Posts with tag: general election

Renters Not Considered in General Election Campaigns

Published On: May 6, 2015 at 10:24 am

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Election campaigns this year have focused strongly on the housing crisis, but those renting have not been promised a happier future.

Renters Not Considered in General Election Campaigns

Renters Not Considered in General Election Campaigns

Ahead of tomorrow’s vote, it is positive that the property market has been so widely covered this general election. However, the parties’ policies have generally concentrated on the cost of buying a home. Politicians are really pushing the idea of homeownership.

There has not been a party dedicated to tenants in the private rental sector. 30 years ago the Labour Party would have stood up for this group, but the housing market has affected political sentiment. In this time, the amount of homeowners has grown and so has the number of owner-occupiers voting Labour, so its policies have changed.

So why haven’t the parties responded to the changes in the housing market today? Homeownership is still the predominant housing tenure in the UK, but the amount of private tenants now exceeds the number of social renters.

Private renters have not been given much thought. Even when they are considered, it is always related to aspiring homeownership.

The Conservatives are pushing its Help to Buy Isa for those stuck renting; the Liberal Democrats have a rent-to-own property plan; and Labour has promised long-term tenancies with rent controls to help households plan for the future. But for generation rent, a life outside renting is not realistic.

Alistair McIntosh wrote on 24 Housing that it is time for a “rent army”. He says: “I meet a lot of very clever young people. They all rent. And they know they will be renting for a long time. A smorgasbord of gimmicks at election time will not turn them into homeowners any time soon.”1 

Private and social tenants are now closer than ever before. Housing associations are using the tricks of the private rental sector to manage their stock. This huge group of renters makes a whole new stream of voters.

Campaigners and lobby groups do all they can, and they have achieved a lot. However, they mainly work on specific issues, unlike political parties who cover a wide range of topics.

Also, it is important to remember that renting is not just a housing matter. Lifelong tenancies affect other areas of the economy and society. For example, renters are less likely to have a pension and do not have an asset to pay for later life expenses. They are also more flexible in where they live and don’t support the community as much.

Renting does not just highlight housing problems. The growing amount of this group means that a political party could really focus on making their lives better, and this would only have a positive impact on Parliament.

1 http://www.24dash.com/news/housing/2015-05-01-Opinion-Time-to-mobilise-the-Rent-Army

Election uncertainty slowing property demand

Published On: May 5, 2015 at 11:46 am

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Categories: Property News

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The latest monthly figures from estate agents seems to suggest that property hunters throughout the U.K are holding out for the result of Thursday’s general election before pressing on with their search.

Demand

A report from the National Association of Estate Agents (NAEA) revealed that 63% of its members believe that demand for property is at its lowest point since last year. 343 would-be buyers are currently registered on average per NAEA branch, as opposed to 406 in September 2014.[1]

Findings from the report also indicated that only 22% of house sales in March were made to first-time purchasers. This represented the lowest figure since July 2014, and was also down by a substantial 30% on February.[2]

Election indecision

There is also concern amongst NAEA members that demand is continuing to far exceed supply for first-time buyers. Housing policy is one of the biggest election battles, with the report showing that 48% of NAEA agents back the Tories’ pledge to build 200,000 purpose starter homes. However, just 6% support Labour’s promise to increase house-building numbers to 200,00 per year by 2020. [3]

31% do not think that any of the policies put forwards will be sufficient in solving the housing problem.[4]

Mark Hayward, NAEA managing director, said that, ‘an event as monumental as a general election,’ would always have, ‘an impact on the property market.’ However, Hayward believes that, ‘what makes this election so interesting is that no one knows what the result will be.’[5]

Hayward thinks that, ‘with housing featuring so prominently in all three main parties’ manifestos, buyers in particular are holding off to see what will happen.’ He went on to state that the, ‘outcome of the election will impact first, second, third and last-time buyers.’[6]

Election uncertainty slowing property demand

Election uncertainty slowing property demand

Rise

Interestingly, while demand was down to 343 house hunters per branch during March, supply went up on average from 43 to 48 homes. This is due to houses staying on the market for an increased period, due to nervous property hunters.

