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Em Morley

What do you look for, when considering the value of a property?

Published On: June 21, 2019 at 10:04 am

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New research by YouGov and property measurement service Spec has looked into the most important factors considered by prospective homebuyers, when it comes to property valuation.

This research has concluded the two highest-ranking factors to be property size and accurate measurement.

This survey took into account the views of 2,025 people across the UK, with 70% of respondents considering accurate measurement of a property to be very important. 91% of those involved went for the next option down of ‘important’, bringing Spec to the conclusion that this is a rather significant factor for homebuyers.

Spec has also highlighted that, of those surveyed, a resounding 83% of respondents listed property size as the factor they value as most important when it comes to the valuation of a property. This was followed by 68% choosing damage from wear and tear as their most important factor to consider, and a further 66% opted for age of the property.

James D Marshall, Founder and CEO of Spec, said: “What this research indicates is that property size is a much more significant factor for homebuyers than initially assumed. Even more surprising is the importance of accurate measurement – customers clearly don’t want to base their purchasing decisions on a rough estimate.

“Our research found that in London alone, the average discrepancy across all properties (including flats and houses) we analysed was 54 square feet, which is the equivalent of a small bedroom or study. In houses the average discrepancy was 92 sq ft.

“There is clearly a real opportunity for intrepid estate agents to stand ahead of the crowd and provide a solution that customers are crying out for.

“It also gives agents the opportunity to insulate themselves from possible legal action, as agents falling foul of CPR legislation related to property measurement can face significant fines or up to two years in prison.”

Property Activity Index shows Momentum for UK Lettings Market in May

Published On: June 21, 2019 at 8:33 am

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Just as April saw a typical slowdown in the UK lettings market, so did May follow the trend of reporting an increase. The national month on month figures for new listings ‘To Let’ reported a buoyant 9.5% and properties ‘Let’ sat at 5.3%.

Historical data for the Property Activity Index show that figures for this year are marginally down on those recorded in 2018. However, over a three-month rolling period, the new listings figures are like for like.

This upward trend has continued across each region recorded in the Property Activity Index. 11 out of the 12 regions included in the report have seen increases in new listings ‘To Let’. 10 of them have also reported increases in properties ‘Let’.

The regions performing the best for this month were London and the South West. The capital saw a robust increase in new listings at 21.5% and properties ‘Let’ faired well at 10.9%, but year on year figures were down.

Similarly, in the South West, new listings rose to 20.1% and 13.9% for properties ‘Let’, but again the figures for new listings were down year on year.

A robust level of lettings activity was also reported for Wales, with properties ‘Let’ at 29%. This is the largest increase in figures for the month since 2015.

Increases were also recorded for the following regions:

Properties ‘To Let’

  • Central England 17.8% 
  • East Anglia 14.7% 
  • West Midlands 11.1% 
  • Yorkshire & Humberside 9.9% 
  • East Midlands 8.2% 

Properties ‘Let By’

  • North West 18.6% 
  • Scotland 16.4% 
  • Central England 5.1% 
  • East Midlands 3.9% 
  • West Midlands 3% 

Yorkshire & Humberside saw the largest decline in figures for this month’s index. Properties ‘Let’ sat at -9.4%, which was a larger decline in activity compared to the figures from 12 months previous. However, the three-month rolling period figures reported a more positive 0.50%.

Latest UK House Price Index for April 2019 Released

Published On: June 20, 2019 at 9:05 am

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The UK House Price Index for April 2019 was released yesterday. The Index shows an update to the latest house price changes for England, Scotland, Wales and Northern Ireland.

The highlights of this report show:

  • House prices have risen by 0.7% on average since March 2019
  • There has been an annual price increase of 1.4%
  • This annual price increase makes the average property in the UK valued at £228,903

More about the report can be read on the Gov.UK website: https://www.gov.uk/government/news/uk-house-price-index-for-april-2019

Lucy Pendleton, founder director of independent estate agents James Pendleton, has commented on the April 2019 Index: “Another drop in property prices in London ensures the capital continues to be a bit of an outlier. Other regions haven’t followed the capital’s trajectory as quickly as has been the case historically. 

“Some comfort can be taken from the fact that, as prices in London fall, buyers are being fairly energetic in stepping up to take the opportunity to get in.  

“This should not be taken as a sign that we will soon see an outright rebound in prices in the capital but it’s extremely unlikely that this kind of behaviour will give way to more dramatic downward revisions in property values.

“What will precipitate a short-term consolidation is an improvement on the number of homes for sale but any fall in values as a result will likely be brief and muted in percentage terms.”

Paul Stockwell, Chief Commercial Officer, of Gatehouse Bank, has said: “House prices have fallen out of inflation’s slipstream in broad UK terms but price growth in Wales is extremely buoyant at nearly 7% year on year.

“In the month after a postponed Brexit, it’s not just there where the property market has staged a sharp recovery. While Wales nearly doubled its annual growth rate, the North East has come hurtling out of the red, posting a 2% rise year on year, compared with the 0.8% annual slump recorded the previous month.

“However, it’s hard to credit March’s political drama for these surprising shifts. It takes time to sell property and these sales reflect buyers’ much longer-term determination to transact.

“Markets in England have bounced back almost across the board, with only one exception. The South East, which is the only region to see an annual fall, while even the worst performing area, London, has bounced back slightly.”

4 in 10 Landlords Considering Selling if Section 21 is Dropped

Published On: June 20, 2019 at 8:19 am

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Government proposals to scrap Section 21 repossessions have raised concerns amongst landlords, with many saying that they would consider selling their properties rather than take the potential risk of being stuck with a bad tenant.

