
Our writer Connor Coombe-Whitlock is exploring for MFS the current news and trends in the financial and property markets. Discover what he’s got to say.
Fido and mittens are the real victims of changing rental legislation
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 MFS 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 MFS 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 MFS” 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 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 MFS 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.