Study of Issues with Private Renovation and Property Sales in London

This report investigates the issues associated with private renovation and the sale of housing properties in London, focusing on the impact of Brexit and the increasing trend of let properties. The research employs a qualitative methodology, utilizing secondary data and thematic analysis to identify key factors influencing the London housing market. The study reveals that Brexit-related uncertainties and price fluctuations are significantly affecting property trends, making renovation and sales complex. The analysis also examines the shift towards let properties and the impact of new taxation policies. The report highlights the variations in house prices across different London boroughs and recommends further studies to understand market dynamics and trends. The research aims to assist real estate professionals and individuals in navigating the current economic uncertainties and understanding the trends in the London housing market.

Issues with private renovation
and sales of property in
London

ABSTRACT
Purpose
The research aims to identify the various issues associated with the private renovation
and selling of housing properties in London.
Research methodology
The research is qualitative and interpretivism philosophy is used in the study. For data
collection secondary methods are used and a thematic analysis is carried out to determine the
findings. The study uses descriptive design and an inductive approach is followed to execute the
study.
Findings
It has been evaluated from the study that price and current uncertainty in London due to
Brexit are playing great role in influencing house property market.
Limitations
In the study secondary data collection methods are used thus the data obtained is limited
and largely based upon the market analysis and critiques instead of the actual perspective of
buyers and sellers in London.
Recommendations
It is recommended that Brexit and several other factors are making renovation and
property selling in London quite a complex function. Thus, it is recommended that this type of
study must be carried out so that it can help people to understand the trends.
Value:
Within current uncertainties in the UK economy the study will help people and real estate
professionals to understand the present trends and purchasing behaviour in house property
selling.
Keywords:
London house market, Brexit and property trends in London, private renovation in
London houses.

ACKNOWLEDGEMENT
I would like to express my deep gratitude to my professors and mentors who provided me
a great opportunity to accomplish this study. Without their support and guidance it would not
have been possible to become a part of such valuable and interesting research area. I would also
like to thank my family and friends who were always there with me to provide me emotional
support and time. During the entire research they encouraged and motivated me so that I could
complete the project on time and with dedication.

TABLE OF CONTENTS
ABSTRACT.....................................................................................................................................2
ACKNOWLEDGEMENT ..............................................................................................................3
CHAPTER 1: INTRODUCTION ...................................................................................................1
1.1 Overview .........................................................................................................................1
1.2 Aim ..................................................................................................................................2
1.3 Research objective ...........................................................................................................2
1.4 Research Questions .........................................................................................................2
1.5 Rationale ..........................................................................................................................2
1.6 Significance......................................................................................................................3
1.7 Scope of the research .......................................................................................................3
CHAPTER 2: LITERATURE REVIEW ........................................................................................4
Issues in private renovation and sale of property in London .................................................4
Reasons affecting the renovation and sale of private property in London ............................5
Current trend in housing sector impacting the increasing tendency of let property in London .7
CHAPTER 3: RESEARCH METHODOLOGY ..........................................................................12
3.1 Research approach .........................................................................................................12
3.2 Research design .............................................................................................................12
3.3 Research type .................................................................................................................13
3.4 Research philosophy ......................................................................................................14
3.5 Data collection ...............................................................................................................16
3.6 Data analysis ..................................................................................................................17
3.8 Ethical consideration .....................................................................................................18
CHAPTER 4: DATA ANALYSIS AND DISCUSSION .............................................................19
REFERENCES .............................................................................................................................20

ILLUSTRATION INDEX
Illustration 1: Number of houses sold by real estate brokers in London in three months...............9
Illustration 2: Growth pattern in house prices in London................................................................9
Illustration 3: Growth pattern in rent of let properties...................................................................10
Illustration 4: Increasing trend of renovation in UK......................................................................20
Illustration 5: Average rental price in London...............................................................................25
Illustration 6: Average property price in London .........................................................................25
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Title:
Issues with private renovation and sale of the property in context of increase in let
properties: A Study on London housing market”
CHAPTER 1: INTRODUCTION
1.1 Overview
The housing property market has been facing tough challenges post Brexit. There has
been uncertainties over the economic stability of UK. The stagnant properties in London are
facing price falls because the potential buyers are frustrated and unsure regarding the property
trends and thus are preventing the real estate deals (Laska and Spain, 2016). The dramatic
changes in the buying behaviour of property buyers has even made it hard for people to think
about renovations. People are considering the rental properties as the safest approach in the
current scenario.
