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Em Morley

Prime central London rental values lowest for 12 months

Published On: October 6, 2015 at 4:24 pm

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Call for rental housing strategy from Public Accounts Committee

Yearly rental growth in prime central London slipped to 2.4% in September, the lowest increase since the same period twelve months ago.

Research from real estate firm Knight Frank also indicates that the number of tenancies secured in the three months to August dipped by 5.9% in comparison to 2014. Prime gross rental yields held steady at 2.96%.[1]

Slowdown

This slowdown come as a result of unstable financial markets, with nerves surrounding the Chinese economy moving into commodity, mining and carmakers, according to Tom Bill, head of London residential research at Knight Frank.

Bill remarked that, ‘this current overriding mood of uncertainty means companies are more hesitant about recruiting and are more conservative with relocation budgets for senior executives, which has dampened demand in the prime central London lettings market.’[1]

Prime central London rental values lowest for 12 months

Prime central London rental values lowest for 12 months

‘As a result, the number of tenancies agreed in the three months to August fell 5.9% compared to the previous year and the number of viewings declined 10.2%. Such declines suggest the trend for falling rental value growth will persist in the short term,’ Bill continued.[1]

High and low

Additionally, Bill said that this trend is less marked in lower and higher price brackets. He noted, ‘demand among younger professionals remains strong while demand at the super prime level of £5,000 per week and above has been buoyed by the fact tenants have moved across from the sales market due to last December’s stamp duty increase.’[1]

[1] http://www.propertywire.com/news/europe/london-prime-rental-market-2015100611059.html

 

 

Brits Buy a Fifth of All Spanish Property Sold to Foreigners

Published On: October 6, 2015 at 3:51 pm

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Britons have started buying property abroad again as the cost of living remains low in the UK. The highest proportion of foreign property purchasers in Spain is British.

Brits Buy a Fifth of All Spanish Property Sold to Foreigners

Brits Buy a Fifth of All Spanish Property Sold to Foreigners

Of all homes sold in Spain in the first half of this year, foreign buyers bought 12.7%. The Spanish equivalent of the Land Registry, the Colegio de Regisradores, reports that 19.8% of all foreign purchases in the first six months of 2015 were by Britons.

Currently, 750,000 British people officially live in Spain, with the most popular areas to buy property being the Balearic Islands and the Canary Islands, followed by Murcia, Andalusia and Catalunia.

Spain was badly affected by the global economic crash, causing house prices to drop substantially.

Alongside a pleasant climate, relaxed lifestyle and attractive coastline, Spain has become a popular place for Brits to buy property.

Additionally, the UK’s spiraling housing costs are another motive to moving abroad. In London, the average house price is a huge £513,000, according to the Office for National Statistics (ONS). This is almost 40% above the peak recorded before the financial crisis.

Brits aged 55-64-years-old are the most likely to buy abroad, at 43%, followed by those aged 45-54 at 31%.

Although most buyers move to Spain for a bit of sun and low prices, Brits are also purchasing luxury property in foreign countries. According to leading overseas property broker, Tranio.com, they are often the ones buying homes worth €800,000 and over.

Also, 90% of Spanish housing priced over €1m is bought by foreign buyers, according to Spanish Property Insight.

Property data reveals that 16.7% of registered homes in Spain belong to UK citizens, with the French following at 10.3% and the Russians at 7.5%.

BTL mortgage options rise to nearly 1,000

Published On: October 6, 2015 at 3:47 pm

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The number of buy-to-let mortgage products available soared to almost 1,000 during the third quarter of the year, according to a new report.

Data from the latest Complex Buy to Let Index from specialist brokers Mortgages for Business show that options for buy-to-let investors rose by 11% during the last three months.

Annually, there has been an increase of 35% in these products.

Yielding success?

‘Vanilla’ buy to let properties offer the lowest gross yield to landlords, with a further fall of 0.8% recorded in quarter three of this year to 5%. Annually, these yields have fallen by 0.9%.[1]

Moreover, between the second and three quarters of 2015, yields on multi-unit freehold blocks feel from 7.1% to 6.1%. Year-on-year, yields for this type of property have fallen by 2.5%.[1]

In comparison, HMO’s performed reasonably well, with yields only falling by just 0.1% in quarter three.

‘The number of new mortgages coming onto the market has rocketed in recent months,’ said David Whittaker. ‘There is huge interest in mortgages suitable for limited companies as landlords take advice from their accountants.’[1]

Continuing, Whittaker suggested that, ‘as rents fail to keep pace with racing property prices, yields are continuing to plateau. Returns on vanilla buy to let have now fallen to the 5% mark. Landlords will reasonable borrowing costs and a strong portfolio of these sorts of properties will still be making a solid income from such investments but this changes the case for those considering new purchases. With average yields on HMO’s still nearer 10%, more complex property types are likely to attract a growing portion of new investment.’[1]

BTL mortgage options rise to nearly 1,000

BTL mortgage options rise to nearly 1,000

Remortgaging rises

Further data from the report shows that remortgaging performed better than new purchase loans for the fourth consecutive quarter. During the third quarter of this year, 66% of vanilla buy to let loans were for remortgaging, in comparison to 34% for new property purchases. [1]

For multi-unit freehold blocks, remortgaging accounted for 89% of all new mortgages in the period, up by 7% month-on-month and by 22% on the same period one year ago.

