Friday, 30 September 2016

Landlords warned about ‘risk’ of using limited companies for buy-to-let


Buy-to-let landlords face the risk of double taxation if they choose to put their property investments into a limited company to avoid paying higher rates of income tax, a leading tax advisor has warned.

Addressing an audience at last week’s Association of Short Term Lenders’ annual conference, Nick Cartwright, a tax partner at Smith & Williamson, said that there is a chance that buy-to-let landlords could be hit with a potential double layer of tax on part or all of their rental income, as they may be taxed both in the company and on the extraction of their money.

He said that the “overall tax rate, if rental income is distributed, could be as much as 50% with current rates”, adding that incorporation works better with what he called a “roll-up” strategy.

He continued: “Incorporation is good if you want to build up money within the company, but not if you want to live off the income as it is earned.”

The issue appears to be that the landlord could be taxed on taking money out of the company and, where taken as a salary, could also be liable for National Insurance contributions, which would be payable both by the employer company and the director/employee.

Susan Emmett of Savills also warned of the consequences of taxation changes in the buy-to-let market saying that the government should be “careful of what they wish for”.

She commented: “Fewer buy-to-lets means more competition for rental properties, resulting in rising rents making it yet harder for potential first-time buyers to save for a deposit.”

She went on to say that there has “definitely been a slowdown in enquiries from investor buyers” but that some of these may now be looking in areas of lower cost housing, however she warned “this goes against what the government wants, as landlords will be competing more strongly with the first time buyers in these areas”.

“The problem is that if you are an investor there aren’t that many options out there and the property market is still the best option,” she added.

https://www.landlordtoday.co.uk/breaking-news/2016/9/landlords-warned-about-risk-of-using-limited-companies-for-buy-to-let

Landlords set to be hit with a hefty ‘green tax’


Up to 330,000 buy-to-let landlords will be required to pay a “green tax” of up to £5,000 to make their properties more energy efficient, according to a report in the Telegraph.

The newspaper has learnt that many landlords will have to pay upfront for measures such as insulation, cavity wall filling and new boilers from 2018.

It had previously been suggested that landlords would be able to apply for loans from the Green Deal scheme to make the necessary improvements, which would then be repaid by tenants who benefit from lower bills. However, the new Department for Business, Energy and Industrial Strategy is now proposing that homeowners provide the money.

Landlords who let out homes from the Victorian and Edwardian eras are likely to be most affected by the green tax as these types of properties are typically less energy efficient compared to homes built over the past decade or so.

"Unless they make funding available, landlords will be forced to pass these costs on to tenants in the form of higher rents. It could also make being a buy-to-let landlord prohibitive. They could struggle to find such a large amount of money upfront," said Richard Jones, policy adviser at the Residential Landlords Association.

"Landlords have been harshly treated. This is an extra stealth tax on top of all the other measures that threaten the finances of the sector," he added.

From April 2018, buy-to-let landlords must raise the energy efficiency of their rental homes to at least Band E. That means that around 330,000 residential properties currently in bands F and G will require major works.

https://www.landlordtoday.co.uk/breaking-news/2016/7/landlords-set-to-be-hit-with-a-hefty-green-tax

Thursday, 29 September 2016

Investor interest in commercial property is 'strong and growing'


The UK commercial property market could see an exceptionally high amount of activity in the coming weeks as investors flood to the market, according to Allsop.

While some investors are exercising caution amid greater economic and political uncertainty, the auction firm has seen a high level of early interest in many of the 244 lots set to be sold under the hammer at its fifth and largest commercial auction of the year, which will take place at The Berkeley in Knightsbridge, central London, on Monday 10th October.

The sale will see a range of properties located throughout the UK go under the hammer, with guide prices ranging from £40,000 to £4.5m.

The total income from all the lots on offer is around £10.1m per annum from vendors including Aviva, Royal London, M&G, Berkeley Group, CBRE and Deloitte.

Duncan Moir, partner and auctioneer, said: “Investor interest in commercial property is strong and growing, in part owing to the favourable SDLT rates compared to the residential market. This increased activity from buyers is leading to more supply from sellers, and hence this is our biggest commercial auction of the year so far.

“There has been particular appetite for retail – and particularly retail parades – over the last six to eight months, and with 134 retail assets in our catalogue, we look forward to a busy auction room on 10th October.”

Allsop has highlighted the following properties in the October catalogue as ones to watch:

Lot 108, London SE20 – A freehold retail parade on the High Street in Penge, comprising 12 shops with 18 apartments above and two advertising hoardings. Total rents £307,345pa. Guide Price: £4,500,000+.

Lot 16, Stow-on-the-Wold – A freehold restaurant investment in a popular and attractive Cotswolds market town, let until 2030 with no breaks and a rent review in 2020. Total rent £35,000pa. Guide Price: £450,000 - £500,000.

Lot 30, Keighley, West Yorkshire – A modern drive-thru restaurant investment entirely let to McDonalds on a lease expiring in 2026, with no breaks. Current gross rent reserved £73,525pa. Guide Price: £1,200,000+.

Lot 161, Salisbury, Wiltshire – A Grade II listed building in the city centre comprising three shops and vacant offices. Current gross rents reserved £49,750pa. Guide Price: £400,000+.

Lot 222, Wrexham, Wales – A freehold town centre shop investment fully let on a lease expiring in 2024. Current rent reserved: £14,580pa. Guide Price: £140,000 - £160,000.

Lot 237, Birmingham – A leasehold 81 sq m ground floor unit in a larger residential building close to Broad Street and Brindley Place. Vacant possession. Guide Price: £75,000 - £100,000.

Lot 240, Halifax, West Yorkshire – A freehold former bar with ancillary accommodation in the town centre. Vacant possession. Guide Price: £300,000.

Lot 242, Blackburn, Lancashire – A freehold 11,151 sq ft former Liquid and Envy nightclub located in the town centre. Vacant possession. Guide Price: £175,000.

https://www.propertyinvestortoday.co.uk/breaking-news/2016/9/investor-interest-in-commercial-property-is-strong-and-growing

Will I pay CGT if I sell my buy-to-let to help fund a new home?

I’m hoping I don’t need to pay capital gains tax as I am using the ‘gain’ to help me move from one main residence to another


Q I would really appreciate your advice on capital gains tax (CGT).

I own a second property, which I have let out for the past 10 years. I have declared the rental income each year on my self-assessment tax return.

I am now in a position where I want to sell the second property and put the profit I have made towards moving out of the home I live in to another place. Do I need to pay CGT on my second property even though I am using the gain to help me move from one main residence to another? VS

A The short answer is yes, you do have to pay tax on any gain you make from selling your second property. What you plan to do with the money you have made has no effect whatsoever on whether CGT is payable.

You may have heard of “private residence relief”, which makes gains on a home that you have lived in for the whole time you have owned it CGT-free. Sadly, private residence relief is not available for a property that has been let for the whole time you have owned it, even if you are going to use the gain to buy a new home.

The good news is that you don’t pay tax on the sale proceeds from selling your second property. Rather, you take the sale price and then take off what you paid for the property 10 years ago plus buying and selling costs such as legal fees, estate agents’ fees and stamp duty. You can also knock off the cost of improvements to the property, such as a loft conversion or kitchen extension (but not regular maintenance costs because these can be offset against income tax on the rental income). Assuming that you have no other gains in the 2016-17 tax year, you can reduce the taxable gain by subtracting your CGT annual exempt amount of £11,100.

