Property Market – House Prices, Stamp Duty, Tenant Evictions, and Institutional Players
Hello, Samuel Leeds here with an update of what's currently happening in the UK's property market. There have been many changes, which I understand keeping up with can be a struggle. So in this blog, I'll aim to provide you with a thorough, up-to-date understanding of what going on in the property market by touching on these topics:
- Stamp duty holiday
- Tenant eviction ban
- Institutional investors
- House prices
Tenant Eviction Ban
#Owing to the pandemic and the loss of jobs that followed, the UK government banned tenant evictions during the lockdown. Some people were in support of this legislation, whereas others opposed it. Those for it included tenants who were down on their luck. I mean, if you've just lost your job, the last thing you want is to be kicked out of your house as well.
However, for a landlord like myself, the tenant eviction ban was terrible. As landlords, we should be able to evict tenants that aren't paying their rent. Was Sainsbury's asked to start giving out free food? No. So why should landlords allow tenants to live on their property for free?
Fortunately, as of 31st May, the ban on bailiff-enforced evictions officially ended. That means we can now evict tenants. However, I'm urging my fellow property owners not to be quick to kick out tenants who are going through tough times. Have a heart. Remember, what goes around comes around.
But just because the tenant eviction ban ended does not mean the eviction process is now as easy as before the pandemic. Among other hurdles, is the introduction of Breathing Space regulations (The Debt Respite Scheme). Debtors can now receive legal protections from creditor action for up to 60 days, which some tenants are taking advantage of.
So while you can now evict a tenant, it's still a slow process. There's a backlog of eviction-related court cases right now. But regardless of there being sluggish, I'm happy with the current eviction rules. I finally think the government is being fair to landlords as well.
Now, let's talk about the institutional players looking to invest or are already investing in residential property. The Financial Times reported that Lloyds Bank is planning to buy residential properties and rent them out. They, therefore, stand to become one of the largest private landlords in the UK.
The question is, how is Lloyds Bank able to invest in property? Simple. They use your money. The money they ask you to save safely in the bank. The crazy thing is, if you went to Lloyds Bank seeking a loan to invest in property, they'd tell you that's risky. But if you ask for a loan to pay for your wedding, they'll give it to you because they know you'll squander that money. And that means they can keep you in debt.
Anyway, what does it mean for the UK property market when large institutions like Lloyds Bank join the market as property developers and landlords? I think it will potentially push house prices up.
Speaking of house prices, according to Nationwide Building Society, over the last 12 months, house prices have gone up by 10.9% nationwide. If you watch my videos, view my Instagram posts, or read my tweets from last year around June-July, I predicted that house prices would go up by at least 10% in the next 12 months. I remember some people were like, “we'll check back in a year.” Well, it's happened. I was right.
Since the market is booming, many property educators are popping up on YouTube. I've been making educational property videos for years, a little over six years, to be specific. And time and again, my predictions have been proved right. I'm not saying I have a crystal ball, but I'll let my track record speak for itself.
Stamp Duty Holiday
Jump on the bandwagon of buying property now because the Stamp Duty holiday is in the process of being phased out. The nil rate band of £500,000 for Stamp Duty Land Tax (SDLT) ends on 30th June 2021. Then from 1st July 2021 to 30th September 2021, the nil rate band will apply up to £250,000.
Back in April 2020, I had several properties for sale on auction, but everything suddenly came to a halt. People couldn't view houses. Property valuers couldn't go to value them. The pandemic had paused the sale of over half a million properties, and it looked like the market was going to crash.
So to help stabilize the market, the government began offering incentives like Stamp Duty holiday to encourage people to buy property. Well, it worked because the property market actually blew up! However, Stamp Duty Land Tax (SDLT) rates will soon return to what they were before 8th July 2020, so now is the time to buy property.
- The effects of the eviction ban will be limited because of slower access to courts and bailiffs and 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 houses either to move from one area to another 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.
Where to Buy Property
Remember, every area has its own economy. So while house prices have gone up across the country, it's not the case everywhere. Ensure to do thorough research on an area before buying property there. Ideally, you want to buy a property for a reasonable price and where there are positive cash flow properties.
Property Investors Crash Course UK Tour
Listen, you've learned all this in a 9-minute video. Imagine how much more you can learn in a crash course. Starting 21st June 2021, I'll embark on a property investors crash course tour across England. The seminars will take place in Portsmouth, Swindon, Walsall (Birmingham), Watford (London), Manchester, and Leeds. Among other things, I'll be teaching strategies for investing in property, finding the right areas, and tips on negotiating and closing deals.
Get your free ticket to the crash course here and join me in any of the cities and towns listed above. Getting educated about property investment is crucial before investing in property. It's the only way you'll become financially free. So invest in yourself first. I look forward to meeting you.