In a survey carried out by Landlord Action, a leading housing law specialist, 33% of buy-to-let landlords said they would leave the rental market if the government removed Section 21 rules without providing a clear alternative. 38% of those surveyed said they would definitely consider selling up upon hearing the news.

The proposals, designed to increase the amount of long-term tenancies in the UK, could in fact have the opposite effect. The study goes on to find that 70% of landlords would be less willing to consider long-term tenancies if Section 21 was removed.

Whilst the measures are supposed to combat so-called rogue landlords: A small minority that have been abusing rules to unfairly evict tenants,

Paul Shamplina, founder of Landlord Action states: “If this was the case [that Section 21 was scrapped], the government’s efforts could end up being counter-productive and harming the most vulnerable tenants”

He believes that the proposals will reduce competition in the market by discouraging some landlords from the business, driving prices up, making renting even more difficult for lower income tenants.

Section 21 was initially introduced to attract private landlords to the sector, as a means of allowing them to vacate their property quickly if they had good reason to believe that their investment was at risk. It became a hot topic after a small minority of landlords used the rule to unfairly evict tenants but for the majority, it is merely a safety net against financial loss.

Shamplina says: “Remember, landlords want tenants, and good tenants at that, to stay in a property as long as possible. The vast majority of landlords would have no interest in evicting a tenant who respects their property and pays their rent on time.”

He states that long term tenancies make business sense, meeting the needs of the changing rental market and believes that the government should incentivise landlords to give tenants longer tenancies.

At the same time, a clear definition of what constitutes reasonable grounds for eviction must be enshrined into law in order to fill the void that the removal of Section 21 will create.

Landlords Calling for Overhaul in Universal Credit Payments

Published On: June 19, 2019 at 9:21 am

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The Scottish Landlords Association (SAL) is calling for the housing portion of Universal Credit (UC) benefits to be paid directly to landlords.

In its current form, UC is paid, in full, to tenants who must then pay landlords themselves. Whilst claimants do have the option to have the housing element sent directly to landlords, this is not the norm, with two thirds opting to make the payment manually.

The issue forms part of a wider criticism against Universal Credit, which has seen numerous campaign groups arguing that the rollout is making claimants worse off and discouraging landlords from letting to them.

Simon Graham, the director of SJ Lettings, based in Buxton, Derbyshire states: “In theory, universal credit is an empowering idea, encouraging people to learn to budget for themselves, but for the more vulnerable tenants, being given £600 at the start of the month and expecting them to make it last until the next month is just not realistic.”

By removing this middle step, both delays and uncertainty that landlords can experience when letting to tenants in receipt of housing benefits would be reduced.

The Social Security Committee of the Scottish Parliament agrees, stating that this change would ensure that all tenants would have equal access to rented accommodation, regardless of how they pay for it. Unfortunately, as of yet, The Scottish Government has not taken the opportunity to make any changes to the way UC is paid.

John Blackwood, chief executive of SAL said: “What we are proposing, and the committee report agrees with, is that the default position would be that the housing component of Universal Credit is paid directly to the landlord, private or social, but the tenant would still be able to opt-out if they wanted. This would reduce the risk to landlords of renting to those on Universal Credit and ensure those in receipt of benefits are treated fairly and equally as they deserve to be.

“The government is expected to formally respond to the Social Security Committee’s report over the summer and I hope they will reflect on their conclusions and join private and social landlords as well as charities and others who support this measure so together we can persuade the UK government of our case.”

How Letting Agents Can Help Landlords Reduce Void Costs

Published On: June 19, 2019 at 8:36 am

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Tenant Shop says letting agents can reduce void costs to landlords if they focus on having the right processes in place.

The leading utility management service says that agents can retain landlord clients by reducing void periods, which is particularly important right now in a time when savvy landlords are shopping around more than ever to find better value for money management fees.

Kent Reliance estimates in their latest study that the typical landlord loses £528 per year due to void periods. They also note that this figure is on the rise due to an increase in the average rent and an increase in the gap between tenancies.

Glenn Seddington at Tenant Shop goes on to say: “Landlords will be looking to minimise lengthy void periods at all costs and letting agents have an important role to play in saving their clients money, ensuring a smooth changeover between tenancies.

“With the tenant fees ban now in force, keeping void costs will be an even higher priority for landlords, especially those who are paying higher management fees as a result of the new legislation.”

How Can Letting Agents Help?

Managing changeovers more efficiently and proactively matching tenants to soon to be vacant properties are just two of the ways that agents can minimise void periods.

“By having the right software and processes in place, agents can help to prevent void periods becoming a serious and costly issue for their landlords,” Seddington continues.

“Tying up loose ends at the end of a tenancy is crucial in saving time and making sure everything is ready for a new tenancy to commence. This includes notifying local councils and utility companies about tenancy changeovers and dealing with stray bills.”

“If agents can automate these processes using the best PropTech solutions, they can save themselves time and keep their clients happy which is a win-win situation for all parties,” he says.

Retaining landlords is crucial to agents’ survival

In a world of banned fees, higher government regulation and tougher competition than ever before, agents must work harder to retain landlords by keeping them happy and demonstrating value for money.

“Agents need to focus on showing landlords everything that is included in their service and why they are more effective than local competitors,” says Seddington.

“If your service is slick and efficient this is only going to impress landlords, increase your chances of long-term retention and provide your staff with more time to focus on growing your business further.”

“Working out how you can reduce the impact of pain points landlords face on a regular basis, such as void periods, will only help in showing your clients why they need the services of a professional letting agency now more than ever,” he adds.

“Despite a challenging market, there are still plenty of opportunities for letting agents to be successful. Utilising the best PropTech services and products can be hugely beneficial in achieving long-term stability.”