What a year 2021 was! Just as we came out of one variant, we headed into another, possibly more infectious one and talk of more lockdowns ensued. The interest rate rise that everyone predicted was announced a few weeks ago, the first in 3 years. And more hikes are predicted this year to curb inflation. We had the stamp duty holiday which can be considered to be a success in that it kept property transactions buoyant, but it also helped to cause the inflation that we are now seeing. And the London rental market seems to have made its first steps of recovery after a couple of tough years. This has taken place despite a fairly healthy rental market elsewhere in the country.

So, what are the predictions for 2022?

Well, inflation is expected to continue being an issue as many economies globally struggle to come to terms with supply shortages largely cause by the pandemic. The Consumer Prices Index (CPI), which is a measure of inflation, rose by 5.1% in the 12 months to November 2021. That’s one of the largest increases of the last 20 years. And for this reason, it means interest rates are expected to continue rising to keep inflation at bay. The Office of Budget Responsibility (OBR) has forecast that rates could reach as high as 3.5% by 2023 which is a concern seeing that the current rate is only 0.25%. This means we are likely to see the beginning of the end of the era of record-low interest rates.

Rightmove expects the housing market to be less frenetic than it was in 2021, with more balance between buyers and sellers. Part of the reason for the price inflation was, and is, the lack of supply of housing stock. Despite this, Rightmove predicts that house prices will rise by 5% this year on a national level and one has to agree that the underlying numbers still appear strong. For example, requests from homeowners to estate agents to have their home valued were up 19% on this time a year ago. And November’s data shows buyer numbers up by 41% on 2019, and 3% up on 2020.

However, until we hear more from the government on how long its directive to work from home will continue (for those that are able to), and if more restrictions are on the way in January/February, nobody knows how the market will pan out with any degree of certainty or what economic impact it will have on the property market. At the time of writing there seems to be some light at the end of the tunnel with talk of an end to the restrictions coming soon.

In terms of regional hotspots for 2022, Manchester continues to be a region where strong growth is expected. And Birmingham too is also expected to be one of the biggest winners largely due to the HS2 project and being the host of the Commonwealth Games in 2022, which will improve it presence on the international stage.

The duo behind The Property Podcast, Rob Dix and Rob Bence, suggest that the top areas to invest in the UK for 2022 are Manchester, Liverpool Derby and Nottingham.

They go on to make bold predictions of property price growth between 6-8% which is more aggressive than many other official predictions, including the Rightmove prediction above. For London they expect the market to grow by a modest 4%. Check out their valuable podcast for more information.

Clearly, making predictions is a bit of fun and no one can predict the future with any great level of certainty but getting the views of a multitude of experts across the industry on what’s likely to happen for 2022 will keep you informed and set you up to act if there are any changes in the market, but at the same time, as the great American football coach once said, always “expect the unexpected”.

Xuan worked for 10 years in the investment fund industry but is now a full time, successful property investor. Over the last few years she has built up a successful portfolio in South West London which now generates over £500,000 in gross rental income per year.

What is the property investment strategy that you have chosen?

I buy really run down properties, no more than 30 minutes from where i live, then renovate and refurbish them to add value either by extending them or obtaining planning permission. Once this is done i refinance and take out every single penny

What do you love about the world of property?

There are several things:

– I am my own boss
– It’s very creative
– It’s quite profitable
– It has a flexible timeline so i can spend more time with my little girl. My daughter is also the one who will benefit as i can pass over my portfolio to her when she is older

What advice would you give to your younger self, just starting out in the industry?

Start earlier!

What property hack (or website/app) do you know of that you’d recommend to others?

A lot of people pay for expensive training courses. Instead go onto the Amazon website and type into the search bar the subject matter you want to find out about. This is the way i have learned about property as well as from friends and support groups.

What are your property market expectations for 2021?

Prices will go up so I am still looking to buy and add value to properties.

If you would like to find out more about Xuan’s property journey please visit: www.cosyhauz.com

Over the last year or so as far as the property industry is concerned apart from the stamp duty holiday one of the other topics that has generated a lot of column inches in the press has been the cladding issue. It is a sensitive topic of course because of the Grenfell Tower tragedy which happened nearly 4 years ago. The Inquiry that took place in the aftermath in 2019 concluded that the tower block’s cladding was the “primary cause” of the rapid spread of the fire that was responsible for killing 72 people in the summer of 2017.

What is cladding?
Cladding is a material which is wrapped around the outside of a building to improve appearance and insulate and waterproof buildings. They are often blue or green panels, and in the Grenfell Tower example, they were fitted only weeks before the fire struck as part of a general £9m renovation of the block.

Why has cladding become such an ongoing issue?
The government has identified as many as 462 high-rise tower blocks up and down the country that have similar cladding to that of Grenfell. This cladding is made of materials which are said to be chemically similar to paraffin and therefore highly flammable and easy to melt. Surprisingly, as of January 2021, still nearly a third of the 462 blocks have yet to be fully made safe nearly 4 years after Grenfell.

However not only are tower blocks affected by the cladding issue, there are also many other types of residential buildings that are clad in hazardous materials. The Labour party recently estimated that even up to 4 million properties or 11 million residents could be affected including nearly every owner of a recently constructed purpose-built flat. Cladding has also been found in up to 30 NHS trust buildings.

What impact does it have on leaseholders?
Apart from the obvious safety concerns that this causes, leaseholders are being pursued for the cost of remedial measures to make the buildings safe. The original developers are not picking up the cost and so it’s the freeholders of the affected properties who are passing on the cost to the leaseholders which seems really unfortunate

Many, many homeowners are now effectively trapped in flats they cannot sell or remortage until they get proof that the building is safe.

