Posts with tag: London

Generation Rent Launches List of Letting Agent Fees in London

Published On: February 25, 2016 at 12:23 pm

Tags: Generation Rent,letting agent fees,letting agents,London,tenants

Tenant lobby group Generation Rent has created a new website to help London tenants find the best letting agent in their area.

The organisation has researched letting agent fees in the London boroughs of Croydon, Ealing, Tower Hamlets and Waltham Forest. It hopes that by publishing the fees, tenants will save themselves potentially hundreds of pounds, and letting agents may bring their costs down.

Generation Rent Launches List of Letting Agent Fees in London

The list of local letting agents in these areas and the fees they charge to tenants can be found here: http://lettingfees.co.uk

Since May 2015, letting agents have been required to publish details of the fees they charge to tenants and landlords on their website and in a prominent position in each branch.

Generation Rent has revealed that about one in four have not complied with this law and has reported them to their local councils to investigate.

Using volunteers, the body has been able to compile a comprehensive list of the typical fees from local letting agents.

Waltham Forest Renters was the first group to help Generation Rent, by investigating fees in the area in June. In the northeast borough, rents have increased by a third in the last two years and demand appears to have encouraged agents to charge the highest average tenant fee for the typical two-person household (out of the four boroughs) at £489.

Ealing was the cheapest on average, at £374.

Tower Hamlets has both the most expensive letting agent and the cheapest. The priciest, Skampi, charges £900 per couple, while Tabiner imposes a cost of just £40.

As competition for rental properties is very fierce, it can sometimes be impossible to choose a letting agent. However, Generation Rent hopes that by releasing this information, tenants will be able to avoid the rogues.

And the Government believes that this transparency will bring letting agent fees down. If it does, Generation Rent will update the figures on its site. Tenants can also report an incorrect fee.

Meanwhile, the group is working alongside volunteers in 13 other local council areas in England and the site is set to be updated soon. If you wish to research letting agent fees in your own area, you can register on the website here: http://lettingfees.co.uk/explore/

Shortage of Conveyancers Putting Property Sales on Hold

Published On: February 23, 2016 at 9:32 am

Author: Em Morley

Categories: Property News

Tags: buying a home,conveyancers,first time buyers,house prices,London,Stamp Duty

A lack of conveyancers is holding up a large number of property sales, according to recent research.

The CEO of estate agent haart, Paul Smith, notes that as a result, the amount of exchanges dropped by 14.7% in January compared to the previous month and by 7.5% compared with January last year.

Based on his own company’s data, Smith estimates that there were 50,152 exchanges in January, with an average house price of £225,914.

He reports that demand has grown by over a third year-on-year, while housing supply has increased by 8%.

Shortage of Conveyancers Putting Property Sales on Hold

Part of the surge in demand may have come from a rush of buy-to-let landlords hoping to complete on a property investment ahead of the 1^st April Stamp Duty deadline.

Smith comments: “The property market in the New Year has got off to a flying start with a surge in buyer registrations and new property instructions.

“The number of new homes coming on the market is up by a healthy 8% compared to a year ago, but demand has surged by 35% over the same time period, with buy-to-let investors responsible for a large proportion of this rise in anticipation of the Stamp Duty surcharge.”

He continues: “This high level of activity has resulted in a substantial backlog of homes in the pre-completion stages, and we’re now seeing a shortage of conveyancers and lawyers to progress these sales, leading to delays and a subsequent decline in the number of completions in January.

“Across the UK, we’re now seeing more than 15 buyers chasing every property to come onto the market, and house prices have subsequently risen by 10% annually.”

How does the whole UK property market compare to London?

“London is also seeing a high level of activity and finally the issues surrounding the supply of homes is starting to ease, with a 20% increase in instructions registered compared to last year,” Smith reveals.

“In fact, supply is now beginning to outpace demand, which is up by 14% over the same time period. While this increase is very welcome, we are still seeing nearly 21 buyers for every instruction, despite the slowdown at the top end of the market.”

