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Category: June 2020

Tenants demand bike storage

Forget super-fast broadband and space for an office, bike storage is the latest ‘must-have’ for rental properties post-lockdown.

This is according to data from executives at leading online rental app Movebubble. They report a huge shift in searches for flats with bike storage – or at least space where cycles can be stored – compared to three months ago. They also note a 193 per cent increase in demand for properties with a garden or any kind of outdoor space.

Meanwhile, property portal RightMove say 40,000 properties deals have been concluded since lockdown restrictions were lifted in England during the third week in May.

Aidan Rushby, CEO of Movebubble, said that the desire to travel safely and avoid public transport had led to lots of renters requesting “additional space in the form of bike storage” – regardless of whether they had a bike at present. This chimed with a recent Mintel survey which showed we were becoming a nation of cyclists even pre-lockdown, with e-bike sales rising by 40 per cent last year.

This potential change in behaviour lockdown has brought about also means more individuals becoming comfortable walk-through viewing videos, say Movebubble.

New tenancy electrical safety checks add to Landlord burden

New legislation for landlords to carry out electrical safety checks is due to come into force on July 1.

The Electrical Safety Standards in the Private Rented Sector (England) Regulations 2020 means landlords will have to provide an EICR report for all new tenancies. A copy of the report should then be passed on to tenants within 28 days of their moving in. After that the electrical installations will have to be professionally tested at least every five years.

The law will be extended to existing tenancies from April 1, 2021.

Right now, tenancy demand is at a premium. Goodlord reported an increase of 122 per cent on June 2 compared to the same day last year, meaning many landlords will already have their hands full dealing with paperwork.

Tom Harrington, Managing Director of property services  assessment provider PropCert warned landlords and estate agents should make sure they have access to electricians in time.

He added: “If electricians are unable to meet demand and checks are not carried out, this backlog could lead to tenancies being delayed or falling through, which would be highly counter-productive as the market continues to recover from the effects of Covid-19.” Failure to comply with the regulations could result in a financial penalty of a maximum of £30,000.

Fears over first-time buyer market

The Coventry Building Society this week became the latest lender to dash the hopes of first-time buyers with small deposits. Although it said it was offering a 10 per cent deposit deal – it would only be for four days.

The list of other lenders who are no longer offering ‘first time buyer 10 per cent deposit deals’ has grown phenomenally since March. They include Clydesdale, Virgin Money and Accord. Pre-lockdown, first-time buyers could choose from 294 total 90 per cent loan to value deals with a fixed rate of two years. For a fixed rate of five years there were 137 deals on offer. By May there were only 24 and 11 deals respectively.

Only HSBC continues to offer 85 to 95 per cent deals – although these are ‘sold out’ after 30 minutes each morning. Nationwide continues to offer a 95 per cent deal (via its branches – not a broker).

The fear is that effectively shutting out first-time buyers will prevent the property market from bouncing back quickly post-lockdown.

Reasons for withdrawing the 90 per cent deposit deals were put down to the inability to provide physical valuations for properties. They also cited worries over negative equity in the event property prices didn’t pick up after lockdown. Reduced staff resources was also cited as a reason.

Landlords feel lighter after Letting Index results

Landlords in England can relax after it was confirmed the lettings market hasn’t suffered from the inactivity of the past couple of months.

On the contrary, pent-up demand caused by the coronavirus lockdown, has seen record number of enquiries in the sector compared to similar years. According to Proptech firm Goodlord’s Letting Activity Tracker the number of rental applications and completed lettings have far surpassed last year’s figures for the same period.

On June 2, for instance, the number of new rental applications were 112 per cent up on the same day in 2019, while completed lettings reached an increase of 124 per cent on June 10 compared to the same day in 2019.

Social distancing measures are still in place for viewing due to the coronavirus pandemic and video technology is increasingly being employed. But, unlike in Scotland and Wales, leases are being signed. Scotland is expected to open its property market again tomorrow (June 18) and Wales on Friday (June 19).

Build-to-rent popularity grows day by day

The number of Build to Rent (BTR) homes in the UK is now sitting at around 157,512.