The bad news is that the gain after all the above deductions is taxable at 18% if you are a basic-rate taxpayer, or 28% if you pay tax at higher rates. Gains on residential property do not benefit from the new lower rates of CGT – 10% and 20% – which came into force on 6 April 2016.

https://www.theguardian.com/money/2016/sep/29/capital-gains-tax-cgt-if-i-sell-buy-to-let-fund-new-home

Wednesday, 28 September 2016

The tenants paying the price so landlords don’t have to

A charity has spoken out against the high fees being charged to tenants who, as Felicity Hannah has been finding out, can’t take their business elsewhere


Holding fees, deposits, tenancy agreement fees, payment for reference checks, inventory charges, check-out costs. It’s an expensive time to rent a home in the UK, even before you consider figures from referencing firm HomeLet that show rents rose by more than 5 percent in the 12 months to April.

This week a major charity added its voice to growing demands that letting agents be banned from charging fees to tenants. Citizens Advice has warned that letting agent fees have risen 60 per cent in the last 5 years alone and that tenants are suffering as a direct result

It has argued that all UK letting agency fees should be paid by landlords as they can shop around, whereas renters have to deal with whichever agency is marketing the home they want. Not only are tenants paying higher bills but there’s also concern that high letting agent fees discourages tenants from moving out of unsuitable homes, because the cost of fees and deposits can be so significant.

Last year it became a statutory duty for letting agents to fully publicise fees in advance, but the Letting Fees campaign organised by Generation Rent has found that 14 per cent of agents still do not list their fees publicly.

But even with greater transparency, the issue of fees is a pressing one for the UK’s 11 million private renters that in spring this year there was a Commons debate on the subject.

Conservative MP Maria Caulfield said then that increased competition for properties has led to rocketing agent fees. In her constituency of Lewes alone the local Citizens Advice charity has found fees ranging from £175 to £922. She told the House: “Not only has the amount charged by letting agents increased, but there has been an increase in the types of fees charged.”

However, the Government does not agree that an outright ban on fees for tenants is necessarily the answer. Such a ban already exists in Scotland and Marcus Jones, under-secretary of state in the Department for Communities and Local Government, says the evidence strongly suggests a connection between banning fees and higher rents for tenants.

Despite that, campaigners say it is the only solution. A spokesperson for the Letting Fees campaign argued: “A landlord is more able to ‘shop around’ than a tenant and so has a more powerful position to avoid and force down uncompetitive charges. Even if the costs are returned to the tenant through higher rent the total amount paid would be reduced – and importantly spread over the length of the tenancy, which reduces the financial shocks of renting.”

An outrageous example

The Citizens Advice research will come as no surprise to tenants, who have been paying these rising fees for years. Just last week one Twitter user, Magnus Jamieson, posted an example of the various fees chargeable through one agency, opining that “letting in London “is ****ing bananas”.

His succinct outrage was easily explained by the fees listed by the agent. There would be a non-refundable holding fee of £500 to secure the property (although this would be deducted from the first month’s rent). Referencing fees of £60 per tenant plus £60 each for any guarantors, there was also a tenancy agreement fee of £250. To renew their tenancy the household would pay £120, and when the tenants came to leave there would be check-out fees of up to £175.

With fees that high, a couple with two guarantors who remained in a two-bedroom property for two years would pay almost £800 in fees alone. That’s a substantial amount for tenants who face paying high fees when they move again, potential before any remaining deposit has been released. What’s more, it’s on top of what the agent charges the landlord.

That is not even a particularly extreme example. We found agents charging tenants all that and more, including £30 and more for a right-to-rent check and check-out fees exceeding £250.

Paying but not the customer

Tenants are also in a peculiar position as they are paying for a service when the landlord is the customer. The landlord is also able to shop around for an agent, while tenants are forced to use whatever letting agent is advertising the property that best suits their needs.

Gillian Guy, chief executive of Citizens Advice, says: “Letting agents are hiking up their fees for a service that’s often not up to scratch.

“With fees rising year on year for letting agents, many tenants will rightly be wondering why they are paying hundreds of pounds for a simple contract renewal or for management services that leave them waiting months for essential repairs…

“Private renters shop around for properties, not for letting agents. Landlords are better able to choose agencies based on performance and cost and it should therefore be landlords paying letting agent fees, not tenants picking up these rising costs.”

How much? Tenants rights group The Tenants’ Voice suggests tenants should not pay more than £50-100 for an inventory fee in a furnished tenancy, £50-100 for a tenancy reference, and £100 for an administration fee. Unreasonable charges might include: a penalty payment if you don’t pay the rent by standing order, a reservation fee to hold a property while you get a reference or deposit, and both moving in and moving out charges.

http://www.independent.co.uk/money/spend-save/the-tenants-paying-the-price-so-landlords-don-t-have-to-a7320206.html

London property prices at risk of ‘severe correction’ – UBS


House prices in London are at risk of falling sharply because they are grossly overvalued, according to research from UBS Global Real Estate.

The study found that London is second only to Vancouver in Canada in the list of world cities at risk of a “severe correction” in its housing market, suggesting that the market is heading into bubble territory despite the strong economy in the capital.

Only property in Hong Kong is more unaffordable than London, when taking into account rising property prices and average earnings.

In London, residential property prices are 15% higher than the 2007 market peak, but incomes are 10% lower.

UBS highlighted the fact that the slowdown at the high-end of London’s housing market, caused largely by the introduction of higher stamp duty rates, reflects “an end to the global boom for luxury properties”, with a “renewed luxury boom” unlikely to happen due in part to the recent Brexit vote, and yet the slowdown at the top of the market has “failed to cool down the broader housing market” in the capital.

The report added that inflated house prices were likely to continue in London due to the supply-demand imbalance and record-low mortgage rates, describing the UK housing market as a “fragile equilibrium”.

Matthias Holzhey, an economist for UBS wealth management, said: “The situation is fragile for the most overvalued housing markets. A sharp increase in supply, higher interest rates or shifts in the international flow of capital could trigger a major price correction at any time.”

Last year, just London and Hong Kong were classed as being at risk of a bubble; this year there are six global cities in that category:

1 - Vancouver

2 - London

3 - Stockholm

4 - Sydney

5 - Munich

6 - Hong Kong

https://www.propertyinvestortoday.co.uk/breaking-news/2016/9/london-property-prices-at-risk-of-severe-correction--ubs

Tuesday, 27 September 2016

Landlord avoids jail after fire leaves tenant fighting for life


A Coventry-based landlord has avoided a prison sentence over fire safety offences after his tenant suffered life-threatening burns to 40% of his body when he was trapped in his room in a multi-occupancy house due to a fire deliberately started by another tenant.

At Warwick Crown Court landlord Simon Fox escaped jail after pleading guilty to not having proper fire safety precautions in place at his buy-to-let property in Humber Road, Coventry.

The arson incident, which happened in January 2011, occurred after an intoxicated ground-floor resident, who has since been jailed for three years, started a fire in her room.

Most of the other residents were asleep, and two were trapped in their first-floor rooms and had to be rescued by the fire brigade, with one tenant, David Lennon, suffering severe burns.

Mark Jackson, prosecuting on behalf of the West Midlands Fire Service, explained: “He [Lennon] opened his door, but by then the fire had taken hold and he could not get down the stairs. He was beaten back by a blast of heat and was trapped in his room.

“He tried to get out of the bedroom window, but the gap was too small; and the next thing he could remember was waking up in the burns unit of a London hospital.”

