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Our Review of London's Property Market 2019

Posted on Friday, December 20, 2019

It was a year of political turmoil, dominated by one big issue … Brexit, as first Theresa May, then Boris Johnson, repeatedly tried to push a Brexit deal through parliament.  

This instability was reflected in the housing market. The most recent Land Registry figures show that for October average prices across London fell by 1.6% on the previous year.

However, many commentators believe the Conservatives’ decisive general election win, giving Mr Johnson his mandate to ‘get Brexit done’, is already bringing a new confidence to the market.

In 2020, the new government’s efforts are likely to be focussed on Brexit and delivering promises on the NHS. But, the Conservative manifesto held plenty of housing sector pledges too - from new lifetime mortgages to increased stamp duty for foreign buyers and an end to Section 21 no-fault evictions.

To find out what exactly was happening in the property world during 2019, read our review of the year, month by month.

January

Phil Spencer wants experts not politicians to solve the housing crisis



Location, Location, Location presenter Phil Spencer has called for the creation of a National Housing Commission, with powers to transform the housing market, saying, “our chronic shortage of homes needs long-term solutions, not quick fixes.”

Writing in i news he claims that the problems in the housing market need to be considered by experts, rather than used as vote-winning strategies by politicians.

Spencer, a former buying agent who hosts the popular Channel 4 show with Kirsty Allsop, also co-founded the property advice website Move IQ.

He said: “Barely a month goes by without the launch of some new measure – be it an incentive for first-time buyers or a squeeze on buy-to-let investors – which generates headlines and soundbites aplenty for the Government. Whether this constant tinkering actually makes a difference to the fundamental problems in the housing market is another matter.

 “Cynics conclude that such grand ministerial announcements are more about photo opportunities than fixing long-term, systemic issues. I, for one, would be happy never to see another picture of a smiling Chancellor of the Exchequer in a hardhat pretending to lay bricks on a building site.”

To read our full article – please click here



February

Mayor plans rent controls for London’s private housing sector



London Mayor Sadiq Khan could introduce rent controls to the capital, after a YouGov poll found that two thirds of Londoners are in favour of capping the amount that landlords charge in rent.

According to the Mayor, “London is in the middle of a desperate housing crisis that has been generations in the making. At City Hall we are doing everything in our power to tackle it, including building record numbers of new social homes, but I have long been frustrated by my lack of powers to help private renters. The arguments for rent control are overwhelming, and Londoners overwhelmingly want it to happen.”

Mr Khan highlighted that average private rents in London rose by 38% in the decade up to 2016, at a time when far more Londoners are also now renting. The average cost of renting a one-bedroom home in the capital is now higher than for a three-bedroom home anywhere else in England.

To read our full article – please click here


 

Fewer empty nests as more young people live with parents



The number of 20 to 34-year-olds living with their parents has risen by almost a million in 20 years, to 3.4 million, according to a new study from thinktank Civitas, echoing concerns about the impact of the UK housing crisis on millennials.

The trend has been strongest in London, where there has been a 41% increase in young people living with their parents between 1998 and 2015.

The report also highlights a “collapse in single living”; with young people, who do leave home, more likely to live with partners or friends than during previous decades.

According to Daniel Bentley, editorial director at Civitas: “The data is bearing out what we feel anecdotally to be the case. Younger people are beginning to live with their parents for longer and are finding it more difficult to move out. If they do move out, they’re often living with larger groups of people.”

To read our full article – please click here

 

March

High rise - is 2019 London’s year of the tall building?



More tall buildings will be completed this year in London than ever before, according to a new survey. A total of 76 towers will transform the skyline - more than three times as many as last year.

The new skyscrapers will go up across the capital, with buildings planned for 22 of London’s 33 boroughs. The largest number (18) will be in Tower Hamlets, with 11 towers planned for Lambeth. For the first time, buildings of 20+ storeys are also earmarked for the boroughs of Camden, Barnet and Hounslow.

London’s deputy mayor for planning, regeneration and skills, Jules Pipe, said: “London continues to grow and with this comes a number of challenges. Located in the right place and designed with their surroundings in mind, tall buildings have a role in meeting the needs of our rapidly expanding city.”  

Around 90% of the tall buildings proposed are substantially for residential use, delivering an estimated 110,000 new homes.  

To read our full article – please click here

 

April  

Generation Rent needs new ideas not Help to Buy


Generation Rent needs new ideas to help them buy property - not the government’s Help to Buy scheme, according to the director of a leading UK think tank.  

Writing in City AM, Robert Colvile, director of the Centre for Policy Studies, says Britain can only solve its housing crisis by building more homes, and finding ways to promote home ownership.  

