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Em

Em Morley

ARLA Announces New President

Published On: July 16, 2015 at 2:44 pm

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The Association of Residential Letting Agents (ARLA) has announced that it has a new president.

Peter Savage is an ex-professional drummer, having been a session musician for 13 years. He entered the property industry while living in Spain.

Upon returning to the UK in 1990, Savage went to work with an agent in Islington, London.

On his first day, Savage says: “I was given a desk, a phone, a list of properties and a bunch of cards with prospective tenants’ names and numbers on. No computers, no mobiles, no email.”1 

A full interview, in which Savage says that he would not use an online estate and calls for full regulation of the industry, can be found here: http://www.propertyindustryeye.com/interview-new-arla-president-peter-savage/.

1 http://www.propertyindustryeye.com/arla-could-beat-to-a-different-drum-under-new-president/

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Maine Tower rooms sell quickly

Published On: July 16, 2015 at 2:43 pm

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Buyers have flocked to purchase flats in the latest Canary Wharf development, with hundreds of flats selling in the opening five hours of going on sale.

The Maine Tower skyscraper in the east of the capital saw a flurry of purchases from both overseas and domestic buyers.

Maine Attraction

Boasting deluxe elite lifestyle living facilities and an all-private tower, the complex has no apartments for social housing. With 41 floors, prices start from £350,000 for a studio, rising to £1.25m for a three-bedroom flat. [1]

At the launch event for the complex, in excess of 200 apartments were purchased, totalling a combined £140m. Remarkably, these apartments sold in just over four hours, equating to £580,000 worth of sales per minute. Even more remarkable is that the development will not reach its conclusion until 2019.[1]

Flats were sold to both homebuyers and investors. However, 67 swanky flats and penthouses, with stunning top floor views of the capital, will go on sale at a later date.

David Galman, sales director at Galliard Homes said that the, ‘volume and speed of sales at the Maine Tower launch was incredible and shows the confidence that buyers from both the UK and overseas currently have in the London market.’[1]

Maine Tower rooms sell quickly

Maine Tower rooms sell quickly

Demand

Values of London housing stock have constantly climbed over the last five years, rising by £563bn, or 61%. As such, developers are keen to cash in on the increased demand. 54,000 homes are planned to be built in prime areas of the capital, with the majority costing over £1m.

Looking at the profiles of buyers purchasing rooms in the Maine Tower, Galliard said some purchases were made by parents for their children, while a number of overseas buyers bought more than a single apartment.

Maine Tower is to be the tallest of five residential buildings in the Harbour Central development in the Docklands. The tower is to have a gym, a cinema and its own library. Property prices in Tower Hamlets, where Maine Tower is located, increased by 13% in the twelve months to May, with average prices nearly £500,000.

Overseas interest

A leading property expert believes developers sell properties such as those in Maine Tower in order to finance the overall completion of the buildings being sold off. Henry Pryor feels that, ‘to do this, developers will pre-sell some properties, but these can only be bought by people who don’t need a mortgage-a mortgage offer only has a six month shelf life.’

‘The biggest market of cash buyers for these kinds of properties are overseas, so this is where the developers, agents and lawyers go booking hotel lobbies in foreign capitals and selling what is really a sterling currency option dressed up in bricks and mortar,’ Pryor continued.

He added that the rental returns that investors could make were low, and as such, this could be the final time overseas buyers hurried to purchase property in London in this way. ‘Markets move and the time will come when the international buyer is no longer in awe of London and ceases to see the merits of owning 1100 sq ft of soulless real estate thousands of miles from home,’ he concluded.[1]

[1] http://www.theguardian.com/money/2015/jul/13/canary-wharf-flats-maine-tower-overseas-buyers

 

Carmarthenshire Sees First Prosecution Under Selective Licensing

Published On: July 16, 2015 at 1:50 pm

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A landlord in Wales has become the first to be prosecuted under a selective licensing scheme by Carmarthenshire County Council.

