Confused about Retirement Savings? 7 Popular Pension Myths Busted!

With the next phase of automatic enrolment starting from April, Alistair McQueen from Aviva separates facts from fiction.

The minimum amounts that can be put into workplace pensions will be stepped up from April, as UK savers are encouraged to put aside more for their retirement.

Under automatic enrolment rules, from April 6, the minimum that can be put in by employers and their staff will increase from 5% of qualifying earnings to 8%. Within the new 8% rate, at least 3% must be paid by the employer, with the remaining 5% made up by staff.

Automatic enrolment started in autumn 2012, amid concerns people were living for longer but not saving enough for their later years. “Automatic enrolment is approaching its seventh birthday. In its short life, it has already brought a quiet revolution to pensions in the UK,” says Alistair McQueen, head of savings and retirement at Aviva.

Pensions are not always easy to understand, though, and there’s still a lot of confusion around them for lots of people. Do you feel unsure of the facts? Here, McQueen busts seven pensions myths…

busting pension myths

Myth 1: No one is saving into a pension

Automatic enrolment has introduced more than 10 million new savers to workplace pensions since 2012. There are now a total of 22 million people participating in workplace pensions in the UK.

Myth 2: Pensions are for old people

Contrary to popular perception, it is the under-30s who are leading the way. All ages have seen an increase in workplace pension participation since 2012, but the under-30s have seen the biggest increase – more than doubling from 35% saving to over 79% by 2018.

busting pension myths

Myth 3: The government will pay for all my retirement

It’s true that we can expect some money in retirement from the state, but this is currently up to a maximum of about £8,500 every year. Today, the majority of the typical retirees’ income in retirement is from sources beyond the state, such as private pensions and other savings.

Myth 4: I will receive my state pension from age 60 if I’m a woman, or 65 if I’m a man

These commonly referred to and long-standing ages were set decades ago, when we could generally expect a few short years in retirement. Since then, average life expectancy has greatly increased, and the age at which we are eligible for our state pension has been increasing, with women starting to qualify for their state pension at the same age as men.

The state pension age is set to keep rising too. The yourpension.gov.uk website can help you check your state pension age.

busting pension myths

Myth 5: I can’t retire until I reach my state pension age

We are free to retire whenever we want to. However, we can only really think about retiring when we feel we have saved enough money to meet our needs when we’re not working. New rules allow people to access private pensions from age 55 – but the state pension age is set by government.

As individuals, we have the freedom to choose our retirement age, but this brings with it a responsibility to ensure we can fund our lifestyle from that point onward. There are many free online resources to help make this decision – such as Aviva’s ‘My retirement planner’ (aviva.co.uk/retirement/tools/my-retirement-planner).

Myth 6: I’m the only one who is confused by pensions

Research suggests only a minority of us feel we really understand pensions. So, if you’re feeling a bit uncertain, you’re not alone. The great news is that more of us are saving for our future. And if you’re looking for a little nudge in the right direction, Aviva suggests three general rules of thumb that could help you be better prepared:

1. Save at least 12.5% of earnings towards your retirement. This can include money from your employer and the taxman.

2. If possible, start saving at least 40 years before your target retirement age.

3. Try to have built up at least 10 times your salary in your pension by the time you retire.

busting pension myths

Myth 7: Retirement is further away than ever

There’s still a collapse in workplace participation as we progress through our 50s. This represents a huge waste of talent, experience and potential. One of the strongest levers we can pull to help fund our lives in retirement is to work longer. Many employers are taking fresh steps to support a fuller working life, with the aim of ensuring that age is no barrier to opportunity.

House Buyers Ignore Brexit in January

house buyers ignore brexit image

With the first month of 2019 trading behind us, it appears that despite the chaos in the Palace of Westminster around Brexit, house buyers are simply getting on with making decisions around matters of day to day life, which are the drivers for a house move.

All of the McCarthy Holden branches experienced an uptake of buyer interest in January and the McCarthy Holden web site enquiry hits were up on the January 2018.

