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Coronavirus Other Finance News

Post-Lockdown Exodus Sees City Dwellers Flee for the Country in Record Numbers

It was not long ago that small city centre apartments with the bare minimum space were the most desirable properties for movers in the UK. Given the choice, it seemed most would have liked to relocate to major employment hotspots like London, being perfectly happy to sacrifice space at home for the convenience of urban living.

Or at least, that is how the situation looked before lockdown.

According to property portal Rightmove, homebuyers in record numbers are setting their sights on quieter and more spacious homes far from crowded towns and cities. In fact, the number of searches being carried out for properties in rural locations with smaller populations has more than doubled since lockdown was enforced.

Primarily, the desire for larger homes in quieter locations is being fueled by homeworking becoming the new norm for much of the population. Coupled with the fact that more people are spending more time in their own property (indoors or out) than ever before, the appeal of larger homes in quieter corners of the country is understandable.

Outdoor Space a Key Selling Point

Seaside towns and villages in particular have spiked in popularity among homebuyers, reports Rightmove. Irrespective of whether such a move could potentially add significant mileage to a worker’s twice-weekly commute, it is apparently a small price to pay for what is on offer.

Rightmove’s report made it clear that outdoor space has become a key selling point for homes on the market in 2020. The availability and quality of a property’s gardens and outdoor living spaces are now taking precedence over previous priorities.

Whereas it was once kitchens, bathrooms and convenient locations that sold homes, it is now manicured gardens, patios and tranquil settings.

Prices Set to Fall in 2021?

Nothing is certain for the time being, given the potential threat posed by COVID-19 and Brexit, however, some real estate watchers believe that 2021 will bring an end to record-breaking property price increases.

“There is increasing concern that the combination of significant losses over the coming months allied to the scaling back of policy initiatives in early 2021 will have an adverse impact on transaction levels,” commented Simon Rubinsohn, chief economist at The Royal Institution of Chartered Surveyors, though this does not necessarily mean that next year’s slowdown will reverse the positive movement of the past couple of months entirely.

According to the Halifax, average house prices in the UK saw their biggest monthly growth in September since 2016 – a huge 7.3% spike. This took the average UK property price to a new high of £249,870.

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Other Finance News

UK House Prices Spike a Further 5% in September

Fears of an imminent halt to property price acceleration across the UK have been temporarily allayed, after one of the country’s biggest lenders once again reported strong monthly growth.

According to the latest figures from Nationwide, average UK house prices for September saw an impressive 5% spike compared to the same month in 2019.  Growth that suggests post-lockdown demand is continuing to fuel the UK property market’s impressive recent performance.

Property Purchase Restrictions Eased

The removal of restrictions on property viewings in most parts of the UK has been credited with the stronger and ongoing recovery of the housing market.

Data published in Nationwide’s recent report suggests that not only were average property prices up an additional 0.9% in September from the previous month, but that the annual rate of growth is now the highest it has been since 2016.

On a quarterly basis, average property prices were up approximately 1.7% in the three months ending September 30.  At which point, the average asking price for a home in the UK stood at £226,129.

The report from Nationwide also suggested that house prices were up in most UK regions, rather than being confined specifically to the usual key areas.

“The rebound reflects a number of factors. Pent-up demand is coming through, with decisions taken to move before lockdown now progressing,” commented Robert Gardner, Nationwide’s chief economist.

Mr. Gardner also highlighted how the chancellor’s temporary holiday on stamp duty payments was continuing to drive property purchase decisions in England and Northern Ireland. Until the end of March next year, purchases of properties valued at £500,000 or less will not incur any stamp duty payments.

“Behavioural shifts may also be boosting activity as people reassess their housing needs and preferences as a result of life in lockdown,” Mr. Gardner added.

Uncertain Long-Term Projections

While the picture is predominantly positive for the time being, economists are unwilling to rule out more turbulent times ahead for the housing market. Nationwide and several other major lenders have indicated expectations of long-term coronavirus-related implications, which may not become fully apparent for some time.

One of which being job fears among younger workers and professionals in particular, who due to the risk of redundancy or reduced working hours are putting home purchase plans on hold.

Government wage support is also becoming less prolific, causing many to rethink major purchase decisions in general.

The vast majority of economists and real estate experts agree that the recent record-breaking property price performance cannot last forever. Though in most instances admit being pleasantly surprised with the speed at which the market has returned to strength.

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Bridging Loans

The Big Question: Renovate or Relocate?

For some, lockdown provided the perfect opportunity to take stock of what matters and appreciate their homes in an entirely new way. For others, the whole situation made it abundantly clear that they simply were not happy with where they lived.

COVID-19 has forced millions to revisit what we expect, what we want and what we need from our homes. Particularly with more people than ever now working from home on a semi-permanent basis, many homeowners are struggling with the space they have available.

In which case, there are two primary options to choose from – relocate or renovate. Both of which can be advantageous in their own unique ways.

Relocating in the Current Climate

While COVID-19 has brought about inevitable obstacles and challenges for those considering relocation, there is also one major home buying benefit to consider right now. The temporary stamp duty holiday introduced by the chancellor has removed all stamp duty liabilities for anyone purchasing a property with a market value of £500,000 or less.

This amounts to a significant discount on the overall purchase price for most buyers until March 31 next year.

In addition, lenders in general are currently willing to accept relatively low down-payments of 10%-15%. Although some continue to demand 20% or even 25%, there are affordable options available for movers and first-time buyers alike.

Comparing the market with the help of an independent broker is essential to get the best possible deal in the current climate.

Renovating Your Existing Home

Of course, there are many instances in which conducting renovations and home improvements could work out more cost-effective than relocating. For those considering renovating their existing home, experts advise first establishing whether the structure of the property is suitable for the proposed alterations.

This will typically mean arranging an inspection and survey of your property and having an independent contractor look and guide you through the options available.

Some smaller extensions may not require planning permission, though it is still advisable to make the necessary enquiries to ensure you do not contravene restrictions in your area.

Funding major home improvements and renovations has the potential to be easier and more affordable than obtaining a conventional mortgage. By securing a property development loan against the value of your home, you will have access to competitive rates of interest and low overall borrowing costs.

Compare the Market…

Whether you have extensive renovations in mind or are considering relocation, we can help you find the best possible deal to suit your objectives and your budget. At UK Property Finance, we work with an extensive network of specialist lenders across the UK, scouring the market in its entirety to find unbeatable deals on all types of mortgages and home improvement loans.

For more information or to discuss your requirements in more detail, contact a member of the team at UK Property Finance today.

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