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UK property prices jumped by 7.3% year-on-year during September, with lender Halifax also reporting in its latest House Price Index that mortgage applications have reached a 12-year high.

Halifax’s figures showed that the average price of a residential home reached £249,870 in September, a 1.6% rise from August. This brought the annual growth rate to 7.3%, the fastest observed since June 2016, beating analysts’ predictions of 0.6% monthly growth.

“Few would dispute that the performance of the housing market has been extremely strong since lockdown restrictions began to ease in May,” said Russell Galley, managing director at Halifax. “Across the last three months, we have received more mortgage applications from both first-time buyers and home movers than anytime since 2008.”

However, Galley also warned of “significant downward pressure” that would be placed on house prices in the months to come as the housing market will eventually be dampened by the UK’s economic downturn.

“It is highly unlikely that the housing market will continue to remain immune to the economic impact of the pandemic. The release of pent up demand and indeed the stamp duty holiday can only be temporary fillips and their impact will inevitably start to wane,” he said.

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The “pent up demand” of prospective house buyers has been widely credited for the resurgence of property sales since March and April, when house viewings and moves were banned under COVID-19 lockdown measures.

It is likely that the housing boom will be weakened by the reimposition of strict lockdown rules in several parts of the UK, and by the ending of several of the government’s employment support measures at the end of October.

Halifax’s house price index, released on Monday, revealed that the average UK property sold for £245,747 during August, the highest level since records began.

The widely followed index recorded a 1.6% increase on house prices in July and a 5.2% annual rise. This figure fell below analysts’ expected 6% year-on-year increase.

The UK has seen a house price boom in recent months, following the imposition of a stamp duty holiday on home purchases below £500,000 in England Northern Ireland which came into effect in early July. Lockdown measures in the wake of the COVID-19 pandemic also drove many first-time buyers to delay their search for a home, leading to a swell of demand as lockdown restrictions eased.

Halifax noted this demand surge in its release. “A surge in market activity has driven up house prices through the post-lockdown summer period, fuelled by the release of pent-up demand, a strong desire amongst some buyers to move to bigger properties, and of course the temporary cut to stamp duty,”  the lender wrote.

However, Halifax also warned that the price increase will likely be curtailed soon: "Notwithstanding the various positive factors supporting the market in the short-term, it remains highly unlikely that this level of price inflation will be sustained.”

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Nationwide, a rival lender to Halifax, released its own figures last week that showed prices at record highs in August. According to Nationwide’s data, prices rose by 2% between July and August, and 3.7% from the same period last year.

According to the latest Halifax House Price Index, the average price of a UK home rose as high as £241,604 last month. July’s figure represents an increase of 1.6% from June, and an increase of 3.8% year-on-year.

The new figures – which represent the highest house prices ever recorded by the Index in its 37-year history – also support the recent findings of the Nationwide Building Society, which saw house prices climb by 1.7% during July.

Halifax managing director Russell Galley hailed the results as a positive sign for the housing market. “Following four months of decline, average house prices in July experienced their greatest month on month increase this year, up 1.6% from June and comfortably offsetting losses in 2020,” he said. “The latest data adds to the emerging view that the market is experiencing a surprising spike post lockdown.

Galley attributed this price spike to pent-up demand from months spent under lockdown suddenly being released into the market, coupled with an ongoing lack of available houses to meet the surge in demand.

However, Galley also emphasised that the uncertainty regarding the effects of the COVID-19 pandemic and the government’s response would continue to play a role in the sector: “As government support measures come to an end, the resulting impact on the macroeconomic environment, and in turn the housing market, will start to become more apparent.”

Anna Clare Harper, the author of Strategic Property Review, echoed Galley’s opinion. "What we can't forecast is what happens next: economically, and in policy. What we can predict accurately is that these two factors will prove fundamental to the future of the UK housing market," she said.

