This Week in Property: The Latest News (4th March 2022)
Take a look at what our CEO Gill Fielding has to say about this week’s property news…
A diner in a restaurant in America had clams but one of them had a bonus surprise! As he bit into it he found something hard – a pearl. And not only a pearl but a round and perfectly white 8.8 mm pearl which could be worth up to $10k. The man and his wife have been visiting the restaurant for 35 years and never had such a surprise before. The point for me is that you never quite know where your next piece of good fortune is coming from – so keep your eyes, ears – and teeth open!
Affordability testing hokey cokey
I’m old enough to remember a time before affordability testing came in – in fact most of us are as it only came in 8 years ago in 2014. Affordability testing is a test when you take out a mortgage and it’s the test that needs to know how much you spend on holidays and hair cuts and now the Bank of England are debating whether to remove this test for mortgage lending. They have started a consultation which will close on 6th May and I suspect this review is because the affordability test might not terribly affective in picking up people who subsequently can’t afford payments as apparently only 6% of borrowers took out lower mortgages as a result of the test. I know that the authorities are trying to protect people but it’s interesting that all this copious form filling that we’ve done for the last 8 years has not really resulted in much and what is more important is actually implementing regulations and guidelines that actually help people rather than cover the backsides of the financial providers and experts involved.
London leads the field
It’s official! London has beaten New York, Paris and Hong Kong to be labelled the wealth capital of the world. It’s a list of 100 cities complied by The Wealth Report which reveals that there are 25,771 people in the UK worth over $30 and a third of them live in London. What interest me is where their money is invested and 31% invest in property whilst only 11% invest in cryptocurrency. Apparently $3 billion was invested in UK property last year. Now I suspect those figures may have changed dramatically in the last week due to the Ukraine situation but the principles remain the same. The rich, wealthy and international reviewers still consider London to be the world’s financial hub and property still the number one asset of choice. We may not be as rich as them but we can certainly copy what they do and learn the right wealth principles. I was fortunate enough to have been born in London and that wasn’t anything to do with me but the choice to invest in property certainly has been my choice – you never know if I keep going I might make it into the realms of the Wealth Report.
Rental Rat Race……
I know there’s lots of news about rising property price rises and how difficult it is to find a property to buy but the same issues are affecting renters. According to a report in the Times this week there are 39% fewer properties to rent now than the five year average (figures from Zoopla) and consequently rents are at a 13 year high. The average rent in the UK is now £969 which is up £62 since the start of the pandemic. Overall rents are up 12% over the last 5 years but specific local areas are suffering much higher uplifts than that and London is one of those areas where one tenant in London was asked for an additional £700 per month in rent. I have two sides to my thoughts with this: firstly I’m concerned for the tenants and that lack of availability and the rising cost but as a property investor there’s part of me that is pleased with increasing rents. However, these two sides of my thoughts can be reconciled IF only the government would help private landlords more to create decent, reasonably priced accommodation for all. We’re here and ready and deserve not to be punished with tax increases just because we’re providing a necessary service and doing the governments work for them. We are mainly decent people and can help to solve the property crisis but it would be easier if we weren’t constantly fighting HMRC and people who think we’re criminals.
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