Monday, 31 July 2017

Have we reached 'peak London' as millennials leave in record numbers?

By Rosie Walker

Traditionally, London lures the talented young – but high rents now mean that the capital may no longer be able to hang on to them, as thousands opt for far cheaper living elsewhere in England. Photograph: REX/Shutterstock
A room in a friend’s rented north London houseshare came up recently. Usually, this would mean an instant queue of prospective tenants waiting for their 10-minute interview slot, followed by an unpleasant few hours of decision-making. This time, my friend reported, whole days passed without anyone getting in touch. We wondered if it might be the first hairline crack in some huge chasm about to rip through life as we know it – if, in the future, we would look back on the empty wasteland of the city and remember that day as The Day London Turned.


The news last week that the number of people leaving the capital has reached a five-year high will come as no surprise to anyone trying to house themselves in the capital. Whatever the political shocks of the last year, some things are unchanged: house prices continue to bear no relation to earnings, private landlords remain largely unregulated and rents continue to eat up two-thirds of the average Londoner’s wages. Plus, it’s dirty, noisy, overcrowded and the Central Line on a hot day is enough to make anyone dream of Milton Keynes.

If the number of those leaving is increasing (the report says 93,300 people fled this year), London is still growing, overall. And we don’t know from figures like these how much is “pull” and how much is “push”; how many are homeowners cashing in on the London property bonus, buying something bigger and taking portable careers with them, and how many are wrenching themselves away from families, social networks and jobs that don’t exist outside of the capital.

If London really is past its peak, it is perhaps good news for the rest of the country. Youngish people (those in their 30s are leaving at a higher rate than other age groups) with skills and energy can revitalise regions that have suffered from London’s tendency to vacuum up opportunity. If this is an example of markets being benign and beautiful, leavers, whether they’re jumping or being pushed, can create new culture, start businesses, improve schools and, yes, maybe even smarten places up with their demand for better coffee. They can bring with them their experience of living in a global city. Even better, London’s greedy landlords will get their comeuppance and discover, as if in a sweet nursery fable, that you really can set the rent so high that people will stop paying it.

But the report lists St Albans, Dartford and Cambridge as the top destinations for leavers, meaning it’s unlikely they’ll be doing any of these things, as their jobs will still be in London and they’ll be too knackered (and poor) from the commute. Even for those moving beyond the boundary of what is thought reasonably commutable (an ever-extending boundary, which now takes in Bristol at £11,000 for an annual train ticket), skills and a can-do attitude only go so far; you can’t magic industries or professions out of thin air.

And some jobs only exist in London. Anyone who wants to work in politics, national media, much of the creative industries or the arts has to be able to live here and to say “just choose a different job” is to make a stark argument about social mobility: that nobody without family wealth or parents living in London ought to be allowed into these professions. We have to hope that those taking – or looking for – jobs outside London genuinely want those other options, rather than giving up on careers they were well qualified for simply because they couldn’t afford to house themselves.

And if the leavers are teachers, NHS professionals, firefighters, social workers, who really can transfer their skills out of the capital, it hardly needs explaining why that is terrible news for London. Schemes over the past 15 years to provide various forms of homebuying subsidy for keyworkers have been confusing and ineffective; many, illogically, require salaries that public sector workers don’t earn. I know a web designer who somehow managed to secure a place on one. He worked in advertising, so he could afford a place on a scheme designed to keep desperately needed public servants in London.

The irony is that the less we intervene in the housing market, the more we find ourselves having to over-engineer who gets to live in certain places. I was asked to be on a planning group for a new housing project designed to provide low-cost housing for artists in a neglected part of east London. A valiant effort to stem the tide of developers – but who should be eligible for a place? How much art should an artist contribute to their community? Is pottery more socially valuable than screen printing?

Independent housing co-ops are pioneering in spirit, but they tend to select members who are most like themselves or who meet criteria based on arbitrary values. Not that the state is any more thorough: keyworker housing schemes rarely include street cleaners or care workers employed by private agencies – the people doing the work of the public sector, but not actually employed by it. Other kinds of social value are just as hard to measure: aren’t local news reporters or charity campaigners also useful?

It might be simpler to base policy on a person’s economic circumstances, rather than on the kind of person they are. It’s as if, instead of intervening in the market enough to level the playing field (for example, taxing landlords and second-home owners heavily or giving renters proper rights), we’d rather tilt the playing field at such an angle that most people can’t even walk on it, then allow a few to be handpicked and placed strategically.

Fact is, London’s population is still growing, prices aren’t crashing and the city’s landlords are not worried. But it’s understandable why we attach great significance to this “exodus” story: it taps into our unease about the skyscrapers going up that nobody lives in, about living costs rising, about the creeping privatisation of public life.

Whether we, London dwellers, dream of the promised land elsewhere or fear we will be forced to leave, we want to believe there will be a reckoning, a rebalancing. Whatever methods we use to try to control who can afford to live in our capital, it matters for everyone. But, in terms of “exodus”, London’s population only recently rose back to where it was before the Second World War; there might be a long way to go yet.

Rosie Walker is co-author of The Rent Trap.

https://www.theguardian.com/commentisfree/2017/jul/30/can-exodus-from-london-be-good-for-britain-reviving-the-regions

Top tips for getting tenancy deposit protection right

By Marc Da Silva



Despite the anti-landlord policies adopted by the government, many investors continue to be drawn to the buy-to-let market as the returns routinely outperform those of other investments

Buy-to-let returns continue to beat many other mainstream investments, including commercial property, UK government bonds and cash, while remaining a highly popular alternative to the volatility investors often risk when investing in the stock market.

Yet, many landlords are putting their property investments - probably their biggest assets - at risk by failing to comply with basic legislation, such as placing their tenants’ deposits in a government-backed tenancy deposit scheme within 30 days of receiving the deposit.

Deposits taken on assured shorthold tenancies in England and Wales by landlords or letting agents must be protected within 30 days in any one of three government-backed insurance based or custodial deposit protection schemes operated by MyDeposits, Deposit Protection Service (DPS) and the Tenancy Deposit Scheme (TDS).

Insured scheme

The insurance product enables landlords or agents to retain the deposit during the tenancy but in return pay a protection fee to the scheme.

Custodial scheme

The custodial scheme allows landlords or agents to hand over the deposit for protection during the tenancy, with no fees attached. The scheme is funded entirely from the interest earned from the deposit pool.

There are separate tenancy deposit protection schemes in Scotland and Northern Ireland.

The three appointed scheme administrators in Scotland are Letting Protection Service Scotland, Safedeposits Scotland and MyDeposits Scotland.


In Northern Ireland, the schemes are Deposit Scheme Northern Ireland, MyDeposits Northern Ireland and Letting Protection Service NI.

Although it has been mandatory to hold a tenancy deposit in a tenancy deposit scheme since 2007, as many as 300,000 landlords are estimated to be running the risk of a heavy fine for not placing money into a government authorised scheme, research reveals.

Even if the property is managed by an agent, it is the landlord’s responsibility to ensure the deposit is properly protected.

Here are some top tips from the Residential Landlords Association for getting deposit protection right:

+ If you accept the deposit in installments, remember that each individual payment would need to be protected within 30 days of receiving each part.

+ If you have an agent managing the deposit protection, ask for a copy of the deposit protection certificate – if your agent doesn’t protect the deposit on time then you will be liable for between one and three times the deposit amount.