After Brexit people are also expecting that the new taxation and regulations related to
property dealings will also change significantly. Thus, with the buyer’s current situation it is not
ideal for buying or selling housing properties. Instead, there has been a great increase in the let
properties. On one side when there are uncertainties for the housing prices, according to statistics
presented by Housing in London report, (2018) there has been a decrease in both house prices
and rental prices in London in the past year. However, the growth rate of private rents is lower in
London as compared to other regions of UK. This is also one of the reasons that people prefer let
properties.
There are people who are interested in buying new housing property but it has been
observed that the new taxation policies and fear of getting lower prices is preventing the final
purchasing decisions. Most of the potential consumers are demanding that real estate agents must
give them good deals because due to Brexit there are less purchasing intentions and thus they
deserve better prices. However, on the other hand the sellers are assuming that the stability after
few months will give them good opportunity to enhance their profits (Preece, 2016). Though as
per current trends there is reduction in private renovation and selling but this will be overcome
soon.
In different boroughs of London there has been great variation in the house prices. People
are assuming that it may not be beneficial for them to renovate their private properties because
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with change legislations these properties are not generating huge amount of profits. Instead,
currently it is strongly believed by the investors that for some time it will be safe to keep their
money in savings rather to spend it in uncertainty of house market of London (Gudgin and et.al.,
2018).
1.2 Aim
“To investigate the issues with private renovation and sale of the property in context of
increase in let properties: A Study on London housing market”
1.3 Research objective
 To identify the issues in private renovation and sale of the property in London housing
market.
 To determine the reasons effecting the sale and renovation of property in London.
 To analyse the current trends impacting increase in number of let properties in London.
 To recommended solution to mitigate the effect and decrease the trend of let properties in
London.
1.4 Research Questions
 What are the issues in private renovation and sale of the property in London housing
market?
 What are the reasons affecting the sale and renovation of property in London?
 Analyse what are the current trends which impact the increase in number of let properties
in London?
 Provide recommendation to mitigate the effect and decrease the trend of let properties in
London.
1.5 Rationale
Brexit has not only influenced the UK economy but it has also affected the trade and
business across different countries of the world. The London housing property market is not only
the attractive choice for the UK citizens but is also the matter of interest for the foreign investors.
There has been constant issues of affordable housing (Poppy, Baverstock and Baverstock-Poppy,
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2019). Due to high prices people are not able to afford to buy houses while the tremendous
increase in let properties has also caused overcrowding in rental houses.
Thus, the study is essential to understand the various factors which are creating these
differences in renovation and property selling trends in London. Being the capital city the
housing properties and affordability greatly affects the national economy as well as the overall
living standard of UK citizens. Another reason to choose this research topic is that since the
impact of Brexit on the economy and UK have not been identified clearly (Poppy, Baverstock
and Baverstock-Poppy, 2019). The study will help to analyse the changes in the legal system of
housing properties as well as the purchasing attitude towards the housing properties. There has
been a significant gap between supply and demand of let properties as well as the selling
properties in London (Lea, 2017a). The study will help to evaluate this gap so that influencing
factors can be analysed.
1.6 Significance
The study is very beneficial for the people and real estate dealers who desire to
understand the various factors which are changing the house purchasing trends in London. Prior
to Brexit London was considered as the tempting place for the investment in housing properties
because the investors were assured to get high return amount on their investment. However, the
exit of United Kingdom from European Union has created havoc in terms of predicting the
economic trends in London and other parts of UK (Lea, 2017b). The research will help people as
well so that they can estimate the actual trends of housing property. With the analysis of this
study people may have clear concepts of which decision will lead to more benefits to them,
rental properties or newly constructed properties.
