Housing Market
News covering issues affecting the UK residential property market, house prices, interest rates and buying and selling trends.
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Property market’s surprise revival during Xmas run-up
The number of homes sold in the UK unexpectedly increased by 0.2% during the usually quiet run to Xmas last year, the HMRC has revealed. It tracks all residential property transactions over £40,000 and says 220 additional homes were sold during December compared to the month before. The uptick in activity was felt by many agents across the UK as buyers, frightened off buying or moving as the Brexit aftershock rumbled on, returned to the market late in the year. One Winkworth franchisee on the South Coast even considered cancelling its branch Xmas party to cope with demand. More properties were also sold during 2016 than the year before, up by just under 3% to 1,057,340 despite the substantial reduction in sales following the introduction of extra Stamp Duty on second homes and buy-to-let properties in April last year. “Despite the figures showing a slight monthly rise in the number of homes being bought and sold, the housing market remains overshadowed by our nation’s ongoing supply crisis,” says Stephen Smith of L&G Housing Partnerships (pictured, left). “Two key factors are hindering the housing market from reaching its full potential. The first is the ever-expanding gap between supply and demand, and…
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Tenants not planning to buy
A growing number of tenants are not planning to buy and will probably rent for the long term, with little likelihood of buying a home. As letting agents experience growing demand, will there be enough properties? 38.4 per cent of tenants surveyed by The Deposit Protection Service said that they plan to remain in a rented home rather than buy property, The Deposit Protection Service (The DPS) has said. Most of those who said that they do intend to buy a property said it wouldn’t be likely within the next 12 months. 25.5 per cent said they hoped to own within six months, but 62 per cent said they didn’t expect to within the next year. The 1,000 tenants surveyed have their deposits registered with The DPS. Julian Foster, Managing Director of The DPS, said, “Renting is a vital part of the housing sector, and a significant proportion of the UK population choose to be tenants as it better suits their life plan or lifestyles. “However, buying a house is a significant financial undertaking, and renting will often also suit those who are saving for a deposit before accessing a mortgage. “The UK needs a flexible residential sector that suits the varied life choices and…
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Has the London rental market topped out?
The pressures and costs of living in the capital are persuading many tenants to look elsewhere to live as demand within the London rental market ‘slides’, it has been claimed. According to the National Landlords Association (NLA) the number of landlords in central London reporting a rise in tenant demand has dropped from 45% to 17% compared to January last year. But figures from the Council of Mortgage Lenders also suggest that the reduction in demand among tenants is down to increased number of first time buyers in the market, something that Prime Minister Theresa May put at the heart of her vision for Britain when she came to power last year. The CML’s latest figures show first time buyer mortgage borrowing increased by 9% in November, year-on-year. But London’s rental market problems, coupled to looming tax increases for landlords, are either driving many investors out of the market, or frightening them off new property purchases. The CML say that landlord borrowing has fallen by 10% year on year. The NLA says just 5% of London landlords say they plan to buy further properties this year, down from 15% last year, while outside London confidence is much higher. In the North…
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Landlords turning to HMOs and commercial as extra buy to let taxes loom
Buy-to-let landlords are moving into HMOs and commercial property in a bid to mitigate or avoid the punitive extra buy to let taxes being introduced this April, it has been claimed. Allsop, which is the largest property auction house the UK, told The Daily Telegraph yesterday that it has seen three times the number of buy-to-let landlords entering the commercial property since the new taxes were announced last year by the then chancellor George Osborne. “We’re getting a lot of investors into our market because of the [tax] changes to buy-to-let. Once they have bought one, they can’t believe the simplicity and want to do it again,” George Walker, commercial auction partner at Allsop (pictured, left), told the paper. Landlords are also converting existing single-occupancy buy-to-let properties into HMOs in a bid to increase their income and offset the likely extra taxes, according to bridging loan specialist lender Roma Finance. The company says it funded more conversions cases of this type during 2016 than in any other year. “One landlord we worked with calculated that in one of their properties they could rent out five rooms, vastly increasing income and yield, for just a £30,000 conversion cost,” says Scott Marshall, MD of…
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London rents are falling down says Rightmove
