Why pandemic effects on property are expected to be short-term

We think it’s high time for a little reassurance in light of the current global situation.

The present COVID-19 pandemic has seen economies across the world grind to a halt. This is obviously concerning for a wide range of people across many industries. Property is no different, as businesses across the property spectrum struggle with uncertainty. Buyers are hesitating, transactions are slowing and lettings are difficult. However, it’s well worth noting why this is happening. At least in the UK, the economy has slowed, not because everyone, or comparatively many people (at the time of writing) have become ill, but because measures are being taken to keep COVID-19 at bay. This just means what everybody knows, that this situation is temporary, and activity in the markets will resume.

In fact, if you’re a buyer you could be in a good position. Although there could be fewer properties available, there will be people who need to sell fast and will be more inclined to accept low offers than say two weeks ago.

But what about house prices? Industry experts Savills have published an excellent once over, with the key message: they stand by their original forecasts, published a few months prior to the Coronavirus outbreak, back in November.

These forecasts present excellent predicted growth especially in Northern England. It is a relief to hear that that they are sticking to their guns on this, and it really come from what we have already said – this is a temporary glitch in the market that will re-emerge. Unfortunately when we will see an uplift is somewhat up for grabs.

Savills explain the three fundamental effects of the pandemic on the market are on 1. sentiment – making buyers cautious in the short term. 2. The practical impact it has on transactions. 3. The impact on the economy and the traditional drivers of affordability.

The report states,

“The emergency cut in the bank base rate, economic stimulus from government spending pledges and the willingness of mortgage lenders to take a considerate view of short-term mortgage arrears, are designed to mitigate the impact.  Meanwhile, the perceived security of a bricks-and-mortar investment in times of uncertainty should help to underpin values.”

Essentially, this points to a temporary hiatus through this period of economic suspended-animation. But, thanks to the long lasting, and firmly held, belief that bricks and mortar stand for stability, we will see activity returns before. As with all matters at this time, it’s about patience.

Having said that, if you are a buyer from overseas and your currency happens to be pegged to the dollar, you can buy at extremely reduced rates, thanks to the value of the pound dropping against the dollar of around 10% over the last week and a half. For those wanting to capitalise on this, now may be the best time.

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Here at Aspen Woolf, we offer our clients the best in UK property investment. Our focus is currently on Northern England where high capital growth combines with strong rental yields. Have a look at what we have to offer.

 

 

 

What is the Liverpool Waters regeneration project?

In this article we’re going to run through the key facts about one of the UK’s most exciting regeneration projects, and quite possibly one of Europe’s (if not the world’s) most ambitious waterfront regeneration schemes: Liverpool Waters.

Liverpool Waters is a 60 hectare site, (that’s 84 football pitches) to create to create a world-class, mixed-use waterfront quarter in Liverpool city centre. Residential space, office space, jobs, training and skills development are all arriving on the water front to benefit from this transformative scheme. Infrastructure changes will allow easy access to the other areas of the centre and the city more broadly.

Liverpool Waters is said to enable Liverpool to compete with the likes of Hamburg, Boston, Toronto and Barcelona in terms of the scale and diversity of its waterfront offer.

Liverpool Waters is broken down into 5 districts. Let’s have brief look at them one by one.

Princes Dock

Princess dock will be focus on creating a vibrant neighbourhood of 1,200 high-quality residential units, overlooking the River Mersey. Amenities will include two hotels, a coffee shop, restaurants, a nursery, multi-storey car parking facilities and Liverpool’s Cruise Liner Terminal. The location of Princess Dock is perfect for residents who want easy access to the most exciting attractions in Liverpool, including the famous Tate Gallery, British Music Experience, Beatles Museum and Liverpool One.

Central Docks

This is Liverpool Waters’ business and leisure hub, offering more than 185,560 square meters of mixed used floor space. Culture will be a mainstay of Central Docks as it becomes a hub for Liverpool’s cultural heritage, further bolstering its current reputation as a popular event location.  The area will benefit from a 17 acre public park and views overlooking the River Mersey and the Leeds and Liverpool Canal. Residential accommodation will still feature in Central Docks, with 3,800 new homes.

Clarence Docks

The regeneration of Clarence Docks will bring 3,000 new homes and 8,000 sq. m. of restaurant and bar space to the Liverpool Waters dockside. Local residents can already benefit from a water-sports centre.

