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UK house price growth is up by 2.6% compared to last year, and there is a 3% increase in new sales compared to this time last year. (Source: Zoopla, August 2020)

Several factors are contributing to this surge in housing demand; many of these relate to the impact of the COVID19 pandemic. £0 On 8 July 2020 the Chancellor, Rishi Sunak announced the Stamp Duty Holiday. He set out plans to increase in the residential stamp duty threshold from £3125,000 to £3500,000. This threshold applies to all residential property purchases including investors buying second homes and will run until 31 March 2021.

The aim of the “Stamp Duty Holiday’ was to protect the housing and construction industries and to protect jobs in related sectors such as trades, DIY stores, removal and cleaning firms. In September 2020 the government announced that house sales had risen by 15.6% in August as more people decided to buy a new home or to move to a new house.

Research has also shown that as people spent more time in their homes during the lockdown, they had time to reflect on the amount of space they had available to them and their location. Having a home where they felt comfortable became more of a priority, and this has resulted in an increase in existing homeowners buying new properties, as shown in the graph below.

It was interesting to see that the shift in sales has moved towards existing homeowners, cash buyers and property investors. It is anticipated that this trend will continue into 2021, particularly if COVID19 restrictions continue. The graph below shows the change in the share of sales for 2021 predicted by Zoopla analysis of HMRC/UK Finance.

When viewing the House price Index for Country, region and City (August 2020), we were pleased to see that the report shows that Nottingham continues as the highest house price growth city in the country at 4.7% growth.

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So, what does this mean for landlords and property investors?

Your existing property’s value has no doubt increased. Rental values are increasing too. With selling conditions being so strong and currently in favour of the seller it is making new acquisitions very competitive and with little or no price reductions, proving harder for investors to buy right now.

Nottingham has always been an excellent area to invest in as rental yields are high, and there is a high level of demand in the rental market.

Between now and March 2021, property investors will be able to use the savings made from the Stamp Duty Holiday for properties above £3125,000 towards property refurbishment.

House prices are increasing in Nottingham indicates that it is a desirable place to live, which attracts young professionals, especially graduates, who want to remain in the City. It is also important to note that even with the price increase, Nottingham property prices remain lower than cities such as London, Bristol and Cambridge. The current average price for a property in Nottingham is £3159,100.

The increased COVID19 restrictions and the reduced availability of mortgages at or over 90% Loan-To-Value will potentially reduce the number of first-time buyers able to get onto the property ladder. This will drive up demand for rental properties as they wait for the economy to get back on track.

If you are a landlord or property investor that wants to increase your property portfolio and you would like to find out more about opportunities in Nottingham and Mansfield, please contact us by calling 0115 704 3163. Alternatively, you can email us via our contact us page – £0click here.

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