Written By Em

Em

Em Morley

Will New Nottingham Licensing Scheme Have the Desired Effect?

Published On: August 9, 2018 at 8:07 am

Author:

Categories: Landlord News

Tags: ,

Nottingham City Council has now introduced a new licensing scheme affecting landlords in specific areas. It came into force at the beginning of this month, requiring 32,000 private rented homes to be registered for a standard fee of £780, or £480 for accredited landlords.

The aim of this new licensing scheme is to stamp out rogue landlords, however many landlords have voiced their opinion that the scheme is simply a way for the council to make more money.

Like many other councils across the UK in areas that have been introducing selective licensing schemes, Nottingham City Council believes that they are the way forward for improving the standards of rented accommodation and put a stop to rogue landlords.

With the current set fees per property for a licence, Nottingham City Council is set to bring in around £23m. A petition is currently running in protest of this scheme, calling for the Government to carry out a review. It focuses on the point that certain areas have been unfairly targeted by the scheme, “particular areas such as the Park Estate, Mapperley Park, Wilford and the City Centre”. It has so far received just over 1,900 signatures, and will run until 2nd January 2019.

Mike Siebert, chair of Nottingham Park Residents Association, has commented: “It [the licensing scheme] is just a way of making money for the council.”

“It backfires if rents go up. It is more expensive to rent than get a mortgage so it will be worse for them. If everyone puts up the price of rent what is it achieving?”

These added costs to landlords are likely to simply be passed on to the tenants in the way of increased rents. This would therefore have an adverse affect on the current situation for those who rent in the affected areas. It is possible that those who actually fall under the category of “rogue landlords” may simply ignore the licensing scheme, so it will be imperative that efficient enforcement will follow.

Top Ten Best and Worst Locations to Sell: England and Wales

Published On: August 8, 2018 at 9:56 am

Author:

Categories: Property News

Tags: ,

The buy-to-let market has recently experienced a slight downfall, with some landlords forced to exit the market as profits drop amid a tax squeeze. However, there remains potential to make a strong recovery from the PRS.

According to Landbay’s Rental Index 2018, the top ten best performing local authorities for rental growth on an annual basis have been identified, with Monmouthshire in Wales ahead of the game with rental growth at 3.22%.

Nottingham follows with 2.7% and Conwy with 2.71% in third.

Four of the ten best performing areas are in Wales, while Scotland and England both have three apiece.

Furthermore, Landbay has also mapped the top ten worst performing areas, with Aberdeen City and Aberdeenshire deemed as the two worst performing locations.

Both locations were impacted as the local economy was impacted by the drop-in oil price in 2014, but the area is appearing to recovery.

The best and worst areas by annual percentage change are as follows, with England racking up a slightly disappointing 7 worst areas:

Top ten areas by annual percentage change

1 Wales Monmouthshire 3.22%
2 England Nottingham 2.87%
3 Wales Conwy 2.71%
4 Scotland Stirling 2.68%
5 Wales Blaenau Gwent 2.61%
6 Scotland Inverclyde 2.59%
7 Scotland Edinburgh City 2.58%
8 England Northamptonshire 2.51%
9 England Bristol 2.42%
10 Wales Carmarthenshire 2.60%

Worst ten areas by annual percentage change

1 Scotland Aberdeen City -4.44%
2 Scotland Aberdeenshire – 4.30%
3 England Windsor and Maidenhead -1.19%
4 England Luton – 1.07%
5 England Halton – 1.06%
6 England Kensington and Chelsea -0.93%
7 England Hartlepool -0.85%
8 England Brent -0.76%
9 England Kingston Upon Thames – 0.50%
10 Scotland Angus – 0.39%

 

Generally, UK rental prices are witnessing an increase, at the slowest pace for five years according to the latest Landbay Rental Index.

The data, powered by MIAC, has revealed that rents in the UK, excluding London, increased by just 1.18% in the 12 months to July 2018. However, despite the rental growth across the UK being in positive territory, there is a synchronised slowdown.

In England, excluding London, the level of growth remained at 1.18%, its lowest point since April 2013. With the capital included the pace of growth slows to 0.81%.