Northern Docks

Northern Docks will be the site for recreation and shopping, rather than residential living. It is currently proposed that a world-class sports stadium will be constructed, and negotiations are said to be ongoing between Liverpool and Everton football clubs. Planning permission has been outlined for the construction of a marina to hold various retail units, bringing a sense of luxury and modernity to the development. All in all, there is estimated to be 8,000 sq. m. of retail space in Northern Docks.

King Edward Triangle

King Edward Triangle is a point of connection between Liverpool Waters and the commercial district of Liverpool city centre. A number of businesses will take their places in this area, and in fact several already have. Micro-brewery, Carnival Brewing Company, Crew42 Gym and public health services provider, HE Simm have all recently moved into the city centre location.

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Our Liverpool Waters offer

Here at Aspen Woolf, we specialise in offering the UK’s best investments to our clients. We focus on cities n Northern England as these offer the highest rental returns and the best capital growth. In fact, the North West is named by industry experts Savills as being the top region for capital growth, predicted to see 24% appreciation in the next 5 years alone.

As a top performing city, Liverpool is expected to see the full benefit of regional growth.

We happen to have a fantastic and landmark investment opportunity based in Liverpool Waters. Alexandra Tower was one of the first buildings to be constructed; and is superbly designed development offering uninterrupted views of the River Mersey and the Liver Building. We have strictly limited apartments available. Read more about it here.

What does the 2020 budget mean for the Northern regions?

How time flies; the “Northern Powerhouse” is already more than 5 years old. But have George Osborne’s plans to bring better connectivity, improve infrastructure and redress the balance between North and South achieved enough?

Last year’s report from the Institute for Public Policy Research(IPPR) finds progress has been made now that 47.1 per cent of the North is governed by a Mayor, 69.6 per cent of the North is now covered by a combined authority, and Transport for the North has brought forward a £70 billion investment package. This last point in particular looks like a major step in the right direction, but by this time we surely want to see concrete results and initiatives that truly change people’s lives, rather than any kind of bureaucratic fluff.

However, the Government itself cites a £13 billion of transport investment, the creation of 287,000 more jobs, and the total Northern economy growing by £10bn to £339 billion, which certainly sounds like progress. The IPPR does note several areas the Government aren’t so keen to mention themselves, including public sector employment falling by 37,000, transport spending in the South actually doubling the North when calculated per person, and jobs ceated by Foreign Direct Investment falling as well. The fact that the Northern regions are twice as vulnerable to the deleterious effects of Brexit in terms of employment, according to the IPPR, is a bitter irony, given voting habits in those regions.

There’s clearly work to be done, and new Chancellor Rishi Sunak’s 2020 budget is an opportunity for the Conservatives to reaffirm their commitment to building up the north of England. Admittedly, a certain global pandemic has taken precedence, but we can still ask – how did the north fair?

The Chancellor named a figure of £640 billion of gross capital investment will be provided for roads, railways, communications, schools, hospitals and power networks across the UK by 2024-25, and it’s good to see that a number of projects for the North fall under this.

Building on the Transforming Cities Fund, the government will invest £4.2 billion from 2022-23 for five-year funding settlements for eight Mayoral Combined Authorities in West Yorkshire, Greater Manchester, West Midlands, Liverpool City Region, Tyne and Wear, West of England, Sheffield City Region and Tees Valley.

Elected Mayors will be able to deliver the full benefits of devolution and put forward ambitious plans, such as the renewal of the Sheffield Supertram, the development of a modern, low-carbon metro network for West Yorkshire and tram-train pilots in Greater Manchester.

The Mayoral Combined Authority in West Yorkshire will provide £1.1 billion of investment for the area over 30 years, as well as devolving significant new decision-making powers on transport, planning and skills. It also underpins the agreement of a long-term intra-city transport settlement for the region starting in 2022-23.

The government is due to provide up to £500,000 to support Bradford’s regeneration and development plans to increase the benefits of potential Northern Powerhouse Rail connections.