And how are first time buyers faring?

Smith explains: “First time buyers have started the year enthusiastically, with demand for starter homes up 26% annually. This is just the start of an upward trajectory for first time buyers, as the 3% Stamp Duty surcharge for buy-to-let investors, due to be introduced in April, will mean less competition for homes.”¹

From 1^st April, buy-to-let landlords and second homebuyers will be charged an extra 3% Stamp Duty on properties costing £40,000 and over. Many investors have been rushing to purchase rental properties ahead of the additional tax charge.

Tax specialists have warned about the high cost of missing the deadline.

For the latest landlord information and advice, check back to LandlordNews.co.uk.

¹http://www.propertyindustryeye.com/lack-of-conveyancers-holding-up-huge-numbers-of-house-sales/

Thousands of London Homes Left Empty Despite Housing Crisis

Published On: February 22, 2016 at 4:53 pm

Author: Em Morley

Categories: Property News

Tags: empty homes,housing crisis,London,unoccupied property

Tens of thousands of London homes have been left empty for so long that they are classed as long-term vacant, despite a chronic housing crisis in the capital.

Data obtained by The Guardian found that more than 1,110 properties have been left uninhabited for over a decade.

More than 22,000 homes have been left empty for over six months, despite an extreme shortage of housing in the capital, according to figures from London boroughs in response to a Freedom of Information request.

Councils hoping to bring empty properties back into use have a variety of options, including charging an additional rate of Council Tax, helping homeowners will the cost of repairs and even compulsory purchase orders.

However, the data shows that a large number of properties have been left vacant for years rather than months, suggesting that councils have not been using their powers to ensure existing housing does not go to waste.

More than a third of the total number of empty homes (8,561) have been left vacant for over two years, with 1,151 uninhabited for more than ten years.

The Green Party candidate for the Mayor of London, Sian Berry, comments on the findings: “With homelessness rising to crisis proportions, it’s not right that so many properties should be sitting empty and for so long.

Thousands of London Homes Left Empty Despite Housing Crisis

“The best way of bringing them back into use is via self-help housing groups – in many cases building a constructive relationship with the owner, who may well not have wanted the property to fall into disuse in the first place and will welcome efforts to put matters right.”¹

The real number of empty homes may be even higher, as homeowners are not obliged to report that their property is empty to their local council and councils are not required to keep registers of vacant homes. Additionally, Council Tax databases do not include properties in such a state of disrepair that they are uninhabitable.

Also, just 31 of 33 London boroughs responded to the request – Bromley Council did not respond, while Westminster claimed it could not supply the dates that the properties became empty.

Since April 2013, councils have been able to impose an empty homes premium of an additional 50% Council Tax, discouraging homeowners from admitting that their properties are unoccupied.

Greater London has 3.4m homes, but this number is insufficient in housing the capital’s growing population. Some councils, however, are starting to take action against the buy to leave trend, which sees investors purchase homes with the intention of leaving them empty, in order to take advantage of London’s spiralling house prices.

Last year, Islington Council enforced planning laws aimed at banning owners of new homes from leaving their properties unoccupied for over three months, with a threat of legal action for those that flout the law.

Other reasons that homes become unoccupied include owners not knowing what to do with inherited property or lacking the funds needed to repair properties to a habitable state.

The Chief Executive of charity Empty Homes, Helen Williams, says: “With so many people priced out of decent housing across London, it makes sense to make the most of existing properties, as well as build new homes, to address the capital’s housing needs.

“The casework that councils do with property owners can be incredibly effective in ensuring that homes that have been stuck empty are brought back into use. At the same time, we would like to see more long-term empty properties across England bought by councils and charities to create new homes that are affordable to people on low to moderate incomes.”

However, she adds: “But questions remain as to how well Government-funded housing programmes will continue to support this work, now that dedicated empty homes programmes have come to an end.”¹

If you are a landlord with an empty rental property, remember that you can protect your asset with unoccupied property insurance, before your new tenants move in or while you are completing repair work.