Alpa Bhakta, CEO of Butterfield Mortgages Limited, offers Finance Monthly her predictions for the future of the  UK property market.

The introduction of the Stamp Duty Land Lax (SDLT) holiday on 8 July by Chancellor Rishi Sunak has been heartily welcomed by the UK’s property sector. Investors were thankful, especially given that treasury leaks ahead of the announcement suggested it would only apply to a certain type of buyer and would be officially unveiled as part of the autumn budget later in the year. What’s more, it came into force immediately after the chancellor’s speech and applies to the first £500,000 of all property sales in England and Northern Ireland.

Thus far, it seems to have been successful in stimulating further housing market activity. Property listing site Rightmove recorded an “unexpected mini-boom” in the week following the holiday’s introduction—with the average asking price of homes listed rising by 2.4% when compared to March figures pre-lockdown, and inquiries being 75% higher year-on-year.

How effective is it likely to be?

This is not the first time a UK government has introduced an SDLT holiday to kickstart the economy. Following the 2007-2008 global financial crisis, the lower threshold of SDLT liability was raised from £125,000 to £175,000—a move designed to support the lower end of the housing market at a time where the dreaded “credit crunch” meant much market activity had ground to a halt.

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Back then, the holiday was later expanded to cover all property transactions after not having the immediate positive effect intended. In the end, it resulted in an 8% increase in transactions for the homes that were covered by the holiday.

This current holiday, conversely, already covers nine out of ten homebuyers. In theory, this means we should be expecting a sustained increase in property transactions during the holiday period. However, the COVID-19 pandemic is not that simple; nor is the property market.

Of all the sections of the property market, the prime central London (PCL) offers valuable insight. Its size and attractiveness to international investors means we can assess overseas sentiment towards the UK as an investment hub while also determining how many buyers at the higher end of the market are returning.

The SDLT holiday and prime property

Estimates suggest that those purchasing high-end property in the nation’s capital can expect to save approximately £15,000 through this new tax relief holiday. This substantial discount, accompanied by other factors, means the PCL housing market could expect an influx of new buyers as property investors look to take advantage of discounted opportunities.

Estimates suggest that those purchasing high-end property in the nation’s capital can expect to save approximately £15,000 through this new tax relief holiday.

The importance of overseas investors in the PCL property market cannot be understated. In 2019 alone, such buyers accounted for 55% of all PCL housing purchases. While COVID-19 naturally brought the majority of transactions to a standstill, it has been clear that appetite for prime property has not diminished. Estate agency Beauchamp Estates sold over $374 million worth of property in the capital between December 2019 and June 2020.

Aside from the current SDLT holiday, an additional factor that will no doubt fuel future purchases is the SDLT adjustment announced by Chancellor Rishi Sunak back in March 2020. The chancellor stated that in April 2021, foreign buyers of UK property would have to pay an additional 2% SDLT surcharge. Many of the prime property purchases we are likely to see over the coming months by non-UK residents will no doubt be made in order to avoid this added cost.

Given what’s discussed above, I believe this SDLT holiday will facilitate a great resurgence in the PCL property market. Of course, I must mention that a second spike in COVID-19 cases or the reintroduction of lockdown measures in the capital would delay this recovery considerably. However, as it currently stands, I look forward to the PCL housing market leading the way for a strong UK property market resurgence sooner, rather than later.

This has especially rung true for the British high street in recent years, with retail centre footfall having fallen almost exclusively between January 2017 and March 2019.

Whilst the future prospects for high street retail may initially seem bleak, there is nonetheless good reason to believe that there is light at the end of the tunnel. In this article, Jason Wood, Head of Commercial Property and Rashid Ali, Partner at UK law firm Smith Partnership, take a closer look at the role of commercial property in the age of high street decline.

Is High Street Retail Really Nearing Death?

Headlines announcing 'the death of high street retail' have become commonplace in the public arena, and there is definitely significant evidence to suggest that the high street is at least feeling the pressure.

