Property ownership -- long a struggle for low earners -- has increasingly become the preserve of the better off.(Bloomberg Photo. Representative image)
Property ownership -- long a struggle for low earners -- has increasingly become the preserve of the better off.(Bloomberg Photo. Representative image)

UK’s hot housing market highlights Covid’s two-speed economy

House prices have surged to new records and mortgage approvals are at the highest level since before the financial crisis as the affluent take advantage of rock-bottom interest rates and a transaction-tax cut to seek more space or leave urban areas.
By Bloomberg| Posted by: Harshit Sabarwal
UPDATED ON DEC 02, 2020 11:59 AM IST

Few places expose the uneven economic impact of the UK’s Covid crisis more clearly than the property market.

House prices have surged to new records and mortgage approvals are at the highest level since before the financial crisis as the affluent take advantage of rock-bottom interest rates and a transaction-tax cut to seek more space or leave urban areas. At the same time, millions struggle, with the pain of job losses falling hardest on the young and the low-paid.

The following charts show the scale of the disparity:

Property ownership -- long a struggle for low earners -- has increasingly become the preserve of the better off. That’s especially the case in London where the average first-time buyer has to pay nine times their salary, according to Nationwide. That means buying often requires the ability to save outsize deposits, or having family able to help out.

On the other hand, those who have ridden out the crisis largely unscathed are fuelling a housing market mini-boom. Prices rose at the fastest pace in almost six years last month.

While that defies the UK’s economic reality, the fact that mortgage approvals also rose to a 13-year high “points to prices continuing to increase in the coming months,” according to Bloomberg Economics’ Niraj Shah. He still expects demand to “be hit by the reversal of the property tax cut” and the end of government wage-support programs.

The ability of young people to even consider buying property has been further eroded in recent months. Those under the age of 25 are more likely to have found themselves unemployed, not only hampering their prospects now but putting their future earnings potential at risk.

Click here for complete coverage of the Covid-19 pandemic

Young people are also more likely to work in industries that have been shuttered as part of the Covid restrictions, such as retail, hospitality, the arts, and travel. They are the least likely to be able to work from home.

The pandemic is also exacerbating income inequality in other ways. For wealthier Britons, lockdowns and curbs on movements have made 2020 an opportunity to boost savings. Extra money left at the end of the month has been squirreled away for better times or used to pay down debt, according to Bank of England data.

Savings have fallen for low-income households during the crisis. They are most likely to have had to resort to extra help to cover everyday costs, according to the Resolution Foundation think tank.

Those day-to-day expenses include higher energy and food bills after children were kept home from school for a large part of the year. The government’s failure to address the issue culminated in a popular campaign by footballer Marcus Rashford to help feed England’s poorest children over the winter. His plea for funding forced a U-turn by Prime Minister Boris Johnson.

There is no sign of Johnson extending a temporary increase to benefit payments that is due to expire in the spring. Think tank the Legatum Institute says 690,000 more people have been pushed into poverty by the pandemic, a number that would have been doubled without the current uplift.

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SBI's home loan interest rates for loans up to <span class='webrupee'>₹</span>75 lakh start at 6.7% and 6.75% for loans above <span class='webrupee'>₹</span>75 lakh. (iStock/Hindustan Times Archive)
SBI's home loan interest rates for loans up to 75 lakh start at 6.7% and 6.75% for loans above 75 lakh. (iStock/Hindustan Times Archive)

SBI offers home loans at 6.7%, zero processing fee in a limited period offer

By hindustantimes.com, Hindustan Times, New Delhi
PUBLISHED ON MAR 01, 2021 02:39 PM IST
  • SBI also said that the processing fee waiver and interest concession in the loan amount are subject to the CIBIL score of the loan applicant.
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Estate agents for sale and sold boards in a van in Colchester, UK. (Bloomberg File Photo )
Estate agents for sale and sold boards in a van in Colchester, UK. (Bloomberg File Photo )

Housing booms in Australia as prices surge most in 17 years

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While housing prices are surging from Singapore to Canada and the US, a return to boom times in Australia threatens to swell an already worrisome pile of household debt and make it harder for young people to get a foot on the property ladder.
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Globally, about 26% of the ultra-wealthy also plan on purchasing a home in 2021, up against 20% of 2020. The pandemic-induced residential mini-boom is expected to continue through 2021. (Representative Image)(AFP)
Globally, about 26% of the ultra-wealthy also plan on purchasing a home in 2021, up against 20% of 2020. The pandemic-induced residential mini-boom is expected to continue through 2021. (Representative Image)(AFP)

One out of five Indian UHNWIs planning to buy a new home in 2021: Report

ANI
PUBLISHED ON FEB 27, 2021 03:05 PM IST
The preferred investment locations for ultra-wealthy Indians are largely concentrated in domestic market followed by preferences in international markets of the United States, the United Kingdom, Singapore and the United Arab Emirates.
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FILE - In this Aug. 13, 2018, file photo a house is pictured for sale in Christchurch, New Zealand. New Zealand's government on Thursday, Feb. 25, 2021 made the first of several promised moves to rein in skyrocketing house prices by ordering the nation's Reserve Bank to consider the impact on housing when making decisions. (AP Photo/Mark Baker, File)(AP)
FILE - In this Aug. 13, 2018, file photo a house is pictured for sale in Christchurch, New Zealand. New Zealand's government on Thursday, Feb. 25, 2021 made the first of several promised moves to rein in skyrocketing house prices by ordering the nation's Reserve Bank to consider the impact on housing when making decisions. (AP Photo/Mark Baker, File)(AP)

