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Em Morley

Property Price Growth Remains Slow

Published On: January 29, 2015 at 2:22 pm

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Property price progression is staying slow, revealed findings from two leading researchers.

House prices in England and Wales in the year to December increased by 7%, down from 7.2% in November, and the fourth consecutive month that the annual rate has dropped, according to the Land Registry.1

Building society Nationwide’s recent study corresponds to these discoveries.

Despite finding that property prices in the UK rose by 0.3% in January, the annual rate of growth reduced to 6.8%.1

The average UK house price was £188,446 in January, according to Nationwide. The Land Registry found the average property price in England and Wales was £177,766 in December.1

Both lots of data reveal that average prices have been steady since last summer. Nationwide believe the reasons for this slowdown “remain unclear”1, as the general economy has continued to recover.

Robert Gardner, Nationwide’s Chief Economist, says: “Annual house price growth continued to soften at the start of 2015.”

He adds that the amount of mortgage approvals for house purchases has been around 20% less than the level seen at the start of 2014, and surveyors continue to report lower levels of new buyer enquiries.

Property Price Growth Remains Slow

Property Price Growth Remains Slow

Drop in sales

Henry Pryor, property expert, says that he predicts this slowdown will last until at least after the general election.

He says: “The heat is clearly coming out of the market but it is too early to tell what effect the Stamp Duty changes announced in the Autumn Statement may have.”1

Both sets of research reflect recent data from HM Revenue & Customs (HMRC), in which monthly figures for the whole of the UK show that sales have dropped in the last months of last year.

One reason for the slowdown in the housing market is that the peak seen in late 2013 and early 2014 was motivated by Government systems such as the Funding for Lending Scheme (FLS) and Help to Buy.

Some of the suppressed demand from earlier years, when getting a mortgage was extremely hard due to the financial crisis, may have been exhausted.

The rise in prices in the last few years, which has continued to surpass earnings growth, has pushed homeownership further from aspiring buyers.

Gardner, however, remains confident that sales will pick up again soon: “If the economic backdrop continues to improve as we and most forecasters expect, activity in the housing market is likely to regain momentum in the months ahead.

“It is encouraging that the number of new homes built in England was up 8% in the year to the third quarter of 2014.”1

1 http://www.bbc.co.uk/news/business-31034821

Landlords Face Energy Efficiency Improvements

Published On: January 28, 2015 at 11:32 am

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Categories: Landlord News

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Landlords could face financial penalties, and be unable to rent their properties if they do not meet minimum energy efficiency standards that will come into force in 2018.

Law firm Maples Teesdale warned that the new standards reflect a ticking time bomb that could have a huge impact on rental income and property values if they are not addressed.

Landlords Face Energy Efficiency Improvements

Landlords Face Energy Efficiency Improvements

By 1st April 2018, all relevant properties in the non-domestic minimum energy efficiency regulations for England and Wales must be improved to a minimum standard before being let to tenants, unless certain exemptions apply.

Additional tenant energy efficiency improvement regulations will be brought in by 1st April 2016, and mean that renters can request energy efficiency measures to their rental property, which cannot be unreasonably refused by the landlord.

A partner at Maples Teesdale, Neil Sagoo, says: “These regulations are likely to have a big impact on the private rented sector. They are presenting a straightforward ultimatum: bring your properties up to scratch in terms of energy efficiency, or risk losing income.”

For landlords who do not bring their property up to the minimum standard, consequences could be severe. Financial penalties will be applied, potentially involving the rent earned during the landlord’s breach, and possibly a tribunal that could force landlords to make the necessary changes.

Sagoo explains: “This means that landlord’s can no longer pay lip service to energy efficiency. Whereas it was once a worthy aspiration, it is becoming as fundamental as fire safety or building regulations, and is to be ignored at your peril.”1

After a brief consultation at the end of 2014, the Government has suggested that it hopes to have the regulations in place before the general election in May. It is likely that the implementation of the minimum standards will follow in stages, coming into effect on all new lettings from April 2018, and for existing lettings from April 2023.

The consultation document can be found at: http://goo.gl/AcHDEG

1 http://www.landlordtoday.co.uk/news_features/Landlords-face-ticking-timebomb-of-energy-compliance

 

Consumer Confidence is not Strong Despite Economic Recovery

Published On: January 28, 2015 at 11:30 am

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Families are not experiencing Britain’s economic recovery, as the housing market lulls and household finances are still too strained to benefit from the drop in energy prices.

The latest YouGov/Cebr report says that twice as many people in every region of Britain felt that they are getting worse off rather than better off in January.1

Consumer confidence has stayed at last year’s levels, as just 9% of people experienced their financial circumstances improving in January compared to the previous month.1

The YouGov/Cebr Consumer Confidence Index increased slightly in January from 109.7 to 110.7.

Fewer consumers were positive about the value their home gained in the past and for the coming months. Nevertheless, more people are optimistic about their job situation at present and job security for the future.

