What impact could coronavirus have on the housing market?

The property market had enjoyed a boost thanks to the outcome of the general election in December, but now the market faces uncertainty as the coronavirus pandemic continues.

Residential property prices increased for the fourth consecutive month in February as the market’s so-called "Boris bounce" pushed the average cost up to £312,625 according to Rightmove, but there are concerns that the surge could be dented by the coronavirus outbreak.

The property website reports that prices are up 3.5% year-on-year, thanks to a major rebound in the market since the Conservatives' election victory in December.

However, the coronavirus disease COVID-19, which has already caused a number of deaths in the UK, could pose a risk to this growth if it has an adverse impact on buyers’ confidence,

Colby Short, CEO at estate agency comparison website GetAgent.co.uk, said: “These are great numbers from Rightmove in respect of asking price highs and a significant reduction in the time taken to sell, particularly in the capital. But hold on, this is data collected only up until 7th March - and to say that a week is a long time in politics is nothing compared to a week where the CoronaVirus news cycle is concerned. 

“The year has started strongly for property and we all realise that the current crisis of health will be temporary, don’t we? But the question is, how temporary? And will a property market that had sprung from the doldrums of political paralysis weather a viral rival? I think so, but it will be challenging indeed for a while still.” 

There are growing signs that the disruption caused by coronavirus is spreading into the property industry, but London-based estate agency Benham & Reeves is urging buyers and sellers to “remain optimistic". 

Marc von Grundherr, director at Benham and Reeves, commented: “Covid-19 is of course a significant issue albeit that enquiry levels and viewings do seem to be holding up for now and we should remain optimistic, firstly for a swift resolution to the pandemic, followed by a robust response from the markets including property which is clearly well placed to withstand current uncertainty.”       

The impact this could have on the housing market is as yet unknown, as the length and continued coronavirus outbreak could cause yet more disruption.

Russell Galley, managing director at the Halifax, said: “The UK housing market has remained steady heading into early spring.

“The sustained level of buyer and seller activity is strong compared to recent years, with positive employment conditions and a competitive mortgage market continuing to support demand.”

But Galley acknowledged that it is a waiting game to ultimately see how the housing market will be impacted by coronavirus.

Tristan Batory | Associate 

Fine & Country Oxford 
267 Banbury Road, Summertown, Oxford, OX2 7HT 


E: tristan.batory@fineandcountry.com
T:   +44 (0) 1865 953243
M:  +44 (0) 7879 407697

www.fineandcountry.comere...

Oxford Property Market – Is it Time to ‘Plan’ to Get the Builders In?

Even though the new legislation was placed on hold because of the recent General Election, it is expected the Government will start fining around half of all UK local authorities for failing to build enough new homes as Westminster starts to force local authorities to build more homes with the new laws.

The Conservative Government has gone on record with an ambition to build 300,000 new homes each year from the mid-2020s (aspiring as the average for the last 13 years has only been 177,000 pa). So Downing Street see the planning system as requiring root and branch change to ensure local authorities deliver on that promise. The Ministry of Housing, Communities and Local Government’s ‘Housing Delivery Test’, which should be launched on an undetermined date this year, will hold local authorities to account for ensuring they hit their own specific house building targets. 

If a local authority is unable to show that it has a five-year stock of land for building new homes, it gives builders greater rights and liberties to build their new homes where the builder wants (not where the local authority wants).

This will mean there will be a house building free-for-all

as the council will have less control over the setting, types of properties, contribution to infrastructure and location of any new home development. 

Only 44% of local authorities have a local plan that is less than five years old.

Locally, Oxford isn’t in that 44% of local authorities. The current situation is, they have submitted its draft Local Plan to the Secretary of State for examination.

Yet, the original question of this article was to find out if we are building enough homes in Oxford and the surrounding local authority area i.e. should we get the builders in? Well, the Government set targets for local authorities for the number of homes they should build each year. The latest set of data is for 2018, so for the three years up to and including 2018 i.e. 2016/2017/2018,

Oxford’s new home building target was 1,266 new homes, yet it achieved 1,247, a shortfall of 19 new homes

So, what does that all mean for the Oxford property market?

Even with the slight shortfall, there are positive and negatives to this. The Oxford property market is not broken, yet it does need to get the builders in. Irrespective of the results from the last three years, we have over three decades of under building, which has created issues regarding affordability of homeownership and older generations being stuck in homes too big because there aren’t enough suitable homes for them to move to, i.e. bungalows. The stabilisation of the General Election has been a net positive to overall confidence in the local property market, meaning Oxford homeowners and Oxford landlords looking to sell their home in the coming spring and summer will find decent demand (although sellers still need to realistic with their pricing).