There’s a change in tempo across the private rented sector, says Rightmove, as rents rise in almost every area outside London. Rightmove’s quarterly index shows a new pattern, as London rents have peaked because the tenants simply cannot afford it. The Negotiator received a ‘phone call today from one frustrated home-seeker asking for advice on where she could get a ‘room’ in a shared flat in London for less than £1000 per month. Now, Rightmove’s index shows the facts behind the commentary saying that “Inner London rents fell by 5.2% while there was a smaller drop of 2.5% in Outer London.” All regions except London recorded a rise in asking rents in 2016, with prices up annually by 3.0%, just slightly lower than 2015’s rise of 3.7%. Northern regions led the way as the year ended, with Yorkshire and the Humber up 4.5% and the North West up 4.4%, overtaking the East of England that had been the best performing region until Q4. In London, more available rental stock throughout the year led to a 4.4% annual drop in prices across the capital. Buy-to-let concerns Rightmove’s Head of Lettings Sam Mitchell said, “This year will be one of caution for buy-to-let investors…
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Property market goes into Xmas deep freeze
Latest property market figures from the National Association of Estate Agents (NAEA) reveal how much the government’s recent increased Stamp Duty and other measures to put off landlords plus the post-EU referendum slowdown have taken their toll during the run-up to Christmas. Almost all indicators for house sales in the UK are down, its research shows, including asking prices and the supply of and demand for property. And although this can be blamed on the traditional Xmas slowdown, it’s the most severe since records began. Agents sold fewer properties per branch during November than in previous months, down from nine in September and October to eight properties last month. Also, four out of five properties or 84% sold for less than the asking price during November, the highest proportion since the NAEA began gathering data in 2013. Last year the proportion was 76%. Also, during November the number of house hunters fell by a fifth or 22% from 440 to 344 registered per branch. Supply also fell – the number of properties on agents’ books dropped from 43 to 39. As a proportion of sales, first time buyers have eased off slightly from 32% to 29%. “Following the EU referendum earlier…
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80% of agents say rents will rise after fees ban
Eight out of ten letting agents expect the tenant fees ban to be passed on as increased rents while reduced supply and increased demand will also contribute to upward pressure on rents, says the Association of Residential Letting Agents (ARLA). It canvassed 917 of its members over the past two weeks and found that 53% also expected to see increased competition for rental property during 2017 and 63% said there would be a drop in the number of privately rented properties available within the market. “I manage around a dozen properties for one of my clients and I spoke to her recently about the tenant fees ban,” says Brighton letting agent David Burt. “She made it clear to me that she wasn’t going to pay extra for the referencing or any of the other costs associated with acquiring tenants for her properties that tenants normally pay, so I’m going to have to consider putting up the rent so that my percentage management fee rises instead. Otherwise I’ll be working harder for less money.” ARLA says the recent increase in Stamp Duty for landlords and the reductions in personal tax and capital gains tax allowances are pushing up costs for landlords before…
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Rental market inflation slows
Rents agreed in September were 3 per cent higher than a year ago, New data from the September HomeLet Rental Index reveals, but the pace at which rents are rising is continuing to slow, as landlords strive to ensure that tenancies remain affordable.
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Average size of a deposit rises by £5,000
The average deposit on a property in England and Wales rose by c. £5,000 year-on-year...
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Property sales level out after summer of slump
The number of property sales in the UK increased by one percent between September and October this year, latest figures from the Office of National Statistics show. But compared to October last year, the volume of house sales dropped by 8% across the UK. London is taking the brunt of the slow down. Sales there fell by 39.3% latest figures from August reveal, while in England volumes dropped by 20.3% compared to the year before. This is an improvement on July’s figures, when house sales were down by 28.1% year-on-year. Wales also experienced lower sales volumes, down by 11.6%. The figures reflect other market indicators including lower levels of lending, fewer first time buyers as well as fewer buy-to-let investors around following the April Stamp Duty change. “As a result of Brexit, earlier this year we found one in five [people] were less likely to sell their home. Now, with a lack of willing buyers, there has clearly been a shift from a seller’s market to a buyer’s market,” says Stephen Jury, Spokesperson for Plentific.com. The Royal Institute of Chartered Surveyors says the supply of homes coming on to the market remains tight, which is helping keep house prices buoyant. The October data for…
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