Craig Upton

Craig Upton

Craig Upton has worked with UK Property Finance Ltd for over 18 years writing content for the websites and online finance publications. Craig writes website content, press releases and articles on popular financial brands in the UK. Creating strategic partnerships and supporting data with extensive research in the latest trends Craig is well versed with most products within the financial sector. Craig has worked within the online marketing arena for many years, having worked with British brands such as FT.com, Global Banking Finance and UK Property Finance, specialising in bridging loans and specialist mortgage finance. Craig has gained a wealth of knowledge and is committed to publishing unique content for our readers on various financial platforms supporting the products offered by UK Property Finance.

UK House Prices Set to Fall in 2023

After more than two years of record gains, average UK house prices are now predicted to fall in 2023. But while this may buck the trend of the past couple of years, the likelihood of a major crash remains low.

Even in the face of growing economic uncertainty and an unprecedented living-cost crisis, demand for quality homes in desirable areas of the country remains strong.

October brought the first decline in average UK house prices in 28 months, according to data published by the Royal Institution of Chartered Surveyors. The same survey also found that house price expectations among market watchers and analysts also slumped for the first time in over a year.

Experts now believe that a decline of around 4.7% in average house prices will creep into the equation by the end of next year. This will mark the first annual drop recorded in over a decade and comes in stark contrast to the enormous annual house price gains collected over the past couple of years.

But as average house prices increased by almost 6.3% in 2022 alone, the declines forecast for next year are unlikely to have a huge impact on overall affordability.

“There is a rebalancing, but nothing like we saw after the global financial crisis. Supply is still relatively tight, so that is helping support prices,” said Chris Druce at estate agency Knight Frank.

Data from the Land Registry suggests that while average UK property prices fell by approximately 19% during the last global financial crisis, they have since doubled.

Supply issues continue to fuel higher prices.

Several major UK housebuilders have indicated that they have built fewer homes this year than originally planned, due largely to supply chain issues and escalating costs.

Taylor Wimpey Plc said that its housebuilding targets for 2022 would not be met, while Persimmon Plc has predicted 2023 land additions to be lower than in 2022. These and other factors will continue to affect the availability of housing across the UK, fuelling high prices.

Looking further ahead, 2024 is predicted to bring a slight increase in overall property prices: total annual gains of around 1%. After which, a further 3.5% increase has been forecast for 2025.

As polled by Reuters, experts believe that while a housing market crash cannot be ruled out of the equation, the more likely scenario is a correction. More than half of those polled said that the possibility of a crash remained high for the time being but that its impact would not be quite as severe as those experienced in the past.

“We see a one-year correction in 2023, with the economic performance and job numbers a little better than expected. 2023 will be a very difficult year, but life will feel semi-normal in 2024,” said Tony Williams at consultancy Building Value.

Even so, analysts have such wildly differing opinions on what will happen over the next 12 months that forecasting anything with even a slight degree of certainty is almost impossible. In London, experts believe that anything from a 12.5% drop to a 4.0% rise in average house prices could be recorded next year.

“Prices have continued to fall in London due to exacerbated affordability issues. New builds are also likely to plummet in London as build cost inflation and reduced development finance start to bite,” said Mark Farmer at Cast Consultancy.

 

 

Third Quarter Bridging Loan Transactions Hit New Record High

New data from Bridging Trends suggests that in spite of the year’s first quarterly interest rate increase, total bridging activity has once again reached a new record high. The impressive figures from Q3 indicate total bridging loan transactions of £214.7 million for the quarter, up a huge 20% on Q2 (£178.4 million).

This is the best quarterly performance for the UK’s bridging sector since Bridging Trends began monitoring the sector and reporting on combined market activity in 2015. The figures are even more impressive when taking into account the year’s first (albeit minor) increase in average bridging loan interest rates.

Having stood at 0.69% in Q2, the average interest rate on a bridging loan issued in Q3 came out at 0.73%.

Chain break prevention: The new top use for bridging finance

There was also a significant shift in borrower spending patterns in Q3, bucking the trend of several consecutive prior months. Chain break prevention topped the table as the most popular application for bridging finance, accounting for a huge 22% of all transactions (up from 21% in Q2).

Purchasing investment properties, which had been the most popular application for bridging finance for five previous quarters in a row, accounted for just 16% of all transactions in Q3 (a major fall from 24% in Q2). This is the lowest share of the bridging market ever recorded for purchasing properties for investment purposes and is likely the result of investors delaying important decisions due to the turbulent economic climate.

“I anticipate investment purchases to increase in the next few months,” commented Sam O’Neill, Head of Bridging at Clifton Private Finance.

