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Em Morley

Zoopla Introduces Property Buyer Reports at £9.99

Published On: July 14, 2015 at 3:02 pm

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Zoopla has introduced new property buyer reports priced at £9.99 each.

The reports appear to be available to most, but not all, properties listed on the property portal.

A spokesperson for Zoopla says: “We are trialling a partnership with Vectis Surveyors of RICS-approved [Royal Institution of Chartered Surveyors] homebuyer reports, which give guidance on what to generally look for when buying property.

Zoopla Introduces Property Buyer Reports at £9.99

Zoopla Introduces Property Buyer Reports at £9.99

“They highlight repairs a specific property may need and will also give an indicative estimate of possible costs associated with any works required.

“The reports are relevant to all buyers, whether first time or second steppers, through to those looking at buy-to-let and investment opportunities.”1 

However, an agent that bought a report is questioning its effectiveness.

Paul House, of London agent P J Morgan, bought a report for a property that his firm markets alongside another agent, which lists its properties on Zoopla. P J Morgan does not.

House says that he was surprised by its findings, which indicated that £8,600 worth of repairs was required.

In fact, House says that the whole property needs work that would cost between £25,000-£30,000.

The property’s report also gives a rental valuation of £594 per week.

House argues that this would only be achievable after at least £30,000 was spent, and if it was rented out in the peak months of August and September.

However, the report does state: “…these are simple checks for a first viewing. We would always recommend a RICS survey and valuation, particularly as the property requires refurbishment.”

It continues: “Trust us when we say never rely on a mortgage valuation as an indication of worth or condition.”1

House comments: “The report appears to undersell the value of work due whilst at the same time overvalue the rental return.

“It does lead you to wonder how these figures are derived at and the actual point in such a report, especially as the information is inaccurate and misleading to the consumer, and more importantly, was downloaded in seconds without any inspection.

“In fact, the only real information specific to this property is the valuation and amount of refurbishment they think is required.

“The rest is basic information that although useful, can easily be downloaded for free from the internet.”1

1 http://www.propertyindustryeye.com/zoopla-launches-new-property-buyer-reports-at-9-99/

UK house market stirring, says CML

Published On: July 14, 2015 at 2:11 pm

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The UK housing market is beginning to stir from its slumber, according to new research from the Council of Mortgage Lenders.

Growth

Following a quiet period during the Spring months, the firm said that homeowners took out 49,000 loans during May. This was the largest number recorded since December of last year and is up from the 48,300 loans taken out during April.[1]

In addition, separate figures from the Office for National Statistics indicate that annual UK house price growth rose to 5.7% in May, rising from 5.5% in April.[1]

The report from the Office for National Statistics also indicated that lending levels remain lower than they were twelve months ago

‘House purchase lending in May was slightly up on the previous month, suggesting the market might be waking up after a subdued first quarter,’ commented Paul Smee, director general of the CML.[1]

UK house market stirring, says CML

UK house market stirring, says CML

Regional rises

Figures indicate that in the year to May, house prices in England increased by 5.8% and in Scotland they rose by 2.9%. Property prices in Wales also climbed, albeit by a smaller 2.5%.[1]

However, the largest increase was recorded in Northern Ireland, where property values climbed by 10.5%.[1]

[1] http://www.bbc.co.uk/news/business-33519370

 

 

How Landlords Can Avoid Huge New Tax Bills

Published On: July 14, 2015 at 2:06 pm

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Private landlords that are facing losses due to the Government’s plans to cut tax relief on buy-to-let properties could protect their income by making their letting activity a business, experts say.

Chancellor George Osborne announced that tax relief that landlords in the top tax brackets receive on their mortgage interest payments are being reduced from 45% to 20% by April 2020.

He stated in the Budget that this was to “level the playing field” as it is “unfair” that landlords receive this benefit but owner-occupiers do not.1

How Landlords Can Avoid Huge New Tax Bills

How Landlords Can Avoid Huge New Tax Bills

Accountants PwC has analysed the proposals and found that if a private landlord transfers one or more properties to a company structure, known as incorporating a business, the total tax rate is hugely reduced.

A tax partner at PwC, Paul Emery, explains: “This is because a company is paying tax on the actual profit and therefore the rate does not fluctuate wildly. If the profit reduces, so does the tax.

“If the rental property is run privately, there is a scenario where because you no longer get full tax relief for your expenses, you can pay tax even if there is no profit. That means potentially enormous effective rates of tax.”

