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Em

Em Morley

Immigration Bill to be rolled out-response

Published On: May 27, 2015 at 3:27 pm

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Categories: Landlord News

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Today, her majesty confirmed the opening of a new Parliament with the annual Queen’s Speech. One of the main announcements was that the Immigration Bill is to be rolled out across the country, after a trial in the West Midlands during last year.

Responding to the announcement, a property professional has raised concerns over the workability of the scheme for thousands of landlords.

Steve Bolton, Founder and Chairman of Platinum Property Partners, also believes that more is to be done to improve standards in the private rented sector.

A step forwards

Mr Bolton commented that, ‘so far only landlords in the West Midlands have been required to check the immigration status of new tenants: however the Queen’s Speech stated that this will now be rolled out nationally. Any landlords who fail to carry out these checks could incur a fine of up to £3,000, so it is vital that the buy-to-let investor community is aware of these changes as soon as they are implemented.’[1]

Immigration Bill to be rolled out-response

Immigration Bill to be rolled out-response

He went on to say, ‘although the checks will involve slightly more admin, they won’t cause a headache for the majority of landlords and will ultimately help to protect their business as well as encourage professionalism in the sector. Only landlords who fail to carry out thorough referencing checks will be troubled by these changes.‘[2]

Bolton also said that, ‘noticeably absent from the Queen’s Speech was any mention of a mandatory licensing scheme for landlords.’ He is of the opinion that, ‘widespread licensing would do even more to raise standards and uncover rogue landlords: but the fees attached to this could impact some landlords financially.’ Finally, he said, ‘any additional legislation must regulate the few bad landlords rather than penalize the majority who provide a good, quality and much-needed service.’[3]

[1] http://www.propertyreporter.co.uk/landlords/immigration-checks-will-protect-landlords-but-mandatory-licencsing-still-needed.html

 

 

Average Home in London will be £1m by 2030

Published On: May 27, 2015 at 3:20 pm

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Categories: Property News

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Average Home in London will be £1m by 2030

Average Home in London will be £1m by 2030

The average property in London will cost over £1m by 2030, as job growth stays strong and the housing shortage pushes up prices, suggests new research.

The growing population, higher employment levels and the lack of supply of homes could drive prices above £1m in the next 15 years, double the current average of £490,000.

Market experts Oxford Economics claim that if the huge increase in population coincides with “an increasing divergence between those with high and low incomes, then it will mean affordability problems for people on low incomes,” but that “a lot will depend on the rate of house building.”

London’s price inflation is predicted to continue outpacing other European cities, like Paris and Frankfurt, as investment in infrastructure from the private and public sector will fuel growth “for many years to come.”1

Employment levels are expected to slow down to an average of just under 1% per year by 2030, compared to the 1.5% average between 1991-2015. This is an extra 800,000 jobs, compared to over 1m jobs between 2000-2015.

1 http://estateagentnetworking.co.uk/2015/05/18/house-pricing-in-uk-2015/

 

 

Right to Buy Extension Explained

Published On: May 27, 2015 at 1:20 pm

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Categories: Landlord News

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One of the first policies to come into force under the Conservative Government will be the extension of the Right to Buy scheme.

Margaret Thatcher introduced the system in her Conservative government, allowing council tenants to buy the homes they had previously rented. However, the new Housing Bill, detailed in the Queen’s Speech today, will give housing association tenants the same right.

The Scottish and Welsh governments have rejected the proposals, indicating a difference in attitudes toward publicly owned housing stock in the UK.

Eligibility

Those hoping to take advantage of the scheme must have been tenants for at least three years, the same requirement as council tenants. The Government believes that around 1.3m housing association tenants will be eligible in England.

About 500,000 housing association tenants are already eligible for discounts. The new policy will extend these rights to a further 800,000 tenants and raise discounts.

In Wales, Right to Buy is being abolished completely and in Scotland it will be phased out by August 2016. A separate scheme is in place in Northern Ireland.

Discounts

Right to Buy Extension Explained

Right to Buy Extension Explained

For those eligible, discounts begin at 35% on a house and 50% on a flat. The maximum available is 70%, but this is capped at £77,900 outside London and £103,900 in the capital. For instance, if someone has been a pubic sector tenant for ten years, they could buy a £100,000 flat for £40,000 using a 60% discount.

Funding

The new Housing Bill will specify that local authorities must sell off their most valuable council homes when they become vacant. The Government believes this could raise £4.5 billion. The councils are then required to build replacement homes with the money raised and the excess will fund Right to Buy. The Government will make up the difference.

The cost

The Government has not revealed what this scheme could cost, but has pledged to refund the discount to the housing association involved.

The National Housing Federation (NHF), representing all UK housing associations, says that Right to Buy for housing association tenants could cost £11.2 billion, if all those eligible actually buy.

The Institute for Fiscal Studies (IFS) thinks that it could cost “billions of pounds” and will “worsen the UK’s underlying public finance position.” The IFS also says the policy will signify a “substantial giveaway” to housing association tenants.1 

Social rental sector

The Government says that by selling off housing association homes and requiring replacements to be built, the scheme will effectively double the amount of homes available. It would also increase the number of homeowners in England, which has dropped recently.

However, the NHF argues that since 2012, just 46% of homes sold have been replaced, despite the requirement. Councils, especially in urban areas, are struggling to find enough land to build new homes on.

Right to Buy Introduction

Mrs Thatcher launched Right to Buy in October 1980, and 2.5m council tenants have bought their homes since. The peak was seen in 1982-83, when 167,000 people bought their house, falling to 3,179 in 2009-10. After discounts were raised, sales grew to over 15,000 in 2013-14. The Government hopes this will increase further.