“The total gross lending will be an interesting benchmark for the next quarter given the current uncertainty of the market. With uncertainty comes opportunity, and we are already seeing investors looking to capitalise on under market value transactions caused by panic selling vendors.”

“I would be interested to see the re-bridging figure in the next quarter’s statistics. Current bridging loans nearing their term’s end are subject to more stringent criteria on mortgages and an uncertain buying and selling market. Will more lenders who don’t currently consider re-bridging see this as an opportunity? Or a necessity to keep pace with other lenders and the demands of the market?”

A boost in business bridging

Elsewhere, the use of bridging loans for business applications increased by almost 100%, hitting a new height of 11% in Q3 (up from 6% in Q2). Likewise, there was a major increase in the number of borrowers taking out bridging loans to finance auction purchasers, up from 5% in Q2 to 8% in Q3.

All of this occurred at the same time that average monthly interest rates on bridging loans increased for the first time in 2022. Having hit a record low of 0.69% in Q2, average bridging loan interest rates increased slightly to 0.73% in Q3.

Rates remain low in comparison with historic averages, but there are those who believe further increases over the coming months are inevitable.

“As predicted in Q2, interest rates have started to slowly rise to 0.73%, but it is worth noting they are virtually on par with Q3 in 2021 (0.72%). What comes next remains to be seen, but I would not be surprised if interest rates continue to rise and investors remain cautious,” said Gareth Lewis, Commercial Director at MT Finance.”

“Considering the volumes we have seen in Q3, bridging finance clearly continues to be a useful tool for homeowners and investors alike. What has been interesting is the drop-off in bridging being utilised for investment purchases, which is likely due to buyers taking stock of the current market. While it’s too early for us to really feel the impact of September’s mini-budget, I expect this will be more visible in Q4.”

 

Key Changes to Planning Permission Over the Past 70 Years

Understanding where planning permission rules came from and why they exist holds the key to making sense of them in a modern context. Right now, estimates suggest that at least 300,000 new homes need to be built every year for the next decade, just to ensure the government meets its own lofty housing targets.

In reality, the likelihood of this actually occurring is practically zero.

Critics believe that sweeping changes to planning permission rules and general building regulations could hold the key to turning around the UK’s escalating housing crisis. Whether any such alterations come about remains to be seen, as many developers and construction companies continue to find themselves blighted by overly complex rules and regulations.

A brief history of planning permission

As the Second World War drew to a close, the reconstruction of towns and cities across Britain became the government’s top priority. Plans were also drawn up for developing entirely new towns and cities from scratch.

To get things started, the 1946 New Towns Act established a programme for the development of new towns. This resulted in several areas of the country being designated for new town and city projects, the first of which would emerge as Stevenage.

However, the 1947 Town and Country Planning Act followed soon after, placing heavy restrictions on where rapid urbanisation of rural spaces would be permitted. At this point, planning permission needed to be issued by local councils for any developments to proceed.

In 1955, conservative minister Duncan Sandys requested that local councils prohibit the development of new residential zones on the edges of towns and cities, so as to:

A: Check the further growth of a large built-up area.
B: Prevent neighbouring towns from merging into one another.
Preserve the special character of a town.

From the 1990s

There was a moderate easing of planning permission restrictions in the 1990s, or when the Town and Country Planning Act had been updated. At this point, it would only be necessary to apply for planning permission for projects that formerly met the definition of “development”. Things like changes in the primary use of land or buildings, interior alterations, and projects that do not alter the external appearance of buildings could all be performed without applying for approval.

A General Permitted Development Order was implemented in 1995, providing even greater scope and flexibility for developers. Later in 2013, the government acknowledged that the need for residential spaces across the UK should prompt a rethink of current restrictions.

The rules were modified once again, and the conversion of certain commercial properties into residential homes became exempt from planning permission guidelines. However, some of the country’s less reputable and responsible “cowboy” developers exploited the new freedoms, creating tiny and uncomfortable flats out of office spaces that were never meant to accommodate residents full-term.

Recent changes to planning permission

Most of the recent changes to planning permission rules have focused on raising residential standards. New rules were introduced towards the tail end of the COVID-19 crisis to allow more types of commercial conversions, including the repurposing of medical facilities and gyms into residential units.

As things stand, anyone looking to build something new, make significant changes to an existing building, or alter the main use of a building needs to apply for planning permission. None of which is helping new and aspiring developers get their projects off the ground, but there is at least a dedicated Planning Portal now, which is designed to simplify the process of obtaining planning permission.

