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Em

Em Morley

Britain facing another housing crisis

Published On: April 17, 2015 at 11:35 am

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Experts are warning that Britain faces another significant threat of a housing crisis, with home shortages pushing up property prices across the whole of the U.K.

Slowing

A shortage of property for sale has led to a slowdown in market activity and has coincided with the London property market showing it’s slowest growth in many months.

The Royal Institution of Chartered Surveyors (RICS) has recently released their latest property forecasts for the next five years. RICS suggest that house prices will rise by 2.5% during 2015, and then by 4.5% each year for the next five years.[1]

Their latest report on property price growth has shown an increase in value of homes across most regions of the UK in the three months to March 2015. However, prices actually fell in London and in the North of England.

Slipping back

Simon Robinson, member of RICS, said that, ‘the boost that was given to the housing market by the Help to Buy scheme has begun to dissipate and activity levels have slipped back.’ Robinson also believes that, ‘even more worrying are the tentative signs that price momentum could be set to pick up once again, as the supply of stock to the market continues to fall.’[2]

Mr Robinson also points out that, ‘election uncertainty may be having some impact on the market,’ but is gravely concerned that, ‘underlying the trends visible in the latest survey is a very real housing crisis which will urgently need to be addressed by the next government.’[3]

Election tension

These latest figures from RICS come when the future of the housing market is subject to scrutiny in the election debate. The Tories have pledged to extend the Right-to-Buy scheme to Housing association tenants, alongside local authority housing. Furthermore, the Conservatives will allow homes up to the value of £1m to not become subject to inheritance tax.

All main political parties seem to have given their support to increasing homebuilding. With this said, figures suggest that very few local authority houses being built has contributed largely to Britain’s home shortage problem.

Small solution

The Conservative Party’s proposals regarding the Right-to-Buy scheme will not solve the housing shortage problem, according to RICS member Jeremy Blackburn. He feels that the proposal to extend the scheme to local authority housing will only help, ‘relatively small numbers of tenants to move into home ownership’ and will not help at all to, ‘solve the shortage in overall housing supply.’[4]

Blackburn went on to suggest that, ‘aspirational home ownership is at the core of our economy,’ but feels that Britain, ‘must ensure that we have a future stock across all tenures and particularly for those on lower incomes.’[5]

Rental concern

In the letting market in particular, demand for housing continues to exceed supply. The RICS report states that, ‘expectations for rental growth remain almost unchanged versus the previous month with respondents anticipating growth of 2.7% over the next year to come.’ Additionally, RICS predict that growth will increase thereafter to, ‘an average of 4.7% per annum over the coming five years.’[6]

Britain facing another housing crisis

Britain facing another housing crisis

 

Deposits put down by first-time buyers have also been perceived to be lower in the first three months of the year. Surveyors have noted that these deposits are lower in comparison to the final quarter of 2014.

Loan approval

The Bank of England’s latest Credit Conditions Survey has indicated that both banks and building societies are now more open to lend to persons with deposits lower than 10%. Lenders have indicated that they expect to see an increase in home loan application approvals during the coming months.

 

[1-6] http://www.thisismoney.co.uk/money/mortgageshome/article-3040143/Housing-shortage-triggering-worrying-upsurge-property-prices-expectations-2-5-rise-2015.html

 

 

 

The Craziest Homes You Can Stay in Around the World

Published On: April 17, 2015 at 8:20 am

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Categories: Property News

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Common options for holiday home rentals include picturesque cottages and villas with pools. But there is a new trend for unique holiday experiences, involving specific themes and décor.

You can now choose all sorts of properties for your holiday. Here are just a few:

Gingerbread House, Geyserville, California, USA: £84 per night

 

The Gingerbread House at the Isis Oasis Retreat Center is designed to be cosy and comfortable inside. Sleeping two downstairs and one in the loft, the house has stained glass windows with LED lights inside.

Around the cabin are trees encasing it. Outside is a wood-fired oven and picnic table. Guests can enjoy a pool, sauna and hot tub.

Cluedo house, Aviemore, Scottish Highlands: £315 per night 

 

Inshriach House boasts an incredibly similar layout to a Cluedo board. Guests can explore the property, which has ten bedrooms, and look out over stunning views.

The house and estate are often used for films and photoshoots, meaning that it is expensive to stay there.

In the Cairngorms National Park, this Edwardian house is an ideal holiday spot. It is also one of the greenest historic holiday homes in Scotland, heated by biomass and fuelled by solar panel electrics.

The house is in the heart of a 200-acre estate and is five miles from Aviemore.

Inside you can expect dark panelling, Persian rugs and roll-top baths.