Lennon was rescued by firefighters who had discovered him unconscious in his room and was rushed to University Hospital in Coventry before being transferred to a specialised burns unit in London, while other residents had to be treated for smoke inhalation.

Jackson added: “He was in a critical condition, and his family were told he might not make it. He had burns to 40% of his body.

“He has had eight operations and 17 skin grafts, and he has lost his employment and his relationship has broken down as a result.”

An investigation revealed there was no interlinked automatic fire detection system, and although there were some individual smoke detectors, the one in the kitchen, where there was no fire blanket, had no battery in it.

There were no smoke detectors in one of the ground floor bedrooms and two of the first-floor rooms, including Mr Lennon’s.

Fox was sentenced to four months in prison suspended for two years and ordered to do 250 hours of unpaid work.

Judge Stephen Eyre QC also fined him £25,000 to be paid by the end of August 2017, with 15 months in prison in default, and £24,300 costs.

The judge told Fox: “The ensuring of proper fire precautions in properties in multi-occupation is a matter of life and death. It is no exaggeration to say that, it is a literal truth.

“This is far from a reckless disregard for the safety of tenants, but you did not take the precautions you should have taken,” he added.

https://www.landlordtoday.co.uk/breaking-news/2016/9/landlord-avoids-jail-after-fire-leaves-tenant-fighting-for-life

Refocus housebuilding on towns and villages to solve crisis – report

Housing-zone funding is skewed towards London, which has been given 100 times more than the rest of England combined


London has been given almost 100 times more housing zone funding than the rest of England combined, but has only built twice as many houses, new research has revealed.

Calling for housebuilding investment to be more fairly distributed across the country, the Housing and Finance Institute thinktank concludes that it is a “cultural myth” that the greatest need for homes is in the biggest cities.

The organisation cited figures that show nearly 80,000 more people are on housing waiting lists in regional local councils than in the capital and metropolitan areas combined.

The IHF report used housing-zone funding – money awarded to councils by central government to aid development on specific brownfield sites – to support its argument that funding is skewed towards major urban centres.

London has secured £600m of housing-zone funding, which will be used to build 75,000 homes, while £6.3m has been allocated to the rest of England in the same period that will be used to build 34,000 new homes.

The privately funded body was launched by the coalition government in March 2015 to provide advice to local authorities on housebuilding. It argues that the housing crisis should be solved by refocusing government funding efforts on coastal communities, country villages, market towns and the historic cities and counties of England.

“Undoubtedly there is more that can be done in London and other major urban centres to build more homes, but those areas already have huge resources to do more,” the report says.

“The demand for new homes is as great in the regional local areas, the opportunity to turn planning permissions into new homes is greater, and they need a fairer share of funding. They should not be asked to pay over a greater and greater share of their, much smaller, resources.”

The institute argues there has been a longstanding emphasis on funding housebuilding in big cities and metropolitan areas, while they were only responsible for building about 30% of new homes planned and built in 2015/16. Some 70% of homes planned and built over the same time period are in district and unitary councils.

HFI chief executive, Natalie Elphicke, said energetic local councils that were working hard to build houses without the help of comfortable cash flow or big balance sheets should be rewarded. “Too often it has been the noisy major metropolitan cities or the massive housing associations already awash with cash who ask for even more,” she said.

“Yet the beating heart of sustainable housing delivery is in the counties, ordinary towns and districts of England. It’s time to harness the energy across the country in building homes and regenerating communities. The government needs to put more of its housing money where the opportunity to deliver is, and that means right across the country.

“If a council can show it is housing-business-ready, has a good track record and will commit to minimum housing targets, why shouldn’t it get the type of individual deals, powers and money given to the big devolved city authorities.”

When it came to housing delivery, Elphicke said biggest was not always best. “Some of our coastal communities, country villages and market towns, post-industrial heartlands and historic cities and counties of England are absolutely brilliant at making housing delivery happen and are delivering the majority of our new homes.”

https://www.theguardian.com/business/2016/sep/27/refocus-housebuilding-towns-villages-housing-finance-institute

Monday, 26 September 2016

I finally own my first house – so why do I have buyer’s remorse? Stuart Heritage



Much has been written about “generation rent” and its myriad ills: the ballooning house prices, the unscrupulous landlords with their dingy buy-to-let empires, the fat wedge of millennials who can’t plan a future because they’re financially trapped in a basement flatshare with a ketamine-addled porn fanatic they met on Gumtree. This is a real problem, and it affects millions of lives.

I know this because I’ve always been a member of generation rent. For years, I’ve poured the bulk of my wages into the pockets of a succession of landlords slapdash enough to fit cupboards that fall off walls, or oven doors that spontaneously shatter of their own accord, or carpets that inexplicably become attractive to slugs at night. And it was miserable.

But this all changed last week. On Thursday afternoon I bought my first house. Admittedly, as it’s 2016, it’s a too-small house with a weird layout next to a graveyard 60 miles from London, the city I was priced out of two years ago. But it’s a house nonetheless; a house paid for in compromise and sacrifice and a deposit that took years to scrape together.

Now, bear in mind that this has only just happened, so there’s a fairly good chance that I still haven’t properly processed all the intricacies of home ownership, but so far my main take on buying a house is that it’s horrible and I hate it and I wish I was still renting.

My buyer’s remorse is overwhelming. You know how many times I saw this bloody house before I bought it? Once. I went to an open-house day, spent 10 minutes craning my neck to see past the dozens of other people filling the living room, and made an offer. Ten minutes. I’ve taken longer than that deciding whether or not to buy cake. I once bookmarked a pair of trousers on Asos and spent a full week umming and ahhing about whether to get them. But no. Ten minutes. It took 10 minutes to decide that this house was good enough to make me want to spend the rest of my life in debt to a bank.

What in God’s name was I thinking? I bought it because I’m 36 years old – two years older than the average first-time buyer in London, almost a decade older than the average in Carlisle – and I wanted to pay off my mortgage before I retire, rather than using a pension that I won’t actually have. It isn’t even my house. It belongs to a bank, and I’m going to spend the next three decades buying it back from them half a per cent at a time.

My first thought on looking around the new house and noticing all its weird flaws for the first time wasn’t a happy feeling of security. It was a realisation that I’m one of those “your home is at risk” people now. I’m one of those people who gets yelled at by the panicky man at the end of radio adverts. And, let’s not kid ourselves here, my home is definitely at risk. I’m a freelance journalist in the year 2016, so, realistically, I only have four months left before work dries up and I’m replaced by a Facebook Live video of a toddler balancing on a log.

The buck stops with me now. One of the little-discussed benefits of renting a house is that nothing is really your fault. If the oven explodes or the fridge goes kaput or sludge starts seeping out of the plugholes, you just call your landlord and someone will come and fix it for free. Now, though, that’s on me. Which means that my family is going to have to get used to showering up to its ankles in pubey grot.

And there’s a fishpond, too. An entire fishpond that I didn’t clock during my sole cursory glance about the place, that seems to have been put there specifically to endanger my child. I mean, Jesus Christ. I’m an idiot. That’s the only explanation for this.

On the one hand, this does feel as if I’ve finally made it to the last stage of responsible adulthood, now that I’ve got a wife and a kid and a house. But on the other hand, that’s it. All I have to look forward to for the rest of my life is decades of impossible debt, and the distant hope that there won’t be a property crash 30 years from now that will stop me from treating the value of my house as something I can use to buy food.