He also argues that the Help to Buy scheme may have pushed up property prices, actually putting home ownership out of reach of some people.

Robert Colvile says: “The scheme has driven the construction of more new-build homes, but during its existence, the price of new builds has risen by 51%, versus 26% for older properties. This suggests that Help to Buy is helping some people onto the property ladder, while pulling it out of reach for others.”

To read our full article – please click here

 

May

Landlord concern over Section 21 sees drop in Tory support



With the Conservative party leadership up for grabs, following Theresa May’s resignation, the party has fallen out of favour with landlords, a new poll suggests.

The survey, by the National Landlords Association (NLA), found that while 69% of private landlords voted Conservative in 2017, just a quarter (25%) said they would vote the same way, were a general an election called today.

In addition, 85% of landlords claimed they would vote against any party proposing to remove Section 21 notices as grounds for eviction and 89% would vote to oppose any rent controls.

Richard Lambert, CEO of the NLA, said: “It’s hardly surprising that landlords are losing faith in the Conservatives given the way their government has overturned the economic, and now legislative, foundations of the private rented sector since 2015.

“Our members have told us that removing Section 21 would be devastating and costly for their businesses. Conservative ministers need to take the time to understand what’s actually happening in the private rented sector or it may end up costing them dearly.”  

To read our full article – please click here

 

 

June

Boom in buy-to-let sees more people with second homes


One in 10 UK residents owns an additional property, according to a new report by the Resolution Foundation. Worth £941 billion in total, these additional properties include buy-to-let and second homes in the UK and abroad.

The research revealed that buy-to-let property is now the most common form of additional property investment, having grown by 58% in the decade to 2018. It found that 1.9 million people own a buy-to-let property, with 1.4 million owning a second home and 970,000 having a property overseas.

According to the report, the number of buy-to-let mortgages has also increased 15-fold since 2000.

Reasons cited for investing in property include the desire for additional rental income and security in retirement as well and as a legacy for younger relatives.

To read our full article – please click here

 


July

Government urged to prevent a generation rent homeless crisis


The UK could face a homelessness “catastrophe” within two decades, according to a government inquiry, which studied the impact of a generation of millennials, unable to get a foot on the housing ladder.  

The report calls for a national strategy to fend off a “crisis of pensioner homelessness”, alongside efforts to build more than 1.1 million extra homes by the late 2040s.

Given that average incomes tend to halve after retirement, the inquiry predicted that 52% of pensioners in the private rented sector could be paying more than 40% of their income on rent by 2038. This would leave 630,000 people unable to afford a decent home and forced into state-funded temporary accommodation.

Richard Best, who chaired the inquiry said: “The number of households in the private rented sector, headed by someone aged over 64 will more than treble over the next 25 to 30 years. But unless at least 21,000 suitable homes are built a year, there will be nowhere affordable for them to live. The consequence is bound to be homelessness for some.”

To read our full article – please click here

 

August

Chancellor has no plans to move stamp duty to sellers


The chancellor, Sajid Javid has confirmed that he has no plans to move stamp duty from buyers to sellers, following a report that he was considering the idea in an effort to help people onto the housing ladder.

Responding to the report, in The Times, the chancellor tweeted: "I wouldn't support that I know from the Ministry of Housing, Communities and Local Government that we need bold measures on housing - but this isn't one of them."  

The idea of shifting the burden of stamp duty onto sellers is supported by the Association of Accounting Technicians, an accountancy and tax industry group. Its head of public affairs, Phil Hall said: "Switching liability would be considerably fairer, simpler, more effective and cheaper than the current stamp duty regime. [It] would remove every single first-time buyer across the country from stamp duty liability while crucially also helping those already on the property ladder to move up."

To read our full article – please click here

 

 

September

Should you take out a 15-year fixed rate mortgage?


With continued economic uncertainty, some lenders are introducing long-term fixed rate mortgages, for buyers wanting financial security, whatever happens to interest rates and the pound. But are these mortgages, last seen during the 2008 financial crisis, a sensible way to plan ahead or an expensive and risky gimmick?

Virgin Money announced its 15-year fixed rate product in July, with rates of between 2.55% and 3.75% depending on the loan to value ratio. It was followed by the Yorkshire Bank with rates of 2.79% to 3.65% and commentators expect more lenders to follow suit.  

The main advantage of 15-year fixed rate is knowing, many years into the future, how much your monthly mortgage repayments will be. The downside is that rates are higher than with short-term fixed rate products and early redemption fees are steep.  

To read our full article – please click here