Housing Market
News covering issues affecting the UK residential property market, house prices, interest rates and buying and selling trends.
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250,000 give up on home ownership
250,000 non-homeowners have given up on the dream of owning their own property in the past year alone, says the 2017 Homeowners Survey.
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11 home buyers chasing every property for sale, says leading agent
Estate agent haart says the current shortage of stock in the housing market is so severe that 11 home buyers are chasing each property across its branch network. “There are simply not enough homes to meet this strong demand,” says haart CEO Paul Smith (pictured, below). His comments follow research done by haart among 2,000 homeowners which reveal that Brexit has so far not damaged the property market. Home buyers Haart’s research found that 75% of those it quizzed said Brexit had not impacted at all their decision whether to sell or buy a home recently. 16% said they were worried by Brexit but felt it would not affect their decision to move, while 3.2% were initially worried but then decided to go for it. But only a tiny number are holding off before moving – 2.7% of vendors and 1.7% of home buyers. “Nearly a year on from the UK’s vote to leave the EU, the UK property market remains sound,” says haart CEO Paul Smith. “House prices are up 5.6% on the year, a world away from the 10-18% drop that the former Chancellor was plugging to middle Britain, and clearly consumer sentiment is that the ongoing negotiations…
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London borough cracks down on short-term lets via Airbnb
Renting out a property via Airbnb has become a useful source of income for tens of thousands of landlords in London, and several agents including Portico have branched out to service this new short term lets management market. But one London borough is striking back after experiencing a deluge of Airbnb listings by its leaseholders and tenants. Southwark has revealed that it saw a 139% increase in the number of homes rented via Airbnb since the Deregulation Act 2015 loosened the rules for short-term lets of up to 90 days. Before the new regulations were introduced, leaseholders in London had to seek planning permission before being able to rent their properties out via home ‘sharing’ websites such as Airbnb. Now, Southwark says it is to clamp down on its leaseholders and tenants who advertise their properties on Airbnb. Beach of conditions Leaflets are being sent to both groups to remind them that “renting out their homes on any short-term holiday let website breaches the conditions of their lease and could result in legal action”, it says. People who have purcahsed properties from Southwark via Right to Buy are being reminded that their leaseholds stipulate that their homes should not be “used…
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Sales agreed rise to highest levels in three years, says Rightmove
Rightmove says the number of sales agreed in the UK rose by 7% last month compared to a year ago, making it the busiest May since 2014 and the second busiest over the past decade. But it’s a headline figure that hides wide variations in performance from region to region. Although Rightmove paints an upbeat assessment of the market including rising numbers of home sold in all regions, it says that sales agreed in the north increased the most at 11% compared to 3% in the south. Rightmove’s sales agreed figures make no mention of London, which many agents have said is experiencing a significant slowdown so far this year. This includes Savills, which recently described the capital as “falling back to 2015 levels”. But Rightmove does hint at what’s going on in London and its commuter towns. It says prices in London dropped by 2.4% during May, and 0.9% in the South East. Central London prices fared the worst – for example Kingston upon Thames house prices dipped by 6.7% , City of Westminster by 4.4% and Islington by 6%. “London and its commuter belt are proving to be a drag on the national figures, but are currently counter-balanced…
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Property sales market shines north of the border as London struggles
Do you run or work for an agency in the North? Then you may be heartened by the latest property sales figures from Your Move and Reeds Rains. They show that, while London and the South East are facing an alarming and continuing slump in sales, the north is proving much more resilient. The number of transactions in the North increased by 10% over the past three months (February to April) and increased by 6% in the North West, 7% in Yorkshire and Humberside, 6% in the West Midlands and 13% in Wales. In contrast, the two companies say, transactions in London have plummeted by 19% over the past three months in Greater London, and 7% in the South East. West Midlands property sales The figures also underpin what developers have known for some time – that Birmingham and the West Midlands are the property hotspots of the UK at the moment. Not only are transaction increasing, but house prices in the region are up 5.1% so far this year, while neighbour Shropshire has seen prices increase by 7.1% over the same period. “The market remains resilient and there’s encouraging activity in the North, but we need to urgently address…
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Build-to-Rent investment set to triple by 2021
