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Em Morley

Mortgage approvals rise at largest rate for 6 years

Published On: June 3, 2015 at 3:55 pm

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The latest Bank of England Money and Credit Report has given encouragement to the property market.

According to the report findings, approvals for mortgage rose in April to their largest amount since 2009. In total, 68,076 house purchases mortgages were rubber-stamped last month, an increase of 9.89% from March and the highest rise since February six years ago.[1]

Confidence

These results are sure to buoy the mortgage market as they suggest that confidence appears to be growing, one year after the implementation of the Mortgage Market Review. All types of mortgage approvals during April were substantially above average for the last six months.

Head of lending at the Mortgage Advice Bureau, Brian Murphy, said that, ‘remortgage approvals have risen at twice the rate of house purchase approvals over the past year, despite tougher affordability checks which some feared would imprison consumers in their existing deals.’ He went on to say that, ‘falling mortgage rates have boosted demand in the remortgage sector and there are significant savings to be had for borrowers moving away from their lender’s standard variable rate.’[1]

Mortgage approvals rise at largest rate for 6 years

Mortgage approvals rise at largest rate for 6 years

Positive

Mr Murphy also said that, ‘with the election clearly having little impact on mortgage activity, the outlook for the rest of 2015 remains positive. Lenders have a healthy appetite for business and affordability conditions are being helped by the low rate environment.’[1]

He warns however that, ‘today’s rock-bottom prices can’t last forever and it is likely we’ll see greater levels of mortgage activity as borrowers seek to lock into a preferable rate while they still can.’[1]

[1] http://mortgageadvicebureau.com/news/Mortgageapprovalsjumpbyhighestamountinsixyears/1028/

 

Stamp duty reforms save homeowners £701m

Published On: June 3, 2015 at 3:00 pm

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An astonishing new data release has indicated just how much homeowners have saved as a result of the introduction of Stamp Duty Land Tax reforms.

Savings

Findings from myhomemove has suggested that since the introduction of the reforms on December 4th last year, UK homeowners have saved a huge £701m. Changes brought about by the reforms involve how stamp duty is levied. This cut tax for the 98% of people the purchase homes under £937,500.[1]

The research from myhomemove shows the largest savings made by UK property owners and indicates that each buyer saved an average of £1,400.[2]

Myhomemove CEO Doug Crawford, stated that, ‘the stamp duty reforms have saved UK home buyers a significant amount of money since its introduction and provided an important boost to the property market, just as house transactions were starting to slow down in the run up to the general election.’[3]

Crawford believes that, ‘the changes have a particularly positive impact on those struggling the most to get onto the property ladder, first-time buyers, as they can now save more money towards a deposit for their purchase.’[4]

Stamp duty reforms save homeowners £701m

Stamp duty reforms save homeowners £701m

Substantial Increase

Continuing, Mr Crawford said he feels that, ‘under the old slab system, there was a substantial increase in price at the stamp duty thresholds, which the reforms have reduced significantly, leading to greater movement up the property ladder and enabling homeowners to aspire to own properties that would have previously been unobtainable.’[5]

‘While there are losers from the changes, these are a small minority of buyers. For them, the risk of a prospective mansion tax was far greater than the increase in stamp duty,’ Crawford explained. He went on to say, ‘early signs indicate that the election result has reassured buyers of higher value properties, with many estate agents reporting a buoyant market at the top.’[6]

[1] http://www.propertyreporter.co.uk/finance/new-stamp-duty-rules-save-homeowners-701m.html

 

 

Which is Britain’s Fastest Growing Region?

Yorkshire and the Humber has experienced the highest monthly property price growth of all UK regions, revealed Land Registry data.

The region’s monthly price rise of 2.7% arrives after a minor annual increase of just 3.1%, taking the average house price to £123,471. However, Yorkshire and the Humber is only the sixth fastest growing region in the UK.

Which is Britain's Fastest Growing Region?

Which is Britain’s Fastest Growing Region?

It is not shocking that London has seen the highest annual price growth, of 10.9% in the last 12 months, to an average of £474,544.

