Written By Em

Em

Em Morley

Scottish rents down in August

Published On: September 24, 2015 at 10:16 am

Author:

Categories: Landlord News

Tags: ,,

Residential rents north of the border dipped month-on-month for the first time since the beginning of the year, according to a new report.

The latest buy-to-let index from Your Move shows that Scottish rents dropped by 0.5% in August. This means that the average monthly rent in the country has fallen by £3 from its summer peak of £549 to stand at £546.[1]

Growth

Recent rental growth has turned annually. The first half of 2015 saw an acceleration of annual rent rises but Scottish rents are now just 1.7% more than they were one year ago. This represents a downturn since July, when the annual rise was 2.8%.[1]

‘This should provide a welcome let up for tenants, after only last month, rents hit a new record level,’ noted Brian Moran, lettings director at Your Move Scotland. ‘This adjustment has also broken up the forward march of annual rent growth that’s been gathering speed recently,’ he continued.[1]

Moran acknowledges that, ‘peak lettings season is only around the corner and this breather may not last for long.’ He said that the, ‘vast discrepancy between demand and supply of available homes to let has not disappointed and this gap will only widen if landlords are scared out of the market by the Government’s proposed regulatory changes and draconian rent controls.’[1]

Regional rises

Data from the report shows that rents are higher than one-year ago in four out five regions in Scotland. The largest rise was recorded in the Highlands and Islands, where annual rents were up by 6% in the year to August. Rents in the region now stand at £570 per month.[1]

In the South of the country, rents were up by 4.5% in the year. Edinburgh and the Lothians and the East of Scotland saw annual rises of 2.6% and 2.5% respectively. The only Scottish region to see a drop was Glasgow and Clyde, where rents are 3.6% less than they were in August 2014.[1]

By month, three out of the five regions saw an average rate drop. Again, the greatest decline was found to be in Glasgow and Clyde, where rents fell by 1.3%, meaning the typical rent in the region now stands at £554 per month. The East of Scotland saw rates drop by 1.1%, with the South witnessing a drop of 0.5%.[1]

Scottish rents down in August

Scottish rents down in August

Arrears

Worryingly, the report also indicates that the proportion of rent being paid in arrears reached a record level in August, rising to 12.2% of all rent due in the month. This was a steep increase of the 9.6% recorded in June and more so from the 6.5% in August of last year.[1]

‘This is the latest in a long line of setbacks for Scottish tenant finances, meaning that more rent than ever before is now being paid in arrears,’ said Moran. ‘The long term trend has been worsening for a while now, and action needs to be taken soon to break this cycle.’[1]

Moran said that, ‘paying the rent on time is clearly a deeper-rooted problem that goes beyond rental prices, which have actually gone down this month. Not every household is tasting the fruits of Scotland’s economic recovery or all Scots seeing their incomes rise substantially to lift themselves out of the red.’[1]

‘Supply of available homes to let is also struggling to keep up with demand and there is an urgent need for further buy-to-let investment in Scotland to ease some of the financial pressure,’ Moran added.[1]

Yields

As of August, the average gross yield on a Scottish rental property stood at 4.1%, which was the same as in July. Annually, gross yields have risen slightly from 4% in August 2014.[1]

The average total annual return on a buy-to-let investment in Scotland was 4% in the year to August 2015, when taking into account property price growth and void periods between tenants. This was a substantial decrease in comparison to the 9% recorded in August 2014.[1]

In absolute terms, this means the typical Scottish landlord has seen a return of £6,400 in the year to August of this year, before any mortgage repayments or maintenance costs. Of this, rental income totals £5,900, while capital appreciation on buy-to-let property accounted for the other £500.

‘In the face of the tax changes afoot in the Scotland purchase market this year, rental yields have cushioned some of the house price reverberations for landlords. Total annual returns are now mirroring the correction we’re seeing in the property market, and starting to stabilise, but it’s climbing gross yields which are the most important barometer for aspiring property investors. With house price growth at more measured levels, and cheap mortgage finance readily available, this is a great time to invest in buy to let,’ Moran noted.[1]

Moran concluded by saying that, ‘the only blot on the horizon is Holyrood’s planned intervention and future regulatory changes.’ He believes that, ‘rent controls and the red tape outlined in the Private Tenancies Bill will end up being more of a hindrance than a help to tenants, if landlords are dissuaded from investing in the private rented sector as a result and if competition for available properties mounts.’[1]

[1] http://www.propertywire.com/news/europe/scotland-residential-rents-index-2015092311012.html?utm_content=buffer24f41&utm_medium=social&utm_source=twitter.com&utm_campaign=buffer

 

 

113,000 Council Homes Sold Off Through Right to Buy, Warns Shelter

Published On: September 24, 2015 at 9:55 am

Author:

Categories: Landlord News

Tags: ,,,

113,000 Council Homes Sold Off Through Right to Buy, Warns Shelter

113,000 Council Homes Sold Off Through Right to Buy, Warns Shelter

Almost 113,000 council houses could be sold off through the Government’s Right to Buy scheme, which will force councils to put their most valuable properties on the market when they become vacant, warns Shelter.

