Property Market Roundup

Discover the latest headlines from the UK Property Market in our Property Market Roundup, all wrapped up in one place.

August UK Property Market Roundup

The SevenCapital Property Market Roundup is all the headlines you need to know about the property market over the last month, brought together in one handy place. For August 2021, we discuss the property markets first fall in 2021, the rise of the North West and Midlands in 2022 and a record breaking summer for the rental market. And with a banking giant now delving into the world of property, the August Property Market Roundup has all the need-to-knows for Buy-to-Let investors.

House Prices Have Fallen for the First Time This Year

 

Despite being over half way through the year, the UK property market continues to thrive since a strong start to 2021. The Stamp Duty holiday and the loosening of Covid-19 restrictions have made for a perfect storm of rising demand and constrained supply, which in turn, has been driving the average property price to new highs.

That said, August brought with it a new headline – house prices have fallen for the first time this year. According to Rightmove, the average house price has dropped by 0.3%, equating to £1,076 and bringing the average price to £337,371. 

While the overall average has taken a hit, this has largely been caused by falls in the upper sector. Four-bedroom-plus properties have recently seen a decrease in demand, coinciding  with the change in the Stamp Duty threshold. On July 1st 2021, the nil rate band dropped to £250,000, meaning buyers in the upper-end market no longer benefit from Stamp Duty savings. 

Although larger properties have seemingly taken a downward turn, properties aimed at first-time buyers and ‘second-steppers’ or investors are still breaking records. Two-bedroom properties are now up by £1,328 (0.6%), making the average property price for first-time buyers £208,714. This impressive activity continues to sustain the property market, leaving experts hopeful for an ‘Autumn bounce’ in demand and prices. 

Lloyds Bank Set to Move into the Private Rented Sector

 

Not only has the impressive performance of the property market been encouraging more investors to consider Buy-to-Let opportunities, but it has also drawn a banking giant to the market. Working under its new brand, ‘Citra Living’, Lloyd’s Bank aims to purchase 10,000 homes by the end of 2025.

With these projections, Lloyd’s Bank is set to become the biggest private residential landlord in the UK. If the banking giant reaches this ambitious target, it would equate to a property portfolio worth around £4 billion, which would generate £300 million in profit, before tax. 

The bank already has its first investments in sight – 45 new apartments in Fletton Quays in Peterborough. However, it’s expected that this portfolio will be much larger by the end of the year, with Lloyds aiming to have 400 properties under its belt going into 2022. 

This would put the bank on track to achieve its long-term goal, which is to acquire 50,000 homes over the next decade to rent out to tenants. Working alongside housebuilders to identify sites for new homes will form part of this plan. 

Download the 2021 UK Investment Guide

In the 2021 UK Property Investment Guide you will find:

  • Current market performance
  • Forecasts for the UK property market in 2021
  • Updates on UK currency
  • What will life look like after Coronavirus
  • How will UK property deal with the Brexit transition
Download the Guide
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Lettings Market set for Record Breaking Summer

 

Unlike house prices, the rental market is seeing positive growth across the board. Not only are average rental costs now above their 12 month rolling average, but void periods are down to just 14 days.

This increase in the average rent has been driven by the demand for rental property, which has allowed many landlords to push their rents up. As a result, the average rental price for July has reached a new annual high of £1,060, up £100 on June’s average of £960. July and August are typically better performing months for the rental market, which is seemingly still the case in a post-pandemic world. 

With the increasing demand for property, it’s no surprise that void periods are at their lowest level since August 2019. Although almost every region across England had drops in average void periods, the West Midlands and the North East saw the biggest reductions. The void average across the West Midlands dropped by 20%, leaving it at just 18 days, while the North East is now averaging 8 days for void periods. 

Competitive growth, combined with falling void periods, only increases the appeal of Buy-to-Let property, especially amongst international investors. UK property is relatively affordable in comparison to other markets, and with its performance over the past 12 months, areas such as Derby are emerging as potentially lucrative investment hotspots. 

North West and Midlands Lead the Way in 2022 Property Forecasts

 

As Q4 grows closer, property experts are starting to re-evaluate the future of the property market. Savills has released its latest forecast, identifying which areas across the country are expected to see rising property prices in 2022. 

While the London property market once outpaced the remainder of the UK, since the pandemic, price growth has been lagging behind other regional cities, which is set to continue in the new year. Instead, the North West is leading the way thanks to Liverpool’s affordable market and above-average growth. 

Following closely behind is the Midlands. With the second highest increase in England, both the West Midlands and East Midlands are set to be strong performers in the new year. Price growth across the region is expected to reach 24% – a 4.5% increase on previous forecasts, making the likes of Derby, Birmingham and Nottingham prime Buy-to-Let investment locations.