This Week in Property: The Latest News (7th May 2021)
Take a look at what our CEO Gill Fielding has to say about this week’s property news…
Honk Kong boost for prices
Since the government offered UK citizenship to British National Overseas passport holders in Hong Kong recently, there has been a surge in Hong Kong residents looking for prime property in London and since the announcement, residents of the colony now account for 4% of home sales in London up from only 1% a year ago.
That figure includes both prime residential in central London as well as nearly 2,000 sales across London generally. These numbers seem fairly small and insignificant until we remember that our property market is fuelled by low supply and high demand and additional demand coming in just exacerbates the discrepancy and pushes prices higher.
The UK government estimate that over the next few years 300,000 people from Hong Kong will take advantage of the citizenship offer and that is equivalent to our normal annual property shortfall – and they all have to live somewhere!
This 300,000 is more than our net annual inflow of people from the EU countries – even when we were in the European Union. Obviously it was right to offer these people from Hong Kong a safe haven but it will impact our property market going forward.
All good news for financial life after the pandemic!
I’ve never liked New Builds!
If anyone has ever heard me speak about property at an event they will know that I don’t like new build houses as an investment and today I have the factual evidence to support my bias! The property analysts TwentyCi have discovered that people pay, on average, £63,00 more for a new build property than an existing one.
Wow! That’s a lot. In the north east the premium is a whacking 62% with an existing property selling for £175k and a new build for nearly £202k.
In the south east it’s less at about 14% difference, and London the least at about 5%. The Homeowners Alliance confirmed that a new build property depreciates the moment you put the key in the door and it can take a few years to make that premium back.
That’s Ok if you intend to live in it as a family home for those years but it’s a disaster for investors. I always knew I didn’t like new builds!
Where to work in the future?
I’ve been watching all the news about coming out of lockdown and today there’s a suggestion that 1 million people will continue to work from home after the pandemic and many major employers are considering hybrid working for their staff where they work a couple of days in the office and a couple of days at home.
Meanwhile the bankers Goldman Sachs have told their staff to get ready to get back into the office in June.
Personally I would much rather work in an office and get the sense of community and so on but I realise it’s a matter of personal choice. Going forward this will create a point of difference between employers and when looking for a new job, people will add to their required job list where they work in addition to salary, hours, perks and pensions.
Of course employers can keep in line with things like pay but they don’t appear to have a unified front on home versus office working so it will be a real dilemma for people going forward.
To take the better job but not the ‘right’ workplace or not. Like most things it will be a balance of the financial and the emotional for each person and it’ll be interesting to see what wins!
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