The number of people purchasing goods and services online is expected to increase from 1.66 billion in 2016 to around 2.14 billion in 2021. Overall, ecommerce sales already accounted for more than 14% of global retail sales in 2019, and forecasts are tipping it to grow further towards 22% in the next four years alone.

Although these figures do not necessarily mean that digital consumers are shifting their focus entirely towards the online sphere, the trend undoubtedly represents a threat to traditional retail businesses. That observation is backed by the numbers, with the closure of UK chain stores having led to a decline of 6537 stores in 2018.

It's not all bad news, however. Amidst this general downturn, takeaways, sports clubs, pet shops and specialist clothing stores are just some of the retailers that have posted a net gain in store numbers during the first half of 2019.

Retailers' Response

As online sales continue to grow, retail businesses have begun to adapt and diversify their approach. Aside from making their own move into the online market, retailers have found many new ways of safeguarding their commercial longevity. These could range from practical steps such as selling assets and large-scale reorganisations to focusing on the delivery of a more immersive brand experience.

Although the former approach may be seen as a necessary consequence of the changing retail environment, the latter steps may well be the ones that help reimagine high street retail in the 21st century. The presence of physical stores will always be the main distinction between online and offline shopping, and retailers are faced with the challenge of playing to those unique strengths in a future-oriented way.

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What About the Commercial Property Sector?

Retailers aren't the only ones having to adapt to this brave new world the commercial property sector has its own role to play in shaping the direction of the UK high street.

Store closures affecting both small businesses and high-profile retailers have made it harder for property investors to make the most out of their brick and mortar assets. Instead, many of them are faced with vacant space and reduced rental yields.

Unsurprisingly, commercial landlords whose portfolio is heavily focused around retail space are being hit hardest by the struggling retail sector. Rental cuts and company voluntary arrangements (CVAs) are at the order of the day, forcing landlords to rethink their strategy.

Commercial landlords whose portfolio is heavily focused around retail space are being hit hardest by the struggling retail sector.

Much like retailers themselves, diversification is often at the centre of that new approach. In some cases, this calls for nothing more than the repurposing of one retail space into another – as more and more shopping goes digital, retail warehouses continue to retain their importance.

In other cases, commercial property investors are moving into an entirely new direction. Opportunities in residential property, build to rent, flexible office space and other areas mean that landlords still enjoy many avenues through which to pursue commercial success. If the decline of the high street has taught us anything, it's that adaptability is central to achieving that goal.

In order to ensure longevity, developments can no longer be based solely on office or residential use. A greater focus on multi-use, the environment and more flexible lease structures can go a long way in shaping spaces that occupiers wish to remain in, helping landlords guarantee income in the long term.

The commercial property sector is also responding to these changes through moving away from retail-led and transactional high streets. There is now a greater focus on experience and the blending of retail, leisure and culture into a single space. The future of city centres lies with being more than just a place to shop; they are set to become community hubs where visitors can shop, eat, visit and explore to their heart's content.

In the face of such developments, landlords themselves are also having to alter their approach. Commenting on the changing role of the commercial landlord, Smith Partnership's Wood and Ali said:

"Landlords focused on providing long leases at high rents are likely to struggle for survival in the long-term. In their place, landlords who take a more active role in the management and performance of their tenants are likely to become the new norm. As such, commercial landlords are steadily settling into a new role as the curators of the high street, considering which businesses will thrive in their space and supporting them in doing just that."

A New Horizon

With changing consumer behaviours continuing to have a significant impact on the UK high street, the time has never been better to carve out a new way forward.

Although retailers and commercial landlords will undoubtedly face further challenges in the years to come, there is also a wealth of new opportunity on the horizon. Those who are able to capitalise on it successfully are set to play an instrumental role in shaping the path ahead.

Tracking 65,384 property sales between August 2018 and August 2019 from start to finish, the monthly updated local house market insights tool shows the average differences between asking prices on Rightmove and their actual sold prices lodged at the HM Land Registry.