The report arrives following the official GDP figures released yesterday, which show the UK’s economy grew by 2.6% last year. This is the fastest pace for seven years, but still not at the expected 3%.1

Consumer Confidence is not Strong Despite Economic Recovery

Consumer Confidence is not Strong Despite Economic Recovery

Growth in the last quarter (Q4) of last year was pulled down by a weak construction sector that saw production drop by 1.8%. This has been its worst downturn since Q2 2012.1

Director at the Centre for Economics and Business Research, Charles Davis, says that although the economy has grown at its fastest rate in seven years, there is a risk of it slowing in early 2015 as confidence drops.

Davis comments: “More importantly, we are still struggling to see clear signs that consumers feel the benefit of faster growth in the wider economy. Logic says this should start to change as pay growth finally runs ahead of inflation. But it will take time for UK households to make up years of lost growth from the aftermath of the crisis.”1

Head of YouGov Reports, Stephen Harmston, thinks that the data draws “quite a bleak picture.”

He explains: “Consumer confidence has dropped away from its highpoint of last spring and summer as the housing market stutters and household finances are too stretched to pick up the slack and generate optimism.

“Despite talk of the recovery gaining ground, consumer confidence is stuck at similar levels as this time last year.

“The fall in energy prices has not fed through to consumers and they still don’t feel the recovery in their wallets, and this is as true of people in London as those in Liverpool or Lanarkshire.”1

These findings, however, do not correspond to other research released yesterday, which indicates that families have a further £15 to spend on extras due to declining fuel prices and cheaper utility bills. This increase in discretionary spending, not including bills, taxes or essential items, was the highest since November 2009, found the Asda Income Tracker.1

1 http://www.thisismoney.co.uk/money/news/article-2928535/Consumers-confidence-stuck-year-s-levels-economic-recovery-fails-reach-people.html

 

Demand for £1m a Year Rental Properties as Concerns Grow over Election

Published On: January 27, 2015 at 9:09 am

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Homes costing £1m per year to rent are experiencing growing demand as those wealthy enough to live in prime properties are worried about mansion tax and Stamp Duty.

Two large penthouses were rented in Mayfair, London in 2010, and since, the £1m rental market has seen a boost.

This select sector has since expanded over the capital and into areas such as Knightsbridge, Chelsea, South Kensington, Notting Hill, Regent’s Park, and Holland Park.

In London’s uber-prime lettings industry, the average weekly rent is now £3,500 per week or £182,000 a year. This is a 23% increase on five years ago, and is more than the average house price in England and Wales.1

Around Central London, the rental sector has had the highest rate of growth for over three years. The average rent paid in the third quarter (Q3) of 2014 was 6.5% more than the previous year.1

It is also believed that the amount of people looking to rent these luxury properties, rather than buy them, could rise even higher. Wealthy Londoners are moving into the rental sector due to a lack of high-end homes and worries over the general election, says a report from Beauchamp Estates and Dataloft.

Managing Director of Beauchamp, Gary Hersham, currently has a six-bedroom mansion on offer, situated next door to the Qatari Royal Family on Cornwall Terrace, overlooking Regent’s Park and known as the most expensive terrace in the world.

This 8,883 square-foot mansion can be let for £960,000 per year and a £260,000 deposit. Beauchamp are also offering a five-bedroom home in Knightsbridge for £768,000 a year with a £85,000 deposit.

Demand for £1m a Year Rental Properties as Concerns Grow over Election

Demand for £1m a Year Rental Properties as Concerns Grow over Election

Hersham says: “Concerns over a change of government, the mansion tax debate and now Stamp Duty changes have led high net worth individuals to decide to rent for the next 12 months and delay purchase plans. This might cost a client up to £1m, but this is less than a £25-£100m outlay for an ultra-prime property.

“Whilst the ultra-prime lettings market has boomed during 2014, the equivalent sales sector has been affected by the uncertainty in the market caused by the pending general election and the issues over the mansion tax.”1

Another agency, Rokstone Properties, has a Mayfair home to let for £576,000 per year. Found on Audley Street, Westminster, the property has eight bedrooms.

Managing Director of Rokstone, Becky Fatemi, explains: “Prime Central London’s ultra-prime lettings market, properties for rent for over £20,000 per month or more, has only truly emerged over the last 12 months and has really taken off over the last four months.

“Traditionally, clients owning luxury residences in projects such as One Hyde Park, The Knightsbridge, 10 Soho Square, and Trevor Square would not have chosen or needed to rent, preferring to leave their properties empty, enabling them to effectively remain brand new.

“The tenants are celebrities, overseas royals, corporate rents and people looking to buy but deciding to wait until after the election.

“Currently, lettings demand is exceeding lettings supply and the number of sales instructions on the market is also down. This is resulting in lettings values going up, and also sales values going up as there are simply not enough properties in either sector available to meet demand at present.”1

Russell Simpson estate agents is offering The Court House in Chelsea for £600,000 a year.

