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The Increased Demand For Housing In The UK

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2020 and 2021 have so far been two years like no other, with challenges and changes on a UK and global level. However, the latest government and industry statistics show a housing demand increase in the UK, showing the population’s resilience and change in lifestyle values.

So, what do the statistics for housing market supply and demand show?

  • Housing demand in 2021 is up 6% – According to Estate Agency Get Agent, their latest index shows that demand has risen in the first quarter of 2021 by 5.7%. The highest demand is seen in Bournemouth, Newcastle, Oxford, Bristol, Glasgow, Sheffield, Leeds, and Plymouth, with London showing its first signs of higher housing demand, following the rises seen elsewhere.
  • Housing demand in 2020 was up 40% – According to Zoopla, demand in 2020 was 40% higher than in 2019.
  • November 2020 house sales were up 20% over 2019 – HMRC recorded 115,190 house sales in November 2020, which is up 19.3% from November 2019.

House prices and mortgage approvals are also on the rise:

  • House prices rose 7.5% in 2020 – According to the Office of National Statistics (ONS), house prices have increased by 7.5% over the year up to January 2021, with the highest price growth seen in rural areas.
  • Mortgage approvals are at their highest since 2007 – According to figures from the Bank of England, the highest number of mortgage approvals were recorded in November 2020. Mortgage approvals are at their highest since August 2007.

 

What Has Led To The Increase In Demand

The increase in housing demand is broadly believed to be in response to two significant events that occurred in 2020:

  1. COVID-19 pushes lifestyle priorities towards more space – The Coronavirus pandemic has changed the way that people work, with a large shift to remote working from home, increasing demand for larger properties with a higher number of rooms to accommodate home offices. Furthermore, with restrictions on socialising indoors and in groups, more outside space is a top priority for many home buyers. The combination of these desires for more space is reflected in a change where demand is strongest, with rural properties and houses in higher demand than city apartments and flats.
  2. The Stamp Duty holiday significantly lowers the cost of buying a home – In England, the Stamp Duty holiday was introduced in July 2020 (July 15th in Scotland and July 27th in Wales). This tax break was set to end on March 31st, 2021. However, the Chancellor of the Exchequer has announced that the Stamp Duty holiday will be extended to June 30th, keeping the higher threshold before Stamp Duty is applied.

 

Can Supply Meet Demand?

Housing supply and demand are often in an imbalance, with demand higher than supply. However, access to residential development finance helps developers acquire the financing they need to build or convert one home to hundreds.

BLG continues to support developers with residential development finance, and our team of experts are waiting to help you get your next project underway.

WHAT OUR CUSTOMERS SAY ABOUT US

"A challenging site like no other with every inch of the plot being built on and 12 apartments built-out through a driveway 2.5m wide off of a main high street with limited access rights, not to mention all the complexities associated with 13 Party Wall Agreements. Most lenders would not have had the vision for the scheme or the confidence in Spiller Builders to build out the scheme.  I just wanted to say how helpful the entire BLG team have been during the build. A very approachable and knowledgeable team, with a “can do” approach to lending. We will be looking to do more business with you for sure."

“We have used BLG for development finance for over 8 years. During that time we have found their knowledge and expertise in the property development industry to be second to none. Their loan process, pragmatic and flexible approach to lending and flexibility when required has supported our business needs throughout the period and provided us with support to deliver new homes in Bristol and the surrounding areas.”

“As property developers you never know the curve balls that you may get and a project that is great on paper may prove a bit more tricky.  This happened to us on a project that BLG have funded and throughout they have supported us.  Our business likes to be collaborative and when we hit those tough moments it really felt like we were working as a team with BLG.  If you have a decent project you can get it funded, but what you really need is a business that is there to support and advise you as well.  For us on this project it was BLG.”

“I approached BLG Development finance with an opportunity I had in Chesham, Buckinghamshire, to build 5 new build houses in 2021. My main contact was Anil Bains who is a Director covering Asset Management. Within very quick timescales, BLG provided me with indicative quotes in regards the finance levels they could offer me. Having considered those levels, I requested a valuation to be carried out which again was dealt with swiftly. We proceeded to completion. The build went very smoothly with monthly monitoring being carried out by BLG and monthly drawdown requests dealt with in a very timely manner. Due to a difficult time generally in the market in regards selling, I was in need of a six-month extension to the loan which again was appraised very quickly and granted. Having dealt with numerous funders over the last 20 years, I can only speak highly of my personal experience with BLG and would very confidently work with them again on any future projects. “

"From our side it has also been a pleasure working with BLG and the team there. We have found you easy to deal with, proactive in resolving any minor issues that have arisen through the project and shown great flexibility in working with us as a partner. We will certainly like to work with you on future partners."

“I really appreciate your hard work. We really like the way you communicate & I must say I haven't seen many people who are that approachable.”

“A very efficient processing team, dealing with the DD once deal credit approved, through to completion”

“Many thanks for your efforts on this one and getting it approved and sorted so swiftly, very much appreciated. I am sure I will be speaking to your over the coming months.”

“We had other funding options, but chose to use BLG again, as we work well with the team, who always provide very clear information and advice with a friendly approach throughout the funding process. Very efficient and always very helpful.”

“Many thanks Anil, it’s been a real pleasure working with BLG so far.  We’re lining up the next project too”

“We would recommend all staff we have dealt with at BLG, as we are very satisfied with the team and the initial offer/terms presented, then you and the funding team, through to the draw down team at valuation stage.”

“All documents are clear and the way you keep clients informed, all the way along the funding process, is refreshing for us”

“With regard to what should be improved at BLG, we work with many lenders in our business and we do not get the help and response we have had on the two projects with all at BLG on our funding for our developments.”

“We would particularly mention Dave Edwards and Tom Pitts as being central to having a smooth working relationship and being positive and helpful at all times. Their guidance in helping us navigate the project from inception to completion was invaluable. As was their patience, particularly at the beginning. We look forward to many future projects with the BLG team.”

“We would like to express our appreciation for your support on our development in Bristol. We were very pleased that, from the outset, you shared our vision of the project to convert a dated but classical building, that had outlived its usefulness as a school, into unique luxury apartments with views overlooking the city. We found our dealings practical and streamlined. Monthly payments were processed in an efficient and timely manner.”

“BLG are very good at communicating with clients and all documents are very clear and all at BLG are always happy to help.”

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