Housing Market
News covering issues affecting the UK residential property market, house prices, interest rates and buying and selling trends.
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Housing market needs 2 million new homes now to solve crisis
Former housing minister Grant Shapps has suggested that the time for radical solutions has come if the UK stands any chance of solving the current housing market problems. Shapps, who was housing minister from 2010 to 2012, made the comments during a live section of Friday night’s Channel 4 News that examined the housing market. He suggested that between one and two million new homes need to be built over the next five to ten years. That would mean up to five sizeable garden cities to be built within the countryside, Shapps suggested. “We need to build in areas where there aren’t that many people in the first place, thus reducing the difficult of building,” he said. Housing market Referring to comments on the programme by Matt Thomson (pictured, right), Head of Planning at the Campaign to Protect Rural England that brownfield sites could help make room for new homes and that it “was not necessary to build on the green belt”, Shapps said citing brownfield as the solution to the housing crisis was “conning people”. Shapps also said that even building an extra 200,000 homes a year – which is often cited as the minimum number to help alleviate…
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Central London sales market turning a corner, claims LonRes
LonRes, the London property market fee sharing and data firm, says the capital’s central prime sales market is turning a corner after over three years of dipping transactions and prices. The company’s latest market report shows that the number of sales in Prime central London increased by 3% during the first six months of the year compared to the same period last year. “Withdrawal rates are falling in central London and tentative signs are that prospective buyers and movers are beginning to get itchy feet again,” says Marcus Dixon, Head of Research at Lonres (pictured, left) He also says supply is increasing; the number of properties on the market across all areas of Prime London has risen compared with 2016. But LonRes Managing Director Anthony Payne (pictured, right) says London’s stucco-fronted prime property market still has a long way to go before it returns to the pre-Stamp Duty increases and pre-Brexit ‘normal’, and that many wealthy people looking to live in London are renting at the moment rather than buying. Anthony says a house that rents for £25,000 a week or £1.3 million a year in central London would cost £5,150,000 in Stamp Duty, twice that amount payable before the…
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Tax changes herald arrival of uber renter says London agent
The UK’s looming exit from the EU and the ending of permanent non-dom tax status by the Cameron government in 2015 has created a new phenomenon in the property called the uber tenant, it has been claimed. Not a tenant who uses the mobile app to get around but, says a leading north London agent, the growing number of overseas residents who rent luxury property instead of buying them. Agent Trevor Abrahamsohn of Glentree Estates (pictured, left) says fewer wealthy families are purchasing the sort of £20-£25 million mansions his company deals in and that, instead, they are renting them, often for over £100,000 a month. “With Sterling being greatly devalued and the draconian banking regulations which apply to bringing wealth in to this country, some of our international friends find it easier to rent than to buy, which is markedly pushing up prices,” says Trevor. Amit Soni (pictured, right), who runs Glentree’s rentals business, says this month his average rent for a property on his patch has been £40,000 a week, which he says is “unprecedented both for us and the locality”. “By renting these mansions, they are able to live in the same luxury as if they had…
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Property market is over EU referendum shock, claims Rightmove
Rightmove says the property market has recovered from the shock of the EU Referendum with more sellers coming to market and more people buying than a year ago. Its latest house price index reveals that there were 4.6% more sales agreed last month compared to June 2016, and 7.6% more properties coming to the market. “The half way point of 2017 is a useful time to make a comparison with the previous year and the number of sales being agreed by agents is uncannily within fractions of a percent of the number at the same half-way point of last year,” says Miles Shipside of Rightmove (pictured, left). “This year and last year have had their own shocks and distortions, but these statistics show that the distractions have been short-lived and have now evened themselves out. “While the number of existing owners coming to market this month is up in eight out of ten regions compared to a year ago, giving more fresh choice, it has to be kept in mind that the comparison is against a subdued new listing period in 2016 around the time of the referendum.” Despite the upbeat market data, prices are at a “virtual standstill” across…
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Half of foreign buy-to-let landlords have quit UK
The number of foreigners who own buy-to-let properties in the UK has more than halved over the past seven years, it has been revealed. But despite this dramatic drop, they still earn £5.4 billion a year in rent half of which comes from London properties. Countrywide, which conducted the research, says this decline in the number of overseas landlords is down to both a steady increase in tax on property investors, and stalling capital growth particularly in London. “The growth of the private rented sector since 2010 has not been driven by overseas investors,” says Johnny Morris, Research Director at Countrywide (pictured, left). “As well as having to contend with increased stamp duty and the annual tax on enveloped dwellings (ATED), overseas investors also saw the removal of capital gains tax exemptions in 2015.” Countrywide also says the proportion of UK property owned by overseas landlords has dropped from 12% to 5%, a record low. And in Greater London the reduction has been more dramatic from 26% to 11%, the research says, while in prime Central London the proportion has dropped from nearly a third in 2010 to less than a quarter now. Asians largest group Countrywide says the reduction…
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English Housing Survey: 7 new facts it reveals