It was revealed that, out of the 575 assessed properties in South West London, sellers were dropping their asking prices by an average of over £71,000 to secure a sale.  A similar story was seen in North West London, where 206 vendors reduced their initial prices by almost £69,000 on average.

Below are the top 10 areas with the greatest drops have been seen:

Region Average Difference Between Asking and Sold Prices No. of Properties Analysed
South West London -£71,178 575
North West London -£68,840 206
West London -£53,998 243
North London -£37,597 369
Kingston upon Thames -£28,147 641
Harrow -£27,818 260
Slough -£27,584 258
Watford -£25,705 276
Guildford -£25,435 694
Western Central London -£25,268 4

Property Solvers co-founder Ruban Selvanayagam commented: “Even some of the most experienced estate agents are failing to understand the current realities.” 

“Arguably due to the cloud of uncertainty surrounding Brexit, we’re operating in a buyer’s market at the moment and the fact that agents knowingly state exaggerated valuations at the initial stages is a disservice.”

Bearing in mind that prices in the South tend to be higher than in the Midlands and North, some of the lowest asking to sold reductions were seen in Wigan (-£3,890), Hull (-£4,258), Doncaster (-£4,705), Sheffield (-£4,884) and Sunderland (-£4,915).

Selvanayagam goes on to comment: “When we speak to homeowners, we always underline the importance of referring to HM Land Registry sold price data.  It’s never been easier to access this kind of information online.”

"Of course, it’s never a bad idea to incorporate a bit of wiggle room into the price.  Also, if a client has spent a significant amount of money on extending / refurbishing or there’s more floor space then, of course, it makes sense to command more.”

“However, overly inflated price valuations in the current sales climate invariably leads to properties lingering on the market for a lot longer than they need to.”

Do such disparities between asking and sold prices mean that the market is crashing?

“I would say not – although much would depend on the outcome of the seemingly endless Brexit negotiations.  A ‘no deal’ or disruptive exit from the European Union could, however, change the trajectory of house prices.  However, it’s too early to predict at this stage.”

It is very likely to be the most significant purchase you ever make. Because of its long term ramifications, you want to take the process seriously. Below, the experts at Crawford Mulholland provide Finance Monthly with a simple guide to buying your first home.

  1. Are You Ready?

First, you want to examine whether or not you are actually ready to purchase a home. Buying a home isn't something that you should jump into without proper preparation and knowledge. While owning your own home might sound appealing, it involves a lot of maintenance and ongoing work. When you own a home, you are responsible for paying all of the repairs and you are going to be responsible for paying for the respective taxes, insurance, and everything else. Because of this, you need to figure out if you are financially ready for such a leap.

  1. Budget For Other Costs

You want to be sure that you are factoring in the costs that you might not necessarily be looking at initially. There are plenty of costs associated with buying your own home that you have to factor into your buying decision including but not limited to the removal costs, stamp duty, the initial furnishing, the survey costs, the solicitor's fees, and more. Make sure that you are factoring in everything when you are making a buying decision.

  1. Shop For A Mortgage

Once you have decided that you want to go ahead and purchase a home, you want to shop around for a mortgage. This way, you will be able to minimise the interest rates that you are forced to pay on the mortgage. You will be able to search for some of the best mortgage rates online in order to find the best deal. You want to find the best deal because it will end up saving you a lot of money in the long run and you will need to look to see which type of mortgage would best suit your family.

  1. Find The Right Property

When you are shopping around for your first home, you want to take the necessary steps in order to find the right one. Finding the right home is very important because you don't want to make such a large investment in something that you are going to regret later on. Take your time to figure out where you want to live and find a home that is suitable for you to live. You should be looking at the different properties in the surrounding areas that you would like to live to see whether or not you can find a place that you would love to call home. Don't rush the search process because it is going to dictate where you live for the foreseeable future. You want to factor various things in this process including how long the home has been on the market, why the property is being sold, and what is included in the sale.

