Our resident content writer at Market Financial Solutions, Connor Coombe-Whitlock, explores the current news and trends in the financial and property markets. Find out more about his takes in this edition of ‘A Market in Focus’.
The £2.89tn Generational Question Facing the Property Market
Sometimes, with the content I write on behalf of Market Financial Solutions, I tend to follow a particular subject for a while. It can be a few articles on holiday lets, or a couple of blogs on gazumping. My current area of focus, for whatever reason, is generational wealth, and the different investing priorities between demographics.
I’ve focused on it a lot, and I have plans to continue to do so over the next few weeks. But it really is worth focusing on. In my opinion, nothing will have as big of an impact on the property market than our demographic changes.
As we all (sadly) age, we need to focus on what the coming generations may prioritise. It may surprise you to know that the young appear keen to invest, and pour their wealth into property specifically. Already, there are at least 3,000 landlords under the age of 21, and the estate agency John Minnis found that many 25 to 34-year-olds are investing in BTL properties to build wealth, as opposed to purchasing homes to live in.
One of the key reasons why I think these kinds of trends or preferences are so crucial is because of the “Great Wealth Transfer.” Globally, some $18.3 trillion in wealth is to be transferred between the generations by 2030. Around $3.5 trillion of this will happen within Europe, but I’ve struggled to find UK-specific figures.
However now, we have a much clearer idea of the dramatic shifts that could be on the horizon in our market. According to Savills, baby boomers are sitting on £2.89 trillion in property wealth. This won’t just disappear. Eventually, these assets will need to be handed down, or sold off. The next few years will be interesting to say the least. It’s worth trying to get ahead of things while we can.
A key lesson to learn from global trade tariffs
Got to love it when life proves a point. I recently wrote a whitepaper on diversification in investing, looking at the broader asset classes that sit alongside property. We surveyed a broad range of investors for their thoughts on equities, bonds, commodities, and more.
The results for each asset class had some commentary. Here’s a bit of what I said about equities: “the equity market is prone to crash periodically, which can decimate wealth very quickly. Black Monday, the Dot-Com Bubble, and the Credit Crunch still linger in our memories. As always, taking the long-term view is probably the safer option with equities.”
On the bond market following the 2022 mini-Budget: “Eventually, the Bank of England had to step in to calm things down. But it just goes to show, bonds can be steady and safe at the best of times, but all it takes is one nasty surprise to upend the market. Ultimately, as with any investment class, there are pros and cons with bonds, and investors need to consider how much exposure they want to them.”
And commodities: “Many investors believe a second Trump presidency will have the biggest impact on their investment decisions this year. With his ‘drill, baby, drill’ rhetoric, investors may be tempted to take a closer look at the oil market in 2025.”
Lo and behold, mere days after publication, President Trump announced trade tariffs, and sent all of these asset’s markets into a tailspin. But, equities have been hit especially hard. It further emphasises my central point: It’s better to be diversified than not when disaster strikes. Some assets may fare surprisingly well as others falter. Of course, he’s also since announced pauses on tariffs, which has moved the markets again.
If you want to find exactly how investors are diversified at the moment, you can download our free whitepaper here.
Thoughts from the MIMAs
29th November 2024
I, along with the rest of the marketing team, had the pleasure of attending the Mortgage Industry Marketing Awards this week. It’s our Oscars.
We had an amazing result this year. We made the shortlist in six categories, a record for us. We should have won them all of course, but in the end it was Leah Brunskill who walked away Marketer of the Year. While Alex Hewett won the first ever Event Manager of the Year award.
First and foremost, these wins were entirely deserved. Those were my first thoughts following the announcements. But looking around during the ceremony, I couldn’t help but realise that industry wide, the bar is very high.
I know just how much blood, sweat, and tears go into our marketing efforts. So, the fact that some of our competitors pipped us at the post in certain categories really brought it home that we must continue to push for greatness. We can’t (not that we would) take our foot off the gas pedal.
We need to keep our efforts at 100%, for both our sake, and that of our clients. I can’t wait to see what we come up with in 2025. This time next year, I’m sure I’ll be writing about how we’re gobsmacked at sweeping the board.
Panicking because we don’t know what we don’t know. It’s wasteful, but relief is here
28th October 2024
All that stress, for nothing. The last few days have strengthened my belief that unchecked speculation is rarely worth the trouble. Our guesses and worst fears may end up being true, but we must never kid ourselves. We don’t know what we don’t know, and goalposts are surprisingly malleable.
It’s reached that point again where “surprise” leaks emerge ahead of a budget. Now, we still don’t know for sure what’s on the way, and Rachel Reeves’ announcements will likely have dramatic impacts on the property market. But landlords may be able to breath a (tentative) sigh of relief at the moment.
Reportedly, the Chancellor has been forced to abandon a planned “attack on landlords”, scrapping a capital gains tax (CGT) raid on property investors. Specifically, second homeowners and BTL investors will be spared any rises to the levy which instead will target other assets such as shares.
This will make all the difference to some. Fear of hiked CGT bills forced many landlords to sell up in recent months, while keeping those who stuck around up at night with worry.
It just goes to show, we should try and avoid panicking over what may be on the way. If we’re going to stress, let’s at least stress about the things we know to be true. On that, I’ll be writing up an Industry Reacts on the budget once we know where we stand. So keep an eye out for what industry insiders have to say about what’s worth actually preparing for…
The importance of getting ahead of events season
27th September 2024
I aim to add to ‘A Market In Focus’ at least once a month. My last update was in June. It’s shameful.
If I have a defence, it’s that the entire marketing team here at Market Financial Solutions have been swamped with the events and awards season. We’re attending, and creating, more happenings than ever – which requires more work than ever.
But, I have to admit, through gritted teeth, that it’s important to do the work. As our market and economy becomes more digital, the need for in-person interaction becomes ever more apparent. I’ve seen it first hand at some of our in-house events.