Whilst it is too early to comment on the market direction for 2019, it nevertheless appears that house buying decisions are mostly made by very localised factors such as schooling, access to work and general employment levels and family situations ranging from the three D’s (death, divorce and debt) through to the three N’s (new job, new baby, new beginnings).

high levels of house sales image

Amongst the Estate Agents in Fleet, our own branch had a particularly productive January with, witnessed by events such as £3.4m. worth of residential property sales exchanging contracts in just one 24 hour period.

As we said in our 2018 / 2019 market review, who knows, there might well be some pleasing outcomes to report at the end of 2019.

So, if you are considering a move this year, now is a great time to get ahead of the competition by calling one of our property experts for a free, no obligation, advice on how is best to market your home.

Latest Property Event Kick Starts 2019

Whilst it is undoubtedly too early to comment on the market for 2019, at McCarthy Holden we felt it was worth letting you know that the usual seasonal spike in online activity in the run up to New year followed that of previous years.

Based at our Fleet Estate Agents branch, Associate Director Ben Murphy witnessed the success of our Boxing Day Live, with 18 new properties entering the market for sale and a further 9 properties all reduced in price.

According to data from Rightmove.co.uk, 25,147,701 properties were viewed on Boxing Day alone with activity still strong leading up to New Years Day.

“During the Christmas / New Year period we opened our doors for trading and secured 18 viewings, 5 valuations and two instructions.

Off-street activity was also high with new buyers registering looking for property. Not a bad result in 12 hours work” Comments Ben Murphy.

“Opening our door again yesterday saw activity at a good level, with this weekend filling up with viewings on a wide range of property. “

“Clients tend to think marketing before Spring is wrong but there are some fantastic advantages to marketing before the daffodils blossom. This is because there is usually less competition and therefore clients can hope to achieve a good price for their property. Furthermore, people tend to spend more time at home over the Christmas/winter period and begin to feel their home may be too small/too big and look into moving.”

So, if you are considering a move this year, now is a great time to get ahead of the competition by calling one of our property experts for free, no obligation, advice on how is best to market your home.
Contact one of our branches:
Estate agents in Fleet
Estate agents in Hartley Wintney
Estate agents in Odiham

Ben Murphy photo
Ben Murphy - Associate Director

The unknown, or a property market that bucks the Brexit fears?

estate agent sold board

The Market 2018

Let us start with 2018, which was peppered with challenging market conditions for residential property sales.

Because our trading year runs January to December we can report on the full picture for 2018, which may indicate the direction of travel for 2019.

Surprisingly, some branch productivity levels for house sale revenue was at or above 2017 levels, especially in the village locations. That outcome however doesn’t for one moment disguise the fact that during the first half of 2018 we saw one of the poorest levels of house sale transactions for some time, however, buyer positivity surfaced in the summer and remained reasonable through to December despite the increased chaos around Brexit.

When we say house sales were up in the second half of 2018, we are talking about house sale volumes not prices. Large house price gains are gone for a while, but like all markets when they rebound from a low they come back with a sharp and fast uptake.

The rental market performed extremely well in 2018, with a notable uplift in activity for high end rentals outside of London, especially in our core area of operation on the Berkshire / Hampshire borders.

Properties taken to the rental market in the £7,000 to £10,000 p.c.m. sector frequently saw rental offers from multiple tenants. This was driven by high end house buyers deciding to pop into a property rental for the next year or so, using some of the stamp duty funds they would have allocated on a property purchase around £2.0m. or £3.0m., and then wait and see how property values shape up post Brexit.

house let
High end rental activity compensated for house sales

One certainty

One thing that is certain, is that uncertainty impacts on the property market especially around the times of a General Election or a Referendum. How this uncertainty works its way into tangible outcomes for 2019 is not straightforward and varies in different house price sectors of the property market.

In the short term, house buyers generally will be more cautious and slower in their decision making. This doesn’t mean house prices will fall, because buyer demand remains steady and employment levels are excellent. There is the prospect of a flat market in respect of property prices, however, discerning house buyers are seeing the current market conditions as an opportunity to move whilst prices remain static. House sellers will sell successfully in the 2019 market, but they can’t expect a fancy or inflated price and must engage with the reality that over pricing will fail in a market where buyers are cautious.