  1. Prepare To Negotiate

If you are going to be purchasing a home for the first time, you want to be prepared to negotiate. Without proper negotiating, you are not going to minimise the total price you end up having to pay for the property.

Overall, there are plenty of things that you can do to make the process much simpler. By following the tips above, you should be able to maximise your chances of finding a great home to purchase as a first time home buyer.

One of the top things that you need not skip is the "staging" process. This is the phase where your house will be readily available for potential buyers to see. Not only does this help you sell your property faster, but it even helps you add a few more pounds and value to your house for sale. Listed below are some tips on how you can prepare for your house's staging process.

  1. Declutter

Go over your entire home and de-clutter your space. Whether it's a one-story home or a three-story house filled with lots of rooms and baths, you may want to go over your things declutter those that you're not using at all. Give it to charity, sell them, give it to a friend. If you've not used it for months, then it's probably best that it goes. While you may not be including furniture pieces at home along with the sale, this is still an important process because we want to make sure that potential buyers won't see the house in a "messy" and "cluttered" state.

  1. Re-Paint

A fresh lick of paint will immediately transform an old-looking house and give it a fresh, new look. Make sure that when you're showing your property to potential buyers, given them a nice impression. Show them how beautiful the property is, and they can't appreciate it if the paints are all chipped, old, and dusty. Choose neutral colors for the paint and avoid personalizing the house too much. This way, buyers can see the true beauty of the home and they can do the personalization themselves.

  1. Keep It Clean And Minimal Looking

If there are minor repairs that need to be done, do it. Do you have holes in the wall? Fix it? Are the door knobs broken? Replace it! We want to make sure that the house looks clean, refreshing, yet minimal looking. Do not over-decorate. It's hard to appreciate the entire house when it is filled with large furniture and overwhelming with home decor.

You may also want to do a general cleaning this time. If you can't do it, hire someone to professional help you with this. Get rid of the lime streaks if any, clean the windows, make sure that the floors are waxed - until every inch of the house is squeaky clean.

  1. Upgrade Your Kitchen!

Did you know that the kitchen is one of the most precious and well-prized of your home? Many people's decisions make or break when it comes to the kitchen. Resurface your kitchen cabinets, replace the tiles or clean them if they're all filthy. You may also want to consider upgrading your kitchen countertop. It may be a little bit expensive, but it definitely adds a lot more value to your home and helps you sell it at the best price.

  1. Keep It Light And Airy

Give your guests a welcoming feeling. Make sure that the house doesn't have furniture that is too squished or too close together. Making it look light and airy adds value to your house and can even help you sell it at a higher price.

  1. Keep House Smelling Clean!

We don't want potential buyers stepping into your home while the house smells stinky! If there are drainage problems, it may cause odor and we don't want to just patch that with a band aid. Instead, to add value to your home and to make sure that it sells quickly at the best price, fix the source of the problem.

During a house visit, you may also want to bake some cookies or bread, as it helps them feel at home. Or, you can add some diffusers for a nice smelling home with therapeutic effects too!

  1. Work With An Estate Agent

Lastly, to make sure that you won't be ripped off by potential buyers, make sure that you work with an experienced real estate agent. Find one that has extensive experience in this field and one that can help you further increase the value of your home. When giving potential buyers a tour to your home, let the agent do the talking. They're the ones trained and they know exactly what to say, to help you get the best price and even sell the home much quicker.

 

The report looked at figures for 2018 and showed that 370,000 people applied for their first mortgage, an increase of 1.9% on the previous year and the highest number since 2006 when there were 402,800 applications.

New lending

The report also showed that there was some £62 billion in new lending during 2018, an increase of almost 5% on the same period the previous year.  Schemes such as the Help to Buy scheme from the government means that more people than ever are in a position to buy their first home, without always having to have a massive deposit.