The Council introduced selective licensing in the Tyisha ward in 2014, hoping to improve living conditions for private renters and clampdown on anti-social behaviour.

Carmarthenshire Sees First Prosecution Under Selective Licensing

Carmarthenshire Sees First Prosecution Under Selective Licensing

The scheme requires all landlords to apply for a license. However, Brett Richard Taylor failed to do so.

He pleaded guilty at Carmarthenshire Magistrates’ Court on 26th June to an offence under section 95 of the Housing Act 2004, in that he failed to correctly license his rental property.

Taylor was fined £290 and ordered to pay costs totalling £433.

His tenant could now claim back all of the rent paid during the period that the property was unlicensed.

Additionally, due to his conviction, Taylor is not classified as a fit and proper person in managing properties that he owns in Tyisha. He must select someone to manage them and be the license holder on his behalf.

However, it doesn’t end there. When the Welsh Government launches its Rent Smart Wales scheme later this month, Taylor will not be able to apply and he will not be allowed to manage any properties his owns anywhere in Wales.

The Rent Smart Wales scheme requires all landlords and agents in Wales to register and license their properties.

Councillor Linda Evans, Executive Board Member for Housing, says: “This sends a clear message to all landlords with homes in the Tyisha ward; we are taking the selective licensing scheme very seriously.

“If you rent out a poorly managed, substandard property and leave your tenants at risk, we will catch up with you.

“We have made every effort to encourage landlords to license each of their properties in this ward and where they fail to do so, we will prosecute. Unfortunately, as this case demonstrates, this has serious consequences for landlords in the long-run.”1 

1 https://www.landlordtoday.co.uk/breaking-news/2015/7/first-prosecution-under-selective-licencing-for-carmarthenshire

 

Treasury Analysis of Rental Market is Wrong, says IFS

Published On: July 16, 2015 at 12:44 pm

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Treasury Analysis of Rental Market is Wrong, says IFS

Treasury Analysis of Rental Market is Wrong, says IFS

Independent body, the Institute for Fiscal Studies (IFS), has stated that the Treasury’s analysis of the rental market is wrong.

Of the Chancellor’s decision to reduce mortgage interest tax relief for landlords, IFS Director Paul Johnson says: “At present, if you own a property that you let out to tenants, you can set any mortgage interest costs against tax due on rent received.

“The Budget red book states that this means that ‘the current tax system supports landlords over and above ordinary homeowners’ and that it ‘puts investing in a rental property at an advantage’.

“This line of argument is plain wrong.”

Johnson explains: “Rental property is taxed more heavily than owner-occupied property.

“There is a big problem in the property market making it difficult for young people to buy and pushing up rents. The problem is a lack of supply. This change will not solve that problem.”1

1 https://www.landlordtoday.co.uk/breaking-news/2015/7/ifs-treasury-analysis-on-rental-market-is-wrong

 

 

 

 

 

 

 

 

 

 

 

 

 

 

North-East has most pessimistic outlook on property

Published On: July 16, 2015 at 11:59 am

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Fresh research has revealed that people in the North East of England are the most pessimistic in the UK when it comes to forecasting property prices.

A survey from Clydesdale and Yorkshire banks shows that 11% of homeowners in this region believe the value of their home will dip this year. This is five-and-a-half-times the national average and nearly double the total in the next most-pessimistic area.

Confidence

Data from the research indicates that confidence in the property market has cooled in the last twelve months. Fewer property owners are anticipating an increase in the value of their homes in comparison to the same period last year.

