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Em Morley

Halifax House Price Index indicates “no real shift” in August

Published On: September 9, 2019 at 8:39 am

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Categories: Property News

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Halifax House Price Index

The latest Halifax House Price Index reports that house prices have held steady for another month.

The highlights of the report include:

  • On a monthly basis, house prices rose by 0.3%
  • In the latest quarter (June to August) house prices were 0.1% higher than in the preceding three months (March to May) 
  • House prices in August were 1.8% higher than in the same month a year earlier 

Russell Galley, Managing Director, Halifax, said: “There was no real shift in house prices in August as the average property value grew by just 0.3% month on month. This further extends the predominantly flat trend we’ve seen over the last six months, with the average house price having barely changed since March.

“While ongoing economic uncertainty continues to weigh on consumer sentiment – with evidence of both buyers and sellers exercising some caution – a number of important underlying factors such as affordability and employment remain strong. 

“Although the housing market will undoubtedly be influenced by events in the wider economy, it continues to show a degree of resilience for the time being. We should also not lose sight of the fact that the single biggest driver of both prices and activity over the longer-term remains the dearth of available properties to meet demand from buyers.” 

Lucy Pendleton, founder director of James Pendleton, the independent estate agent, comments: “This index from Halifax has plummeted from some extraordinary annual growth figures seen earlier this year, and somehow always seemed out of kilter with other indices. 

“It is still a nose and perhaps one shoulder ahead of the UK’s other meters of property price progress but has slowly fallen more into line with the rest. All now trail inflation as Brexit has slammed the door on the property market’s fingers, leaving a crack through which only modest price growth can be achieved.

“The market has continued its idling path to what feels like an inevitable grinding halt. It’s very hard to read sentiment at times like this and that’s partly because housing markets fall quickly when they do retreat but have a tendency to bump along for a while with tiny rates of growth beforehand in the absence of a major economic shock. 

“This is one of the consequences of home owner psychology, because people view their home as a piggy bank which can accept money from everyone but shouldn’t be opened by anyone but them. The tendency to think of capital growth in homes as money earned instead of profit yet to be realised is one of the enduring traps sellers fall into.”

Milton Rodosthenous, director of online auction service LetsBid Property, comments: “It’s pleasing to see a monthly rise return to the market. However, the relatively low growth could be attributed to a traditional summer market lull combined with ongoing political uncertainty.”

“The positive news is that the market still appears to be performing well on a quarterly and annual basis, reinforcing the strength of property as a long-term investment.”

“We now expect market activity to ramp up as eager movers look to get deals done before the Christmas and New Year period. However, it will be interesting to see if the unprecedented political circumstances we find ourselves in have a significant effect on this traditionally busy home moving period.”

“As we move through 2019, it’s clear there are still many opportunities for buyers and sellers to achieve their goals if they are proactive, patient and work with a reliable estate agency.” 

Jonathan Samuels, CEO of property lender Octane Capital, says: “If August was anarchic, political events in September have been positively schizoid and so the extended rut prices have been in looks set to end.

“While the market flatlined in August, it’s highly unlikely to emerge unscathed from the latest chaos in Westminster.

“Cheap mortgage rates, high employment and low supply have been supporting property prices to date, but the political climate is is now so febrile that this looks set to change during September.

“With both government and opposition in a state of unprecedented disarray, the property market could soon be paying the cost.”

Who’s enforcing The Tenant Fees Act? New law relies on honesty and tenants being in the know

Published On: September 6, 2019 at 8:46 am

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Tenant Fees Ban Enforce Flaws

Despite the introduction of the tenant fees ban back in June, there are still some glaringly obvious flaws in the Government’s plan to simplify and reduce tenant fees. The act relies on all parties being fair and honest, and being up to date on the law rather than true enforcement of the new rules.

Tenancy deposits are now capped at a maximum of 5 weeks’ rent providing the annual rent is under £50,000. This cap increases to 6 weeks’ for properties with a higher rent. The Act also bans the charging of additional fees such as agency fees, pet deposits and so-called admin fees.

The Deposit Protection Service (DPS) highlighted last month that despite seeing a drop in the number of deposits that exceed the cap, more than 40% are still higher than current legislation allows. It may be the case that many of these deposits are left over from tenancies that began before the ban and will simply be reduced once they are renewed.

And whilst the change to the law specifically stops extra fees and deposits going above the limit, it did not protect against landlords and letting agents simply increasing monthly rent payments to make up for their reduced income elsewhere. Back in July, David Cox at Arla Propertymark released figures showing that rents had increased across the country since the ban came into effect:

“Unsurprisingly, rent costs hit a record high in June as tenants suffered the impact of the tenant fee ban.