By 2020, when interest rates will likely be higher, the tax on a property worth £100,000 to a private landlord in a higher tax bracket, with an 85% loan-to-value (LTV) mortgage and a mortgage interest rate of 5%, would be 106%.

As a consequence, the landlord would suffer an annual loss of £100.

If the same property were run as a business, the landlord would pay a tax rate of 49.2%, and make £888.

And if mortgage rates increase further, the difference is much more evident.

If rates reach 6%, the property owner operating as a business would pay 49.2% again, but the private landlord would pay 186.7% and make an annual loss of £780, using the PwC model.

Emery continues: “Other taxes such as Stamp Duty and capital gains tax [CGT] could affect profits from a rental business, especially for a landlord with only a handful of properties.”

If the owner is a sole trader, they would pay Stamp Duty again on the “incorporation of the business” based on the cost of the property. However, if the owner is in business with a partner, they could receive some Stamp Duty relief.

Otherwise, if a sold trader or business partners own over six properties, it is categorised as a commercial property business, and they will pay just 4% Stamp Duty on the sale.

Emery adds: “The big tax difference is CGT when the company finally comes to sell and dividend the profit to the owner at 49% compared to 28% for a private landlord, but at least you would know what your effective rate of tax is, and if you are reliant on the income rather than the appreciation of price, it may be a hit worth taking.

“Although incorporating your business helps you guarantee your monthly tax bill, it is not a magic solution. Tax is only one consideration when forming a company. For example, audited accounts might need to be filed.”1

1 http://www.telegraph.co.uk/finance/property/11731646/Buy-to-let-How-landlords-can-cut-their-shock-new-tax-bill.html?utm_campaign=Landlords%20%26%20Property&utm_content=18039099&utm_medium=social&utm_source=twitter

 

 

Councils Crack Down on Rogue HMO Landlords

Published On: July 14, 2015 at 1:03 pm

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Councils Crack Down on Rogue HMO Landlords

Councils Crack Down on Rogue HMO Landlords

Councils around the country are cracking down on unsafe Houses in Multiple Occupation (HMOs) after a number of successful prosecutions against rogue landlords.

Individual fines issued by the courts have reached tens of thousands of pounds, which is a warning to those that do not comply with current regulations.

One of the larger fines was to a landlord in Hatfield, Hertfordshire, who was ordered to pay over £17,000 after pleading guilty to 23 offences regarding his HMO. The charges included failing to maintain the property to a safe and satisfactory condition and failure to comply with fire safety regulations.

Other significant fines were in Barnet at £10,000, Bristol at £7,500, Cambridge at £7,000 and Lincoln at £5,700. Additionally, landlords in Dartford, Fylde, Hillingdon and Sutton Coldfield suffered penalties.

The London Borough of Barnet has now implemented an amnesty as a result. HMO landlords in Barnet who are operating without a license must apply before 31st July 2015, or face prosecution.

Camden Council is also planning to introduce new licensing rules for landlords of shared accommodation. From December 2015, a new five-year license will only be granted if minimum standards are met. Camden Council hopes that living conditions for tenants within the borough will improve as a consequence.

Lincoln Council is proposing legislation that would limit the number of new HMOs. Their plans involve requiring landlords and property owners to gain planning permission before converting a property into an HMO.

 

 

 

 

 

 

Auction house reveals record start to year

Published On: July 14, 2015 at 12:23 pm

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Award-winning auctioneer Auction House has announced record results for the first half of 2015, with the total number of lot entries for the group reaching the highest ever figure.

Records

In the opening six months of the year, the auctioneer sold 1,415 through its national network of 40 auction rooms. This was a rise of 14% on the same period last year and represented a success rate of 76%. What’s more, a record £179m was raised in the process.[1]

For July, a best-ever figure of 726 auction lots are to be offered, which is a 10% increase on the groups previous highest monthly total.[1]

Roger Lake, Founding Director of Auction House, said that, ‘this double-whammy of successes have taken place during a period of weakened supply and the market disruption that surrounded the General Election.’ He continued by saying, ‘despite these challenges, Auction House has managed to buck the national trend and deliver our best achievements ever-both in terms of lots sold and lots entered. Yet again, it’s a sure sign that our regional approach to auction sales is winning through.’[1]

Commercial gains

Auction house is also noting a marked increase in the number of commercial lots being offered. According to the group, the diversity of stock is proving to be an added attraction, with increased demand for commercial buyers and sellers for regional auction services.

