News

Annual house price growth for November is reported to have risen to 10%, up from 9.9% recorded in October, according to the Nationwide index.

Continuing to rise, the UK house price increase hit double digits following the end of furlough and the stamp duty holiday, indicating that demand remains strong. According to figures from Nationwide, the average UK property price rose by 0.9%, which followed an increase of 0.7% in the previous month. This takes the average UK house price to £252,687, an increase of 10% from the same period last year.

Property prices have increased to nearly 15% higher than levels seen back in March 2020, when the full effect of the pandemic first hit the UK. The reason for this continual rise can be put down to supply and demand, with a lack of homes available to buy. According to data from HMRC, October 2021 saw the quietest activity for almost a decade. Home sales were 28% lower this October when compared to October 2020, following a record high in activity early on in 2021.

In the same period, figures for mortgage application approval fell to the lowest levels seen for the last sixteen months.

“There have been some signs of cooling in housing market activity in recent months,” Nationwide’s chief economist, Robert Gardner, commented.

He added that this was “almost inevitable” after the stamp duty tax relief in the UK finished at the end of September, as buyers made every effort to bring forward their purchases to take advantage of the tax break.

“Activity has been extremely buoyant in 2021. The number of housing transactions so far this year has already exceeded the number recorded in 2020 with two months still to go and is actually tracking close to the number seen at the same stage in 2007, before the global financial crisis struck,” Gardner said.

He also added that he felt things looked a bit uncertain for the future: “It is unclear what impact the new Omicron variant will have on the wider economy.”

Gardeners felt that the expected rise in interest rates and the increased cost of living would further negatively impact the housing market.

The chief UK economist at Pantheon Macroeconomics, Samuel Tombs, said, “Mortgage rates look to be rising. Swap rates, which lenders use to price their loans, have increased, and profit margins on home loans are already very tight by past standards”, he said.

“Admittedly, the link between variations in mortgage rates and changes in house prices isn’t stable.”

Estate agent Knight Frank’s head of residential research, Tom Bill, commented, “Gravity-defying price growth is the result of low interest rates and tight supply, which are both things we expect to reverse next year, putting downward pressure on prices. Interest rates may rise more slowly if the new Omicron COVID-19 variant proves to be more serious than the early anecdotal evidence suggests.”

The new Omicron variant of the COVID-19 virus is sure to have a cooling effect on the property market, with many people holding back on selling their properties due to uncertainty in the future.

“The number of homes for sale coming on to the market is slowing, which is nudging prices steadily upwards,” said the chief executive of Property Finders, Jonathan Hopper.

Life insurance is often overlooked as a seemingly superfluous expense. It is the kind of thing you hope you will never need and therefore assume you can do without.

Unfortunately, the financial complications that can accompany the death of a spouse or partner can make an already horrendous time in life practically impossible to negotiate.

Family life insurance provides priceless peace of mind for those closest to you in the form of essential financial support if the worst should happen.

What is life insurance?

Life insurance policies are typically finite, taken out over a specific period of time as required by the policyholder. The idea is that if you die or are diagnosed with a terminal illness during this time, a lump-sum payment is made to your spouse, partner, or family.

For example, if you take out a mortgage over 30 years, you may choose a similar life insurance term to ensure the debt will be covered.

In the event that a claim is made on a life insurance policy, the beneficiaries: For example, those you designate to receive the money can spend the funds any way they like. Most life insurance payments are used to clear outstanding mortgages and pay off other debts, though they may also be used to cover day-to-day living expenses.

Who needs family life insurance?

Family life insurance is considered essential when debts are taken on (such as a mortgage) that would be difficult or impossible for your family members to cover in the event of your death.

Likewise, family life insurance provides an essential financial safety net to cover essential living costs if the policyholder, who is the primary financial provider for the family, dies during the policy term.

All family life insurance policies are tailored in accordance with the income level, outgoings, and general financial situation of the policyholder. An effective life insurance policy will ensure that the beneficiaries named in the policy are supported financially. This will include debt repayment and living costs in the event that the policyholder dies.

How much does family life insurance cost?

Family life insurance policy costs vary significantly in accordance with the financial status of the policyholder, the length of the policy, and the extent of the coverage required.

It is technically possible to take out life insurance starting at around £5 per month. As a general rule of thumb, however, the lower the monthly premium, the lower the payment received by the policy’s beneficiaries if a claim is made.

Life insurance costs are also influenced by factors such as the applicant’s age, occupation, lifestyle, smoking status, medical history, and so on.

Is family life insurance really necessary?

The short answer is yes: family life insurance provides essential financial support if the worst should happen and priceless peace of mind if it doesn’t.

Nobody knows for sure what may be around the next corner. The fact that most life insurance terms pass without a claim being made does not mean it is a facility that should be overlooked.

