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Rightmove: House hunting at record high as stamp duty holiday rumours mount

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Online house hunting reached a new record this month, overtaking the previous one set last summer.

Rightmove said there were 8.5 million visits to its website on Wednesday February 17, higher than the previous record on July 8.

It comes amid widespread speculation that the Chancellor will extend the stamp duty holiday by three months from the end of this month to the end of June.

Rishi Sunak is understood to be considering the move as part of measures he will announce in a giveaway Budget next week, paving the way for a post-lockdown boom.

This six-bedroom home is on the rural outskirts of Wedmore, in Somerset, and is for sale for £975,000 via estate agents Roderick Thomas

This six-bedroom home is on the rural outskirts of Wedmore, in Somerset, and is for sale for £975,000 via estate agents Roderick Thomas

Rightmove said the number of prospective buyers contacting agents in February is up 22 per cent so far on February last year.

It suggested that this could be a sign that some people are planning a move regardless of the stamp duty holiday due to end next month. 

Although it is worth noting that in February last year, fears over the coronavirus pandemic were mounting.

In addition, Rightmove said the number of tenants contacting agents has increased by 39 per cent compared to a year ago.

It follows a challenging year for the housing market, which saw it shut down for several weeks during the first lockdown.

Pent-up demand and the stamp duty holiday have  helped to boost the market, with prices increasing to an average of £229,748 in January, up 6.4 per cent in a year, according to Nationwide Building Society.

Rightmove said interest in commercial properties has also reached record levels, hitting a new high on Wednesday, February 17, and all of the top 25 business days for commercial property have been recorded in January and February this year.

The interest could continue to rise after Boris Johnson unveiled his roadmap out of lockdown at the beginning of this week.

Rightmove said the roadmap will prompt businesses to review the type of space they need to reopen as lockdown restrictions are hopefully able to start easing in the coming months.

Rightmove suggested that the prospect of being able to travel abroad to view property later this year has also led to its overseas section of the site seeing a record 1.1 million searches on Valentine’s Day this year.

The most popular destinations overseas that people searched for included Dénia, Costa del Sol and Tenerife.

This eight-bedroom hotel in the village of Ingleton in the Yorkshire Dales is for sale for £750,000, via Colliers International estate agents

This eight-bedroom hotel in the village of Ingleton in the Yorkshire Dales is for sale for £750,000, via Colliers International estate agents

Rightmove went on to say that a lack of suitable properties to move to is the biggest reason putting homeowners off selling their home right now.

Its research found that 33 per cent of people who are planning to sell later in the year said this is the reason why they are delaying.

Other reasons included waiting until lockdown is over – for 22 per cent – and wanting to know if the stamp duty holiday is going to be extended or not at 24 per cent.

The property website said supply remains low, with 21 per cent fewer new properties coming to market than this time last year.

Of those currently in the process of moving or planning to move this year, 21 per cent are worried they will not complete in time to make use of the stamp duty holiday if it does come to an end on March 31.

This guest house in Pensford, Bristol, is for sale for £2.5million via estate agents Christie & Co

This guest house in Pensford, Bristol, is for sale for £2.5million via estate agents Christie & Co

A bigger group of 37 per cent said the stamp duty holiday was not a factor in their decision to move, while 16 per cent said they are likely to pull out of the sale if they don’t complete in time to make use of the stamp duty savings.

Rightmove records 

The number of visits to Rightmove reached a record high of 8,512,518 visits on February 17.

It is up from the previous record of 8,505,765 visits on July 8.

Tim Bannister, of Rightmove, said: ‘Despite all of the uncertainty right now, there are clear signs from buyers that they want to move home this year.

‘Our traffic levels are on a par with the mini-boom from last summer, and July’s busiest ever day last year has been replaced by a lockdown day in February.

‘Now that we have some clarity on what the roadmap out of lockdown could look like we expect to see more people putting their home on the market. This should help open up more choice in the market to satisfy the strong buyer demand we’re seeing.

‘I’ve heard a number of stories of people falling in love with their dream home, only to find it takes time to sell their own one and so lose out on their move. 

‘I do completely understand the thinking that homeowners want to find somewhere first, but in the current competitive market if they already have their property up for sale it means when they do find that dream home they’ll have a much better chance of having their offer accepted.

‘People will be eager to hear what the Chancellor decides to do to stamp duty in the budget next week and there are clearly a number of people who are worried about missing the current deadline, but our research shows there are also a large group who do not see this as a factor in deciding to move this year.’

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Could equity release be used to help more younger homebuyers?

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Younger first-time buyers could be given more financial help from the Bank of Grandma and Grandad, through the use of improved equity release products, a new report suggests.

The document written by Tom McPhail, of consultancy The Lang Cat, claimed that younger buyers are missing out because older members of their family are unable to satisfactorily tap into their property wealth.

Mr McPhail said: ‘Releasing some of the equity in a property means older homeowners can choose when and how they share their wealth with younger generations.

‘An equity release by grandparents of say £20,000 now, could be transformational for a 20 something struggling to raise a deposit and get on the housing ladder but would make only a very modest dent to the value of the grandparent’s house.’

Releasing some of the equity in a property means older homeowners can choose when and how they share their wealth with younger generations, says new report

Releasing some of the equity in a property means older homeowners can choose when and how they share their wealth with younger generations, says new report

The report acknowledged that equity release has endured a poor reputation in the past after customers suffered ‘severe’ financial knocks.

The sector has been criticised for encouraging people to take on debt, particularly later on in life.

There has also been other concerns about equity release, such as customers falling into negative equity where the value of a property is less than the loan taken out against it when house prices fall.