“Ever since the government proposed the ban, we warned that tenants would continue to pay the same amount, but the cost would be passed onto tenants through increased rents, rather than upfront costs.”

In another example, landlords across England have started charging additional rent for pets as they are no longer allowed to ask for a higher ‘pet deposit’. Whilst it is understandable that landlords may be concerned about extra cleaning charges or damages caused by animals, and must cover those costs somehow, the tenant fees ban has forced them into a corner in which they have no other choice.

Tenants with animals now find themselves in a situation in which they were better off before the ban: owners that made sure their pets didn’t cause additional damage got their money back, but by adding it onto the rent, they will never see that money again.

It is clear that the banning of tenant fees has been ineffective, but it has also arisen that the policing of the new law is equally impotent. The system relies almost entirely on landlords knowing their responsibilities and being honest about the way they conduct business, whilst on the other side, tenants are expected to keep up to date with their rights and report landlords that they believe are flouting the rules.

The new law was meant to protect vulnerable tenants and punish the small minority of rogue landlords, but has shown itself to have very little effect on the groups it was meant for.

In the case of landlords exceeding the maximum deposit cap, the deposit schemes themselves cannot enforce legislation. A spokesperson from The DPS had this to say:

“Our systems provide landlords with information that helps them understand the regulations affecting tenancy deposits, and we remind them of the cap specifically when they are registering deposits. We also have extensive communication and training programmes that help both landlords and renters understand the responsibilities that come with a tenancy.

“Nevertheless, all tenancies are different, and it is ultimately the responsibility of landlords themselves to make sure they are compliant with any relevant laws and regulations. While our systems are designed to help inform landlords and tenants, we are not responsible for enforcing legislation.”

With no clear direction or follow-up from the Government, rogue or unaware landlords are essentially free to continue charging high deposits and unfair fees until they are (un)luck enough to be reported by a clued-up tenant. More must be done to ensure that The Tenant Fees Act is being followed and enforced.

Spending Review pledges to reduce homelessness and rough sleeping

Published On: September 6, 2019 at 8:17 am

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Spending Review

As part of the Spending Review, Chancellor Sajid Javid has pledged £54m of new funding to reduce homelessness and rough sleeping.

Overall, the Government’s funding commitment will now reach a total of £422m.

Here are the highlights from the Spending Review announcement:

  • £40m additional funding for Discretionary Housing Payments to tackle affordability pressures in the private rented sector in England and Wales
  • £23m to fund a range of other measures, including support for vulnerable claimants and people with complex needs migrating to Universal Credit, additional outreach activities to support those who are homeless, and increasing the number of Armed Forces champions to support veterans when entering the labour market.

Reacting to the announcement, Jon Sparkes, Chief Executive of Crisis, said: “Right now there are thousands of people homeless up and down the country and even more in vulnerable circumstances, on the brink of homelessness. 

“The Government has committed to ending rough sleeping and tackling homelessness, and whilst the additional funding announced today is a welcome step, today’s Spending Review is ultimately a missed opportunity for Government to be serious in tackling the fundamental issues that cause homelessness in the first place. 

“Every day through our work we hear from people whose Housing Benefit simply doesn’t cover the cost of their rent, leaving them under immense financial pressure and at genuine risk of homelessness. We need significant investment commitments from Government to genuinely help struggling families to keep the roof over their head.

“If Government is serious about meeting its 2027 commitment to end rough sleeping, then we need bolder financial commitments to prevent people from losing their home in the first place, and investment decisions that result in significantly more truly affordable social homes to be built. 

“We know that homelessness can be ended, but without measures such as  these prioritised in Government’s spending decisions, it will only continue to rise.”

Increase in landlords charging pet rent as Tenant Fees Act puts cap on deposits

Published On: September 5, 2019 at 9:10 am

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Categories: Tenant Fees Ban

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pet rent

Landlords in England are charging additional pet rent, as recent fees ban prevents them from asking tenants for a pet deposit.

The Guardian has reported this week that tenants with animals are being charged up to £50 a month extra rent for a single pet.

This is becoming an increasingly popular way for landlords to recoup lost income since the Tenant Fees Act 2019 came into force on 1st June.

Darren Baxter, a renter looking for a home in York with his partner, two children and cocker spaniel Padfoot, told The Guardian: “In certain letting agencies it seems to be a standard term in agreements.

“It seems exorbitant given the potential damage a pet can cause. We went to one place where they wanted a reference for the dog. That was ridiculous.”

He pointed out that this is yet another example of how people who cannot afford to buy are disadvantaged when it comes to being able to enjoy some of the basics of family life.

The ban on tenant fees is supposed to be saving renters in England a total of £240m a year. However, with landlords no longer able to ask for an additional pet deposit, which would have been refundable at the end of the tenancy, they now feel they need to increase rent prices to guarantee this financial security.

