What’s NEW for Property?! From the Eviction Ban End to Institutional Investors and More!

Samuel Leeds

What’s NEW for Property?! From the Eviction Ban End to Institutional Investors and More!

In this article, I will take a look at recent news in the UK property market as well as some of the broader trends that are emerging.   

Eviction Ban

The government’s eviction ban came to an end on 31 May 2021, but landlords will still have issues with the eviction system.

The end to the ban will not mean that access to evictions will be speedy:  

 

  • There is limited court time. Courts will prioritise the most serious cases, such as fraud or anti-social behaviour. 

 

  • Limited capacity of bailiffs will also slow evictions.

 

  • Breathing space’ legislation gives debtors, including tenants, the option to pause most debt collection for 60 days.

The point: While the eviction ban has ended, there are a number of factors which mean that landlords will not be able to gain fast repossession of their properties. This will mean that landlords will probably continue to be left waiting for some time, and only the most serious cases will receive priority. The effects on the property market from lifting the ban may also not be seen for some time as evictions will be slow.   

Institutional Players

There has been a rise in institutional investors renting out residential property. Large institutions renting out residential real estate (e.g. owning blocks of flats) has been more common in some other countries, but we are starting to see more of it in the UK too.       

Some of these institutional investors include: 

 

  • Property developers

 

  • Life assurance companies 

 

  • and even plans by Lloyds Bank to rent out homes, according to the Financial Times

 

The point: Institutional interest in residential property is a sign of strength in the sector. It will also mean increased competition for properties both for investors and for those looking for a home.   Individual landlords will increasingly be competing for tenants against large companies and will need to insure their service is as good or better than the competition, if they wish to attract good tenants.     

Nationwide House Price Index 

Nationwide’s report on house prices published for May 2021 found an annual house price growth of 10.9%

Of those moving home or considering a move:

  • The main reasons for moving were either changing area or looking for more outdoor space. 

 

  • Most were looking to move to less urban areas.

 

The Point: The property market is growing. People are looking to have more outdoor space and to live away from bigger cities. Property investors should consider what kind of outdoor space is available either with the property or publicly accessible close by.  

Stamp Duty Holiday Continues

The stamp duty holiday which was intended to end in March has been extended. The first £500,000 of a purchase will be exempt until the end of the month (June 2021) but you must have started the transaction already

If you haven’t started a purchase yet, you can still benefit; from 30th June 2021 to 30th September 2021, the first £250,000 will be exempt. 

The Point: The decision to end the stamp duty holiday in a more gradual way will mean that the effect of this tax break will continue to have a positive impact on the market for some time. It remains to be seen if demand will slow when the scheme fully ends in September.  

In short… 

In summary:

 

  • The effects of the eviction ban will be limited because of slower access to courts and bailiffs as well as the use of ‘breathing space’ legislation by tenants. 

 

  • Institutional investors are increasingly interested in renting out residential property. 

 

  • Nationwide reports continued property market growth. People want to move house either to change area or for more outdoor space. Most want to move to less urban areas. 

 

  • The stamp duty holiday will continue until the end of September for the first £250,000.           

 

 

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