The money raised from the sales will be used to fund discounts of up to £100,000 for housing association tenants who wish to buy their homes.

The housing charity says the scheme is “potentially devastating”1.

It states that the London Borough of Camden will be one of the worst affected areas, with over 11,700 homes facing a forced sale, equivalent to around 50% of the total council housing stock in the area.

Kensington and Chelsea could be forced to sell a huge 97% of its total council housing, or more than 6,600 homes, once they become vacant.

Shelter also believes that the loss of council homes will not only be experienced in London; Cambridge could lose 46% of its total, or over 3,200 homes, and York could see 1,400 homes sold, or a fifth of its total stock.

Chief Executive of Shelter, Campbell Robb, says: “At a time when millions of families are struggling to find somewhere affordable to live, plans to sell off large swathes of the few genuinely affordable homes we have left is only going to make things worse.

“More and more families with barely a hope of ever affording a home of their own and who no longer have the option of social housing, will be forced into unstable and expensive private renting.”1

1 http://www.propertyindustryeye.com/shelter-says-scheme-could-see-113000-council-homes-sold-off/

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Property Hotspots for Tech Professionals

Published On: September 24, 2015 at 8:53 am

Author:

Categories: Landlord News

Tags: ,,,

Silicon Roundabout, on Old Street, London, is filled with around 7,000 tech firms, making it a hotspot for digital entrepreneurs in the capital.

Estate agent Stirling Ackroyd says that it’s the location that makes the hub so successful, as it is on the edge of some of London’s most well connected areas whilst remaining affordable.

Although the average house price in the outskirts of the area has hit £700,000, starter homes can still be found near nearby Tube stations for less than half this figure. One-bedroom flats sell for an average
of £373,000.

One of these hotspots is Stratford, which will benefit from the Crossrail service from 2018, and Clapton, where new cafes and shops are attracting families to the quirky neighbourhood.

House prices in Hackney and Dalston have seen huge price growth in the last few years, but good value one-bed properties can still be found for under £300,000 if you’re willing to opt for ex-local authority flats, rather than Georgian terraces and stylish warehouse conversions.

Managing Director of Stirling Ackroyd, Andrew Bridges, says: “A distance of five miles between peak property prices in one part of London and the heart of innovation further east is no accident.

“Nimble start-ups and a young, innovative population both flourish best in a dense but comparatively affordable environment.

“Start-ups are shifting the sands of London property as their employees start to trace a different Tube line home. And in even greater numbers, a bigger pool of tenants is attracted by the wider appeal of these new cultural hubs in eastern London. That younger, creative population then feeds the flames again.”1 

A fine example is the City’s latest co-working office, Alphabeta, where the front archway opens onto Finsbury Square and the back door leads to Shoreditch, joining together tech financiers and creatives.

The highlight of the new building is its cycling ramp that allows those riding to work to enter straight into the building’s storage and changing facilities without stopping. The office also boasts rooftop bars and chill-out zones.

Alphabeta’s architect, Studio RHE’s Dickon Hayward, says: “Cycling is an increasingly popular means of transport within the city and we wanted to embrace it as an important component in workplace design.

“From the atrium you can see glimpses of descending cyclists, adding activity within the building and emphasising the importance of cycling within the building’s values.”1 

1 http://www.homesandproperty.co.uk/property-news/news/four-homes-hotspots-tech-savvy-londoners

London’s New Homes are More Environmentally Friendly

Published On: September 23, 2015 at 5:37 pm

Author:

Categories: Landlord News

Tags: ,,,

Garden designers are changing London’s new property developments, by putting the focus on the environment.

These green spaces fit perfectly into new housing schemes and will help to reduce pollution, absorb rainwater, prevent flooding and lower urban heat.

Instead of traditional evergreens, the new gardens boast a variety of trees, shrubs, perennials and bulbs selected not just to look pretty, but for their ability to adapt to climate change and attract wildlife.

Matthew Wilson, an award-winning garden designer who recently landscaped the new development Cloudesley House in Islington, says: “Historically, it was landscape architects who were called in for the big developments.

“Now, there’s a definite move to employ garden designers.”

He explains the difference: “Developers and contractors aren’t always aware of the differences, but they are huge.

“A landscape architect will specify the balustrades on the building and the lighting in the car park, but it’s not a required component of landscape training to know about plants.

“Garden designers like Andy Sturgeon, Dan Pearson and myself are increasingly asked to work on schemes and, speaking for myself, I don’t know about balustrades, but I just need to know a man who does. The result is that we work with landscape architects, collaboratively.”

Rather than fitting the landscape into an allocated space afterwards, the green space is part of the whole concept from the start.

Wilson speaks of his project: “Cloudesley House is a Victorian school building and in the middle of the building was an old gym. Initially, a developer would think, ‘I can get five flats in there’, but this time, the developer said, ‘Let’s take the roof off and make a contemporary courtyard’. It’s very encouraging.”1

Andy Sturgeon talks of the Earls Court Lillie Square development, a former 7.5-acre car park: “In the past, it was about landscaping the spaces left over. Now, the building is arranged around the landscaping.”

