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Em Morley

Government to Make Gazumping Illegal to Speed Up Buying Process?

Published On: May 11, 2016 at 11:16 am

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The Government is reportedly planning to make gazumping illegal in order to speed up the home buying process.

Ministers are considering a crackdown on buyers and vendors who pull out of a deal at the last minute, or who try to gazump or gazunder each other.

They plan to make house purchases legally binding much earlier in the process, for example, when an offer is accepted. If either the buyer or seller pulls out afterwards, they

Government to Make Gazumping Illegal to Speed Up Buying Process?

Government to Make Gazumping Illegal to Speed Up Buying Process?

must pay the other party’s costs.

In March’s Budget, the Government said that it would call for evidence on how to make the buying process better value for money and more consumer friendly.

It now seems that the Government is planning to call for that evidence in the near future, through a consultation on speeding up and improving the home buying process.

A spokesperson has ruled out importing the Scottish system. In Scotland, deals are binding once missives are exchanged, which prohibits gazumping and gazundering.

The Managing Director of the National Association of Estate Agents, Mark Hayward, believes that alternatives could include having a pre-contract agreement or charging the buyer a deposit. However, he thinks these options would be unpopular.

He also warns that the Scottish system is not perfect.

He says: “The Scottish system is sometimes referred to as the ideal system, but if you speak to people in Scotland, they may disagree. The onus is on the purchaser who has to have carried out all the checks before making an offer on the off chance that it would get accepted.

“We perhaps need a hybrid system. In France, you have a ten-day cooling off period after an offer is accepted.”1

Hayward also believes that the whole legal process of buying a property needs an overhaul.

Estate agent Chris Wood, of PDQ Property, agrees.

He says: “Gazumping is a problem, but it is not the main problem. The problem doesn’t happen as often as people think.

“What is needed is a review of the process so there are minimum statutory time periods that parties like solicitors and mortgage lenders have to respond in. Banning gazumping won’t solve the problem of delayed or failed property sales. Some would say that is just how the price is tested.”1

How do you believe issues with the property buying process could be resolved?

1 http://www.propertyindustryeye.com/government-considering-making-gazumping-illegal/

Sadiq Khan’s New Database Will Expose London’s Rogue Landlords

Published On: May 11, 2016 at 9:53 am

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The new Mayor of London, Sadiq Khan, has revealed plans for a database that will expose the capital’s rogue landlords.

Sadiq Khan's New Database Will Expose London's Rogue Landlords

Sadiq Khan’s New Database Will Expose London’s Rogue Landlords

The London Landlord Watchlist will help Khan crack down on those who exploit tenants “like a ton of bricks”. The policy, aimed at the capital’s two million private tenants, would introduce a public City Hall database that enables renters to check out landlords before moving into a property. It will name and shame rogue landlords in the capital, and could include those who have repeatedly broken the law.

Offences that could put landlords on the database include unlawful eviction of tenants, failure to comply with an overcrowding notice and harassment. Recently, a landlord in Peterborough was prosecuted for harassing a tenant.

Ministers have already announced plans for a landlord register, but this would only be accessible by councils, not the public.

Housing was at the forefront of the mayoral campaign, as a host of Londoners continue to struggle to afford to rent or buy.

A recent study by housing charity Shelter found that around six in ten Londoners face daily living hazards in their rental properties. Meanwhile, one in ten has suffered health problems in the past year as a result of their landlord failing to deal with dangerous conditions.

It is vital that you keep up to date with landlord law at LandlordNews.co.uk.

Research by the Labour Party also found that tenants would have to pay an average of £2,400 in letting agent fees over the next eight years unless action was taken. Khan has already revealed plans for a landlord licensing scheme and citywide not-for-profit letting agency.

He said: “Most landlords treat their tenants well, but too many renters are being deliberately exploited by rogue landlords. Enough is enough. I will come down on rogue landlords like a ton of bricks with a new London Landlord Watchlist to name and shame the worst offenders.

“We can’t stand by as thousands of renters are suffering high costs and low standards. That’s why I will promote licensing schemes to drive up standards and establish a not-for-profit lettings agency that will end rip-off fees for renters and promote longer tenancies.”1 

Remember to stick to the law and avoid being named and shamed!

1 http://www.standard.co.uk/news/mayor/sadiq-khan-my-watchlist-will-expose-rogue-landlords-a3239716.html

Returns on buy-to-let property rise year-on-year

Published On: May 11, 2016 at 9:29 am

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New data shows that total returns for buy-to-let property in England and Wales increased substantially in the year to March.

According to figures in the Property Partner residential market index, overall returns on buy-to-let increased to 9.57% during the twelve months.

Ups and downs

The Index combines both rental income and capital growth to gauge the total rate of return on residential property over a period of time. Results are generated by research carried out by Property Partner and Office for National Statistics data.

Quarterly, buy-to-let portfolios were up by 2.31%, despite falling by 0.31% month-on-month.

The year-on-year rises recorded were lead by London, where buy-to-let returns increased by 16.49%. The capital was followed by the East of England, where a rise of 13.18% was recorded. Next came the South East (12.1%) and the East Midlands (8.59%).