Worst of all, buying a house makes me feel like a traitor. It feels as though I’ve let down all my generation-rent friends, as if someone drew a line in the sand and I deliberately chose the side of Kirstie Allsop. I feel as if I have become part of the 1%, and I should ride about inside my boxy, broken-down new home on a pony like the shrieking Fauntleroy I apparently am.

Getting to this point was ridiculous. House prices increased much faster than my ability to sensibly save for a deposit. Getting it together was like trying to chase a moving train. But now I have caught up with it, and jumped on board, and discovered that all the other passengers are nitwits. This cannot possibly end well.

https://www.theguardian.com/commentisfree/2016/sep/26/i-finally-own-my-first-house-so-why-do-i-have-buyers-remorse

Local authorities are letting down tenants, say landlords

Two landlord associations have criticised local councils for a lack of enforcement and failing to prosecute criminal landlords. 
The Residential Landlords Association (RLA) says tenants are being let down, while the National Landlords Association (NLA) claims it’s 'too easy' for landlords to get away with unlawful behaviour.
The united message comes in response to figures released by housing charity Shelter which show that one in eight tenants are suffering due to a landlord who has broken the law.
Shelter's study, which surveyed over 3,000 renters, found that over 7% of tenants' landlords had entered a rental property without permission.
The report also suggests that the equivalent of 64,000 tenants have had their utilities cut off without consent and the equivalent of 200,000 have been abused, threatened or harassed by their landlord.
The charity says that it is a minority of landlords causing these problems, but reports it has had over 220,000 unique visits to its website pages for advice on problems with landlords over the last year.
“Every day at Shelter we speak to people at the end of their tether after a law-breaking landlord has caused chaos in their lives," says Danielle Goodwin, helpline adviser at Shelter.
"These range from instances where the renter has been unaware of their rights, to cases where renters are exploited and subjected to terrible experiences by a minority of law breaking landlords."
Richard Lambert, chief executive of the NLA, says: “These figures highlight serious issues that are simply unacceptable but our research with tenants shows that 82% say they are happy with their current landlord.” 
"Furthermore, Shelter’s figures show the vast majority of landlords to be law abiding."
Andrew Goodacre, the RLA's chief executive, adds: "[We are] fully supportive of regulations that protect tenants but the reality is that we can regulate all we like but without proper enforcement it becomes meaningless."
"Tenants are being let down by local authorities who are failing to properly enforce the powers available to them to tackle the criminal minority of landlords.”

https://www.lettingagenttoday.co.uk/breaking-news/2016/9/local-authorities-are-letting-down-tenants-say-landlords

Friday, 23 September 2016

The tenants paying the price so landlords don’t have to

A charity has spoken out against the high fees being charged to tenants who, as Felicity Hannah has been finding out, can’t take their business elsewhere


Holding fees, deposits, tenancy agreement fees, payment for reference checks, inventory charges, check-out costs. It’s an expensive time to rent a home in the UK, even before you consider figures from referencing firm HomeLet that show rents rose by more than 5 per cent in the 12 months to April.

This week a major charity added its voice to growing demands that letting agents be banned from charging fees to tenants. Citizens Advice has warned that letting agent fees have risen 60 per cent in the last 5 years alone and that tenants are suffering as a direct result

It has argued that all UK letting agency fees should be paid by landlords as they can shop around, whereas renters have to deal with whichever agency is marketing the home they want. Not only are tenants paying higher bills but there’s also concern that high letting agent fees discourages tenants from moving out of unsuitable homes, because the cost of fees and deposits can be so significant.

Last year it became a statutory duty for letting agents to fully publicise fees in advance, but the Letting Fees campaign organised by Generation Rent has found that 14 per cent of agents still do not list their fees publicly.

But even with greater transparency, the issue of fees is a pressing one for the UK’s 11 million private renters that in spring this year there was a Commons debate on the subject.

Conservative MP Maria Caulfield said then that increased competition for properties has led to rocketing agent fees. In her constituency of Lewes alone the local Citizens Advice charity has found fees ranging from £175 to £922. She told the House: “Not only has the amount charged by letting agents increased, but there has been an increase in the types of fees charged.”

However, the Government does not agree that an outright ban on fees for tenants is necessarily the answer. Such a ban already exists in Scotland and Marcus Jones, under-secretary of state in the Department for Communities and Local Government, says the evidence strongly suggests a connection between banning fees and higher rents for tenants.


Despite that, campaigners say it is the only solution. A spokesperson for the Letting Fees campaign argued: “A landlord is more able to ‘shop around’ than a tenant and so has a more powerful position to avoid and force down uncompetitive charges. Even if the costs are returned to the tenant through higher rent the total amount paid would be reduced – and importantly spread over the length of the tenancy, which reduces the financial shocks of renting.”

An outrageous example

The Citizens Advice research will come as no surprise to tenants, who have been paying these rising fees for years. Just last week one Twitter user, Magnus Jamieson, posted an example of the various fees chargeable through one agency, opining that “letting in London “is ****ing bananas”.

His succinct outrage was easily explained by the fees listed by the agent. There would be a non-refundable holding fee of £500 to secure the property (although this would be deducted from the first month’s rent). Referencing fees of £60 per tenant plus £60 each for any guarantors, there was also a tenancy agreement fee of £250. To renew their tenancy the household would pay £120, and when the tenants came to leave there would be check-out fees of up to £175.

With fees that high, a couple with two guarantors who remained in a two-bedroom property for two years would pay almost £800 in fees alone. That’s a substantial amount for tenants who face paying high fees when they move again, potential before any remaining deposit has been released. What’s more, it’s on top of what the agent charges the landlord.

That is not even a particularly extreme example. We found agents charging tenants all that and more, including £30 and more for a right-to-rent check and check-out fees exceeding £250.

Paying but not the customer

Tenants are also in a peculiar position as they are paying for a service when the landlord is the customer. The landlord is also able to shop around for an agent, while tenants are forced to use whatever letting agent is advertising the property that best suits their needs.

Gillian Guy, chief executive of Citizens Advice, says: “Letting agents are hiking up their fees for a service that’s often not up to scratch.

“With fees rising year on year for letting agents, many tenants will rightly be wondering why they are paying hundreds of pounds for a simple contract renewal or for management services that leave them waiting months for essential repairs…

“Private renters shop around for properties, not for letting agents. Landlords are better able to choose agencies based on performance and cost and it should therefore be landlords paying letting agent fees, not tenants picking up these rising costs.”

How much? Tenants rights group The Tenants’ Voice suggests tenants should not pay more than £50-100 for an inventory fee in a furnished tenancy, £50-100 for a tenancy reference, and £100 for an administration fee. Unreasonable charges might include: a penalty payment if you don’t pay the rent by standing order, a reservation fee to hold a property while you get a reference or deposit, and both moving in and moving out charges.

http://www.independent.co.uk/money/spend-save/the-tenants-paying-the-price-so-landlords-don-t-have-to-a7320206.html


UK housing market ‘remains alive and active’ three months after EU poll


Three months on from the EU referendum and economists are still trying to assess what impact the decision to leave the 28-member state will have on the UK economy, but as far as the housing market is concerned it “remains alive and active”, according to Jackson-Stops & Staff.

Fresh analysis of the UK housing market by the national estate agency, based on a daily sample of more than 500,000 actual properties for sale in the UK over the last three months, shows that the volume of homes on the market in the UK has increased since the vote, while the proportion sold subject to contract has only fallen by just 2.5%.

