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Em Morley

Slowdown in the Property Market Normal for This Time of Year

Published On: August 4, 2016 at 10:50 am

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The slowdown in the property market recorded over July is normal for this time of year, according to the latest Property Activity Index from Agency Express.

The recent property market report from the firm found that both new listings and the number of properties sold dropped in July.

Nationally, the number of new property listings fell by 15.3%, while the amount of properties sold was down by 8.8%.

Slowdown in the Property Market Normal for This Time of Year

Slowdown in the Property Market Normal for This Time of Year

However, over the past three months, the decline has been less severe, with new listings down by 3.2% and properties sold down by 3.8%.

Looking back over the Property Activity Index’s historical data, a slowdown in the property market in July is not uncommon. As the summer holiday months commence, a seasonal cooling in the market is expected, and this year’s figures appear consistent with those recorded between 2013-15.

Across the country, just four of the 12 regions included in the Property Activity Index bucked the seasonal trend.

The best performing region in July was the West Midlands, which saw a record best rise in new property listings for July, of 5.6%.

The strongest regions for new listings in July included:

  • West Midlands: +5.6%
  • East Midlands: +3.1%
  • North West: -0.5%
  • Wales: -1.9%

In terms of the number of properties sold, the best performing regions were:

  • Wales: +3.2%
  • North West: +0.2%
  • South East: -3.7%
  • South West: -3.8%

The greatest declines seen in July’s Property Activity Index were in London. New listings in the capital fell by a huge 49.9%, while the amount of properties sold was down by 19.9%.

With buyers and sellers in London remaining cautious over the effects of Brexit, the rental sector in prime central spots has experienced a boost: /rent-prices-prime-central-london-following-brexit/

The Managing Director of Agency Express, Stephen Watson, says: “Throughout July and August, we traditionally see a decline in the UK property market. This month, the vote to leave the EU did bring an air of uncertainty, but as it stands, figures have remained true to trend.

“However, with the Brexit effect yet to emerge, it will be interesting to see if September’s figures return with the same vigour.”

Check back to Landlord News for the latest property market updates and insight.

Nearly 9 in 10 renters can’t raise 5% deposit

Published On: August 4, 2016 at 9:51 am

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An alarmingly new study has found that almost nine out of ten renters in Britain cannot save enough to cover even a quarter of the deposit required to buy an average-priced first home.

The investigation by the Equality Trust discovered that 86% of tenants have less than the £8,838 required for just a 5% deposit on a typical home.

Crisis?

This news comes on the heels of reports that the so-called housing crisis has spread north from the capital, taking hold of cities from the Midlands upwards.

Spiralling rents are pricing many families out of getting onto the property ladder, despite mortgage interest rates plummeting to historically low levels.

Those renting in the capital already spend in excess of 60% of their income on rent. Average rents in Britain currently stand at £764 per month, while in London they are £1,543.

A spokesperson for The Equality Trust said, ‘the vast majority of renters are locked out of home ownership through a lack of income and savings, with many unable to afford even the cheapest housing.’[1]

Priced out

The study found that even in Burnley, the local authority with the cheapest houses in Britain, eight in ten people don’t have enough savings to raise a quarter of the deposit for a home.

John Hood, acting director of the Equality Trust, said, ‘it’s startling to see just how many people are priced out of owning their own home. At the same time, a small number of people at the top are making huge wealth from our dysfunctional housing market.’[1]

‘This isn’t sustainable and we need action from our politicians. That means reforming council tax, which hits the poorest hardest and a substantial house building programme. Anything less threatens to lock a generation out of home ownership and into insecurity and punishingly high rents,’ he added.[1]

Nearly 9 in 10 renters can't raise 5% deposit

Nearly 9 in 10 renters can’t raise 5% deposit

Tackling

New Prime Minister Theresa May has promised to tackle the housing deficit. Just last month, she noted that unless this issue was dealt with swiftly, young people in the UK will, ‘find it even harder to afford their own home.’[1]

‘The divide between those who inherit wealth and those who don’t will become more pronounced. More and more of the country’s money will go into expensive housing,’ she added.[1]

[1] https://www.theguardian.com/money/2016/aug/02/nine-10-renters-do-not-have-savings-buy-home-deposit-study

The Cost of Renting Across the Capital

Published On: August 4, 2016 at 9:19 am

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Although the cost of renting in the capital has slowed for the second quarter this year, unprecedented levels of demand mean that tenants are still struggling to find affordable housing.

