Housing Market
News covering issues affecting the UK residential property market, house prices, interest rates and buying and selling trends.
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Spring Budget 2017: stunned industry wonders where the property went
Chancellor of the Exchequer Philip Hammond delivered a Spring Budget 2017 totally devoid of any help for the UK’s struggling housing market. It also failed to lessen or backtrack on recent Stamp Duty hikes for landlords or the lettings fees ban. The only palpable good news for agents includes a mooted extra tax for digital-only businesses to level the playing fields with their high-street competitors – something for agents facing competition from online-only and hybrid ones. Corporation tax Other business benefits within the budget include a reduction of corporation tax from 19% to 17% by 2020 and that businesses with turnovers below the VAT threshold will be given a year’s grace before having to start quarterly digital reporting. Business rates But for the industry’s 20,000 branches, a much-hoped-for reform of the business rates system did not materialise as major hikes loom for many high-street operators. Instead, and in order to see off a potential Tory rebellion, the Chancellor announced a fighting fund of £435m to help soften the blow. This will include a £300m discretionary fund to be shared out by councils to businesses least able to take the rates hit. Hammond also pledged that no business losing its small…
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Hybrid agent ‘concept’ for build-to-rent sector is launched
More proof that the build-to-rent sector is establishing a significant foothold in the UK property market has come today with the launch of what is claimed to be new kind of hybrid property company. Two London-based firms, specialist block management company James Andrew Residential and new-build property management and lettings outfit LiFE Residential, have combined their expertise to create The PRS Partnership to manage one-owner apartment blocks. The two firms say their new partnership is the first to be created specifically to offer a one-stop-shop service for this market. Both companies say they already have 6,000 properties under management between them in the capital. Although The PRS Partnership claims it a new kind of company, several of the larger agents including Savills and CBRE offer block management services. Also, several specialist property management companies such as Trinity, which until now have managed estates for house builders and management companies, are active in this market. According to build-to-rent consultant Dustin Fjeld (pictured, left), there is a growing market for these kinds of companies. This is because he says, some of the larger US build-to-rent operators are already in the UK managing their own apartment blocks. “One company running these blocks will become a requirement for…
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‘There will not be a segment of short-term rentals that Airbnb does not wish to dominate’
The threat that Airbnb presents to agents is laid bare by recently comments by a senior figure within the company, as well as research carried out exclusively for The Negotiator within the London market. This shows that the dot com is not only beginning to eat up the general short lets market in London and remove many properties from the traditional private rented sector, but that many high-end property owners are also utilising it to increase their returns too. The research by Airdna reveals that there is a significant number of central London properties that are generating huge incomes for their owners, properties that can hardly be described as bedroom rents or sofa surfing. This includes a six-bedroom property in Mayfair that over the past 12 months has earned £97,600 for its host, a Swiss Cottage garden flat that has earned £69,800 and a Westminster duplex that has generated £67,100. Some property owners are also renting out entire apartment blocks. One property in Shoreditch, a nine-apartment block, has generated £212,670 for its owner via Airbnb over the past year, according to Airdna. “Entering the high end of the market lays out the statement that Airbnb has gone far beyond its air…
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House buyers rejoin the market, but where are the properties for sale?
The number of house buyers increased significantly during January, the latest data from NAEA Propertymark has revealed. It says that while property supply remains at its lowest since July last year, the number of buyers increased by 10% compared to the month before, although the number of first time buyers decreased. “January saw a surge in buyers looking to kick off the New Year with a new home – but competition is rife with an average of 11 buyers chasing each property,” says Mark Hayward, Chief Executive of NAEA Propertymark (pictured, left). This increase in the number of home movers looking to buy has not fed through to sales yet; the number agreed per branch rose by just one to eight, on average. The significant imbalance between supply and demand – 425 prospective buyers per branch versus 38 properties for sale – drove up agreed prices and seven percent sold for more than their asking price, the highest level since April last year. “The increase in the number of properties selling for more than asking price in January could be a result of heightened interest and the fact there is simply not enough housing to meet demand,” says Mark. “When the…
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Hobbit house, barge, chapel, what’s your dream?
