Housing Market
News covering issues affecting the UK residential property market, house prices, interest rates and buying and selling trends.
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20% more landlords struggling with mortgage payments than a year ago
The number of landlords struggling financially has soared by 20%, figures from UK Finance, the organisation replacing the Council of Mortgage Lenders, reveal. Its latest market report shows that the number of landlords with more serious mortgage arrears is on the increase. Those with arrears of between 7.5% and 10% of their balance increased by a fifth year-on-year, although the buy-to-let ‘crackdown’ being led by the government has yet to drive increased possessions in this market – which have held steady. Buried deep in the UK Finance figures is one less publicised fact – that ten times fewer landlords are in mortgage difficulties than homeowners. This may baffle the many landlords who are facing increased lending criteria following the Prudential Regulation Authority’s recently-introduced stricter buy-to-let lending rules. But although the buy-to-let market is struggling, the lending market for homeowners is looking much brighter, UK Finance says. The number of homeowners with arrears of up to 5% of their mortgage balance has been dropping dramatically over the few years, down from 55,000 mortgage in 2014 to 34,500 mortgage during the final quarter of last year. And year-on-year, this type of mortgage arrears decreased by 10%. Also, those in serious arrears has…
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Theresa May chairs first meeting of new housing taskforce, but was Dominic Raab there?
Meeting of ministerial minds urged by PM to "think creatively" about how to build more homes, but where was her Minister for Housing?
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Letting agents “unfairly” taking deposits from millions of tenants, it is claimed
Letting agents and landlords have unfairly deducted money from the deposits of 2.34 million tenants or 16% of the UK’s renters, it has been claimed. Student lettings website SPCE, which started up last year and claims to have a 50,000 strong property inventory and deals with six universities in the UK, says its research among 2,000 tenants revealed that the problem was even worse among younger renters, who are less likely to know their rights. A quarter of younger tenants and 30% of students had seen their deposits returned with “unfair” deductions, it is claimed, while only 18% of all tenants have successfully challenged attempted deductions from their deposits by a letting agents or landlord. The research also reveals that many tenants lose a part of their deposits because of damage done by fellow housemates, or because of a problem created before they moved in but, presumably, not spotted when the move-in inventory was completed. The research follows figures published last year that revealed that landlords and agents took £1 billion from deposits, according to rental property interiors firm Hillarys. Leon Ifayemi, CEO and co-founder of SPCE (pictured, left), commented on the findings: “With rent prices at record highs, the financial…
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Slow-moving prime London property market drives £1 billion January ‘sale’
The pain in the prime London property market continues as research reveals that nearly £1 billion has been knocked off the original asking prices of properties for sale within its upmarket streets. Analysis of portal data by Garrington Property Finders shows that the average reductions is 9% or, by the crazy metrics of the capital’s property market, £223,000. Such dramatic reductions (shown in a heat-map form, above) have been created by a slow market, Garrington says, and in six of the seven areas featuring the greatest reductions more than half of properties currently for sale have been on the market for over six months. The most dramatic reductions in prime London property are in the more expensive enclaves including St James and Victoria, where the average reduction is 14.1% or £765,919 and Knightsbridge, where asking prices have been slashed by 12.1% or £927,188 on average. Well-to-do homes in the City, South Kensington, Soho, Covent Garden and Marylebone areas of London have all seen an average reduction of approximately 10%, the research shows. “2017 was not a year for the faint-hearted in London’s prime property market,” Garrington’s Managing Director Jonothan Hopper (pictured, left). “Acute price sensitivity among buyers continues to force…
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Portfolio landlords struggle to get mortgages as PRA rules kick in, research shows
Nearly three quarters of landlords with multiple properties are finding it harder to get either mortgages or remortgage existing debt as the Prudential Regulation Authority’s second wave of mortgage rules kick in, it has been revealed. Research completed on behalf of lender Foundation Home Loans among 2,000 landlords found that 70% of those with more than four properties had struggled to obtain further finance to buy more properties, while half of those with between one and three properties also faced problems. The second wave of PRA rules went live in September last year to allay fears that excessive borrowing by banks on generous terms to landlords might endanger the economy during a downturn. The larger the portfolio, the harder it has become for landlords to get the green light for more finance, largely because those with more than four properties are now effectively classed as enterprises and must submit business plans to get a home loan or remortgage an existing one. Rejected by lenders Two thirds of landlords with eleven or more properties within their portfolio now believe the range of mortgages available to them has dropped, while a quarter think they are now more likely to be rejected by…
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Airbnb to restrict ‘entire home’ rentals to 90 days in another UK city