The Mirror House, Pittsburgh, Pennsylvania, USA: £116 per night

 

The Mirror House is in a quiet suburb near Fox Chapel and is an artist’s home and studio. The exterior of the property is covered in mirrors and the interior continues this theme, including original artwork and furnishings.

Guests can enjoy a bedroom with a 42-inch plasma TV, free Wi-Fi, a sunken bathtub and walk-in shower.

Additionally, guests have access to the whole house, which includes a home cinema.

Nature Observatorio Treehouse, Costa Rica: £144 per night

 

This holiday home is for the outdoorsy type, who will enjoy the 1.5-mile walk through the forest to the Nature Observatorio Treehouse. Guests are taught a short climbing lesson, and then begin their ascent to their retreat.

There are two bedrooms upstairs and a living area with ecologic bathroom downstairs. The water supplied to the property is collected rainwater and the toilet is compost-making.

Meals are delivered to you by a pulley system and you can enjoy monkeys, toucans and others waking you up in the morning.

Hobbit House Saffir, Ceredigion, Wales: £50 per night 

 

The Hobbit House is situated in an organic farm in west Wales and is the perfect rural getaway. The open plan property is designed around an octagonal theme and boasts high quality furnishings.

A king size bed offers prime comfort for adults and there are handmade birch bunk beds for children and teenagers. Outside is a garden area and barbecue.

Cave house, Santorini, Greece: £145 per night 

 

White Pearl Villas in Oia, Santorini are carved into the volcanic rocks of Theran. The Superior Pearl Villa sleeps two and has a view across the Caldera cliffs and blue Aegean Sea.

A modern interior with minimal décor, the property is beautifully luxurious. Found in the village of Oia, the cave house is 11 miles from the Athinios port, ten miles from the airport and six miles from the town of Fira.

 

UK house price growth slows

Published On: April 16, 2015 at 3:59 pm

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Categories: Property News

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The latest Office for National Statistics report has indicated that the growth of the property market is slowing. Additionally, the report shows that London is no longer the leader in UK property inflation.

 

Fall

Prices of houses within the U.K increased by 7.2% in the 12 months leading up to February 2015. In comparison, year on year growth in January was at 8.4%.[1]

 

London in particular has seen a substantial slowdown in growth in the recent period. House prices in England’s capital were still 9.4% higher than in February 2014, but this indicates the smallest annual increase for a number of months. In January, annual growth was recorded to be 13%.[2]

 

The average price of a house in London was £490, 000 in February, £9,000 less than the previous month.[3] Initial reaction would suggest this could be down to the change of stamp duty introduced by the Chancellor in December. Other experts are pointing the Labour party’s proposed ‘mansion tax,’ for all properties over £2m, should they win the election, as another reason why growth has slowed.

 

Stamp Duty

Many experts have suggested that changes to stamp duty regulations have played a key part in slowing London’s high-value property selling. Under the new rules, buyers purchasing a house for more than £937,000 face a larger stamp duty bill.

 

During the first three months of 2015, 638 transactions in excess of this price occurred, dropping significantly from 949 in the same period in 2014.[4]

 

Regional differences

With London recording slower growth than in recent times, other regions have taken over at the top of the UK property price inflation league. Northern Ireland boasted an annual increase of 14.2% in February, with the East of England recording a growth of 10.7%.[5] This rise in the East of England means that inflation of property prices now stands at a record level for the region.

UK house price growth slows

UK house price growth slows

 

Good news?

Stephen Smith, director of Legal and General Mortgage Club and Housing, acknowledged that, ‘house price growth has slowed since the end of 2014.’ However, he went on to suggest that, ‘although it might not seem like it, this is actually good news for the housing market,’ as price rises that are too sharp can prevent people from getting on the property ladder.’[6]

 

Mr Smith believes that in an ideal world, ‘house prices would grow at roughly the same rate as inflation, so that prices don’t rise faster than potential buyers can save a deposit.’ He believes that a step in this direction would be for more houses to be built, ‘so that demand keeps pace with supply.’[7]

 

The Office of National Statistics report stated that, ‘annual house price growth is showing signs of slowing across the majority of the U.K.’[8] Without question, a veritable explanation for the recent decline is the upcoming General Election, with many buyers holding onto their cash until after May 7th.

[1-8] http://www.dailymail.co.uk/money/mortgageshome/article-3038168/House-price-growth-continues-slow-9-000-monthly-fall-London-means-capital-no-longer-boasts-highest-annual-rise.html?ITO=1490&ns_mchannel=rss&ns_campaign=1490

 

 

Norway Eco Village Offers 20% Returns… But What is Really There?

Published On: April 16, 2015 at 2:35 pm

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Categories: Property News

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Those looking to invest in property could get 20% returns from an eco village in Norway, but how reliable is a project like this?