New buy to let mortgages stood at 5,100 but this has actually fallen on previous years, by around 5%.  This shows that the market has become a little cautious in the light of new tax rules and other regulations being put in place for landlords.

First home success

With 370,000 new first-time buyer applications, this is the highest number in a 12 month period for 12 years, showing that while there are concerns about the housing market, there are still plenty of positive signs.  This works out as around 35,000 first time buyers a month that are moving into position to buy their first home.

The report also showed that the average age of the first time buyer was 30 and their gross household income was £42,000.

Getting that first mortgage

The increase in numbers is a positive sign but there are still considerations for first-time buyers, and this is why that average age is around 30.  For starters, you need to have a deposit of between 5-20% of the cost of the home before you attempt to get a mortgage.  So if you are looking at a property worth £150,000, you will need at least £7500 in a deposit.   The more deposit you have, the more mortgage products are open to you.

Deposit isn’t everything, you also need to factor in other costs.  Buying your first home still involves some costs that can be quite substantial and include:

There’s no Stamp Duty to pay on your first property up to a value of £300,000, as long as it isn’t worth more than £500,000.

Monthly repayments

After the problems of the Financial Crisis, lenders are also a lot more cautious about ensuring you can afford your mortgage payments and still pay all of your other living costs before they commit to giving you the money.

It can be an idea to put together a budget before you start mortgage shopping that looks at your outgoings.  This can be things like food, utility bills, council tax, water rates and also any existing debt you might have.   You will need to provide proof of income and outgoings to show the mortgage company that these figures are accurate.

You may qualify for a home buyer scheme backed by the government and a mortgage broker will be able to tell you about that.  There are affordable housing schemes, shared ownership schemes and also the Help to Buy scheme that could all make the difference between getting that house or not.

Finding the right deal

There’s a lot involved with finding the right mortgage deal and that’s why many first time buyers now use a mortgage broker.  They aren’t tied to specific companies and can find a product that suits your circumstances and budget.  That way, more people can continue to become first-time property owners in 2019.

One77 looked at the average cash and mortgage buyer house prices from the Land Registry and how much higher or lower the average mortgage house prices was, compared to those funded by a cash purchase.

With interest rates remaining at affordable levels and house prices at not so affordable levels, it’s no surprise that mortgage sales volumes across the nation are 138% higher than cash sales volumes. However, despite slower market conditions and the ease of dealing with cash buyers over those with a mortgage, the average house price for cash buyers is still 9% lower than mortgaged average house price levels.

By Region

In fact, there is just one region where cash buyers pay a higher property premium and that’s in London.

The gap is highest in the North East where mortgage funded house prices are 14% higher than those purchased with cash.

Great Britain

Some of the highest gaps in Great Britain are in Scotland with the highest being Falkirk, where house prices fuelled by mortgaged buyers are 32% higher than cash buyers. North Lanarkshire (26%) and Renfrewshire (25%) are also amongst the highest.

Hartlepool is the largest gap in England at 25%, East Renfrewshire, East Dunbartonshire, Preston, Middlesbrough, Burnley and St Helens also make the top 10.

Although placing 18th in Great Britain, Newport is home to the highest Welsh gap in mortgage and cash buyer house prices at 16%.

Although only the 83rd largest gap overall, Sutton is home to London’s largest gap with mortgaged fuelled house prices sitting 10% higher than those purchased with cash in the borough.

On the flip side, there are a couple of factors that can see the average cash sold price exceed that of mortgage sold prices in an area. Property prices could be more realistic, or buyers could have pockets deep enough to front the cash as is the case in some areas of prime central London (Westminster in particular). There’s also the chance that more properties in that area are unmortgageable and therefore competition from cash-only buyers will push up the cash sold prices statistics. This is often the case in the remote and sparsely populated Scottish islands, where lenders won’t go due to the tricky geographical factors and lower demand for property.

