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Em Morley

The Property Redress Scheme Signs Up its 5,000th Member

Published On: August 17, 2016 at 8:57 am

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Less than two years since the Property Redress Scheme (PRS) began, the organisation is celebrating signing up its 5,000th member.

The Government-authorised scheme was the newest of three available consumer redress schemes for the property market when it launched in the summer of 2014.

The Property Redress Scheme Signs Up its 5,000th Member

The Property Redress Scheme Signs Up its 5,000th Member

It is a legal requirement for all letting and estate agents to be a member of a redress scheme, but the PRS also accepts other property professionals. Recent new members include the Association of Independent Inventory Clerks (AIIC) and VeriSmart, a smart inventory provider.

The London region has the most PRS members, with over 1,250 agents in the capital, followed by the South East counties of Kent, Surrey and Sussex, which have over 600 members. The Midlands and Yorkshire also account for over 1,000 PRS members.

Wales, Scotland and Northern Ireland have lower membership levels, but still make up over 100.

Anthony Hamilton Estate Agents Ltd in Basingstoke became the PRS’s 5,000th member, and was treated to a bottle of champagne to celebrate.

The agency’s owner, Mark Chubb, says: “What a nice treat to celebrate we’ve become the 5,000th member of the PRS. We will definitely drink a toast to the redress scheme.”

Tim Frome, the Managing Director of the PRS, comments: “We are delighted by this further testimony to our success. Our scheme is easy to join and offers straightforward advice for both property professionals and consumers. We’re just short of our second anniversary, and have enhanced our offering continuously since we first started.

“In fact, there are many advantages of choosing the PRS: Enhanced members now enjoy access to a 24/7 legal helpline, and we have started to provide workshops on essential industry topics across the country. We recently hosted a workshop in Cardiff on the new Rent Smart Wales legislation, which requires agents to have Professional Indemnity Insurance and Client Money Protection, aside of their redress scheme membership.”

Letting and estate agents must remember their legal obligation to join a redress scheme.

Landlords, always ensure that any agent you use is a member of a recognised redress scheme.

Landlords still looking to expand despite changes

Published On: August 17, 2016 at 8:55 am

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A new investigation has revealed that the number of landlords and investors looking to expand their portfolio during the coming year has risen slightly.

Data from the report by Shawbrook Commercial’s Client Barometer found that 58% of buy-to-let landlords are looking to purchase an additional property in the next twelve months.

In January, this figure stood at 56%.

Confidence

The slight increase could be seen as a surprise, given the number of significant changes seen in the last six months. The introduction of the 3% additional stamp duty surcharge and the UK’s historic decision to leave the EU are just two of these alterations to have an impact on the market.

Pleasingly, landlord and investor confidence in the sector has been unwavering, given the severity of the changes.

Further data from the Shawbrook report reveals 57% of people questioned are either ‘very confident’ or ‘fairly confident’ about the market moving forwards six months.

This is only a small drop from 59% recorded in January.

Challenges

Despite many investors saying they feel upbeat bout the future of their investment, many have highlighted the Brexit vote as the largest challenge facing them moving forwards.

42% of those surveyed have said they feel Britain’s exit from the EU will have a negative impact on property investors. Just 14% said the vote to leave would have positive implications.

Stephen Johnson, deputy chief executive and managing director of property finance at Shawbrook, noted, ‘seeing this optimism reflected in investors’ plans to acquire new BTL properties is a promising sign that the specialist market shows no signs of slowing despite uncertainty.’[1]

‘We have not yet seen any real change in customer behaviour and there is still a great deal of activity across the Commercial business,’ he added.[1]

Landlords still looking to expand despite changes

Landlords still looking to expand despite changes

Uncertainty

Mr Johnson went on to say that the referendum result has created uncertainty in the sector, with many investors waiting to see what the impact will be on prices, tenant demand and supply.

Savvy investors however could act swiftly to secure a bargain and add to their portfolio at a discounted price.

‘Whilst the full effects of the Referendum result remain to be seen, it is clear those who have confidence in their business model and a sensible level of gearing are best placed to prosper through any period of uncertainty,’ Johnson concluded.[1]

[1] https://www.landlordtoday.co.uk/breaking-news/2016/8/more-landlords-looking-to-expand-their-portfolios-over-the-coming-year

A Mixed Month for the Lettings Market in July

Published On: August 17, 2016 at 8:27 am

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The latest Property Activity Index from Agency Express reveals a mixed month for the lettings market in July.