John Goodall, CEO and co-founder of Landbay commented: “Rental growth across the UK is stuttering. However, there are signs of a recovering market in London and stronger demand for rental properties.

“On the face of it, landlords have had a tough time in the past two years from increased regulatory pressure to a significant increase in stamp duty costs, yet they have managed to shoulder many of these costs without passing them onto tenants.”

Annual House Price Growth Hit 3.3% in July, Reports Halifax

Published On: August 8, 2018 at 9:30 am

Author:

Categories: Property News

Tags: ,

Rightmove reports 'best ever spring sellers’ market' for the UK

Annual house price growth hit an average of 3.3% in the three months to July, with the typical property value in the UK now standing at a record high of £230,280, according to Halifax’s latest House Price Index.

On a monthly basis, the average price rose by 1.4% between June and July, while quarterly house price growth stood at 1.3% in May-July.

Housing activity

Halifax also reports that UK home sales fell by 3% in June, to 96,340. In the three months to June, sales were unchanged from the previous three months. The volume of residential property sales has been broadly flat over the past year, and is expected to remain so in the coming months.

Industry-wide figures from the Bank of England show that the number of mortgages approved to finance a home purchase – a leading indicator of completed property sales – increased by 1.4% between May and June, to 65,619 – the second highest monthly level seen this year. There are some encouraging signs for the housing market, with mortgage approvals up by 4.1% since April. However, demand remains weak, Halifax notes.

Annual House Price Growth Hit 3.3% in July, Reports Halifax

Annual House Price Growth Hit 3.3% in July, Reports Halifax

Similarly, new buyer enquiries have been flat or falling for 18 consecutive months, while agreed sales deteriorated between May and June. On historical figures, both sets of data point to mortgage approvals holding broadly flat until the end of 2018. On the supply side, new instructions, which had dropped for 26 consecutive months, have now edged up in the past two months.

Comments

Russell Galley, the Managing Director of Halifax, comments on the index: “House prices picked up in July, with the annual rate of growth rising from 1.8% in June to 3.3% in July – the largest increase since last November. The average house price is now £230,280 – the highest on record. House prices in the three months to July were 1.3% higher than in the previous quarter – the fastest quarterly increase, again, since November.

“While the quarterly and annual rates of house price growth have improved, housing activity remains soft. Despite the recent modest improvement in mortgage approvals, the latest survey data for new buyer enquiries and agreed sales suggests that approvals will remain broadly flat until the end of the year.

“In contrast, the labour market remains robust, with the numbers of people in employment rising by 137,000 in the three months to May, with much of the job creation driven by a rise in full-time employment. Pressures on household finances are also easing, as growth in average earnings continues to rise at a faster rate than consumer prices. With regards to the recent rise in the Bank of England base rate, we do not anticipate that this will have a significant effect on either mortgage affordability or transaction volumes.”

The Founder Director of independent estate agent James Pendleton, Lee James Pendleton, also gives his thoughts: “Annual growth just exploded to a level not seen since the autumn, another traditionally busy moving period.

“This shift up a gear has undone much of the damage of recent months, with annual price growth having failed to keep pace with inflation in every month this year bar March.

“With two negative quarters behind us, many were hoping the usually busy summer period would produce a bit of a bounce, and this is a promising start.

“Buyers were seemingly happy to shrug off the possibility of a looming rate hike, as buyer incentives and low supply continue to play the dominant role in charging up the market.

“The market still needs a healthier flow of transactions, so it would be better for the numbers of homes changing hands to grow faster than prices. However, it is these demand-side carrots, such as the Help to Buy scheme and Stamp Duty relief for first time buyers, that appear to have the upper hand over rates and Brexit when it comes to winning the battle of sentiment that is playing out in people’s minds.”

Stuck with the Stigma: Private Landlords Close to Quitting

Published On: August 8, 2018 at 8:59 am

Author:

Categories: Landlord News

Tags: ,

Does media really have the power to turn landlords away from the private rental sector?

Adjustments to the buy-to-let tax regime are pressing private landlords’ margins, but many are contemplating an exodus from the PRS. This is not due to lower profits, but because of the negative portrayals of landlords on TV.