Life insurance is all about taking care of those closest to you if you are no longer able to do so personally. There are policies available to suit all budgets, and the peace of mind that comes with quality coverage is often worth the low monthly premium alone.

Average house prices in the UK have hit another all-time high. According to Nationwide, a typical home in the UK had a value of £254,822 in December, an increase of just under £24,000 compared to January last year.

But like most other major lenders, Nationwide predicted a gradual slowdown for the sector over the coming months, due in part to the withdrawal of the government’s temporary stamp duty holiday.

In addition, Nationwide believes that the spread of the Omicron variant of COVID-19 could adversely affect the market’s performance.

“The Omicron variant could reinforce the slowdown if it leads to a weaker labour market,” Nationwide’s chief economist, Robert Gardner, said.

Mr Gardner also said that the inevitability of interest rate hikes over the course of the year will have a “cooling influence” on the sector, which sustained its record-breaking performance throughout much of 2021.

Bank of England base rates were recently increased from a historic low of 0.1% to 0.25%, with more increases on the cards over the coming months. As mortgage rates grow and house prices hover at all-time highs, getting a foot on the property ladder is likely to become increasingly difficult for many first-time buyers.

“House price growth has outpaced income growth by a significant margin over the past 18 months, and, as a result, housing affordability is already less favourable than before the pandemic struck,” Mr. Gardner added.

The UK’s highest-growth regions

In stark contrast to traditional norms, London saw the lowest average property price increases over the course of the last 12 months, up 4.2% to just over £507,000. By contrast, average house prices in Wales skyrocketed by almost 16%, reaching a new high of £196,759.

A brief summary of house price growth by region in 2021:

• Wales: Up 15.8% to £196,759
• Northern Ireland: Up 12.1% to £167,479
• South West: Up 11.5% to £294,845
• Outer South East: Up 11.3% to £329,869
• North West: Up 11.2% to £196,806
• Yorkshire and Humberside: Up 10.8% to £190,855
• East Anglia: Up 10.4% to £268,146
• East Midlands: Up 10.4% to £221,813
• Scotland: Up 10.1% to £172,605
• West Midlands: Up 9.4% to £227,031
• Outer Metropolitan Area of London: Up 8.8% to £410,992
• North: Up 7.7% to £148,105
• London: Up 4.2% to £507,230

Commenting on the figures, Nationwide stated that this was the first time in the bank’s history that Wales had seen the largest annual house price growth of any UK region.

“Price growth remained elevated in Northern Ireland at 12.1%, the strongest end to the year for the region since 2007,” Mr Gardner said.

“Annual house price growth in Scotland was 10.1%, in line with the wider UK.”

Average monthly rents are rising faster than at any point in the past 13 years, the latest figures from Zoopla indicate; according to the property website, the average cost of renting a home privately was 4.6% higher in September year-on-year, coming out at £968 per month.

Annual rent growth was particularly strong outside London, averaging 6% compared to the same time last year. This is the fastest growth recorded for this part of the sector in more than 14 years.

Skyrocketing monthly rents continue to be fuelled by a lack of affordable inventory and high demand for quality homes in desirable parts of the country.

The Southwest saw the biggest gains of all, with average monthly rents increasing by 9% over the past 12 months. Wales recorded its strongest performance in years with 7.7% annual growth, followed by the East Midlands with just under 7%.

The gradual easing of lockdown restrictions has seen more activity in major cities and busy urban centres as many workers return to the office and life slowly edges back to normality.

The figures from Zoopla indicate annual rent growth in London of just 1.6%, but this is still a strong performance considering average rents were down around 10% at the beginning of the year.

Some of the top-performing cities in terms of annual rent growth were Nottingham and Bristol, both of which recorded growth of more than 8% since September 2020.

Search for space fuels ferocious competition

Speaking on behalf of Zoopla, head of research Grainne Gilmore said that there was still heavy demand for spacious properties in quieter and less densely populated corners of the country.

“Households looking for the flexibility of rental accommodation, especially students and city workers, are back in the market after consecutive lockdowns affected demand levels in major cities,” commented Gilmore.

“Meanwhile, just as in the sales market, there is still a cohort of renters looking for properties offering more space or a more rural or coastal location.”

Some parts of the country have seen the kinds of average monthly rent hikes that are pricing locals completely out of their own communities. In Purbeck and Dorset, for example, average monthly rents for September had increased by more than 16% since the same time last year.

Combined with high unemployment and lingering economic uncertainty, rising rents are creating a gloomy outlook for millions of private renters.

Dan Wilson Craw, Deputy Director of the campaign group Generation Rent, said the whole thing amounted to “terrible news” for current and prospective private renters.

“We have been hearing from renters who have lost bidding wars for homes or failed affordability checks, so they are being priced out of their areas,” he said.

