Written By Em

Em Morley

Landlord fined after ignoring improvement notice

Published On: July 26, 2016 at 11:20 am

Tags: buy to let landlord,improvement notice,landlords,rental market

A buy-to-let landlord who failed to comply with an improvement notice has been hit with a fine and costs of almost £1,000.

Richard Barratt, of Gainsborough in Lincolnshire, was told to pay these costs having ignored the local councils’ order to improve a run-down property he was renting out in the region.

Failures

Mr Barratt admitted failing to take action following a prohibition order issued by West Lindsay District Council. Barratt was told to pay up within 14 days.

Pleading guilty to the charges, Mr Barratt was fined £550, with council costs of £335 and a victim surcharge of £56.

The court was told that West Lindsay District Council issued the prohibition order in November 2015, which required the property to either be improved or vacated by December 2015.

However, subsequent inspections found that the property was still let despite the order still standing and the required improvements not being made.

Landlord fined after ignoring improvement notice

Licensing

The council has recently introduced a Selective Licensing Scheme for the Gainsborough area in an attempt to reduce anti-social behaviour and standards of housing.

This requires every property in the area to be licensed and to comply with conditions set out by the council. A licence for five years costs £375 per property. All landlords in the region must apply for a licence, with failure to do so a criminal offence incurring fines of up to £20,000.

Standards

Councillor Sheila Bibb, chairman of West Lindsay District Council’s prosperous communities committee, noted, ‘poor property standards do affect the quality of living for local people and it is unacceptable.’[1]

‘Whilst West Lindsey District Council works closely with partners including landlords to support them, we will take enforcement action where necessary. Overall this is an excellent result and provides a clear example for landlords in West Lindsey that the council will take the necessary enforcement action in order to ensure that poor property standards are addressed.’[1]

‘I would like to thank our officers involved in this case for their due diligence.’[1]

[1] http://www.lincolnshireecho.co.uk/landlord-who-failed-to-repair-run-down-rental-property-faces-near-1-000-court-bill/story-29548782-detail/story.html

Average First Time Buyer Age Rises to 30

Published On: July 26, 2016 at 11:00 am

Author: Em Morley

Categories: Property News

Tags: first time buyers,house prices,London,property ladder,rent prices

The average first time buyer in the UK is now 30-years-old and 32 in London, according to the latest Halifax First Time Buyer Review.

The report warns that rapidly rising house prices and sky-high rents are making it increasingly difficult for private tenants to get onto the property ladder.

The study also found that first time buyers in the capital are now putting down an average deposit of £96,000 – almost three times higher than the UK average of £34,000, where first time buyers are generally able to get onto the property ladder two years earlier than in London.

Average First Time Buyer Age Rises to 30

Rising house prices

The price of the average first time buyer home in the UK increased by 12% in the last year to reach just under £200,000. This rises to £385,000 in London and £257,000 in the South East.

Londoners will not be surprised to learn that the ten most expensive areas of the country to buy a first home are all in the capital, with Brent being the least affordable borough for first time buyers. Its average price of £460,000 is 12.5 times the average annual earnings of a typical buyer.

Across the capital, the average first time buyer deposit was 25% of the purchase price, compared with 17% in the rest of the UK. Halifax believes that Londoners opt for a higher deposit in an attempt to keep monthly mortgage payments as low as possible. Although higher wages in the capital might account for first time buyers being able to save more, the report adds that many are receiving more help from the bank of mum and dad than those in the rest of the country.

All first time buyers in London were liable for Stamp Duty, which applies to properties costing over £125,000, with 85% paying more than £250,000 for their homes.

More first time buyers

However, it’s not all bad news – the number of first time buyers rose by 10% over the first six months of this year, compared with the same period in 2015, with almost 155,000 people buying their first home in the first half of 2016.

The Mortgages Director at Halifax, Chris Gowland, comments: “This rise has been broadly in line with a general improvement in market activity and is likely to have been helped by Government measures including the Help to Buy scheme.

“Although numbers remain below their previous peaks and many potential first time buyers are facing escalating house prices and deposit sizes, record low mortgage rates continue to make buying seem a more attractive option than renting.”

Although the outlook for first time buyers appears more positive, many are still forced to rent privately while they save. It is vital that good landlords look in the right parts of the country to invest, so that they can provide the safe, secure and high standard properties that generation rent needs.

New Licensing Scheme Announced for Landlords in Ealing

Published On: July 26, 2016 at 10:12 am

Author: Em Morley

Categories: Landlord News

Tags: HMO's,landlord licensing scheme,London,rental property,rogue landlords

Private landlords in Ealing, one of the capital’s largest boroughs, will soon be required to obtain a license for their House in Multiple Occupation (HMO).

Ealing Council plans to introduce two new landlord licensing schemes in January 2017, in a bid to improve standards in the private rental sector across the borough, which is home to over 137,000 residential properties, including around 36,000 private rental homes.

New Licensing Scheme Announced for Landlords in Ealing

Under existing rules, only certain larger HMOs in Ealing are covered by the existing compulsory licensing scheme.

