender ‘Foundation’ also reported a 46% increase in applications from landlords with three or less properties as well as a 23% increase in applications for small or standard HMO properties.

As a tangible and profitable asset, property always proves a popular investment, even in a changing market and HMO’s appear to be no different. 

Demand rises for HMO properties HMO Management Agency