Housing Market
News covering issues affecting the UK residential property market, house prices, interest rates and buying and selling trends.
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General election reduces ALL housing market indicators
Not many agents have thanked Theresa May for holding a general election during the crucial summer months, and now the extent of the damage being caused by the campaigning is laid bare. All the UK’s housing market health indicators fell last month which, according to NAEA Propertymark which compiled the figures, is “most likely down to uncertainty triggered by the snap General Election starting to take effect, as buyers put their plans on hold until the result is clear”, it says. House hunter number fall This includes the number of house-hunters in the market which fell by 4% to 381 per branch, property supply per branch which dropped by 8% to 36 per branch, and the number sales agreed per branch. This fell from ten per branch in March to eight in April. This is the third April in a row during which politics has conspired to dampen down the housing market after last year’s EU Referendum – which had the hardest impact on the market – and, before that, the 2015 General Election. For example, during the EU Referendum the number of house hunters dropped to 325 per branch, 17% lower than the current figure of 381. “Periods of…
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Buy-to-let tax squeeze should be “scrapped” says high profile Tory peer
A former Tory grandee has criticised the government’s recent buy-to-let tax tax squeeze, describing it as “ill conceived”. Former Tory vice-chairman and shadow Vice Secretary to the Treasury Lord Flight (pictured, right) has called for the government to scrap many of the recent taxes on landlords and “provide the support needed to the individuals and small businesses who make up the vast majority of the country’s landlords”. Stifling investment His comments were made on the Conservative Home website over the weekend, in which he also calls for the recent hike in Stamp Duty on buy-to-let purchases and reduction in reliefs to be scrapped because they are “stifling investment, as anyone could have predicted” and catching out “natural Conservative voters”. “The decisions to impose a stamp duty levy on the purchase of homes to rent out, coupled with restricting mortgage interest relief to the basic rate of income tax and the decision to tax a landlord’s turnover rather than profits, are causing many landlords simply not to invest further in much needed new homes to rent; or even to consider leaving the sector altogether,” he says. “The mortgage interest restrictions need to be scrapped, and the stamp duty levy needs also…
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Large London landlord scraps tenant deposits
A London Build to Rent landlord which owns the former Olympic athlete’s village in London is to stop asking for tenant deposits. Get Living London, which is also due to open a site in Glasgow and rents out approximately 1,500 homes at its East Village London site (pictured, right) says its tenants will no longer have to pay any deposit. Tenants can also sign up for a more secure three-year tenancy and already do not have to pay any fees at any point in their tenancy. “Where we have led – with no fees and longer tenancies – others have followed. We hope deposit-free renting becomes the norm,” says Get Living London CEO Neil Young (pictured, left). The company has also scrapped any fees and tenants are able to break their tenancy agreement after six months without penalty. But tenants do pay interest at 4% on any overdue rent and must also pay for the apartment to be cleaned when they move out, its sample contract says. Also, the deposit-free deal is only available to tenants who pass referencing, the cost of which is paid by Get Living London. Get Living London is also to return existing tenant deposits, worth…
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Letting fees ban will be forgotten, says Generation Rent
Campaigning group Generation Rent says it is worried that Theresa May’s manifesto promise of a letting fees ban is likely to be kicked into the long grass by the hung parliament and the pressures of Brexit negotiations. The government’s consultation on the ban closed on 2nd June. Generation Rent says it is concerned that, despite all-party support for a lettings fee ban, is believes the legislation is likely to “fall down the political agenda”. General Election It also says renters were a key reason for the Conservative’s poor performance during Thursday’s General Election. It has looked at the results and concluded that 20 of the 32 seats that the Government lost were areas where there is an above-average proportion of voters who are renters. This includes some of the election’s more high-profile upsets such as Portsmouth South, Reading East, Battersea and Croydon Central, where former housing minister Garvin Barwell’s lost his seat. Barwell didn’t have to worry about getting a job after the election, though, unlike many other Conservative MPs voted out during the election. He is now Theresa May’s new Chief of Staff. “As the Prime Minister prepares her legislative programme, she should bear in mind that most of the…
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Sales agreed, prices and time to sell increasing despite election, says Rightmove
This summer’s election campaign is having a less corrosive effect on sales levels than two years ago when David Cameron made his bid for power, Rightmove has claimed. Its monthly house price index reveals that the number of sales agreed so far this year is 2% higher than during the lead up to the 2015 general election. Rightmove also reckons that the number of days it takes to sell a property is reducing too, down from 79 days in January 2017 to 60 days in April 2017. The reduction is even sharper in London, where in January it took 71 days to sell a home, compared to 53 days in April. Stock levels are rising too, Rightmove says. The number of properties for sale per agent has risen from 52 in January to 57 in April. House prices are also rising, the portal’s index reveals, increasing during April by 1.2% or £3,626 on average, the fifth consecutive rise. All-time high “Whilst all-time high asking prices or economic and political uncertainty could be deterrents to would-be home-buyers, this month shows another strong set of figures,” says Rightmove’s spokesman and director Miles Shipside (pictured, left). “Demand is exceeding supply in many parts of the country…