Nothing compares with talking through a deal or challenge face-to-face. We need to get out there and interact with our brokers and borrowers. We risk losing sight of what’s important if we don’t. Indeed, a recent report from Finova showed that only 13% of borrowers enjoyed interacting with chatbots, while just 12% found virtual consultations with AI useful.
Looking ahead, we’ve got big things planned. We hope to see as many of you as possible at all the events we’ve got scheduled. Come say hello, shake our hands, and take your eyes off a screen for a few hours.
Also, as I’ve finally got all my event-related work done (for this year at least, sigh) I vow to be much more consistent here!
The next few weeks will be tense but don’t let emotion cloud your judgement
27th June 2024
So now, with the latest base rate decision out, we have a pretty rounded view of where we stand economically ahead of the election. It’s a mixed bag. But we know it’s a mixed bag. We can prepare.
Let’s get the bad stuff out of the way. Interest rates are staying put for now, as is GDP. After growing at the fastest rate in three years in Q1, our economy failed to grow in April. Blame the weather.
There are positives, however. Inflation is finally under control, slowing to 2% in the year to May. After three long years, the CPI is back on target. Also, the latest land registry data, arguably the most reliable data source we have on house prices, showed average UK house prices rose by 1.1% in the 12 months to April 2024.
All of this will likely have a huge impact on how property investors act in the coming weeks, but will have little effect on outcomes. Regardless of who wins on July 4th, house prices will likely rise. There will be much to factor in and prepare for over the coming weeks, but we urge you to keep your eye on the prize. Emotion risks clouding judgement.
For every action there is an equal and opposite reaction
19th April 2024
It’s an obvious reality, which often leads to unfortunate outcomes. People, and investors specifically, will do what they can to avoid raised costs or aggro. If the tax burden is increased, investors may flee offshore, taking their wealth with them.
Tighten up inheritance laws, and people simply find ways to circumvent them. And, sadly (yet inevitably), attempts to minimise evictions simply leads to more of them.
It’s official, ahead of Michael Gove’s no-fault eviction ban, section 21 eviction notices shot up, hitting a five-year high in the process. Unfortunately, this may only ramp up over the coming months too.
The Renters Reform Bill is set to be back in in the Commons on Wednesday 24th. One step closer to reality.
Still, we must focus on the positives. Evicted tenants will need new places to live. There’s, evidently, going to be a worsening lack of supply. Landlords willing to embrace a tougher climate will likely be rewarded with grateful tenants, who stick around for the long-term.
Making plans one day, abandoning them the next
26th March 2024
I’ve got whiplash! To much chagrin, HMRC announced it was to close its phone lines for six months every year, shutting down shop in the summer and reopening in the winter. The response was as you’d expect.
When I saw this, I began thinking about how it could affect property investors. Landlords need to complete Self Assessments after all, and they probably need just as much help with them as other taxpayers do. I could post about it on our social channels. Maybe I’d even dedicate an Industry Reacts to it.
I was keen. Excited even. But then, the very next day, Jeremy Hunt ordered HMRC to cancel its plans and keep the phone lines open. Sometimes, trying to keep up with the headlines is pointless.
But, it does serve as a nice reminder of the importance of remaining flexible. It’s next to impossible to predict what public announcements are around the corner. It’s even harder to know what plans will be abandoned entirely. We’ve been aware of this for years at Market Financial Solutions, which is why we prioritise being adaptable – even when we’re caught unawares.
Also, for anyone wondering, our phone lines will remain open throughout the summer. We don’t want to risk being told off by the Chancellor.
It’s worth seeking out juxtapositions in the economy
27th February 2024
One of my university lecturers was obsessed with analysing juxtapositions within the business world. He loved examples of it. A pristine pizza restaurant next to a rundown chicken shop – now that’s standing out done right!
It didn’t matter the context of the assignment. If I could squeeze in a reference to juxtaposition somehow, it was an easy way to get a few extra marks with little effort. Ever since those university years though, it’s been ingrained in me to look for juxtapositions wherever I can find them, as if I’m still that student trying to go from a 2:1, to a 1st.
Fortunately, our economy is great for this. Take our recession news. Our economy shrank by 0.3% between October and December, which has got everyone worried.
But, at the same time, bridging loan demand skyrocketed. Completions rose by 18.4%, reaching £1.69bn. Loan books also hit a new high of £7.6bn.
So, while GDP was declining, property investors were seeking out specialist finance in record numbers. An amazing contrast!
It’s an illuminating exercise to engage with – looking for a positive figure to counterbalance a negative one. Good news may be hidden, but you’d be surprised at how much of it is out there, quietly matching the bad.
I guess I should thank my old lecturer for his obsession. It’s held me in good stead so far.
Property investing and cruising – obviously they go together
9th January 2024
I’m feeling smug. I’ll be heading on a cruise around the Caribbean soon, a fact I’ve enjoyed sharing repeatedly with the rest of the marketing team. No more drizzly London skies for me. In mere days, it’ll be pristine white beaches and golden horizons.
For a lucky few, these changes can be permanent, while somehow still making financial sense. Austin Wells, a remote worker from San Diego, made headlines recently for buying an apartment on a cruise ship so he could travel the globe while he worked. Maddeningly, this worked out cheaper than buying a flat in California.
But, Brits don’t have to go to such extremes to try and combine the cruising world with their investment strategy. An odd proposition, I grant you. But one that may hold a surprising amount of potential.
Recent analysis from CBRE revealed where the top 10 cities for house price growth are for the coming decade. Two of these cities are cruising hotspots.
Southampton, the top UK port for cruises, received a high score of 82/100 for its short-term rental options, and tourism potential. Liverpool also made the list, mainly as a result of major regeneration work – which includes a new cruise ship terminal.
It just goes to show, there’s always a way to creatively target very niche elements of the property market. It also goes to show, that I will always find creative ways to fit in brags about my holidays into marketing content. I’ll see you in a few weeks.
Will property investors become more popular in 2024?