Despite landlords being instrumental in providing homes to millions of people and families in the country, it is reported that two thirds of landlord claim that they are being demonised, forcing them to consider whether they still want to remain in the sector, renting out their properties.

According to research provided by MakeUrMove, 65% of landlords felt that TV shows, such as ‘Landlords from Hell’ in addition to ‘The Week the Landlord Moved In’, are providing the British public with a disingenuous portrayal of private landlords as whole.

Moreover, the study discovered that while the majority of landlords agreed that it was justified to expose rogue operators in the sector, they believe that more balance is required to show the bigger picture and represent landlords in a fairer manner, instead of ‘sensationalist’ reporting that the media is often guilty of portraying.

Most research by the online letting agent revealed that most landlords and their tenants have a pleasant relationship, suggesting that it may only be a minority of landlords who are being penalised.

Alexandra Morris, Managing Director of MakeUrMove, the online letting agents for private landlords and tenants, commented: “These figures demonstrate that ‘rogue landlords’ are really in the minority, yet the portrayal in the media is leaving good, honest landlords feeling hugely undervalued.

“We’ve found that a majority of landlords are happy for their tenants to make changes to the property, with 71% allowing them to make alterations, and many also try to do the best for their tenants even if it impacts their margins, with 46% saying they will keep their tenants rents the same despite rising costs, which is the complete opposite of the TV image of landlords.

“With more than half of landlords also feeling the government afford them little to no value, it’s having a real impact on a vital part of the UK’s housing sector, risking crucial landlords leaving the market.

“Given the heavily saturated nature of ‘rogue’ landlord TV programming, these findings may come as a surprise to many and hopefully provide a sense of perspective.

“TV paints a picture of nightmare landlords running amok in Britain, when in reality, the majority of landlords are genuine, hard-working people who want to maintain good relationships with their tenants.”

Call for Landlord EPC Improvements Tax Relief on Rented Properties

Published On: August 8, 2018 at 8:12 am

Author:

Categories: Landlord News

Tags: ,,

The Residential Landlords Association (RLA) is calling for all private rented homes to be made as energy efficient as possible.

Since April this year, it has become illegal to grant a new lease (even to existing tenants) on a domestic or commercial property with an Energy Performance Certificate (EPC) rating below E. As of April 2020, this will apply to all tenancies.

The Government recently began a consultation, seeking evidence on how EPCs are currently performing, with the aim of gaining feedback and suggestions of what improvements could be made. The Call for Evidence: Energy Performance Certificates for Buildings has been published by the Department for Business, Energy and Industrial Strategy.

The Government is also considering raising the legal rating to a C by 2030, and the RLA is calling on policy makers to be more ambitious for the private rental sector. In its forthcoming submission to the Treasury ahead of the Budget, the RLA will make clear its suggestions on how the Government can achieve this.

It wants all work carried out by landlords that is recommended on an EPC to be considered as a tax-deductible repair. The aim is to encourage a culture of continuous improvements to properties, rather than simply meeting the set targets and failing to push for further progression.

RLA’s research body PEARL has released data from new research, revealing that 37% of landlords with properties rated F and G cannot afford to bring their property up to the minimum E rating. On average, these landlords reported that it would cost them almost £5,800 to improve their properties to meet this required standard.

Past research from RLA PEARL has found that 61% of landlords reported that tax relief for energy efficiency property changes and repairs would encourage them to make such improvements.

With the Landlord Energy Savings Allowance having been withdrawn, due to a lack of take up, the RLA feels that the provision of targeted tax relief for energy improvements could be more of an enticing option, especially with the minimum targets that need to be met.

In 2006, just over 25% of private rented homes had an EPC rating of F or G. However, by 2016 this was reduced to under 7%.

The Committee on Climate Change’s (CCC) annual report has found that the UK is currently on track to miss its legally binding future carbon budgets, due to a lack of progress in cutting emissions from buildings.

David Smith, RLA Policy Director, has commented: “Whilst progress has been made, we need to be more ambitious for the country’s stock of private rented homes.

“Energy efficient homes are good for tenants and good for landlords. That is why we need to use taxation far better than we do at present to encourage a continuous culture of energy improvements.