Affordability

The NHF has estimated that 15-35% of housing association tenants eligible for the new scheme will be able to afford a mortgage. This means that 221,000 households could make use of the policy, but if mortgage rates rise as expected, this number would fall.

1 http://www.bbc.co.uk/news/business-32884747

Don’t rush immigration bill rollout-warning

Published On: May 27, 2015 at 12:56 pm

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Categories: Landlord News

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Today marks the official opening of the new Parliament, with the Queen’s Speech outlining the legislations for the next twelve months.

Just last week, the Prime Minister announced that the Tories will bring about a nationwide rollout of changes in the Immigration Act 2014, now that they have a majority government. A pilot scheme of immigration status and right to rent checks was introduced in the West Midlands at the back end of last year.

During his address, Mr Cameron blamed the coalition government for the fact that the nationwide rollout had not been introduced sooner. However, the reminder to landlords within the West Midlands to fill out official questionnaires on the success of immigration checks suggests that a full report of the findings and any subsequent rollout will not be occurring until late this year.

Be cautious-warning

With the national rollout of the scheme in the offing, the head of lettings at Carter Jonas, Lisa Simon, has appealed to the Government not to rush ahead with their plans. She believes that, ‘it’s difficult to see how any sensible wider roll-out of the Right to Rent regime, although it has long been forecast to come this year, can be made before the full-results of the survey have been analysed and made public for full discussion.’[1]

Continuing, Simon said that, ‘it’s important that landlords and letting agents respond to the final survey but even more important that the Government publishes the results to facilitate full discussion, both within the lettings industry and also between the industry and the Government.’[1]

Thorough analysis

Simon feels that alongside the increased workload for landlords and agents, Home Office support for those in the West Midlands should also be thoroughly assessed. She claims that, ‘it needs to be clear just what effect there has been on workload, how effective the checks have been and whether or not the Home Office support and helpline for the limited numbers implementing Right to Rent has been sufficiently robust and will be adjusted to ensure it can cope with increased demand after a fairly limited trial.’[1]

Don't rush immigration bill rollout-warning

Don’t rush immigration bill rollout-warning

‘The industry – and the country – needs planned implementation of this rather than shock announcements that lack substance as to how change will be implemented. Everyone was hopeful that with a majority, the Conservatives would be more considered with policy announcements and that the era of fag packet policy was in the past,’ she added.[1]

As head of a national lettings agency, Simon stated that she was, ‘concerned to see how the immigration check system has worked and what it has cost, especially in the current climate where lettings agents are already under scrutiny for charging tenant fees for our services.’[1]

Concluding, Simon warned all letting agents and landlords to be vigilant when the checks are eventually introduced in their area, to ensure there are no legal issues further down line.

[1] http://www.lettingagenttoday.co.uk/breaking-news/2015/5/%E2%80%98do-not-rush-with-immigration-checks%E2%80%99-%E2%80%93-carter-jonas

 

 

Remortgage Loans Reach Six-Year High

Published On: May 27, 2015 at 12:33 pm

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Categories: Finance News

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Remortgage Loans Reach Six-Year High

Remortgage Loans Reach Six-Year High

The total value of remortgage loans hit £4.8 billion last month, indicating that housing market activity may be returning to pre-crisis levels.

This is the highest number since 2009 and is a 15% rise on April 2014.

Conveyancing firm LMS has estimated that the amount of remortgage loans increased by 21% and the average loan has risen to £32,230 from £26,600.

Boss of LMS, Andy Knee, says: “The growth is a much-needed boost to a sector which has experienced huge fluctuations over the past 12 months.”1

1 Baird, R. (2015) ‘Remortgage loans ‘hit six-year high’’, Metro, 27 May, p.24

 

 

 

 

 

 

 

 

 

 

 

Increase in landlords selling their property

Published On: May 27, 2015 at 11:56 am

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Categories: Property News

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A recent survey has suggested that more landlords are selling their buy-to-let properties, with a rise in sales recorded between March and April.

The Association of Residential Letting Agents (ARLA) surveyed a number of London property owners and found the number of landlords selling their investment home doubled during the month.

Increases

With London agents saying that the number of properties rose from three to six per branch on average, further increases were recorded north of the border. In the same period, Scottish agents saw an average increase of four to seven homes for sale.

ARLA also indicates that 32% of letting agents questioned said that rents had risen during April. Following the outcome of the election, 80% of people believe that rents will rise again during the next five years.[1]

Increase in landlords selling their property

Increase in landlords selling their property

An increase in the number of landlords selling their homes in April is more than likely to be due to political uncertainty, according to ARLA’s managing director David Cox. ‘We know that Labour’s plans with the PRS were unpopular for many landlords and agents, so this increase in those selling their buy-to-let properties may have been a knee jerk reaction to the possibility of Labour’s proposals coming into practice,’ Cox suggested.[1]

Supply-demand

Further data from the investigation shows that supply and demand remained fairly constant in April. Members of ARLA managed 193 properties on average last month, in comparison to 192 during March.

Cox also believes that it is, ‘going to be interesting to see what happens in the market in the next few months following the election result and whether we see an increase in supply of rented accommodation.’ He continued by saying that, ‘hopefully, now the country is under less political uncertainty, we will begin to see the market pick up again and with the policies on offer in both the rental sector and housing market we should see the overall market heading into the right direction.’ [1]

[1] http://www.lettingagenttoday.co.uk/breaking-news/2015/5/more-landlords-selling-their-properties-say-arla-agents