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House of Lords Rejects Smoke Alarm Law with Just 3 Weeks to Go

Published On: September 10, 2015 at 8:34 am

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New legislation on the installation of smoke and carbon monoxide alarms in private rental properties has been rejected by the House of Lords, with just three weeks to go before its enforcement.

The requirement was for alarms to be installed in almost all private rental homes by the end of this month.

However, the draft regulations have not been approved by Parliament, and yesterday, the House of Lords rejected them and demanded a debate.

Peers argued that the Government has not done enough to inform landlords and letting agents of the requirement, and that the legislation is poorly worded.

House of Lords Rejects Smoke Alarm Law with Just 3 Weeks to Go

House of Lords Rejects Smoke Alarm Law with Just 3 Weeks to Go

However, landlords and agents should be aware that the legislation could still be implemented on 1st October this year.

Just days ago, the Government rushed out a guide to the requirement, despite it not going through Parliament yet.

Currently, the rules would require at least one smoke alarm on every storey of the property.

The draft regulations state that there will be no grace period and landlords breaching the legislation could be fined up to £5,000.

Now, it is unclear whether the requirement will be enforced from 1st October and if so, whether landlords and their agents will be given more than a few days’ notice to comply. The regulations may even be changed.

Yesterday, the British Property Federation (BPF) criticised the “Government’s disorganisation and lack of clarity.”1

Additionally, it complained of a lack of consultation.

If the draft regulations do not change, landlords or their agents are required to fit a working smoke alarm on each floor of their rental property. A carbon monoxide alarm must also be fitted in any room where solid fuel is used.

The requirement covers properties with existing and new tenancies.

Landlords or their agents will be responsible for ensuring the alarms work at the start of the tenancy. Tenants are then responsible for looking after them.

Houses in Multiple Occupation (HMOs) are exempt from the rules, as they have their own regulations on alarms. Properties owned by social landlords are also exempt.

Local authorities will enforce the legislation, requiring landlords to fit alarms within 28 days.

The Government’s guide can be accessed here: https://www.gov.uk/government/publications/smoke-and-carbon-monoxide-alarms-explanatory-booklet-for-landlords

1 http://www.propertyindustryeye.com/chaos-as-lords-rejects-smoke-alarm-regulations-with-just-three-weeks-to-go/

Mortgage Rates Drop to Record Low

Published On: September 9, 2015 at 5:51 pm

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Mortgage Rates Drop to Record Low

Mortgage Rates Drop to Record Low

Average mortgage rates fell to a new record low in the second quarter (Q2) of this year, as borrowers rush to secure cheap deals.

Rates dropped to 2.83% from 2.99%, reports the Bank of England (BoE) and Financial Conduct Authority (FCA).

The Mortgage Advice Bureau’s (MAB) Brian Murphy says: “Borrowers are aware that these cut-price rates have a limited lifespan, particularly as we edge closer to an interest rate rise.”1

Interest rates are expected to increase next year.

1 Keogh, P. (2015) ‘Mortgage rates fall to new low’, Metro, 9 September, p.2

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Barratt Sees Profits Rise by 45%

Published On: September 9, 2015 at 4:59 pm

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The UK’s largest house builder has reported that completions rose by almost 11% in the year to June, causing profits before tax to increase by 44.8%.

Barratt Sees Profits Rise by 45%

Barratt Sees Profits Rise by 45%

Completions growth was fuelled by unit sale prices and consumer demand.

The company’s full year profits before tax rose to £565.5m compared with £390.6m in 2014.

Average home sale prices were also up by 8.7% to £262,500 in 2015, £21,000 higher than in 2014.

Chief Executive of Barratt Developments, David Thomas, says: “The new financial year has started very well; we have a strong forward sales position and are making very good progress towards our FY17 targets of at least a 20% gross margin and at least a 25% return on capital employed.”1

In its annual report, Barratt states: “Government support for the UK house building industry has remained strong and the Government has extended Help to Buy (Equity Loan) in England until 2020.”1

The builder expects Help to Buy England to remain attractive to first time buyers, despite the fact that Help to Buy has ended in Scotland and will end in 2016 in Wales.

It notes that the positive mortgage market has provided access to finance that allows buyers with a 5% deposit to purchase a home through the Help to Buy (Equity Loan) scheme. This has pushed competition in the higher loan-to-value (LTV) market.