The marginal decline in residential property sales has contributed to a 2% fall in average asking prices across the UK, from £297,508 in mid-June to £291,547 today, led by a 3% drop in London.

Nick Leeming, chairman at Jackson-Stops & Staff, commented: “Three months after the UK’s historic vote to leave the EU, the property market remains alive and active.

“There are more properties on the market today than on the day of the Brexit vote, and there has only been a marginal decline in the number of properties under offer. House prices have also declined only moderately.

“The normal events – families growing, the desire to downsize, a new job, a change of lifestyle – the fundamental drivers for people buying and selling property, have remained unchanged.”

But while the overall housing market remains broadly stable, the data does show that high stamp duty rates are having an adverse impact on the top end of the housing market, particularly properties priced £2m-plus, with just 7% of homes in the capital priced above £2m currently under agreed offer.

Leeming continued: “London has always been an island when it comes to the housing market and is governed by a range of forces that are not as strongly at play across the rest of the UK, such as significant international investment and high net worth buyers.

“The fact that there is a freeze around the higher value properties in the capital is due to a number of factors, not just confidence levels following the Brexit vote, but also the impact of stamp duty at the very highest levels.”

“We anticipate that the market will correct itself as we head into the final quarter of this year,” he added.

https://www.propertyinvestortoday.co.uk/breaking-news/2016/9/uk-housing-market-remains-alive-and-active-three-months-after-eu-poll

Thursday, 22 September 2016

Prime London property prices to fall 9% this year, says Savills

Uncertainty over Brexit plans and stamp duty on second homes have driven down central London prices, says estate agent.


Post-Brexit uncertainty and tax changes mean a typical multimillion-pound, “prime” central London house could end this year worth £360,000 less than it was at the start of 2016, according to the upmarket estate agent, Savills.

The firm defines the prime central London markets as those where the average property price is around £4m, which includes Mayfair, Knightsbridge and Belgravia. It said these markets had been heavily impacted by changes to stamp duty, including April’s 3% surcharge affecting landlords and second-home buyers, and by uncertainty over the government’s Brexit negotiations.

As a result, prime central London property prices were expected to end this year down 9%, said Savills. That would be on top of the 3.3% fall registered in 2015, and would equate to a £360,000 drop in value for a £4m property in 2016.

The firm predicted that property values in these top-end enclaves would then stay flat during 2017 and 2018, with 0% growth, as Brexit negotiations continued, before bouncing back in 2019 with an 8% jump.

“Post-referendum uncertainty has compounded the impact of successive tax rises on values in London’s prime housing market, and will delay the sector’s return to growth,” said Savills.

Lucian Cook, its UK head of residential research, said that early signs from the autumn housing market were that committed sellers of top-end properties had “adjusted” their prices by between 5% and 10%. “The current situation is reminiscent of the 2002-to-2004 post-bull-run period, when a less significant financial shock combined with an uncertain geopolitical backdrop. Prices then fell a total of 10%,” he said.

Savills said a return to growth in 2019 was forecast, and that it was anticipating total price growth of 21% in the five years from 2017 to 2021.

In the lower-value outer London markets, where the average house price is £2m, total price falls of 5% are forecast for this year, which would more than wipe out the 2.3% gain notched up in 2015. A further fall of 1% is then predicted for 2017, with total price growth of just under 15% anticipated for the five years ending December 2021, “reflecting mortgage-lending constraints and greater caution around financial sector job security”.

Earlier this month, official government data revealed the average price of a London home was £485,000, and that typical values in the country’s most expensive area, London’s Kensington & Chelsea, had fallen by 3% in the year to July, putting it in the “bottom five” of all local authorities for house price growth.

https://www.theguardian.com/money/2016/sep/21/prime-london-property-prices-fall-9pc-this-year-savills

The young prioritise property over pensions


There was more bad news for the pensions industry after a new study found that young people feel saving for property is more important than a pension.

The research, conducted by independent market research firm Consumer Intelligence, found that under-35s are three times as likely to prioritise saving for a residential property than for retirement.

The report, which was commissioned by Nottingham Building Society, revealed that 24% of under-35s rate saving for a home as their top priority compared with just 8% who prioritise retirement saving.

Retirement saving has long been the main saving and investing priority for the population as a whole, but this latest study shows that attitudes are changing and that getting a foot on the housing ladder is now the main priority for many people, especially those under the age of 35.

The research shows that 34% of under-35s are either saving for the first home or to move home compared with 18% of the population as a whole, which partly reflects the fact that return on investment in residential property continues to outperform all other mainstream investments.

Only last month, Andy Haldane, the Bank of England’s chief economist, said that investing in property is a better investment for retirement than paying in to a pension.

“The importance that younger savers place on buying their first home or moving home demonstrates that there is strong demand for help with saving with under-35s saying owning a home is three times more important than saving for a pension,” said Ian Gibbons, senior mortgage broking manager at Nottingham Mortgage Services.

https://www.propertyinvestortoday.co.uk/breaking-news/2016/9/the-young-prioritise-property-over-pensions


Wednesday, 21 September 2016

European house price boom continues unabated, market analysis shows




Residential property prices rose in 17 of the 22 European housing markets for which figures were available during the year to Q2 2016, Global Property Guide’s latest detailed analysis of individual regions and countries shows.

In total, six of the ten strongest housing markets in the Global Property Guide’s global survey are in Europe, with Romania now the strongest housing market in the region.

Property in Romania

Romania is now the strongest housing market in Europe and the third best performer in Global Property Guide’s global survey, amidst strong economic growth and the government's focus on rebuilding public trust. The average selling price of apartments rose by 10.1% during the year to Q2 2016, from year-on-year rises of 11.55% in Q1 2016, 7.74% in Q4 2015, 7.57% in Q3 2015, and 4.83% in Q2 2015. House prices increased 0.77% quarter-on-quarter in Q2 2016.

This comes as a surprise given Romania's disappointing performance from 2008 to 2014, amidst struggling economy. House prices plunged by 24.22% in 2009, 22.08% in 2010, 6.99% in 2011, 5.96% in 2012, 10.43% in 2013, and 1.59% in 2014. It was only in the second half of 2015 that the housing market fully began to recover. The Romanian economy expanded by a robust 3.7% in 2015, one of the EU's highest growth rates, and a marked contrast to the almost zero growth between 2009 and 2014. Romania's economy is expected to grow by 4.2% this year, due to tax cuts and salary increases.

Property in Germany

Germany's housing market remains strong, mainly due to supply shortages and strong economic fundamentals. The price index for apartments rose by 9.89% during the year to Q2 2016. Apartment prices rose by 3.71% q-o-q in Q2 2016.

Long a picture of housing market stability, Germany was one of the few countries that avoided a house-price slump in the wake of the 2008-2009 global financial crisis. Since then, extremely low interest rates have encouraged demand. In Q2 2016, the economy expanded by 3.1% from a year earlier, up from an annual growth rate of 1.5% in Q1 2016, according to the Federal Statistics Office. The economy is expected to expand by 1.7% this year and by 1.4% next year, after growing by 1.5% in 2015, 1.6% in 2014, 0.4% in 2013 and 0.6% in 2012, according to Bundesbank.

Property in Turkey

Turkey's housing market remains robust, with house prices in Istanbul rising by 9.67% during the year to Q2 2016. House prices increased 0.36% q-o-q in Q2 2016.