How Green Technology Can Reduce Energy Bills

Up and down the country, landlords and everyday households are scurrying to find any and every viable solution to the UK’s spiralling energy bills. This year may have brought Britain’s hottest temperatures on record, but the prospect of an exceptionally bleak winter is already taking its toll on the nation’s welfare.

The escalating living-cost crisis was and is one of the most pressing issues for Liz Truss, who just days into her premiership announced plans to freeze energy bills at an average of £2,500 a year for two years. The announcement came as part of much broader support packages for households and businesses, but whether she remains in power long enough to come through on any of her pledges now remains to be seen.

Indeed, there are those in government (including several prominent members of the Conservative Party) who believe Liz Truss will be ousted before the end of the month.

Either way, capping energy bills at an average of £2,500 a year for two years is not something most would praise as a major step in the right direction. It still represents a major increase from last year’s average household energy bill of £575 for gas and £764 for electricity.

Striving for longer-term savings

A joint study conducted by Scottish Power and the World Wildlife Fund (WWF) found that the average household could save almost £1,900 per year by upgrading to the latest green technologies. This includes advanced insulation, the installation of heat pumps, and the use of solar panels.

All of these devices work in different ways, but they are ultimately designed to reduce energy consumption and bring household energy costs under control.

Unfortunately, stepping up to these kinds of green technologies is not something that comes cheap. It can cost anything from £7,000 to £13,000 to install a heat pump, while solar panels for the average home will typically carry a price of between £5,000 and £11,000. With the living cost crisis biting harder than ever before, this simply is not the kind of money most people have at their disposal.

This is where government bursaries and grants can offer at least a modest lifeline to many households and landlords. The Green Homes Grant scheme has now come to an end (at least in the sense that no further applications are being accepted), but there are still initiatives like the Boiler Upgrade System that can pave the way for significant discounts.

One grant application can be submitted per property, which (if successful) could be worth as much as £5,000 to £6,000 off the price of installing a heat pump or biomass boiler, either of which could significantly boost a property’s energy efficiency and effectively pay for itself long-term.

Improved property values

Along with reduced household energy bills, property owners are being prompted to consider the extent to which green improvements can increase a home’s market value. Specific figures are hard to come by, but the study conducted by Scottish Power and the World Wildlife Fund (WWF) suggested that the average home could see a £10,000 boost to its market value through the adoption of green technologies.

But as all green technology grants and incentives introduced by the government to date have been strictly temporary in nature, those looking to take advantage of any such discounts are advised to do so as promptly as possible. Landlords in particular stand to make significant savings by investing in green technologies for their rental properties, as the countdown continues to the introduction of the government’s tightened carbon emissions rules for all UK households.

Money Saving Expert Bridging Loans: What’s the Verdict?

For some time, Money Saving Expert has been the UK’s go-to for honest and impartial advice on the most essential financial topics. Along with the useful resources published by the MSE team itself, the website also has a forum with more than two million active members.

But what is the official (or unofficial) Money Saving Expert’s take on bridging loans? Does the Money Saving Expert website offer any advice, direct or otherwise, for those looking into bridging finance?

What is a money-saving expert?

Established in 2003, Money Saving Expert was created by Martin Lewis, a financial journalist who would eventually make his own fortune helping other people save money. He’s now worth tens of millions of pounds, but he can still be found regularly advising folks on how to save money on their household bills and other outgoings in general.

Money Saving Expert is staffed by more than 100 people who create and curate a steady stream of consumer-finance-related posts. Martin Lewis himself has become known as something of a guru on the financial advice scene and is constantly popping up in high-profile slots on popular TV and radio shows.

He sold Money Saving Expert to the Money Supermarket Group several years ago for a massive sum of money, but he still contributes to its output.

What does a money-saving expert say about bridging loans?

Interestingly, bridging finance is not a topic that has ever been brought up on Money Saving Expert in any official capacity. In fact, there has barely been any mention of bridging finance from the Money Saving Expert team itself over the years.

The same can also be said for Martin Lewis, who so far has remained fairly tight-lipped regarding his thoughts on bridging finance. Perhaps due to the fact that bridging loans have only recently started to become mainstream in nature, having previously been near-exclusively available to established business borrowers.

What is a bridge loan?

A bridging loan is a type of short-term finance that typically lasts 12 months or less. It will provide you with an instant cash boost while you wait for longer-term finance. Bridging finance is often used by people who want to purchase a property but have yet to sell their present household.

If you choose to take out a bridging loan, you can do so from traditional lenders, such as high-street banks, or through a finance broker, such as UK Property Finance. Keep in mind that a bridging loan will be secured against an asset; this is usually your property. If you don’t meet any of the repayments, your home could be at risk.

How about the money-saving expert forum?