He has designed one of the largest garden squares in West London, sitting in the heart of the project. Over 50% of the site is green space, an industry first.

“We were briefed to make the landscape more meaningful,” explains Sturgeon. “Now, wherever you are in the development, you’re in and among the plants.”

Previously, landscaping just involved creating a green space.

Now, Sturgeon says: “The challenge is to make something more garden-esque and flowing, but that can still be easily maintained. There are still the evergreen shrubs, but we’re making more imaginative choices than the usual hebes and phormiums.”

For the future, developers are hoping to include gardens not only on ground level, but on the top of their sky-high developments.

Sturgeon, who also designed the rooftop gardens at Battersea Power Station, where there are allotments for residents, insists: “And you can’t underestimate the value of play space for children.

“At Lillie Square, there’s not only a designated playground, but the whole landscape is playable throughout.”

The new method of London landscaping is not focused on creating breathtaking scenery, but about making sustainable spaces that will benefit residents and passers-by, as well as the whole environment.

Sturgeon sums up: “Five years ago, when we’d go into a meeting, developers didn’t even have the vocabulary, but now they have. Finally, city landscaping is more about the horticulture than the paving.”1

1 http://www.homesandproperty.co.uk/property-news/new-homes/battersea-power-station-earls-court-londons-latest-new-homes-come-sky-high-designer-gardens-and

Former Energy Secretary Calls Right to Buy Extension ‘Mugabe Politics’

Published On: September 23, 2015 at 4:32 pm

Author:

Categories: Landlord News

Tags: ,,,,

One of David Cameron’s former cabinet ministers has described the Right to Buy scheme extension as Robert Mugabe politics.

Ed Davey, an ex-Liberal Democrat MP who was Energy Secretary in the 2010 coalition cabinet, criticised the proposal, which will force housing associations to sell off homes.

Former Energy Secretary Calls Right to Buy Extension 'Mugabe Politics'

Former Energy Secretary Calls Right to Buy Extension ‘Mugabe Politics’

At the Lib Dem conference in Bournemouth, Davey said: “The Tory policy of selling housing associations is Mugabe. That’s not acceptable, it’s shameful.”1

Housing associations are private, not-for-profit landlords that manage social housing. The organisations house people off the social housing waiting list, but also let properties on the open market.

Opponents have said it is wrong to force the private organisations to sell their homes at a discount.

Last week, David Cameron wrongly said housing associations are “part of the public sector”1.

Housing associations borrow against the value of future homes to fund building projects, and they insist the extension will affect their ability to raise finances and build new properties. Some claim they will challenge the scheme in the courts if plans go ahead.

In April, the Institute for Fiscal Studies states that the extension will likely cause higher Government debt and result in fewer homes being built.

It said: “Given this uncertainty, and the coalition’s less-than-impressive record in delivering replacement social housing under the existing Right to Buy, there is a risk that these policies will lead to a further depletion of the social housing stock – something the proposal explicitly seeks to avoid.”1

Right to Buy was launched in the 1980s as a way of making homeownership more widely available.

However, many homes bought through the scheme have ended up being let back to tenants by the private landlords that purchased them.

Figures from August reveal that private landlords are now renting out almost 40% of properties sold through the scheme. Additionally, just one in ten homes sold under Right to Buy are actually being replaced, despite the Government vowing to replace the houses one-for-one.

The Government insists that the policy gives more people the opportunity to own their own homes.

1 http://www.independent.co.uk/news/uk/politics/right-to-buy-extension-is-politics-of-mugabe-says-one-of-david-camerons-former-ministers-10513217.html

UK property sales highest for 18 months

Published On: September 23, 2015 at 4:26 pm

Author:

Categories: Landlord News

Tags: ,,

There were more homes sold in the UK in August than in any month since February of last year, according to a new report.

Seasonally-adjusted data from HM Revenue and Customs indicate that 106,480 homes were sold during the month. This represented the third month in succession where more than 100,000 sales were recorded.

However, this total is still a long-way short of the 150,000 monthly sales seen in the housing boom of 2006.

Rises

The official data shows that UK property prices increased by 5.2% in the year to the end of July. This is a long way above general prices with CPI inflation standing at zero in August.

Housing commentator Henry Pryor said, ‘despite rising prices, buyers and sellers are able to transact.’ He asked peers to, ‘look out for the increasing impact of cash buyers in the months to come’ before continuing by saying, ‘figures from mortgage lenders suggest that around 40% of all homes today are bought without a mortgage leaving the government unable to dampen house prices as they once did-by raising rates.’[1]

UK property sales highest for 18 months

UK property sales highest for 18 months

‘As we saw last December, the chancellor now reaches for other levers to control the excess of the market,’ Pyror continued. ‘He had almost snuffed out the top end of the market with huge changes made to Stamp Duty Land Tax, making buying the most expensive homes very unattractive.’[1]

Peter Rollings, chief executive of Marsh & Parsons estate agents, said that rising demand, coupled with a chronic lack of supply, would ultimately result in house prices continuing to increase, particularly in the capital.

[1] http://www.bbc.co.uk/news/business-34324229?error_code=4201&error_message=User+canceled+the+Dialog+flow#