+ If you choose to use insurance-backed deposit protection such as TDS Insured or DepositGuard, include a stipulation in the tenancy agreement about what will happen to any interest the deposit generates at the end of the tenancy.

+ Ensure you include in your tenancy agreement all the reasons that you might need to use the deposit – e.g. cleaning, redecoration, damage, removal of items, replacement of items, rent arrears, gardening, etc. If you have not put a clause stating that the deposit may be used to cover loss in the instance then should a dispute arise you may be unable to claim the money from the deposit.

+ Ensure you make a thorough inventory and check in/out report which includes the condition, age and cleanliness of all items – this will give you a good starting point in any deposit deduction claims.

+ Remember that you must serve the prescribed information along with the scheme leaflet within 30 days of receiving the deposit. It is generally a good idea to have evidence that the tenant received such as their signature or proof of postage.

https://www.landlordtoday.co.uk/breaking-news/2017/7/top-tips-for-getting-tenancy-deposit-protection-right

Friday, 28 July 2017

Three agents expelled by Property Ombudsman after failures to co-operate

By Rosalind Renshaw


Three agents have been expelled from membership of The Property Ombudsman (TPO) scheme for two or more years, after failing to pay awards made by the Ombudsman or comply with TPO’s Codes of Practice for Residential Estate Agents and Letting Agents.

The decisions to expel Shields & Co (Nottinghamshire), LPC Lettings Limited (Liverpool) and Blackhorse Property Management Limited (Bradford) follow complaints made against the companies by landlords, tenants and, in one case, a vendor.

Across the three cases, unpaid awards and rent which had not been passed to the respective landlords, totalled nearly £11,000.

The complaints were independently reviewed and upheld by the Ombudsman, who ordered payment of the money to those owed, together with awards for avoidable aggravation in all of the cases.

TPO members are required to comply with any award and/or direction given by the Ombudsman and accepted by the complainants.

In the first case, a landlord contacted TPO when he was unable to resolve his dispute relating to rental payments owed by Shields & Co on four separate properties.

TPO liaised with Shields and the complainant in an attempt to set up a payment plan as a resolution, but an agreement as to the terms was not reached.

Sheilds & Co did not respond to the case review but their communication in relation to the payment plan was enough to satisfy the Ombudsman that the landlord was owed the full sum of £2,657.15 in rental payments.

A further £500 to reflect the significant aggravation caused was also awarded. Similarly, a complaint made against LPC Lettings for not passing on rent totalling £5,967.54 was also supported by the Ombudsman. An award of £600 was granted for the avoidable aggravation.

This case highlighted the importance of letting agents ensuring they keep client money in a separate designated account and transfer all monies due to clients promptly.

A further case against the same company covered a wide variety of issues, including renovations, invoicing and quality of repairs, treatment of tenants as well as rental payments.

The Ombudsman criticised LPC for failings on several counts and instructed them to pay an award of £550 as full and final settlement. LPC Lettings was subsequently expelled from the TPO scheme for a minimum term of three years.

In the final case, Blackhorse Property Management Limited (BP) was expelled from both sales and lettings redress membership of TPO for a minimum of three years following two separate cases brought against them.

The first  related to a lack of tenant referencing where the Ombudsman made an overall award of £350.

The second case against Blackhorse, made by a potential seller, concerned the transparency of the contract, potential loss of viewings and insufficient complaints handling for which the complainant was awarded £300.

The three agents were referred to TPO’s independent Disciplinary and Standards Committee, which decided to expel the agents for failing to implement the Ombudsman’s decision.

An agreement between all the existing redress schemes means the three  will not be able to register for any form of redress until the awards are paid. Redress registration is required for the agents to trade legally.

Gerry Fitzjohn, chairman of the TPO board, said: “Wherever possible, we will always facilitate early resolutions between agents and consumers.

“However, agents that do not cooperate with our investigations, as in these cases, put themselves at greater risk of having a complaint upheld, as the Ombudsman only has the consumer’s evidence to consider.”

http://www.propertyindustryeye.com/three-agents-expelled-by-property-ombudsman-after-failures-to-co-operate/

Coming soon! My interview with serial entrepreneur Liam Ryan of Assets for Life




Coming soon my interview with serial entrepreneur Liam Ryan of Assets for Life

Foxtons and Countrywide profits plunge as they blame 'unprecedented' uncertainty in the market

By Sam Dean and Isabelle Fraser

London-focused Foxtons has been struggling in the sluggish property market CREDIT: PETER PAYNE
Beleaguered estate agents Foxtons and Countrywide have reported big falls in profits as they continue to be dogged by the sluggish property market.

London-based Foxtons posted a 64pc fall in profits, while Countrywide, the UK's biggest estate agent, recorded a 98pc collapse in pre-tax profits in the first half of the year.


Both companies' shares slumped in early trading, with Foxtons down 5.3pc and Countrywide, which owns brands such as Hamptons, down 9.7pc to a record low.

Foxtons said the market had been hampered by “unprecedented economic and political uncertainty" as it revealed that first-half profits plummeted from £10.5m to £3.8m in the six months to the end of June.

The decline was driven by a 29pc drop in revenue from property sales against tough comparisons from last year, when the company benefitted from a “surge in transactions” before stamp duty went up.



Meanwhile, Countrywide said its pre-tax profits fell to £447,000 in the same period from £24.3m last year, as the number of homes it sold fell 20pc compared to the same period last year. The company added that in London it was "seeing increased differences between vendors and buyers on price expectations while both groups wait to see how the political situation unfolds".

Countrywide is in the process of streamlining its business and boosting its digital offering to compete with online-only estate agents. Alison Platt, the chief executive, said she "wouldn’t describe [the 98pc fall in pre-tax profits] as dramatic," as the company's earnings before interest, taxes, depreciation and amortisation were within expectations. But she admitted: "We’re not optimistic about the housing market in the next half and our mantra has been one of self help."

She added: "We cannot sit here and say we will wait for market to come back because our view is it won’t in the next few years."

Anthony Codling, an analyst at Jefferies said: "The costs of this strategy are being felt before the benefits." He added: "We continue to believe that Countrywide is doing the right things."

Both companies' focus on lettings mitigated some of the losses felt in sales. Countrywide said that its revenue from lettings in London climbed by 5pc, while Foxtons' letting revenue fell by 2pc. There are turbulent times ahead for both as the Government introduces a ban on one-off tenant fees. When the policy was announced last year, Foxtons shares fell more than 10pc.


Foxtons said the changes to stamp duty had continued to weigh on the property market, adding that the unexpected general election had led to a “further slowing” of transaction levels in the second quarter.

It warned that it expected trading conditions to be “challenging” for the rest of the year, but insisted that London would remain a “highly attractive property market for sales and lettings”. Despite the results, Mr Codling was positive about the controversial estate agent. He said: "Foxtons is a fighter and although the results took a hit in the first half, with cash on its balance sheet it has the stamina to stay in the ring for many more rounds to come."

Foxtons reduced costs by £3.7m in the first quarter compared to the same period last year, and chief executive Nic Budden said its performance had been “resilient”.

He added: “While conditions remain challenging, we are confident that these initiatives, together with the strength of our network, our balance sheet and our brand will support long-term growth for our shareholders."

Wednesday, 26 July 2017

Commercial property investment in UK holding up despite political uncertainty



Commercial property investment volumes in the UK increased by 1% in the first half of 2017 to £27.2 billion despite uncertainty caused by the general election.