18th December 2023
Time heals all things. Relationships once deemed irremediable can be fixed with a bit of patience. A perfect example within the property world: estate agents. They’re not very popular at the moment by the looks of things.
The latest Ipsos Veracity Index – the longest running poll on trust in professions in Britain – ranked estate agents among the five least trusted professions. This isn’t all that surprising. Estate agents, along with many other property related industries, have had to face down a very tough year. Getting anything done smoothly in 2023 has been tricky.
But, estate agents have mounted a comeback in recent months. Not only has the number of estate agents climbed in 2023, but their popularity is now on the rise. As the market became increasingly complex, homebuyers and sellers turned to high street agents for their expertise and guidance.
I can’t help but wonder, as we approach 2024, if any other unpopular property players today will be viewed more favourably in the coming months. Maybe portfolio landlords will end up respected for the service they provide? Or, could the efforts of 2nd homeowners be recognised for bringing seasonal uplifts to our coastal towns? Will property investors be thanked for delivering more stock for the market?
No matter what surprises lay ahead, everyone here at Market Financial Solutions wishes you the best of luck for 2024. We will be here to support you in all your property investing endeavours, and I’ll continue to keep you updated on the state of the market. I’ll see you next year!
WeWork, you work, they all work – often still in the office
13th November 2023
WeWork has put flexible working back under the spotlight. Once a typical unicorn darling of Silicon Valley, the coworking space provider filed for bankruptcy on November 6. As expected, the shift to working from home, among other challenges, was blamed for the company’s downfall.
The question remains, what does this mean going forward? How should investors take the news, and what’s the outlook for offices as an asset? As always, there’s no clear answer for these kinds of questions.
Some may assume that offices, at large, have had their day. Heading into work 5 days a week just isn’t a thing anymore. To a certain extent, this is the case. Across the US, France, and Germany employees simply don’t want to want to head back to the office full time. But no country appears to embrace working from home like Britain does.
So, does this mean any investment in an office is doomed? Again, there is no one right answer. Many companies want their workers back. We’re seeing tugs-of-war here, but more people are now back working 5 days in the office than working from home for the first time since the pandemic.
Also, around a third of landlords in London who intend to add to their portfolio over the coming months are considering switching from residential assets, to commercial. And despite everything, some 37% of those looking at commercial property are thinking of investing in office space.
What’s more, offices still hold a lot of potential even when they’re empty. Billions have already been pumped into unwanted office space to convert them into student accommodation, hotels, and even laboratories.
Remember, just because it’s reported in the press that a market is struggling, it doesn’t mean that everyone is struggling with said market.
If you find an opportunity that works for your circumstances, it could be worth pursuing. Even with all the sentiment going against you – just remember that you should seek qualified advice and make sure it fits with your overall goals.
The Halloween marketing cliches have started – brace yourself
20th October 2023
I really dislike Halloween. I have – many – personal reasons for this. But for the sake of this update, I’ll stick to the professional causes of my irritation. In my opinion, Halloween, more so than Christmas or Easter, is riddled with marketing and advertising clichés.
I may be wrong on this, due to my bias. Perhaps there are more wince-inducing messages out there during New Year’s or Valentine’s Day. But there’s one particular line that grates on me year after year. So much so, that it feels like I spot it everywhere.
You may have already seen it. “No tricks, just treats”.
No string of words makes my eyes roll quicker. Alas, this line seems to be the green light for countless Halloween-related property news items.
So far, I’ve discovered that living near a haunted spot could add up to £85k to your home’s asking price. That living at number 13 could knock off £5,000 from your house price, and putting up Halloween decorations could see you fined under the 1957 Occupier’s Liability Act.
Over the next few days, expect to see more on “scary” house price movements, “spooky” selling trends, or “hair-raising” announcements.
Rest assured. So long as I’m around in the Market Financial Solutions marketing team, our messages at Halloween will be as cliché-free as possible. I can’t promise the same for Valentines day though, as other members of the team love a valentines related property pun.
RIP EPC. Is being green still worth it?
22nd Spetember 2023
It’s disheartening to say the least. After months of pushing from the state, and millions spent in the PRS, the government has u-turned on its green plans. For now, EPC obligations for existing tenancies are a thing of the past.
There may be various reactions to this news, depending on where one stands. If you, as a landlord or property investor, were worried about how you’d afford green upgrades, you’re probably relieved. If you had already made changes, you’re likely a tad annoyed.
But, even though there may no longer be an obligation involved, it doesn’t mean you should give up on being environmentally conscious. Requirement or not, they’re incentives to act.
Many market participants already seem to recognise this. In the opening months of 2023, we surveyed landlords who owned at least 1 investment property. Just over half (56%) revealed the sustainability of their property(s) was important to them – regardless of looming EPC regulations. This was also particularly true for those with larger portfolios. Of those who owned 4 or more properties, 65% valued sustainability highly.
This could all pay off. Nearly half (47%) of homeowners agreed they’d be willing to pay a 6% premium for greener properties, according to Barclays. In London, some environmentally sustainable commercial buildings have attracted capital premiums of over 20%. Renters in late 2022, at the height of the cost-of-living crisis, were still happy to pay up to 13% more for a greener home.
Yes, much of this was likely driven by the fact that legislation was about to force change. But, just because the obligation is gone for now, it doesn’t necessarily mean you should remove environmental considerations from your investment strategy entirely.
Will the return of Jamie Oliver to the high street sway your outlook on the commercial property market?
17th August 2023
I’m a huge fan of Jamie Oliver. How you feel about that will depend on where you stand on the Naked Chef. But every recipe of his I’ve cooked has turned out delicious. Granted though, he may not be the best restaurateur.
Four years ago, Jamie crashed out of the mid-market scene as his “Jamie’s Italian” chain went into administration. Which is why the news that he plans to return to London with a new upmarket restaurant in Covent Garden caught my eye. Launching a high-end restaurant in the current economy may seem baffling at first glance. But, the timing may actually make sense.