A quarter of British people dream of living in a hobbit house. Truly, they do. A further 10 per cent would like to sail away to live on a converted boat, a canal boat or a floating house and, holy smoke, 26 per cent pray for a converted chapel, in which to rest. However, once they have realised how expensive/problematic/silly their dream is, most British buyers settle down and moderate their dreams. The most coveted feature of a modern home, reports the interiors retailer Curtains.com, is a country kitchen – a surprisingly high 54 per cent of women covet the cosy look. That country kitchen would, ideally, be in a traditional thatched cottage (32 per cent) and when it comes to the decor, most are in favour of traditional features and period character. And, of course, it follows that over 50 per cent of us fantasise about that cottage being set in a decent sized garden in a quiet rural setting. SIZE MATTERS, APPARENTLY More than half of Brits would rather live in a small home (if not an actual hobbit house) in a premium location as opposed to a home with more square footage in a cheaper area. When…
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Mortgage lending recovery lead by first-time buyers, says CML
Last month mortgage lending reached £18.9 billion, 6% lower than December but 2% more than last January, says the Council of Mortgage Lenders (CML) The CML also says last month’s total was the highest for a January since the pre-financial crash peak in 2008. The number of loans approved has also been increasing since last summer’s Brexit-induced quiet property market, and the CML now says it expect to see 71,000 mortgages approved every month, 10,000 a month more than the period following the EU Referendum. But the CML’s senior economist Mohammad Jamei says the figures mask a twin-track market. “Weakness in buy-to-let and home movers have been offset by an increase in first-time buyers and remortgage lending,” he says. The CML says this trend shouldn’t be a surprise because most government schemes have been aimed at helping boost first-time buyer numbers and that, as a result, there were 360,000 first time buyers during 2016, up 8% on 2015. “A continuing acute shortage of homes being offered for sale is one aspect of a broken housing market, that looks unlikely to resolve in the near term,” says Jamei. Jeremy Dunscombe from the Legal & General Mortgage Club, says: “The start of…
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Conveyancing volumes at highest since financial crisis
Last year conveyancing volumes hit their highest point since the financial crash of 2007/8, an industry market tracker has revealed. Search Acumen, which uses Land Registry data to examine competitive pressures among conveyancers, says the number of properties sold exceeded a million during 2016, up from a low point of 650,000 in 2009, although the market has yet to regain its pre-crash highs of 1.3 million. The number of conveyancing firms is also increasing, says Search Acumen’s Conveyancing Tracker, rising by 4% to 5,357 firms, breaking a five-year long run of decline. Since 2007 approximately a quarter of conveyancing firms have exited the industry, the Search Acumen data shows. “The number of firms operating in the market might have decreased [but] conveyancers are becoming more productive and are adapting to the challenges in the market to meet the increasing demand for property,” says Mark Riddick, chairman of Search Acumen (pictured). Riddick says the industry’s improved performance came despite a “testing year for the conveyancer” that has included changes to Stamp Duty, the EU referendum and, before that in 2014, the Mortgage Market Review. “The sector very much adopted a ‘business as usual’ attitude, disallowing the multitue of obstacles from the…
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Which? says over-pricing costs vendors £4.3bn a year
Consumer champion organisation Which? has launched a scathing report on sales agents that will make painful and probably infuriating reading for many. Its research found that of the 370,000 property sales it looked at between October 2105 and September 2016, one in five had been heavily reduced in price between asking and final agreed price, and that the optimistically-valued properties sold more slowly and for less. More controversially, Which? says online-only and hybrid agents sold more homes that hadn’t been reduced in price compared to traditional agents. Also, Which? says its data suggests overvalued properties take 64 days longer to sell than the rest, and that properties that start out over-priced don’t generally later achieve a higher one than an ‘uninflated’ one. The best-performing agents across the UK for selling above the asking price are also revealed, as are those Which? says are the ‘worst’. In London these include Fine & Country, James Pendleton, EasyProperty, Camerons Stiff & Co, Watson Bull & Porter, Faron Sutaria, Chestertons and Marsh & Parsons. Outside London it includes Redferns in the SW, Nick Tart in the West Midlands, Boxall Brown & Jones in the East Midlands, Aldreds in the East of England, Whitegates in…
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Home repossessions at 35 year low
Home repossessions by banks dropped by almost 25% last year the Council of Mortgage Lenders (CML) has revealed. During 2016 some 7,700 homes home were taken back by banks, down from 10,200 in 2015, the lowest number since 1982. The CML also says that mortgage arrears were down last year by 7% and that it is part of a long-term trend (see graph). Repossessions peaked in early 2009 following the financial crisis at approximately 50,000 a year then began a prolonged year-on-year decline as the economy recovered, with some of the largest reductions over the past two years. “It is encouraging to see another improvement in arrears and possessions during a year in which borrowers were clearly helped by the downward trend in mortgage rates,” says Paul Smee (pictured, left), director general of the CML. “But customers do need to be ready for a time when the outlook may not be so benign, with pressure on real incomes increasing and as interest rates begin to move upwards again. “Lenders remain committed to helping borrowers work through any period of temporary payment difficulty and remain in their home wherever possible.” The number of buy-to-let mortgage arrears during 2016 also fell, by 11% compared to the year before,…
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RICS property market survey reveals weak January
The sales market remained quiet with both enquiries and transactions little changed at the start of year during what is usually a busy period, while the rental market faces a lack of supply as landlords exit the market, says the Royal Institute of Chartered Surveyors (RICS) property market survey. Only five percent of its members reported an increase in demand for properties for sale, which is the weakest since last August, and the supply of fresh properties to the market reduced, RICS says. Supply has been weakening over the past consecutive 11 months now and many of RICS’ agent members’ stocks are reaching historic lows. Despite the worrying news, RICS says its agent members’ outlook was growing more positive about a bounce back as the year progresses, particularly in Scotland and Northern Ireland. RICS also says prices have been rising across the UK except in London, where they have been in ‘negative territory’ now for nearly a year. In the rental market, the government’s unremittingly hostile measures are taking their toll and RICS says the flow of new landlord instructions ‘failed to improve’ for a fourth consecutive quarter. RICS also says the imbalance between lowering supply and increasing demand for…
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