However, average prime yields in June remaining static at 4.7% due to ongoing uncertainty, according to the latest analysis report from international real estate advisor Savills.

Savills forecasts that total returns are expected to be around 5.5% for UK commercial property in 2017 and improve throughout the next five years.

Offices being the most popular sector, accounting for 39% of investment in the first half of the year and in terms of location, investment was split 50/50 between London and the rest of the UK.

Savills says that sectors which could still see yields harden slightly by the end of 2017 include food stores, M25 offices, regional offices, retail warehouses, industrial distribution and industrial multi-lets despite economic and political uncertainty.

The report suggests that the continued weight of overseas investment targeting UK property is likely to maintain current pricing while the current gap between yields for prime and average commercial property is currently approximately 160 basis points (bps), close to the 10 year average of 180 bps.

‘UK commercial property is in good health, with investors continuing to be attracted by its underlying strengths, with overseas buyers additionally benefitting from the current currency discount. Indeed, volumes in the first half could have been higher, but have been held back by lack of sellers, rather than any reluctance from buyers,’ said Richard Merryweather, joint head of UK investment at Savills.

According to Steve Lang, director in the commercial research team at Savills, whilst uncertainties from the various worldwide political changes may create some localised volatility, particularly as the reality of Brexit negotiations become more apparent, the higher income returns from UK property look set to maintain its attraction with a wide pool of investors.

‘Indeed, in June we observed that a major US pension fund is looking at a build to core strategy in the UK, looking to make physical improvements or agree new leases in order to move assets into core, demonstrating the willingness for some funds to move along the risk curve in order to access UK stock,’ he said.

Another BTL lender changes criteria ahead of new portfolio rules

By Graham Norwood

Accord Buy To Let is the latest lender to change its lending criteria for portfolio landlords with four or more investment properties, in accordance with stricter underwriting standards being introduced in the autumn.

Accord will assess the financial strength and competency of a portfolio landlord by taking into consideration their experience in the buy to let market, their full property portfolio and any outstanding mortgages along with their assets and liabilities.

All background properties must collectively meet a minimum rental calculation of 135 per cent interest coverage ratio at a stressed rate of 5.0 per cent.


This brings it in line with Bank of England Prudential Regulation Authority requirements for more thorough underwriting standards for ‘portfolio landlords’ with four or more mortgaged properties. All buy to let lenders must implement the new standards by September 30.

There will be no changes to Accord’s loan to value limits, maximum loan size or minimum income criteria, while stress rates and the number of properties accepted will remain the same.

Last week we reported on similar changes introduced by Paragon Mortgages.

https://www.lettingagenttoday.co.uk/breaking-news/2017/7/another-btl-lender-changes-criteria-ahead-of-new-portfolio-rules

Tuesday, 25 July 2017

Rent4sure offers a service ‘landlords can rely on’, says IT director

By Marc Da Silva

Living next to inconsiderate neighbours can be a nightmare, but letting to bad tenants can prove costly, especially when issues, which are simply out of your control, take a turn for the worse. And there are very few things worse for a landlord than a bad tenant.

If a tenant is not looking after the property or regularly failing to pay their rent on time, the experience can really make a landlord’s life unhappy.

While measures such as credit checks and tenant referencing can minimise the chances of letting a property to bad tenants, there are no guarantees that what may appear to be a perfect occupant may turn out to be a tenant from hell.

As one of the UK’s leading suppliers to the letting industry, Rent4sure provides a comprehensive range of services and specialist products, including credit checks, full references, company references, a ‘know your customer’ service, rent protection, legal expenses insurance, tenants liability insurance, and landlords insurance, all providing first class support to the letting industry through an online platform.

“Our innovative, cloud-based platform is now considered to be one of the most advanced, cutting-edge and intuitive platforms in the industry, thanks to the fact that we, unlike many of our competitors, have our own in-house IT department, with several developers working on our products at any given time, said Jack Webb-Heller, IT director at Rent4sure.

The company, which works with more than 30,000 tenants a month, generates most of its business from tenant references, but it also offers a range of insurance products that appeals to buy-to-let landlords, including rent protection and legal expenses insurance, tenancy liability insurance, and landlords building and contents insurance.


“As a specialist provider to the letting industry, agents and landlords can rely on us for advice, opportunities and support. It’s what we’re here for,” Webb-Heller added.

https://www.landlordtoday.co.uk/breaking-news/2017/7/rent4sure-offers-a-service-landlords-can-rely-on-says-it-director

No fault evictions: time to put an end to this unscrupulous practice

By Dan Wilson Craw
No fault evictions allow private landlords to turf tenants out without any reason. It’s legal but its use is on the rise and it needs to stop

Joseph Rowntree research attributes 80% of the recent rise in evictions to the no fault process. Photograph: Alamy

For every school in England there are five children without a home. The Local Government Association reports that 120,000 children are living in temporary accommodation. The primary cause of this homelessness is the end of a private sector tenancy, ie eviction.

Unfortunately, there is no official explanation for this, because private landlords don’t need to give a reason when they ask tenants to leave. In a study released on Sunday, Joseph Rowntree Foundation attributes 80% of the recent rise in evictions to this “no fault” process.

This process is enshrined under section 21 of the Housing Act 1988. The other eviction route is section 8, where evidence of a breach of the tenancy is required. Section 21 evictions are therefore easier.

Section 21 was designed to encourage investors and their mortgage lenders to enter the private rented sector and provide a flexible supply of housing. But it worked too well, attracting amateurs gambling on rising prices, with no interest in providing long-term homes.

The right to evict gives landlords enormous power over their tenants. Many tenants don’t even know they exist until a two-month notice to quit arrives through the letterbox; if valid it cannot be appealed. It has also allows the worst landlords to ignore disrepair – they can simply kick out tenants who complain. The coalition government did bring in protections against these retaliatory evictions but they apply only to tenants who live in an unsafe home – an estimated 17% of the total, according to the government’s recent English Housing Survey.

That survey also found that one in six private renters moved in the past three years because the landlord asked them to leave or, raised the rent or had a “poor relationship” with them, making staying untenable.

This particularly affects those renters who don’t have a spare £1,000 for the average deposit (pdf), £400 for the average letting agent fees, and more than £900 for upfront rent and moving costs – all payable before their current landlord releases their deposit.

It also partly explains why we are seeing a huge rise in homelessness as a result of eviction – accounting for 78% of the rise in homelessness since 2011. Some 24% of private renters claim housing benefit; and the fear for these people is that a blameless eviction would leave them struggling to find an affordable replacement in the private sector. As Joseph Rowntree Foundation says, unfreezing housing benefit is critical in order to avoid the arrears that are driving some evictions and homelessness. But it is only part of the solution. According to the English Housing Survey, 66% of private renters have no savings, so, even if they can afford rent, an unwanted move could plunge them into crisis too.

While building more homes for long-term rent is important, we need a quicker solution. Ending section 21 could just be it.

Landlord groups claim their members only evict delinquent tenants and only use section 21 to do that because it’s quicker than section 8. The English Housing Survey begs to differ, finding that 63% of evictions happen when a landlord plans to sell or otherwise use the property.

The majority of landlords, who are interested in keeping reliable tenants have no need for section 21.

Landlords should be legally accountable for ending a contract early. Enforcing a penalty for this type of behaviour, which could be paid to tenants, at a high enough rate that it could pay for setting up a new tenancy, would discourage blameless evictions. There should also be limits on rent rises to prevent unscrupulous landlords pricing out tenants.

