Housing Market
News covering issues affecting the UK residential property market, house prices, interest rates and buying and selling trends.
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First tenants sign up to Open Banking rent-reporting service
The recent Open Banking initiative that promised a ‘revolution’ in the way bank account data can be used by third parties is already making inroads into the private rented sector, it has been claimed. Proptech firm CreditLadder says the first tenant has now signed up to its Open Banking-enabled rent reporting service and that over a thousand tenants have followed suit. The company, which calls itself a credit improvement platform and has processed £14m of rents since it launched, asks tenants to allow their bank account statements to be read each month by CreditLadder. It then notifies partner reference agency Experian, the largest in the UK, about each payment including whether the rent was paid on time and in full. This payment track record is then added to their credit history by Experian. Letting agents The service, which is being offered to tenants for free, generates its income both through a premium tenant service and a paid-for package for letting agents. CreditLadder says it already works with 700 agents branches in the UK. “When CreditLadder launched its Open Banking service last month we were acutely aware that the take up maybe held back given the newness of the technology,” says…
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Landlords enjoyed £86,600 buy-to-let bonanza last year
Landlords who sold a buy-to-let property last year made a capital gain of £86,660 on average in the UK and had owned it for just under nine years, it has been revealed. But the capital gains made in London put these national figures to shame. Landlords selling up in London last year made a capital gain of £254,000 on average per property, says Countrywide. Its latest buy-to-let research reveals that, therefore, a landlord who invested in property within London eight years ago will have made three times more money from selling their property than those outside the capital. Eight of the top ten places where landlords have made the largest capital gains from their buy-to-let properties are in London and include Brent, Waltham Forest, theCity of Westminster, Haringey, Lambeth, Pendle, Islington, Kensington & Chelsea and Southwark Buy-to-let gains In these areas landlords who sold up last year enjoyed huge capital gains including, in Westminster and Kensington & Chelsea, gains of over half a million pounds on average. Also, in these areas of London 28% of landlords who sold up last year doubled their original investment. “Even in areas where price growth has lagged behind, most landlords have made a profit…
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Government’s first time buyer Stamp Duty give-away has failed in South, claim surveyors
The government’s attempt to kick-start the first-time buyer market by removing Stamp Duty and Land Tax (SDLT) for all but the wealthiest has proved a damp squib in London and the South, surveyors have claimed. In last November’s Budget Chancellor Phillip Hammond eliminated SDLT for 80% of first time buyers, and cut the duty for 95% of those who pay it. But the Royal Institute of Chartered Surveyors (RICS) says in its latest property market snapshot that new buyers’ enquiries fell for the eleventh month in succession. “This would appear to suggest that the government’s attempt to breathe fresh life into the market through eliminating the stamp duty charge for most first-time buyers in the Budget is not having a significant impact on overall demand,” says RICS’ Residential Market Survey for February. Affordability is the key to demand among first time buyers, the figures show. The SDLT stimulus appears only to be working in the north of the UK where house prices are more affordable; the number of enquiries to agents from first-steppers increased in Scotland, Northern Ireland, Yorkshire, Humberside and the North, but stalled elsewhere. RICS also says the number of properties available to sell has continued to drop.…
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37% more home buyers surge into property market during January
Every estate agent knows the weeks after the New Year can be some of the busiest for the property market but 2018’s have been bumper ones, it has been claimed. NAEA Propertymark says the number of house hunters registered with agents increased by 37% during January to an average of 367 per branch, up from 268 in December. This is the highest monthly figure since September last year. But such good news for agents comes at a cost for first time purchasers. The increased number of buyers has mainly been second steppers, the NAEA says, and first-time buyer activity dropped off as they have faced competition from other types of buyers during the New Year rush for properties. Supply has also increased, NAEA says, up from 33 properties per branch in December to 36 during January. The fall-off in first-time buyer activity ends a year of improvement in their numbers during 2017, which UK finance recently revealed had reached their highest numbers since the financial crash of 2007/8. “As we usually see in January, buyers and sellers have re-entered the market after the festive slow-down and triggered an uplift in the number of sales agreed,” says Mark Hayward, Chief Executive,…
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London to be hit by triple whammy as experts predict soft property market during 2018
House price rises will slip behind inflation this year by half a percent across the UK and 1.6% in London, it has been predicted by over 30 leading property market experts. News agency Reuters, which polled the unnamed experts last week, says continuing worries over Brexit and weak consumer spending will subdue house price rises and investment confidence in the property sector. “Would-be sellers are holding onto assets for longer and buyers are being a little more diligent before committing to significant expenditures, all this against a backdrop of inflation-surpassing wage growth,” says Rod Lockhart of online mortgage firm LendInvest (pictured, left). Reuters says a majority of the experts it polled believed that the effect of the UK’s planned exit from Europe on London had been to decrease sales turnover, but that the picture was less clear nationally. Eleven of the 18 experts who answered the question on property sales said London’s turnover would decrease this year, driven by huge affordability problems, Brexit but also the government’s tax-hikes for landlords. “Quite simply, with loan-to-income ratios for first time buyers sitting at around four times, average salaries of £33,000, and your average flat in London costing over £500,000, it’s extremely difficult…