This is according to the latest figures from the British Property Federation (BPF). A breakdown shows that of the total, 43,236 units are finished, 33,505 still being built and 80,771 still in the planning stage.

London has the biggest number of BTR units with 74,892. But other areas with high concentrations of the rental units are Manchester and Salford. More homes too are sprouting in the Midlands and, in fact, most UK cities have at least some form of BTR – whether under construction or still ‘on paper’ for the time being.

Giant investors plough money into BTR

The BTR sector currently accounts for around three per cent of the property market, but a recent influx of major players – attracted by the low risk the sector represents – means that number will only grow. The investors to note include Goldman Sachs, Legal & General and Aberdeen Standard Investments.

Goldman Sachs, in conjunction with developer Quintain, are building several hundred BTR units near Wembley Stadium, at a cost of £150.0 million. The banking giant last year spent £184 million for a BTR skyscraper in Birmingham.

Legal & General own 4,600 BTR units worth £1.7 billion and has many more in the planning stages, including Glasgow, Brighton, Woolwich and Croydon. Existing homes are in Manchester, Birmingham and Walthamstow.

Continuing interest north of the border has seen Aberdeen Standard Investments contribute to BTR schemes in Edinburgh. Leeds and Stratford are other locations the group is focusing on, while they recently gave £50 million for a 170-unit project in Barking in East London.

BTR the home model of the future?

Meanwhile, property analysts believe that the new ways of working for many home-owners post-coronavirus means BTR units will only grow in popularity. That’s because they tend to be in large apartment-like complexes, with facilities such as purpose-built remote working areas, onsite. Other ‘more social’ areas include entertainment rooms and rooftop gardens. These would provide the opportunity to ‘mingle’ and avoid going out in large crowds.

Financial aid affecting mortgage applications

Some small business owners and self-employed individuals looking for a residential mortgage are being penalised for taking government help during the pandemic, it has emerged.

This is contrary to what the government promised back in April when it offered support to businesses via a 12-month interest-free Bounce Back loan or to furlough staff. Some brokers – and lenders – admit it is included in mortgage credit scoring.

This is despite the fact many business owners and self-employed individuals may simply have taken the support because it was there. Thousands will have used the furloughing help for solely childcare reasons, for instance.

Will other lenders follow Virgin Money’s example?

Virgin Money – which owns the Clydesdale and Yorkshire Building Society – was the first to declare, weeks ago, that it wasn’t taking mortgage applications from business owners and/or self-employed staff who were receiving Covid-19 government support. At least, it wasn’t including furloughed income.

Nationwide, Lloyds and TSB said they weren’t ruling out individuals who had used government support, which includes the Coronavirus Business Interruption Loan Scheme. But they said it would be considered as part of their overall financial situation.

Mortgage broker Chris Sykes warned lenders were “setting the bar very high.” He added: “Some are scrutinising how people’s businesses are performing during the pandemic but not taking all circumstances into account, and we’ve seen some very harsh decisions.”

Mortgage holidays bad news for self-employed

Broker Nick Morrey of John Charcol, said those self-employed individuals who had taken a mortgage holiday might find their mortgage credit scores affected. This is also despite government assurances this wasn’t the case.

He said: “I understand they [lenders] don’t want to lend to people who won’t be able to pay it back, but they are treating the self-employed very differently to other clients.”

As well as their personal finances, many self-employed business people looking for a residential mortgage (or to re-mortgage) are being asked to show details of their company accounts too. In April many lenders were asking small business owners to provide personal guarantees when applying for an emergency loan. This practice has since been banned.

Aspiring new challenger bank

Nazzim Ishaque, Lintel Founder and CEO

Lintel is a new, London-based banking firm aimed at international students and professionals, making it easier for them to study, work and live in the UK.

Lintel seeks to be the UK’s most inclusive and socially-minded bank that will put the Great back into Britain

Nazzim Ishaque

International students alone generate over £25 billion of gross output, support over 200,000 jobs nationally and generate over £1 billion in tax revenues. UK universities now recruit more international students each year than any other country in the world. Many of the world’s top employers are either headquartered or have their main European operations based here.

