BREAKING PROPERTY NEWS – 05/08/2021
Daily bite-sized proptech and real estate news in partnership with Proptech-X. Today, Stanton looks at the Airbnb effect on the Private Rented Sector, Property Deals Insight’s automated valuation model, and Taylor Wimpey’s operating profits.
- Has the Private Rented Sector gone all Airbnb?
- Property Deals Insight cures house price blindness
- Taylor Wimpey says operating profit likely to increase
Has the Private Rented Sector gone all Airbnb?
There’s a lot going on in the PRS, with tens of thousands unable to pay some or all of their rent, but the bigger story is Airbnb’s ongoing creep into the mainstream rental market.
Of course, owners of second properties or professional landlords with multi-properties can let to who they want and in a way they want. But due to the hugely lucrative ways that Airbnb can repurpose a nice little earner – after all the deductions and tax that landlords have to pay – into an asset that can produce a months rent in a week, severe problems for the sector may be on the horizon.
There are now areas in the UK where it is difficult to get a traditional tenancy if you want to stay in rented accommodation, as most of the rental inventory is hosted through Airbnb. This of course typically hits the lower-paid demographic looking for rental accommodation, and also those who are currently renting because they have contracts to work in certain areas.
As reported in The Times, the MP for Totnes Anthony Mangnall feels the situation needs to be addressed. He said: “There are just nineteen properties you can rent long-term in the whole of South Hams on Rightmove, yet there are 300 advertised on Airbnb in Salcombe, another 300 in Kingsbridge, a similar number in Totnes. Yet we have hospital staff who can’t find anywhere to live, RNLI crew that can’t live in the town they serve. This is starting to become dangerous.”
Further South West in Cornwall, it is thought that there are over 9,000 Airbnb-hosted accommodations, prompting calls for action to be taken against this practice. With the pandemic and month after month of lockdowns coming in waves, it is of course fair that landlords should be able to maximise their property assets. With restrictions in place, it’s not surprising that premium rates for very short term lets exist, though it’s not the solution to the problem, it’s compounding it.
Property Deals Insight cures house price blindness
Following a recent extensive property study of 2,000 homeowners by Zoopla, it was found that over 70% of property owners did not know their property’s true value, with 45% underestimating the value. To solve this, the founder of Property Deals Insight, Nitin Aggarwal, has now launched a new, bespoke Automated Valuation Model that combines millions of data points from trusted sources.
These data points are further enriched to provide an accurate average per square metre pricing for specific property types in specific areas, instead of generic local averages, taking the guesswork out of the equation.
Aggarwal said: “Years ago I was amazed to find that there was no standard way of knowing a property’s value, and as I dealt with property at the time, I really needed a 100% solution to cover the knowledge gap. In the end, after extensive analysis and development, I built a solution.”
What Property Deals Insight built utilising advanced coding and software and pulling in multiple datasets is a 2020 AVM automated valuation model, which can help a variety of clients. The result, as Aggarwal puts it, is “a dedicated bespoke API that delivers comprehensive information from per square metre valuations to the latest off-market deals and analysis, you can identify the best deals in the UK, where the top ROI properties are, local area analysis and more.”
Aggarwal explains: “The AVM is so advanced it has multiple users. For example, estate agents can use it to win instructions by wowing the potential vendor with a deep dive analysis that shows that the agent is ahead of the pack, rather than the limited reports agents often provide.
“Property investors will also find it to be an essential tool of choice, it will be like their property compass giving detailed intel on property yields, index properties by measurement, comparables…in fact, this functionality was the core functionality that was built first.”
Asked if Property Deals Insight’s offering is better than the judgment of a property professional alone, Nitin Aggarwal said: “The very fact that more than a dozen of the fifteen major UK lenders rely on AVMs when underwriting the value of property shows that fast, accurate, software-driven analytics is where the future lies.”
With a dedicated bespoke API that delivers comprehensive information from per square metre valuations to the latest off-market deals and analysis, you can identify the best deals in the UK, where the top ROI properties are, local area analysis and more.
Aggarwal goes on to say that “we help customers make property decisions faster, and this efficiency is a winner as both the general public and property professionals demand digital tools that provide instant UX. No one wants to wait around for an answer.”
Property investor clients using Property Deals Insight can use property heat maps, the property deal finder and property valuation report resources. For other types of clients, like surveyors or lenders, there’s a host of functionality that just does not exist elsewhere on the market.
Taylor Wimpey says operating profit likely to increase
It is never an exact science, predicting the operating profit of a company that relies on legal completions of properties to swell its coffers, but Taylor Wimpey seems to think that it will make another £12 million by year-end taking its operating profit for the year to £820m.
What has catapulted them forward has been the stamp duty holiday, the phasing out of the help to buy old-style scheme, and the general frenzy to move induced by work from home, the pandemic and a positive housing market with cheaper housing finance.
The company, which now feels that it will see 14,000 new owners collect their keys before the end of December, had previously been less bullish, thinking that they might be looking as low as £756 million in revenue.
But with just a shade over 7,300 completed sales under their belt by the halfway mark of the year, as long as the weather allows for construction to continue at the current rate of knots, double this amount is likely.
If you have a view – please let us all know by emailing me at [email protected] – Andrew Stanton Executive Editor – moving property and proptech forward.