Managing Director of One77 Mortgages, Alastair McKee, commented: “Many home sellers will be drawn to a cash buyer as it can often mean a quicker, smoother selling process with less paperwork and no onward chain, which can be hugely appealing to someone that needs a quick sale in particular.

However, savvy buyers will know that they are in this stronger position and as a result they will often negotiate more off the asking price than they otherwise would, with the seller tending to accept it, resulting in a lower sold price achieved. I myself sold my last property at £100,000 below asking price to a cash buyer due to the greater convenience of doing so as I was lucky enough to be in a strong position due to my onward purchase, so I can certainly understand the appeal.

When considering which works best for you it’s really down to priorities. If you need to sell quickly then a cash buyer is the way to go, but if the sold price is more important, it’s worth holding out for an offer at full asking price.”

Region Difference of Average Mortgage House Price to Cash House Price % of Mortgage Sales Volumes Over Cash
North East 14% 111%
North West 13% 121%
Scotland 12% 124%
West Midlands 10% 205%
East of England 8% 160%
South East 7% 155%
Yorkshire and the Humber 6% 128%
East Midlands 5% 147%
Wales 4% 91%
South West 2% 76%
London -7% 281%
England 9% 143%
Great Britain 9% 138%

 

Highest Gaps in Great Britain
Region Difference of Average Mortgage House Price to Cash House Price % of Mortgage Sales Volumes Over Cash
Falkirk 32% 190%
North Lanarkshire 26% 255%
Renfrewshire 25% 190%
Hartlepool 25% 83%
East Renfrewshire 24% 130%
East Dunbartonshire 23% 158%
Preston 21% 143%
Middlesbrough 20% 149%
Burnley 20% 22%
St Helens 19% 193%
     
     
Highest Gaps in England
Region Difference of Average Mortgage House Price to Cash House Price % of Mortgage Sales Volumes Over Cash
Hartlepool 25% 83%
Preston 21% 143%
Middlesbrough 20% 149%
Burnley 20% 22%
St Helens 19% 193%
Warrington 17% 182%
Solihull 16% 182%
Warwick 16% 208%
South Tyneside 16% 157%
Darlington 15% 152%
     
Highest Gaps in Wales
Region Difference of Average Mortgage House Price to Cash House Price % of Mortgage Sales Volumes Over Cash
Newport 16% 268%
Rhondda Cynon Taf 14% 114%
Neath Port Talbot 10% 119%
Caerphilly 9% 212%
Bridgend 9% 188%
Blaenau Gwent 9% 67%
Swansea 8% 90%
Merthyr Tydfil 7% 127%
Vale of Glamorgan 7% 138%
Monmouthshire 7% 66%
     
Highest Gaps in Scotland
Region Difference of Average Mortgage House Price to Cash House Price % of Mortgage Sales Volumes Over Cash
Falkirk 32% 190%
North Lanarkshire 26% 255%
Renfrewshire 25% 190%
East Renfrewshire 24% 130%
East Dunbartonshire 23% 158%
South Lanarkshire 17% 170%
City of Dundee 17% 139%
East Ayrshire 16% 94%
City of Glasgow 16% 150%
North Ayrshire 15% 29%
     
Highest Gaps in London
Region Difference of Average Mortgage House Price to Cash House Price % of Mortgage Sales Volumes Over Cash
Sutton 10% 454%
Redbridge 7% 430%
Enfield 6% 362%
Bexley 6% 421%
Harrow 5% 338%
Greenwich 4% 464%
Hillingdon 4% 443%
Kingston upon Thames 4% 407%
Havering 3% 397%
Bromley 3% 310%

 

Those wishing to invest in property this year need to be aware of the emerging markets and demographics in order to make the best decisions.

Here, you will discover the ultimate real estate investment guide to purchasing property in the year ahead.

Which areas should you focus on?

