The property market in the UK has rebounded vigorously from the recent succession of lockdowns, prompting a tidal wave of price increases in some parts of the country – especially rural areas. Yet many homeowners continue to undervalue their homes. And, for landlords, things have not yet quite returned to a pre-pandemic normal when it comes to evictions.
Let’s take a closer look at these stories that made the recent headlines.
Where are the UK’s current property price hotspots?
The property market across the whole of the UK is riding on a high. Prices increased by an average of 5.1% in the past 12 months – the national average standing at a record £327,797 said Property Reporter on the 4th of May.
Areas of Liverpool and Manchester in the north west of England emerge as property hotspots.
Average prices in Wallasey, on Merseyside, are 15.6% higher than a year ago – an increase of £24,000 on the average asking price – and those that sell do so within just a week of listing.
Second place on Rightmove’s list of hotspots is Leigh, in Greater Manchester, where prices have increased by an average of 12.8%.
‘Urban flight’ raises house prices in villages
As homeowners emerging from lockdown look for more space inside and outside, the “urban flight” from towns and cities has prompted a surge in prices in the countryside, explained a report by the BBC on the 1st of May.
Within the 10 least densely populated local authorities across the UK, prices have increased by an average of 10%, says the report, compared with an increase of just 6% in the more built-up areas.
Because the demand is for larger homes, smaller houses and flats remain in more plentiful supply.
Any exodus to the countryside, of course, relied on the ability of homeowners to make such a move – and for lower-income groups, a home in a spacious, rural setting would remain little more than a pipedream.
UK homeowners collectively undervalue their homes by £237bn
Online listings website Zoopla published some startling figures on the 21st of April revealing the extent to which many UK homeowners undervalue their property.
A survey of “hidden equity” in the average home revealed that nearly half of all homeowners undervalued the property in which they lived by an average of £46,300 – a tidy sum, which represents almost one and a half times the average annual salary in the UK.
More startling, perhaps, is the discovery that more than one million homes are likely to be worth £100,000 more than their current owners appreciate.
These under-valuations stem from the way in which an estimated two-thirds of homeowners have seemingly fallen out of touch with the true value of their homes. This is despite the fact that when eight out of ten of them discovered that true value, they realised how much that knowledge could “improve their lifestyle”.
Indeed, when the current home was sold – and the previously hidden equity released – around half of those selling were able to move into a better home than they had imagined owning.
Landlords warned of change to the arrears and eviction process
Landlords have been warned to pay careful attention to changes in the issue of Section 8 eviction notices with effect from the 4th of May, according to advice published by the National Residential Landlords’ Association (NRLA).
There is currently a temporary freeze on landlords’ ability to issue Section 8 notices to quit because of any arrears of rent (but certain other grounds to evict remain valid). With effect from the 4th of May, moreover, landlords must include written details about the government’s Breathing Space initiative for any Section 8 notice to be valid. If the landlord has not included such a reference, the notice to quit will need to be re-issued.
An article in Landlord Today explained that the Breathing Space initiative – formally the Breathing Space Moratorium and Mental Health Crisis Moratorium (England and Wales) Regulations 2020 – imposes a temporary moratorium on efforts by landlords or their letting agents to recover arrears of rent from tenants.
This also includes removal of the landlord’s right to serve a Section 8 eviction notice on the grounds of arrears of rent. Whatever the reasons cited for the Section 8 notice, landlords must now provide tenants with written details of the Breathing Space initiative.