Turkey's housing market was boosted by strong foreign investment and growing population, despite a collapsing currency, dissatisfaction with the government, and geopolitical tensions.

From 2007 to 2011, house prices in Turkey fell by 29% inflation-adjusted as economic growth slowed sharply to 0.7% in 2008, a sudden end to the impressive of 6.8% annual GDP growth during 2002-2007. Existing house prices plunged 14.65% in 2008, by 2.82% in 2009, by 3.54% in 2010 and by 2.39% in 2011. The Turkish housing market finally recovered in 2012, with house prices rising by an average of 8% annually from 2012 to 2015. The economy grew by a striking 4.8% in Q1 2016 from a year earlier, after expanding by 3.8% in 2015, 2.9% in 2014, 4.2% in 2013, 2.1% in 2012, 8.8% in 2011, and 9.2% in 2010. The economy is projected to grow by 3.8% this year, and by another 3.4% in 2017, according to the IMF.

Meanwhile the decline of the Turkish lira against all major currencies, especially the euro, made residential properties more affordable to foreign homebuyers. In just two year, the lira lost about 13.2% of its value against the euro to TRY3.31691 = EUR1 in August 2016. Over the same period, the lira depreciated by almost 27% against the US dollar to TRY2.95954 = USD1.

Property in Malta

Malta's property market is performing very well, buoyed by government measures aimed at supporting property demand, such as the Individual Investor Programme and stamp duty exemption for first time homebuyers. Maltese property prices rose by 7.63% during the year to Q2 2016, up from a y-o-y increase of 3.59% a year earlier. Despite this, property prices declined 5.6% q-o-q in Q2 2016.

The Maltese property market enjoyed strong growth from 2000 to 2007, with house prices rising by 53.4%. However, property prices fell with the global financial crisis by 9.1% in 2008, 1.1% in 2009 and another 5% in 2010. After a short-lived recovery in 2011, house prices fell again by 5.2% in 2012. The housing market bounced back in 2013, due to government's launch of new property-related measures. House prices rose by 5.34% in 2013, 4.32% in 2014, and 8.66% in 2015. The economy is expected to expand by 3.6% this year, and by another 3% in 2017, after growing by 6.3% in 2015, 3.7% in 2014, 4.1% in 2013, and 2.8% in 2012, according to the IMF.

Property in Ireland

Ireland remains strong with house prices rising by 6.34% during the year to Q2 2016, at par with an annual rise of 6.19% a year earlier. This surge can be attributed to strong demand, coupled with limited housing supply, especially in the capital city of Reykjavik. House prices in Iceland increased 1.17% q-o-q in Q2 2016. Iceland’s economy is expected to grow by a robust 4.2% this year, after expanding by 4% in 2015, 2% in 2014, 4.4% in 2013, 1.2% in 2012, and 2% in 2011, according to the IMF.

Ireland's house prices continue to rise, albeit at a slower pace, with residential property prices up by 6.27% during the year to end-Q2 2016. During the latest quarter (Q2 2016) Irish house prices dropped slightly by 0.9%.

The Irish economy is now the fastest-growing economy in the EU according to the official GDP growth figure of 26.3% in 2015 (revised up from the previously estimated 7.8% growth) However note that the spectacular revised figure largely reflects tax-based financial alchemy, rather than real growth - if it were real and continued the Irish economy would be larger than China's by 2037!  The Irish economy is expected to grow by a healthy 5% this year and by another 3.6% in 2017. Ireland is considered by some to be Europe's austerity star performer, having introduced structural reforms early in the crisis and it is, according to this narrative, now reaping the benefits.

Other European property markets

Other strong European housing markets include Riga, Latvia, with house prices rising by 5.61% y-o-y in Q2 2016, followed by Slovak Republic (5.46%), the Netherlands (5.41%), Vilnius, Lithuania (5.28%), and the UK (4.82%). All saw positive quarterly growth during the latest quarter. Also, all performed better in Q2 2016 compared to a year earlier.

European housing markets with minimal house price rises included Portugal with house prices rising by 2.87% during the year to Q2 2016, Tallinn, Estonia (2.75%), Spain (2.22%), Norway (2.04%), Finland (0.92%), and Macedonia (0.72%). All, except Estonia and Macedonia, recorded positive quarterly growth during the latest quarter. All, except Estonia and Norway, showed better performance in Q2 2016 compared to a year earlier.

Property in Russia

Russia remains depressed, along with some others.

Russia remains the weakest housing market in the global survey, with residential property prices plunging by 12.46% y-o-y in Q2 2016, slightly worse than last year's residential price decline of 11.13%. Russia's house prices fell by 2.27% during the latest quarter.

After a period of soaring consumer prices, inflation has somewhat stabilized, thanks to prudent monetary policies. In July 2016, headline inflation fell to 7.2%, from 7.5% in the previous month and its lowest level since March 2014, according to the Federal State Statistics Service. However, it remains high by international standards. The high inflation rate is the reason for the substantial difference between the nominal y-o-y decline in Russian house prices (-6.03%) and the real decline (-12.46%). The overall inflation rate had surged to 15.5% in 2015, the highest rate since 2002. Inflation is expected to be 8.4% this year, according to the IMF.

In August 2016, crude oil prices stood at US$46.97 per barrel, up by 26.5% from US$37.13 per barrel in December 2015 but still 55.7% down from US$106.1 per barrel in June 2014.

In 2015, Russia's economy experienced its steepest contraction since 2009, with GDP falling by 3.7%, according to the International Monetary Fund (IMF). The economy is expected to contract again by 1.8% this year, amidst international sanctions and low oil prices, according to the Ministry of Economic Development. Russia's currency has collapsed, and interest rates are high.

From the perspective of foreign homebuyers the price decline has been much greater, since the ruble has declined against major currencies. The ruble lost more than 44% of its value against the US dollar in just two years, from an exchange rate of RUB36.20= US$1 in August 2014, to RUB64.87 in August 2016. Over the same period, the ruble depreciated against the euro by almost 34%, from RUB48.18 = EUR1 in August 2014 to RUB72.70 = EUR1 in August 2016.

Property in Montenegro

In Montenegro, prices of dwellings in new residential buildings dropped 10.15% y-o-y in Q2 2016, in sharp contrast with an annual rise of 2.38% in the previous year. On a quarterly basis, house prices dropped 0.78% during the latest quarter. The economy grew by 4.1% last year, its strongest growth since 2008. Economic growth this year is projected to be a healthy 4.7%, according to the IMF.

More European markets

Other European countries with minimal house price falls included Kiev, Ukraine, with house prices falling by 2.95% during the year to Q2 2016, Greece (-1.95%), and Switzerland (-1.15%). All recorded negative quarterly price changes during the latest quarter (Ukraine, -1.58%; Greece, -2.1%; and Switzerland, -1.36%). Despite this, only Switzerland showed worse performance in Q2 2016 compared to a year earlier.




Tuesday, 20 September 2016

Renting's not just a young person's game: Two in five tenants across the UK are at least 46 years old - and they're happy not owning


  • 40% of tenants in the UK are now aged 46 and above
  • 18% of renters are aged 55 and above, the same proportion as those under 25 years old
  • Over 55s are 46% more likely to be happy with renting compared to renters under the age of 45 

A surprising two out of five tenants in the UK are at least aged 46 years old, research has revealed. 

Eighteen per cent of renters are over the age of 55 and 22 per cent are between 46 and 55 years old. The figures from letting agent Your Move found that 39 per cent of those in private rental accommodation were aged under 35 years old. 