Barratt reports there were 2,853 affordable home completions for housing association partners in the year to June, compared to 2,255 the previous year.

In May, the firm had a record forward order book for £2.5 billion, with forward sales up 17.9%.

1 http://www.mortgagesolutions.co.uk/news/top-uk-house-builder-barratt-sees-45-profit-increase/

 

 

 

 

 

 

 

 

International students add £600m to London rental market

Published On: September 9, 2015 at 4:53 pm

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Categories: Landlord News

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With the new academic year underway, a survey has shown the importance of international students to London’s rental market.

Research from lettings firm E J Harris indicates the 107,000 international students in the capital cumulatively contribute £600m to the market each year.

Wealthy

Data from the report shows that some of the richest Chinese, Russian and Malaysian students spend up to £1,500 per week to live in residences in regions such as Mayfair, Knightsbridge and South Kensington.

Utilising statistics from their own client instructions over the last three years , alongside figures from the Government’s Higher Education Statistics Agency, the firm looked at the number and country of origin of foreign students in London. In addition, E J Harris looked at where these students choose to live, their preferred property and how much they spend in the sector.

There are 40,000 international students from continental Europe, with 67,000 from the rest of the world. In total, these academics spend £1.32bn on tuition fees, £1.36bn on accommodation and subsistence, of which £600m is spent on private lets or halls of residence.[1]

Origins

In terms of country of origin, the largest group of international students in London is Chinese, with 18%. American students make up 9%, India 7%, Hong Kong 5% and Malaysia and Nigeria 4%. There is also significant foreign student make-ups from Singapore, Pakistan and Canada.[1]

Annually, 20% of the firm’s clients in the capital are students, of which 50% are foreign. Accommodation for these students is typically provided by their parents, though some receive grants from their country of origin.

International students add £600m to London rental market

International students add £600m to London rental market

Typically, the majority of overseas students in London pay between £500-£600 per week for a two-bedroom apartment in areas such as Notting Hill, South Kensington or Shepherds Bush.

Rising

‘There are over 100,000 international students studying and living in London and their numbers are rising,’ said Elizabeth Harris, managing director of the firm. ‘University applications from overseas students are up by 18% since 2010 and up by 30% for the capital’s best universities,’ she added.[1]

Concluding, Harris observed, ‘in our experience international students make for extremely good tenants, they are very studious and take their studies in London extremely seriously. As tenants they tend to be quiet, hard working and tidy. Smoking tends to be the only common vice.’[1]

[1] http://www.propertywire.com/news/europe/london-rental-property-students-2015090910959.html

 

 

10% of over 50’s landlords make no profit

Published On: September 9, 2015 at 4:00 pm

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Categories: Landlord News

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Data from an investigation from Saga Landlord Insurance indicates that 10% of buy-to-let owners over the age of 50 make no profit from their investment.

Although many have gained substantial financial returns from entering the market, a further quarter said they found it tougher than they expected.

Optimism

The poll of 10,141 over 50’s showed that almost 10% are now making the most of the opportunities presented by the buy-to-let market, with reasons for optimism for potential landlords.[1]

Of those landlords surveyed, an average of £700 profit per month from letting a property was recorded. However, one in ten said that they were either just breaking even or running at a loss.[1]

A third of respondents were thought to have entered the market during the past five years and 24% said that they have found being a landlord tougher than they originally thought. 10% said that the buy-to-let business was easier than expected. This could be down to the fact that just 45% of people questioned said that they had purchased a property with the specific intention of renting it out. 14% said that they had inherited the property, with 7% saying that had purchased it for a child or other relative to live in.[1]

Becoming a buy-to-let landlord comes with some daily concerns. The top reasons why landlords worry were found to be renting the property to bad tenants (36%) and managing the property in older years (19%). Another survey from Saga showed that 32% of landlords had experienced issues with tenants not paying rent, 27% had problems with property damage and 11% going as far as taking legal action against their property inhabitants.[1]

10% of over 50's landlords make no profit

10% of over 50’s landlords make no profit

Challenges

Sue Green, Head of Landlord and Home Insurance, Saga commented that, ‘Buy-to-let is an increasingly popular investment for the over 50s, particularly in the current financial climate but clearly it is not without challenges. The recently announced cuts to tax relief for buy-to-let landlords, for example are a new factor that people will have to take into account when deciding whether to start letting a property.’[1]