Real estate in New Zealand feels Covid heat as housing prices skyrocket

PTI, Wellington
PUBLISHED ON FEB 25, 2021 07:57 AM IST
Opposing the expectations, prices have risen by more than 19% over the past year, putting them out of reach for many people wanting to buy their first home.
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In view of the lockdown, MahaRera had first extended validity of real estate projects by 3 months on April 2, and then extended it by another 3 months on May 18.(HT FILE)
In view of the lockdown, MahaRera had first extended validity of real estate projects by 3 months on April 2, and then extended it by another 3 months on May 18.(HT FILE)

Realty sector witnessing K-shaped recovery: Report

PTI, Mumbai
PUBLISHED ON FEB 22, 2021 05:09 PM IST
The smaller sized real estate companies' woes will “weigh heavily” on the sector as a whole, domestic rating agency Icra said in its report.
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In view of the lockdown, MahaRera had first extended validity of real estate projects by 3 months on April 2, and then extended it by another 3 months on May 18.(HT FILE)
In view of the lockdown, MahaRera had first extended validity of real estate projects by 3 months on April 2, and then extended it by another 3 months on May 18.(HT FILE)

NRIs eye southern realty for investment: Report

PTI
PUBLISHED ON FEB 16, 2021 11:03 PM IST
The maximum search or demand comes from those NRIs living in the US, followed by the UAE and Britain, said the report by Commonfloor, a Quikr platform that offers home-seekers, sellers and realty professionals an online ecosystem.
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Singapore’s economy is projected to rebound as the city keeps coronavirus infections at bay and rolls out vaccinations.(Unsplash)
Singapore’s economy is projected to rebound as the city keeps coronavirus infections at bay and rolls out vaccinations.(Unsplash)

Singapore home sales exceed two-year high as curbs may loom

Bloomberg
PUBLISHED ON FEB 15, 2021 11:50 AM IST
  • Singapore’s property market has made a rapid recovery after the pandemic sent the economy into its worst recession, fueling speculation that authorities could intervene to calm the sector. Government ministers warned last month that they don’t want the market to run ahead of economic fundamentals.
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Registration for two housing projects of Ansal API Ltd in Sushant Golf City, Lucknow has been cancelled.(Source: Sushant Golf City website)
Registration for two housing projects of Ansal API Ltd in Sushant Golf City, Lucknow has been cancelled.(Source: Sushant Golf City website)

2 Ansal API projects in Sushant Golf City, Lucknow cancelled by UPRERA

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PUBLISHED ON FEB 12, 2021 11:04 AM IST
  • Action was taken based on site visits and a large number of complaints related to non-possession, non-refund, violation of terms and conditions of the sales contract/allotment letter by the builder.
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A general view of a government housing complex in Hong Kong. (Anthony Wallace / AFP)
A general view of a government housing complex in Hong Kong. (Anthony Wallace / AFP)

Century Real Estate sells over 100 plots in 10 days at Century Greens

ANI, Bengaluru
PUBLISHED ON FEB 11, 2021 10:48 PM IST
  • Century Greens comprises a state-of-the-art 10,000 sq. ft. clubhouse, located at the heart of the development that provides a grand experience of landscaped greens, indoor and outdoor amenities with easy access from every plot.
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Rates in existing commercial areas and upcoming commercial areas were hiked.(Sanjeev Verma/HT PHOTO)
Rates in existing commercial areas and upcoming commercial areas were hiked.(Sanjeev Verma/HT PHOTO)

RLDA to lease land parcels in city for commercial development

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Representational Image. (HT archive)
Representational Image. (HT archive)

New DDA policy to regulate development in green belt villages on Delhi periphery

By Risha Chitlangia
UPDATED ON FEB 10, 2021 11:40 AM IST
Currently, no new construction, either residential or commercial, is allowed in the 47 rural villages located on Delhi’s periphery such as Dhansa, Mitraon, and Kapashera
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The value of single-family homes, known locally as villas, rose 2% in the richest and largest of the seven sheikhdoms that make up the United Arab Emirates, real estate consultancy Core said in a report.
The value of single-family homes, known locally as villas, rose 2% in the richest and largest of the seven sheikhdoms that make up the United Arab Emirates, real estate consultancy Core said in a report.

Abu Dhabi villa prices climb for first time in five years

Bloomberg
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Representational Image. (File photo)
Representational Image. (File photo)

DDA gets 15k applications for 1,354 flats on sale; draw of lots on March 3

By HT Correspondent | Edited by Smriti Sinha
PUBLISHED ON FEB 08, 2021 12:24 PM IST
The DDA has so far received 4,147 applications along with payment for its 1,011 HIG and MIG category flats in Dwarka and Jasola
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In Delhi, properties are classified in eight categories from 'A' to 'H', with 'A' class properties being the posh areas and the least developed areas fall into 'H' category.(HT File Photo)
In Delhi, properties are classified in eight categories from 'A' to 'H', with 'A' class properties being the posh areas and the least developed areas fall into 'H' category.(HT File Photo)

Want to buy new property in Delhi? Here is good news for you

By hindustantimes.com | Edited by Shivani, New Delhi
PUBLISHED ON FEB 06, 2021 02:28 PM IST
The existing rate of land in 'A' category is 7.74 lakh per square metre, After the revised circle rate this will go down to 6.19 lakh per square metre, as per PTI report. In 'H' category, the circle rate will be reduced from 23,280 to 18,624 per square meter.
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The rising sun seen over a construction site on a foggy morning at Pragati Maidan, New Delhi. (Arvind Yadav/ Hindustan Times)
The rising sun seen over a construction site on a foggy morning at Pragati Maidan, New Delhi. (Arvind Yadav/ Hindustan Times)

Delhi govt cuts circle rates of properties by 20 per cent

PTI, New Delhi
PUBLISHED ON FEB 05, 2021 08:14 PM IST
Delhi govt cuts circle rates of properties by 20 per cent
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