A new report from flat and house share website SpareRoom.co.uk found that the average rent price in the capital has risen by just 1% over the year, taking the typical cost of renting a room to £734 per month in London.

The Cost of Renting Across the Capital

The Cost of Renting Across the Capital

Although the cost is continuing to rise, this year’s rate of growth is significantly lower than the 8% recorded between 2014-15.

The Director of SpareRoom, Matt Hutchinson, explains: “It seems many areas of London are at rental saturation – people simply can’t afford to pay higher rents, so they’re stabilising.”

A third of postcode districts in the capital have seen an annual decrease in average room rents, with prices falling by 4% in northwest and 2% in west central and east central London.

A slowdown in rent price rises has also been seen across the wider residential lettings market. However, a recent report claims that rents are up in prime central London, as buyers remain cautious over the Brexit outcome.

Parts of southwest London are also bucking the trend, such as Barnes, Tooting, Mortlake and West Brompton/Chelsea, with average room rents now at £763 per month following a 5% annual increase.

However, demand continues to be high in this part of the capital, as an increasing number of tenants are priced out of Clapham, Battersea and Fulham. Four renters are competing for every room, while in west central London, the odds of securing a room are slightly lower, with five potential tenants for every vacancy.

The Head of Lettings at Rightmove, Sam Mitchell, reports: “Overall demand from tenants is at record levels. There will always be localised markets where there just isn’t enough property and rents therefore will rise. Typically, this happens in areas in Zone 2 with really good transport links.”

Mitchell also notes that following a rush of buy-to-let landlords to purchase rental properties ahead of the Stamp Duty deadline in April, the lettings market experienced an influx of properties on the market, which has led to a slowdown in rents.

According to SpareRoom, east London is the best bet for tenants to find a room, as it offers the greatest levels of supply and the cheapest prices.

Landlords looking for the highest returns should look to Abbey Wood in southeast London, which has recorded rent price growth of 21% over the year, largely due to the forthcoming Crossrail project. The average rent price per month here is now £564, cementing it as one of the few remaining areas with an average rent price under £600 a month.

The cheapest places in London to rent a room are Eltham (£518), Manor Park (£525) and Chingford (£544), which are all in southeast or east London.

With tenants heading east, landlords should move further out of central London to take advantage of high levels of demand.

Landlord fined heavily for ignoring repair requests

Published On: August 4, 2016 at 9:00 am

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A rogue landlord has been fined nearly £18,000 and given a criminal record after refusing to carry out renovations to his rental property.

Mr Paul Fenton, of Radlett, Hertfordshire, pleaded guilty to offences under the Housing Act 2006 at Willesden Magistrates Court. Fenton failed to explain how his rental property, that he was letting for £1,000 pcm, had fallen into such a state of disrepair.

Poor conditions

The property was discovered to have severe damp and mould growth, which were so bad that the chair of magistrates slammed the abode as uninhabitable. Other problems included a leaking boiler and rotting front door.

Brent Council received a complaint from the tenant of the property regarding its condition. As a result, enforcement officers inspected the flat in August 2015 and found a whole host of hazards. Fenton was subsequently issued with a formal demand from the council, permitting him to repair all damages within 56 days.

However, when council officers returned to the flat in both January and May this year, they found that repairs had not been carried out.

Mr Fenton, who has owned the property since 1990, claimed that he had not been into the flat for a number of years. He falsely assumed that the tenants were pleased, as they had not asked him for repairs.

Landlord fined heavily for ignoring repair requests

Landlord fined heavily for ignoring repair requests

Fines

Despite Fenton claiming he was unsure of his income, he was eventually fined £16,000 and ordered to pay costs of £1,573 and a victim surcharge of £120.