Nationally, the number of new property listings to let rose by 3.6%, while the amount of properties let fell by 5.2%.

A Mixed Month for the Lettings Market in July

A Mixed Month for the Lettings Market in July

Analysing the index’s rolling three monthly data, figures from May to July show declines in both new listings, by 2.5%, and properties let, at 2.7%.

Contrastingly, figures for the same period of 2015 were more robust, with new listings rising by 4.2% and properties let by 5.6%.

The Property Activity Index found that just five of the 12 regions recorded in the study saw increases in new listings and only three recorded growth in the number of properties let.

The best performing regions for new rental property listings and the number of properties let in July were:

New property listings

  • North West: +12.8%
  • West Midlands: +9.1%
  • East Midlands: +8.8%
  • Yorkshire and the Humber: +8.1%

Properties let  

  • Central England: +7.1%
  • East Midlands: +3.7%
  • West Midlands: +2.2%

July’s top performing region in the lettings market was the North West. After two consecutive months of decline, the North West bounced back, recording the greatest rise in the past month’s Property Activity Index. New listings to let increased from -5.4% in June to 12.8% in July.

The greatest decreases in the latest index were in the North East. Following a strong month in June, where new listings hit 26.5% and let properties reached 13.0%, July experienced a substantial drop in figures. The amount of new property listings in the lettings market fell by 10.3%, while the number of properties let dropped by a huge 18.5%.

Landlords, did you experience a mixed month in July? If so, where were your best performing regions for the lettings market?

As the latest Property Activity Index from Agency Express is the first since the Brexit vote, it will be interesting to see whether these mixed results continue.

HMRC debating new tax regime for smaller BTL investors

Published On: August 16, 2016 at 11:04 am

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HM Revenue & Customs has moved to launch a 12-week consultation on a scheme which it claims will improve the simplicity of tax demands levied on lesser-scale buy-to-let investors.

The new proposal, if agreed, will see buy-to-let landlords with an annual rental income of below £10,000 not permitted to keep their business records digitally. In addition, landlords falling into this category will not have to provide quarterly updates to HMRC.

However, they will still be obliged to utilise the so-called ‘optional cash basis.’

Alterations

If the proposal receives approval, it is likely to be introduced in the Finance Bill 2017, for full implementation in 2018 or later.

Through its wide-ranging digitisation programme Making Tax Digital, HMRC had been banking on landlords to utilise specialist software in order to keep detailed business records. These would then be submitted quarterly.

HMRC debating new tax regime for smaller BTL investors

HMRC debating new tax regime for smaller BTL investors

The cash basis option will only be made available to simple property businesses. These include individual landlords and partnerships where partners are individuals.

This said, a statement from HMRC noted, ‘the option to use the cash basis will make budgeting for tax easier for landlords allowing them to better manage cashflows.’[1]

Under the cash basis, buy-to-let landlords would only be permitted to declare their rental income for cash actually received. As part of the digital quarterly accounting scheme, they would be required to include the income that their tenants should have paid as income for the year-even if this rent had not been paid.

[1] https://www.lettingagenttoday.co.uk/breaking-news/2016/8/hmrc-mulling-easier-tax-regime-for-small-scale-buy-to-let-owners

 

 

UK Property Market Resilient to Brexit Jitters, Reports ONS

Published On: August 16, 2016 at 10:45 am

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The UK property market proved resilient to Brexit jitters in the month of the vote, according to the latest House Price Index from the Office for National Statistics (ONS).

The average UK house price rose by 8.7% in the year to June 2016, up from 8.5% in the 12 months to May, continuing the strong growth recorded since the end of 2013, found the study.

The report, compiled using Land Registry data, reveals that the average UK house price in June – for which the most recent figures are available – was £214,000, up by £17,000 on June 2015 and £2,100 higher than the previous month.

UK Property Market Resilient to Brexit Jitters, Reports ONS

UK Property Market Resilient to Brexit Jitters, Reports ONS

The main contributor to the increase in UK property prices was England, where values rose by 9.3% in the 12 months to June. The average house price in England is now £229,000, compared to £145,000 in Wales, which saw an annual increase of 4.9%, and £143,000 in Scotland, where prices were up by 4.6% over the year. The average property value in Northern Ireland was just £123,000 in June.

