Housing Market
News covering issues affecting the UK residential property market, house prices, interest rates and buying and selling trends.
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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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Rents rise and stock shrinks as landlords sell up
ARLA Propertymark (Association of Residential Letting Agents) has just published its March Private Rented Sector (PRS) Report and with rising rents and increasing sales, it’s not all good news. In March, agents reported a rise in the number of landlords selling their buy-to-let (BTL) properties, with an average of four selling up per branch, compared to three in February. The last time the number of landlords selling their BTL rose above three per branch was in November last year, when the letting agent fees ban was announced. Rising rents are also a concern. The number of tenants negotiating rent reductions rose month on month in March – in February, 2.2 per cent of agents witnessed successful rent reductions, whereas in March, 3.6 per cent reported this happening. On the other hand, a quarter (25 per cent) of letting agents saw landlords increasing rents in March – a figure which has not changed since January. Year on year, this is down by seven percentage points. In March 2016 almost a third (32 per cent) of agents were seeing rent increases. Rental stock levels steady but demand rises The number of properties managed per member branch remained the same as the previous month, with…
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Millennials on the move as housing market shifts
Millennials, (that’s anyone aged between 25 and 34, born between the mid-1980s to the mid-1990s, according to the Government), make up 13.9 per cent of the total of the UK population and we hear a great deal about the challenges they face in terms of housing. Now, a new briefing paper from the House of Commons measures the demographic components of the ‘Millennials’ group, providing some interesting statistics around their wealth, work and housing, compared to that of older generations. Twenty years ago, households led by people aged 25-35 were more likely to own than rent. In 1996 the trend was almost the reverse as it is today, with 55 per cent of households led by a 25-29 year old person and 68 per cent of those led by 30-34 year olds were owner occupiers. Now 55 per cent of millennials are renting. City living Millennials like city living – 20 per cent of this age group live in London, compared to 14 per cent of the UK as a whole. Their favourite haunts are Battersea (32%), Vauxhall (31%) and Bethnal Green and Bow (30%). Clearly Millennials aren’t too keen on the South West, Wales and the South East, with each area…
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Spring bounce for the housing market says Rightmove
Positive noises coming from Rightmove’s latest report: a 1.1% (+£3,547) rise has pushed the national average to £313,655, exceeding the previous high of £310,471 set in June 2016. This has been driven by strong buyer demand, with the highest number of sales agreed at this time of year since 2007, before the credit crunch. While the run-up to an election creates a degree of uncertainty and often a pause in activity, this strong set of figures should help mitigate pre-election jitters. Miles Shipside, Rightmove Director, said, “High buyer demand in most parts of the country has helped to propel the price of newly marketed property to record highs. There are signs of a strong spring market with the number of sales agreed achieved at this time of year being the highest since 2007. It remains to be seen what effect the run-up to the snap election will have, though any slowdown in activity will be counter-balanced by the market’s current fast pace. Indeed, in locations where choice of suitable property is limited, hesitation could mean losing out to others who still decide to act.” “Increasingly stretched buyer affordability will continue to be a price moderator for sellers who are over-ambitious with their…
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New world prefabs could solve our housing crisis
New world prefabs could solve our housing crisis, say the experts – and we’re not talking about the future – we’re ahead of the game in the UK. Europe’s tallest modular (formerly known as prefabs) tower is now complete – and it’s in north London. The 29-storey structure is a student accommodation scheme developed by Tide Construction and Vision Modular Systems with 679 modules that will be ready for students to move into in September. The development will also include communal facilities, such as a cinema and a courtyard. The total build time was just 12 months, with the modules stacked up in just 13 weeks to the height of 90 metres. Designed by architects HTA Design LLP, the building has a BREAAM rating of Excellent. Apex House will be the fourth modular scheme that Tide Construction and Vision Modular Systems have completed in Wembley. Christy Hayes, CEO at Tide Construction, said, “We are delighted that both the Housing Minister Gavin Barwell and London Mayor Sadiq Khan have made off-site construction a priority in the capital to help ease the strain on London’s housing supply. Modular construction provides a much faster alternative to traditional construction without compromising on the quality of the building, or…
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Will the snap 2017 General Election slow the Spring property market?