The report suggested that while the equity release sector has since begun to put ‘its house in order’, it is ‘still not perfect’ and some regulatory safeguards need to be strengthened.

It called for several issues to be looked at, including early redemption charges on equity release products.

It said that most providers apply a simple sliding scale of charges, for example 10 per cent in year on to 1 per cent in year 10.

However, it claimed that some providers apply an early redemption charge based on prevailing gilt rates at that time, putting customers at an ‘unfair disadvantage’.

This is because the fees are not transparent as there is no way a customer can know in advance whether they’d be liable for a charge and if so, how much. 

In the past, customers have also fallen foul of the small print on their equity release loans when it comes to early-redemption penalties – such as couples who must pay an exit fee unless both of them need to go into care.

The report also raised questions about interest rates on equity release products. It said providers should be consistent with their lending criteria and not move the goalposts after customers have taken out a loan, as this can make it harder for them to access a top-up loan in the future, potentially forcing them to remortgage. 

Equity release products could help people access their property wealth to help younger members of their family onto the property ladder

Equity release products could help people access their property wealth to help younger members of their family onto the property ladder

The report argued that equity release products could help people access their property wealth to help younger members of their family onto the property ladder.

Mr McPhail added: ‘Raising a deposit has become an increasingly significant barrier to getting on the housing ladder, with increasing numbers of first-time buyers having to rely on financial help from older generations.

‘Releasing some of the equity in a property allows older homeowners to choose when and how they share their wealth with the younger generation.

‘This more targeted approach gives them greater control to use their assets to the maximum benefit at the point of need.’

Raising a deposit is a barrier to getting on the housing ladder, with increasing numbers of first-time buyers having to rely on financial help from older generations, says the report's author Tom McPhail

Raising a deposit is a barrier to getting on the housing ladder, with increasing numbers of first-time buyers having to rely on financial help from older generations, says the report’s author Tom McPhail

Equity release: How it works and advice

To help readers considering equity release, This is Money has partnered with Age Partnership+, independent advisers who specialise in retirement mortgages and equity release. 

Age Partnership+ compares deals across the whole of the market and their advisers can help you work out whether equity release is right for you – or whether there are better options, such as downsizing. 

Age Partnership+ advisers can also see if those with existing equity release deals can save money by switching. 

You can compare equity release rates and work out how much you could potentially borrow with This is Money’s new calculator powered by broker Age Partnership+.* 

 * Partner link

Jonathan Harris, of mortgage broker Forensic Property Finance, said: ‘Equity release has historically been viewed as a ‘murky’, high-risk sector, fuelled by minimal regulation, poorly-qualified advisers, only a handful of lenders and extortionately high interest rates.

‘Fast forward to today and we see a dramatically transformed sector, benefiting from strict regulation, highly-qualified advisers, multiple lenders and access to very competitive interest rates. 

‘Not surprisingly, equity release is now a viable and growing market for older borrowers looking to utilise the gains seen on property prices to bolster lifestyles, as well as pass on wealth to children when they need it.

‘Those considering equity release should make sure they understand the implications and involve family in any decision-making. It is always important to seek advice from suitably-qualified advisers.’

It comes as a separate report by Legal & General suggested that one in every £90 spent by retired Britons is funded by equity release.

It said that equity release funded an estimated £3billion in retirement spending last year, although it didn’t mentioned the money going to younger generations towards buying a property.

Instead, the report’s survey of 2,000 homeowners found that those with equity release have most frequently used the product to finance home improvements, at 26 per cent.

It said equity release is also being used to support costs such as medical expenses at 17 per cent, maintaining living standards in retirement at 16 per cent, and paying off personal debt at 16 per cent, for example paying off interest-only mortgages. 

It suggested that equity release is likely to play an increasingly important role in financing care-related expenses, with 19 per cent of prospective homeowners citing it as a consideration.

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Allianz Real Estate buys prime office building in Rome (IT)

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Allianz Real Estate, advised by Dils, has acquired an office property in the centre of Rome. The transaction, worth circa €175m, is one of the most important to have been carried out on the real estate market in Rome in recent years.

 

The building, consisting of eleven storeys, comprising nine above-ground and two underground, has a gross lettable area of circa 22,000m² and has undergone a major refurbishment, offering the highest environmental sustainability and energy efficiency standards (LEED Gold Certification). The strategic location, between the CBD and Termini Station, is enjoying great success, especially among corporate occupiers. 

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NCC sells Valby office scheme (DK)

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NCC is selling Kontorværket 1 office project in Valby, Copenhagen to Industriens Pension. The building will become biotech company Genmab’s new headquarters and will meet high environmental standards for both the building and the area. The transaction will be conducted as a company divestment, based on an underlying property value of approximately €81.9m (SEK875m). Transfer of the project and payment of the purchase consideration is expected to result in a positive earnings effect in the NCC Property Development business area in the first quarter of 2023.

 

“We are now selling Kontorværket 1, the first phase of our development project in Valby in the central parts of Copenhagen. Here we have developed property with an optimal infrastructure and appealing architecture, and I am pleased that Industriens Pension is now taking over,” said Joachim Holmberg, Business Area Manager, NCC Property Development.

 

Kontorværket 1 encompasses 16,000m² of lettable area and also includes a basement featuring a parking garage next to the building, with space for 280 vehicles and facilities for parking bicycles.

 

“This is an attractive and future-proof office property, located in an area with very good infrastructure, a motorway, a nearby metro and S-train station. The 15-year lease with Genmab fits well with our strategy as a long-term owner, and we expect the property to contribute a stable return for our members for many years to come. We look forward to welcoming Genmab’s experts in biotechnology,” said Soren Tang Kristensen, Head of Real Estate Investments, Industriens Pension.

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