Auction house reveals record start to year

Auction house reveals record start to year

Mr Lake stated, ‘more and more local sellers are choosing the speed and certainty that auction provides, rather than the very protracted private treaty process with its associated high cancellation rate. The prices achieved through our regional auction rooms regularly equal or exceed the levels obtained by estate agents for suitable properties and in a fraction of the time.[1]

‘With 40 sales rooms across the UK, our unique approach of selling property to local buyers at higher prices through nearby auction rooms is a proven formula that no other auctioneer in the country is able to match,’ Lake concluded.[1]

[1] http://www.propertyreporter.co.uk/auctions/record-results-and-entries-at-auction-house.html

 

 

Shortage of Homes on Market Drives Prices Up 1.7% in June

Published On: July 14, 2015 at 12:01 pm

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The amount of homes on the market dropped to a 37-year low in June, driving prices up by 1.7% over the month.

These figures have caused concerns that prices will surge to increasingly unaffordable levels.

Surveyors have said that the number of properties for sale with each of its members is at the lowest level since records began in 1978. Britain’s biggest mortgage lender, Halifax, also reported that the average UK house price has surpassed £200,000 for the first time on its measure, due to an unexpected 1.7% rise in June.

The Royal Institution of Chartered Surveyors (RICS) states that the average number of homes for sale with each member has fallen to 49.5 from 61 last June and is down from a record high of 148 in 1996.

Shortage of Homes on Market Drives Prices Up 1.7% in June

Shortage of Homes on Market Drives Prices Up 1.7% in June

It says the causes of this vary around the country. In expensive parts, high Stamp Duty costs and other fees make it more appealing to renovate or extend homeowners’ current properties than move. It also says that lack of housing stock is a vicious cycle, as people do not want to sell because there aren’t homes to move into.

Demand for homes rose in every region except the South East, and RICS says that its members are more positive about sales growth than at any point since April 2014.

The difference between supply and demand is keeping prices steady and RICS says that the number of members reporting price rises has reached an 11-month high. In total, 41% more surveyors said they expect house prices to increase in the next three months; the highest proportion in over a year.

Chief Economist at RICS, Simon Rubinsohn, comments: “There had been some hope that the removal of political uncertainty following the general election would encourage more properties onto the market but the initial indications are that this is not proving to be the case.

“Additionally, the recent flat pattern of appraisals by respondents to the survey suggests this is not about to change anytime soon. As a result, it is hardly surprising that prices across much of the country are continuing to be squeezed higher, with property set to become ever more unaffordable.”1 

Halifax’s monthly data, based on mortgages it has approved during the month, indicates that prices have risen for the fourth consecutive month, and are now higher than the previous pre-crisis peak.

During the quarter, prices were up by 3.3%, the largest three-month increase since November 2009. The lender says that the average UK house price is now £200,280, which is the first time it has passed £200,000 since it began recording in 1983.

Housing Economist at the Halifax, Martin Ellis, says lack of supply of homes for sale is driving up prices: “This shortage has been a key factor maintaining house price growth at a robust pace so far in 2015.

“Economic growth, higher employment, increasing real earnings growth and very low mortgage rates are all supporting housing demand, with signs of a recent modest pick-up in demand.”1 

This sudden increase in June has caused a significant rise in the annual rate of inflation to 9.6%, compared with 8.6% in the previous month. Annual house price growth is back to levels seen in September 2014 and has caused economists to re-evaluate their predictions.

Chief Economist at IHS Global Insight, Howard Archer, described Halifax’s latest report as “a bit of a stunner.”

He continues: “Our current forecast is for house prices to rise by 6% over 2015, but the Halifax data at least suggests that this may be too conservative a projection.”1 

However, Archer warns that data from Halifax may be more unpredictable than other house price measures and that no one should place too much trust on one particular house price survey or measure.

Property Economist at Capital Economics, Matthew Pointon, says that future house price gains are anticipated over the rest of the year.

However, he adds: “We doubt prices will be able to continue to rise at this breakneck pace.”

He says that mortgage lending is unlikely to relax substantially and the Bank of England’s recent concerns over buy-to-let “should prevent a surge in active housing demand and keep house price gains to around 6% this year.”1

1 http://www.theguardian.com/business/2015/jul/09/shortage-homes-uk-market-prices-up-june