Lintel submitted its formal deposit-taking license application to the Prudential Regulation Authority (PRA) earlier this year and are now subject to their statutory review timetable.

At its heart, the bank seeks to relieve the pain and anxiety that incoming international students and professional workers face when trying to get a UK current account.

With Lintel’s unique on-boarding process and technology, customer’s can open a bank account in their home country. When they arrive in the UK, their current account, debit card and money transfer service will be ready to use, following a short pre-booked face to face appointment.

Lintel will serve its customers for life with the roll-out of products and services that map to crucial life stages as the customer progresses from education into highly skilled employment and settlement in the UK.

“Lintel seeks to be the UK’s most inclusive and socially-minded bank with a mission to promote our world-class universities and employment opportunities to international students and professionals across the world who want to make the UK their home. Now the need is even greater, as we emerge from Covid-19 and play our part in the rebuilding process and putting the Great back into Britain and showing the world that we open for business” said Nazzim Ishaque, Lintel’s founder and CEO.

Property price plummet: the winners and losers

Regional winners and losers as property prices plummet

As expected, property prices have plunged over the last month – according to the Nationwide House Price Index, published this week.

The fall – of 1.7 per cent – fits in with the reduction in property sales 54 per cent compared to the same time last year. But it’s not putting property analysts into a spin. Most are confident of a price rebound effect, with the damage proving short-to-medium term. Others aren’t so optimistic. Samuel Tombs, chief UK economist at Pantheon Macroeconomics predicts a continuing decline for the rest of the year – to a five per cent drop by January 2021.

Pantheon does, however, admit that Google searches for property mid-May was only 13 per cent less than it was pre-lockdown.

Leicester is best UK city to invest says Raisin Index

Meanwhile, another two Indexes we’ve been looking at recently have been attempting to pin-point the best locations to invest. Private company Raisin lists the top three area for UK property investment based on business survival and property price increases. The other Index, by the urban policy research unit Centre for Cities, looks at where Universal Credit claims spiked last month.

So, is Leicester really where property investors should be focusing on at this moment in time? According to successful Berlin-based fintech company Raisin they should. The 2014 start-up – which refers to itself as a pan-European marketplace for savings and investment products – also encourages commercial investors to consider the city.

The company bases its findings on their recently commissioned report, the Raisin UK city investment index. The results showed 91 per cent of businesses in Leicester are still performing after two years. At the same time, property prices there have risen by more than a quarter, at 28.3 per cent (£69,000). It brings the price of an average price of a property to £246,000 – up from £176,382 in 2018.

Coventry and Bristol took second and third place in the Index respectively. Their scores for business survival were 90.6 per cent and 88.7 per cent. House prices in each city had increased by 28 per cent (Coventry) and 26 per cent (Bristol).

Avoid investing in Blackpool, Hull and Liverpool

Meanwhile, areas to avoid buy-to-let investments right now, according to a Centre for Cities Index, is the North of England. That’s because claims for Universal Credit there are the highest in the country. Blackpool saw the biggest jump in claims in April – an increase of 3.4 per cent from 11,650 individuals (or 8.9 per cent of the population). Other big increases came from those who are also now jobless as a result of coronavirus, in cities such as Hull, Liverpool and Manchester.

The increase in unemployment numbers in the North is no doubt already causing landlords anguish since, simultaneously, more landlords have mortgages on their property than in other regions of the UK. Research by estate agency Hamptons showed 67 per cent of landlords who invested within the past three years were mortgaged. The figure for neighbouring North West was only 2 per cent lower and in Yorkshire it was 60 per cent. The national average for landlords with mortgages on buy-to-let properties is 54 per cent.

Tradespeople build industry standard “Covid-secure” safety toolkit

SaferTrader, a training and safety firm, are rolling out a great new scheme to help tradespeople get back to work safely – and help their customers to have the confidence to call and book jobs with them.

The firm realised that there is a big gap between Government guidelines and how people understand them and that tradespeople have no way to prove to their customers that they are ‘Covid secure’ and have read, understood and will apply the guidance.