Yes, the entire hospitality sector has struggled against the same inflation crisis that’s hit all of us. But, there is some evidence to suggest higher end restaurants are somewhat protected from the challenges than their more casual counterparts.
As Emilio Foa, chief executive of the Ottolenghi chain, said in the FT: “Probably the majority of our customers are in the cluster where if your mortgage payment goes up, you’re not happy but it doesn’t mean that you have to cut other expenses.”
For property investors, this all may offer food for thought. Any commercial investment needs to be considered very carefully and professional advice sought. We’ve all seen how difficult it’s become to get offices and retail shops filled.
Yet, 78% of the UK’s biggest restaurant groups are currently making a profit, according to UHY Hacker Young. Up from 35% last year. Meanwhile, the annual UK Eating Out Market Report from Lumina Intelligence forecasts that our restaurants are poised for a 4.6% growth in value by the end of the year.
Consumers, no matter how skint they are, just can’t resist a good steak every once in a while. Let’s wish Jamie the best of luck eh!
Are we on the right economic track? It depends on whether you ask the PM or the BoE
4th August 2023
Are you a half glass empty, or half full type of investor? What do you think the chances are we’ll see our way out of this economic mess by the end of 2023? Maybe 50/50? How about 70/30?
Those in charge also seem to be wondering about the odds at the moment. Rishi Sunak, during a recent LBC interview, backed away from two of his five key pledges. The first being cutting NHS waiting lists. The other, halving inflation by the end of the year.
But while Mr Sunak may be unsure, the Bank of England is, surprisingly, more optimistic. The BoE recently forecasted that we’re on track to see inflation drop to around 4.9% in the final 3 months of 2023. The CPI was running at 10.7% in the final quarter of 2022 so if we hit the 4.9% mark, that’ll be a drop of over half.
Fingers crossed eh. As always, all we can do is keep pushing forward, make sensible financial decisions, and hope our collective efforts are working. At Market Financial Solutions, we like to believe we’re on the right track.
We’re optimists. We think the glass is half full. There are endless scary stats out there, but the important ones are going in the right direction. A few examples: the estimated value of the private rental sector has grown to £1.5trn – jumping 30% since 2019.
Nationwide noted a fall in house prices in July, but prices are still 21% above their February 2020 level. And in our own market, gross bridging lending reached nearly £280m in Q1, a 67.6% rise on the previous quarter.
Keep going. The property market has been through worse, and we will come out of this clean on the other side. As our own CEO said in a recent i news article: “Today’s hike shows that – perhaps counter-intuitively for borrowers, even though the base rate rose, there is some good news in that the jump was smaller than previously predicted, allowing lenders to reassess their rates accordingly.”
Flexible working is about to become even more widespread – you may want to get your portfolio ready
24th July 2023
Flexible working, for all its faults, is one step closer to being a rule, rather than an exception. The Employment Relations (Flexible Working) Act 2023 (AKA – the flexible working bill), has passed through its third reading in Parliament.
What this means in practice is that soon, employees may be able to make two flexible working requests in any 12-month period. Employers, in turn, will be required to respond to these requests within 2 months of receiving them.
There are many other facets to the bill but, in short, companies will need to take flexibility requests very seriously over the coming months. Even if they don’t want to.
How we manage these shifts will be crucially important. There’s much at risk if we get it wrong. Around 4 million workers had changed their careers due to a lack of flexibility in their jobs, according to recent research from the CIPD. Nearly half (40%) of employers have seen an increase in requests for flexible working since the pandemic.
Meanwhile the charity Working Families found that three in 10 UK parents are in jobs below their skill levels as they cannot secure flexible working arrangements.
If workers are encouraged to ask their bosses for flexibility, it stands to reason that tenants may soon make similar requests of their landlords. Buyers may even make their purchases contingent on certain changes. As the work from home culture grows, more emphasis may be placed on having home office space, and top-tier internet connections.
There could be rewards for property investors who get ahead of this though. “Shed-offices” have grown in popularity and having one could boost your property’s value by over £20,000.
Hybrid workers, those who head into work a few days a week, are keen to live in larger homes with space for a home office. Between 2020 and 2022, the prime Covid years, detached property values rose by 26%. This equated to growth of nearly £78,000, according to Nationwide Building Society.
Now may be the time to start thinking about any refurbishment, conversion, or renovation plans that have been on your radar. Four-bedroom houses are great. But maybe your future buyers, or tenants, will be happier with 2 bedrooms, 1 office, and 1 nursery?
Our USPs are not selling points, they’re necessities
6 July 2023
A reminder: the flexibility we provide and regularly shout about isn’t there just to look good in our marketing efforts. We prioritise flexibility, because the market needs it. It’s not an empty tagline or slogan.
Our supply must meet increasingly complicated demand. Consumers and borrowers are clearly struggling, with more financial difficulties coming to light almost daily. But, we proudly have solutions for these difficulties. More and more, we’re finding that these solutions are not only useful – but vital.
More families are seeking debt advice as costs rise, with the proportion of homeowners approved for an IVA rising from 7% to 13% since last year. There were nearly 13 million adults with a heavy debt burden at the start of the year, up 66% from October 2017. Retirees are also falling behind on their direct debits and standing orders.
It’s times like these where specialist finance shines. Our products were created from the ground up with our current economic problems in mind.
Your clients don’t need to be excluded from the property investment world just because the wider economy is unforgiving. We’re still here for those with missed payments, IVAs, and debts to their name.
Mortgages are disappearing, but you still have options
15 June 2023
Mainstream lenders are gripped by fear. Again. On a seemingly daily basis, mortgage deals are being withdrawn. We’ve seen this before of course, but the speed at which it’s happening feels especially painful. Particularly for brokers. We’ve had to deal with a lot of frantic calls in recent days.
We completely understand though. Deals are disappearing so quickly that brokers barely have time to react. Some lenders gave as little as two hours’ notice that they were pulling all their products for new customers. Two hours – not for a tweak to terms, or specific rates being pulled – but an entire product range.