Whittaker feels that there is, ‘a change of mood for landlords. Recent unfriendly noises from the Government and Bank of England have contributed but mostly this represents a natural cooling in the buy to let industry after an exceptionally strong first half of 2015.’[1]

‘Consolidation is the order of the day. Landlords are taking full advantage of record low borrowing rates while this lasts. The fact the landlords are choosing in vastly larger numbers to remortgage rental property rather than purchase shows they are looking to get a competitive fixed rate mortgage,’ he added.[1]

[1] http://www.propertywire.com/news/europe/uk-landlords-buy-let-2015100611062.html

 

 

Flat For Sale Measuring 6ft 6in Wide

Published On: October 6, 2015 at 2:52 pm

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A flat measuring just six foot, six inches wide has gone on the market.

The property in Reading, Berkshire, is for sale to cash buyers only through Parkers, priced at £110,000.

The property, close to the Royal Berkshire Hospital, is expected to achieve £500-£550 per month in rent.

The top floor studio, which measures 18 foot, ten inches long, has just one room plus a shower room and two windows. It has attracted attention on social media.

Reading has the fastest rising house prices in England and Wales, according to Land Registry. In August, prices increased by 2.4% in the town.

 

New Section 21 Notice Rules Review

Published On: October 6, 2015 at 1:57 pm

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New Section 21 Notice Rules Review

New Section 21 Notice Rules Review

If you are still not up to date with the Deregulation Act 2015, here are the main points you need to know.

Predominantly, the Government has made changes to the way section 21 notices can be served. Now enforced, the rules mean that landlords cannot issue a section 21 notice within the first four months of a new tenancy (starting on or after 1st October). When a notice is served, it will only be valid for six months.

From October 2018, this regulation will apply to all tenancies, regardless of when they started.

The changes are part of the Government’s plans to crack down on rogue landlords, who get rid of tenants that complain against disrepair issues. Now, if a renter makes a written complaint, landlords cannot issue a section 21 notice until the problem is resolved.

Additionally, tenants must now be given a How to Rent booklet. Unless landlords have provided this, either as a hard copy or by email, along with a valid gas safety certificate and Energy Performance Certificate (EPC) – which were both previously required – they cannot start repossession proceedings.

The How to Rent guide details landlords’ and tenants’ rights and obligations.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Communication vital in avoiding disputes

Published On: October 6, 2015 at 12:58 pm

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Categories: Landlord News

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The Association of Independent Inventory Clerks (AIIC) has reiterated that by holding a simple conversation, landlords and tenants could avoid entering a formal tenancy deposit dispute.

According to the AIIC, if a tenant contacts landlords to discuss any issues concerning deposit-deductions, the chances of an eventual formal dispute by one of the government-approved tenancy deposit schemes is greatly reduced.

Increases

Recently, the Tenancy Deposit Scheme published its annual report, which showed that the total number of disputes lodged with the firm rose by 25% in the last 12 months.

Further data released by mydeposits indicate that during the last 12 months, 30% of initial disagreements did not go forwards to the Alternative Dispute Resolution. This underlines the importance of increased communication between all parties.[1]

Yearly, the number of disputes are rising, with the AIIC warning that if this figure is to fall, the importance of communication is paramount.

Common reasons

The Tenancy Deposit Scheme also indicates that cleaning (58%) and damage (52%) were the two most common reasons for disputes. Rent arrears made up just 10% of issues.

‘It is disappointing that disputes seem to be on the rise,’ noted Patricia Barber, Chair of the AIIC. ‘There are easy steps to follow to ensure that both parties are protected and the chance of an end of tenancy dispute is minimised. Aside from the tenancy agreement, protecting a property by having a fully detailed inventory is vital,’ she added.[1]

Continuing, Barber said, ‘tenants must have a copy of this document on the day they move in to enable them check and agree the contents. This signed document can then be used at time of check out, it is very difficult for a tenant to argue against such firm evidence of check in condition. Should a dispute occur a simple conversation between the landlord and the tenant really could make all the difference.’[1]

Communication vital in avoiding disputes

Communication vital in avoiding disputes

Inventory

Barber believes that, ‘the increased frequency of damage and cleaning disagreements highlights the value of a property detailed inventory carried out by an independent inventory clerk. The deposit protection schemes may place more weight on an inventory that is complied by an inventory professional rather than the landlord.’[1]

‘An independently complied inventory will comprehensively detail the condition of the property at the beginning of the tenancy. Therefore, it can become an invaluable resource at the end of the tenancy and really could contribute towards avoiding a formal deposit dispute,’ she concluded.[1]

[1] http://www.propertyreporter.co.uk/landlords/communication-is-key-to-avoiding-deposit-disputes.html