1.7 Scope of the research
The study can be used by the authorities to understand the supply and demand gap in
house affordability in London. There is need to explore these housing trends so that the life
standard of people can be improved. It will also assure that affordable living facilities are
available to every citizen. Further, research can be conducted to evaluate the impact of
increasing let properties in London and how it is influencing the local citizens as well as foreign
investors. This research study can also be considered as the ground for predicting the upcoming
challenges in property renovation and rental properties.
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CHAPTER 2: LITERATURE REVIEW
Issues in private renovation and sale of property in London
As per the view of Wadsworth et.al., (2016), uncertainties appear in the housing property
market of London. In many borough councils of London a shortage of affordable homes is a very
critical issue. The people are forced to live in small spaces and thus the problem of overcrowding
is becoming quite common in London. Instead of deciding to buy new homes people are
considering that renovating them is more affordable and easy option for them. Since the number
of households is increasing it is more feasible to renovate the existing house property than to buy
the new one because with renovation they can afford the higher number of people to stay and
more rent can be earned from the let properties.
Irrespective of the future scenario post Brexit there is higher demand in some regions of
London. The Brexit impact and new tax policies are forcing people to improve their houses
instead of moving to new places or houses. Several buyers who desire to shift to new houses in
response to the growth of their families have to face more financial burden because the
relaxations are provided to only first-time buyers. According to London house prices: foreign
buyers tempted back by weak pound, 2019 prices of properties are falling continuously and there
will be estimated 41% decline in purchasing of house in first few months of year 2019. The
paper has focused on retail trends in entire UK. The article is published by newsletter and thus
for making it precise and trustworthy it has used reviews of leading economist, BBC reports and
real estate agents. Since the capital city London is facing the most ups and downs in its property
market the article could have been made more influential by introducing private property trends
in London.
The house supply is declining and people are not able to have a wide range of choices for
the houses. This situation may continue until clarity is received on the Brexit issue. Though
Brexit and regulation changes are affecting all parts of UK London has most integration with the
foreign and European economies the house prices therefore are highly influenced by London
compared to other regions. As per the views of Amaro, (2018) with the continuous fall in house
prices from 2017, it has been feared that the house capital market may not crash. The
uncertainties among potential buyers has been dominating over the lower borrowing rates and
strong job market in the city. The article reviewed by Amaro (2018) has highlighted all aspects
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of London housing. For instance in the beginning the introduction to factors influencing market
stream are discussed. The article can be considered as important and effective because it analyses
the perspective of real estate agencies which are closely related to the matter. Along with the
analysis of problem article has also evaluated the effectiveness of renting solution. It makes the
literature review more impactful.
As a result, there has been huge shift of landlords from buy to let opportunity. According
to Hunt and Wheeler, (2017), at the same time when prices are declining homeowners are
utilising this as a great time to negotiate harder. Though prices are falling but first-time buyers
are still not able to afford even the cheapest houses in locality of London. In the UK property
market London can be assumed as the weakest point because most of the people are not capable
of buying affordable housing. The cooling house price seems to be attractive for the first time
buyers however with low average income and increased stamp duties it still may be impossible
for the people to move to new houses.
According to Badarinza and Ramadorai, (2018), the most influencing issue in the current
property market of London is that both buyers and sellers are adopting to wait until the final
Brexit decision is made in the next few months. Nevertheless, contrary to this Gallent and
Tewdwr-Jones, (2018) argued that though Brexit issue has made local market of London more
cautioned but it cannot be claimed that the annual growth in housing property has completely
stopped. Many house vendors are making attempts to sell their properties immediately so that
they can avoid the predicted difficulties due to separation of UK. In the same context purchasers
are having strong faith that more stock is available and waiting for some time can help them to
crack a good deal from the secured property.
Reasons affecting the renovation and sale of private property in London
There is some evidence which highlight the present state of property prices in London.