It’s a difficult situation to be in. But one that needs a bit of perspective. Mere months ago, things were much, much worse.
In autumn 2022, there was well over 8,000 mortgage products available, both residential and BTL. By October, this dropped to 2,258. We only saw comparable drops to this in the 2008 crisis, and during the opening months of the pandemic.
To put things into perspective: between May and June 2023, the total number of mortgages out there fell by 682, according to Moneyfacts. We’re, undoubtedly, in a tricky spot. But, we haven’t quite reached crisis levels just yet. Regardless though, in good times and bad, we’ll be here to support your clients, and keep you in the loop at all times.
Fido and mittens are the real victims of changing rental legislation
1 June 2023
Pet owners beware. The Renters Reform Bill will not allow landlords to “unreasonably” refuse requests for keeping pets. Whilst this may initially seem like good news, predictably, this is set to force landlords to raise rents or deposit sizes to offset the potential damage caused by animals – claw marks on doors from overly excitable dogs. Cat hair embedded in the carpet. Hamsters chewing through the wiring.
Although, raised costs may be rendered irrelevant for some. Many landlords are expected to sell up entirely because of the new rules. This doesn’t bode well for animal lovers. Only 7% of landlords currently market their properties as “pet-friendly”.
But for property investors who can stomach the potential downsides, there could be rewards for opening their homes to the animal kingdom. Since the pandemic, our dog population has skyrocketed to over 12 million.
In 2021, Rightmove saw a 120% rise in searches for pet friendly properties on its site. Some buyers are even seeking out properties with high-end built-in dog showers, or dog beds integrated into kitchen units.
It’s worth reconsidering those with furry friends. Over a quarter (26%) of tenants would likely stay in a property for longer if they were allowed to keep a pet.
If you’re still not sure, you could start slowly. Maybe consider tenants with a well-behaved dog to begin with. Cat owners can – rightfully – be dismissed. (These views are my own and not shared by Market Financial Solutions or even members of my own team).
Think outside the box on the Renters’ Reform Bill
19 May 2023
The Renters’ Reform Bill has finally landed and, predictably, it’s sent the media into meltdown. There’s lots to unpack, but most of the commentary seems to be focused on the scrapping of section 21 “no-fault” evictions.
Landlords will flee the market entirely, so we’re told. Buy-to-let is, once again, ‘dead’. We’ll see if this will be yet another death called too soon – I expect it is. But for now, let’s look at how this change could actually benefit landlords and tenants alike by possibly resolving another issue – our population. Stick with me on this.
In the UK, we’re not having enough children. To keep our population and economy stable, couples need to be having at least 2.1 children. At the moment, we’re sitting around the 1.6 mark. But with each child costing an estimated £200,000, it’s no wonder many are opting to not have them at all.
Setting aside the costs of raising a child, a lack of stability in housing may also be contributing to these statistics. For parents who can afford to grow their families, would they risk doing so knowing they could be evicted with little-to-no notice?
With the rules changing though, we may see fortunes change. Where couples feel the risk of eviction is gone, maybe then they’ll start thinking about children. For landlords, there’s also plenty of incentive to keep their homes open for expanding families.
Growing families, despite what many think, are known to take great care of the homes they rent. They also tend to stick around for a lot longer. In the current climate, wouldn’t it be nice to secure income for 5, 10, or even 15 years?
As always, a change in legislation is not the be all and end all it’s made out to be. New laws do not kill-off industries as substantial as the private rental sector. The buy-to-let world will adapt. New opportunities will present themselves. Common sense will prevail.
Does the return of 100% mortgages tell us anything about the state of the economy?
12 May 2023
So, 100% mortgages are back. Well technically, it’s been possible to get a 100% mortgage with financial help from friends or family for a while now. But a new product has emerged which doesn’t require a guarantor of any kind.
There has been a mixed reception so far among pundits. Some argue now is an odd time to launch a product like this, with so much uncertainty looming.
But, innovation in our market should always be welcomed. More options for borrowers are always a good thing. What brokers and investors alike need to remember is that it’s important to do their homework. A quick glance at the details of this new option highlights a product with rigid criteria and limitations in place. It may not be for everyone.
For those who do qualify though, it could provide a much-needed first step onto the housing ladder. Looking at the broader picture, it may also signify optimism is slowly, but surely returning.
I hold faith in this outlook.
I’m sure we’re all aware, and exhausted by the challenges we’re bombarded with at the moment. I, luckily, need to keep up with the bad news to do my job. But what gets overlooked is how often the forecasts prove to be wrong.
Economic experts in the Square Mile recently had to admit they were wrong to predict the pound would plummet and hit parity with the dollar. In Threadneedle Street, Bank of England policymakers ripped up their forecasts, acknowledging that Britain is likely to expand over the next 2 years, rather than fall into recession. And the International Monetary Fund (IMF), with its very important and official-sounding position, has been consistently wrong about the UK’s growth rate since at least 2016.
We shouldn’t underestimate the issues we’re facing. But that doesn’t mean we can’t embrace innovation or boldness either.
An evening with Market Financial Solutions and thoughts on the days ahead
28 April 2023
We’ve been reminded of the importance of the human touch. This week, we hosted our very first “Evening with Market Financial Solutions” event where we invited our cherished brokers to enjoy some good food, comedy, and live music with us. During this prestigious event, I had the responsibility – nay, honour – of handing out name tags.
Jokes aside, it was great to see how real working relationships can thrive. There was no hint of financial doom among the attendees. Instead, all I saw was smiles galore, shared camaraderie, and toasts to borrowers supported through thick and thin.
In catching up with our brokers, we also gleaned insight on what’s proving important at the moment. Hesitancy among lenders and some investors has provided brokers with a rare opportunity to step back and focus on what’s needed.
Turns out, people are needed. Our brokers shared how they are struggling against overly corporate lenders in this tricky market. They’re tired of dealing with chatbots, or bureaucratic processes when they’re just trying to support their clients.