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Gazumping is back as market grows more competitive, says Sarah Beeny
The lack of stock within the market is leading to an outbreak of bidding wars among buyer for the properties that do come on the market, research has revealed, and that gazumping is on the rise. Online agent Tepilo surveyed 2,000 home buyers and discovered that 23% had been involved in bidding wars, and that 19% had paid over the asking price to secure their preferred home. The-dog-eat dog nature of the market is also evident in the research – which reveals that 86% of those surveyed believe the housing market is competitive and that 16% had been gazumped and 14% lost out to a rival during a bidding war. Buying costs And perhaps predictably given the research is from Tepilo, the results show that 26% of respondents thought the significant costs of buying and selling a home were also “factors that make it competitive”. “This survey reveals the competitive nature of the UK housing market and how it’s affecting buyers, and things will only get more competitive in the more popular places to live until the Government really focuses on this as a priority,” says Tepilo founder and TV presenter Sarah Beeny (pictured). “The lack of new affordable houses…
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Do you know your local average house price? Amber Rudd doesn’t either
Home Secretary Amber Rudd has been caught out by a TV news reporter who asked her what the average house price was in her Hastings & Rye constituency. During an interview with an ITV Meridian news team yesterday afternoon on Southampton docks Rudd was asked if he she knew what the average house price was in her constituency, to which she answered “yes, I do, do you know what it is?” back. The reporter answered that she did and, turning the question back on Rudd asked her to reveal what the local average house price was. Amber Rudd, rather than admit she had no idea, appeared to bluff her way out said it was “certainly a little over £100,000, that’s true” before being told by the reporter that it is £217,983. To which Rudd replied “wow”. Trip-ups Amber Rudd’s is the latest in a series of trip-ups on TV during the general election campaign, including two days ago when Theresa May controversially suggested last year’s problems with the sterling exchange rate had nothing to do with the EU referendum vote, and Labour MP Dianne Abbott’s car crash interview with Nick Ferrari during which she forgot her figures on the cost…
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Conservative Party Manifesto: Theresa’s 12-point plan for property
If the expected Conservative victory on June 8th materialises then what should the property industry look forward to (or not) from a renewed Tory administration? The question was answered comprehensively today after Theresa May launched the Conservative Party manifesto, several pages of which are dedicated to the housing market. In summary, the Tories today promised a 12-point property plan, some details of which was specific, others which were not: 12-point plan Reform and modernise the home buying process so it is more efficient and less costly. Crackdown on unfair practices in leasehold, such as escalating ground rents. Improve protections for those who rent, and look at how to increase security for good tenants and how to encourage landlords to offer longer tenancies as standard. Fix the dysfunctional housing market so that homes are more affordable, and that there are enough homes built to meet demand. Bring the cost of renting of down by securing more homes available to rent – a veiled reference to Build to Rent. Support specifically the building of mansion blocks, mews houses and terraced streets – i.e. high quality but high density housing. Build 160,000 homes on government land. Introduce a £23bn National Productivity Fund which…
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Agents face double whammy of fees ban and belt-tightening landlords, research shows
As the government’s letting fees ban looms, agents face a second squeeze as landlords rein in spending on their properties as their tax bills rise, research has revealed. Landlords spend £3,632 on each of the properties on average every year or a third of the average rental income, according to Kent Reliance Building Society. Of this, £1,025 is spent on maintenance, repairs and servicing, with £870 spent on letting agent fees. But this spending is likely to reduce by nearly 7% this year as ever-rising tax burden on landlords force 36% of them to consider cutting costs, the building society’s research reveals. Letting agent fees It also pinpoints letting agent fees, property maintenance and mortgage costs as the targets for cost cutting by landlords. Kent Reliance reckons landlords currently contribute £15.9bn to the UK economy, a figure that has doubled since 2007. But the lender says that £500m less will be spent each year as landlord rein in their property budgets. Landlords currently spend £5.5bn on property maintenance and upkeep, £2bn on service charges and ground rent, £963m on insurance, £904m on utilities and £1.1bn on miscellaneous costs. Spending on letting fees totals £4.7bn a year and £644m on legal and accountancy…
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Market is feeling cold winds of the general election, research reveals
The looming general election is beginning to affect confidence among home buyers and sellers, research has revealed. The number of people planning to sell their home within the next six months has dropped to 17%, says Zoopla, down from 23% in October last year. Its figures also reveal that a similar drop in the number of people planning to buy a property, down from 25% in October to 17% today. The portal says these drops in confidence are directly attributable to the looming general election called by Theresa May for the 8th June. Homeowners may be reluctant to move home in the current political and tax environment, but 87% of them across the UK are confident about the value of their home and expect house prices to increase over the next six months. According to Zoopla’s Housing Market Sentiment Survey, this is an increase of 4% since its last survey six months ago. General election “Despite a continued period of political uncertainty, it’s encouraging to see a rise in confidence for property price growth,” says Zoopla spokesman Lawrence Hall (pictured, left) “[But] we can’t ignore that there’s been a rise in reluctance to buy and sell properties. With the upcoming general…
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