Different sectors, different outcomes in 2019

Different market sectors will have different outcomes in the forthcoming months ahead. Buying decisions on property sales from around £250,000 to £1.5m. are mostly made by very localised factors such as schooling, access to work, general employment levels and family situations ranging from the three D’s (death, divorce and debt) through to the three N’s (new job, new baby, new beginnings). Decisions around such matters of day to day life will continue to be made by house buyers against the backdrop of political uncertainty, so house sales will be maintained at the current level with price sensitivity being the watchword.

Further up the property price sector, and especially in the £2.0m. to £6.0m range house buyers will be more influenced by global and political factors so we could see further negative price impacts in this sector. Savvy top end buyers are playing a waiting game, but they are there on our books and will respond to excellent marketing and a competitive price strategy.

House sellers and buyers should approach 2019 with realistic expectations, engaging positively with the new beginnings for the country and house moving opportunities and, who knows, there might well be some pleasing outcomes to report at the end of 2019.

We wish you a happy Christmas and the very best for 2019.

 

John Holden – Chairman and Managing Director McCarty Holden

POST BREXIT IMAGE LEAP

Boxing Day due to be the next big property search event

boxing day go image

According to Rightmove there was a 200% spike in traffic between Boxing Day and 2nd January in 2018, suggesting an uplift in house buyer searches online on Boxing Day. This  is why McCarthy Holden are offering a special incentive to join the next big event in property.

Boxing Day Go Event

During November and December all a would-be house seller has to do is instruct McCarthy Holden to offer their property for sale from Boxing Day.

You can indulge in all of the traditional Boxing Day activities, happy in the knowledge that house buyers are tapping on mobile devices searching for the right property and, who knows, your house could be top of their list for viewing in the New Year.

Many of our clients have already asked to go live on the Boxing Day Go property launch, so if you are contemplating a house move in 2019 then go to our home page and click on valuation, for a free property appraisal and discover the benefits of being part of the no sale no fee and no obligation Boxing Day Go property event.

New Campaign Urges Consumers To Buy British Christmas Trees

christmas trees

A new campaign has been launched by Grown in Britain to encourage UK consumers to buy more assured British grown Christmas trees.

Grown in Britain says many people may be assuming they are buying fresh British grown trees, when they are not. The organisation is urging consumers to support rural businesses in Britain and reduce ‘tree miles’ by checking where their Christmas tree comes from before they buy.

christmas trees grower

According to Government statistics, £3 million pounds worth of real Christmas trees were imported into the UK last year.

Grown in Britain has created a Christmas tree licensing scheme that operates throughout the supply chain from growers to retailers and provides an assurance that trees are fresh and grown in the UK in a responsible way with due regard to the environment.

Chief Executive Dougal Driver says: “The UK has a flourishing Christmas tree growing sector and our auditing process checks that trees are definitely from the UK, grown responsibly and meet a strict forest floor to shop floor freshness test.”

He adds: “This is the start of the campaign with approximately 50,000 Christmas trees currently licensed for sale, but the public can really make a difference by asking their stockists to supply assured Grown in Britain trees now and in the future. This will help ensure the number of assured homegrown Christmas trees rises over time, with a consequential boost to the UK’s rural economy.”

To find out your nearest supplier of Grown in Britain licensed Christmas trees, look at the licence holder map on the Grown in Britain website www.growninbritain.org

christmas trees growing

House of Horrors at number 10 so what next for the house market

image of Mrs May behind doors

High drama and high stakes on the political and Brexit front have set the scene for more uncertainty, so how will this impact on the domestic residential property market?

With the imminent prospect of a challenge to Theresa May’s leadership, the resignation of Cabinet ministers including Brexit Secretary Dominic Raab, seemingly no prospect of the draft Brexit agreement being passed by Parliament and the increased likelihood of a harder Brexit, there is now in place a wide range of serious uncertainty factors rarely seen conspiring at around the same time. Furthermore, with Mrs Mays party in revolt and many of her colleagues departing we don’t know yet, if a General Election is also around the corner.

