Canning Town scheme gets green light
The latest phase of a major project to revive part of Canning Town in East London has been given the green light.
Bouygues development arm Linkcity can now proceed with the third and largest phase of its £600 million Hallsville Quarter development. This will include 620 homes, of which 50 are care homes, the first in the borough of Newham.
The development includes large areas of public realm, an NHS health centre, office space and 120,000 sq ft of retail, with this coming together to provide a new centre for the district. The project should be completed in 2023.
Other features of the project include leisure facilities, a hotel, community facilities, 1,148 homes and basement car parking. Phase one included 179 flats and houses and there were 349 residential properties in phase two, including some available on shared ownership basis.
Of particular interest to investors looking to get involved in sites adjacent to the scheme is the connectivity provided by its location next to Canning Town Underground Station, which is on the Jubilee line and includes an interchange with the Docklands Light Railway.
Among the areas of focus by the developer have been the creation of attractive features such as high-quality restaurants in the area. Once a traditionally working class docklands area, the transformation of Canning Town in this manner may be regarded up to a point as gentrification, although the wide mix of housing will mean it still retains a more diverse social character.
Indeed, investors in the capital will be well aware of the progress made in changing large parts of East London. Newham and its neighbour Tower Hamlets saw the two largest percentage increases in population in the decade to 2011, partly as a consequence of the developments around the Olympic Park in Stratford.
The legacy of that event has continued the growth and with east London being seen as the area with the greatest capacity to absorb the bulk of the city's projected population rise to ten million by the 2030s, many more large developments can be expected.
Council takes control of north London property project
A huge redevelopment project in north London is to be managed in its entirety by Enfield Council, after it decided against appointing another development partner.
The Meridian Water scheme will cover 210 acres of land in the River Lea valley, with the waterside developments including 10,000 new homes, extensive workspace designed to help generate thousands of jobs, plus a new railway station that will open next year.
Barratt London had been lined up to be the council's main partner, but, 18 months after being appointed, withdrew last October.
Having considered the alternatives, the local authority is now bringing the management of the scheme in-house.
Commenting on this move, leader of Enfield Council Nesil Caliskan said: "Meridian Water is back on track and the way we are delivering is genuinely new for a local authority.
"Going forward we will be in control and we will be the custodians of the place Meridian Water will become; investing council money and resources to ensure that local people are the principal beneficiaries of the new homes and jobs that will be created."
Although there is no single major partner, different small projects will involve various other construction firms, architects and contractors.
The first phase will be a plot on Willoughby Lane that includes the old National Grid site. Planning permission has been in place since 2016 and this will include 725 new homes, shops, public open spaces and the new Meridian Water station. The station is due to open next year and will provide services to Stratford and Liverpool Street stations in London and northward links to Stansted and Cambridge.
For investors, this may be a sign that local authorities are increasingly determined to push ahead with major projects even if major construction partners have their qualms about getting involved. That may indicate that future opportunities will not just be cherry-picked schemes in prime locations.
Majority of UK's build-to-rent homes now outside capital
The build-to-rent sector was once a very London-centric industry, with an obvious focus on meeting the need for rental accomodation in a crowded city with high property prices through the building of large new developments.
However, the situation has been changing significantly in the last few years, with a number of other major cities seeing the rise of build-to-rent. Manchester and its neighbour Salford have been a key centre for many projects, with the latter being home to the largest private rental scheme development outside the M25, at Clippers Quay.
There have also been plenty more schemes in other cities and indeed in smaller towns, recognising the growth of this market and the need for it all over the country.
As a result, London's dominance of the market has diminished, with the proportion of the overall tally in the capital gradually shrinking. Now, according to the British Property Federation (BPF), it has been overtaken by the regions.
Back in the second quarter of 2017, 55 per cent of build-to-rent homes that were either completed, under construction or in planning were in the capital. In the same period this year, the gap vanished. Indeed, by the slenderest margin of 62,021 to 62,015, the tally of build-to-rent homes was greater outside London.
However marginal the figure, it represents a first and a pivotal moment for the UK property sector.
Commenting on the development, BPF director of real estate policy Ian Fletcher said: "This is a significant landmark moment for build-to-rent, with the sector’s total number of homes across the UK’s regions overtaking London’s total for the first time ever.
"Clearly, recognition of build-to-rent’s potential to deliver much-needed new, high-quality rental homes is gathering momentum across the country."
Notably, the figure did not come about as a result of any fall in London output, which was up from 54,702 a year earlier.
The overall number of build-to-rent properties is likely to continue rising, said Mr Fletcher, pointing to a recent review by former government minister Sir Oliver Letwin showing that build-to-rent is capable of delivering homes on a large scale faster than building for sale.
That is the kind of factor that will influence decision makers keen to see the number of homes of all kinds being built in greater numbers, with overall targets now pushed towards 250,000 a year, with future plans to reach 300,000 per annum in the next decade.
Notably, the BPF recently surveyed MPs and found 75 per cent of them back the build-to-rent sector's role in expanding housing provision.
With such momentum, the investment potential of this sector is set to carry on growing all over Britain. But for those wanting to focus on London, the good news is that the sector still expanding in the capital as well.