Reforming this damaging law is Generation Rent’s top priority. With a quarter of families now living in private rented housing, paying rent should, at the very least, give tenants security.

Dan Wilson Craw is the director of Generation Rent

https://www.theguardian.com/housing-network/2017/jul/25/no-fault-evictions-landlords-tenants

Friday, 21 July 2017

Leasehold homeowners are ‘overpaying to extend’ leases

By Felicity Hannah

Leaseholders are being charged extortionate fees to extend their leases, but that’s not the only expensive, and largely unknown, problem plaguing owners and buyers


Homeowners living in leasehold properties are being asked to pay extortionate prices to extend the leases on their homes. That’s the conclusion of the London School of Economics and Political Science (LSE), which has analysed data from 8,000 sales of leasehold properties showing how the sale price varied depending on how much time was left on the lease.

The cost of extending a lease relies on a concept called relativity, which describes how the value of the home drops as the lease term runs down. The lower the relativity, the more it costs to extend the lease.


It’s a tricky concept but the outcome can have a dramatic effect on costs. Relativity is expressed as a percentage and it’s the difference in value between a short lease and an effectively freehold home – such as one with a 999-year lease and low, fixed rents. The lower the relativity, the more it costs to extend the lease.

The problem is that the LSE research suggests that the current practises underestimate the value of leases when there are under 70 years remaining. And that means that leaseholders who pay to extend their leases could be paying thousands of pounds too much.

James Wyatt, a chartered surveyor and one of the authors of the research, said:  “Our findings mean that many leaseholders may be seriously overpaying for lease extensions. Our alternative, evidence-based calculations could result in savings in the order of thousands of pounds for most leaseholders, and much more for owners of some of the most expensive properties.”

The findings are yet another blow for leaseholders who have been rocked by a series of scandals suggesting they are being overcharged, under-informed and potentially even exploited.

Campaigning against clauses

It was recently revealed that some developers, including Taylor Wimpey, were selling homes with 999-year leases but adding clauses that doubled the ground rent every 10 years. That meant they incurred significant additional costs within just a few decades, affecting their sale value.

Buyers also found that their leaseholds had been sold onto investment companies. Instead of being able to buy them after a couple of years for a few thousand pounds, they were being asked for 10s of thousands.

Campaign groups have sprung up demanding action and in the spring Taylor Wimpey announced it would pay £130m to alter the terms of doubling leases for some owners of newly built leasehold properties.

At least now the government has noticed the issue. Despite the Queen’s Speech being heavily dominated by Brexit, the issue of leasehold transparency was included.

The speech included: “We will consult and look to take action to promote transparency and fairness for leaseholders. We will look at the sale of leasehold houses and onerous ground rents, working with property developers, the Competition and Markets Authority and others.”

However, this was put forward as an aim and not detailed as part of any particular bill. It does show that alleviating buyer concerns is back on the government’s agenda.

Consumer confusion

The Home Owners Alliance (HOA) has warned that the issue of leasehold properties is exacerbating the country’s homeownership crisis. In fact, it has issued a strongly worded statement accusing the sector of “widespread malpractice and lack of consumer understanding”.

Whether it could be regarded as malpractice or not, there is certainly no doubt about the consumer confusion. HOA research shows that just 58% of leaseholders questioned said they knew the length of their current lease, and almost a quarter of these said it was less than 80 years. That is widely seen as the number at which the lease begins to harm the property’s value and so its ‘mortgageability’.

What’s more, property listings often don’t offer information on the tenure of the homes for sale. In fact, less than half of those surveyed actually specified whether a home was freehold or leasehold. And only a quarter of the listings specified the amount of time left on the lease.

Paula Higgins, head of the HOA, said: “Unscrupulous and avaricious actors within the property industry are using sharp leasehold practices to line their own pockets and fleece householders.”

She added: “Developers and estate management companies rely on leasehold to bamboozle consumers, charge exorbitant administration fees, ever increasing ground rents and render properties unsellable.

“The situation is exacerbated by the fact that many estate agents are themselves ignorant about leasehold and fail to inform and educate their customers properly. The government needs to take urgent legislative action to protect people from these practices, help people who are already trapped and avert a full-blown crisis.”

Perhaps the one good thing to come out of the scandals and the extension prices and the baffled buyers trapped in a home they apparently own but pay rent on, is that more people are reading up on leaseholds and their limitations. At the very least, developers are facing greater scrutiny of their leasehold practises – from government, from campaigners and from buyers themselves.

http://www.independent.co.uk/money/spend-save/leasehold-homeowners-overpaying-extend-leases-fees-sales-housing-market-a7848556.html

Thursday, 20 July 2017

People on estate facing demolition for HS2 could struggle to find new homes

By Helen Pidd

Government report finds that residents of Shimmer estate may not receive adequate compensation to acquire similar properties in light of shortage

Opponents of HS2 say engineers did not even realise that the newly built Shimmer estate, Mexborough, existed when they planned the route. Photograph: Christopher Thomond/for the Guardian
The government has said that residents of a brand new housing estate facing demolition to make way for the HS2 railway could struggle to find replacement homes nearby.

More than 130 families living on the Shimmer estate in Mexborough, South Yorkshire, may have to leave their homes after the government decided that the HS2 train line should go right through their neighbourhood. Some only moved in days before the route was proposed in July last year.


They are among 540 homeowners within 100 metres of the new Yorkshire leg of the line who potentially face being forced out of their homes, according to research by the Yorkshire HS2 action groups, who oppose the route. The campaigners argue that an earlier proposal, which would have seen the line go to Meadowhall shopping centre, north-east of the city centre, rather than follow the M18 motorway to the city centre, would have resulted in only 296 residential demolitions.

Opponents to HS2 claim that engineers didn’t even know that Shimmer existed when they planned the route, chosen by transport secretary Chris Grayling on Monday. Construction of the estate began only in 2011 and it doesn’t appear on Google Maps or most satellite navigation systems.

Grayling said only 16 homes would have to be demolished to make way for a viaduct to carry the high-speed line, but residents believe the whole estate is doomed. Many feel that they are not being offered a fair price by the government to sell up and fear that they will find themselves in negative equity.

On Tuesday, the government published a report by property specialists Carter Jonas which found that the compensation package offered may not allow some Shimmer homeowners to acquire a similar property in the local area.

House prices on the estate have already dropped by an average of 10% of their original purchase prices, according to Carter Jonas. Consultants found that a shortage of similar new-build properties in the surrounding area could lead to price inflation as ousted Shimmer residents bid against each other.

“The value of properties on the Shimmer estate, together with a low supply of affordable housing in Mexborough and its surrounding areas, could therefore make it difficult for homeowners to buy a local equivalent property with statutory compensation they would receive from the government,” the report concluded.

According to Carter Jonas, 130 houses have been sold on the estate, with a further 90 properties either built and unsold or yet to be built. All homeowners can now apply for the government to buy their properties at the “HS2 unblighted” market rate, plus 10% compensation and moving costs.

Peter Douglas, 63, and his wife Sue, 66, bought their house on the Shimmer estate for £165,000 in 2014 and spent two years doing it up for their retirement. Their home is only five metres from the proposed viaduct, so is not included in the 16 definitely facing the bulldozers, but they have applied for the government to buy their home. “Who in their right mind would want to buy or rent a house next to a railway line running 200mph trains?” said Peter.

