What does 2020 have in store for the UK property market?

As we enter a new year (and decade), the opening weeks of 2020 are an appropriate time to reflect on the state of the UK economy and map out the key political and economic events likely to shape the real estate market.

While it is difficult to predict exactly what lies on the horizon, evidence suggests 2020 could be more eventful than 2019. The Conservative manifesto has some clues, with greater investment in public services and the UK’s withdrawal from the EU featuring as two primary aims for Prime Minister Boris Johnson. For business leaders, and those involved in property, the latter will be vital in encouraging investment into bricks and mortar. 

A recovering property market

We have already witnessed first-hand how Brexit uncertainty has affected the wider economy. For example, The Guardian reported last September that the pound sterling dropped to its lowest point in three years.

However, it is not just the value of the pound that has been affected by uncertainty. Nationwide estimates that by October of last year, prices had grown by under 1% for 11 consecutive months. Analysis suggests that since April 2019, uncertainty has reduced the cumulative worth of London property by more than £2 billion.

Thankfully, things are looking positive over the coming months. Whatever your political persuasion, a majority government is in power, thereby reducing the likelihood of an election and making it easier for new policy to be passed without undue delays. With political tension and fatigue reaching fever pitch over the festive period, this reprieve is likely a good thing for the country.

Investors turn to real estate in 2020

Whilst claiming a “Boris Bounce” may be going too far, there is a sense that 2020 will be smoother sailing for the property sector; Savills has predicted that the prime central London (PCL) market could be set to grow as much as 3% in the coming year. Indeed, such growth can be attributed to investor demand.

In 2019, Butterfield Mortgages Limited (BML) surveyed a sample of investors to uncover their sentiment towards property. The BML research revealed that some 61% of investors believe traditional assets like property are best positioned to deliver stable and secure returns during the current political uncertainty. A fifth (20%) said they plan to increase the amount of money they have invested in real estate in 2020.

Growth such as this would be excellent news, and not just for those in London. More transactions taking place at the top of the market should be complimented by the modest growth that the rest of the country enjoyed last year, with the upshot being improved market liquidity. In turn, this ensures there are more real estate opportunities available for domestic and international investors alike.

Managing foreign investment into the UK

The weakened pound has meant that non-UK residents are enjoying greater purchasing power than might have been the case pre-referendum. Many of those looking to purchase a UK-based property may be looking to take advantage of this current climate.

The aforementioned BML survey revealed that 57% of UK-based investors believe that foreign buyers investing in the country’s real estate are vital to the economy, but want restrictions on their activity. This requires delicate and balanced policy, something we could see as part of the upcoming budget. During the election campaign, Prime Minister Boris Johnson touted a new 3% surcharge on foreign nationals purchasing property. It remains to be seen how and when such a policy will be implemented. 

It would be naïve to be purely optimistic about 2020; risks still exist for the UK property market. Firstly, Brexit is still ongoing. The process is long and amounts to one of the largest diplomatic tasks ever undertaken. Understanding that setbacks are still possible, despite Prime Minister Boris Johnson’s majority, is important. Similarly, there is no guarantee that a disorderly, no-deal Brexit is completely off the table.

However, at this point, it appears highly unlikely.

A cause for optimism

2020 looks set to be a strong year for the property sector, with renewed healthy growth forecasts already creating a buoyant narrative. As ever, there are risks, but with a majority government in power providing consistency, these seem to be less concerning than the cliff-edges of 2019. I now look forward to seeing the government addressing the challenges facing the property market, ensuring that investors and homebuyers are in a position to readily access new opportunities, in turn encouraging the growth of the sector.

 

Source: www.propertyinvestortoday.co.uk

Boris Johnson and UK property

UK PROPERTY: With the General Election now behind us, asking prices for homes being listed for sale are predicted to rise as we head into the new year, according to latest figures

Pent-up demand from buyers who have been holding off making any major financial decisions until such times as there was more certainty around Brexit are now more likely to commit in the coming months, particularly as mortgage product rates remain low due to the current competition between lenders.

Certainly, there are early indicators that the UK property market may pick up pace as we move into 2020.

According to Rightmove’s data, the decrease in asking prices of 0.9 per cent in December is the lowest at this time of year since 2006.

The report also suggests that so far in 2019, overall buyer levels have remained robust, with the number of sales agreed only 3 per cent lower than in 2018.

However, as the number of properties being listed for sale has been down overall by 8 per cent when compared to the previous year, this would indicate that overall supply hasn’t kept up with the number of buyers who have been active, regardless of what’s been going on at Westminster.

Rightmove director Miles Shipside comments on the data, “The greater certainty afforded by a majority government gives an opportunity for a more active spring moving season, with some release of several years of pent-up demand.

“Given the Brexit track record to date, further political twists and turns should not be ruled out, though with a large majority there is a higher possibility of an end to the series of Brexit deadlines, and the prospect of an orderly resolution.”

Miles continues: “With much of the political uncertainty removed, we expect that the number of properties for sale will recover as more new sellers come to market, making up some of this year’s lost ground.

However, property supply is still limited, with estate agents having the lowest proportion of properties available for sale in two years, and this will fuel modest gains in the national average asking price of property coming to market.”

