Written By Em

Em

Em Morley

Flats soar in value over the decade

Published On: September 23, 2015 at 3:56 pm

Author:

Categories: Finance News

Tags: ,,

reform of leasehold

A new investigation has indicated that one particular property type has experienced a surge in demand during the last decade.

The study conducted by the Halifax showed that flats have risen in price more than any other property during the last ten years.

Not a flat rate

Since 2005, the average price of a flat has risen by 60%, or £730 per month, from £87,550 to £233,424. Over the same period, a terraced house rose in value by 41%, a semi-detached home by 32%, a bungalow by 28% and a detached property by 21%.[1]

The Halifax believes that the large rise in sales of flats is due to the market in London, where over half of all sales are for this particular property type. However, the spiralling cost of a flat is apparently making some first-time buyers turn their attention to other property types, which could suit them better in the long term, should they wish to start a family.

First-time options

Data from the report shows that semi-detached homes have increased in popularity amongst first-time buyers. This property type accounts for 28% of purchases in the first half of 2015, in comparison to 21% ten-years previously.[1]

On average, the average price of a semi-detached home is £370,000 but in the North and the Midlands, this price is under £120,000. ‘First-time buyers have switched to some extent away from flats-reflecting their large price increases-towards semi-detached homes over the last decade,’ noted Martin Ellis, housing economist at the Halifax.[1]

In London, the average price of a flat was found to be £370,281.[1]

Abstract home and key (done in 3d)

Abstract home and key (done in 3d)

Regional differences

Flats were the best-performing property type over the last decade across the UK, but in London, Scotland and the South West of England, other property types came out on top.

Semi-detached were the most popular property types in the South East, East Anglia and the East Midlands. In Wales, terraced homes were the greatest performers, as well as in the North of England, the North West, Yorkshire and the Humber and the West Midlands.

All figures were taken from Halifax’s house price database.

[1] http://www.propertyflock.co.uk/f/EEB96B53D

 

 

Most New Million-Pound Postcodes in Wandsworth

Published On: September 23, 2015 at 3:31 pm

Author:

Categories: Property News

Tags: ,,,

The London Borough of Wandsworth, in the south of the capital, is the area with the most new million-pound postcodes in the past year, according to Which? Mortgage Advisers.

The figures also reveal that prices are rising across London, with the traditionally working-class borough of Hackney seeing as many new million-pound postcodes as upmarket Kensington and Chelsea.

Most New Million-Pound Postcodes in Wandsworth

Most New Million-Pound Postcodes in Wandsworth

In the last 12 months, Wandsworth had the highest number of postcode areas in which two or more homes were sold for £1m for the first time.

Using statistics from Land Registry, Which? found that out of 10,007 postcodes in Wandsworth, 284 (2.8%) had two or more properties sell for £1m or more for the first time in 2014-15, adding to the total of 715 million-pound postcodes already in the borough.

Analysis of data across the capital reveals that expensive areas are multiplying.

Wandsworth’s neighbouring borough, Richmond upon Thames, saw 205 new million-pound postcodes, or 2.7% of the total, and Hammersmith and Fulham was in third place, with 183, or 2.6% of the total number of postcodes.

These areas are typically more expensive, but the borough of Hackney has always been associated with being cheaper. However, it now has the same number of new million-pound postcodes as Kensington and Chelsea.

Housing campaigners have noted the rising gentrification in Hackney, which has caused 2% of its postcodes to house million-pound properties for the first time this year.

As these figures are based on the amount of postcodes passing the £1m mark for the first time, other boroughs exceed Wandsworth by far in the total number of homes selling for these prices.

In Westminster, for example, 571 houses were sold for £1m or more in the past year, compared to 392 in Wandsworth.

However, Which? has revealed that some parts of London are still relatively affordable. In Hounslow, the average property price is £326,000, with just 0.6% of its postcodes becoming million-pound spots for the first time in the past 12 months.

In Lewisham, the average house price is £330,000.

Buyers hoping for a lower price should also consider Barking and Dagenham, as it is the only borough in the capital that has still not seen a home sell for over £1m.

But the data still highlights the difficulty most buyers face when searching for a property in London, with all but the wealthiest being priced out.

And with the average price in London expected to hit £1m by 2020, (read more here: /average-house-price-to-reach-300000-in-the-next-three-months/) buyers should look to take advantage of today’s prices.

Council Criticised for Spending More on Beach Huts than Affordable Housing

Published On: September 23, 2015 at 2:37 pm

Author:

Categories: Landlord News

Tags: ,,,,

Council Criticised for Spending More on Beach Huts than Affordable Housing

Council Criticised for Spending More on Beach Huts than Affordable Housing

A council in Devon has been criticised for spending five times as much on beach huts than on affordable housing.

Torbay Council forked out £2.35m on the huts in the past three years, compared to just £470,000 on affordable homes.

Liberal Democrat Steve Darling called the situation “shocking”1, saying the council has got its priorities wrong.

However, the Conservative-led council, which rents out some huts for over £2,500 per year, says: “They bring in much-needed revenue.”1 

1 Unknown (2015) ‘Housing crisis? Our beach huts are nice’, Metro, 22 September, p.23

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Average Flat Price Rose by 60% Over the Last Decade

Published On: September 23, 2015 at 1:32 pm

Author:

Categories: Finance News

Tags: ,,,,,

Flats have experienced the highest price growth of all property types in the last decade, rising by an average of 60% since 2005, compared with a 38% increase in price for all homes, revealed research by the Halifax.

The bank found that the average flat saw £730 added to its value every month in the past ten years, taking the typical price from £145,800 in 2005 to £233,400 today.