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NO DSS notices now “unlawful” claims Shelter following landmark case
Letting agents who try to screen out applicants for rented properties who are on benefits may now be breaking the law, it has been claimed. This follows legal action brought by Birmingham tenant Rosie Keogh with the help of housing charity Shelter against a lettings agency after she claimed to have been rejected because part of her rent was to be paid by housing benefit. “You feel like a second-class citizen,” she told the BBC. “I felt as a housing benefit claimant I was somehow not be trusted with paying my rent on time.” Rosie (pictured, left) says she hopes the case will stop the common NO DSS signs seen in many rental ads by setting a precedent making the “No DSS rule unlawful [which] will then open up the market so everyone can participate in it,” she said. The Moseley-based part-time cleaner and former para-legal secretary had a eleven-year track record of paying her rent on time before encountering problems in 2016 when she applied to rent a property marketed by lettings firm Nicholas George. She claimed that, because 60% of people on housing benefit are women, and that 95% of single parents are women, the agent’s actions discriminated…
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Dramatic drop in tenant arrears despite rising rents, says Your Move
There has been a dramatic reduction in the number of tenants who are in arrears despite rising rents across the UK, it has been claimed. Agent Your Move says 8.4% of its tenants were in arrears during January, down from 12.4% in December and significantly less than six months ago when arrears peaked at 13.7% of its tenants. It’s also much lower than the post-financial crash figure of 14.6%, which Your Move recorded in February 2010. Tenant arrears are improving despite rising rents, which Your Move says have increased by 2.5% across England and Wales over the past 12 months to an average of £829 per property, just under the Bank of England’s current reported inflation figure of 2.8%. Regional differences But the company says this figure masks regional differences. Rents increased by 2.9% in the North West but dropped by 2% in the North East. The data follows our report yesterday that the number of managed rental properties dropped by 8% during January, which ARLA blamed on the government’s recent tax increases for landlords and said would lead to increased rents. And the shocking difference in rents between London and the rest of the UK continues, Your Moves says.…
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Number of managed rental properties drops by 8% during January
The government’s tax-take on landlords is having the effect many predicted it would as the Association of Residential Letting Agents (ARLA) reports an 8% reduction in the number of rental properties managed by agents during January. ARLA says its member agents reported 184 rental properties managed per branch compared to 200 during December, the lowest figures for four months. Such an alarming contraction in the market during a traditionally busy period is also taking its toll on tenants’ finances, ARLA says. As the housing market forces more people into rented accommodation rather than ownership, ARLA says the number of tenants registered with agents increased from 59 to 70 per branch. Rough ride ARLA’s Chief Executive David Cox (pictured, below) says renters are in for a “rough ride” this year as the imbalance between supply and demand begins to push up rents. It’s already begun, ARLA claims, revealing that nearly a fifth of tenants experienced rent increases during January, up from 16% during December. The ARLA figures are backed up the latest rental index, which found that rents in the UK are rising across every region for the first time in two years. Buy-to-let lender Landbay, which produced the index, also…
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Property sales remain flat during January, says HMRC
Property sales in the UK during January increased by 1.3% month-on-month, hitting 102,610 transactions says HMRC, but down 0.1% year on year. These figures, which are seasonally adjusted to take account of the Christmas shutdown, are for all residential sales over £40,000. “Property transactions have remained stagnant for quite some time now,” says Richard Sexton, Director of e.surv (pictured, left). “Although our latest research showed one-fifth of mortgage approvals went to first-time buyers last month, if we are to see a real boost in numbers and overall market activity, we need to address our country’s limited housing supply which is acting as a roadblock.” Jeremy Duncombe, Director, Legal & General Mortgage Club, (pictured, right) says: “It is clear that a lack of housing supply across the UK continues to take its toll on the market. “Not only is it having an impact on potential borrowers who want to make their first move onto the property ladder, but it’s also limiting the options available to those who are looking to downsize in later life.” But HMRC’s detailed figures also reveal that, despite much commentary from agents about a difficult market in London and the South, overall UK transactions have been increasing each…
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House hunters are returning to the property market, claims Rightmove
The latest house price index from Rightmove reveal rising home hunter activity, an increase in properties coming to market, and asking prices going up in all but one region of the UK. Also, the portal says the contraction in the number of homes being sold in recent months is now losing steam. Its figures, which are for January, reveal that the average asking price has increased by 0.8% across the UK; that the number of properties coming to market rose by 2%; and that agent stock held steady (see graph, right). Also, the number of homes sold contracted by only -1.6% during January, compared to -5.5% in the final quarter of 2017. As well as reporting record traffic to its website at 141 million visits last month, Rightmove says the hottest property market is in the Midlands, where asking prices are rising three times faster than the national average. “The average price of newly-marketed property in the Midlands is up by over 5% compared to a year ago, a marked contrast to parts of London and its commuter belt,” says Rightmove’s Miles Shipside (pictured, left). “Many buyers in the Midlands are willing and able to pay more to secure their…
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