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Rural locations becoming more attractive to home movers in the UK
People in the UK want to live in villages but the need to have easy access to shops, transport and medical facilities and good broadband, new research has found. Some 21% of people who are moving home said that they wanted to live in a village, making it easily the most popular type of location, compared to 14% for a market town and only 12% for either a big city or a suburb, according to the study by Strutt & Parker. The Housing Futures Report found that broadband and mobile connections are essential to rural life. Access to broadband was a key factor for 49% of those intending to move to a village, while 38% highlighted mobile connectivity. It reveals that with 60% want to be able to walk to shops, 48% close to local transport and 45% near to medical facilities. ‘The UK might seem to be focused on urbanisation but we believe a new, overlooked trend is set to shape Britain’s housing market over the coming decades and this is the desire to move back to rural locations,’ said Stephanie McMahon, head of research at Strutt & Parker. She explained that while some research would suggest cities have the upper hand over villages as the urban trend has gathered pace in the UK, a number of negative traits have begun to appear such as a rise in inadequate housing provision, urban sprawl and increased pollution. She pointed out that the shift away from cities is being driven by people looking for neighbourhood safety at 86%, while 58% want space between neighbours and 48% are looking for a strong community feel. The report also point out that technology is helping to change the rural economy, which plays a key role in creating jobs and prosperity. England’s rural economy now accounts for £210 billion of economic output and hosts over 25% of all registered businesses, according to DEFRA. New companies are thriving in rural locations, including hi-tech manufacturing, food processing, the service sector, retail and power supply. ‘The expansion of broadband and mobile communications has seen a greater uptake of working from home in rural locations compared to urban areas. It seems that the same factors that once drove urbanisation, improving economic and social conditions, are now inspiring the village revival,’ added McMahon. And it’s not just those wishing to sell up from their city lives to buy in a village setting, with the report showing a significant increase in respondents looking for rental accommodation. 10% of those wanting to move to a village would live in a professionally managed private rental unit, up from 1% in 2013. The South East, South West and North East are the three leading destinations for people who are intending to move in the next five years. London’s strong economy and housing market will have a direct effect on the South East, which… Continue reading
Research suggests buy to let landlord confidence in the UK is low
Recent and forthcoming changes to tax for buy to let landlords in the UK seems to have dented confidence with new pieces of research showing many are set to re-evaluate their situation and put new strategies in place. One new report reveals that just one in five landlords believe there is still money to be made in the buy to let market even although many purchased buy to let property in the last three months to beat the Chancellor's stamp duty reforms. The study conducted by online letting agent PropertyLetByUs, shows that 43% of landlords are considering putting their properties into a limited company to beat the tax rises. Some 5% of landlords have sold buy to let property because of the increased tax burden and 6% plan to reduce their property portfolio and invest their capital in stocks and shares. However, despite all the rhetoric about buy to let profits, only one in six landlords are seeing a reduction in their profits and many of them appear to have strategies in place to off-set the tax rises such as opting for incorporation, but they are also set to increase rents. The surge in landlords investing in buy to let property in the first quarter of 2016 has created a bubble of new rental properties in some parts of the UK, according to a separte report from research consultants BDRC Continental. It suggests that in the longer term, it is likely that the tax changes will limit the supply of rental property and discourage potential new landlords from investing in the buy let market. The good news is that tenant demand will continue to rise, as unaffordable house prices push home owning out of reach for many people. Indeed, according to BDRC Continental’s latest quarterly Landlord’s Panel research report confidence is at the lowest level since the research began almost a decade ago. ‘There are few happy ever after tales here. Many private landlords in Britain are really concerned about the impact of the 2015 Budget when tax relief on private rental properties was cut, and given the housing shortage, the potential knock-on effect on renters and the supply of rental homes is something that we all need to care about,’ said Mark Long, director at BDRC Continental. The report says that confidence in three key metrics has seen the biggest falls year on year; that’s business expectations for the UK Private Rental Sector, UK Financial Markets and Own Letting Business. The majority of landlords, 59%,believe that the 2015 Budget will decrease their profitability Some 81% of private landlords with 20 plus properties believe that they will experience a decrease in profitability, twice as many as single property landlords. Landlords with buy to let mortgages feel hardest hit. Just 39% of those with a buy to let mortgage rate their short term prospects as good or very good, compared to 48% of landlords who are not leveraged. The research also… Continue reading
House prices in key cities growing faster than UK as a whole
House prices growth in key cities in the UK was 4.2% higher in the first quarter of this year, the highest for 12 years, the latest index shows. The normal seasonal upturn in demand was boosted by investors rushing to beat the stamp duty deadline in April which saw a 3% rate on buy to let properties and second homes, according to the cities house price index from Hometrack. It suggests that tougher lending criteria and tax changes are likely to push investors into higher yielding, lower priced markets, and city level house price growth is expected to moderate in the second quarter of the year. Overall the annual growth for the 20 city house price index is running at 10.8%, ahead of 8.7% across the UK as a whole, the data also shows. Liverpool recorded the fastest increase in the first quarter of the year but the index report explains that this was due to priced rising off a low base. But it does mean that Liverpool is closing the gap to other major cities such as Manchester and Leeds where house price growth is running at over 7% per annum, the highest year on year growth since 2007. ‘The acceleration in growth in the last quarter has, in part, been down to stronger demand from investors, especially those searching for higher yielding property. Tougher lending criteria for buy to let investors and changes to tax relief on mortgage interest payments are likely to push investors to search for higher yielding property which means more focus of investor demand in lower value cities, with lower buying costs, and further support for house price growth,’ the report says. ‘With the rush to beat the stamp duty deadline now over, the question is how weaker investor demand will impact house price inflation in the second quarter of 2016. This at a time when home buyers start to consider the implications of the European Union referendum for the economy and mortgage rates,’ it points out. ‘We believe house prices will continue to rise but a moderation in investor demand and greater caution in the run up to the EU vote will limit further acceleration in house prices. We expect the rate of house price growth to slow more rapidly in high value, low yielding cities such as London where house prices will be more responsive to weaker investor demand,’ it adds. Continue reading