Airbnb has offered to restrict the period landlords can rent out their properties in Edinburgh to 90 days a year, copying a similar ban it introduced in London last year following criticism of its business model. In London, from January 2017 any ‘entire home’ listing has been limited automatically by the company’s software to a maximum 90 days total per calendar year. This has now been mooted in Edinburgh by the Californian company in a submission it made to a expert panel set up by the Scottish government due to publish its findings next week. Airbnb: ‘commercial’ lets? Criticisms of the way landlords use Airbnb in Edinburgh echo those made in London; that too many landlords are buying properties with the express purpose of renting them out via the platform. This, says Green MSP Andy Wightman (pictured, left), means Airbnb is being used “as a route to market by commercial operators who see it as a very cheap way of advertising the availability of a flat, which is used 100% of the year for commercial short-term letting,” he told the BBC. Wightman says this is far from its original purpose, which was to enable home owners to make extra cash…
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Tory’s flagship housing policy will not get Britain building again, say MPs
The government’s recently-launched flagship housing policy to get ‘Britain building’ has been heavily criticised by senior MPs today, including members of May’s own party, and also that the Stamp Duty changes for first time buyers will “distort” the property market. The Treasury Select Committee believes both the abolition of Stamp Duty for properties bought by first-time buyers worth up to £300,000, and the easing of the local council borrowing cap to build homes, do not go far enough and will not achieve the 300,00-a-year new homes a year the government thinks it will. The Committee also says the Stamp Duty will create a ‘cliff edge’ at the £500,000 price point because the new rules enable the duty to be avoided by first time buyers on properties up to that value, although only on the first £300,000. “A house worth £500,000 will attract £5,000 less in SDLT than a house worth £500,001,” the Committee report says. Housing cliff edge “When the previous Government redesigned [Stamp Duty] to remove ‘cliff edges’ faced at certain property values, the then Chancellor said that he had reformed a ‘badly designed system that has distorted our housing market for decades’. “It is regrettable that the abolition…
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Savills says its UK estate agency branches enjoyed strong finish to 2017 despite “uncertainty”
Savills says its UK residential arm helped grow its group revenue during 2017 “ahead of our previous expectations” as it prepares to publish its full-year results in March. The company’s statement to the stock exchange early this morning reveals that it experienced a stronger than expected finish to the year helped both by its resilient UK residential business but also its presence in several expanding commercial property markets overseas. These include Hong Kong, China, Australia, Japan, Ireland, Spain and the Netherlands, the company says. These countries performed better than Savills had expected and helped offset a wobble in the US office market which has been impacted by reduced government spending, and the recent cost of setting up Savills’ Capital Markets operation in New York. It is now part of its wider global property investment advice and brokerage team. Savills says it helped commercial clients buy and sell property assets worth €5.5 billion last year and launched several property funds. 2018 worries But the company’s now largely global business may be not so rosy next year. Savills says that “in the current year, against the backdrop of heightened uncertainty over global economic prospects, geopolitical risks and rising interest rates, we expect…
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Landlord exodus revealed as stock of London rental properties drops by 21%
The stock of rental properties within the private sector dropped last year by 4% across the UK and by 21% in London, helping push the average rent for a property to £960 a month, and without London to £768, it has been revealed. The East of England also saw a double digit (-15%) reduction in the number of rental homes. Five other areas also witnessed a shrinking stock of rental properties includes Scotland, the SW, Yorkshire and the Humber, East Midlands and the NW. But stocks in four rental markets are still expanding including Wales (+13%), the West Midlands (+12%) the NE (+6%) and the SE (+5%). Countrywide’s monthly rental index reveals that the ratio of homes bought by landlords during 2017 as a percentage of the total market dropped to 12.5%, a nine year low, and lower than during 2016 (14.7%) and 2015 (16.3%). Increasing rents This reduction in the stock of privately rented homes, set against a trend of increasing numbers of tenants, is helping push up rents, Countrywide says. Rental increases have jumped by a third from 1.8% in 2016 to 2.4% during 2017. The figures also reveal that forty-six per cent of landlords increased the rent…
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New Year property market gets off to a roaring start, claims Rightmove
The first weeks of the New Year property market have begun well with increased numbers of buyers looking for homes and asking prices rising, says Rightmove. Its monthly snapshot of the property market reveals that the number of visits to its online listings of sales properties is up 9% so far this month compared to last year. Also, asking prices for newly-listed homes are up 0.7% compared to last year. But Rightmove warns that, despite the rise in interest during the New Year, buyers are extremely wary on price, and that the number of sales agreed during the final three months of last year was down by 5.5% compared to the same period the year before. Rightmove also hints that while in more normal times the current stretched buyer affordability and uncertain political outlook might have seen prices tumbling, a surge in first time buyers following the recent Stamp Duty reductions, plus a lack of supply in the market, is instead pushing prices up. “Considering some of the gales that buffeted the market in the latter part of 2017, these early readings for 2018 show that there is currently a good following wind of search activity,” says Rightmove Director Miles…
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