Will the property market now face a six-week close-down as movers wait to find out what happens after the 2017 General Election called today by the Prime Minister, Theresa May? On previous form, it might. The market had to wait for the 2015 General Election called by the doomed David Cameron and the ensuing EU Referendum last year, both of which sucked precious weeks and months from those years’ crucial Spring – and normally busy – property buying peaks. This time around been a mixed reaction from the property and lending industries. The Yorkshire Building Society was first out of the blocks following the announcement this morning by Mrs May. Its economist Andrew McPhillips (left) said: ““The housing market is going through a sluggish period at present and a general election adds to the chances of it lasting longer. “Home buyers who are well on the way to making a purchase have traditionally not been put off by such surprise macro-events but those only thinking about it may decide to pause.” North London agent Jeremy Leaf (right) says: “The period of indecision starts from now until the election and thankfully it is relatively short. Inevitably, a lot of decision-making will be put…
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NLA questions Right to Rent scheme
The Right To Rent immigration control scheme introduced by the government in England last February is not having the “desired effect”, the National Landlords Association says. The comments come from its head of policy Chris Norris in reaction to figures released today showing that one landlord is being fined every four days under the Right to Rent rules. Sixty-two landlords received penalties under the scheme during its first eight months of operation from February to September last year, the figures show. Fines totalling £37,000 were handed out, or £596 on average per landlord, although fines in theory can reach £3,000 for the most serious cases. Out of the 62 cases 36 were for lodgers in private houses and 26 were handed to landlords of private rented accommodation. The figures were obtained by the Press Association through a Freedom of Information request. Chris Norris, head of policy at the National Landlords Association (pictured, left), says he believes that most of the landlords involved are accidentally breaking the immigration rules rather than knowingly doing it. He also said that “ultimately this scheme should be judged on whether it tackles or prevents those who knowingly ignore the law and let to people who…
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RICS says supply to England’s sales market continues to “wane”
RICS has reported an ailing sales market within its latest survey of agent sentiment, which each month is carried out among its members across UK. In an unusually forthright report, the figures for March have prompted it to use strong language to describe the UK sales market, including “stagnant” and “waning interest”. RICS reveals that new buyer enquiries and sales remained flat and stock levels hit a new record low “as the number of properties coming on to the market continues to decline”, the report says. “The key theme that really runs through the whole of this survey is the lack of supply in the market,” says Simon Rubinsohn, RICS Chief Economist (picture, left) “Our key measures – average stock per surveyor – has actually hit a new low, and this explains why house prices on balance remain in modestly positive territory. For the time being it is hard to see any major impetus for change in the market, something also being reflected in the flat trend in transaction levels.” RICS says new instruction dropped during March with 13% more respondents experiencing a drop in new listings, and agents now hold 43 properties for sale on their books, on average.…
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Over half of tenants CHOOSE to rent, says survey
If you are annoyed by the constant government narrative that all those who rent are unhappy, failed home owners denied the delights of bricks and mortar by high house prices and unhelpful lenders, then research by London agent Benham & Reeves Residential Lettings should cheer you up. It interviewed 1,400 of its tenants in the capital, where it has four branches in North London, to ask them about why they rented – part of the largest survey of its customer base that the company has ever completed. Diverse mix London’s very diverse mix of tenant nationalities was revealed. Some 18% of the respondents were non-British residents working for a relatively short period in the capital – and therefore less likely to buy in London. Only 3.66% of those in the survey were renting because they had been turned down for a mortgage because they did not earn enough, while 5.76% had been turned down because their deposit was not large enough. Some 17.8% of those in the survey said they were saving up a deposit to buy a property. But over half of tenants in the survey classed themselves as ‘lifestyle’ renters with 24% saying they chose to rent because it…
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