One certainty

One thing that is certain, is that uncertainty impacts on the property market especially around the times of a General Election or a Referendum. How this uncertainty works its way into tangible outcomes is not straightforward and varies in different house price sectors of the property market.

In the short term, house buyers generally will be more cautious and slower in their decision making, and the impact on prices will mean large house price gains are gone for a while. This doesn’t mean house prices will fall, because buyer demand remains steady and employment levels are excellent. There is the prospect of a flat market in respect of price rises, however discerning house buyers are seeing the current market conditions as an opportunity to move whilst prices remain static. House sellers will sell successfully in today’s market, but they can’t expect a fancy or inflated price and must engage with the reality that over pricing will fail in a market where buyers are cautious.

Different sectors, different outcomes

Different market sectors will have different outcomes in the forthcoming months ahead. Buying decisions on property sales from around £250,000 to £1.5m. are mostly made by very localised factors such as schooling, access to work and general employment levels and family situations ranging from the three D’s (death, divorce and debt) through to the three N’s (new job, new baby, new beginnings). Decisions around such matters of day to day life will continue to be made by house buyers against the backdrop of political uncertainty, so house sales will be maintained at the current level with price sensitivity being the watchword.

Further up the property price sector, and especially in the £2.0m. to £6.0m range house buyers will be more influenced by global and political factors so we could see further negative price impacts in this sector. It’s perhaps no surprise that in 2018 we saw a significant uplift in house rentals in the £6,000 to £8,000 p.c.m. sector, driven by future potential house buyers who have decided to retreat into the luxury rental market and watch for when the top end house sales market starts to recover. Such recovery could be a year or so away, but one thing is for sure, all markets when they rebound from a low come back with a sharp and fast uptake. Savvy top end buyers know this and are playing a waiting game, or taking care of business now by buying at extremely competitive levels.

Respond with investment, no time for the faint hearted

Check out what McCarthy Holden are doing to maximise selling and letting opportunities for clients between Christmas and New Year. If you would like and up to date market no obligation valuation, go to our home page and click in valuation.

The Christmas and New Year 2019 magazine In The Country & Town

House hunting starts between Christmas and New Year

The Christmas and New Year 2019 magazine In The Country & Town

The time between Christmas and New Year is a time for people to relax, read magazines and it’s when people start house hunting. So having a property featured in the lifestyle and property magazine In The Country and Town, could be a smart move for house sellers and landlords alike.

Over Christmas and New Year people take time out to relax and indulge in the pleasure of reading magazines, so a special edition of In The Country and Town is being distributed over the festive season.

If you are thinking of selling or letting a property, this is the ideal opportunity to get the attention of buyers and kick start your plans to move house in early 2019.

A lifestyle and property magazine with reach

This leading lifestyle and property magazine reaches thousands of buyers, search agents and tenants from London to Beijing, all of whom will receive the ‘In The Country and Town’ magazine in time for Christmas and New Year 2019.

The Opportunity for house sellers to appear in this magazine, without obligation or cost unless the property is sold or let is a big appeal.

The real story of this successful magazine is that it brings new buyers to the market, many of whom are not actively in the market looking around agents or property portals, hence the reason we tag the magazine name with ‘Creating the inspiration to move.’

Does it work?

This quality magazine is showcasing wonderful content from stunning properties, to celebrity chefs and motoring features, great interior design, market insight, politics and gardening. So, does it work?

Thousands of copies of each issue are distributed by Royal Mail and many more by direct distribution. Looking back on previous issues, there are many examples of properties which were sold directly from this magazine, despite these properties already being on the open market on property portals such as Rightmove. So yes this old fashioned print marketing can work and in many cases outperformed the digital property portals such as Rightmove. Take a look at this example.

farm sold
The house above sold as a result of the successful buyer picking up a copy of the magazine in a railway carriage travelling from Waterloo to Fleet

How to advertise without obligation or cost

So in summary, if you are thinking of selling or renting a fine home then don’t just focus on digital marketing but in addition think about the role of quality print. Fortunately at McCarthy Holden we are leaders in digital and video marketing as well as professional print.

