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Landlords with houses see dramatic uplift in capital appreciation

Landlords with houses in their portfolios will have seen a dramatic increase in their capital value according to Zoopla.

It says demand for all types of houses, from terraced to detached, has more than doubled in the current housing market - creating a disparity in average price growth when compared to flats.

A new report from the portal shows that family homes are most popular amongst buyers, with demand up 114 per cent compared to levels typically seen at this time of year between 2017 and 2019.


While flats and houses recorded almost equal price growth of 1.4 and 1.9 per cent respectively in June 2020, the pandemic ‘search for space’ has driven prices for houses up 7.3 per cent over the past year.

By contrast, demand for flats has failed to keep pace and, as a result, prices growth is lagging at just 1.4 per cent, the same rate of growth seen last year.

Price growth for houses is highest in Wales at 10.2 per cent and the North West at 8.8 per cent; it’s weakest in London at 5.6 per cent. Meanwhile, price growth for flats is highest in Scotland at 5.2 per cent and East Midlands at 3.7 per cent; again the weakest spot is London where prices have actually fallen 0.5 per cent.



Looking at the wider market Zoopla forecasts that price growth will edge upwards to six per cent in the coming months before easing back towards the end of the year as the impact of the extended stamp duty holiday unwinds and the economic landscape becomes more challenging.

“Overall buyer demand coupled with constrained supply signal that price growth will continue to rise in the coming months, peaking at around six per cent, before falling back to between four and five per cent by the end of 2021” says the portal.

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    I have a smaller than average terraced house that I paid 25k for in 1995, the end house went on the market at 210k and sold in a week, I am told by the owner for more, another one in the same terrace is now on the market for 190k, and is getting a lot of interest, the house next door is to rent at 800 per month, I'm working on mine at present the last tenant was paying me 600 per month, these prices are madness, but it is happening and I'm not one to complain, I'm not selling, just think of all that CGT the government would take.

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    Unfortunately with this type of growth further down the road something will have to give. The Government should not interfere in this market as they solve one problem but create others. Time will tell how this plays out.
    I have been forced to put up rents due to Section 24 mainly. I had not increased rents with existing tenants for years due to falling interest rates, even now I am probably at least £250 behind the average rent per month and that includes the £50 increase I applied in June. I have warned my tenants to expect similar £50 rises for the next 3 years per year.
    I will be selling a property this year and for the next two to reduce my leverage as interest rates will eventually go up. I will keep selling until i am 80% value to loan.
    Therefore HMRC will get around £100,000 from me over these 3 years, as I suspect that this is a planned bonus for them as they try to curb the numbers of private landlords or private landlords with multiple houses.


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