In the North West, there was a rise of 8.44% and 8.42% in the South West. The West Midlands saw an increase of 6.08%, Yorkshire and the Humber 4.51% and the North East 2.57%.

Returns on buy-to-let property rise year-on-year

Returns on buy-to-let property rise year-on-year

Stamp Duty Rises

Rob Weaver, Property Partner’s director in investment, feels the strong yearly growth was driven by investors rushing to beat the Stamp Duty surcharge increase deadline.

Weaver notes, ‘this was especially true of London, where annual returns were in double digits, reaching an eye-watering 16.5%. The East was strong too and from first hand experience the Northern Powerhouse regeneration plan is boosting investment activity in the North West and in particular Manchester.’[1]

‘What’s clear is that regional disparities in the housing market are widening, with Yorkshire and Humberside and the North East regions looking fragile,’ he continued.[1]

Referendum caution

Mr Weaver also pointed out that would-be investors are exercising caution ahead of the EU referendum in June. He went on to say however that, ‘the fundamentals of high employment, wage growth, cheap borrowing and the chronic shortage of supply remain in place and are positive.’[1]

[1] http://www.propertywire.com/news/europe/englandwales-buy-let-2016051011897.html

The Housing Crisis is Deepening as Homeownership Remains Unaffordable

Published On: May 11, 2016 at 8:48 am

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The housing crisis is deepening, as homeownership remains unaffordable for the high number of aspiring first time buyers who cannot get onto the property ladder, according to new research conducted by YouGov on behalf of the HomeOwners Alliance and BLP Insurance.

The study, now in its fourth year, polls over 2,000 UK adults on their housing concerns and the latest trends affecting homeowners and those looking to buy a home.

The survey highlights the growing appetite of first time buyers to get on the housing ladder. Around three-quarters (73%) of non-homeowners now say they would like to own their own home, compared to 69% last year, 68% in 2014 and 65% in 2013.

The Housing Crisis is Deepening as Homeownership Remains Unaffordable

The Housing Crisis is Deepening as Homeownership Remains Unaffordable

Although the desire to own a home is mounting, the ability for first time buyers to purchase a property and save for a deposit remain the UK’s main concerns, with 82% and 80% respectively saying that these are serious issues.

Additionally, the proportion of aspiring homeowners who say that the availability of housing is a serious problem has soared to 78%, up from 72% last year. Hopeful homeowners are also increasingly concerned about the quality of housing, with 60% naming it a serious issue.

The study also found that the housing crisis is most severe in the capital. However, the new Mayor of London, Sadiq Khan, has set ambitious aims to tackle the shortage of affordable housing.

Positively, there was a noticeable drop in concern about the rates of Stamp Duty, after the Government’s reforms were introduced almost two years ago.

However, landlords are now facing a further 3% in Stamp Duty on buy-to-let properties. Concerns have been raised that landlords may decide to leave the sector, which would cause a decline in private rental property stock; further exacerbating the affordability crisis.

The Chief Executive of the HomeOwners Alliance, Paula Higgins, comments on the results: “Despite a blizzard of Government initiatives aimed at helping homeowners, the housing crisis is deepening across the country, with ever more non-homeowners wanting their own home, and ever greater concern about the lack of housing.

“Many Government policies have boosted demand for homes, but what this survey shows is that the real problem is the desperate shortage of houses. Until the Government tackles the fundamental issue that we just don’t have enough good quality homes, the housing crisis will continue to deepen and a generation will continue to have their dreams of homeownership crushed.”

The Chief Executive of BLP Insurance, Kim Vernau, also responds: “We are now at a critical juncture for the construction industry and housing market. The Government urgently needs to speed up the delivery of new homes for aspiring first time buyers. Tenures of all types are required across the country, and affordable housing and social housing should also be a priority.”

With a high number of prospective first time buyers struggling to purchase their own homes, demand for private rental property looks set to remain strong. Therefore, good landlords that stick to the law and rent out good quality homes are crucial – make sure you check LandlordNews.co.uk regularly for landlord updates.

Strong start to the year for property market

Published On: May 10, 2016 at 1:19 pm

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A new report has underlined the strong start to the year for the British property market, with the positivity recorded at the end of 2015 continuing.

Data from the research conducted by Connells Group shows the number of active buyers coming into the residential market has soared to record highs. Combinations of attractive factors, such as low interest rates, have contributed to this increase.

Growth

David Livesey, group chief executive, noted that with stock available at record lows, additional pressure from new buyers, combined with buy-to-let investors looking to beat the stamp duty deadline, has lead to widely-restricted choice.

He believes however that the ratio of applicants in comparison to new instructions has evened out and that property price growth has not been as rapid as seen in previous quarters. This in turn is leading investors or first-time buyers to believe that purchasing could be productive in the long-term.