The scheme is called the Convent in the Hills, and is described in its advertisement as “a new exclusive eco village development investment opportunity providing homes in Norway.”1

Pictured as a small charming Scandinavian village in the advert, the material explains that planning permission has been granted for 212 plots that will form the village and incorporate The Convent development of 20 eco properties.1

Investors are required to give a minimum of £15,000 to the project. For this they will get shares in the UK firm that owns the 3,500-acre plot.

Investors are promised a 20% yield within the year. The scheme is called “secure” and “asset-backed”1, but what is really at the site?

Norway Eco Village Offers 20% Returns... But What is Really There?

Norway Eco Village Offers 20% Returns… But What is Really There?

The spot is isolated; a three-hour train journey from the nearest major city of Stavanger. Around the area, many communities still speak their own languages. There are small settlements made up of wooden houses.

Near the site, a woman doing her gardening says that the project has been well received by neighbours. However she adds: “But now I hear it has been delayed.”1

Through the forest is a clearing; the Convent in the Hills. Some trees have been chopped down, but there are pools of icy water and no sign of construction work.

The architecture company that initially designed the plans for the project says that they stopped work on the Convent before last Christmas. A local newspaper also reported that the development has been postponed.

The owners of the project say that work was always planned to start this year, and should begin in the autumn.

This information, however, is not included in the Convent’s adverts. There is a warning though that informs investors that the Financial Conduct Authority does not regulate the scheme. This means that consumers are not protected if anything goes wrong. Investors will not have access to the Financial Ombudsman Service or the Financial Services Compensation Scheme.

There are a number of unauthorised investments being sold currently, due to pension reforms. They include airport parking spaces, second-hand car loans and hotels.

Head of Pensions Research at investment firm Hargreaves Lansdown, Tom McPhail, says: “On the face of it, these sorts of investments don’t seem the sort of places where people should be investing their retirement savings.

“Do you want to gamble your nest egg on something so niche? You should always think twice before taking money out of your pension and be mindful of the consequences. If you are looking to invest, be very, very wary about investing in unregulated investments. You have no protection if things go wrong.”1

The British couple that own the Convent in the Hills project is Matthew and Charlotte Roberts. They run a luxury hotel in Woodchester, Gloucestershire, also called The Convent.

This hotel was backed through crowdfunding, where the cost was raised by a large number of contributors. These investors are paid a return. Already, 185 people have invested in the hotel.

However, Mr. Roberts was declared bankrupt last September. Therefore, he cannot be a company director in the UK until this is discharged. Mrs Roberts is the director of three companies and Mr. Roberts is employed in the businesses.

A company called Investment Opportunities sells investments in both The Convent and the Convent in the Hills projects.

1 http://www.thisismoney.co.uk/money/investing/article-3038927/Would-invest-forest-Pensioners-promised-returns-20-eco-village-Norway.html

Small Bedrooms can still have large comforts

Published On: April 16, 2015 at 2:20 pm

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Categories: Property News

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Buy-to-let landlords and property owners shouldn’t see small bedrooms as an excuse to be minimalistic in utilising their space and design features. Many small rooms are decorated in such a way that they feel crowded and busy. However, there are certain guidelines that can be followed in order to make smaller bedrooms feel comfortable.

De-clutter

This may sound simple but by removing all unnecessary items from the room will enable people to see exactly how much room they have got to play with. Replacements for all unnecessary items should be essential features, such as shelves, chest of drawers and other storage space.

Bright is better

To give small rooms more perceived space, landlords or property owners should consider painting or decorating the room with bright, bold colours. As well as giving the room a spacious appearance, bright colours will highlight interior features further.

Purchase sensible furniture

When decorating a sub-average sized bedroom, the furniture included should be purchased in relation to room size. Additionally, maximizing storage facilities should also be taken into account when deciding upon furniture to be included. For example, beds with pull out drawers are a great option to create more storage room and assist with the de-cluttering of the entire space.

 

 

Small Bedrooms can still have large comforts

Small Bedrooms can still have large comforts

 

TV guides

Many people cannot live without a television in their bedroom. In smaller rooms, televisions must not be oversized and overpower the space and design. Larger television should be either wall mounted or incorporated into furniture.

Be technologically advanced

When purchasing or providing technological extras such as clocks and electronic displays, landlords and owners alike should ensure that they do not detract from the style of the bedroom. If there is room, computer areas should be neat and tidy and not become an eyesore of any otherwise stylish part of the house.

Remember, bedrooms are supposed to be comfortable areas and therefore all design aspects should work with this in mind.

 

 

 

 

 

How Would the Conservatives’ Right to Buy Work?

Published On: April 16, 2015 at 11:08 am

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Categories: Landlord News

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The Conservative Party have proposed an extension of the right to buy policy to housing association tenants, but what will this mean?