They are preparing for “hard negotiations” to secure a fair price, fearing that because the estate has never been finished (because of uncertainty over HS2), they will be undervalued.

Andrew Weaver, chief executive of Strata, which built Shimmer, said: “Our thoughts are with the homeowners, who like us, have had to live through over 12 months of uncertainty for a decision to be made. The residents remain our priority and we now need to understand what this decision means for the development and the Strata business as a whole.”

Grayling said on Tuesday: “Britain’s new railway line will bring huge economic benefits across the country and help ensure this government delivers on its promise to spread wealth beyond London and the south-east.

“We will now press ahead with building the line, while continuing to ensure affected communities get appropriate support and are treated with fairness, compassion and respect.”

https://www.theguardian.com/uk-news/2017/jul/18/people-on-estate-facing-demolition-for-hs2-could-struggle-to-find-new-homes

20% Below Market Value Property in Wolverhampton, INSTANT EQUITY



Location
Wolverhampton
FY4 3JB

Description

  • Market value = £92,000
  • Purchase price = £75,000
  • Approximate discount of 20% below the market value.
  • Two bed apartment with Reception Room , Kitchen and Bathroom. First to see will buy!
For more photos, comparables and information, click here.

If interested, please send me an email at dav@mpinvestments.co.uk .

How To Start A Buy To Let UK Investment Property Business Or Portfolio |...





How To Start A Buy To Let UK Investment Property Business Or Portfolio | Your First Four Houses

How to start a buy to let UK investment property business?

Today, let me give you the ten areas I feel you need to focus on if you're thinking about investing in property (AKA Buy to Let) and building a portfolio. These are in a loose order, starting with the one I feel should be completed first - setting your financial goal.

I consider this crucial to your success - because once you know what this is you can then go through the exercise I outline in the video and this WILL drive you to success!

Here are the ten points - but I have woven some additional property "key learning" within the video itself.

1. Set your financial goals
2. How much time can you give your buy to let business
3. Start build your property investing knowledge
4. Pick your investing strategy
5. Research you property goldmine area
6. Go see a Mortgage Broker
7. Learn how to find buy to let property deals
8. Start building connections
9. Consider your property "exit strategy"
10. Take Action... NOW!






More million pound homes being sold outside of London, new research shows



Rising house prices in England and Wales means that more properties worth £1 million or more are being sold with London not the only location to see a rise in higher prices properties, new research has found.

The ripple effect out from London means that the highest growth in the number of £1 million plus properties sold has been in Hertfordshire, Surrey and Essex and half of home sales in this price bracket are set to be outside of greater London in 2017.

According to the analysis of data from the Land Registry by mortgage broker Private Finance, the volume of £1 million plus property transactions rose 195% in England and Wales from 2011 to 2016, compared to a 54% rise in total activity over the same period.

The study says that the trend comes despite cooling activity at the very top of the housing market after successive reforms to stamp duty in December 2014 and April 2016. The continuing rise of house prices across much of the country meant that sales worth £1 million and over still rose 10% between 2015 and 2016.

Historically, the majority of sales in this price bracket have taken place in Greater London, which enjoyed a 63% share of the higher end market in 2011. London also recorded by far the biggest growth at 7,333 sales in the annual volume of transactions between 2011 and 2016, followed by Surrey at 818 and Hertfordshire at 676.

However, Private Finance’s analysis shows that this may be about to change, due to the sizeable increase in £1 million plus property transactions outside the capital in recent years. From 2015 to 2016, growth in Greater London was outpaced by Hertfordshire, Surrey, Essex, Hampshire and Kent.

The report points out that this may prove to be a conservative forecast, as the latest indices suggest house prices are currently rising faster year on year in the East of England, the South West, the West Midlands, the South East, the East Midlands, Yorkshire and the Humber and Scotland than they are in London.

The analysis shows some of the biggest proportional increases between 2011 and 2016 were in South Yorkshire, County Durham and Swindon while the biggest percentage increase in £1 million plus transactions from 2015 to 2016 was in Carmarthenshire in Wales.

Data from Private Finance for mortgaged purchases in the £1 million plus price bracket between 2011 and 2016 shows the average loan to value (LTV) was 54%, rising to 56% last year. It says that this suggests home buyers in this part of the market are leveraging substantial amounts of their assets as six figure deposits.

‘Sustained house price growth in London means that even for many highly paid professionals, a large family home in the capital is now out of reach,’ said Shaun Church, director at Private Finance.

‘With buyers looking further afield as a result, this has contributed to significant growth in the number of million pound plus transactions in areas like Kent, Essex and the Home Counties, which are all within easy commuting distance of London,’ he explained.

‘Buying a million pound plus property is a significant financial commitment, and with increasing numbers of buyers falling into this category, borrowers may need to look to private banks and brokers to ensure they are able to access appropriate mortgage finance,’ he pointed out.

‘These tend to offer a more bespoke, flexible service. For example, buyers might leverage unconventional assets like jewellery, fine art or sports cars as a means of obtaining their property. The lender will take into account how liquid the assets are and make a judgement as to whether the borrower could sell an item to repay the loan,’ he added.

‘Private banks are also able to offer interest only mortgages to such clients, giving them greater choice about when they want to repay chunks of capital, such as if they get an annual bonus. This type of flexibility can prove invaluable in ensuring borrowers can access the most affordable and suitable mortgage finance for them,’ he said.

http://www.propertywire.com/news/uk/million-pound-homes-sold-outside-london-new-research-shows/

Wednesday, 19 July 2017

MP launching new bid to make rental accommodation ‘fit for human habitation’

By Rosalind Renshaw


Labour MP Karen Buck is planning to reintroduce her Homes (Fitness for Human Habitation) Bill in Parliament today.

In the wake of the Grenfell Tower disaster, the move had been expected.

Buck, who represents Westminster North, originally introduced a Private Member’s Bill in 2015/2016 seeking to amend the Landlord and Tenant Act 1985 to require that residential rented accommodation is provided and maintained in a state of fitness for human habitation.

Her Bill was talked out.

Labour then sought to reintroduce her proposals in the Housing and Planning Bill 2015/2016, but 312 MPs – almost entirely Conservatives – voted against, while 219 voted in favour.

The amendment would have placed a duty on landlords to ensure their homes were safe for human habitation when let, and kept so during the course of the tenancy.

However, David Cameron’s government said at the time that the requirement would place extra regulation and costs on landlords, and would push up rents. It said that local councils already had powers to deal with poor and unsafe accommodation, which it expected them to use.

David Smith, policy director for the Residential Landlords Association, said he welcomed the reintroduction of Buck’s Bill.

He said: “Tenants have a right to expect that homes are fit for habitation, and the vast majority of good landlords already provide this. This Bill therefore reinforces what landlords should already be doing.

“By providing a route to direct tenant enforcement of basic housing standards, the Bill will give a further opportunity to deal with the minority of landlords who have no place in the market.

“Current legislation often lets these criminals off the hook due to underfunded councils being unable to properly enforce it.


“We look forward to working with Ms Buck as the Bill is developed and considered in Parliament.”

http://www.propertyindustryeye.com/mp-launching-new-bid-to-make-rental-accommodation-fit-for-human-habitation/

Average rents up 1.8% in past year, say official government figures

By Graham Norwood

The typical rent paid by tenants across Britain rose by an average of 1.8 per cent in the 12 months to June according to the latest official figures from the Office for National Statistics.

This annual rate has remained unchanged now for the past three months of ONS data.

