Surelock Network Auctions September Newsletter
Welcome to Surelock Network Auctions’ September Newsletter! It’s back to routine for many of you and straight into a busy time of year. The summer months are usually quiet on the news front, but that hasn’t been the case this year. There have been plenty of interesting developments in the past four weeks or so and we’ve got a few views we’d like to share!
Central Bank’s Chief Economist Favours Property over Pensions
The Bank of England’s chief economist turned a few heads last month with his comments in an interview with the Sunday Times. When asked whether he thought property or pensions were the best investment, the BOE’s Andy Haldane answered: “It ought to be pension but it’s almost certainly property. As long as we continue not to build anything like as many houses in this country as we need to . . . we will see what we’ve had for the better part of a generation, which is house prices relentlessly heading north.”
His comments have received some criticism, but there are plenty of Britons who undoubtedly agree with his sentiments, something that is clear by the growing size of the private rental market and the continued popularity of property programmes on TV. But, even if those who have spoken against his views have a point, so does Mr. Haldane. When something is in high demand and the supply of that thing doesn’t grow and even begins to shrink, then its value tends to rise.
Until a lot more homes are built in the UK, house prices will continue to rise, keeping property at the top of the investment list for many people.
August Ended with a Run of Upbeat Survey Data
Uncertainty over the UK’s economy has been growing for the last six-eight weeks or so and a number of economists have cut their forecasts for growth this year and next. Four separate surveys in the last week, however, have shown that those concerns may be overdone.
Data analytics firm Markit’s manufacturing and construction August purchasing managers indexes were both stronger than expected. The manufacturing PMI rose a record 5 points from July to 53.3 in August, boosted by increasing new orders and output. The construction PMI, meanwhile, also rose sharply from to hit 49.2 in August, up from July’s seven year low.
Elsewhere, consumer confidence as measured by GfK surged five points as consumers’ appetite to buy large items returned. And, lender Nationwide’s house price index rose 0.6% on the month and 5.6% on the year in August, largely due to the ongoing lack of new homes for sale combined with low mortgage interest rates and the BOE’s stimulus package pushing prices higher.
UK Government Reportedly Planning New Housing Stimulus Package
A recent report from industry publication Property Week states the UK government is putting together a new housing stimulus package worth £50 billion of new money. In this response to the growing housing crisis, the government is said to be making money available to builders across the country and SME firms involved in the house building business, in the form of loans and guarantees.
There is also the suggestion that the government is interested in investing in the ‘modular house construction’ sector. This is where homes are constructed off-site while the land is prepared on-site at the same time, allowing the finished ‘home’ to be slotted into place on site.
This modern and efficient way of building would certainly help speed up the creation of much needed homes and could also prove a good move for the UK economy in terms of jobs and output. Expectations are for the final package to be announced in the Chancellor of the Exchequer’s autumn statement in November.
For the investors and developers among you, it might be prudent to take a look at what projects and properties are available right now and get to work in providing some of the much needed supply before the big guns step in. If that sounds like an interesting prospect, why not take a look at our September and October auction catalogues for inspiration?
We hope you enjoyed Surelock Network Auctions’ thoughts on the issues discussed in our latest newsletter. If you want to keep up-to-date with Surelock’s auction dates visit our website and to keep abreast of our news and views, take a look at the blog section.
We welcome any comments on the points we have mentioned, or any questions at all, even about a property you are interested in that isn’t listed at one of our auctions. Additionally, if you want to share your own views on another topic, please contact us. You can get in touch by responding to this email, tweeting us @KhalidAuctions or commenting on the blog section of the Surelock Network Auctions website.