With demand far exceeding supply, a slight fall in demand will not affect overall sales. In fact, March saw an increase of the average amount of sales secured per branch, with ten sales as opposed to eight in February.[7]

Mr Hayward commented that despite the slight increase in supply during March, ‘it is not an ongoing trend or a big enough jump to fill the gap for demand.’[8]

Not enough

Despite saying that it is, ‘encouraging to see all parties actively proposing plans to regulate supply and demand,’ Hayward believes that, ‘the policies in place are unlikely to be enough to rectify the crippling situation we’re in.’ Explaining his comments, Hayward said that, ‘it’s all very well proposing to build 200,000 houses, but planning law, lack of infrastructure and available labour can make this process so lengthy that it may be ten or twenty years until we see this, by which time demand will be greater.’[9]

Hayward concluded by saying that the market will rise again at a, ‘rapid rate,’ following the election, and stressed that it is, ‘more important than ever that the party elected focuses on increasing the supply of homes.’[10]

 

[1-10] http://www.propertywire.com/news/europe/estate-agents-buyer-concerns-2015050110458.html

 

 

Foxtons Sees Profits Drop Ahead of Election

Published On: May 3, 2015 at 4:16 pm

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Categories: Finance News

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A slowdown in the property market approaching the general election has affected revenues and profits at London estate agent Foxtons. Buyers and sellers are awaiting the result of next week’s poll.

The chain made revenues of £33.1m in the first three months of the year, a 3.1% drop on the first quarter (Q1) of 2014 when the sales market was its strongest since 2007.

Sales commissions also fell almost 12% to £15.5m in Q1, but lettings were up, with a 5.4% increase to £15.9m. Mortgage broking also rose by 13.5% to £1.6m. Foxtons made underlying profits of £8.3m, which is around a quarter less than the same period in 2014.

Foxtons Sees Profits Drop Ahead of Election

Foxtons Sees Profits Drop Ahead of Election

Chief Executive of the firm, Nick Budden, says: “As expected, property sales transactions in London have remained relatively flat since the end of last year with many potential buyers and sellers apparently delaying their decisions until the outcome of the general election is known.

“Encouragingly, growth in our lettings business has continued from the momentum we saw at the end of last year.”1

Foxtons is not anticipating a market boost until there is security after the election. Rival company Countrywide, Britain’s largest estate agent, cautioned this week that market transactions in the first six months of the year would be substantially down on last year’s levels due to the election. However, it is predicting a recovery in the second half of 2015.

The outcome of the election is unclear. Nate Silver, who correctly predicted the results in every state of the US 2012 election, expects a “messy outcome” for the UK, resulting in a possible coalition.1

The sudden drop in profits caused Foxtons to reduce its staff, after hiring more last year for the anticipated long-term improvement. Currently, the firm employs 1,270 people.

Despite the dip, Budden thinks that the long-term fundamentals of the London housing market are secure. Many of Foxton’s branches are situated in less central parts and have reported better levels of volume growth recently.

Foxtons has continuously expanded, opening five new branches in areas such as Walthamstow, northeast London, and Bromley, southeast London. It now has 56 offices. Another two are scheduled to open this year.

Shares in Foxtons increased by 6% to 312p.

1 http://www.theguardian.com/money/2015/apr/30/foxtons-blames-election-for-slowdown-in-london-property-market

Labour’s Housing Policies Take £200m off Value of Builders

Published On: May 1, 2015 at 10:49 am

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The Labour Party’s housing plans have taken criticism from leading property experts as house builders experienced their share prices falling after Ed Miliband announced the proposals.

Around £200m was taken off the value of Taylor Wimpey, Barratt Developments and Persimmon after the policies were revealed on Sunday. One plan is to limit private landlords from increasing rent by more than CPI inflation for three years.

This could cause buy-to-let investors to leave the sector, as the market would be less profitable. This would worsen the shortage of housing for generation rent, which Labour has claimed to want to help.

The Association of Residential Letting Agents (ARLA) claim that three-quarters of its members are worried the plans will “see landlords exit the market and reduce supply.”1 

Head of the National Landlords Association (NLA), Richard Lambert, says: “We understand Labour wants to assure tenants they have their concerns at heart, but this policy will backfire because they don’t understand the economics of supplying private housing to rent.

“These changes will have far-reaching consequences for the private rented sector, for landlords’ willingness to put their own money into providing homes, and for mortgage lenders’ view of the risk in supporting them.

“If these proposals are going to be rushed into the first Queen’s Speech, less than a month away, without time to think through the consequences, Labour’s good intentions could make the housing crisis worse, not better.”1 

Labour's Housing Policies Take £200m off Value of Builders

Labour’s Housing Policies Take £200m off Value of Builders

The British Property Federation (BPF) has also cautioned that rent controls “could deter much needed investment in the housing sector.”

Chief Executive of the BPF, Melanie Leech, comments: “Ultimately what will help tenants best is more investment in housing.

“Pension funds and other institutions have billions to invest in this market; developing places that would provide a new generation of high-quality homes that offer greater choice to renters, including the option to sign longer tenancies.

“This additional investment will be vital to tackle the housing crisis, and we would urge the next government to do all it can to encourage it, rather than chase it away with an overly-proscriptive approach to rent setting.

