Leeds Property Market Update February 2021

As we begin the process of exiting our third national lockdown, the Leeds property market has remained optimistic in February. House prices, rental yields and demand for residential property continues to be favourable, as investors realign their objectives to a more longer-term outlook.

Despite the excitement, with the upcoming Spring Budget, as well as the possible end to the furlough scheme, the immediate economic outlook remains a little more unclear.

We continue to see a reduced number of new properties coming to the market compared with previous years, with many sellers preoccupied with juggling their day jobs and home-schooling responsibilities.

On the flip side, the lettings market has remained strong with many people taking advantage of virtual viewings to save time and help narrow the list.

In general, the strong rental demand coupled with the mild downward pressure on house prices over the next 6 months, means it is a great time to start investing in the Leeds property market.

Rightmove House Index Feb 21

Sales Update

We are still seeing a shortage of new properties coming to the market compared to previous years – Rightmove recently reported a 21% decrease in sales stock. This is likely caused by the additional responsibilities and time pressures of home-schooling as well as the practicalities of getting a property ready for viewings while the whole family is at home.

On a more positive note, now that the national vaccination programme is in full flow and with the Prime Minister outlining a roadmap for exiting the current lockdown, we expect to see an influx of stock coming to the market over the coming months, rebalancing the supply. Also with the notice that the stamp duty holiday will be extended until end of June, we anticipate that this should keep the market buoyant.

Mortgage Update

From a mortgage perspective, the situation remains the same with mortgage offers from some lenders taking longer than usual to come through. This is predominately because of a reduction in staff available to deal with the incoming applications, rather than any nervousness on the lenders part.

In terms of rates, investors purchasing in their own name will see interest rates around the 2% mark, compared to approximately 3.3% if purchasing in a limited company. On one hand, although this is nearly 1.5 times more, the absolute amount is relatively small – circa £100 per month. On the other hand, investors need to take into account the additional legal, mortgage and accounting fees of purchasing in a limited company, when calculating the real financial impact.

Lettings Update

Unlike the sales market, the lettings market in Leeds has remained robust in February and we have managed to rent 3 properties with multiple applications for each property helping us secure higher than expected rents for our clients.

One downside of the pandemic has been that rent guarantee insurance policies have seen an increase in price from approximately £20 per month to £30 per month, as providers start to prepare for an increase in pay-outs once the furlough scheme ends. It is useful to know that all our tenancies are backed by a deposit and where possible, a guarantor, to ensure the tenant has an incentive not to skip rent.

As we begin the process of exiting our third national lockdown, the Leeds property market has remained optimistic in February. House prices, rental yields and demand for residential property continues to be favourable, as investors realign their objectives to a more longer-term outlook.

Despite the excitement, with the upcoming Spring Budget, as well as the possible end to the furlough scheme, the immediate economic outlook remains a little more unclear.

We continue to see a reduced number of new properties coming to the market compared with previous years, with many sellers preoccupied with juggling their day jobs and home-schooling responsibilities.

On the flip side, the lettings market has remained strong with many people taking advantage of virtual viewings to save time and help narrow the list.

In general, the strong rental demand coupled with the mild downward pressure on house prices over the next 6 months, means it is a great time to start investing in the Leeds property market.

Rightmove House Index Feb 21

Sales Update

We are still seeing a shortage of new properties coming to the market compared to previous years – Rightmove recently reported a 21% decrease in sales stock. This is likely caused by the additional responsibilities and time pressures of home-schooling as well as the practicalities of getting a property ready for viewings while the whole family is at home.

On a more positive note, now that the national vaccination programme is in full flow and with the Prime Minister outlining a roadmap for exiting the current lockdown, we expect to see an influx of stock coming to the market over the coming months, rebalancing the supply. Also with the notice that the stamp duty holiday will be extended until end of June, we anticipate that this should keep the market buoyant.

Mortgage Update

From a mortgage perspective, the situation remains the same with mortgage offers from some lenders taking longer than usual to come through. This is predominately because of a reduction in staff available to deal with the incoming applications, rather than any nervousness on the lenders part.

In terms of rates, investors purchasing in their own name will see interest rates around the 2% mark, compared to approximately 3.3% if purchasing in a limited company. On one hand, although this is nearly 1.5 times more, the absolute amount is relatively small – circa £100 per month. On the other hand, investors need to take into account the additional legal, mortgage and accounting fees of purchasing in a limited company, when calculating the real financial impact.

Lettings Update

Unlike the sales market, the lettings market in Leeds has remained robust in February and we have managed to rent 3 properties with multiple applications for each property helping us secure higher than expected rents for our clients.

One downside of the pandemic has been that rent guarantee insurance policies have seen an increase in price from approximately £20 per month to £30 per month, as providers start to prepare for an increase in pay-outs once the furlough scheme ends. It is useful to know that all our tenancies are backed by a deposit and where possible, a guarantor, to ensure the tenant has an incentive not to skip rent.