Unfortunately, the negatives are that many Oxford renters that want to buy, are unable to as they can’t save after paying their rents and feel as if they’ve been left behind. I know the Government recently launched their “First Homes” scheme for selected first time buyers at the start of February, where a 30% discount would apply to “a proportion of new homes” and would be subsidised out of contributions from builders, the Tory’s have previously promised to build 200,000 cut price homes for first time buyers back in 2015, yet the National Audit Office has recently confirmed they never built a single one!

The simple fact is, we as a country need to build far more affordable homes in the areas where people want them. This means the dream of homeownership will be a greater possibility for our children and grandchildren in the future. Our local authority needs to continue to plan the housing needs (and associated infrastructure) to ensure that as we live longer and continue to grow as country - we have the homes in place to live in that are suitable for every generation.

Tristan Batory | Associate 

Fine & Country Oxford 
267 Banbury Road, Summertown, Oxford, OX2 7HT 


E: tristan.batory@fineandcountry.com
T:   +44 (0) 1865 953243
M:  +44 (0) 7879 407697

www.fineandcountry.com

Banbury Property Market – Is it Time to ‘Plan’ to Get the Builders In?

Even though the new legislation was placed on hold because of the recent General Election, it is expected the Government will start fining around half of all UK local authorities for failing to build enough new homes as Westminster starts to force local authorities to build more homes with the new laws.

The Conservative Government has gone on record with an ambition to build 300,000 new homes each year from the mid-2020s (aspiring as the average for the last 13 years has only been 177,000 pa). So Downing Street see the planning system as requiring root and branch change to ensure local authorities deliver on that promise. The Ministry of Housing, Communities and Local Government’s ‘Housing Delivery Test’, which should be launched on an undetermined date this year, will hold local authorities to account for ensuring they hit their own specific house building targets. 

If a local authority is unable to show that it has a five-year stock of land for building new homes, it gives builders greater rights and liberties to build their new homes where the builder wants (not where the local authority wants). 

This will mean there will be a house-building free-for-all

as the council will have less control over the setting, types of properties, contribution to infrastructure and location of any new home development.

Only 44% of local authorities have a local plan that is less than five years old.

Locally, Cherwell is in that 44% of local authorities having had a local plan in place within the last five years.

Yet, the original question of this article was to find out if we are building enough homes in Banbury and the surrounding local authority area i.e. should we get the builders in? Well, the Government set targets for local authorities for the number of homes they should build each year. The latest set of data is for 2018, so for the three years up to and including 2018 i.e. 2016/2017/2018,

Cherwell’s new home building target was 1,677 new homes, yet it achieved 3,914, a surplus of 2,237 new homes

So, what does that all mean for the Banbury property market?

Even with the surplus, there are positive and negatives to this. The Banbury property market is not broken, yet it does need to get the builders in. Irrespective of the results from the last three years, we have over three decades of under building, which has created issues regarding affordability of homeownership and older generations being stuck in homes too big because there aren’t enough suitable homes for them to move to, i.e. bungalows. The stabilisation of the General Election has been a net positive to overall confidence in the local property market, meaning Banbury homeowners and Banbury landlords looking to sell their home in the coming spring and summer will find decent demand (although sellers still need to realistic with their pricing).

Unfortunately, the negatives are that many Banbury renters that want to buy, are unable to as they can’t save after paying their rents and feel as if they’ve been left behind. I know the Government recently launched their “First Homes” scheme for selected first time buyers at the start of February, where a 30% discount would apply to “a proportion of new homes” and would be subsidised out of contributions from builders, the Tory’s have previously promised to build 200,000 cut price homes for first time buyers back in 2015, yet the National Audit Office has recently confirmed they never built a single one!

The simple fact is, we as a country need to build far more affordable homes in the areas where people want them. This means the dream of homeownership will be a greater possibility for our children and grandchildren in the future. Our local authority needs to continue to plan the housing needs (and associated infrastructure) to ensure that as we live longer and continue to grow as country - we have the homes in place to live in that are suitable for every generation.

Oxford Landlord’s £23.4m Tax Bill

I am asking Anneliese Dodds the Labour Co-op MP for Oxford East and Layla Moran the Liberal Democrats MP for Oxford West and Abingdon to remind the Chancellor Sajid Javid and Prime Minster Boris Johnson to use their persuasive skills to highlight and take a more holistic approach and attitude to the private rented sector and tackle issues which affect an Oxford landlords’ capability and capacity to strategically run an effective buy-to-let business.