“In places like London, tenants will find this policy on rents may make their budgeting harder, rather than easier. Their rent will tick along at CPI for a couple of years and then they will face a potential sharp rise in year three when the rent returns to market.”1 

Mr. Miliband seemed unaffected by the drop in house builder’s share prices: “Our proposals will be better for companies building homes in Britain. The housing market is not working. By common consent the Lyons plan is the most comprehensive for a generation. We can’t carry on with the status quo.”1

He says that small house builders will benefit from the policies.

Labour’s plan to abolish Stamp Duty for first time buyers on homes worth up to £300,000 also faced disapproval. The Royal Institution of Chartered Surveyors (RICS) believes it could further push up house prices.

Head of Policy at RICS, Jeremy Blackburn, says: “While this proposed Stamp Duty reform could help some first time buyers in the market, it’s another measure that tinkers with demand-side stimulus. Prices are already predicted to rise in the next parliament and this is only likely to make matters worse.”1

Labour first revealed rent control plans last year.

Brandon Lewis, Conservative housing minister, comments: “Ed Miliband is relaunching a policy that descended into chaos when it was first announced; the experts he claimed backed his plans came out and attacked it as unworkable.

“Rent controls never work; they force up rents and destroy investment in housing, leading to fewer homes to rent and poorer quality accommodation. Even Ed Miliband’s own shadow housing minister admits they don’t work.”1 

Shares in Taylor Wimpey dropped as much as 2% in morning trading on Monday, while Barratt decreased as much as 1.9% and Persimmon as much as 1.8%.

By late morning, the value of the three FTSE 100 house building firms was £178m less. Shares in FTSE 250 house builders also dropped.

1 http://www.telegraph.co.uk/finance/newsbysector/constructionandproperty/11565524/Housebuilders-hit-by-Ed-Milibands-rent-control-plans.html

 

No. 10’s Value Surges with Cameron

Published On: May 1, 2015 at 9:00 am

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No. 10's Value Surges with Cameron

No. 10’s Value Surges with Cameron

10 Downing Street’s value has spiralled since David Cameron came into power in the 2010 general election.

The property is now worth an estimated £6,312,292, a huge rise from the £4,574,831 it was allegedly worth when Mr. Cameron formed a coalition after failing to win an outright majority five years ago.

Figures, from the Daily Telegraphy and Zoopla, reveal that the iconic Georgian terraced home has experienced substantial growth in the last 36 years.1

The property was worth £860,562 when Margaret Thatcher came to power in 1979. This would have been a huge amount at the time, but would buy you just a small apartment in most of London today.

When John Major replaced Mrs Thatcher in 1990, No. 10 was worth £1,804,952. Seven years later, when Tony Blair took office, the home is estimated to have been worth £1,644,558.

The property has two dining rooms, a basement kitchen and a small private residence on the third floor.

1 http://www.estateagenttoday.co.uk/2298-no-10-shoots-up-in-value-under-cameron

 

 

 

 

 

London House Prices continue to soar

Published On: April 30, 2015 at 3:44 pm

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Categories: Property News

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Figures from the New Land Registry suggest that house prices in London continued to soar over the last year.

The statistics show that average house costs throughout the capital rose by more than 11% over the last twelve months. An average London home will now set back purchasers a cool £462,799.[1]

Strong

Growth in all London boroughs was strong, but the greatest performance was recorded in Newham, where prices rose by nearly 20% in a year. The average price of a property within Newham now stands at £291,364. This can largely be put down to new proposed Crossrail stations and new accommodation at the Royal Victoria Docks and the Olympic Village.[2]

Figures also suggest that the nearby Hackney is the fastest growing London borough, having recorded the largest month-by-month growth to March.

London House Prices continue to soar

London House Prices continue to soar

Buoyant

Andrew Bridges, Managing Director of Stirling Ackroyd estate agents, believes that the figures pour scorn on the notion of pre-election uncertainty within the capital. ‘Election uncertainty is a myth,’ stated Bridges, who went on to say that, ‘house prices across the UK, especially in London, are surprisingly buoyant in the face of the upcoming General Election.’[3]

Mr Bridges did go on to warn however that the election itself, ‘wont’ solve the fundamental mismatch between supply and demand.’[4]

Central Slowdown

Despite the east of London showing the most impressive growth, central London boroughs continued to experience a slowdown. Kensington and Chelsea, the most expensive borough in London, saw the slowest year-on-year growth of 5.2%. With average property prices of £1.3m, Kensington and Chelsea also recorded the largest price-fall in all boroughs in the capital during March, with prices slipping by 1.6%.[5] 

[1-5] http://www.homesandproperty.co.uk/property-news/news/east-london-leads-way-house-price-growth-across-capital