SaferTrader’s Steve Window told us “We found that many customers were scared to call in a tradesperson because they were worried about Covid, or about the rules around working. This meant that the traders were not getting the jobs and the customers not getting the work done.”

SaferTrader developed a simple online training toolkit, with guidance and easy to use documents, that helps traders understand the rules around being “Covid secure” and how to make them work in real life.

One kitchen fitter who was an early buyer of the SaferTrader Toolkit said “we had some information from the Government, but to be honest it was one-size-fits-all. What I needed was training about Covid safety, and how to put it to work for me. That’s what Safer Trader has got right – it really works for me and my customers are so happy to be able to go ahead with work they need doing. Safer Trader enables me to prove I am ‘Covid Secure’ and that I will keep my customers safe.”

SaferTrader told us that they hope the UK’s 1m+ traders, mostly self-employed, will get new confidence about “Covid secure” working from the toolkit – and use it to put customers’ minds at rest, and to start leaving the money worries of the last few weeks behind.

SaferTrader ( is the leading industry provider of the “Covid Secure” Safety Toolkit that provides tradespeople (sole traders, small & medium sized businesses in the wider trade sector) with “Covid Secure” training, a completion Certificate, Risk Assessment template and draft Policy to enable them to work safely and demonstrate to their customers their commitment to keeping them safe.

Lifting restrictions is cold comfort for first time buyers

On the 13th of May, many estate agents and property owners in England breathed a sigh of relief as the industry was, once again, open for business.  For over two months, government guidelines had forbidden the viewing of properties due to social distancing rules and, most estate agent personnel were advised to work from home.  With the same restrictions set to be lifted in Scotland on the 18th of June, the housing industry is about to start the long road to recovery across the UK.

Although the lifting of this restriction will certainly be good news for many, it’s likely to be nothing to write home about for many of the UK’s first time buyers.

Locking down higher deposits

Finance comparison site, Moneyfacts, has reported that there has been a steep drop in the number of 10% deposit mortgages offered by lenders due to fears over an impending house price crash.  In March – the month that lockdown restrictions began in the UK – the number of 10% deposit mortgages dropped from 780 to 87; a drop of almost 89%. Similarly, 5% deposit mortgage deals offered fell to 30 in the same month.  Another problem facing lenders is the backlog created by the restrictions due to valuations being halted for two months.

Despite differing forecasts on the actual percentage, most housing and financial institutions in the UK agree that a drop in house prices of between 2 and 10% is likely during 2020.  Although holding back on low deposit mortgage deals may seem prudent in such an uncertain market, property investor, Jonathan Rowland, warns that this may cause significant problems further down the line.  Jonathan said, ‘’Holding back on lending causes problems for the market,’ he said. ‘We’ve just seen a great example of that recently with businesses struggling to get loans. If that’s replicated in the mortgage market banks could be personally responsible for the collapse of the property market and we could even have another 2008 situation’.

Starting from scratch

For a huge number of first time buyers, being unable to secure a low deposit mortgage will mean that buying a property is simply impossible.  A minimum deposit of 15% means that many first time buyers will need to raise £12,000 up front – a tall order at the best of times, let alone at a time when the country is recovering from a pandemic.  A survey by Legal and General revealed that almost a third of people in the UK have less than £1,500 in savings and, 15% have none at all and, so, the majority of first time buyers will need to secure a loan from their parents or, give up on their dream of owning a property.

The new normal

Despite the doom and gloom, independent mortgage broker, Richard Latterman, thinks that there may just be a chink of light at the end of a very long tunnel.  Richard says,  ‘I’ve had a few emails from lenders that are now doing 90 per cent deals and doing 75 per cent buy to let. There are signs of recovery. There are a couple of lenders doing 95 per cent deals’.

As we wait to get a glimpse of the whole picture of the effects of Covid-19 on the housing market in the UK, we’re unlikely to see a return to anything close to 2018’s figures until at least 2022 – which means a long wait for many of the UK’s buyers.

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