The 18 per cent of renters across the UK that are now aged at least 55 years old is the same proportion as those under 25 years old.


Valerie Bannister, head of lettings at Your Move, said: 'These results show very clearly that renting is becoming extremely important across the UK.

'The rise of the silver renter may seem surprising, but increasingly thousands of people have turned to the private rental sector as the most convenient option available to them, following a change in personal circumstance.

'Now more than ever, it is important that this sector offers good quality, well managed properties that allow tenants to feel at home in them.'


Buy-to-let moving towards ‘an era of professionalism’

Recent changes hitting buy-to-landlords, including the introduction of a 3% stamp duty surcharge and cuts to mortgage interest tax relief next year, will mean a move towards more professional landlords, it has been suggested.

drian Moloney of One Savings Bank believes that the recent and forthcoming changes will inevitably have implications for individual landlords, which will lead to “an era of professionalism”.


Speaking at the Financial Services Expo (FSE) London exhibition last week, Moloney said: “We are seeing a move towards a more professional sector and we’re going to see less of the ‘dinner party’ landlord. This is very much an era of professionalism and I don’t think that’s necessarily a bad thing for the private rental sector.”

Moloney does not believe that some of the changes coming into play are necessarily a good thing for the buy-to-let sector, especially the scrapping of mortgage interest tax relief from next April.

“My hope is that the chancellor will change the tax rules for buy-to-let landlords in the Autumn Statement, but that’s probably not going to happen,” he added.


https://www.landlordtoday.co.uk/breaking-news/2016/9/buy-to-let-moving-towards-a-more-professional-sector

UK first-time buyers hit by steeper rises in starter home prices

Rightmove poll shows starter properties such as two-bed flats are 10% higher year on year despite Brexit vote uncertainty

First-time buyers hoping to snap up a bargain after the Brexit vote could be in for a shock with figures showing new sellers in England and Wales asking 3.3% more for typical starter homes than a month ago.

The latest monthly report by property website Rightmove showed asking prices for newly listed homes were 0.7% higher – now an average of £306,499 – September than in August. However, the headline rate masked a sharp jump in the price being asked for properties with two bedrooms or fewer. While in August, sellers bringing such homes on to the market asked an average of £188,237, Rightmove said the latest listing price averaged £194,477.

“The rising tide of prices is marooning more and more first-time buyers, out-stripping their ability to meet stricter lending criteria and afford the required deposits and monthly repayments,” said Miles Shipside, director at Rightmove.

“Increasing numbers are being cut off from home ownership altogether and while schemes are in place to help, the additional demand they create is not matched by available and affordable supply.”

Over the past year sellers’ confidence appears to have grown across all parts of the market, although first-time buyers have experienced the biggest price inflation. Rightmove’s figures – based on more than 130,000 properties listed on its site – showed that while across-the-board asking prices are up by 4% on last September, first-time buyer homes are now being priced 10.5% higher. For the category Rightmove calls “second-steppers” – three- and some four-bedroom homes – asking prices were up by 5.2% year-on-year, while at the top of the market they were up by 2.7%.

Asking prices had dropped following the UK’s vote to leave the EU, but recent data has suggested the return of confidence to the market. Recently the Royal Institution of Chartered Surveyors (Rics) said its members were expecting house prices to rise over the next three months. Rightmove said that visits to its site in the first week of September were 8% higher than in the same period in 2015.

Shipside said: “While the referendum result has created additional downwards price pressure in some upper segments of the market that were already slowing, those who do not own a home and arguably have the greatest housing need are now finding it harder to achieve their goal in the post-Brexit-vote aftermath.”

Asking prices have risen month-on-month in five out of 10 regions, and unchanged in two more, according to Rightmove. In Yorkshire & the Humber, north-west England and in Wales new sellers were asking less than in August, but were still higher than in September 2015. In Greater London, prices increased by 1.9% over the month, to an average of £630,974. Annual growth rates in the capital continue to be highest in the most affordable areas, with Havering on east London’s border with Essex recording the biggest rise of 11.9%.

Across the country, the biggest annual rise was recorded in the east of England, where prices have been pushed up by a ripple effect from London. Asking prices were 7.9% higher than in September 2015, reaching an average of £337,252.

Monday, 19 September 2016

Property auction calendar – 19th-25th September


Property auctions are a good place for investors to pick up a bargain, and every week these events are taking place at venues across the UK, offering a wide range of properties for sale. Here are details of the property auctions taking place this week.

Here is the full list of property auction dates for September 2016.

19/09/2016         Savills (London - National)            London

19/09/2016         Bagshaws Bakewell         Derbyshire

19/09/2016         Rendells Chagford           Devon

20/09/2016         Countrywide Property Auctions                South Yorkshire

20/09/2016         North West Property Auction - iam-sold                Lancashire

20/09/2016         Cumbrian Properties - The Agents Property Auction        Cumbria

20/09/2016         REA Leinster Auction      County Kildare

20/09/2016         David Plaister Ltd             Avon

20/09/2016         Stags Honiton    Somerset

20/09/2016         Stags Taunton   Somerset

20/09/2016         Stags Wellington              Somerset

20/09/2016         The County Property Auction     Lincolnshire

20/09/2016         Kivells Callington              Cornwall

20/09/2016         Andrew Grant   Worcestershire

21/09/2016         East Midland Property Auction - iam-sold             Lincolnshire

21/09/2016         Smith & Sons     Merseyside

21/09/2016         Fisher German Denton Clark       Cheshire

21/09/2016         Shonki Brothers (London Road) Leicestershire

21/09/2016         Allitt Auctioneers             Lancashire

21/09/2016         Bagshaws Leek Staffordshire

21/09/2016         Graham Watkins & Co    Staffordshire

21/09/2016         Tayler & Fletcher Bourton            Gloucestershire

21/09/2016         Tayler & Fletcher Stow on the Wold        Gloucestershire

21/09/2016         Bagshaws Uttoxeter       Staffordshire

21/09/2016         Steve Gooch      Gloucester

21/09/2016         Astleys West Glamorgan

21/09/2016         Romans                Berkshire

21/09/2016         Auction House Devon & Cornwall             Devon

22/09/2016         North West Property Auction - iam-sold                Lancashire

22/09/2016         Tamlyn & Son    Somerset

22/09/2016         Morris Marshall & Poole               Powys

22/09/2016         Auction House Bristol & Somerset North               Bristol

22/09/2016         Whittaker & Biggs - Macclesfield               Cheshire

22/09/2016         McCartneys        Shropshire

22/09/2016         Nesbits Hampshire

22/09/2016         Wilsons (Scotland)           Ayrshire

22/09/2016         Besley Hill            Avon

22/09/2016         Whittaker & Biggs - Congleton   Cheshire

22/09/2016         Countrywide Property Auctions                Devon

22/09/2016         Bowen Son & Watson    Shropshire

22/09/2016         Greenslade Taylor Hunt Langport             Somerset

22/09/2016         Kivells Launceston           Cornwall

22/09/2016         Whittaker & Biggs - Biddulph      Staffordshire

22/09/2016         Nock Deighton  Shropshire

22/09/2016         Cooke & Arkwright      

22/09/2016         Durrants              Suffolk

22/09/2016         Boultons              West Yorkshire

22/09/2016         Gascoigne Halman Altrincham    Cheshire

22/09/2016         Andrews & Robertson   London

23/09/2016         Phillips Smith & Dunn Barnstaple              Devon

23/09/2016         Phillips Smith & Dunn Bideford  Devon

23/09/2016         Phillips Smith & Dunn Braunton Devon

23/09/2016         Phillips Smith & Dunn Torrington               Devon

23/09/2016         Auction House Symonds & Sampson       Dorset

23/09/2016         DNG Maxwell Heaslip & Leonard          

https://www.propertyinvestortoday.co.uk/breaking-news/2016/9/property-auction-calendar--19th-25th-september




Bank of England leaves interest rates unchanged, but could cut in November


The Bank of England, as expected, opted to leave UK interest rates unchanged at 0.25% yesterday in the wake of recent upbeat economic data, but admits that another cut is still a possibility before the end of the year.