In terms of transport for the North, here’s a quick breakdown:

  • £198 million for the North East, including £95 million for frequency and reliability improvements across the Tyne and Wear Metro system and to complement the government’s recent £337 million investment in new rolling stock.
  • £40 million for Preston City Region, including £25 million for a new station at Cottam Parkway on the Preston-Blackpool line
  • £166 million for Sheffield City Region, including a new Bus Rapid Transit link in Barnsley and a new tram stop on the Tram-Train line to Rotherham at Magna
  • £317 million for West Yorkshire, including £39.9 million for Halifax delivering a new bus station, improved rail station and other improvements to complement the revitalisation of the town centre and £30 million for active and sustainable travel across Bradford

It’s important to note that only the Manchester to Leeds leg of the Northern Powerhouse Rail scheme has been officially reaffirmed. Many people, will be expecting the rest to follow.

Importantly for the areas of Teesside, Humberside and  Merseyside,  the Government plans to spend at least £800m to establish two or more carbon capture and storage clusters by 2030, creating up to 6,000 high-skilled, high-wage jobs.

This all sounds very positive, and it is, but these announcements ought to be the start of things to come.

There are areas that were missing from the Chancellor’s announcement which would benefit from investment and create greater unity within the Northern Powerhouse as a whole. A commitment to the full extent of the proposed Northern Powerhouse Rail, as well as greater investment in towns, is paramount to the flourishing of the North.

All in all, there has been progress and there is more to come. The process of reducing the North/South divide is a long one, and the full delivery of the Northern Powerhouse is bound to take many years. The Conservatives must be held to their word in Northern investment.

For the property sector, that means prices and rental rates in key northern cities will grow as economies boom and jobs are created. Regions in Northern England are expected to see the best house price growth in the UK over the next five years, and with much infrastructure work underway, now is the time for property investors to get involved.

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Aspen Woolf is a leading property consultancy, focused on presenting the best performing investment opportunities to our clients. We search across the UK to find high growth, high yielding investments, and our particular strength in northern England represents the quality of investment that can be found in the growing cities of Liverpool, Leeds and Manchester. Have a look at what we have to offer.

 

How does property feature in the 2020 budget?

This year’s Budget was largely concerned with the resources needed to deal with the coronavirus pandemic, but there were a few announcements that could stir the interests of property owners and investors. The predominant measures are new taxes for property buyers from outside the UK, funding to remove unsafe cladding, a certain amount of spending on new homes delivery and money to tackle homelessness.

Let’s start with the announcement of a hike in Stamp Duty for overseas buyers.

Non-resident buyers of Britain property will have to pay an additional two per cent stamp duty, where previously they were subject to the same charges as UK buyers. Singling out overseas buyers for extra charges will actually bring the UK in line with many other global property markets, and is expected to affect around 70,000 of the UK’s total 1.2 million annual property transactions.

The new rules will come in from April next year, and the treasury expects there to be a surge in buyers ahead of the deadline. Income from Stamp Duty is expected to increase by £250 million in the coming tax year, before dropping by £355 million in 2021-22.

Where’s this extra money going to go? Chancellor Rishi Sunak has promised the cash injection will be fed into building 6,000 new homes for homeless people.

The next point of significance is the pledge of an additional £1 billion for the removal of potentially dangerous cladding from residential buildings, although frustratingly for some, this only applies to buildings that are more than 18 meters tall.

The government is also investing a further £9.5 billion in the Affordable Homes Programme, which in total will allocate £12.2 billion of grant funding from 2021-22 to support the creation of affordable homes across England.

This is a £3 billion boost to the current programme and will be used to support housing associations and to encourage developers to build new affordable housing.

There’s often omissions in a budget, and this is no different. There was no mention of the controversial ‘mansion tax’ or, most controversially, any new strategies to help first time buyers get on the property ladder.

The key element in this year’s budget is the rise in Stamp Duty tax for overseas buyers. If you’re thinking of investing in UK property and you’re from overseas, then you might want to keep that deadline in mind – April 2021.

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Aspen Woolf is a leading property consultancy, focused on presenting the best performing investment opportunities to our clients. We search across the UK to find high growth, high yielding investments, and our particular strength in northern England represents the quality of investment that can be found in the growing cities of Liverpool, Leeds and Manchester. Have a look at what we have to offer.

 

Demand for rental accommodation reaches record high

According to the latest report by ARLA Propertymark – the Private Rented Sector Report, January 2020, more tenants than ever are seeking housing as rental stock is becoming scarcer.