The plan involves expanding the scheme to housing association tenants and offering discounts of up to £102,700 in London and £77,000 elsewhere in England. Right to buy will not apply in Scotland or Wales, where it is being abolished.

In England, there are about 2.5m housing association tenants. Of these, around 1.3m have lived in their property for three or more years; this would give them the chance to buy.

The Conservatives would also require councils to sell the most valuable homes in their remaining stock. Cash from these sales will create a £1 billion fund for creating 400,000 new homes on brownfield land, says the party.

Around 800,000 housing association tenants can already buy their homes, however, current discounts are quite small. In low house price areas, discounts are £9,000 and rise to £16,000 in London. The new policy would include an extra 500,000 tenants and offer much higher discounts.

Tenants

Once a tenant has lived in their housing association property for three years, they can apply to the scheme. For houses, the discount will be 35% of the market price, and for flats it will be 50%. A larger discount will be made the longer they have lived in the property; for every extra year they rent a house, they will get another 1% discount, and a further 2% if they occupy a flat. The total discount will be capped in cash terms.

These terms reflect changes to right to buy legislation from 2012, which cut the rental period required from five to three years and increased maximum discounts. After this reform, council house sales rose from around 2,500 a year to 11,000 a year.1

It has been noted, however, that in areas with high property prices, tenants on low incomes will still struggle to afford mortgage repayments, even with discounts. For example, a council house in South London could be worth £500,000. At a cap set at £102,700, the tenant would still need a mortgage of £397,300. Tenants will also be required to meet strict mortgage criteria, which the Conservatives introduced due to the financial crisis.

How Would the Conservatives' Right to Buy Work?

How Would the Conservatives’ Right to Buy Work?

The Conservatives say that 15,000 high-value council properties fall empty every year, and the forced sale of these will gain a £4.5 billion profit per year, which would fund the new policy.

The cost

It has been estimated that the policy will cost £5.8 billion, however, critics say it could reach £20 billion or more. Total government spending on housing and the environment in 2013 was £25 billion. The National Housing Federation (NHF), representing housing associations, argues that the £5.8 billion figure could instead fund 300,000 shared ownership homes.

The number of homes

It is fairly clear that the policy will reduce the amount of homes available for social housing. The Conservatives say that for each home purchased, another will be made available. However, the NHF reveals that since 2012, just 46% of homes sold under right to buy have been replaced.1

The Department for Communities and Local Government says that 1.88m council houses in England have been sold since right to buy was launched by Margaret Thatcher in 1980. This accounts for 37% of the total council housing stock, but local authorities have built only 345,000 new homes in the same time.1

The majority of housing associations have informed the NHF that they only expect to replace half the homes currently being sold through right to buy. One in ten say they won’t be able to replace any.1

Phoenix Community Housing in Lewisham, southeast London, keeps just a small amount of the profits from each right to buy sale. One of its homes worth £205,000 was sold through the scheme in 2014 for £105,000. The housing association received just £27,332; too small a figure to build a replacement.1

The waiting list for social housing in England is currently 1.36m households, or 3.4m people.1

Mortgage brokers and estate agents are generally supportive of the scheme, however, they are now questioning whether it would help increase housing supply.

The Intermediary Mortgage Lenders Association says: “It is a quick win to help boost a flagging homeownership sector and stimulate turnover in a market where transaction levels are now three times slower than in the 1980s. However, it carries no guarantee of greater house building as a result.

“The danger is that it will weaken the future capacity of the social renting sector to provide a safety net for those who cannot afford to house themselves via the private market.”1

Landlords

It is estimated that over a third of homes sold under right to buy in London are now owned by private landlords. Labour London assembly member Tom Copley believes that 36% of right to buy properties in the capital are owned by landlords, who therefore benefit from housing benefit payments.

He says: “Substantial numbers of these are being let to tenants who are now supported by housing benefit, while many would-be council tenants have now been forced into the private rented sector because of the dwindling supply of council homes. The consequence of both phenomena has been that taxpayers are again being charged more to subsidise higher private rents.”1

Popularity

The Conservatives hope that they will achieve Labour supporters through this scheme. The original Margaret Thatcher policy apparently swayed people to vote for her. However, this was way before the housing crisis, involving sharply increasing prices and the huge rise in private renting. There are now around 9m private tenants, who will feel excluded from the policy.

A NHF study revealed that 60% of the public think that it is unfair for social housing tenants to receive a discount on their homes when private tenants do not.

A YouGov survey found that Conservative voters are more likely than Labour voters to find the extension of the scheme unfair. UKIP voters find it the most unfair of all.

1 http://www.theguardian.com/society/2015/apr/14/right-to-buy-housing-associations-your-questions-answered