The new scheme will apply to all HMOs that are two storeys or more and occupied by four or more people, but not covered by the mandatory scheme.

Additionally, the new selective licensing scheme will apply to all private rental properties in Acton Central, East Acton, South Acton, Southall Green and Southall Broadway wards, where the council believes that this type of licensing will deliver the most benefits to the community.

To obtain a five-year license, landlords or managing agents will be required to pay a fee for each rental property in the designated schemes. The additional licensing fee is £1,100 for each HMO plus £30 for each habitable room, and the selective licensing fee is £500.

Failure to obtain a license could result in prosecution and an unlimited fine.

Landlords that sign up between 1^st October and 31^st December 2016 may be eligible for a 25% early bird discount. Those that are already members of a recognised landlord accreditation scheme may also qualify for a further discount of £75.

Under the proposals, a licensed landlord will also be required to comply with several conditions relating to the management and condition of their property, including gas, electrical, fire safety and other facilities provided.

A written tenancy agreement would be required and anti-social behaviour by tenants would not be permitted.

Councillor Ranjit Dheer, the Cabinet Member for Community Services and Safety at Ealing Council, comments on the plans: “The introduction of the additional and selective licensing schemes in Ealing will significantly reduce the number of complaints associated with private rented properties, while allowing us to better protect the health, safety and welfare of tenants.

“Underlying our plans to expand our licensing schemes is the serious issue of poorly managed properties, which lead to sub-standard living conditions and anti-social behaviour.

“By providing clear standards under which landlords will operate and tenants will know what to expect, we want to encourage stable, long-term tenancies that will then go on to create sustainable communities.”

Dheer continues: “All our residents deserve decent, safe homes to live in, and we are determined to drive up standards in the borough’s private rented sector.

“The new licensing schemes will give us the opportunity to achieve this and robustly tackle unscrupulous landlords.”

Property prices set to increase despite scepticism

Published On: July 26, 2016 at 9:52 am

Author: Em Morley

Categories: Property News

Tags: Brexit,Buy-to-Let,house price confidence,landlords

Despite the Brexit vote affecting sentiment in the housing market, many households are expecting property prices to rise, albeit at a steady pace.

The latest House Price Sentiment Index (HPSI) from Knight Frank and IHS Markit indicates that households across the UK feel the value of their home dropped during July. Respondents in nine of the eleven regions covered by the Index put this solely down to the decision to leave the European Union.

Positive future?

This said, the future HPSI is positive, with the majority of households suggesting that the value of their home will increase over the next 12 months. However, this rise is forecasted to be at its most modest since October 2012.

‘The impact of uncertainty in the wake of the Brexit vote is clear from the HPSI index reading for July, especially in light of the relative strength of sentiment in the run-up to the vote. Although there has been a marked drop in the index, the readings are hovering around the no-change mark, similar to levels in 2012/2013,’ noted Grainne Gilmore, head of UK residential research at Knight Frank.[1]

Regional variations

Results from the Index show that households in the South of England are more confident about property price rises than those in the North, Scotland or Wales.

Alongside geographical discrepancies, there are differences in positivity throughout various age groups. Those over 55 expect the value of their home to fall in the next year, similar to those aged 18-24. However, other age groups expect a moderate rise.

Tim Moore, senior economist at HIS Markit, said, ‘the surge in economic uncertainty after the EU referendum weighed heavily on UK house price sentiment during July. The current prices index signalled the greatest month to month loss of momentum for at least seven-and-a-half-years. Despite a sizeable fall since June, the latest reading signalled that house price sentiment was at a level seen in early 2013 and only marginally downbeat overall.’[1]

‘Households across all UK regions also indicated a sharp recalibration of their property price expectations for the next 12 months, led by those living in London and the South East,’ he continued.

Property prices set to increase despite scepticism

Referendum reductions

Before the referendum, 43% of UK households expected a yearly rise in property values, as opposed to 8% that predicted a fall. Now, there is a fairly even split, with 26% predicting a rise in values and 23% anticipating a fall.

Concluding, Mr Moore said, ‘While it is too early to evaluate the full impact of the EU referendum on the UK property market, it is already clear that heightened uncertainty has cast a shadow over household sentiment. At the same time, fundamental imbalances between housing supply and demand have not changed materially, while lending conditions remain supportive. Nonetheless, a sharp jolt to consumer confidence in July has impacted swiftly on UK households’ perception of their property value, and this is also a signal that price expectations could remain highly sensitive to economic and political developments over the months ahead.’[1]

[1] https://www.propertyinvestortoday.co.uk/breaking-news/2016/7/house-prices-set-to-rise-despite-waning-confidence

Rental market stays stable post Brexit

Published On: July 26, 2016 at 8:46 am

Author: Em Morley

Categories: Property News

Tags: ARLA,Brexit,Buy-to-Let,housing demand,rental market

The latest report from the Association of Residential Letting Agents has suggested that the rental market has stayed relatively stable following last month’s Brexit vote.