In England, average rents grew by 1.9 per cent, while Wales saw growth of 1.1 per cent and Scotland witnessed a small increase of 0.2 per cent over the same 12 month period.


In London, average rents grew 1.3 per cent - around half a per cent less than the all-Britain figure.

The ONS says rental growth has been slowing since the end of 2015, a trend confirmed by the Royal Institution of Chartered Surveyors and the Association of Residential Letting Agents.

Earlier this week Countrywide put the average rent rise over the past year in Britain as 1.1 per cent.

https://www.lettingagenttoday.co.uk/breaking-news/2017/7/average-rents-up-1-8-in-past-year-say-official-government-figures

Monday, 17 July 2017

Asking prices inch up as a lack of affordability crunches property market

By Isabelle Fraser


CREDIT: TOBY MELVILLE

Crunched levels of affordability have flattened asking prices, despite climbing demand for homes.

Online portal Rightmove reported that asking prices for homes are largely flat, with the average property valued just 0.1pc higher in July than in June.

The annual rate of growth was just 2.8pc, with crunched levels of affordability slowing down any increase in prices. This puts the average asking price for a home in the UK at £316,421.

Rightmove also said there has been an annual increase of 4.6pc in the number of agreed sales, with 7.6pc more sellers coming to market compared to last June and 45pc of agents’ stock sold.

This is at odds with the findings of the survey last week by the Royal Institution of Chartered Surveyors, which reported stalling activity in the market and a record low level of stock. However, this could be explained partly by its focus on London, and by the decline in activity and prices a year ago after the referendum to leave the EU. Last July there was a monthly fall of 0.9pc as uncertainty over the referendum result.

The high demand and low level of stock have kept asking prices buoyant.

Miles Shipside, Rightmove’s director, said that despite high levels of demand, “especially as you go further north, sellers should note the market remains very price sensitive as some properties are hitting their price ceiling."

He said: "Buyers, many of whom are sellers too, will struggle to afford to pay much more.

CREDIT: JOHNNY GREIG UK / ALAMY
"Wage growth is muted, there are signs that consumer credit is tightening, and at some point there will be the first rise in mortgage interest rates for a decade or more which will come as a shock to buyers who have either forgotten or have never experienced interest rates going up as well as down.”

Monthly rises in asking prices were recorded in London, the South East, Wales and the West Midlands.

He added: “High demand will continue to underpin prices, but we are seeing stretched affordability limiting the pace of rises, especially in the south of the country.”

It comes as Countrywide reported the average rent in Great Britain has increased 1.1pc in the year to June, up on last month’s 0.5pc.

In London, however, rents have been falling, down 0.8pc in the same period, and these falls were offset by increases across the rest of the country.

It also reported that the level of overseas-based landlords has more than halved since 2010, reaching a record low.

Across the country the amount of foreign landlords has gone from 12pc in 2010 to 5pc in the year-to-date. In London that collapse has been even more dramatic, falling from 26pc to 11pc this year.

This is due to a decline in foreign investment in buy-to-let, which Johnny Morris, research director at Countrywide, said was caused by “a steady increase in foreign investors’ tax bills combined with more recent falling expectations of price growth in London”.

He added: “As well as having to contend with increased stamp duty and the annual tax on enveloped dwellings (ATED), overseas investors also saw the removal of capital gains tax exemptions in 2015.

It found that 33pc of foreign landlords in London are from Asia, and that last year the average overseas-based landlord earned 35pc more in rent than those that were UK resident.

http://www.telegraph.co.uk/property/house-prices/asking-prices-inch-lack-affordability-crunches-property-market/

New exclusive mortgage rate for NLA members

By Marc Da Silva


The National Landlord Association (NLA) has joined forces with Mortgage Trust to offer its members an exclusive buy-to-let deal not available in the wider marketplace.

The exclusive: two-year fixed rate deal is available at borrowing rate of 1.9% for two years, with a £1,995 flat fee, available up to 75% loan to value.

The rate, made possible by Mortgage Trust, has two separate rental calculations available in order to meet the different requirements of landlords:

125% at 5.5% for basic rate taxpayers

145% at 5.5% for higher and additional rate taxpayers


In addition, the NLA is also offering non-members and associates free full membership to the NLA upon successful completion, while existing NLA members will receive cash back.

https://www.landlordtoday.co.uk/breaking-news/2017/7/new-exclusive-mortgage-rate-for-nla-members

Thursday, 13 July 2017

New UK standards launched for professionals in land, property and construction



The Royal Institution of Chartered Surveyors is tightening up requirements for professionals and regulated firms working in land, property, construction and infrastructure.

RICS has published a new UK professional statement on conflicts of interest for the commercial property investment market which bans the controversial practice of dual agency, known colloquially as double dipping.

The standards will come into force on 01 January 2018 and states that dual agency must not be undertaken under any circumstances. ‘For the avoidance of doubt, RICS members working within non-RICS regulated firms are subject to the same criteria as regulated firms when undertaking dual agency in the UK under any circumstances,’ it adds.

The professional statement also covers multiple agency where an agent has competing contractual relationships simultaneously with several buyers, and the provision of incremental advice such as planning, building surveying and valuation related to a purchase or disposal that is incremental to an existing instruction to advise the buyer or seller.

The new standard was developed as the result of an extensive consultation that saw industry professionals and regulatory experts offer their views and the new requirements address concerns around the dual agency practice, providing both greater confidence for investors and increased clarity for RICS professionals.

RICS also has a global statement and following the launch of the UK specific statement, RICS intends to consult on the requirement for further market specific standards.

Already, some of the best-known commercial property firms, such as SEGRO, JLL, CBRE, and Land Securities have indicated their support for the new standards.

‘As a member of the RICS working group, I am pleased to endorse these new rules and guidance which are an important step forward for the property industry in inspiring trust amongst clients and the public in the way we do business,’ said Stephen Hubbard, chairman of CBRE UK

According to Chris Ireland, chief executive officer of JLL UK, the RICS professional statement will reassure clients and the public that we have effective procedures and controls in place and will stick to them.

RICS believes that it is uniquely placed to provide world-class standards for a global profession in land, property, construction and infrastructure. It said that regulating the profession in a way that holds it to this promise is vital to inspire confidence among clients and the public.

http://www.propertywire.com/news/uk/new-uk-standards-launched-professionals-land-property-construction/

Up to £2 million pound profit possible on this deal!

Image

Up to £2 million pound profit possible on this deal!

FULL DETAILS below:

We have just been let down by a partner on a project we was set to complete on last Friday, so the opportunity to JV with us through Goldthorpe Property Developments Limited is available.

We was set to do this on a 75/25 basis but for speed and to secure this we’re happy to do this with yourself at 80/20 split of the profits (80% to the investor, and the rest to Goldthorpe Property), based on us doing all of the works to maximise the profits.

The security on this for you is 80% of the shares for The company, which is the entity we will be taking over who holds this Asset in Barton upon Humber (value as stands 1m).

Sales Costs
Phase 1 x 12 Apartments (Worst Case Scenario - £1.02m / Expected Sales – £1.3m) **FPP in place**
Phase 2 x 15 Apartments (Worst Case Scenario - £1.275m / Expected Sales – £1.65m) **STPP**
Phase 3 x 12 New Build Units (Worst Case Scenario - £1.5m / Expected Sales – £2.1m) **STPP**

**STPP** = awaiting for costs to get through planning, the previous owner has already started to get everything together, which we have in our possession.