Without obligation or cost, unless McCarthy Holden sell or let your property, you can have your property promoted in our property magazine. You simply give McCarthy Holden the instruction to promote your property in the next issue of In The Country & Town and online also – all on a no sale no fee basis.

Then sit back and let the power of high-end professional print and digital marketing go to work.

The pages will be filled with property, features and advertising on a first come first serve basis, so contact your nearest McCarthy Holden branch for details and if required a free no obligation valuation.

Who knows, early 2019 could be a Happy New Year for some house vendors and landlords!

magazine photos

Much Loved Images, but Meerkat Firm Busted By Uk Competition Watchdog

meerkat image with Oops

Britain’s competition watchdog has found that comparethemarket.com is in breach of antitrust law over its arrangements with insurers, which could be resulting in higher costs for consumers.

Following an investigation, the Competition and Markets Authority provisionally found many of the price comparison website’s contracts include so-called “most favoured nation” clauses.

They were found to prevent home insurers from quoting lower prices on rival sites and other channels, meaning customers are presented with fewer options.

It also meant home insurance companies are more likely to pay higher commission rates to comparison sites with the extra costs potentially being passed on to customer, the CMA said.

CMA chief executive Andrea Coscelli said: “Over 20 million UK households have home insurance and more than 60% of new policies are found on price comparison sites. Therefore it’s crucial that these companies are able to offer customers their best possible deals.

“Our investigation has provisionally found that ComparetheMarket has broken the law by preventing home insurers from offering lower prices elsewhere. This could result in people paying higher premiums than they need to.”

The comparison website, famous for its use of meerkats Aleksandr and Sergei in its TV adverts, could be fined up to 10% of its revenue as a result of the breach.

A spokesman for comparethemarket.com said: “We are disappointed by the CMA’s provisional findings.

“We will carefully review the evidence once we have access to it, and look forward to working with the CMA over the coming months to ensure a satisfactory outcome.”

By Ravender Sembhy, Press Association City Editor CITY CompareTheMarket 02 Nov 2018 – 11:52

meerkat group

Thinking about adding a granny flat? Here are 9 points to keep in mind

It might be a great solution but building an annex is a big decision. Lisa Salmon (who had one built for her mum) discusses the granny flat boom.

adding a granny flat pros cons

Thanks to rising property prices and expensive care home fees, a growing number of families are opting to live with, or right next to older relatives, by building granny flats on their homes.

The latest figures from the Valuation Office Agency show there are now nearly 39,000 granny annexes in England and Wales alone – an increase of 16% in recent years.

The government has tried to encourage families to live together by discounting council tax and scrapping stamp duty increases on annexes, and ministers have stressed the benefits of inter-generational families, which help save the NHS and social care system a lot of money.

But if you’ve got an elderly relative, is constructing a granny flat on your home the right option for you and them?

building granny flat points to consider

It was certainly the right choice for our family. Around three years ago, my widowed mother Sheila, now 81, and my husband and I decided we should build a granny flat for her on the side of our house. So she sold her house about 40 miles from us, and we applied for planning permission to build a two-storey annex.

It was a huge decision for us and my mum, who was leaving the house she’d lived in for more than 50 years, as well as her friends and neighbours, to live in a new city where she only knew us.

But the alternative was that, as she got older and became less mobile, she could be lonely – and there’d be no one to help her if she fell, for example, or became ill. Her moving to live, not with us, but next to us, was clearly the best option – particularly as she’d always been vehemently opposed to moving into a residential home should the need arise.

My mum’s now lived in the annex for around two years, and while the process wasn’t always easy (the build was stressful, to say the least!) and my mum understandably still misses her old life and home, we have no regrets. My mum lives completely independently in her self-contained one-bedroom flat on the side of our house, still regularly drives over to her old golf clubs 40 miles away, and is (gradually) forging a new life here.

family living granny flat

There’s no doubt, building a granny flat has worked for us. But what about other families?