Referendum reality

In the aftermath of the decision to leave the European Union, there has been very little movement in terms of rental costs.

12% of letting agents reported a fall in rent, while 77% saw no change.

Prior to the vote, 19% of agents suggested that rents would increase, with 20% expecting them to drop. 61% thought that they would stay the same.

Supply of available properties and housing demand has also stayed fairly constant since the referendum. 67% of ARLA members have reported no change to supply, with 64% saying that there has been no change in the number of tenants looking to secure a rental property.

This said, 45% of letting agents have seen uncertainty from landlords looking to let, which could cause problems in the coming months.

Calm

David Cox, managing director of the Association of Residential Letting Agents, noted, ‘the rental market has responded to Brexit in a calm fashion, with no immediate fallout amid extreme political and economic uncertainty. What we need is some certainty from the new Government that housing remains a priority with the rental market playing a central role. For example, we want to avoid a situation where institutional investors start pulling away from the market, because ultimately this will impact tenants by squeezing supply further and pushing up rents.’[1]

‘Although we’ve seen some hesitation from landlords this is relatively mild and it’s importantly they do not act in haste. Any inevitable longer-term changes will then be taken on board with greater ease,’ he continued.[1]

Rental market stays stable post Brexit

Monthly rises

On a month on month basis, demand for rental accommodation was up during June. In addition, the supply of properties managed on agents’ books also rose. There were 37 would-be tenants on average registered per ARLA branch in June, up from the 33 recorded on average in May.

The supply of rental properties increased by 3% in June, from 171 in May to 176.

Cox concluded by stating, ‘if one thing is clear following Brexit, it’s that supply and demand remains a real issue in the rental market. If supply continues to dwindle against growing demand, no matter what the eventual implications of Brexit are, renting will become more difficult and expensive for tenants.’[1]

[1] http://www.propertyreporter.co.uk/landlords/rental-market-survives-storm-brexit.html

Highest London House Price Growth Under Thatcher and Blair

Published On: July 26, 2016 at 8:39 am

Author: Em Morley

Categories: Property News

Tags: average house price,house price growth,London,London property market,Theresa May

New Prime Minister must address housing supply crisis, warns NRLA

The highest London house price growth occurred when the country was under Margaret Thatcher and Tony Blair, according to new analysis from estate agent Stirling Ackroyd.

Recently, we looked at what the new Prime Minister, Theresa May, will mean for the housing market: /will-theresa-mays-government-mean-housing-market/. However, it is expected that the Brexit could mar her time as PM.

A spiralling market

The average London home cost just £31,370 in 1979 when Margaret Thatcher entered 10 Downing Street. Just 11 years later, this had soared to £110,110 – a whopping rise of 251%. For each year that Thatcher was PM, house prices in the capital grew by an average of 12.1%.

But Thatcher isn’t alone in overseeing a spiralling London property market.

Highest London House Price Growth Under Thatcher and Blair

Tony Blair’s time as PM saw the average house price in London surge from £108,620 in 1997 to £335,040 just ten years later, putting him in second place. During his term, London house price growth averaged 11.9% per year.

The Managing Director of Stirling Ackroyd, Andrew Bridges, says: “With great power comes great responsibility, but there’s one thing the PM can’t control – London house prices.

“Under Thatcher’s tenure, the property market was turned on its head – seeing dramatic house price growth in London. There’s always talk of spiralling house price growth in the capital, but compared to the 1980s, the rate of growth is lagging behind.

“Even the boom years under Blair couldn’t keep up with this pace of growth. Under New Labour, London’s property market reached new heights and became a global competitor. As demand soared, so did prices. Places like Shoreditch became solid investments and a buy-to-let surge started, with those properties snapped up still returning a profit today.”

Recessions bite

For PMs that governed during a recession, it’s been a very different story. House prices in London fell by 1.4% between Thatcher and the end of John Major’s term. In 1991, the average home in the capital cost £110,110, falling to £108,620 at the time Major left office. However, financial difficulty prevented buyers from taking advantage of the drop in house prices.

Similarly, Gordon Brown, who inherited a sharp global recession, also oversaw negative house price growth during his time as PM. When he entered No. 10 in 2007, a typical London home cost £335,040. By 2010, property had become more affordable, at £332,720.

One of the world’s most expensive cities

David Cameron’s time as PM saw the price of a London home increase by 53%, as the capital became a safe-haven for international property investors. In 2010, buyers paid £332,720 for the average home, rising to £507,880 this year.

Bridges concludes: “Buyers in London have paid the price under Cameron’s leadership. House prices started rising swiftly again, and, despite a return to strong economic growth, affordability has become the number one issue for Londoners. Once again, the supply of homes could not keep up with demand and economic growth.

“If the pattern developing over the last 38 years is anything to go by, Theresa May could face a static London property market. The City’s property sphere has been pushed to its limits with new legislation and political events in the last. But there’s a new advantage – London’s property market is more resilient and probably the safest real estate investment globally. The comparisons of May and Thatcher have already begun – but London’s property market can be tamed by no one.”