Before we get into the details of the report, for those who don’t know, it’s worth noting for who ARLA Propertymark is and what they do.

ARLA Propertymark is the UK’s foremost professional and regulatory body for letting agents, representing over 9,000 members. ARLA’s members operate to professional standards higher than the law demands, and they campaign for greater regulation the letting sector of the property market. ARLA protects consumers holding members accountable and empowering customers with knowledge and advice.

ARLA is sub-divided into branches, from which the following research was collected.

The key findings are that in January 2019

  • Demand for rental accommodation reached a record high, with an average of 88 prospective tenants registered per member branch
  • However, supply of rental stock fell to the lowest level seen in seven months
  • The number of agents witnessing rents increase also rose to 42 per cent

The rise means that agents have witnessed a 57 per cent increase in the number of prospective tenants registered since December. Year on year, tenant rental demand for private accommodation has increased 21% – rising from 73 in January 2019 to 88 last month.

The North West, Yorkshire, the South East and Wales were the regions seeing the most demand among renters.

In terms of supply, the number of properties managed per branch fell from 206 in December to 191 in January, a figure that hasn’t been this low since July 2019 year when it stood at 184. Year-on-year supply is down from 197 in January 2019, but up from 184 in January 2018.

One particular factor which is seen to be affecting supply is the growing popularity of short term lets.

ARLA Propertymark Chief Executive, David Cox says,

“Our recent research found that tenants could miss out on nearly half a million properties as more landlords exit the traditional private rented sector and turn towards short-term lets which will only serve to worsen the problem for those seeking longer term rental accommodation.

With the Spring Budget around the corner, it’s important that the Government works to make the private rented sector attractive to landlords again, rather than introducing complex legislation which ultimately squeezes the sector and leaves tenants worse off.”

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Aspen Woolf is a leading property consultancy, focused on presenting the best performing investment opportunities to our clients. We search across the UK to find high growth, high yielding investments, and our particular strength in northern England represents the quality of investment that can be found in the growing cities of Liverpool, Leeds and Manchester. Have a look at what we have to offer.

 

 

The property market is booming in early 2020

Statistics from two of the most important portals in UK property, Rightmove and OnTheMarket show that the property market is exceptionally buoyant at the moment.

In January visits to Rightmove surpassed 150 million, the most ever recorded in a January – a 7% increase on January 2019. Also notable is that the time spent by potential buyers was up 4% with a total of 1.17 billion minutes being send on the site.

The latest figures, from Rightmove’s February House Price Index, show that average asking prices in the UK inflated by 2.9% compared to last year, with an average asking price of £309,399.

This market momentum is expected to increase even more ahead of the spring moving season, suggesting there will be even more records seen as we move forwards.

Miles Shipside, Rightmove director and housing market analyst said: “There is a boom in buyer activity outstripping the rise in the number of new sellers, which we expect to lead to a series of new price records starting next month.”

“… Spring buyers are likely to be faced with the highest average asking prices ever seen in Britain. Buyers who had been hesitating and waiting for the greater political certainty following the election outcome may be paying a higher price, but they can now jump into the spring market with renewed confidence.”

“After three and a half years of Brexit uncertainty, dither, and delay, many now seem to have the 2020 vision that this is the year to satisfy their pent-up housing needs.”

Lucian Cook, head of Savills residential research, said: “Since the election we’ve certainly seen a significant uptick in new buyer demand in the prime market which creates a real opportunity for sellers while stock for sale remains relatively low. Increased confidence is translating into increased activity, both in the prime market and across the wider market as a whole.”

Similarly, traffic to property portal OnTheMarket exceeded 30 million visits in January 2020, a new monthly record, and an increase of more than 28% compared with January 2019, and 11% more than the previous record of 27.2 million in September 2019.

Of course, some of this increase could be down to OnTheMarket’s increased market share as a property portal and a strong marketing drive; but there’s little doubt they are benefitting from increased confidence in the market.

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Aspen Woolf is a leading property consultancy, focused on presenting the best performing investment opportunities to our clients. We search across the UK to find high growth, high yielding investments, and our particular strength in northern England represents the quality of investment that can be found in the growing cities of Liverpool, Leeds and Manchester. Have a look at what we have to offer.