The English Housing Survey has just been published and it reveals some fascinating facts about the fast-changing private rented sector. 1. Last year 787,000 tenants moved home within the private rented sector. Of these, 73% said they moved because they wanted while 11% or 86,600 tenants were asked to leave by their landlord – two thirds because the landlord wanted to sell or move back in, and a third presumably for bad behaviour. 2. Despite constant media coverage of rogue landlords and agents, the survey reveals that 71.4% of all tenants were satisfied with the way repairs and maintenance were carried out on their property. But the survey also says 17.7% of tenants were unhappy with how their landlord looked after their property, leaving 9.5% not sure either way. 3. Being a tenant has yet to become as popular as home ownership, either. Just one in five renters or 21% quizzed by the report were satisfied with their status as a private tenant. 4. The research also reveals that the private rented sector is now significantly larger than the social rented one. There are 4.413 million private homes in the UK compared to 3.85 million local authority and social housing ones.…
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Political uncertainty continues to subdue sales, says RICS
The flat sales market is set to continue as the number of properties for sale per branch hits a new low, says the Royal Institution of Chartered Surveyors (RICS). According to its latest UK market report agreed sales, new buyer enquiries and new instructions have all dipped as domestic political uncertainty continues to impact the market. Some 44% of RICS members who were surveyed said this was the reason for the lack of activity in the market, while 27% said Brexit was the most important contributing factor. But London’s much more subdued market than the rest of the UK is blamed in equal measure on both Brexit and the recent Stamp Duty changes by the capital’s agents, RICS says. “Perhaps not surprisingly in the current environment, the term ‘uncertainty’ is featuring more heavily in the feedback we are receiving from professionals working in the sector,” says Simon Rubinsohn, Chief Economist at RICS (pictured, left). “This seems to be exerting itself on transaction levels which are flatlining and may continue to do so for a while particularly given ongoing challenge presented by the low level of stock on the market. Looking ahead across the UK over the medium-term, agent confidence about…
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Government property market track record is “disaster” says agency chief
One of the UK’s leading estate agency CEOs has launched a blistering attack on the government’s handling of the property market since it was elected in June. Haart CEO Paul Smith reckons the number of landlords registering with its branches to buy property is down by almost a third as fewer landlords invest in property. He says that “this could have serious long-term consequences for the rental market and lead to higher rents, putting those who are trying to save for a deposit in an even more difficult position”. His comments follow the most recent overall data from the Council of Mortgage Lenders (CML) which reveals that , although mortgage lending rose in May by 10% year-on-year, the figures “flatter to deceive” says Paul Smee, Head of Mortgages at CML parent organisation UK Finance (pictured, left). “The seasonally-adjusted data shows a less buoyant lending picture, with home buying activity remaining relatively unchanged month-on-month and remortgage lending gradually decreasing each month since January,” he says. Disaster Haart’s Paul Smith (pictured, below) says he also thinks Prime Minister Theresa May’s legacy on home ownership has so far been “a disaster” and that ‘just about managing’ families are further away from owning their…
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Something strange is going on in the rental market
National rental market data often throws up curveballs, but the latest Rightmove index is a weird one, to say the least. Despite industry predictions that the rental market would see landlords withdraw as the government’s mortgage interest tax relief regulations increased many of their personal tax bills, the opposite appears to be taking place, Rightmove says. The number of properties available to rent outside London is up 7% year-on-year, and has increased by 8% in London. Properties are also consequently taking longer to rent, 11% longer year-on-year outside the capital and 15% longer inside it. “Many thought that rental supply would constrict this year, as landlords sold up and looked to invest their money elsewhere, but clearly this isn’t happening yet,” says Rightmove’s Head of Lettings Sam Mitchell (pictured, left). “It could spell good news for tenants coming to the end of their lease as they might find there is slightly more choice than last year.” The private rented sectors is a market defying economic logic, too. Despite taking longer to rent, and more properties available to rent, asking rents continue to rise across the UK, although not in London, Rightmove says. Outside London rents are up by 2.8% between…
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Will three-year tenancies soon become standard?
A second built-to-rent developer in London is now offering tenants three-year tenancies as standard, this time at a development in West London. Be Living, which also trades as Be:here, is the build-to-rent arm of developer Wilmott Dixon and says a “new era is dawning for renters”. The company also operates as a letting agent under its Be:here brand and advertises properties at its build-to-rent developments on Rightmove and Zoopla. It also says that, following extensive consultation with tenants about how they wanted to live their lives and what they wanted, it decided to introduce the new, longer tenancies. Three-year tenancies A survey of its tenants also revealed that 80% said they wanted to stay at the development “for as long as possible”, while separate research by Knight Frank discovered that 68% of tenants in the UK expect to be renting in three years’ time and beyond. The Gatefold development is in Hayes and includes 119 apartments within a former EMI Records vinyl records factory. As well as longer tenancies, some homes within the site are pet friendly and rent increases are fixed in line with inflation. “While renting is a deliberate choice for a growing number of people because of…
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