“The chancellor has frozen rates for another year, so these rises will make it even harder to find an affordable home. The government has to do much more to bring rents down. That means building more homes, including social housing.”

Selling a home in the current climate should not prove too much of a challenge for those looking to relocate. Record demand across much of the UK has created an unprecedented sellers’ market, with prospective buyers competing ferociously for quality homes.

Still, there are always steps that can be taken to speed things up further. Not to mention, ensure that, when your home sells, you get the best possible price for it.

With this in mind, here are a few simple yet effective ways to ensure the fastest sale for your home in 2022:

1. Advertise it yourself

Even if you have hired an agent to sell your home, you can still advertise it yourself via multiple channels. Social media, in particular, can be a surprisingly effective platform for listing homes for sale. The more places you advertise your property, the faster it is likely to sell.

2. Get it staged professionally

A professionally staged property almost always sells faster and for a higher price. Hiring a home-staging company may seem like an unnecessary cost, but it could pay dividends. The services of freelance home stagers are always readily available online.

3. Focus on first impressions

Think carefully about the first things prospective buyers will see when visiting your home. This usually means things like the driveway, porch, front door, and surrounding exterior, all of which must be in pristine condition and perfectly presented.

4. Apply a fresh coat of paint

Time and time again, this has proven to be the most cost-effective way to boost a home’s appeal and market value. Go for something neutral to create a blank canvas, upon which prospective buyers can visualise how they would like to decorate each space.

5. Focus on the kitchen and bathroom

It is the practical spaces within a home that tend to attract the most attention and scrutiny. If you are going to invest time, effort, and money in renovations, be sure to focus on the kitchen and bathroom. The kitchen, in particular, can be the ultimate make-or-break factor.

6. Consider hiring a photographer

Nobody is going to visit your home if it does not look the part online. The photos you publish could play a major role in determining if, when, and for how much your home sells. Unless you know exactly what you are doing, hiring a photographer could make all the difference.

7. Comprehensively declutter

Removing as many personal items as possible makes it much easier for prospective buyers to see themselves living in your home. Likewise, getting rid of as much clutter as possible helps enhance this ‘blank canvas’ effect you are looking to create.

8. Consider the alternative options available

Alternatives to conventional property sales can also be considered in time-critical scenarios. Examples of this include selling at auction, selling for cash to a specialist property-buying company, and so on. All of these should be discussed in advance with an established broker in order to ensure you fully understand the pros and cons.

It’s fair to say that, in the past, homeownership has been the primary goal for many young people. Times have changed, and it appears that a significant number of ‘millennials’ have now no desire to get onto the property ladder but are quite content to rent for the foreseeable future.

Renting can have many benefits, making it a more attractive proposition, with one of the main reasons cited being freedom from the financial baggage and responsibility that comes with a mortgage.

With homeownership, there are a lot of hidden costs that will be entirely the responsibility of the owner. From the initial deposit to plumbing, electric, garden, and general property maintenance, the cost of buying and maintaining a home can run into many thousands of pounds.

When you rent, you are able to budget better as you have fixed costs for the property. Your monthly rent will, for the most part, remain constant each month. Any maintenance needed is the responsibility of the landlord, not the tenant.

According to the Office of National Statistics, using figures from 2017, young people are way less likely to own their own property today than ever before. Fifty per cent of people in their mid-30s to mid-40s in 2017 had a mortgage, compared to 66% twenty years ago. The same age demographic today is three times more likely to opt for a rental property than they were two decades ago. One-third of this group lived in rental homes in 2017, compared with one-ten just twenty years ago.

The figures released indicate that the population with the highest wealth status, in any age group, is more likely to buy property than those with a lower income. The number of property buyers has decreased significantly in the last ten to twenty years, mostly due to problems raising the initial deposit. But not all renters are renting out of necessity; some are making a considered choice.

The pandemic has had a marked effect on people’s choices when it comes to where they want to live and work. The normality of working from home has caused a rethink of the type and location of homes. With the elimination of travel costs to work, many have opted to put the extra cash into a property that they can work from, basically in any location they desire, which they would not otherwise be able to afford. Another vital advantage of renting is that you are able to relocate quickly and easily without the need to sell or rent out your property.

Renters have rights that they can expect from their landlord in order to protect themselves. Renters’ rights include:

• The right to know the identity of the landlord
• The right to reside in a safe property that is in good repair
• The right to be protected from unfair rent and eviction
• They have the right to have their deposit returned, provided the property is in the same condition as when they first rented it.
• The right to challenge excessive charges
• The right to live undisturbed
• The right to see the EPC (Energy Performance Certificate)
• The right to a legal rental contract (for fixed tenancies over three years)

One of the drawbacks of rental properties is that UK legislation to protect private renters is very poor, and many become victims of unscrupulous landlords.