After an architects meeting today, it has been advised we would be able to add an extra floor onto the building although this would incur extra costs but adds an extra 1.2m to the end total.

Refurbishment Costs
Apartment Costs TBC – expected to be up to £40k per apartment (£1,080,000 in total)
New Build Costs TBC – expected to be up to £60k per unit (£720,000 in total)

These will be finalised and broken down as soon as we have the keys.

Stamp Duty
£2,650

Legal Fees
£10,000 + VAT and £81.60  disbursements (HMLR search fees etc)

Gross Price
£750,000


We estimate that this project will take 12-16 months, although this may vary depending on external factors. On worst case scenario the profit to yourself would be approximate £1,045,728.14 and on what is expected it would be around £2,112,478.14. So on worst case scenario the project is looking at around 45% ROI.

If interested please let me know ASAP, as to secure this we need to complete by Friday latest which will require £764,731.60 investment with the rest required in instalments throughout the works at agreed intervals as it is required for the project. Ideally in one go, although to secure this we need to transfer £160,000 to the solicitor today latest with the rest by Friday. If that isn’t possible the deal cannot be secured.

We are extremely experienced with projects like this and have everything in house to make it a success from the works to selling/letting and everything in-between.

The attached is a fraction of what we have had from our solicitor from this, everything required is available and if you proceed to work with us on this I would suggest meeting to set a plan of action to start the best way possible to limit the amount of time we are on this project.

If you would prefer not to have you name/company on the shares of the asset, this opportunity is available on a fixed return opportunity if you wish to invest it through ourselves.





If interested, email me now at dav@mpinvestments.co.uk 


Buy To Let: investors buying smaller homes with larger yields

By Graham Norwood


Landlords continue to look for cheaper, higher-performing properties according to the results of an index produced by Mortgages for Business.

An analysis of mortgages arranged by the company in the second quarter of this year shows that all types of buy to let properties purchased during the quarter had much lower values than the overall long-term average.

These lower-value properties provide better return on the landlord’s investment, with both HMO and multi-unit purchases achieving average yields of over 10 per cent.


By comparison, these properties achieved yields of just 8.7 per cent and 7.9 per cent respectively when remortgage transactions - applying to already-purchased units - were included.

“Landlords have been selective with their purchases this quarter, choosing properties that maximise income with minimal investment. This strategy is likely to remain common as it allows landlords to maintain profitability while HMRC phases in restrictions on income tax relief for landlords” says Steve Olejnik, Mortgages for Business chief operating officer.

One consequence of this selectivity is that landlords have had to scale back their rate of expansion from last quarter.

The past three months saw a drop in the proportion of buy to let purchase transactions compared to Q1, returning to the preponderance of remortgages that has become common in recent years.

Loan to values remained stable across the quarter, except for a modest four per cent drop among multi-unit properties.

https://www.lettingagenttoday.co.uk/breaking-news/2017/7/buy-to-let-investors-buying-smaller-homes-with-larger-yields

Tuesday, 11 July 2017

Bank of England warns it will go after firms looking to mask risks

By Jill Treanor

Some lenders are taking more risks and are seeking to ‘circumvent the spirit’ of the regulations, says deputy governor

The Bank of England deputy governor set out a number of products facing scrutiny from regulators, including an increase in mortgage terms from 25 to 35 years. Photograph: Martin Godwin for the Guardian
The Bank of England has issued a warning to major lenders not to repeat their antics of the years before the 2007 credit crisis when they deployed complex strategies to mask the financial risks they were running.

Sam Woods, one of the Bank’s deputy governors, also said some lenders were starting to take more risks and set out a number of products facing scrutiny from regulators, including an increase in mortgage terms from 25 to 35 years.


Referencing the famous phrase of William McChesney Martin, a chairman of the US Federal Reserve in the 1950s, Woods said the Bank is on alert for a “return to the punchbowl”.

“Across the wider market, we are observing – not from all firms, but definitely from a few– a shift in credit risk appetite as lenders compete with each other to find ways of widening the pool of available borrowers, increasing the size of loans available to them, or reducing the credit premium charged for inherently more risky loans,” he said.

Woods’s remarks were initially prepared for delivery in May to the Building Societies Association but delayed because of the purdah period imposed once the general election was called. They were published, in an updated form, on Monday.

In a warning to banks and building societies Woods said the Bank had already found behaviour from lenders that “might meet the letter of the regulation” but is “designed to circumvent the spirit”.

Banks would always innovate faster than the regulator could update its rules, he said. “However, some innovation is pure regulatory arbitrage – that is, action taken by firms to reduce specific regulatory requirements without any commensurate reduction in their risk,” said Woods.

“This is why we need well-informed rule-makers and alert supervisors, who together can smell when something is off and decide what to do about it,” Woods added.

“Firms ... should be prepared to defend their compliance, not only with the letter of the regulation, but also with our principles of prudence, effective risk management and adequacy of financial resources at all times.”

He outlined a number of practices that the regulator had uncovered, including borrowing that did not appear on banks’ balance sheets – through the use of so-called off-balance sheet vehicles. He also highlighted technicalities around the way banks handle assets that are easy to sell in a crisis – so-called liquid assets – and the way insurance products could be amended to bolster profits.

The 2007 credit crunch was characterised by an alphabet soup of acronyms for complex financial vehicles and products used by banks such as CDOs (collateralised debt obligations) and SIVs (structured investment vehicles).

With regards to lending, Woods’ remarks were published a week after the Bank of revealed it was stepped up its scrutiny of lenders providing finance on credit cards, personal loans and to buy cars.

Such lending is not typically conducted by building societies, which are more usually active in the mortgage market. Here, he said, the Bank had noted that mortgage terms were extending from 25 year to 35 years – or even longer. While that makes monthly repayments lower it means the total interest is higher, with final amounts due when the customer may have retired.

“That should not be a problem if lenders can be confident about the availability of such retirement income, or about the scope for the borrower to downsize and use the sale proceeds to pay off the balance of the loan,” he said.

He noted that building society profit margins were coming under pressure, often because they were keeping savings rates higher to keep members happy.

“Squeezed margins at building societies are exacerbated when pitted against the mutual pricing strategy many have adopted to protect members in an era of low rates – and so, building societies seek to source new lending that earns higher than average rates,” said Woods. “This combination of circumstances is what led a number of societies to broaden their lending appetites in the mid-2000s.”

More than 60 societies attended the BSA conference in 2004 compared with 44 this year. Societies “ought to be well aware of the warning signs, but I’m conscious that corporate memories can be shed surprisingly fast,” Woods said.

https://www.theguardian.com/business/2017/jul/10/bank-of-england-risk-lenders-sam-woods

More would-be buyers turning to PRS for ‘more affordable accommodation’

By Marc Da Silva


Millions of people are being priced out of buying a property due to high house prices, the latest figures suggest.

A dearth of homes for sale is a major contributing factor to growing property prices, leaving many people with no option but to rent, creating intense competition in the private rental market.

There are now more households than ever before living in the private rented sector in the UK, and the latest house price data suggests that the level of people residing in the PRS is likely to rise further moving forward.

First-time buyers are now having to save almost £33,000 for a deposit according to the Halifax, and the mortgage lender’s latest house price index shows why that is the case.

House prices in the UK fell by 1% in June, the largest monthly fall since January, according to Britain’s largest lender, and yet the average price of a home in the UK now stands at £218,390, which is up 2.6% year-on-year.