We were told, repeatedly, how much they value having good BDMs at hand. When things go wrong, they want someone to speak to. A person at the other end of the phone.
We couldn’t agree more!
Our accomplishment was built on having solid relationships with the wider property community. But it’s nice to share these thoughts with our partners.
If you were in attendance, I really hope you enjoyed yourself. If you couldn’t make it, I hope to hand you your own name tag someday soon!
We’re starting to see just how impactful Help to Buy was – so what’s next?
21 April 2023
The Help to Buy scheme really was game changing. Its shadow will likely loom for a while, even as it ceases to be. Bearing agreed extensions, English purchases via the scheme needed to be completed by 31 March 2023. There’s been a lot of chatter about how the market would cope once the incentives disappeared. So far, there’s been a bit of disengagement.
The land market slowed in the first quarter of 2023 according to Savills. There’s been fewer land transactions and new site launches, reflecting wider housing issues and the loss of Help to Buy. In London, where arguably more homes are needed than anywhere else, housebuilding numbers plummeted in the 2nd half of 2022. Work began on fewer than 5,000 homes after it was announced the scheme would end in May.
Help to Buy had its fair share of criticisms, but that hasn’t stopped a clamouring for a replacement, or alternatives. For buyers, Wales may still hold opportunity, with the scheme being extended into 2025. But for the rest of the UK, nearly three quarters of Conservative voters want to see boosted social housing numbers.
In response to these kinds of demands, the department for Levelling Up, Housing and Communities has set aside £11.5bn for an Affordable Homes Programme. While £4.1bn has been reinvested in new housing from Right to Buy sales.
And of course, Michael Gove has pledged to upend everything from tenant’s rights to holiday-let rules. It remains to be seen if these plans will have anywhere near the same level of impact as Help to Buy did.
Music videos for estate agents – a good idea?
30 March 2023
Trying to find optimistic talking points for A Market In Focus is tricky. But with the news being what it is, I’m desperate to find uplifting stories. That desperation has led me to a very odd place this week.
Just Knock Estate Agents, a small bespoke agency from Leighton Buzzard established in 2020, has gone viral recently. Why has this happened? Is the firm representing a well-known property? Has it broken any sales records?
Nope. Just Knock made waves through a promotional, Stranger Things inspired music video. Claire Cossey, owner of the company, took the 1984 hit “Never Ending Story” and put her own spin on it. What emerged was the “Never Ending Property” ballad. As Claire croons, she shows off the property’s many bedrooms. As she flows across the £700,000 home, she boasts of its green credentials.
Some may call it a cringe marketing ploy. Others, a cheap effort to go viral. But regardless, what you can’t call it is unsuccessful.
So far, the video has attracted over 500,000 views. Not bad for a company barely 3-years old, with a management team of just 2. The video may not be one that you watch all the way through, but it’s nice to see a bit of creativity and fun in the property world. Positivity is desperately needed at the moment.
We’ve been so inspired that we’re thinking about how we can incorporate more music into the specialist finance market. Our Lead Designer is currently working out how he can factor bridging into a performance of either “Maria” or “’I Dreamed a Dream”.
Just where do we start with the most recent news?
23 March 2023
Well, it’s been a busy few days, hasn’t it? Within the space of a week or so, we’ve seen renewed trouble in the banking sector, a spring Budget, a surprise rise in inflation, and a base rate hike. There’s been so much news that it’s hard to pinpoint how it’ll all affect property investors.
If there’s anything to be taken away from all this, I think it’s that we all need to do our best to be ready for the unexpected. It’s a cliché, but there’s a reason this advice keeps popping up. You’re going to face nasty surprises. You’ll want to do what you can to minimise the damage.
A surprisingly cold winter hit crops, pushing up food prices. What can you learn from this? It may be worth getting your properties ready for unpredictable weather. Perhaps you need to upgrade your assets for freezing summers, or toasty winters.
Also, as banks fail and inflation jumps, it serves as a nice reminder to look at the potential relevance of getting capital into assets that tend to stand the test of time. No current savings account rate is beating 10.4%. And despite everything, house prices continue to defy expectations and push upwards. Let’s prepare for the worst and hopefully, enjoy some pleasant surprises soon.
The Budget may not have covered property, but that doesn’t mean there wasn’t housing news
17 March 2023
Trying to find fresh things to write about the Budget is hard. It’s been covered from every angle, in every publication going. It’s especially tricky to do so for a property focused audience. Housing didn’t even get a mention.
So, rather than try to get blood from the stone that is the 2023 Spring Budget, I looked through the OBRs economic and fiscal outlook, released alongside Mr. Hunt’s announcements. Here, the property world was mentioned, and there’s good news.
While mortgage rates are still expected to increase, they’re now forecast to rise at a much slower pace than they were in November. At the same time, house price growth is set to bounce back from 2024 onwards. Over the coming years, property prices may steadily rise, and funding costs could end up being lower than many expected.
And who knows, there may even be more unexpected good news on the horizon. Everyone here at Market Financial Solutions did a double take when inflation was mentioned. Inflation isn’t predicted to fall by 2.9% before the end of 2023, but to 2.9%.
Just a few months ago, that would have seemed impossible. Of course, these are still just predictions. A lot can go wrong between now and the end of the year. But we’ll only push through our current woes if we remain confident in the future. It’s always a tad odd agreeing with a politician, but Jeremy said it best: “The declinists are wrong, and the optimists are right.”
Is there anything on the way for property investors in next week’s budget?
10 March 2023
It’s interesting to see the differing priorities between brokers and buyers. With the next Budget on the way, both parties have shared what they’d like to see from our new Chancellor. Homeowners, reportedly, want to see an extension of the mortgage guarantee scheme, better funding options for first-time buyers, and expanded support for affordable housing.
Brokers on the other hand, want to see revised stamp duty rules, and a replacement for the Help to Buy scheme. Of course, we’ll never know for sure what’s on the way. But, there’s a few likely outcomes.
