This Week in Property: The Latest News (20th August 2021)
Take a look at what our CEO Gill Fielding has to say about this week’s property news…
What stamp duty holiday?
I read a fascinating analysis of the property market over the weekend where they were analysing the change in asking prices between June (when we were still in the stamp duty holiday period) and July (when the main stamp duty holiday had ended) to find that property asking prices overall in the UK continued to rise and so the effect of the stamp duty holiday wasn’t as significant as some people would lead us to believe.
Curiously there is a distinct north south divide with prices in the south rising and the north falling overall. On the surface this may seem weird because property values in the north tend to be lower and many properties fall below the stamp duty threshold of £250,000 anyway but my best guess on why the fall has arisen is due to lower income levels leading to lower confidence in general. But once again it’s good to see the naysayers wrong again with all their predictions of a massive market drop at the end of the stamp duty holiday. When will these people realise that it’s supply and demand that drives the prices and not temporary governmental incentives.
The pandemic has initiated some strange changes in behaviour but none more so than the change in the rental and tenancy market where demand has outstripped supply to such an extent that people are almost fighting in the properties to get to offer above asking rate rents in order to secure a property. One London agency claims that their listing of tenants requiring properties rose from 91 to 415 between June and July 2021 and they only have 83 properties available.
The overall number of rental properties across the UK that are currently awaiting a tenancy is approximately 3.5% but in high demand area such as the southwest there are only approximately 1.5% of the rental stock currently available to rent. This is driving rents up considerably and it is now commonplace for a potential tenant to offer substantially above the rent published and to offer up to a year’s rent in advance.
The rental market is fast becoming a riot place with people bidding for a property before it’s even got onto a website. In Oxford for example there are 22 potential tenants for every property which is all great news for property investors with a portfolio of rental properties but clearly challenging for potential tenants. The situation should ease as we move out of the pandemic as more people feel confident about putting their property up for sale or rent but it’s a rental riot and a jungle out there in the meantime.
The Leather trousers are back!
You may know that the property make over TV programme, Changing Rooms is coming back – and Laurance Llewellyn Bowen is back at the helm – still wearing tight leather trousers as he did 20 years ago (very brave move!). Although it’s only a Tv programme, I was investing when the programme was popular in the past and amazingly it did impact people’s choices – particularly of colours – and I saw many a property with orange and lime green walls as the trend for the programme at the time was for vivid colour statements and crazy ‘concept rooms’. I understand that the programme this time around will be more muted with colours and more suitable for long term living but we shall see.
But as a property investor I will watch the programme not because I want to see the makeover per se but I want to see what trends and fads appear because the mass of humans will copy it and if I want my properties to fit the general mood then I need to keep in step with programmes like this and with how new show homes are decorated for example so I’m not out of step and my properties less saleable or rentable as a consequence. It’s fascinating research to watch these programmes but I need to do it as part of my business and I shall thoroughly enjoy the silliness and the bizarre outfits and antics of Mr Llewellyn Bowen!
BIG recycling challenge!
I am greatly encouraged by the amount of recycling we do as a nation and as a child I had no idea what recycling was or why and so we have come a very long way to now where we have recycling collections and sites all over the place and many businesses emphasising sustainability of their products. In short, we are much more environmentally conscious then we were 50 years ago but although we’ve all got to grips with basic recycling, do any of us know how to recycle a jumbo jet!
It turns out that there are currently 5,467 aircraft (about 25% of the total number of aircraft) in storage many of which are just going to be scrapped and used for parts, although some are going to be recommissioned for commercial use and have been in storage whilst travel has been restricted. But for those of us who struggle to remember which colour recycling bin to use for what, please just spare a thought for the poor people trying to recycle an airplane. It has to be dismantled and split apart and the component parts distributed. Apparently, the only thing difficult to recycle is the internal cabins but everything else can be used again and I think that’s wonderful! Air travel is one of the most environmentally damaging things as individuals we do and although this airplane recycling is perhaps a drop in that ocean I applaud those people trying to make a difference and reuse a jet engine for instance rather than dumping it.
– But what a sizeable challenge to have!
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