“Whilst demonstrating our market’s resilience during times of uncertainty, house prices are continuing to increase year-on-year and at a rate that is well above any wage increase,” said Jeremy Duncombe, Director, Legal & General Mortgage Club.

In London, some first-time buyers are now required to fork up over £100,000 for a deposit, and that is simply “not acceptable”, according to Duncombe.

He continued: “Many would-be homeowners are now turning to the private rental sector to find more affordable accommodation. Nearly a quarter of households are set to be owned by private landlords by 2021.

“The lack of affordable housing is a problem that will only worsen if the government doesn’t implement the revolution in housing policy it previously promised.


“With the dust now beginning to settle after the general election, we want to see a real push to build the thousands more homes that this country desperately needs, whether that be for prospective homeowners or renters.”

https://www.landlordtoday.co.uk/breaking-news/2017/7/more-would-be-buyers-turning-to-prs-for-more-affordable-accommodation

Friday, 7 July 2017

Rents outside London remain steady despite jump in available supply

By Marc Da Silva


Asking rents outside London continue to hold up despite an increase in the number of rental homes on the market, according to Rightmove.

New figures from the property portal reveal that prices increased by 2.8% compared to last quarter, similar to the 2.7% average over the past five years.

There was a 7% rise in the number of homes marketed as available by letting agents listing properties to let on Rightmove compared with the second quarter of last year outside London, though new rental properties coming on the market are down 2%.

It is a similar story for housing stock in London, with available properties up 8%, and new listings down 5%, not surprising, according to Rightmove, when comparing to the boost from last minute buy-to-let purchases in Q2 of last year.

Rental prices in London are still running lower than last year and are now 3.2% lower than their peak of £2,020 per month this time last year.

Sam Mitchell, head of letting at Rightmove, said: “Many thought that rental supply would constrict this year, as landlords sold up and looked to invest their money elsewhere, but clearly this isn’t happening yet.

“Perhaps landlords are remortgaging their buy-to-let properties instead, as they still feel it’s a better investment than looking to other industries.  It could spell good news for tenants coming to the end of their lease as they might find there is slightly more choice than last year.


“Anyone hoping for a drop in prices due to the extra choice will be disappointed though as rents are following a very similar trend to previous years."

Rightmove has found the top locations in each region that currently offer the best choice for renters.

The top spot in the South East is Ascot in Berkshire, where the average asking rent for a two-bedroom unit is £1,417 per month. In the North West it is Salford where a two bedroom property would set you back £842 per month.

The cheapest region is the North East, with Newcastle the location with the best choice for rental properties, at an average of £642 per month.

The findings are based on the areas with the highest number of available rental properties, as a proportion of total housing stock in the areas.

https://www.landlordtoday.co.uk/breaking-news/2017/7/rents-outside-london-remain-steady-despite-jump-in-available-supply

Third of homes meant to be completed remain unbuilt despite housing crisis, Shelter reveals

By Kenza Bryan
More than 320,000 homes have not been built despite having been granted residential planning permission, according to analysis by Shelter

Ordinary working families are bearing the brunt of the issue of ‘phantom homes’, charity says PA
Nearly one in three homes approved to be built in England during the past five years have not been completed, Shelter has found.

More than 320,000 homes have not been built despite having been granted residential planning permission, according to analysis by the housing charity, which said ordinary working families are bearing the brunt of the issue of “phantom homes”.

An estimated 68 per cent of homes with planning permission have been completed over the past five years, Shelter calculated.

It said the problem is particularly acute in London, where around one in two homes with permission have not been built.

But the Home Builders Federation (HBF) said housing supply has shown significant growth and planning delays mean permissions can take years to process to the point where construction can start.

Shelter included a one-year time lag between a home being given the go-ahead and the build being completed when making its calculations. It said if it had not allowed for a one-year time gap, its findings for the number of homes not built would have been higher.

The charity used figures from the Department for Communities and Local Government among other data to make its calculations.

Shelter claimed the country’s house-building system encourages developers to sit on land and drip out new homes, to keep prices high.

It said the Government needs to “get tough” and hand powers to councils to tax those who do not build fast enough, as well as take forward policies outlined in the recent housing white paper, such as granting planning permission to developers based on their track record.

Anne Baxendale, head of communications, policy and campaigns at Shelter, said: “House builders are trickling out a handful of poor-quality homes at a snail’s pace, meaning there are simply not enough affordable homes and ordinary working families are bearing the brunt.”

David O’Leary, policy director at the HBF, said: “Housing supply is up by more than 50 per cent in just three years, with the overwhelming contribution coming from national house builders.

“While headline planning permission data is growing at unprecedented rates, a reflection of builders’ intention to build more in the coming years, the majority of this land is not at a stage at which it can yet be built on.

“Delays in the planning system mean permissions can take years to process to the point where construction can start, especially on very large sites with complex infrastructure requirements.

“The cost and risk involved in securing planning permission has hampered the ability of small firms to grow, with large companies dedicating significant resource to navigating the process.”

He said many “of these so-called phantom homes” will be plots on sites where construction is under way.

Mr O’Leary said: “Oversimplified and ideologically driven analysis distracts from the efforts of builders large and small, public and private, to tackle the housing crisis.”

Thursday, 6 July 2017

New energy efficiency standards in Scotland could harm rural housing



Proposals for a minimum energy efficiency standard for privately let homes in Scotland could risk damaging the sector to the detriment of both landlords and tenants, it is claimed.

Scottish Land & Estates, which represents the majority of private housing providers in rural Scotland, believes that rural housing faces particular challenges in this respect and in its submission to the Scottish Government’s consultation on energy efficiency in private rented housing it calls for this to be taken into account.

In the submission it says that the worst performing housing should be targeted first and the sector given time to gradually improve energy standards.

‘Our consultation response makes clear that there is a risk that the private rented sector could be damaged by well-meaning but ultimately flawed proposals for new energy efficiency standards,’ said Katy Dickson, a senior policy officer at Scottish Land & Estates.

The organisation is calling for the minimum standard to be set at EPC level E and for there to be no back stop date. It says this means the measures will target the worst performing stock and full upgrades can be completed gradually at natural breaks in tenancies.

And ultimately it believes that this will mean all low performing homes will reach a better standard than the current proposals would allow and there would be less disruption to tenants.

‘If the regulations are not manageable or appropriately funded then landlords will consider increasing rents in order to pay for energy efficiency investments or even leaving the sector. Our members are being told there is a rural affordable housing shortage and the Scottish Government is encouraging them to develop new housing to let,’ said Dickson.

‘However, when faced with a new unfavourable tenancy regime and now a proposed minimum energy standard which fails to tackle the issues, landlords are being forced to consider if it viable to continue to let as many properties on a long term basis at affordable rents,’ she pointed out.

The organisation added that problems with accurately assessing energy ratings also created worries for the sector.

‘The Scottish Government has highlighted that the age and location of rural privately let properties means they are more likely to be of lower energy efficiency. Simply being off the gas grid drops the efficiency score,’ Dickson explained.

‘We are one of many stakeholders that has raised concerns about the methodology behind the energy efficiency assessments across the UK. It is not transparent and fails to recognise the reality of many aspects of traditional rural buildings resulting in unreliable assessments. If regulation and funding is to be based on it, there must be improvements as soon as possible,’ she added.

http://www.propertywire.com/news/uk/new-energy-efficiency-standards-scotland-harm-rural-housing/