For the last thirty years, the Government have passed responsibility of housing the masses from local authorities (i.e. council housing) to the estimated 1.5 million British buy-to-let landlords.


However, since 2015/16, Oxford landlords have faced increasing tax burdens as each year goes by, with the removal of mortgage interest rate relief on income tax (Section 24), the introduction of the 3 percent surcharge on stamp duty, and the reduction of the letting relief on capital gains tax. 

My research has calculated the total income tax contribution by 6,146 Oxford private landlords in the tax year 2015/16 was £16,041,462

However, the eradication of higher rate mortgage interest relief (also known as Section 24) announced in 2015 by George Osborne has been estimated to add a further £1.9 billion nationally to landlord’s tax liability. Whilst raising money from landlords is an easy target, and the tax receipts attractive, it does make the landlords financial burden even heavier.

And by 2021/2, when the full extent of the Section 24 relief kicks in, that income tax liability will rise to £23,420,534

for those Oxford landlords

This doesn’t even take into account additional liabilities such as Capital Gains Tax, the 3% additional duty on top of the prevailing Stamp Duty Land Tax and VAT.

Ambiguity and a lack of certainty is the foe of all investment, which has been seen with Brexit. Now, just as things are starting to get rosy in Q1 with the pent-up demand released with the ‘Boris Bounce’, the last thing we need as a ‘collective’ property industry is for the Government to see us landlords as a constant cash cow. This new Tory government must acknowledge the value the majority of private landlords offer by housing in excess of 9.45 million people in the country.

Westminster needs to take a balanced approach to the significant issues of possession (especially with the impeding removal of section 21 evictions), taxation and all rental properties needing to be at least an ‘E’ energy efficiency rating, to connect the value the private rented sector offers the country by effectively housing over a fifth of the population and avoid unintentional consequences by making renting a private rented property harder for tenants … because, it’s not financially viable to buy (or retain) a buy-to-let property with the way things are going against the landlord.

Tristan Batory | Associate 

Fine & Country Oxford 
267 Banbury Road, Summertown, Oxford, OX2 7HT 


E: tristan.batory@fineandcountry.com
T:   +44 (0) 1865 953243
M:  +44 (0) 7879 407697

www.fineandcountry.com

Banbury Landlord’s £5.7m Tax Bill

I am asking Victoria Prentis the Conservative MP for Banbury to remind the Chancellor Sajid Javid and Prime Minster Boris Johnson to use their persuasive skills to highlight and take a more holistic approach and attitude to the private rented sector and tackle issues which affect a Banbury landlords’ capability and capacity to strategically run an effective buy-to-let business.

For the last thirty years, the Government have passed responsibility of housing the masses from local authorities (i.e. council housing) to the estimated 1.5 million British buy-to-let landlords.

However, since 2015/16, Banbury landlords have faced increasing tax burdens as each year goes by, with the removal of mortgage interest rate relief on income tax (Section 24), the introduction of the 3 percent surcharge on stamp duty, and the reduction of the letting relief on capital gains tax. 

My research has calculated the total income tax contribution by 1,508 Banbury private landlords in the tax year 2015/16 was £3,937,085

However, the eradication of higher rate mortgage interest relief (also known as Section 24) announced in 2015 by George Osborne has been estimated to add a further £1.9 billion nationally to landlord’s tax liability. Whilst raising money from landlords is an easy target, and the tax receipts attractive, it does make the landlords financial burden even heavier.

And by 2021/2, when the full extent of the Section 24 relief kicks in, that income tax liability will rise to £5,748,14

for those Banbury landlords

This doesn’t even take into account additional liabilities such as Capital Gains Tax, the 3% additional duty on top of the prevailing Stamp Duty Land Tax and VAT.

Ambiguity and a lack of certainty is the foe of all investment, which has been seen with Brexit. Now, just as things are starting to get rosy in Q1 with the pent-up demand released with the ‘Boris Bounce’, the last thing we need as a ‘collective’ property industry is for the Government to see us landlords as a constant cash cow. This new Tory government must acknowledge the value the majority of private landlords offer by housing in excess of 9.45 million people in the country.

Westminster needs to take a balanced approach to the significant issues of possession (especially with the impeding removal of section 21 evictions), taxation and all rental properties needing to be at least an ‘E’ energy efficiency rating, to connect the value the private rented sector offers the country by effectively housing over a fifth of the population and avoid unintentional consequences by making renting a private rented property harder for tenants … because, it’s not financially viable to buy (or retain) a buy-to-let property with the way things are going against the landlord.

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