Not all areas of the UK are facing a tough property market. In fact, some areas are positively thriving. If you want to ensure you are making the right investment, there are certain locations throughout the UK that you should be focusing on.

Birmingham is a key area currently experiencing adequate growth. It is experiencing significant infrastructural developments and has seen a drastic increase in the level of inward investments. It is thought the city is going to witness a 14% growth over the next three years, making 2019 a great time to invest.

Newport in South Wales is another area to consider. Out of all of the UK council areas, the town has been recognised as the 9th largest in terms of increase in house prices. According to local estate agents, there are waiting lists of buyers looking to invest in the area. This means, if you want to invest in Newport, you are going to need to be patient.

Other key areas experiencing a strong property market include Trowbridge in Wiltshire, Northampton, Leeds, Leicester and Coventry.

Which sectors are performing well?

In terms of which sectors to invest in, there are a couple of market trends to pay attention to this year.

Due to economic uncertainty, the rental market is expected to rise significantly over the next year. However, changes in legislation have led to many buy to let landlords pulling out of the market. Further changes set to be introduced in the form of the Tenant Fees Bill on June 1st, 2019, could potentially push more landlords to leave the market. This means, there will be a higher demand for private rental opportunities. Investors who have the funds could therefore significantly profit from buy to let opportunities.

Auctions are also going to play a large role in the property market. Investing in property from an auction house enables investors to potentially snag a bargain. More sellers are likely to turn to auction houses, particularly if they require the funds quickly.

Overall, the property market has proven how resilient it can be in recent years. There may still be a lot of economic uncertainty, but as you can see above, some areas and sectors still remain lucrative to investors.

When it comes to buying a property, UK homebuyers may rely predominately on mortgages and cash payments, but their knowledge towards other financial products is limited, new research by Market Financial Solutions (MFS) has revealed.

The bridging lender commissioned an independent, nationally representative survey among more than 2,000 UK adults to uncover just how Brits have been financing their property purchases. Of those who have bought a property since 2007, 42% identified as cash buyers while a further 52% said they had used a mortgage or re-mortgage.

Taking into account the rise of the UK’s alternative finance industry – currently worth over £4.6 billion – the research also revealed a noticeable uptake in products outside of mainstream loans. Nearly one in five (19%) homeowners said they had used a form of alternative finance, ranging from crowdfunding to mezzanine finance and unregulated loans, with this figure rising to 29% among respondents aged between 18 and 34. Meanwhile, 13% of homebuyers said they had used a bridging loan – this number increased to 21% for those who were investing in a second home.

Deciding on how to finance a property purchase can seem overwhelming given the number of loans and products currently available in the UK. As a result, 37% of homebuyers have relied on a broker to help them find a financial product best suited to their needs.

However, MFS’s research also showed that the reliance on mortgages and cash payments was partly due to a lack of knowledge surrounding other available finance options. Reflecting the competitive nature of the country’s property market, nearly a quarter (24%) of buyers said they would have liked to have considered other financial products but feared they would lose out on their property purchase if they delayed their credit decision. Delving into awareness of specific alternative finance products, nearly half (49%) did not have a strong enough understanding of bridging loans or the situations in which they can be used.

Paresh Raja, CEO of MFS, commented on the findings: “Mortgages have long been the go-to method for financing a house purchase in the UK. But over the past decade, a range of new alternative finance products has arisen to give buyers different options that might be better suited to their needs. However, today’s research demonstrates that there remains a lack of understanding about what these options are and how to use them.

“From crowdfunding platforms to raise a deposit, through to bridging loans to buy a property at auction, there are many opportunities now accessible for those needing to access credit, and to remain reliant on the mortgage market could restrict an individual’s ability to get the funds they need. Indeed, in the UK’s competitive property market, it is essential that buyers are aware of the financial products they can choose from, in turn putting themselves in the best position to progress with a purchase quickly and efficiently.”

(Source: Market Financial Solutions)

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