Caroline Abrahams, charity director at Age UK (ageuk.org.uk), thinks granny flats are a “great solution” for elderly living – although clearly they’re not something that can be rushed into.

“This type of accommodation is one of a range of housing options open to older people who want to maintain their independence for longer in a smaller, easier-to-manage home, with around-the-clock family support when needed. It’s a great solution, but needs agreement and understanding on living arrangements and expectations,” says Abrahams.

“Bold and innovative new independent living arrangements should be encouraged and made easier to implement and afford. When so many older people are finding it increasingly difficult to get the support they want when they need it, alternative living arrangements for older people such as this play an important role in reducing the overwhelming demand on not only health and social care services but on housing too, and will ensure good health and wellbeing for longer.”

building a granny flat

Thinking of building a granny flat? Here’s nine points that might help…

1. Bridge before care

While it may not be possible for an elderly person to avoid going into a care home eventually, a granny annex can offer a useful bridge between independence and the provision of care.

2. No council tax

The National Federation of Builders (NFB) says an annex occupied by an elderly or disabled family member has a 100% council tax discount.

3. Shared bills

Depending on how it’s built and your preferences, bills may be shared between the family home and the granny flat, potentially saving money (assuming granny or grand-dad doesn’t have the heating on all the time).

4. Do it sooner not later

Moving can be very stressful for anyone, but especially for an older person. A decision to build a granny flat needs to be made sooner rather than later – ie. before an elderly relative is in desperate need of an accommodation change, and while they’re still reasonably mobile if possible. Look on it as an investment for the future.

5. Choose builders carefully

A new build can also be very stressful, so choose your builders carefully. The NFB’s Find a Builder (builders.org.uk/find-a-builder) helps people contact reputable builders who’ve been strictly vetted and have undergone a range of reference checks.

6. Plan for future needs

Think carefully not just about the elderly person’s needs now, but what they may be in the future. If your granny annex is two storeys, do the bedroom and toilet need to be downstairs in case mobility becomes an issue in later years?

7. Communication is key

Honest and detailed discussions are crucial, both with the builder before construction about the budget, timescale and exactly what you and the elderly relative want, and with your relative about how bills will be paid (if they’re shared), who’s responsible for the garden if it’s shared, whether you eat together, whether you knock before entering each other’s homes, etc.

8. Get legal advice

It’s important to discuss, and get legal advice if necessary, what happens if either the younger family or the older relative wants to sell up and move to a different property but the others don’t want to sell.

9. Be prepared for relationship breakdowns

It may also be worth seeing a solicitor to discuss what happens if there’s a relationship breakdown, as one of the family homeowners may demand their share of the property in divorce proceedings. What happens to the granny flat occupant then?

adding granny flat

If you are considering building or adding a granny flat and want to know how this could change the value of your home, please do call your local office for a free no obligation market appraisal where you can discuss the options that you are considering. https://www.mccarthyholden.co.uk/branches/

Summer and Autumn Sold Rush For House Sales

sold board outside property

Will 2018 end well for house sales?

During the first six months of 2018 the level of house sales across the UK were running at a fairly poor level, but now the second half of 2018 is bouncing back with house sales on the up again.

Property sale agreed in Fleet by McCarthy Holden
A quick sale was recently agreed on this £1.85m. guided property in the Blue Triangle Fleet

When we say house sales are on the up, we are talking about house sale volumes not prices.

The market in residential sales remains very price sensitive, which is why discerning house buyers are seeing the current market conditions as an opportunity to move whilst prices remain static. The news for house sellers is that you can and will sell successfully in today’s market, but don’t expect a fancy or inflated price.

Large house price gains are gone for a while, but like all markets when they rebound from a low they come back with a sharp and fast uptake. Savvy buyers know this so are active in the market now.