49% of people in the UK believe their property will have increased in value in another year, in comparison to 54% twelve months ago. On average, just 2% of people believe that the value of their property will fall, rising to 11% for the North East region.[1]

Scotland was the next most gloomy region, with 6% of people north of the border suggesting that their home will lose value in the coming year. [1]

Positivity

The most optimistic region when for property price forecasts was London, where 73% of homeowners expect a rise. 62% said the same in the South East, with just 42% in the North East.[1]

In addition, further research from the pair of banks indicate that just 12% of people are planning to move home this year, in comparison to 14% at the beginning of 2015 and 17% at the same period last year.[1]

North-East has most pessimistic outlook on property

North-East has most pessimistic outlook on property

‘Our healthy sense of scepticism is one of many things which make the North East great but on this occasion, I don’t think people need to be so downbeat,’ said Ajay Jagota of sales and letting firm KIS. ‘Our most recent research showed North East house prices rose at the fastest rate for nearly eight months in June, up 0.8% in just four weeks. Over the course of last year, they actually rose by 11% and it’s far from unlikely that they’ll end up having grown a similar amount by the end of this one,’ he continued.[1]

Jagota believes that conditions in the market are, ‘still practically perfect for property purchasing-depsite unemployment rising for the first time in two years this week.’ He also said despite the threat of a rise in interest rates, the market is, ‘enjoying historically low mortgage rates, non-existent inflation and rising wages.’[1]

Concluding, he stated, ‘on top of that North Easterner’s ability to buy a home is rising faster than the rest of the UK with average households having almost twice as much money left after paying the mortgage as people in London-there’s plenty of cause for optimism.’[1]

[1] http://www.propertyreporter.co.uk/property/north-easterners-gloomiest-about-house-prices.html

 

Buy-to-Let Boom Continues as First Time Buyer Levels Drop

Published On: July 16, 2015 at 11:47 am

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Mortgage lending to buy-to-let landlords has increased significantly in the past year, but approvals for first time buyers has dropped substantially, as young people struggle to break into the housing market due to rising prices, reveals new data.

The Council of Mortgage Lenders (CML) has found that there were 22,7000 mortgages worth a total of £3.4 billion lent to first time buyers in May, a 16% fall on last year. However, this is 1% higher than in April this year.

Additionally, it discovered that lending to property investors rose 22% in the last 12 months. This increase predominantly reflects a jump in remortgaging since the start of the year, with 19,100 buy-to-let loans advanced in

Buy-to-Let Boom Continues as First Time Buyer Levels Drop

Buy-to-Let Boom Continues as First Time Buyer Levels Drop

May, worth a total £2.7 billion.

The buy-to-let sector has attracted new investors in the last few years, as savers attempt to maximise their funds rather than investing in low interest savings accounts.

Experts have cautioned that new pension rules, which allow pensioners to take as much money out of their retirement funds as they like, could cause the buy-to-let market to grow even further, pushing up prices and making it even more difficult for first time buyers to purchase a property.

The CML also found that lending to home movers was also lower than a year ago, with 26,300 mortgages worth a total £5 billion granted in May. This is 15% down on May 2014, but 2% higher than April this year.

The CML represents banks, building societies and other lenders, which together account for 95% of all residential mortgage lending in the UK. It suggests that the slight monthly improvement mirrors an awakening market after a quiet previous quarter.

House prices grew by 5.7% in May to an average of £274,000, separate data from the Office for National Statistics (ONS) shows.

This is £57,000 higher than the peak recorded in May 2008, just before the financial crash caused a dramatic collapse in the housing market.

The average first time buyer property price has risen by 5.1% to £211,000, the ONS also found.

However, although these prices are higher, competitive mortgage rates mean that first time buyers spend a record low proportion of their monthly income on the capital and interest payments of their mortgages. The CML revealed that this is the lowest level since they began recording in 2005.

Altogether, capital and interest repayments on a mortgage account for 18.2% of a first time buyer’s earnings, while home movers spend 17.7% on the same payments.

Both of these figures are the lowest since the CML began tracking the data ten years ago.

These numbers arrive as the Bank of England (BoE) reports higher demand for mortgages, as rates continue to drop to record lows.

Demand has grown significantly in the three months to May, say lenders, after a substantial drop in the previous three quarters. Lenders claim that demand is at its strongest level since the end of 2013.

Banks have also said that there has been a huge increase in the demand for lending for prime properties and buy-to-lets in the three months to June.