Former RICS residential chairman, Jeremy Leaf, cautions that as far as the impact of Brexit on the

housing market is concerned, we’re still not quite out of the woods as yet and suggests that: “The

strength of any post-election ‘bounce’ will largely be determined by early clarification of the Brexit timetable.”

This is of course a factor that is still unresolved. With the UK’s final deal with the EU and trade deals with many other countries still to be negotiated, and a no-deal Brexit still not fully off the table, there may be some who decide to hold back for just another few months, until there is more clarity before moving home.

The question is though, might these buyers miss out and end up paying more for their next property if they wait until mid-2020?

Jeremy suggests, “It would be surprising if there is a significant increase in values over the next few months. Prices have been underpinned for some time by a shortage of supply, so any rise is likely to be more than outweighed by the usual increase in stock covering most price ranges at this time of year.”

How to avoid disasters with deposits in Exeter Devon

Neither a landlord nor a tenant want deposit disasters. It’s time consuming, often stressful and can be expensive for all involved to resolve.

A recent report shows deposit disputes have been at their highest since 2007. Neither tenant nor landlord have to experience these issues.

Experienced, local lettings teams like ours are a easy solution to avoiding disputes such as these in the future. We have been doing just this, day in, day out for years and that level of experience ensures you’re in safe hands. It is very rare for us to come across an issue we haven’t met before and dealt with successfully.

Consistency of staff ensures a supportive environment for landlords and tenants. We are able to be there for as long as you are a tenant or for as long as you own the property. It’s not just a short term project for us either.

Our lettings department here in Exeter is peopled with locals; we live here and know the area. We aren’t in a centralised overseas call centre, as in some other businesses.

Choose the right agent and avoid a deposit disaster.

Thanks for reading and if you have any property related questions please don’t hesitate to get in touch with us – we’d love to help you.

Oliver

PS: If you want to let your property quickly, professionally and cost effectively call me and our team on 01392 204800 or email: lettings @robertwilliams.co.uk for friendly expert advice.

devon landlord property management exeter

Smart investors are keen to snap up bargains, and the buy to let market remains active. However, whilst it is tempting to go out and buy, buy, buy – a word of caution, because it might not be so easy to let, let, let.

Finding a tenant is only one aspect of the venture which some landlords feel can be done independently of a lettings agency. However, we often hear sob stories from new landlords who tried to go it alone - with disastrous consequences.

For example, according to the National Landlords Association, some 50% of landlords have had a property abandoned by a tenant. This usually follows at least one month of rent arrears and can also include substantial repairs bills and cleaning costs, and arrears of electricity, gas and water, which may have accrued without the landlord’s knowledge. So the issue of credit referencing and deposit protection becomes an issue.

Then there is the problem of possession. You can’t just reclaim the property, as the tenants are unlikely to have formally relinquished their occupation. So despite having an empty property, you could still have to gain formal possession through the courts. This can take months and be expensive, especially when compounded with rent arrears and a period of vacancy. And if you re-let the property illegally you can be fined up to 25% of the property’s open market value!

As you might expect from the above, most experienced landlords choose to employ lettings specialists such as ourselves to manage their investment - as well as simply finding a tenant. This is due to the fact that our lettings team have many years of experience and therefore will be able to give reliable advice and avoid stressful situations.

As an estate agent, what advice would you give someone who is just starting their search for a new home?

 

Q. As an estate agent, what advice would you give someone who is just starting their search for a new home?

A. The first thing I would say is that if you are serious about moving, and you have the necessary funds at your disposal, then you can start your property search. However, due to the current market there is a slight shortage in 3-4 bed properties as more people are upsizing rather than downsizing.

It is important that you first of all define precisely what sort of property you are looking for. This may sound like common sense, but without a very clear idea of what you want, you could be about to waste a great deal of time and effort – and not all of it your own, either!

So, list the key features of your perfect home – the number of bedrooms, the location, the style, etc, etc. It can also help to divide these features into the absolute “must-haves” and those which, while desirable, aren’t complete deal-breakers.

That done, it’s on to the actual house-hunting. These days, the majority of people start their search online – but having said that, many properties will sell before showing on portals such as Rightmove, so it’s always best to speak to an agent about what they have available. Some sellers choose to keep their property offline; this means that unless you speak to an agent you won’t even know about it. Don’t restrict your search to online properties as you may lose out!

Before deciding which properties you want to view, read the details carefully to make absolutely sure whether they meet all your essential points. If you live close by, hop in the car and take a drive past, to get an initial impression. Alternatively, you can check out the area online, using tools like Google Streetview and UpMyStreet, which has lots of useful information about things like schools, etc. However, be careful as Google Streetview is often out of date so just to be on the safe side give the agent a call for the full details.

When it comes to making arrangements to view, don’t try to see too many properties in one go. You’ll only wear yourself out. Also, draw up a handy checklist of the features you’re looking for, together with a list of questions to ask the vendor (or the agent, if it’s an accompanied viewing).

Finally, be patient. While a degree of compromise is almost always necessary, never make an offer simply because you are “tired of looking.” You’ll regret it in the long run!

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