BREAKING PROPERTY NEWS – 29/07/2021

Daily bite-sized proptech and real estate news in partnership with Proptech-X. Today, Stanton looks at Devon’s millionaire hotspot, the precipitous housing market, and work from home’s impact on Agents

• Buying a second home in parts of Devon may soon not be possible
• Will the housing market go from boom to bust?
• Agents: Working from home has changed how we value property

Buying a second home in parts of Devon may soon not be possible

Salcombe in Devon, which has its planning strategy set by the South Hams District Council, has now passed a vote that means persons seeking to live in a new build will have to contend with a Section 106 agreement.

The council is very upset that new builds are being bought by local residents and resold to people from outside the local area who own a main residence somewhere else. But the 106 agreement, having been registered against the title of such a property, would stop this practice.

In what can be seen as a heavy-handed measure, the council voted all in favour of making a change or amendment to the local Salcombe Neighbourhood Plan.

“New open market housing, excluding replacement dwellings, will only be supported where there is a Section 106 agreement to ensure its occupancy as a principal residence. This policy is a result of impact upon the local housing market of second or holiday homes. This occupancy restriction will therefore require the imposition of a legal agreement. New unrestricted market homes will not be supported at any time.”

Will the housing market go from boom to bust?

At present, the Bank of England lending rate is just 0.1%, an all-time low, and property prices are at an all-time high; 30% higher than in 2007 when, due to the financial crisis of 2008, the housing market rapidly went from boom to bust.

Kate Davies, executive director of the Intermediary Mortgage Lenders Association, said: “Our findings forecast that 2021 will see the highest level of mortgage lending since 2007 and, with a combination of Government support helping to underpin new purchases and a bumper year for product maturities, we expect this high demand to continue.

However, with the Stamp Duty holiday soon coming to an end, and the Help to Buy scheme due to conclude in 2023, there is still a need for a coherent, long-term housing strategy from the Government that embraces the public as well as the private sectors – and delivers a market that meets Britain’s housing needs for the decades to come.”

Could it be that history will repeat itself yet again? Will the 2021 housing market be fuelled by the actions of the Chancellor and his SDLT giveaway, creating a situation that will ultimately result in a flat market with property prices falling in real terms?

With around 1.3 million people still on the furlough scheme (down from 5.1 million in January) it’s hard to gauge exactly what the real market trend is likely to be.

Agents: Working from home has changed how we value property

There has been much press about working from home and the joys and tribulations that it brings, with an equal distribution of positive and negative coverage.

But now estate agents are having to factor in elements such as wifi connectivity, garden size, etc., as they become hypercritical of the saleability of properties that fulfil certain priorities.

Some agents have said that £10,000 can be added to a property if it will allow its new owner to tap away at their keyboard or be on video conferencing calls without interruption.

Also, as many people are not commuting and are not utilising two cars, parking is, for some buyers, not such a deal-breaker anymore when contemplating properties with limited parking options. This means that these properties are achieving premium prices.

Though this changing notion of what exactly adds value to property has not filtered down to new builds. For example, few new homes are being built with two receptions and two studies to facilitate two adults working from home.

But, as one agent said today: “Though property is in short supply and it is very much hand to mouth, flats are a different thing. The lockdown has, for many, re-enforced the need for outside space and bigger rooms, and we are seeing quite a resistance to buyers enquiring about them. In a normal market there would be a brisk trade, especially to first time buyers.”

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.