¹http://www.theguardian.com/society/2016/feb/21/tens-thousands-london-homes-deemed-long-term-vacant

Redevelopment of Empty London Buildings Could Provide 420,000 Homes for Rent, Says Think Tank

Published On: February 17, 2016 at 4:01 pm

Author: Em Morley

Categories: Property News

Tags: commercial property,house building,London,rental property

Redeveloping unused or empty commercial land and buildings in London could provide up to 420,000 additional homes for rent by 2036, according to a leading think tank.

Research from the Policy Exchange found that there are more than 500 hectares of empty or under utilised industrial land in the capital alone – the equivalent of 750 football pitches – as well as a huge amount of neglected retail space in outer London.

Redevelopment of Empty London Buildings Could Provide 420,000 Homes for Rent, Says Think Tank

The think tank’s report states that if the Government were to commit £3.1 billion per year to finance the purchase of this land, alongside a private sector partner, such as an institutional investor, about 21,000 homes could be built every year.

The Policy Exchange suggests that the homes should be designed to accommodate the ever-expanding private rental sector and shared ownership market by using pre-fabricated materials, which will overcome skills shortages in the construction industry and other factors that slowdown house building, such as bad weather conditions.

Rental income from the homes and the sale of equity stakes could recover the Government’s money within 20 years, says the think tank.

If a scheme like this went ahead, it would be the largest Government investment and delivery on housing since the 1970s.

The report adds that the process of buying non-residential land could be sped up by giving extra powers to the Mayor of London to fast track the purchase of commercial land and buildings that have been empty or unused for two years or more.

At present, around 27,000 homes are being built in London each year – significantly less than the estimated 50,000 homes that are needed every year to keep up with demand.

The Head of Housing at the Policy Exchange, Chris Walker, comments: “The Government urgently needs to make bold reforms to the laws surrounding compulsory purchase of empty or under utilised commercial properties to create a significant supply of land for new housing.

“It should seriously consider making the largest investment in housing since the 1970s to pay for land acquisition, land redevelopment and large scale house building.”¹

¹http://www.telegraph.co.uk/finance/newsbysector/constructionandproperty/12159522/Empty-commercial-buildings-in-London-could-provide-420000-homes-for-rent-think-tank-says.html

PCL rents drop for first time in two years

Published On: February 17, 2016 at 2:12 pm

Author: Em Morley

Categories: Property News

Tags: Buy-to-Let,Cluttons,landlords,London,prime central London rents,rents in London,tenants

The final quarter of 2015 saw rents drop in the capital for the first time in two years, according to a new report.

Cluttons estate agents has provided data suggesting that average Prime Central London rents dropped by 2% over the year to stand at £1,097 per week.

Falls

In addition, Cluttons claim rents are slipping faster than capital values, with average gross rental yields dropping to 3.16%. Despite this, the firm has reported an increase in buy-to-let activity in an attempt to beat the upcoming stamp duty surcharge.

Regions that have seen the most significant dips in rents include Notting Hill, where they slipped by 6.4%, Hollands Park (4.4%) and Marylebone (3.9%).

PCL rents slip for first two in two years

PCL rents slip for first time in two years

‘Landlords are growing wary of burgeoning supply levels at virtually every price point and are adjusting their rental incomes accordingly,’ said Faisal Durrani, head of research at Cluttons. ‘Furthermore, many tenants don’t realise they’re actually paying less than their predecessors in many cases. Some landlords are on the back foot and have been slow to adjust to the evolving conditions and are now undercutting one another to secure tenants,’ Durrani continued.[1]

Stamp Duty changes

James Hyman, Cluttons’ head of residential agency, noted, ‘in the lead up to any tax changes, there is always an increase in activity and the looming SDLT changes are no different, which we expect will become more evident in the coming weeks.’[2]

To this end, Cluttons has forecasted a reduction of the lettings market during 2016, but a growth of more than 16% before 2020.