It is a slightly different story where the Money Saving Expert forum is concerned, where literally thousands of conversations have taken place to date about bridging finance.

All of this makes it surprising that little to no information or guidance has been published by Money Saving Expert.

Taking a look at the Money Saving Expert forum sheds light on some of the most common questions and concerns regarding bridging finance. For example, some of the most frequently asked questions of all by members of the Money Saving Expert forum include the following (and variations thereof):

  • Will I qualify for bridging finance?
  • Who can apply for a bridging loan?
  • What does the bridging loan application process look like?
  • What security needs to be provided for a bridging loan?
  • How are bridging loans repaid?
  • Can a bridging loan be repaid on a monthly basis?
  • Is it possible to get bridging loans with bad credit?

This would seem to suggest that general interest in bridging loans among the consumer audience has been piqued for some time. However given the lack of formal input from bridging loan experts, advice sourced from forums like these is not always reliable.

Ask the experts…

Of course, this is not to say that forums like these cannot be useful for accessing invaluable information. Particularly when it comes to people’s first-hand experiences with bridging finance, there’s much to learn in public forums.

But if you have important questions or concerns to raise regarding bridging finance, they should always be discussed with an expert. Book your obligation-free consultation with the team at UK Bridging Loans today, and we will help you build a clear picture of the pros and cons of short-term borrowing.

Private Renters Now One Bedroom Worse Off Than Two Years Ago

The spending power of private rental tenants in the UK has shrunk to such an extent that the average renter is now one bedroom worse off. Skyrocketing costs combined with a disastrous shortage of available inventory are forcing renters across the country to scale down their ambitions and expectations when seeking affordable rental properties.

Analysis conducted by Hamptons Estate Agents suggests that two years ago, tenants able to spend £929 on monthly rental payments could comfortably afford a two-bedroom property in a desirable location; today, this same budget would only stretch to a one-bedroom home in the same location.

This means that in the course of just two years, private renters have effectively seen a full bedroom wiped off their spending power.

Hamptons report that the average monthly rental cost of a two-bedroom home is approximately £1,070. 16 months ago, this would have been more than enough to rent a three-bedroom property of the same standard in a similar area.

This indicates the fastest and most severe renting power erosion Hamptons has recorded, and the situation is only set to worsen over the coming months.

Skyrocketing monthly rents

Over the past two years, the average cost of renting a property privately in the UK has increased by more than 16%. For the typical private tenant, this equates to another £165 per month on their rental bill.

The last year alone has brought an average rental cost increase of 8.3%, spurred by record demand for affordable rental properties in desirable areas.

Chronic shortages in the private lettings market are worsening as landlords across the UK liquidate their portfolios to escape rising interest rates and unfavourable government legislation. Figures from Hamptons suggest that the total number of available rental properties for July was 9% down on the same month last year and a huge 52% down from July 2020.

Commenting on the figures, Aneisha Beveridge of Hamptons suggested that the worst of the financial squeeze is yet to come.

“Tenants aren’t seeing their budgets stretch as far as they used to, and they are likely to be squeezed further still by a mix of investors leaving the market and the landlords left behind looking to pass on their higher mortgage costs,” she said.

A mass market exodus

Private landlords, particularly those with more compact property portfolios, are exiting the UK lettings sector at a growing pace. As it becomes increasingly difficult to turn a profit with a buy-to-let portfolio, landlords are finding themselves with little choice but to sell some or all of their homes to private buyers or investors.

All of this is placing further pressure on the private rental sector as available inventory becomes increasingly scarce. There are far fewer landlords purchasing properties than selling up and exiting the sector; more than 50,000 rental properties are expected to be lost from the market this year alone.

Ms Beveridge highlighted how the situation is not only affecting those looking to rent for the first time but also for tenants planning to relocate to other parts of the country.

“Those trying to move are increasingly faced with market rents rising faster than what they’ve been paying for their current homes,” she added.

“Often this means they face compromising on what and where they rent next, with some having to trade down.”

Significant cost increases are to be expected by anyone looking for a new tenancy or planning to renew their tenancy over the coming months. The figures in London make for particularly painful reading, where average rents have soared by as much as 33% over the past year.

On average, it now costs £2,672 per month to rent a home in inner London.

New Universal Credit AET Threshold Could Affect 114,000 Claimants

Amendments to the universal credit rules introduced this month could see many thousands forced to boost their income or find work to retain their benefit payments.

Current estimates indicate that around six million people in the UK are currently claiming universal credit, as the escalating living-cost crisis threatens millions with the looming risk of fuel poverty.