These reasons are not only affecting the purchasing prices but renovation trends are also
changing in the state. According to Callanan and Sidders, 2018 the high taxation rates after
Brexit can reduce the house values by approximately 30 percent. This estimation is predicted by
Bank of England and thus people are considering it very seriously. This literature review has
been supported by statistics and graphs so that it can be easy for the people to understand the
actual condition of London housing market. However, from the beginning the article seems to
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make conclusive statement that housing market is worse in London. With the emphasis on
London market the article provides critical analysis of the factors which are demonstrating the
cracks in London private properties.
Other reasons affecting sales of private property is that potential buyers are trying to
avoid the purchasing of new apartments. There are several brokers who are even ready to sell
their properties at lower prices. This trend has been also understood by the lent property owners
and thus they are also renovating their houses so that profits can be earned. Most of the people
are delaying their decision to buy a property and for the current instant they are just finding an
option of let property.
As per the view of Dhingra and et.al., (2016), most of the ready to sell houses are not
picked up as the brokers are not considering London as safe market for the house properties. As a
result, many real estate providers are shutting down their projects from London and are shifting
to other European countries. This is also one of the reasons that people are searching for the let
properties so that their investment is not held by any of the constructors or real estate builders.
The stamp duty issues and higher deposits for the first buyers of property is also one of the
causes which make it challenging for people to prefer house purchasing.
Ho and Atkinson, (2018), stated that people are assuming that with excessive taxes and
stamp duties it will be costly to maintain or renovate a house after few months or years. Thus, it
will be a safe option for them to search for let properties so that they will not require much
investment and complicated processing. London has also been a hub for the overseas buyers,
however the additional taxes are imposed for such overseas buyers. As a result of this most of the
potential overseas customers of Wales and England are not showing much interest in buying
houses.
In the same context Lavery, McDaniel and Schmid, (2018), argued that along with high
tax prices they believe that even if they pay high taxes there is no surety that they will get the
equivalent return. Thus, it will be safe to hold for few months. However, the brokers are making
attempts to pay the stamp duty bills of their customers so that these buyers from the globe can
make purchasing a decision. Though Brexit can be considered to have the most dominating
impact on house trends in London, there are several other factors as well. Along with Brexit the
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stretched affordability, job uncertainties, successive elections have also caused significant
changes in house prices in London.
As per the view of Matikainen, (2017), the credit availability is also preventing let
property owners to renovate their house and to buy new properties. The buyers who are intended
to purchase house for the first time are not getting enough support in terms of finance and
development. The housing project are also not meeting the demands as per the requirement of
customers. Due to these key reasons despite of the least growth rate in house prices in 2018 there
is less concern of people in buying new houses.
The young people are also migrating from London because they are not finding any
options for affordable housing. The let properties are in great demand and thus there is great
shortage of such houses. Even if they are available, to make large profits property owners are
giving them to multiple tenants which is leading to overcrowding. Due to this reason many
people are searching for better and affordable living in other parts of UK.
According to London house prices: foreign buyers tempted back by weak pound, 2019 it
has been observed from the records of National statistics that in 2017 around 330,000 people
move out of London city. The desire to have more housing space along with employment
opportunities is encouraging people to look for alternative options other than capital city London.
It has been observed that now as buyers are having less interest in purchasing expensive houses
the supply of such houses has increased and buyers are having control over the house market.
Boddy, (2018), stated that the main problem which is causing such fluctuations in
housing market and increasing trend of let properties is the overvaluing of the market and
increased stamp duty charges. Also, only a few people have clear knowledge on the proposed
outcomes of Brexit while the majority of people are making predictions. The preference to let
properties instead of buying new houses is also dependent upon average income of people and
interest rates.
According to Gallent, Mace and Tewdwr-Jones, (2017) there are some community
sections in London who are still not able to afford the houses as per their income levels because
interest rates are still high. Thus, it is assumed to be more profitable to invest a proportionate
value for renovation of house instead of buying a completely new property. With the private
renovation let properties can be extended and additional benefits can also be earned. Another
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