[1] https://www.lettingagenttoday.co.uk/breaking-news/2016/2/prime-central-london-rents-fall-for-the-first-time-since-2013

More Tenants than Homeowners in London by 2025, Claims PwC

Published On: February 16, 2016 at 2:56 pm

Author: Em Morley

Categories: Property News

Tags: Generation Rent,Help to Buy,homeownership,London,private rental sector

The majority of Londoners will be living in rental accommodation by 2025, with just 40% owning their own home, according to a new study by PwC.

This prediction is a reversal of 2000’s property market, when 60% of Londoners owned a home either outright or with a mortgage.

The expected continuation of generation rent will be bad news to many, including the Government, which has been attempting to fuel homeownership through schemes such as Help to Buy.

Additionally, Chancellor George Osborne is clamping down on the buy-to-let sector by imposing tax and financial changes on landlords.

However, it is young people that will be the hardest hit by changes to the housing market. Priced out by high house prices and impossible deposits and mortgages, only 26% of those currently aged 20-39 will own their own home by 2025.

Comparatively, 64% of those born in 1960 and 1970 owned a home by the time they were 35.

How homeownership is changing for young people

Affordability issues will hit Londoners the hardest, with a predicted 24.4% rise in the amount of people renting privately in the capital between 2000 and 2025. In the UK as a whole, it will increase by 14.5%.

A senior economist at PwC, Richard Snook, comments on the firm’s predictions: “This analysis shows that people are increasingly being locked out of owning a home in London, demonstrated by the sharp rise in private rental levels and sharp fall in homeownership.

“High prices are making homes in the capital unaffordable to most and could undo a century-long trend towards rising homeownership rates. In just 25 years, the city has been transformed to one where rental is becoming the norm – especially for younger people.”¹

Thanks to low interest rates, those with mortgages are seeing their housing costs fall in comparison to tenants, particularly in London.

The Resolution Foundation reports: “Measured before housing costs, median incomes in London appear to have grown by 2.9% post-crisis; measured after housing costs, they remain 3.7% below pre-crisis levels.”¹

The number of people renting is expected to grow in every region of the UK. Northern Ireland will experience the next highest increase in renters, at 24.4%, fuelled by low levels of house building and a younger population. The slowest rise will be seen in the South West, at 6.1%.

Homeownership in Britain hit a high in 2003, at 71% of households. It has been in decline ever since, according to Savills’ Neal Hudson. The Right to Buy scheme of the 1980s is thought to have boosted the peak in homeownership.

David Snell, a partner at PwC, explains how the country must adapt to these forthcoming changes: “With around 60% of Londoners predicted to be renting by 2025 – 40% private sector and 20% social housing – policy will need to adapt. This could include encouraging a better quality of private rented accommodation, including longer tenure periods and more rental properties designed for families.”

He continues: “Demand for housing in the UK has outstripped supply for more than two decades. Changing the outlook for generation rent will require us to build more houses than needed, just to match population growth in order to make up the past shortfall between housing supply and growth in demand.”¹

Recently, we reported that the average buyer who purchases a home this year will have already spent a huge £52,900 on rent.

However, it was also revealed in HomeLet’s rental index that rent price growth in Greater London is at its lowest rate for two years. Despite this, the average new rent in the capital is £1,510 per month. The average across the UK, excluding London, is £740 a month.

The Chief Executive of housing charity Shelter, Campbell Robb, says: “Faced with sky-high housing costs and instability, and forced to wave goodbye to their dreams of securing a home of their own, the shortage of affordable homes in the capital is putting huge pressure on London’s renters.

“But it doesn’t have to be this way; many renters in Europe enjoy greater stability, and there’s no reason London’s tenants can’t as well. To turn around this crisis, the next Mayor of London must prioritise longer, more stable tenancies in the capital and finally commit to building the genuinely affordable homes that Londoners are crying out for.”¹

¹http://www.telegraph.co.uk/finance/property/property-market/12157946/Generation-Rent-London-to-become-a-city-of-renters-by-2025.html