Livesey said, ‘this slight cooling has by no means turned into a chill, with property remaining a valuable asset that will continue to increase in value for the foreseeable future. Supply side initiatives, driven by the Government’s attempt to stimulate housebuilding in particular, may need further support if they are to have any meaningful impact on the level of available stock in the short term.’[1]

Positive

The report indicates that landlords and tenants alike have enjoyed a productive beginning to the new year. Activity from renters has risen healthily, with many looking to move into new accommodation.

Interestingly, the report shows that despite the fresh demand from new applicants entering the market, the ratio of registered applicants is not as high as in the same period in 2015. Average rents across England have also stabilised .

Mr Livesey pointed out that a rise in rental stock is easing pressure on the market, as buy-to-let landlords are moving to purchase less expensive properties. ‘This may not be what the Government had in mind when it aided the construction of such properties, but it has given tenants respite nonetheless. In addition, tenants are also driving harder bargains, securing longer leases at a cheaper monthly rate meaning they need to return to the market less often, which is also attractive to landlords.’[1]

‘The mortgage market has also sprung back to life this quarter, largely propelled by high activity levels in the residential and buy-to-let sectors. Home movers and first-time buyers are seeking to take advantage of the low interest rate, high LTV lending environment,’ he continued.[1]

Strong start to the year for property market

Strong start to the year for property market

Stamp Duty increases

Unsurprisingly, the report confirms that there was a substantial increase in buy-to-let lending as a result of the 3% stamp duty surcharge on buy-to-let and second properties. The report shows that lending activity fell after the deadline.

Livesey notes however that, ‘this is not a sign that investors have lost confidence, more a short term trend as they simply sought to avoid an unnecessary upfront cost. Indeed, over the long term, the sector is more than capable of riding out the increased levy given its strong fundamentals, namely, high yields, high rental demand and accessible mortgage lending.’[1]

Brexit fears

With uncertainty surrounding the upcoming EU referendum growing, the report suggests that the economic outlook still looks positive.

‘There are some warning lights flashing in certain areas of the global economy and the current Brexit debate is leading to a degree of business uncertainty. The uncertainty is similar to that seen in the lead up to the Scottish Referendum in 2014 and the UK General Election in 2015 and whilst this may introduce some hesitancy to the market during the second quarter of the fundamentals of the UK economy remain strong, with low unemployment, reasonable rates of GDP growth and rising real term wages, ‘Livesey observed.[1]

‘This generally positive climate looks set to be maintained over the coming quarters, regardless of the result of the upcoming referendum and with demand for housing continuing to outstrip supply, the outlook for the hosing market remains positive,’ he concluded.[1]

[1] http://www.propertywire.com/news/europe/uk-property-market-outlook-2016051011895.html

Rise in buy-to-let landlords selling at auction

Published On: May 10, 2016 at 11:11 am

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A rising number of buy-to-let landlords are looking to sell at auction, rather than through estate agents.

That is the view of property auctioneer Auction House, which suggests there is evidence to support its claim.

Changing trend

Founding Director of Auction House, Roger Lake, believes that there are now more people selling homes as tenanted investments, rather than serving notice to the tenant and selling as empty homes.

Mr Lake said, ‘the problem for the landlord is how to achieve the best sale price without losing too much rental income. Most estate agents tell their letting clients to decant their tenants before instructing them to sell the property. But that approach comes with some major disadvantages. Not only do landlords stop receiving rent but the property often looks unkempt and might need redecoration. The process is invariably long and sometimes tortuous and will require the landlord to find monthly mortgage repayments from other sources for up to six months or more.’[1]

‘By contrast, an auctioneer will recommend that landlords sell with tenants remaining in place and the properties offered as tenanted investments. This has the prime advantage of the landlord continuing to receive rent while the sale is taking place. The property also usually presents better when occupied-and invariably the tenants will want to stay put rather than be forced out. It’s a win-win for both parties.’[1]

Rise in buy-to-let landlords selling at auction

Rise in buy-to-let landlords selling at auction

Improvements

Lake’s comments come as Auction House’s latest sales results have been published. The results make good reading, with sales in April of 290 lots 402 offered, a success rate 72%. These sales made a total of £44.5m. The first quarter of the year saw 1,027 lots sold from the 1,241 on offer, resulting in a success rate of 76.6% and a sales value of £137.5m.

‘Demand for residential investments hasn’t dropped away as many pundits suggested,’ Lake observed. ‘Indeed, we have seen a strong start to 2016, with most of our sales rooms showing growth over last year’s excellent performance. There was some seller hesitancy immediately following the introduction of the Stamp Duty surcharge but this is now behind us and entries are strengthening. Most believe that the outcome of the Brexit vote will have little short term effect on the auctions market. Normality is returning to the supply side in our sector and buyer demand is still healthy. I expect activity to increase further during the summer and autumn.’[1]

‘As far as buy-to-let is concerned, there are still numerous cash-rich buyers who see rental property as a highly valued part of their investment programme. It’s one that has consistently delivered in the past and should continue to do so in the future,’ Lake concluded.[1]

[1] http://www.propertyreporter.co.uk/auctions/more-btl-landlords-drawn-to-sell-at-auction.html