‘Our research shows that, while landlords are largely positive about their decision, they are also likely to face practical and financial hurdles. This is why we have developed a guide that provides practical advice to landlords, helping to address the most commonly raised concerns and giving them peace of mind so they can focus on enjoying their retirement,’ Green added.[1]

[1] http://www.propertyreporter.co.uk/landlords/10-of-landlords-aged-over-50-make-no-profit.html

 

Property Hotspots on the London to Hastings Route

Published On: September 9, 2015 at 3:55 pm

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Commuters travelling away from Charing Cross or Cannon Street can sit back and appreciate the beautiful countryside and charming towns they are going back to at the end of the working day.

These stations serve the London to Hastings line, along which there are six options for those hoping to commute to the capital in under an hour.

Of the six, Tonbridge in Kent has experienced the strongest house price growth in the last 12 months, up 18.8% to an average of £324,373, according to research by Savills.

In second place is the East Sussex village of Frant, where prices increased by 8.7%, and another village, Hildenborough, also in Kent, saw prices rise by 8%.

If you’re looking to invest, rent or buy, here are some places to look out for:

Tonbridge 

Not to be confused with the more upmarket town of Royal Tunbridge Wells, Tonbridge is a medieval town in Medway, Kent, boasting a theatre, country park, two swimming pools and an athletics club.

A property consultant at Ellis & Co estate agents, Lynne Fermor, comments: “It is a friendly town, and it is really our schools and trains which attract people.”1

Fermor says that six out of ten of her buyers are moving from London.

The commute to the capital takes 42 minutes and an annual season ticket costs £3,980.

Tonbridge’s housing stock is not glamorous, but the south side of the town features Victorian avenues, including Douglas Road and Priory Street, which are tree-lined and close to the station.

Two-bedroom terraced houses cost between £260,000-£270,000 and you can expect to pay £600,000-£1m for a detached property.

The south side of Tonbridge also boasts good grammar schools, with the best being The Judd School, Tonbridge Grammar School and Weald of Kent Grammar School.

Primary schools include St Margaret Clitherow Catholic Primary School and Woodlands Junior School, both rated outstanding by Ofsted.

Frant

Frant is just over the Kent border, in East Sussex. The pretty village has three pubs, a general store, a pleasant green and a primary school with a good Ofsted rating.

It is more expensive than Tonbridge, with an average house price of £553,915. Flats cost around £248,650.

The train station is a mile away in Bells Yew Green and the journey to the capital takes an hour, with an annual season ticket costing £4,364.

The village attracts walkers and cyclists, as it is on the edge of the High Weald and close to the National Trust’s Nap Wood.

Tonbridge and Frant have outperformed other areas in the past year, but Sevenoaks has recovered most strongly since the recession.

Sevenoaks

House prices in Sevenoaks have risen by over 20% from 2007, with the average property now costing £670,815 and flats priced at around £298,747.

The commute to London takes just 33 minutes and an annual season ticket is £4,364. With fast trains and a location on a hilltop in the North Downs, Sevenoaks is an attractive option.

Along with an upmarket high street, Sevenoaks also has quality private and state schools.

Good primary schools include St Thomas’ Catholic Primary School and Lady Boswell’s Church of England Voluntary Aided Primary School, both rated outstanding by Ofsted.

Secondary schools rated good by Ofsted include Trinity School and Knole Academy. Additionally, most of the Tonbridge and Tunbridge Wells grammar schools will accept applications from those living in Sevenoaks.

Green space can be found within Knole Park, where six of the town’s original seven oaks were destroyed by the great storm of 1987. Residents can also get to the south coast within half an hour.

Savills’ David Johnston says that his clients include buyers from southwest London, who claim the journey to the City and Canary Wharf is faster from Sevenoaks.

This has pushed prices of post-war houses up by around 10% in the last year. Streets east of Montreal Park are close to the station and Riverhead Infants School, which is rated outstanding by Ofsted.

These homes now sell for between £1m-£1.5m, but buyers with smaller budgets can find two-bed cottages for around £350,000-£400,000.

1 http://www.homesandproperty.co.uk/area-guides/uk-areas/commuting-tonbridge-sevenoaks-and-frant-homes-hotspots-along-london-hastings-route