Property sold in Odiham by McCarthy Holden
This cottage in Odiham was snapped up and exchanged when guided £850,000

A turning point this Summer and Autumn

Summer and Autumn trading results on house sales are showing high levels of properties going through to exchange of contracts and new sales being agreed quickly if the price and marketing combination is right.

Take this property below, which had offers within ten days of going to the market with professional video marketing and an eye catching price.

House sales exchanges have been increasing with examples across the price ranges, with the exception of the still soft £2.5 plus market which will no doubt catch up in due course.

There have been encouraging sales just under £2.0m. such as the example below.

Property sold in Finchampstead by McCarthy Holden
Sold (exchanged) just under £2.0m. in Finchampstead, Berkshire

Tragedy comedy or soft landing

We are of course reminded of the phrase All’s well that ends well, which is a title from a play by William Shakespeare, thought not to be neatly classified as tragedy or comedy. Lets hope for the residential house market its neither and 2018 ends well for house sales.

If you are looking ahead to a house sale in 2019, why not ask for a free no obligation valuation for McCarthy Holden.

Commercial Freehold Property Preview

Commercial Investment Opportunity

A Grade II listed ground floor commercial freehold premises, in a High Street position in the thriving Hampshire village of Hartley Wintney.

The guide price is £400,000 for the freehold interest.

Commercial premises for sale
High Street Position

The units amount to around 950 sq. ft. of internal space and there is the added benefit of an outside courtyard space.

More details available soon – telephone 01252 842100 to view early.

floor plan of commercial premises

Early viewing is recommended and we have keys for ease of access. Please note the above plan is for illustrative purposes only and it is not drawn to scale and does not form part of a contract or warranty whatsoever.

Hartley Wintney photo copyright John Joe Photography
Hartley Wintney is a thriving Hampshire village - photo copyright John Joe Photography

Brexit Uncertainty Brings Uplift In Top End House Rentals

Uncertainty around Brexit driving buyers to rent instead of buy

There is an unexpected short term boost in the higher end of the residential rental market going on right now, because of austere house purchase stamp duty levels and Brexit uncertainty.

A number of high end house buyers are deciding to pop into a property rental for the next year or so, using the stamp duty funds they would have allocate on a property purchase around £2.0m. or more, to pay for the property rental instead of going into the Government coffers by way of stamp duty (about £154,000 at £2.0m. and £274,000 at £3.0m.).

The property above has been placed on the rental market today at £6,000 p.c.m.. This is an example of a luxury house in Berkshire which will attract interest from tenants wishing to live near say Wellington College, Reading and Wokingham yet have easy access to London. The video production and photography by johnjoe.co.uk will no doubt enable a quick uptake in tenant enquiries.

The medium term outlook for top end rentals is good, and for house sales over £2.0m. there could be good new post Brexit because the level of hot buyers in rental looking to buy will be at a good level.

The market insight is that the first half of 2018 saw one of the poorest levels of house sale transactions for some time, however, right now, discerning house buyers are seeing the current market conditions as an opportunity to move whilst prices remain static. The news for house sellers is that you can and will sell successfully in today’s market, but don’t expect a fancy or inflated price.

Large house price gains are gone for a while, but like all markets when they rebound from a low they come back with a sharp and fast uptake. Savvy buyers know this and are taking care of business now.

Another example of positive movement in the rental sector £5,000 to £8,000 p.c.m. is the property shown below, which was recently snapped up by a tenant on a guide of £7,995 p.c.m. So, if you are a landlord looking for an agent to manage and rent a luxury property then go to mccarthyholden.co.uk

High end property rentals boost for estate agent McCarthy Holden

Bank of England Warns of No-Deal Brexit House Price Crash

Property Hampshire Warning Bank of England
Governor of the Bank of England Dr Mark Carney leaving Downing Street, London yesterday, following a Cabinet meeting.

Was this a forecast?

The Governor of the Bank of England has warned ministers that house prices could crash by more than a third in the event of a disorderly, no-deal Brexit, according to a report by Gavin Cordon, Press Association Whitehall Editor.