Karolina Misiukiewicz, administrator at Elliot Oliver, an estate agent in Cheltenham, told The Guardian: “The only way to do it is to charge higher rent.

“It’s a new thing for us. In our experience we haven’t taken extra for hamsters or gerbils and definitely not fish.”

According to the veterinary charity PDSA, half of UK adults own a pet. This includes around 11 million owning cats and almost 9 million owning dogs. Research from Landbay, the buy-to-let focussed marketplace lender, has also found that a let where pets are allowed is the most sought-after attribute for tenants, when looking for a new home to rent.

Here’s what tenants look for most in a rental property

Published On: September 5, 2019 at 8:42 am

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what tenants look for

Pet-friendly homes are what tenants look for most in a let, according to research from Landbay, the buy-to-let focussed marketplace lender.

2,000 private renters in the UK were involved in this study, which offers insight to landlords on what tenants look for.

The research found that 14% of renters rated ‘pets being allowed in the property’ as their most important requirement. Specifically in the North East, this figure rises to 27%. However, only 3% of renters in London selected this response.

Second on this list is an unfurnished home. 12% of renters said that this was the most desirable attribute. Landbay highlights that 22% renters aged 55 and above are five times more likely to consider an unfurnished property as crucially important than those aged between 18 and 34 (4%).

A home with a garden came third, with 11% of renters rating outdoor space as their most important attribute. Parents (15%) are more than twice as likely to prioritise a garden compared to non-parents (7%) Off-street parking and the quality of a property’s décor came fourth and fifth respectively.

Having a dryer came bottom of the list of most desirable attributes with just 1% of renters considering it key to their home. A king-sized bed, a balcony, and a dishwasher also polled just 1%. Just 2% of private renters consider a new build property as a priority.

Top Five AttributesBottom Five Attributes
Pets allowed 14%Dryer1%
Unfurnished 12%King sized bed 1%
Garden 11%Balcony1%
Off-Street parking 9%Dishwasher1%
Quality of décor 7%New build 2%

Deborah Mudway, Director, Landbay comments: “This will make interesting reading for landlords, who could be forgiven for believing little luxuries like a dishwasher, dryer and even a king-sized bed make all the difference for tenants. In fact, nothing could be further from the truth.

“Landbay is investing in a research series to help landlords understand tenants and opportunities within the private rental sector. This edition shows renters value two key attributes above all others that are fundamentally free to bring in. In short, they want to make their property feel like home by bringing both pets and their own furniture with them. The reality is, aside from a deeper clean at the end of a tenancy, this really isn’t hard for landlords to implement.

“Essentially, landlords knowing what renters want can make for a happier, more prosperous relationship which benefits both parties in the long run.”

‘Caraplanning’ – the new home design technique for property owners pushed for space

Published On: September 4, 2019 at 8:46 am

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Categories: Property News

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New builds are not all as spacious as the houses made a few decades ago, so it is important to make the most of the space you have. As a landlord, this means showcasing your property to highlight the desirable features and show it off in the most positive light.

Jason Orme, presenter of The Real Homes Show, has shared his thoughts on what we can learn about home design and improvement from the humble caravan…

“It’s all about maximising useable space,” says Jason.  “Let’s consider the four functions in the home: relaxing; food preparation and eating;  sleeping; amenity/utility. Then think about how the layouts/floorplans/rooms meet your needs in each of the four categories.

“If you haven’t much space but potentially have room to grow if the layout is poor or the use of the space is diminished due to clutter, for instance, then it’s possible to adapt that space to make it more efficient.

“This is where the expertly designed caravan comes into its own. It’s flexible so that day use can then be turned into night use; what might be a kitchen diner during the day can be turned into living and sleeping accommodation at night.

“Think about how you could adapt the footprint into the right here, right now through the efficiency of the layout and clever furniture design.

“Storage is also very smart in caravans. Yes, it’s a small footprint but effective use of storage for items such as food and clothes could inspire ideas in the home about just what is needed that day rather than for potential use at some time in the future. 

“I know there’s a movement at the moment about buying items such as clothing for the long term but maybe think about how you can be smarter about what you want and how you can keep it.

“This is where Marie Kondo’s organising method is interesting. Why hoard tins of beans or bars of soap because you are likely to consume them in six months time? What joy are they bringing to your life, stashed away taking up valuable space?

“Think about what you want, need and what makes you happy. Be more ruthless and reduce material goods because too much stuff can make small homes – even large homes – feel even smaller. And that feeling of lack of space can have a detrimental impact on your wellbeing.

“What about playing a game with yourself and considering what you might need for a week away on a road trip or a campsite and ‘caraplan’ your home based on the four fundamental functions above. You might be surprised just how little you need to hand.”