“Using recommendations on Energy Performance Certificates in this way is a clear and easy way of achieving this and we call on the Chancellor to adopt the policy in his Budget.”

Housing Market Profits Continue to Fall as we Enter the Second Half of the Year

Published On: August 7, 2018 at 10:11 am

Author:

Categories: Property News

Tags:

By Marc Trup, Founder and CEO of Arthur Online

The UK housing market continues to fall, with house prices growing at the slowest rate in five years, leading to an overall loss in value of £27 billion.

In the past two decades, the London housing market has faced rapid growth. In January 1998, the average house price was £98,000, compared to £485,000 in January 2018, documenting a 500% increase.

In the first six months of this year, however, a home in Britain decreased in value by £5.12 each day. During this period, homes decreased in value by around £927 per property. While house prices in July went up 0.6%, annual growth has stayed underwhelming, growing at a rate 2.5%, according to the latest index figures.

Reports from July have found that there are increasingly more properties being put on the market, despite a lack of demand for them. The number of stock for sale per agent on the market is at its highest since September 2015. As a result, sellers are having to lower property prices to ensure a sale in areas where there is a greater supply of homes on the market.

Marc Trup, Founder and CEO of Arthur Online

Marc Trup, Founder and CEO of Arthur Online

The number of properties being put up for sale has increased by 8.6% compared to this time last year, yet there is no increase in the number of buyers. Out of the properties currently on the market, a third of them have had their prices reduced at least once since they were first uploaded to Rightmove. This is the highest number of sellers reducing asking prices for this time of the year since 2011.

Lack of buyer confidence could be blamed on the uncertainty of Brexit negotiations and on the property sector’s current interest rates. The HM Land Registry reported there will be a 1% fall in London house prices this year. This will be the first annual decline in the capital since August 2009, nearly ten years.

This offers a rare opportunity for first time buyers, since the sector which faced the largest drop in asking prices was the lower market sector. These are properties with two bedrooms or fewer and are, on average, 3.5% cheaper than they were a year ago.

While there is a greater opportunity for first time buyers, other buyers may actually be put off buying by the drop in house prices. House price growth underpins many homebuyers’ motivation to purchase property. If homebuyers are no longer able to make a profit from their property, such assets can no longer be considered investments.

Properties in London with a greater number of bedrooms faced the largest cash loss, but came second in percentage loss to the lower market, with house prices falling by 2.7%. This is partly because of the new rule passed by the Bank of England, which state that banks can only make 15% of mortgages on their books more than 4x5x the borrower’s salary. The rule makes it even harder for buyers to purchase houses in more expensive regions.

Even though the middle sector of London house prices has seen a rise in comparison to last year’s figures, London’s overall asking prices fell by 1.7% in the past year and fell by another 0.5% in July alone. It takes 67 days for a home to sell in London – a month longer than it takes in Scotland and 21 days longer on average than it takes in the West Midlands.

While London, the South East and the East of England are facing declines in falling house prices, the rest of the country, the West Midlands and Scotland are showing strong growth in house prices. Conditions seem to split particularly between the northern and southern regions within the country.

The West Midlands has the fastest growing annual house prices in the UK. House prices in this region rose by 7% in the second quarter of this year, with an average value of £207,272. However, it is the North East of England which has come out on top for the first half of 2018, where house prices have risen by 0.75%.

If demand continues to fall in the south of the country, new property developments set to grace the housing market will surely be met with a lacklustre reception.

Marc Trup is the Founder and CEO of Arthur Online

Marc fell into the property sector after selling his first business in 1998 to BUPA healthcare. Focusing on residential property, he built up a portfolio in and around the London area, starting off with a small block of flats. Over the following 15 years Marc grew his portfolio to manage over 85 properties. He wanted a system that allowed him to manage the portfolio from his iPhone, while drinking his espresso at the local coffee shop. Having searched online to find an app to help him do just that, he realised that it simply didn’t exist. So, he founded Arthur Online to make not only his life easier but that of other property managers. Arthur Online is a cloud-based platform that enables property managers to respond instantly and solve problems fast – be it with tenants, contractors, property owners or letting agents.