Director of Your Move and Reeds Rains estate agents, Adrian Gill, says: “The election rattled the cage of the London market more than others, with the threat of mansion tax hanging over high-end buyers, who are already having to fork out more on Stamp Duty.

“Activity in the capital should start to flourish again. But, in the meantime, London has been knocked off its perch by Yorkshire and the Humber, which saw the biggest monthly jump in property values across the country.”1

Countdown of the UK’s fastest growing regions

Position

Region Average house price Annual change

Monthly change

10 North East £98,374 -0.6% -0.5%
9 Wales £117,032 0.3% -1.1%
8 West Midlands £137,121 2.3% 0.2%
7 North West £113,301 2.3% 2.1%
6 Yorkshire and the Humber £123,471 3.1% 2.7%
5 East Midlands £135,033 5.1% 1.4%
4 South West £189,447 5.9% 1.4%
3 East of England £201,465 7.8% 0.3%
2 South East £244,238 8.8% 0.8%
1 London £474,544 10.9% 2.3%

The South East, which ranges from Berkshire to the Isle of Wight, and the East of England, from Hertfordshire to Norfolk, are second and third, with annual increases of 8.8% and 7.8% respectively.

With the average house price in the South East at £244,238, this is still around £200,000 less than London. However, as the UK average is now £179,817, these areas are still significantly more expensive than other regions.

The figures indicate that Wales and the North East are the only areas witnessing a decline, with average prices in Wales falling 1.1% and 0.5% in the North East. The North East is the only region to record an annual decrease, with drops of 0.6%.

1 http://www.homesandproperty.co.uk/property-news/news/uk-house-prices-new-report-reveals-britains-fastest-growing-regions

 

 

Labour’s New Shadow Chancellor Against Rent Controls (and He’s a Landlord)

Published On: June 3, 2015 at 1:53 pm

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Labour’s new shadow chancellor says that the political party should not have pledged rent controls to regulate landlords.

Chris Leslie, who has replaced Ed Balls, is a landlord himself. He believes that Labour’s housing policy of limiting the speed of rent rises troubled property investors by suggesting that fast increases exploit renters.

Labour's New Shadow Chancellor Against Rent Controls (and He's a Landlord)

Labour’s New Shadow Chancellor Against Rent Controls (and He’s a Landlord)

He says: “Part of the issue we always face on the centre-left is the temptation to want to control and run what’s going on in a particular market.

“It was reasonable to talk to people who were renting and say, ‘we understand your anxieties.’ But actually the solution is supply of housing and not necessarily implying that landlords are all exploitative and opportunistic.”

Mr. Leslie believes that improving consumer information, increasing transparency and initiating a Help to Build scheme to encourage developers to build more could solve the market.

“I personally feel that it’s got to be about consumer information, about blasting some transparency through these markets,”1 he says.

Mr. Leslie would prefer to see a new house-building scheme, rather than rent caps.

Parliament’s latest register of interests revealed that Mr. Leslie rents out a property in London.

Landlords do not account for a large number of voters, just 3% of the population. However, the amount of tenants renting from landlords makes up a more significant 15%.

According to polls conducted earlier this year, there is a great amount of support for rent controls.

A survey by YouGov revealed that just 8.6% of people are against compulsory rent caps and 59% support them.

The English Housing Survey found that landlords increased rents by 8% in 2014.

Labour pledged to slow rent rises in the general election campaign. The party would have legislated to avoid landlords increasing rents by more than inflation levels for the whole contract length. Tenancies would also have a three-year standard term.

1 http://www.independent.co.uk/news/uk/politics/labours-new-shadow-chancellor-is-against-rent-control-and-guess-what-hes-a-landlord-10288889.html

Search agency announces extension plans

Published On: June 3, 2015 at 12:58 pm

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One of the oldest property search agencies in Britain has announced plans to expand within London.

