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Em Morley

Annual Property Price Growth Slows

Published On: June 4, 2015 at 2:21 pm

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Annual Property Price Growth Slows

Annual Property Price Growth Slows

Annual property price growth in the UK slowed to 4.6% in May, down from 5.2% in April, according to the latest Nationwide house price index.

House prices increased by an average of 0.3% last month, compared to a 1% rise in April. The average property price was £195,166 in May, up from £193,048 in the previous month.

Chief Economist at Nationwide, Robert Gardner, forecasts house price growth to reflect income increases, which is currently around 4%.

He says: “The annual pace of house price growth slowed to 4.6% in May. This resumes the gradual downward trend that had been in evidence since the summer of 2014, which was briefly interrupted in April when house price growth edged up to 5.2% from 5.1% in March.

“Over the longer term, we would expect house price growth to converge with earnings growth, which has typically been around 4% per annum.

“However, much will depend on supply side developments; in recent years, the rate of building activity has remained well below that required to keep up with population growth.”1

1 http://www.propertyflock.co.uk/f/8416B41FC

 

 

 

 

Broker says Future is Bleak for Agents

Published On: June 4, 2015 at 1:29 pm

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Foxtons estate agent experienced falling shares and was given a sell rating by a broker, which has begun covering the UK estate agent market.

The broker, Peel Hunt, also issued hold ratings to Countrywide, LSL Property Services and Savills.

Broker says Future is Bleak for Agents

Broker says Future is Bleak for Agents

It says the long-term outlook for agents is bleak, as fees will start to drop due to competition from online agents.

Peel Hunt said the main issue is when commissions will decline and by how much: “Estate agents operating in London potentially face the greatest downside to commission rates, given the absolute savings that vendors can make using a fixed price agent.”

It also claimed that the general election was generally positive for the housing market, as the result ended uncertainty around mansion tax, rent controls and banning tenant fees.

It adds: “While the near term news is positive and the listed players have diversified into areas with more stable revenue streams, we believe the sector faces longer term headwinds.

“It is still largely exposed to the highly cyclical nature of housing transactions and the growth of fixed price online estate agents is likely to lead to downward pressure, possibly significant, on industry fees and profits.

“The key issue is the pricing structure offered by the online estate agents, which have been expanding rapidly and where the difference in fees is material – especially in higher value areas of the South East and London. The big debate for us is how far and how rapidly will fees fall.”1 

Last year, Foxtons charged an average commission rate of 2.4%.

Yesterday, Foxtons shares closed at 270p, down from their 315p high last year, but up from November 2014’s low of 142p.

1 http://www.propertyindustryeye.com/high-street-agents-are-under-pressure-from-onliners-and-fees-will-fall-says-city-analyst/?utm_content=buffer26e8f&utm_medium=social&utm_source=twitter.com&utm_campaign=buffer

 

 

 

 

 

Homes for sale at lowest rate for years

Published On: June 4, 2015 at 12:36 pm

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A report from the Halifax has indicated that the number of properties for sale on the market is at its lowest level for a number of years.

The chronic shortage of homes for sale, married with surging demand from buyers, has seen prices soar at a greater rate than wages. Property prices increased by 8.6% in the year to May, meaning the average cost of a home is now £196,067.

However, prices did slow in May, albeit by 0.1%, in comparison to April.

Imbalance

Housing economist at the Halifax, Martin Ellis, suggested that, ‘the imbalance between supply and demand is likely to continue to push up house prices over the coming months. Looking further ahead, the increasingly level of house prices in relation to earnings is expected to dampen house price growth.’[1]

Homes for sale at lowest rate for years

Homes for sale at lowest rate for years

Jonathan Samuels, chief executive of Dragonfly Property Finance, agreed with Mr Ellis’ comments. Samuels stated that, ‘unless supply improves materially, it is hard to see how prices will not continue to rise throughout 2015, albeit at a more modern pace relative to last year.’[1]

These figures from the Halifax come hot on the heels of data released yesterday from the Nationwide, which indicated that 38% of properties were sold to cash purchasers during the first quarter of 2015.

[1] http://www.bbc.co.uk/news/business-33003592

 

 

London Council Clamps Down on Rogue Landlords

Published On: June 4, 2015 at 12:27 pm

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Islington Council has fined two private landlords for providing a sub-standard service, with hazardous conditions in their properties.

In one case, an inspection by environmental health officers discovered many health and safety risks at two self-contained flats on Stroud Green Road. The inspectors found that tenants were exposed to damp and mould, cold conditions, poor fire precautions, carbon monoxide, asbestos, falls and electrical safety hazards.

London Council Clamps Down on Rogue Landlords

London Council Clamps Down on Rogue Landlords

The landlord, Thierry Doudrich, was given two improvement notices, demanding he improve living conditions. He did not complete the necessary work, despite Council officers trying to help him. It then decided to prosecute.