The Guardian, i News, The Times, The Telegraph and Sky News are all predicting more energy bill support. With maybe a few tax changes and work incentives thrown in for good measure. There may not be much announced for the property world though.
But, let’s not lose sight of the long-game. We may have a very sympathetic Chancellor helming the exchequer at the moment. A fellow property investor, who might truly understand what the market needs.
On top of residing in Pimlico, Downing Street, and Surrey, Mr Hunt has been associated with investments in several high-end apartments in Southampton. He’s likely faced all the admin, costs, and legal issues you have. Let’s hope he remembers them over the coming months.
The property market still has the mini-budget on the mind, but stability could be just around the corner
09 March 2023
Half a year later, we’re still haunted by the mini-budget. New home sales in February were trending around 20% to 30% lower than they were in 2022. Agents and analysts in the field say the sector is still reeling from September’s chaos. Even with some of the recovery we’ve seen in recent months.
Fear is still the most powerful motivator I suppose. Bad news lingers. Negativity bias is a real thing. Hopefully, some of this will dissipate as Jeremy Hunt delivers his budget in the coming days. We can’t predict exactly what’ll be announced, but there’s got to be some action surely.
There’s been a few guesses made and some of them could be likely. Some of them may even restore a sense of quiet confidence in the property market. By all accounts, Mr Hunt and the wider government wants to get people back to work, while there may also be news on the energy price cap, various taxes, and public sector pay.
The cost-of-living crisis and mini-budget fallout may limit how much room the Chancellor has for manoeuvring. But, let’s not forget there was a surprise surplus in the government’s coffers in January, to the tune of £30bn. Maybe he’ll be feeling a bit more generous in the run up to the 15th…
Now is both the best of times, and the worst of times
24 February 2023
The news is important. Keeping up with what’s going on in the world is crucial. But, there’s no getting away from the fact that the fourth estate is having a bit of an identity crisis. Alarmism is rife and ultimately, stories are written for what will be clicked on.
Personally, I think you should take most things you read with a pinch of salt. At the very least, you should focus on how relevant a story is to your circumstances. What’s the point of letting scary headlines affect your mood, if they have no real bearing on your life.
Take these headlines from the Telegraph: “Worst time to buy a house in 150 years”, and “House prices may be falling – but now is the best time to move”. Want to know how far apart these stories were? Three days.
If the press wants to target worried readers, they’ll do so. Ditto for those who are optimistic. Data can be manipulated to serve endless end-goals, most of which can rarely be tailored to any one individual reader.
Your best bet is to take the figures you see in the news, and apply them to your situation. Rather than focus on what the latest economic figures mean for the whole of the UK, maybe you should just examine how they’ll affect your budget.
There’s not much you can do about energy prices, Westminster drama, or a nervous central bank. What you can do, is best prepare for a future that no one can truly predict.
We need old priorities to fix modern problems
20 February 2023
An online estate agent has gone on the market for support, after struggling with its cost-cutting efforts. A £20m loss warning has already been issued for 2023.
What’s interesting to note, is that this new take on estate agencies was once touted as a game changer. Launched in 2014 as the next big thing, it was meant to disrupt the property world, with its lack of high street stores to visit.
At the time, consumers were all about streamlined services. And to a certain extent, we still are. But it’s amazing how a global pandemic can shift priorities. I think this selling point of online services may also have been part of the downfall.
Companies like Rightmove and Zoopla show there is still a demand for making initial searches easier, by putting available properties all in one place. But, when it comes to the commitment stages, consumers want a person to interact with.
It seems that collectively for buyers, sellers, renters, and landlords – we’re all sick of not seeing each other when it comes to the next step of a process. Zoom calls are soul destroying, and robo-advisors have no souls to begin with.
We saw this resistance coming though. Which is why we’ve got our BDMs on the road to remind people that whilst you can do everything over the phone if you wish, there is a real person ready to discuss cases in person as well.
As we face very modern problems, perhaps the solutions can be found in what’s historically proven timeless.
What’s going on in Wales?
6 February 2023
As an industry and indeed, a nation, we’re obsessed with London and the South East. Rents, prices, costs – they’re all found at their highest in the capital. It makes for great alarmism. But even if you’re London based, it’s worth remembering that London is connected to an entire United Kingdom.
Property investors may want to pay heed to what’s going on in Wales. London will always have opportunities, but they may not always be the most lucrative out there. Last year, London saw a 3% rise in property millionaires. An increase, sure. Yet the biggest rise was found across the border.
More property millionaires were created in Wales last year than anywhere else – with a 26% rise on 2021. Wales may be underestimated as an investment destination, but as many city-dwellers became desperate to find more greenery in recent years, the land of the red dragon has proven tempting.
There’s plenty of reasons for property investors to move there too. The Welsh Government has pledged millions to bring derelict empty homes back to life, while efforts are being made to improve transport connectivity between Wales and the west of England.
What’s more, since 2009, Welsh house prices have overtaken those in Scotland and Northern Ireland, reaching just over £220,000 on average according to the latest data.
Ultimately, where’s best for your investments will depend on your circumstances, and professional investment advice should be sought. But, there’s a lot of land outside of the obvious hotspots for everyone to keep an eye on. Adar o’r un lliw ehedant i’r un lle!
Don’t underestimate the importance of going green
31 January 2023
Like it or not, a greener future is coming. Some are still debating the worth of focusing so dramatically on the environment. Especially considering the other challenges we’re facing. But in the minds of many consumers, the debate has already been settled. Landlords are going to be affected by this in more ways than one.
There’s seems little point in resistance. New regulations are on their way, which will force action. Also, we know many buyers and renters prefer greener homes, but new data from L&G shows just how strong these preferences are. Its latest SmartrFit data found that criteria searches for products which consider a property’s EPC rose 21% in December. Also, additional research showed buyers will pay a 20% premium for low-carbon homes.
It’s not just residential assets that are being affected by this shift either. A third of Gen Zers revealed they had rejected a job offer because they didn’t like the company’s green credentials. Soon, you may not even be able to hire employees if your office isn’t carbon friendly.