Regionally, London continues to boast the highest average house price in England, at £472,000. Behind are the South East, at £309,000, and the East of England, at £270,000. The lowest average house price in England continues to be found in the North East, at £124,000.

However, the East of England has replaced London as the region with the highest annual house price growth, with values rising by 14.3% in the year to June. Despite this, growth in London remains high, at 12.6%, followed by the South East, at 12.3%. The lowest annual growth was seen in the North East, where prices were up by just 1.5% in the past year.

The most expensive place to live in England as of June was Kensington and Chelsea, where the average home costs a whopping £1.2m. Contrastingly, the cheapest area to buy a property was Burnley, at just £75,000.

The Senior Economist at PwC, Richard Snook, comments on the data: “These figures only capture one week of market activity after the vote to leave the EU on 23rd June, so it is too early to draw any firm conclusions from this set of data.

“Nevertheless, we expect that the vote to leave the EU will have a significant impact on the housing market. In our main scenario, average UK house price growth will decelerate to around 3% this year and around 1% in 2017. Cumulatively, our estimates suggest average UK house prices in 2018 could be 8% lower than if the UK had voted to stay in the EU.”

The founder and CEO of eMoov.co.uk, Russell Quirk, also looks at how the Brexit will affect the UK property market: “The latest data from the blended ONS and Land Registry indices shows no Brexit impact in June to the UK property market.

“Nationally, house prices are £17,000 higher than in June of last year and up more than £2,000 when compared to pre-Brexit. However, the two-month reporting lag of this particular indices means the drop in prices reported by Halifax at the start of the month is unlikely to come to the surface until July’s indices.

“Regionally, the capital is still king of UK house prices, at £472,204 on average, but it’s interesting to see the East of England has overtaken London with the highest rate of annual growth, of 14.3%, 1.7% higher than London.”

Quirk believes: “This could be an early indicator of foreign investment fleeing the capital pre and post-referendum result, although, that said, we’ve seen property demand in prime central London plummet to record lows over the last year. This is evidently becoming clear now in terms of property values, with both Kensington and Chelsea and Hammersmith & Fulham in the top five for the poorest performance in terms of annual growth, with values down 6.2% and 3.2% respectively.

“Newham still flies the flag for London as the fourth highest local authority district in terms of annual growth, up 21.4% over the year. So the capital and the UK as a whole are still looking rather robust where the state of the property market is concerned.”

Could night tube boost rental growth in outer London?

Published On: August 16, 2016 at 9:59 am

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The new 24-hour tube service in the capital is launched this coming Friday (19th August). Experts are predicting that the changes could have a positive impact on rental yields for buy-to-let investors in areas subjected to the changes.

Night tube

Commencing on Friday, the new night tube will serve the Central and Victoria lines. Services on the Jubilee, Northern and Piccadilly lines will follow in the Autumn.

Reacting to the move, the Association of Residential Letting Agents (ARLA) said that the new service could provide many people with the confidence to move further out of London. As such, the rental market could receive a timely boost.

Around one-quarter of ARLA members living in London and the South East said they expected to see rental increases around tube stations running a round-the-clock service.

Could night tube boost rental growth in outer London?

Could night tube boost rental growth in outer London?

Desirable

A number of letting agents believe that these regions could become more desirable for tenants, with landlords benefitting from a rise in demand.

Nik Madan, president of the Association of Residential Letting Agents, noted, ‘many Londoners will be rejoicing to see the 24-hour tube finally coming into action. It will mean less time spent on late night buses for those living in Epping or Walthamstow and will make the prospect of living further out of London more attractive-especially as rent costs continue to rise in the centre.’[1]

‘Transport links are a major player in influencing demand and in turn rent costs, so as end-of-the-line areas become connected, there’s a chance we’ll see prices rise,’ he added.[1]

Crossrail

Onlookers are expecting a similar impact on property as experienced by the Crossrail services. Slough and Reading, both served by the new scheme, have seen house prices increase by 39% and 33% since the project was announced back in 2014.

Average regional increases total 22%.

[1] https://www.landlordtoday.co.uk/breaking-news/2016/8/night-tube-could-spark-rental-growth-in-outer-london