Jingle All the Way

This week, UK house prices “surge” +3.7% annually, averaging £268,144 – against what many forecasters predicted about a year ago. For example, Knight Frank and many others predicted in Oct 2023 that there would be around a 4% decrease over 2024 – quite the difference… Due to the Dec seasonal slowdown, it will likely mean the year ends around 3.5% up overall. This just goes to show that the old adage is true – “forecasts are always wrong” (especially sensationalist forecasts in the newspapers that are primarily released to attract eyeballs). It’s just a question of how wrong the forecasts will be – but people seldom go back and check their forecasts do they?… In the end, on a small island, with limited space, a rising population, more demand for living alone and huge shortfalls in house-building, house prices will always increase in the long-term – with short-term corrections and dips along the way due to the cyclical nature of the economy (see my previous post on the 18 Year Property Cycle). And no, 1.5 million homes will NOT be built by the Government over their current term (this is not a political statement, simply a logical fact – you can feel free to test me on this when the time comes). As a side-note – every house-building target ever created by any UK government has never (even remotely) been met.

So what to do? Well it’s probably best just to proceed with a grown-up, layered approach that means that you grow reasonably quickly, but can always survive / ride-out at least a 20% drop in the market during any intermezzo dips (2007 was the worst crash in the UK’s history, dropping average prices by around 16% to 20%). Some ways to potentially do this are by; buying at a (real) discount in the first place (so you have a buffer built-in against market averages), getting longer-term fixed mortgages (to buy time before variable rates kick-in should the worst happen) and by having a liquidity buffer. Probably the worst thing anyone who isn’t already completely financially free can do is nothing – leaving your money in the bank with paltry returns (rates are likely to drift down slowly over the next 5 years by the way). On the subject of calculated and responsible risk – I’ve said it once, and I’ll say it again: in my opinion “there is a time and a place for debt – the place is property, and the time is before you’re 60”. One of the biggest regrets that many in property have (caused by limiting beliefs about money that they learn in childhood) is that they went hell-for-leather to pay off their first mortgage as early as possible – had they invested instead in more properties, they would be alot further along than they are – potentially completely financially already, years earlier. Time is limited – learn from others’ mistakes. Time and inflation erodes responsible debt – even without price rises.*

* This is written from experience and in good faith, but does not constitute financial advice – always seek this independently.

In other news, Flats lead buy-to-let yields , commercial property demand jumps 11%, Additional Dwelling Supplement (ADS) jumps up to an eye-watering 8% north of the border, and interesting new ventures abound as Poundland debuts affordable housing in Scotland! And no, they’re not £1 (which would help alot in Scotland right now) – but it does highlight a continuing trend of more corporates getting into property investment generally.

Still a few more weeks of the year left – and these can be an extremely significant time in property. For example, many Estate Agents will be advising sellers to hold-off until Boxing Day to list their property – so if they are ignoring this advice (and listing now) it’s likely they want a very fast offer acceptance. So if you are active in Property this Christmas – whatever your role – then here’s hoping you “Jingle All the Way” to the end of the year.

ATTENTION LANDLORDS: Coming soon. Tired of tenancy uncertainty or the constant onslaught of regulation and risk? Wouldn’t you rather have trouble-free renting for 2-5 years at a time without any gaps in rent? Find out more here.

UK house prices experience fastest growth in two years. Nationwide reports a 1.2% increase in November, leading to a 3.7% annual rise and an average property price of £268,144. This growth is attributed to strong labour markets and wage increases, with further market stimulation expected from upcoming stamp duty changes in April 2025.

Increased demand for commercial property investments. Rightmove’s latest data reveals an 11% rise in demand for commercial properties compared to the same period last year, marking the largest quarterly increase since 2021. The industrial sector leads this growth with a 34% uptick, potentially driven by recent reductions in interest rates.

UTILITY OF THE WEEK. Energy Ombudsman dispute resolution service. Got an issue with either your own, or your tenant’s energy supply that needs elevating beyond the energy supplier? The Energy Ombudsman can be extremely helpful – I’ve used their online system and was fairly impressed.

Scottish investors call for reform of property transaction tax to boost investment. Institutional investors, including Abrdn, are urging the Scottish government to amend the Land and Buildings Transaction Tax (LBTT) to align with England’s stamp duty reliefs. They argue that the current lack of tax relief on collective investment funds deters property investment in Scotland, potentially unlocking billions if reformed.

Who are M2P? Married2Property are a family-run property company that aims to build social good through property.

Poundland enters property market with affordable flats in Scotland. Poundland has ventured into real estate by developing four one-bedroom flats in Elgin, Moray, priced at over £85,000 each. This initiative revitalised a historic building and showcases the company’s commitment to community development, offering affordable housing options.

If you know someone interested in property, forward this newsletter to them

Flats offer highest rental yields for buy-to-let investors. Research by Inventory Base indicates that flats now provide an average rental yield that outperforms other property types. This is due to a 0.9% decrease in flat prices and a 9.3% increase in rental values over the past year, enhancing their appeal to investors.

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Song of the Week: 🎶 Never Walk Alone – Blond:ish 🎸

And Finally… in the ever unpopular series (no refunds) of Property Christmas Cracker Jokes… Why did the Landlord become a stand-up comedian? Because she always got laughs – even with her flat jokes!

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What do M2P do? Married2Property aims to create social good through by property – by housing more vulnerable groups of people – giving them a stable platform from which to try and improve their lot in life. We also offer Landlords competitive and hassle-free solutions for their property problems.