Councillor Harbl Farah, Brent Cabinet Member for Housing, noted, ‘the dreadful conditions found at this flat reaffirm once again how important our private sector licensing scheme is. Slumlords like Mr Fenton should not be allowed to get away with treating their tenants like this. Brent is committed to supporting tenants by prosecuting unscrupulous landlords who are happy to under maintain and over crowd their properties.’[1]

[1] http://www.propertyreporter.co.uk/landlords/heavy-fine-for-landlord-who-ignored-pleas-for-repairs.html

 

 

Rent Prices Up in Prime Central London Following Brexit

Published On: August 4, 2016 at 8:34 am

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Rent Prices Up in Prime Central London Following Brexit

Rent Prices Up in Prime Central London Following Brexit

The prime central London rental market has remained strong following Brexit, with rent prices rising between May and July, according to London estate agent Portico.

The agency’s July Rental Market Update found that the average rent price for a two-bedroom property in the prime central London borough of Kensington and Chelsea has increased by 0.4% post-Brexit, while rents are up by 1.7% in the City of Westminster.

These two prime central London boroughs have again recorded the highest average rent prices of all the London boroughs, with the average rent price for a two-bed home in Kensington and Chelsea almost hitting the £4,000 per month mark, at £3,989.

On the whole, Portico’s data suggests that the rental market has remained fairly stable post-Brexit, with average rent prices experiencing a slight 1.7% decrease between May and July.

The boroughs with the greatest rent price rises between May and July were Camden, at 3.3%, Tower Hamlets, 1.2%, and the outer London boroughs of Newham, 2.6%, Haringey, 2.2%, Hillingdon, 1.3% and Sutton, 1.1%.

The Managing Director of Portico, Robert Nichols, comments on the figures: “Caution in the sales market has pushed demand into the prime rental market, and as such, we have seen rental prices rise over the past few months. We expect the market to remain stable throughout the summer months, but whether rental prices will continue to rise will depend on the economic consequences of Brexit.

“Outside prime central London, the rental market has remained stable, with tenants still keen to snap up properties in hotspot areas created by infrastructure projects like Crossrail and Crossrail 2, such as Tower Hamlets, Newham, Haringey, Hillingdon and Waltham Forest.”

If you are thinking of investing in the London market to take advantage of robust conditions and forthcoming infrastructure improvements, look to the areas that are likely to benefit from the new Crossrail 2 project. Portico has highlighted the areas that landlords should consider for their next buy-to-let investment: https://www.justlandlords.co.uk/news/crossrail-2-coming-london-invest-along-line/

New property listings up by 3.4% in July

Published On: August 3, 2016 at 1:52 pm

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The latest report from online estate agents HouseSimple.com has discovered that new property listings recovered during July.

Data from the investigation shows that new listings increased by 3.4% during the month across the UK. In London, there was a substantial 13.7% rise.

New to market

In order to compile the Index, HouseSimple analysed more than 500,000 listed properties, to track numbers of new properties marketed each month. This research took place in more than 100 major towns and cities across Britain and all London boroughs.

As Brexit uncertainty took hold in June, new supply of properties was down by 7.3% across the UK and by 12.8% in London. It seems however that in the last month, sellers returned to the market, despite ongoing speculation about the impact of leaving the EU.

Supply of new property was up in 62% of towns and cities involved in the report. The most significant rises were seen in Durham and Hartlepool in the North East.

The top-ten UK towns and cities in terms of rises in new property listings during July in comparison to June were found to be:

Town/City Region % rise in new listings in July vs. June
Durham North East 51.0%
Hartlepool North East 32.5%
Hemel Hempstead East 31.7%
Hereford West Midlands 28.6%
Weston-Super-Mare South West 25.6%
Chesterfield East Midlands 24.3%
Worthing South East 24.0%
Slough South East 23.3%
Doncaster South Yorkshire 23.0%
Bath South West 22.6%

[1]

New property listings up by 3.4% in July

New property listings up by 3.4% in July

Business returning

Alex Gosling, CEO of online estate agents HouseSimple.com noted, ‘it’s been business as usual after Brexit in terms of activity, with many sellers who were waiting on the result of the Referendum, now actively marketing their properties. The reality is that people need to sell for a whole host of reasons and delaying post-Brexit is simply not an option if people are relocating for work or family reasons.’[1]

‘On the ground, what was probably a sellers’ market before the vote is now going to be a more level playing field. That doesn’t mean that quality properties in desirable areas won’t still sell for close to or at asking price, but buyers are holding a few more cards now and motivated sellers may need to more flexible on price negotiations,’ he added.[1]

[1] http://www.propertyreporter.co.uk/property/july-property-supply-sees-rise-of-34.html