On 18th May 2015, Doudrich pleaded guilty to failing to comply with the improvement notices. He was fined a total of £5,000 and ordered to pay the Council’s costs of £3,394.56 and a victim surcharge of £120.

Magistrates said that the level of the fine reflected the seriousness of the hazards at the properties, which made them “potentially lethal” to inhabitants.1

In a separate case, TheCityRooms.com Ltd, based on Cambridge Heath Road, was prosecuted for ignoring an overcrowding notice.

Officers investigated a flat on Mitchison Road, after a tenant complained. They found that the property was occupied by five people, despite being suitable for just three. One room measured only 6.1 square metres.

TheCityRooms.com Ltd was served an overcrowding notice, which specified that the undersized room must not be occupied after the current tenant had left. The firm ignored this and let the undersized room to another renter.

On 14th May 2015, Highbury Magistrates’ Court was told the case and the company pleaded guilty to failing to comply with the overcrowding notice.

TheCityRooms.com Ltd was given a £850 fine and ordered to pay a further £400 for failing to reply to a section 16 notice, which required them to confirm the ownership arrangement of the property. It also had to pay costs of £910 and a victim surcharge of £85.

Furthermore, the company’s director, Jason Zhou, was fined £850 regarding the overcrowding notice and ordered to pay £455.50 costs and an £85 victim surcharge.

Councillor James Murray comments: “We’re determined that private landlords provide homes that are decent, safe and suitable to live in. Most landlords do the right thing and look after their tenants, but we will firmly hold to account those who put tenants at risk.”1

1 http://www.islington.gov.uk/islington/news-events/news-releases/2015/06/Pages/PR6148.aspx

Two more councils to bring in licensing schemes

Published On: June 4, 2015 at 11:36 am

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A further two London councils have indicated that they are to introduce additional licensing schemes in the coming weeks.

Redbridge council held discussions about their latest proposals just last night, while Camden is poised to propose a borough-wide scheme that would apply to all properties shared by three of more people.

Investigation

The changes proposed by Camden comes after a thorough investigation. Environmental health officers visited a total of 391 houses in multiple occupation (HMO’s) and alarmingly, branded 19% as poor or very poor. Additionally, the visited 28 flats situated above shops, and found that 4 had poor conditions.[1]

As part of their 22-week consultation scheme, the council received 1,4000 responses to its online survey. However, of the 171 landlords who replied, 71% were found to be opposed to the licensing proposals.[1]

Despite Camden Council hosting the London Landlord Accreditation Scheme, it argues that having accreditation does not help with poor standards in properties owned by landlords that are not members.

Two more councils to bring in licensing schemes

Two more councils to bring in licensing schemes

Complex

Richard Tacagni, managing director of consultancy firm London Property Licensing, commented that, ‘this move by Camden Council will bring another 8,000 HMO’s within the remit of property licensing in what is becoming an increasingly complex regulatory landscape.’[1]

He continued by saying that, ‘by December 2015, we will have almost 20 separate property licensing schemes operating in London, each with different terms and conditions-a situation that is being replicated in various parts of the country.’ Tacagni also warned that, ‘unsafe and badly managed properties will only be tackled by enforcement action and councils need to step up to the mark and make effective use of their existing enforcement powers.’[1]

 

[1] http://www.propertyindustryeye.com/two-more-authorities-poised-to-bring-in-licensing-schemes/

 

 

Last Time Buyer Market Reaches £820 Billion in Value

Published On: June 4, 2015 at 11:26 am

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The UK’s last time buyer market has reached a total of £820 billion in value, found research from Cebr, the economics consultancy and Legal & General.

Last Time Buyer Market Reaches £820 Billion in Value

Last Time Buyer Market Reaches £820 Billion in Value

This sector, of those buying their last home, also has 5.3m under-occupied properties. Within these homes, there are a total of 7.7m spare bedrooms.

The wealth of this market is expected to hit £1.2 trillion by 2020.

Director at Legal & General, Stephen Smith, says: “We currently have a housing crisis in the UK and there is a chronic shortage of appropriate properties to meet this huge demand. Government policy is focused on schemes to build more homes for first time buyers and to help people get onto the property ladder. Initiatives like Help to Buy, which encourage the building of more homes, are always very welcome.

“However, at present, the last time buyer market is being hugely overlooked and as our figures show it could help to solve the UK housing crisis.

“We need to make it easier for older people to even consider moving by relieving the onerous burden of Stamp Duty, creating better options for equity release and providing real alternatives for older people in terms of the types of home that they can live in and the infrastructure that surrounds them.

“If we are able to get that right we will help older people in the UK move to homes which better fit their lifestyles and their needs and at the same time unlock large swathes of valuable housing stock for growing families.”1 

1 http://www.propertyreporter.co.uk/property/uks-last-time-buyer-market-swells-to-820bn.html