I myself used to live in a block of flats in Hackney built in 2008 and I’ve heard that the issue is preventing owners selling so they are currently unable to move. I can consider my very fortunate to have been able to sell up back in 2016 before cladding became a national issue.

What is being done about it?
There is some help to aid leaseholders who are stuck in this predicament. The government so far has allocated over £5bn to help fund the removal of unsafe cladding but this will not be enough to cover everyone affected. Some experts estimate that the true cost will be closer to £50bn than £5bn. In some cases owners of newly bought flats are being told that they face huge bills despite receiving assurances that materials on their blocks were safe before making the purchase.

Clearly, this issue is not going to disappear anytime soon in what is already a tough time for many households with the economic downturn and the pandemic.

Sumit is a property surveyor by profession but he does a lot more than what one can normally expect from a property surveyor, he is a property investor, a property and investment consultant, author, trainer, mentor and international speaker.

What is the property investment strategy that you have chosen?

I usually use 10 property investment strategies as explained in my book Amazon.co.uk and I mainly focus on lease options and commercial conversions these days.

What do you love about the world of property?

This is the most secure investment and virtually risk free once you have learnt how.

What advice would you give to your younger self, just starting out in the industry?

Educate yourself and network with like-minded people as early as possible.

What property hack (or website/app) do you know of that you’d recommend to others?

We share this more in our training programs, you may check out our website for this.

What are your property market expectations for 2021?

It’s a great time to make money!!

If you would like to find out more about some of Sumit’s training programs please visit: www.propertyexpertsacademy.com

Earlier this month Amazon Prime released a movie called Greenland starring the Scottish actor Gerard Butler. Despite the fact that he keeps referring to his son as “kiddo” every two minutes, It’s an entertaining watch and certainly got some good reviews from the likes of Empire and The Guardian.

The basic premise is, in the event of a global disaster, certain people are chosen by the government to shelter based on their professions so that a new society could be created if the worst happens and humans have to start again.

Without revealing too many plot spoilers Butler’s character, alongside his family, gets chosen to escape to safety because he is a structural engineer/architect.

It got us thinking that in the grand scheme of things the construction industry does play a hugely important part in modern society and in any society. Where would we be without houses or schools or supermarkets or roads?

The pandemic has helped to focus the minds on who are the key workers in modern society. Without Doctors, Nurses, Teachers, Paramedics frankly we would have a far higher death toll than we do currently but even journalists have been included in this list because they have been vital in keeping the wider public informed on what is happening.

Back in 2019 the World Economic Forum published a top ten list of the world’s most highly respected or important professions and it’s unsurprising that the likes of doctors, teachers, nurses and engineers are universally seen as having the most value to any society.

With the increasing influence of Artificial Intelligence what impact will this have on what jobs are deemed are important? According to another report developed by the World Economic Forum millions of jobs globally will be lost to automation and robots and it concluded that half of all ‘work tasks’ will be capable of being carried out by machines by 2025. And there are plenty of Ted Talks that paint a bleak future for many jobs and professions. But even in the future world overrun by Bots, drones and self-driving cars there will still be a need for new buildings. People will still need homes to live in. The work of Estate Agents for example may change and there may be the need for less of them, but new jobs will be created in the property industry, for example, we could see the need for Sustainable Building Regulators, who would be charged with ensuring buildings are 100% environmentally sustainable and free from fossil fuels.

The property & construction industries get a lot of flak at times. The stereotypical images of rowdy groups of builders with their jeans that could do with a good belt continue to exist, and we all know how often estate agents appear in polls as one of least-trusted professions so it’s good to see the wider industry getting some love, albeit indirectly, in a major Hollywood blockbuster. Isn’t that right kiddo?!

▶️ Stamp duty debate continues – With up to 70,000 potential property deals predicted to be affected the stamp duty deadline of 31st March, Zoopla is the latest stakeholder to call for an extension. They suggest an extension of only one month, enough to help buyers who agreed a sale in 2020 to secure the savings they would otherwise have to pay in tax.

▶️ Supply of housing stock for sale down – Zoopla also found out that in the first few weeks of 2021, the flow of new homes coming to the market for sale was 12 per cent lower than a year ago with sellers likely to be waiting for COVID19 case numbers to drop further before listing their homes. However, contrast to this, demand continues to be high with demand in the first 3 weeks of January being 13 per cent higher than the same period in 2020.

▶️ Number of EU tenants in London drops – Unsurprising, with a large part of Brexit now completed, there has been a sharp drop in the number of EU nationals taking up tenancies in London and across the UK. According to Goodlord, the PropTech company, in London in particular, during 2017, the average proportion of tenants who were originally from EU countries stood at 29%. In 2020, EU tenants accounted for just 22% of London residents.

▶️ London prices continue to rise – Property prices in November 2020 in the capital rose on average by 4.0% since October 2020 and by 9.7% year on year taking the average property value in London to £513,997 according to the latest UK House Price Index data.

▶️ First time buyers still buoyant – In a survey conducted by Peabody and property portal, Share To Buy, it was discovered that almost 50% of potential first time buyers said that they are keener to purchase a property than compared to pre-pandemic, with only 4.5% of respondents now less inclined to consider buying a home than previously.

▶️ Plea for stamp duty holiday continues – With average UK house prices in November at the highest ever levels, reflecting the high levels of demand triggered by the stamp duty holiday, many conveyancers are now not guaranteeing completion dates to buyers before the deadline of 31st March. As there is a huge backlog of deals in process the danger is that some buyers will not complete in time through no fault of their own and be faced with the prospect of having to pay the stamp duty tax. Some experts think this could cause a swell of collapsed deals.