As price growth for flats has surpassed that for all other home types, first time buyers are becoming increasingly attracted to semi-detached houses, according to Halifax.

Average Flat Price Rose by 60% Over the Last Decade

Average Flat Price Rose by 60% Over the Last Decade

Meanwhile, buy-to-let investors have started favouring flats, a potential cause of the price increases. Data from the Council for Mortgage Lenders (CML) shows that 36% of mortgages issued to landlords have been for flats.

This rises to around two-thirds in London, making flats the most popular property type for buy-to-let investors. Read more from the CML here: /buy-to-let-landlords-owe-equivalent-of-hong-kong-economy-in-mortgages/

The 60% price growth of flats compares with an average increase of 21% for detached houses and 28% for bungalows.

However, the surge in prices has been predominantly fuelled by the capital, where the prices of flats – accounting for half of all housing stock in London – have risen by an average of 67% in the last ten years.

There are also massive regional variations. The average price of a flat in London is £370,200, a huge difference to the typical prices of £102,900, £110,000 and £113,100 in the North of England, the East Midlands and Wales, respectively.

Although flats experienced the strongest price growth in the capital, Scotland and the South West in the past decade, they have performed a lot worse in several other regions.

The average price of a flat has fallen in two parts of the country since 2005 – by 7% in the East Midlands and by 2% in Yorkshire and the Humber.

Among first time buyers, semi-detached houses have risen in popularity, accounting for 28% of purchases in 2015 compared with 21% in 2005.

Housing Economist at the Halifax, Martin Ellis, comments: “Flats have recorded larger price gains over the past ten years than any other property type.

“The national increase in flat prices has been led by London, where flats account for roughly one in two property sales – substantially higher than for the country as a whole.”

He adds, however, that overall, semi-detached and terraced houses are the most popular choices among buyers: “First time buyers have switched to some extent away from flats – reflecting their large price increases – towards semi-detached homes over the last decade.”1

1 http://www.theguardian.com/money/2015/sep/23/average-uk-flat-value-rises-60-per-cent-past-decade

 

 

More criticism for upcoming fire legislations

Published On: September 23, 2015 at 12:56 pm

Author:

Categories: Landlord News

Tags: ,,

Yet more criticism has been levelled at the upcoming Smoke and Carbon Monoxide Alarm (England) Regulations 2015, which are scheduled to come into force on October 1st.

Charity Electrical Safety First said that the upcoming legislations are flawed, as they do not provide information on electrical safety for tenants.

Safety

The regulations will see landlords permitted to install smoke detectors and carbon monoxide alarms in all of their rental properties. Phil Buckle, director general of Electrical Safety First said, ‘while we applaud any safety improvements for the PRS, we have been extremely disappointed that electrical safety has not included in these new regulations.’[1]

Electrical Safety First believe that electricity is responsible for almost half of all domestic fires in the UK, which cost around £1bn each year. The charity states that electricity-related incidents in Britain kill one person per week and seriously injure an average of 350,000 people per year.

‘Given the huge expansion in the PRS, where a third of properties fail to meet basic standards, concerns around electrical safety can only increase. So we were deeply concerned when our call for regular electrical checks in privately rented accommodation was omitted from these new regulations,’ Buckle added.[1]

More criticism for upcoming fire legislations

More criticism for upcoming fire legislations

Checks

The charity has called for mandatory, five year electrical checks of the installation of electrical equipment in all privately rented accommodation. In addition, it has called for the introduction of Residual Current Devices, which help to prevent a fatal electric-shock to be installed in all private rented sector homes.

Previously, the charity campaigned successfully for mandatory electrical safety checks in PRS homes to be included in the Scottish Housing Bill. It says it is now looking to extend this protection to tenants in Wales and England.

[1] https://www.landlordtoday.co.uk/breaking-news/2015/9/charity-criticises-incoming-fire-safety-regulations

 

 

 

Tax Changes to Hit Six in Ten Landlords

Published On: September 23, 2015 at 12:31 pm

Author:

Categories: Landlord News

Tags: ,,,

Six in ten private landlords say that the tax change announced in the summer Budget will force them to pay higher rates of income tax, rather than the basic rate.

Now, industry experts are warning that many landlords could leave the sector.

Tax Changes to Hit Six in Ten Landlords

Tax Changes to Hit Six in Ten Landlords

In the summer Budget, Chancellor George Osborne said that from 2020, mortgage interest relief for private landlords would be cut to the basic rate of income tax. This will be applied to turnover, not profit.

The Residential Landlords Association (RLA) points out that this means many landlords will face paying higher rates of income tax, despite their income not increasing.

In a survey of around 1,200 landlords, of those paying the basic rate of income tax, more than 60% stated that the changes would push them into either the higher or additional rate of tax.

The RLA has met with the Treasury to raise its concerns over the impact of the mortgage interest changes, insisting that it will affect landlords’ ability to invest in much-needed housing.

Policy Director at the RLA, David Smith, says: “The findings of our survey are deeply concerning. Many landlords currently paying the basic rate of income tax face the prospect of a nasty surprise when they meet with their accountants.

“Having felt that they were not affected by the Budget measures, many will seriously consider whether it is worth continuing in the market when faced with this tax bombshell.

“It cannot be right that many landlords face seeing their income tax increase without an increase in their income.

“All the evidence shows that we need more, not less, rented housing. With almost 90% of landlords being individuals renting out just a handful of properties each, it is only by supporting this group that we will boost the supply of homes to rent.”

Smith adds: “The Budget announcements risk undermining the potential for growth.

“Even at this late stage we are calling on the Government to pause and provide more time to assess the impact on market.”1

1 http://www.propertyindustryeye.com/tax-bombshell-awaiting-six-out-of-ten-private-landlords/