Our regular Bristol and UK property reports are written by economist Chris Worthington, who is a regular speaker at our PIMs.
This month’s edition reports on the time taken to complete a property sale. It is of particular relevance now and in the next few months because the chancellor’s stamp duty holiday on properties worth up to £500,000 ends on March 31 2021.
Data analyst company TwentyCi estimate that it now takes an average of 125 days (4 – 5 months) from offers being accepted to exchange of contracts, compared with 107 days a year ago.
The delays in getting local authority searches done will be familiar to anyone who has bought a property, but unfortunately local authority searches are taking longer because they are under staffed and are offering fewer appointments.
Estate agents also report delays in getting valuations done because surveying companies are being slow to bring back staff from furlough.
The latest edition of the UK House Price Index published by property analyst Hometrack,in association with Zoopla, reported a slightly more optimistic 3 – 4 month lag between sales agreed and legal completion.
In the midst of this doom and gloom BTL investors in search of some good news should note that fall through rates for a property purchase remain stable at around 23%, so the majority of buyers get there in the end.
Turning to rents the UK rental market also presents a degree of uncertainty for BTL investors but this depends on location. The overall picture is summarised in the latest quarterly UK Rental Market Index published by Zoopla.
Here are some of the key findings in the report:
- Rental demand bounced back strongly during the lockdown due to the flexibility and relative speed with which households could move to vacant accommodation.
- A two speed rental market is emerging between London and the rest of the UK. Rental growth in all of the regions of the UK, apart from London, has shown modest year on year rental growth at around 1.5 to 2.5%. Rental growth has turned negative in London, average rents are 1.4% lower year on year.
- Rental growth in Edinburgh has also slowed dramatically over the last year as a result of lower levels of tourism. This would encourage BTL investors to switch from holiday lets to conventional assured shorthold tenancies.
The Rental Market Index concludes that “rental growth across the UK, outside of London will slow from the current rate of around 2. 2% to 1% by the end of the year.
The data on rental growth is useful to BTL investors but it should be combined with other research including the yields on properties.
Our Next Property Meeting
We will all be discussing the latest position on the property market in Bristol and across the UK in the light of Covid-19 at our next PIM.
We’ll be arranging this when it is safe and practical to do so.
Meanwhile, stay safe.