Yesterday, Mark Carney briefed Theresa May and senior ministers on the Bank’s planning for a “cliff edge” break with the EU at a special Cabinet meeting on Thursday to review the Government’s no-deal preparations.

It is understood he warned house prices could fall by up to 35% over three years in a worst case scenario, as sterling plummeted and the Bank was forced to push up interest rates.

“What could be lost in the alarmist headline is that Carney wasn’t making a forecast,” says John Holden Chairman of McCarthy Holden.

We’ve been here before

“And hang on, haven’t we been here before?” Holden continues.

Back in May 2016, the then Chancellor of the Exchequer George Osborne warned that following a leave vote house prices would drop by 18%. Around the same time US President Barack Obama said Britain would go to the “back of the queue” for trade deals with the US if it votes to leave the European Union.

“So again today we read headlines which could damage confidence further in both the wider economy and the UK residential property market.” continues Holden.

Understanding the context

Fortunately, some leading economists have stepped up and put Mr Carney’s comments in a framework of context.

Take BBC’s economic editor Kamal Ahmed, who stated today that it appears that the Governor wasn’t providing the Cabinet with a forecast of what the Bank believes would happen in the event of a no-deal Brexit. He was briefing the Cabinet on what preparations the Bank was making if that does happen, including last November’s stress test.

It was not a forecast.

It was an apocalyptic test where the Bank deliberately sets the parameters beyond what might reasonably be expected to occur. The major banks all passed the test, giving reassurance that the financial system can cope with whatever happens next year.

The Governor believes that a ‘no-deal’ scenario would be bad for the economy. But not as bad as the headlines today which are based on a doomsday scenario that is not actually forecast to happen.

The market insight from John Holden is  that “On the shop floor at McCarthy Holden the first half of 2018 saw one of the poorest levels of house sale transactions for some time, however, since July positivity was in the wings because house buyers began surfacing again with intent.”

“Right now, discerning house buyers are seeing the current market conditions as an opportunity to move whilst prices remain static. The news for house sellers is that you can and will sell successfully in today’s market, but don’t expect a fancy or inflated price.”

“Large house price gains are gone for a while, but like all markets when they rebound from a low they come back with a sharp and fast uptake. Savvy buyers know this and are taking care of business now” concludes Holden.

John Holden - Chairman McCarthy Holden

Below are samples of fine homes that have SOLD (exchanged or completed) during 2018

Renewed Optimism Among Retailers

Some Good News On The Retail Front

Retail sales were slightly above average, up 4%, for the time of year in February, while average selling prices growth slowed compared with the previous quarter, when it had risen to its highest since 1991.

Grocers reported strong sales volumes growth in the year to February, up 65%, while “robust” growth was also reported in internet and mail order goods, hardware and DIY. However this was partly offset by falling sales in department stores, down 45%, clothing, down 77%, furniture and carpets, and footwear and leather.

A third of retailers (32%) reported that sales volumes were up on a year ago in February while 24% said they were down, but 34% expect them to pick up again next month while just 13% think they will fall, according to the latest CBI Quarterly Distributive Trades Survey.

While sales growth slowed for the third month in a row in the year to February, while employment in the sector continued to fall for the fifth quarter in a row, albeit at the slowest pace in a year. However, for the first time since November 2016, retailers said they expect their business situation to improve over the next three months.

Their investment intentions for the year ahead also strengthened to hit their highest point since August 2015. The CBI said retail momentum was “modest” for most of 2017, mainly reflecting the weakness in household income.

Anna Leach, head of economic intelligence at the Confederation of British Industry, said: “While trading conditions remain tough, it’s encouraging to see retailers’ investment intentions improving to their highest since August 2015, in addition to signs of renewed business optimism for the first time in more than a year.

“With labour-intensive businesses such as retailers finding it increasingly difficult to find workers, agreeing a jobs-first transition between the EU and the UK, in writing, by the end of March would provide some much-needed certainty.”

Conclusion

From a property perspective this is more good news following the 2017 uplift in manufacturing exports, and this means employment and confidence is on the up despite the oft-voiced doom and gloom we hear from some about the impact of Brexit.