Within universal credit legislation, the administration earnings threshold (AET) means that claimants who earn nothing or have earnings below a specific threshold are automatically added to the intensive work search regime. Those concerned are required to attend regular face-to-face meetings for job search purposes and are placed under extensive pressure to apply for jobs.

By contrast, claimants who earn in excess of the AET threshold are bracketed in a “light-touch” category, where payments are received alongside their employment and there is little to no immediate pressure to seek higher-paying jobs.

On September 26, the current AET threshold of £355 per month will increase to £494 per month, almost £150 higher. Likewise, the AET for couples claiming together will increase from £567 to £782.

Early indications suggest that approximately 114,000 people will subsequently fall below this new AET threshold and will be subject to the same strict rules and regulations in relation to finding work. If these rules and regulations are not satisfied, AET payments may be withdrawn entirely.

Work and Pensions Secretary Thérèse Coffey was quoted by the Liverpool Echo as having said that the alterations to the regulations will “help claimants get quickly back into the world of work while helping ensure employers get the people they and the economy need.”

Elsewhere, a spokesperson from the DWP said that the AET rule was long overdue and needed an important update.

Since its introduction in 2013, the AET has not kept pace with the increases in the National Living Wage, with the result that the number of hours needed to work to earn the AET has fallen over time,” read an extract from the statement.

“The adjustment will bring the AET back to its original ‘parity’ with the National Living Wage.”

Claimants who are affected by the new AET threshold will be automatically transitioned to the more intensive work search regime. This means being required to attend mandatory work search reviews at a local job centre, which take place either on a weekly or monthly basis.

Evidence will need to be provided at such meetings that the claimant in question is actively looking for work and spending at least 35 hours a week engaged in work-related activities. However, those with caring responsibilities or health conditions will be subject to different rules.

The DWP has stated that it will be contacting those affected by the changes directly.

 

Affordable Housing Shortage Triggers Major Spike in Shared Accommodation Searches

House sharing is typically associated with students and younger people looking to combine independence with affordable living. But as the living-cost crisis tightens its grip on UK households, more over-50s than ever before are setting their sights on shared accommodation.

The latest figures published by a flat-sharing website indicate an almost 240% increase in the number of 55- to 64-year-olds seeking shared housing over the past decade. The site also noted a 114% increase in shared accommodation interest in the 45-to-54 age group.

Most of those seeking shared accommodation are aged 25 to 34 years old, but the number of older adults showing a willingness to share accommodation with other renters paints a stark picture of the UK’s housing market.

Unsurprisingly, the communications director of the website in question told the BBC that astronomic monthly rents coupled with the cost-of-living crisis were the main factors motivating older adults to seek shared accommodation. Mr Hutchinson also said that more people than ever before were accepting the prospect of becoming lifetime renters, having been completely priced out of the housing market.

According to the latest figures from the Office for National Statistics, average rent prices have been increasing steadily and consistently for well over a year now. More people are spending greater proportions of their income on monthly rents than ever before, as landlords continue to increase their prices due to skyrocketing demand.

On average, monthly rent prices have increased by 3.2% over the past 12 months, taking the average monthly rent outside London to £1,126.

The pros and cons of shared accommodation

Surveys conducted by leading home-sharing sites and services suggest that most of those considering shared accommodation are doing so purely for financial purposes. Elsewhere, others have reached the conclusion that the financial benefits (i.e., savings) of house sharing outweigh the potential disadvantages.

Even so, those who are considering moving into shared accommodation at any age are advised to consider all pros and cons carefully.

For example, the main advantage of shared housing is comparatively low living costs. Your monthly rent payment is much lower, and you share the utility bills with your housemates.

In addition, you may be able to secure a place in a property that is otherwise out of your price bracket. This is particularly true when it comes to city centre accommodations and homes in desirable locations in general. By renting a space in a shared house, you could live somewhere that would otherwise be out of reach.

Some older adults moving into shared accommodations have also spoken of the potential social benefits. Making connections as an older adult is not always easy. Shared housing brings the benefit of ‘built-in’ friends. This can be particularly beneficial for those who feel lonely or insecure about living alone.

On the downside, there are no guarantees that you will get along with your new housemates. Their lifestyles and behaviours, in general, may clash with yours, making it difficult to live together harmoniously.

Likewise, conflicts over facilities and resources in shared housing are common. You may have become used to the freedom of having your own kitchen and bathroom, for example, only to now have to wait in line for your turn.

There is a lack of privacy and seclusion that comes with shared housing. Even if you have your own private space within the house, you still technically live with several other people. Whether this is a good or bad thing is a matter of personal preference, but it can still be quite an adjustment to have lived independently beforehand.