Last month the Bank halved its bank rate from 0.5% - the first rate cut since 2009 - as it tried to ward off a Brexit-fuelled recession. But the Bank said that it might cut rates further in the coming months, even though the near-term economic activity have been somewhat stronger than expected following the outcome of the EU vote.

Economists predict that the Bank of England is likely to announce a further cut to the base rate in November, bringing it down from 0.25% to just 0.1%.

“Whilst the base rate has been held as predicted, it is fair to say we can watch this space for further fiscal intervention in the weeks and months ahead,” said Simon Checkley, managing director of Private Finance. “What is becoming apparent is that despite rates being at an all-time low, they cannot be relied upon solely as the means by which to secure economic growth.”

He added: “With finance being so cost effective at present, there are also ample opportunities to be taken advantage of; particularly for first-time buyers and buy-to-let investors.”

Mortgage borrowing rates are currently at an all-time low with lenders across the board continuing to shave percentage points off their best deals in an effort to attract greater business from those buying or remortgage property.


Santander, Virgin Money, Nationwide, NatWest, TSB are among the main lenders to have slashed rates in recent days, but many experts are now suggesting that it is unlikely that mortgage rates will fall much further, as lenders look set to sustain existing rates, or possibly even increase pricing to boost profits.

Samuel Tombs, chief UK economist at Pantheon Macroeconomics, last week reported that the anticipated reduction in the base rate in November has already been factored in to most mortgage lenders’ pricing.

He said: “The rates that banks can borrow at in the wholesale market have been at record lows for a while now.

“Instead of seeing lenders cut rates, we are actually seeing them widen their spreads and I think it's likely we’ll see that process continue, meaning mortgage rates aren’t going to be materially different at the end of the year from now.”

https://www.propertyinvestortoday.co.uk/breaking-news/2016/9/bank-of-england-leaves-interest-rates-unchanged-but-could-cut-in-november

Friday, 16 September 2016

London office market grinds to a halt post-Brexit



London’s office market is under growing pressure from the UK’s decision to leave the European Union as it could result in a significant corporate exodus from the capital, Deutsche Bank has warned.

Earlier this week, Deutsche downgraded Derwent London Plc and Intu Properties plc to ‘sell’, saying it remained cautious on the office market in London due the potential adverse impact that the referendum outcome could yet have on the office market.

The German broker said in a note: “This [the Brexit vote] has the capacity to increase vacancy to historical peaks and after speaking to numerous legal and political experts, we think this risk is under-appreciated.”

CBRE reported last month that City of London office values dropped by 6.1% in July on heightened economic uncertainty, particularly for financial-services firms.

The slowdown in market has already led to reports suggesting that plans for London’s tallest office tower could be scrapped. This follows on from the Brexit vote, as it is now feared that the 22 Bishopsgate project, overseen by AXA’s real estate unit, would provide in the region of 1.4 million sq ft of offices and shops, adding to a potential oversupply of office space, with about 6.4 million sq ft of office space set to be completed in the district over the next two and a half years.

Despite the fact that the market is cooling, it would appear that many investors are being left frustrated in their efforts to negotiate significant price reductions, according to Jones Lang LaSalle.

“We are seeing a lot of demand from Europeans and Asians for investment purchases in London, but we are not seeing any sales because the sellers are saying ‘I am going to wait’,” said Colin Dyer, chief executive officer of JLL. “Investment markets are much more on off, and they can react quite quickly, so they switched off very fast.”

https://www.propertyinvestortoday.co.uk/breaking-news/2016/9/london-office-market-grinds-to-a-halt-post-brexit

Housing market cools in first post-Brexit official figures, but prices are still soaring



House price growth cooled in the month after the EU referendum, according to the first official Government figures since the historic vote.

The annual rate of growth fell from 9.7pc in June to a "robust" level of 8.3pc in July, according to the Office for National Statistics.

Despite the slowdown, the 8.3pc growth rate is the third-highest measured so far this year. On a monthly basis, property prices edged up 0.4pc between June and July.

The increase in values continues to be fuelled by high levels of demand and a shortage of supply, according to the Royal Institution of Chartered Surveyors.

House prices in London soared by 12.3pc in July, only to be outpaced by the east of England, where they rose 13.2pc year-on-year. The average price of a property in the UK is now £216,750.


Samuel Tombs, chief economist at Pantheon Macroeconomics, said that July’s figures, which are based on actual transactions, only show that homebuyers already committed to property purchases didn't try to negotiate prices down in response to the referendum result.

He cautioned against reading too much into the numbers, which he said "don’t reflect the full impact of the referendum vote because it takes several months to complete a house purchase".

Mr Tombs added: "The fall in the average value of mortgages approvals over recent months and the 1.3pc fall in the Halifax measure of prices - which is based on the lenders’ mortgage offers - between June and August suggest that transaction prices will begin to fall soon."

Jonathan Hopper, Managing Director of Garrington Property Finders, described the results as “another dose of robust data", and said that "the post-Brexit bounce is starting to look less like a blip and more like business as usual for house prices”.


He added: "It is too soon, however, to dismiss the Brexit effect. The property market’s fundamentals are far from normal – with both demand and supply falling, the result is a benign limbo that is driving up prices even as the number of sales falls.”

Thomas Fisher, an economist at PwC, echoed these views, saying that "as many of these transactions will have been in motion since before the referendum, more data will be needed to make a proper assessment of how the referendum result is affecting the housing market".

The autumn selling season, which is traditionally strong, will offer a better picture as to the state of the housing market post Brexit.

"Our own expectation is that the UK housing market will cool not crash," said Mr Fisher. "In our main scenario, average UK house price growth is projected to decelerate to around 5pc in 2016 and around 1pc in 2017."


The index also reported that values of newbuild properties grew 15.6pc in the year to July, although the ONS stressed that this was based on a small sample and that the data can be volatile. The average first-time buyer in London paid £423,422 for their home.

Meanwhile, estate agency Winkworth reported that its pre-tax profits were up 8pc in the six months to June 30, while sales grew 6.7pc to £2.75m.

Winkworth, which is largely based in outer London but also has a presence in major towns and cities in south east and south west England, managed to increase its profits despite fewer transactions. This comes in contrast to Foxtons, a London-based estate agency, whose profits nearly halved in the first half of the year.

"Foxtons are in central London moving out, while we are quite embedded in those markets in the outskirts," said Dominic Agace, chief executive of Winkworth. "In part they [Foxtons] are trying to launch new offices in those markets – new and not established – and relying on central London offices, which are struggling with [lower transactions to do with increases to] stamp duty."

http://www.telegraph.co.uk/property/house-prices/housing-market-cools-in-first-post-brexit-official-figures-but-p/