Nearly a quarter of all the UK population will be living in rented accommodation in just five years’ time according to Knight Frank, driven largely by a huge expansion in build-to-rent (BTR). Investment by the City in BTR is set to rise to £70 billion by 2021, the report reckons, up from the current £25 billion. Some 65% of this money is being and will be spent in London, Knight Frank discovered after interviewing the key 26 investors in BTR. “The strength of the UK PRS sector has grown demonstrably in recent years. As consumer demand for affordable, flexible accommodation continues to rise, PRS is firmly establishing itself as a key opportunity for institutional grade investment, due to its long-term potential,” James Mannix, Head of Residential Capital Markets at Knight Frank Knight Frank’s report also reveals that 68% of renters expect to be renting in three years’ time rather than moving on to the property ladder, helping increase the number of private renters to 5.79 million. Current trends Other trends driving this, it says, include the costs of Stamp Duty when buying a property, the needs of young professions to be more mobile as they move around the UK with…
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L&G lays into agents as its first build-to-rent development opens
Legal and General (L&G) has opened its first build-to-rent (BTR) scheme in the UK at a site overlooking the River Irwell in Salford, Manchester (pictured, right) where tenants will pay no moving in fees and a significantly-reduced deposit compared to traditional lets. The insurer, which is one of the UK’s best-known financial firms, set itself directly in competition with traditional letting agents and property managers at the launch. “For too long renters have found themselves at the mercy of expensive moving fees, unresponsive managers, and private landlords who often want to minimise upkeep costs and maximise rents,” says Dan Batterton, BTR Fund Manager at LGIM Real Assets (pictured, left). The Salford BTR development, called the Slate Yard, officially opened today and the first tenants are due to move in later this week, where L&G claims they will enjoy a lifestyle that many home owners would struggle to achieve. Build-to-rent As well as a fee-free move into the property and a low deposit, the building is served by a 24-7 on-site maintenance and management team, has free WIFI and free membership of a car club. L&G says these benefits will save tenants approximately £150 a month. Electricity and heating for the building…
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Rents drop across the UK as government measures hit landlords
Rents are tumbling across many parts of the UK according to the latest rental index from referencing firm HomeLet, whose Chief Executive has questioned the wisdom of recent government measures to reduce landlord appetite for investment. HomeLet says rents fell in the UK by 0.3% last month, the first time this has happened since late 2009 and that rents in London have dropped by 3% over the past year from £1,572 a month last July to £1,502 a month in May. “May 2017 saw average rents nationally fall for the first time in eight years when the economy had suffered the shock of the financial crisis,” says Martin Totty, Chief Executive of HomeLet (pictured, left). “[Our] rental data suggests landlords are now facing a difficult balancing act between ensuring rents are affordable for tenants in a low real wage growth environment whilst covering their own rising costs. “Tenants will still need a vibrant and growing rented sector to provide them with property options at the time of their choosing. “Any constraint to the supply of rental properties, because landlords are unable to achieve the reasonable returns they require, cannot be in the long term best interests of tenants, especially if,…
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Mandatory three-year tenancies questioned by leading lettings agent
The UK’s largest lettings agency Belvoir has set itself against all the mainstream political party manifestos and the Association of Residential Letting Agents (ARLA) by questioning the need for mandatory three-year tenancies. The Conservative Party seeks to “encourage landlords to offer longer tenancies as standard” while Labour goes much further, saying it will “make three-year tenancies the norm with an inflation cap on rent rises”. The Liberal Democrats advocate “longer tenancies of three years or more with an inflation-linked annual rent increase built in to give tenants security”. But Belvoir’s latest lettings index shows that 43% of tenants who rent through its branches stay for between 13-18 months, 29% for between 19-24 months and only 18.2% for more than two years. ‘Question the need’ “Looking at the manifestos of all political parties it would seem that all are looking to introduce three-year mandatory tenancy agreements although [our] figures question the need for this as our tenants can already rent with confidence, and most opt to leave when they wish to do so,” Belvoir says. But not all landlords agree with Belvoir’s point of view. As we reported last week, one of London’s largest Build to Rent landlords recently scrapped deposits…
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Govt lettings squeeze drives up rents as landlords exit
The number of properties available to rent has fallen and prices are rising as the government’s recent Stamp Duty and tax allowance changes take their toll on the the lettings market, says franchise giant Belvoir. “Belvoir’s Q1 rental index, which is prepared for us by property expert Kate Faulkner, has identified some interesting trends, which we believe are a direct result of recent changes to BTL legislation,” says Belvoir’s Chief Operating Officer, Dorian Gonsalves. This includes that the number of landlords bringing between six and ten properties to the market has declined while the number of landlords bringing up to three properties to market remained static. Dorian says the reasons for this include additional Stamp Duty for buy-to-let property buyers and the radical changes to the way mortgage interest tax relief is calculated, which has reduced or cancelled out profits for many landlords. Lettings To counter these measures, Belvoir says, landlords are seeking the highest rental prices for their properties and driving up rents across the UK which have risen year-on-year by 5.75%. “Since 2008 [when Belvoir began its index] rents have moved broadly in line with wages and large movements over and above +/-5% rarely happen,” says Belvoir’s Chief…
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