We’re all, rightfully, focused on interest rates, inflation, and the economy at the moment. But landlords shouldn’t underestimate the importance of keeping their assets environmentally friendly. If we’re painting a picture for how the future will look, the dominant colour we’ll be using is green. They won’t want to clash this with too much red or black.
I love a comeback story
19 January 2023
Despite facing resistance, cash usage rose last year. On average we withdrew £1,500. And it looks like we had no hesitation in spending this money.
Amazingly, we’re seeing the start of a high street revival. M&S plans to open 20 new shops, creating over 3,000 new jobs in the process. What’s more, Next, Boots, JD Sports, and even HMV have reported rising revenues. At the same time, we’ve seen the tech giants lay off staff and cut back on spending. Quite the role reversal.
I think consumers are taking comfort in what’s tangible. We’ve been on such an economical rollercoaster. Perhaps people want to get back to normality by focusing on what’s tried-and-true. They want cash in their hand. A store to walk around in. And, possibly, investments that are visible.
The last few years have been dominated by scary looking charts and diagrams. It can all feel a bit arbitrary. As we try to move forward, bricks and mortar may look tempting for those seeking some peace of mind. We’ve seen how negative sentiment has swayed other markets. But, once all is said and done, houses and commercial spaces will still be left standing.
People need places to live, work, and play. As we remember how comforting it is to hold cash in our hands, perhaps we’ll be reminded of the joy of receiving keys for a new home.
The great British pub to the rescue
13 January 2023
Another month locked in, another step in the right direction. Our economy defied expectations in November, with GDP rising 0.1% on the previous month. This rise was driven by the technology sector and, more importantly, a strong showing from pubs and bars. Despite the national tragedy of not winning, we were boosted by the World Cup.
There can be no doubt, we still have a long road ahead of us. But that doesn’t mean we can’t find time to enjoy ourselves along the way. After two long years of social bubbles and stroll quotas, I say we’ve earned it. And it looks like I’m not the only one.
Whitbread and Mitchells & Butlers, two major players in the pub and hospitality scenes, saw a spike in sales and demand over the festive period. After the Omicron variant effectively cancelled Christmas for many in 2021, it appears we were over not enjoying ourselves. We made up for lost time, and rightly so.
Budgets are stretched, and people are worried, but we all want the situation to get better. Consumers crave enjoyable services and a sense of community. If we can get the basics right, it may put us in the right frame of mind to tackle everything else – Cheers!
Why haven’t base rate hikes worked?
16 December 2022
Another MPC meeting, another hike. The base rate finished up at 3.5% at the end of 2022, as the Bank of England desperately played catch up. Commentators begged Andrew Bailey to act quicker in fending off inflation, but this pleading fell on deaf ears. We were assured that we were simply witnessing “transitionary” inflation. All would be well in a few months.
By the time the BoE realised inflation was here to stay, it was too late. Interest rates rose to the highest level seen for over a decade, but this did little to help. Inflation has stubbornly sat around to 10% mark for months now.
But while it’s easy to point a finger at the BoE for not acting sooner, a small part of me has sympathy for the central bank. There’s only so far monetary policy changes can go to curtail a global pandemic, war, and an energy crisis. Our “perma-crisis” is driven by global causes the BoE have little say over.
Nevertheless, Mr Bailey believes inflation has peaked. A bold statement considering his track record. We’ll find out if he’s right over the coming weeks. But even if we have plateaued, there could be a long road ahead of us.
Some good news for a change – the arrows are starting to go in the right direction
14 December 2022
Amazingly, if you look hard enough, it is possible to find some good news among the headlines. Our collective efforts appear to be paying off. Albeit, slowly.
Although it might not have felt like it, your costs dipped in November. Inflation dropped from 11.1% to 10.7%. It’s still painfully high, but at least we’re heading in the right direction. Who knows, maybe Andrew Bailey’s optimism will prove warranted by the summer. You’ll be able to enjoy the sun without worrying about the cost of the sunscreen.
Also, the lines we want to go up, have gone up. UK house prices grew 0.3% in October. I know we like to see “record highs” but in the current climate, I think we should all just be relieved to see any growth. An increase is an increase – no matter how small.
GDP is also on the up, rising by 0.5% in October. Economists were not impressed, noting we’re still likely to face a bleak 2023. But I think there was a nugget of hope in the figures. We saw the rebound in October after September’s mourning period for the late Queen, where we shut-up-shop.
A reminder that there’s people behind the numbers. A society that, when needed, can show respect, restraint, and reverence. Our economy – our society – is tenacious. With perseverance, I’m sure we’ll get out of this mess. Keep calm and carry on.
Do we really want to be defined by goblins?
14 December 2022
The Oxford dictionary’s word of the year left me amused and perplexed. Brits, with their wisdom and sense of humour, voted “goblin mode” to be the word that defines 2022.
Now, I’m no expert. And I’m sure it’s somehow linguistically correct. but isn’t goblin mode technically two words? Regardless, the choice is telling.
As the Oxford Dictionary defined it: “A type of behaviour which is unapologetically self-indulgent, lazy, slovenly, or greedy, typically in a way that rejects social norms or expectations.” This idea (way of life?) has been around since at least 2009, but really came to the forefront during the pandemic. As the world ground to a halt, it provided many of us with the most precious resource of all: time.
Millions of us, via furlough and other schemes, suddenly found ourselves with no work to do. Commuting was cancelled en masse and, unfortunately, many lost their jobs entirely. We had little to do but wait for better days. So, we might as well have waited in comfy pyjamas – snacks in hand.
The debate over working practices is still ongoing. The question remains if workers are just as effective in tracksuits as they are in business suits. But, perhaps some of us got too-used to the indulgence. As we face down 2023 and its challenges, maybe it’s time we finally shake off the lockdown years and roll up our (shirt) sleeves. Maybe it’s time to put the goblins behind us.