Capital Expansion

Stacks Property Search, which has offices across England and Wales, have decided to extend their London portfolio after increased client demand. James Greenwood, managing director of the firm, commented that, ‘London clients have historically been managed from a single London office. But increasingly, clients are asking us for help finding property in further flung areas of the capital.’[1]

Greenwood said that Stacks’ strategy is, ‘open to a network of satellite offices across the capital.’ He feels that, ‘this works for us well in the country. Our business model is a head office that looks after administration, including marketing and training, and a network or regional directors who have very specialised local knowledge.’[1]

‘Some of the regional offices are run on a franchise basis, others are managed by head office with locally based associate directors at the helm,’ Greenwood explains. ‘We are now offering business opportunities for property search experts in the capital.’[1]

Search agency announces extension plans

Search agency announces extension plans

Extensive Service

Sara Ransom, managing director of Stacks Property Search London, stated that, ‘having experts in different areas on the team will allow us to offer a much more extensive service.’ She continued by saying, ‘our clients come from all over the world, looking for properties ranging from large family houses in Wimbledon, pied a terres in central London, investments in the City and Shad Thames, and properties for children in Clapham and Fulham.’[1]

[1] http://www.propertyindustryeye.com/property-search-agency-stacks-unveils-expansion-plans/

 

 

NLA Disputes Citizens Advice Report

Published On: June 3, 2015 at 12:54 pm

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The National Landlords Association (NLA) has disputed a recent report from The National Association of Citizens Advice Bureaux, a national charity that helps people with their problems.

The Residential Landlords Association (RLA) and housing minister Brandon Lewis have also contested the issues outlined in the report.

The document, titled A Nation of Renters: How England moved from secure family homes towards rundown rentals, suggests that private landlords offer a sub-standard service yet earn “£5.6 billion in rent on unsafe housing.”

Citizens Advice found that 16% of private rental housing is unsafe compared with just 6% of social sector homes. The charity also says that £1.3 billion in housing benefit goes to rogue landlords.

NLA Disputes Citizens Advice Report

NLA Disputes Citizens Advice Report

Furthermore, the report says that 740,000 households in England, including 510,000 families with children, live in private rental sector homes that pose a severe threat to their health. Additionally, it claims that rogue landlords receive £5.6 billion per year for unsafe homes that fail legal standards.

The reports indicates how “renting in England has changed dramatically in the past few decades with the number of households living in the private rental sector doubling in the last ten years.” 

The main findings of the report are:

  • 16% of private rental sector homes are physically unsafe.
  • 8% have serious damp.
  • 10% pose a risk of a dangerous fall.
  • 6% are excessively cold.
  • Private tenants living in properties with a category 1 hazard pay an average of £157 per week in rent.

The report is part of Citizens Advice’s Settled and Safe Campaign to protect private renters. It recommends:

  • Tenants should be entitled to rent refunds if homes are dangerous and not fit for habitation.
  • A national register of landlords – “This could help ensure landlords operating illegally cannot move to different areas to avoid legal action.”
  • Councils should also set up local licensing – “This will help to ensure landlords are providing the quality of housing and service the area needs and help to ensure tenants know what they can expect from a good landlord.”1

It is seemingly obvious that as private landlords take on more tenants who would previously have been housed in social housing, that more complaints will surface.

It is also likely that councils are avoiding addressing situations where rogue landlords are operating, as they have nowhere else to house tenants.

CEO of the NLA, Richard Lambert, comments on the report: “We recognise that bad practise exists in private housing, that it can have a devastating effect on those it affects and that it needs to be stamped out.

“But this report uses loose definitions to compound a perception that private housing is insecure and unsuitable across the board and it ignores the weight of evidence to the contrary.

“The English Housing Survey finds that the average tenancy now lasts just shy of four years and that only 7% of tenancies are ended by landlords. Our own research shows that 86% of families consider their properties as their home and that 62% do not see renting as a barrier to family life.

“Furthermore, just 0.5% of families who rent privately say they’ve had to move because their landlord increased their rent.

“What this shows is that private housing is far from Citizens Advice’s assertion of a market that is ‘failing systematically to deliver what consumers want.’”

“Those who suffer at the hands of the criminal and negligent minority do so because of widespread failure of local councils to commit resources to enforcing the laws that already exist against poor landlords and criminal standards, and because of the failure of successive governments to incentivise the building of much needed homes that would relieve the pressure on the whole housing market.”1

1 http://www.landlordzone.co.uk/news/lies-damned-lies-and-statistics