Head of lettings at the firm, Lottie Henniker-Major, says there is a dip in available properties, which is causing a rise in prices: “There is a distinct shortage of stock in the upper end of the market, with no new properties having come on to the market in the £7,000 per week plus price bracket in 2015 so far. I can only predict that this will lead to a further increase in rental prices moving forward.”1

1 http://www.dailymail.co.uk/femail/article-2926828/Inside-London-s-opulent-rental-properties-1million-cover-YEAR-s-rent.html

London Tenants Share Rooms with Strangers

Published On: January 26, 2015 at 11:03 am

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Tenants in London have to share bedrooms, sometimes with complete strangers, to combat the spiralling rents of the capital.

Flat and house share website SpareRoom.co.uk has experienced a 71% increase in searches for bedroom shares in the last two years.1

Matt Hutchinson, Director of SpareRoom, says: “We know many couples are sharing rooms in house and flat shares with other people to save money, but there’s also a rising number of single people sharing rooms now too.

“Few people would choose to share a room, but the harsh reality is that London’s housing crisis means rents are becoming increasingly unaffordable.”1

A twin room in West London is being listed at £259 a week per tenant. Bunk beds are also being offered as twin rooms in some instances.

Another website, Kangaroom, which helps people find spare rooms, had 93,505 adverts placed on their site in 2014 by those looking to share either twin or triplet bedrooms. This was a 48% rise on 2013.1

Founder of Kangaroom, Jinder Sidhu, says that bedroom shares now make up over 10% of the market.

Sidhu explains: “While rent prices in general rose by 7.5% in 2014, room share prices have decreased by 12% due to increased supply and denser living conditions.”1

Tove Eriksson and Francesca Whitlock, both 25, met at the University of Leeds. After they graduated, Eriksson moved back home to Sweden and Whitlock, from London, taught English in Chile.

London Tenants Share Rooms with Strangers

London Tenants Share Rooms with Strangers

Last year, they both looked to move to London. Researching prices, they found that the only option in their price range was sharing a bedroom. Their friends and family were shocked when they revealed the situation.

Eriksson is a project coordinator for a women’s rights theatre project. It is a paid role, but is only part-time. She works as an office temp the rest of the time. Eriksson was hoping that she would earn enough for her own bedroom, but admits this could be a long way off: “I’m dependent on sharing. It’s either sharing a room or not living [in London].”1

Whitlock is beginning work as a campaigns intern at the Climate Coalition, and thinks living in the capital is the only way she will build a career in the area she is passionate about. She says: “It’s tricky; you feel you have to be here, but you have to pay absurd rents.”

Both girls have expressed how lucky they are to be sharing with a friend. Whitlock comments: “To share with someone you don’t know, I don’t want to use desperate because that’s not a nice word to use, but what a horrible situation to be in if there is no other way you can live.”1

Housing and rent campaigners have said that the trend is worrying, but inevitable.

Housing charity Shelter’s Chief Executive, Campbell Robb, says: “With our housing market out of control and rents sky-high, it’s no surprise that people across the capital are having to resort to these sort of measures just to keep a roof over their heads.

“But it’s simply not right that people are being forced to share their personal space with someone they barely know just so that they can make ends meet each month, let alone save money to build a stable future.

“The only way to end this madness is for politicians to roll up their sleeves and commit to building the genuinely affordable homes we so desperately need.”1

The March for Homes on 31st January will see tenants, trade unionists and campaigns march on City Hall, London, in a bid for Boris Johnson and councils to tackle the lack of affordable homes in the capital.

1 http://www.theguardian.com/money/2015/jan/25/london-tenants-forced-to-share-rooms

Tips for Renters with Pets

Published On: January 23, 2015 at 3:43 pm

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It can be difficult to find a rental property for anyone. If you have a pet, this can make it even trickier.

Tips for Renters with Pets

Tips for Renters with Pets

Moving with your animals can be a problematic process, as not all landlords will appreciate having a pet in their property. They can be wary of damage to furniture, fixtures, fittings, and potential fleas.

This can cause an issue for pet owners looking to rent, especially homes in urban areas.

Here is some advice for tenants with pets:

  • Give yourself lots of time to look for a home, and prepare yourself for a quick move if somewhere becomes available and will accept your pet.
  • Ensure that your pet is house-trained, and obedience-trained. Control any fleas and ticks also, and make sure the landlord is aware of these things. If they know the pet is well handled, they may be more likely to rent to you.
  • Suggest introducing the landlord to your pet. If they see how well behaved they are, they may consider renting.
  • Be prepared to pay a higher deposit, and offer to do so if the landlord is reluctant.
  • Offer to remove all traces of your pet when you leave the property, this could be added as a clause to the tenancy agreement. It is a good idea to specify what this will include, for example professional carpet cleaning.
  • If you wish to insert a cat-flap, approach the landlord or letting agent by explaining that you will ensure the property is as it was when you moved in upon leaving.
  • Dogs Trust has launched a campaign called Lets with Pets, aiming to encourage landlords to rent to tenants with pets. You can visit their website to find out more, and for more information about renting with pets.