UK Property Market: Latest Trends for 2021….
Hey guys, Samuel Leeds here with a quick and brief update of what's currently happening in the UK property market. There has been a lot of scaremongering and fake news about the property industry from various media outlets. So it's crucial to support reputable sources like my property channel and website by liking and sharing to ensure more people get accurate information.
It's also wise to not solely rely on the mainstream media for the latest property news. The reason being, they sometimes don't talk about the things that are actually relevant to property investors. Think back to when the government introduced Section 24. The media, at the time, was talking about the impact of the tax changes the amendment would bring.
What they didn't tell you was, Section 24 didn't apply to companies. So you can set up a limited company and become a guarantor, which allows you to avoid the restrictions on mortgage interest relief. But did the press report this? No. Hence why I insist on getting your information from the appropriate sources.
UK Property Market Overview
That said, here's what you need to know about the property market right now
- Follow the Money
What are the big organizations with the most money investing in, i.e., what are they doing with their money? Here are three large companies that are making headlines in the property market.
John Lewis. The high-end department store company announced that they plan to build 10,000 rental homes in the United Kingdom
- Lloyds Bank. In a previous update of the property market, I had mentioned that the financial institution was looking to buy residential properties and rent them out. They've now put forward their business plan, which they'll execute under the brand “Citra Living.” Through this initiative titled “Project Generation,” Lloyds Bank will become one of the largest private landlords in the UK.
- Macquarie Group Limited. The Australian investment bank announced that they plan to invest over 1 billion pounds acquiring, developing, and operating multifamily residential properties across London and other major UK cities. Macquarie will run the project under Goodstone Living, a specialist real estate development and investment management business they established.
So when you hear people saying it's not a good time to get into the property market, ask them why big companies like John Lewis are pumping money into the country's rental housing market? If institutional players with massive wealth think residential property in the UK is a safe bet, it likely is.
And here's the thing, they're not waiting for properties to go up or for the market to crash to invest. They're jumping into the market now. For years, I've been telling people to invest in property in the UK. There's a shortage of houses and an overpopulation of people. Large companies know this makes investing in property a safe bet and are acting on it. So my advice is, follow the money!
- New Permitted Development Right (PDR)
As of August 1st, a new permitted development right that allows converting commercial properties to residential properties without applying for planning permission came into effect. With many shops, offices, and warehouses having gone out of business and the value of commercial premises dropping, this will further boost the housing market. And keep in mind house prices are rising.
Now, who makes these legislations? Rich people. And how do wealthy individuals make their money? They invest in property. A good number of MPs, for instance, are accumulating wealth through real estate. And there's no reason you should be left out. You can now buy an office, not necessarily with your money, and convert it into a house without getting planning permission in many cases.
However, you still need to make an application and meet certain conditions. You can't, for example, apply to convert a commercial property into a residential one if it's just been vacant for less than three months. Regardless, shop to residential conversion is now easier than it's ever been. So if you have been thinking about getting into property development, this is an option worth considering.
- Residential Property Developer Tax (RPDT)
In other news, residential property developers will face a new tax, known as residential property developer tax (RPDT), beginning April 2022. The government is introducing this time-limited tax as one of its measures to fund the removal of unsafe cladding from residential buildings. The goal is to raise at least £2 billion over a 10-year duration.
But don't start freaking out yet. RDPT will only apply to companies that generate profits that exceed an annual allowance of £25 million in an accounting period. So this will not affect me, and neither will it affect you. Well, not unless you're a big company like Taylor Wimpey.
The government and large institutions betting on the residential property market is proof they are confident and optimistic about where the housing market is going. So as a property investor, I'm really excited about what the future holds, and I hope you are too and will take the necessary steps to get your slice of the pie.
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