This should reassure investors that, despite all the warnings about the potential impact of Brexit and the wider slowdown in the property market in the metropolitan area, this particular sector is continuing to boom. It may no longer be London-centric, but it is still very much on the up.
Halifax points to positive factors for housing market
There are a number of positive factors suggesting strong performance for the UK housing market during the remainder of 2018, according to Halifax.
The bank's latest house price figures, covering the three months to June, showed 1.8 per cent growth compared with the same period a year earlier. This figure was slightly below the 1.9 per cent increase recorded in May.
During the April to June quarter, UK house prices were 0.7 per cent lower than in the January to March period, but this was attributed to 'monthly volatility' in the data.
On a monthly basis, property prices increased by 0.3 per cent in June, reaching an average of £225,654.
While recent trends in the housing market have been relatively flat, Halifax pointed out that there is cause for optimism where future performance is concerned.
Russell Galley, managing director of the bank, said: "At the halfway stage of the year the annual rate is within our forecast range of 0-3 per cent for 2018.
"We continue to see very positive factors of low mortgage rates, great affordability levels and a robust labour market. The continuing shortage of properties for sale should also continue to support price growth."
In research released earlier this year, Halifax highlighted how big an impact property values can have on owners' financial situations. Figures showed that 18 per cent of UK local areas have seen average house prices increase at a quicker rate than average pay in the past two years.
In the London borough of Barnet, homeowners 'earned' £52,000 more from growth in the value of their property than their regular pay over the surveyed time period.
However, the findings also showed that the proportion of areas where house prices are outpacing earnings growth fell from 31 per cent in 2016 to 18 per cent in 2017.
Govt announces construction deal to boost delivery of new homes
A joint deal between the government and various industries is hoped to "transform" the development of domestic properties and buildings through the use of innovative technologies.
The project, which was announced by business and energy secretary Greg Clark in a speech to the Northern Powerhouse Summit in Newcastle, will boost efforts to meet the government's target of delivering 1.5 million new homes by 2022.
Bringing together the construction, manufacturing, energy and digital sectors, the initiative will focus on new approaches that drive productivity in housing development and enable greater energy efficiency and affordability in the property market.
Digital design and offsite manufacturing are two of the key concepts at the heart of the so-called 'bytes and mortar revolution'.
One of its key objectives is to support the industrial strategy goal to halve the energy use of new builds by 2020 - consequently delivering lower energy bills for families and businesses.
Mr Clark pointed out that buildings account for approximately 30 per cent of all emissions, adding that the government wants to put the UK "at the global forefront in designing and building smart, energy efficient and affordable homes and buildings through the Clean Growth Grand Challenge, saving families money on their bills".
He added: "This sector deal is supported by the biggest government investment in construction for at least a decade and will drive economic growth and create well-paid, highly-skilled jobs in every part of the UK."
Some £420 million will be invested in the partnership, which could reduce the time taken to deliver new builds by 50 per cent.
According to recent research from the Home Builders Federation, new-build properties are proving increasingly appealing to first-time buyers, partly because of their energy efficiency, lower running costs and the benefits of the government's Help to Buy scheme.
UK construction growth reaches 7-month high
The UK construction industry had a very strong month in June, with growth reaching a seven-month high, according to the latest Construction Purchasing Managers' Index (PMI) from IHS Markit and the Chartered Institute of Procurement and Supply (CIPS). This is good news for a sector that was hampered by snowfall earlier in the year, which slowed down productivity.
The Construction PMI posted a score of 53.1 in June, an increase of 0.6 points from May's score of 52.5. IHS Markit and the CIPS use a score from one to 100, where anything above 50 denotes growth and anything below that indicating a slowdown. This is the third consecutive month the PMI has reported growth in the construction sector.
In fact, this is the fastest upturn that has been observed by the PMI in seven months, since November 2017. There are signs that this growth will continue in the short-term as well, as June saw the sharpest increase in new construction orders since May 2017, promising a strong summer for builders.
While performance was good across the board, residential construction was the best-performing area. Commercial building also did very well overall, with work rising at the fastest rate in months. Civil engineering activity also rose in June, but only slightly; in fact, the rate of growth for this area was the lowest seen in three months.
This has led to an increase in business optimism, which is good to see after the seven-month low in this area observed in May's PMI report. However, construction companies are still feeling more negative in the long term than they have on average.
Duncan Brock, group director at CIPS, said: "With the fastest rise in new orders since May 2017, it appears the brakes are off for the construction sector. Despite being hampered by economic uncertainty, firms reported an improved pipeline of work as clients committed to projects and hesitancy was swept away."
Government plans three-year tenancies
In a speech delivered yesterday (July 2nd), communities secretary James Brokenshire announced a consultation that is likely to have wide-reaching implications within the property market. He declared that the government is looking into the possibility of a three-year minimum for rental leases.
Mr Brokenshire said: "We’re proposing a new longer tenancy model, of a minimum of three years, with a six-month break clause to allow tenants and landlords to exit the agreement early if needed." The idea would be for this to protect renters and give them more stability.
While in theory this would prevent exploitative landlord practices, many have warned that it is a poor solution to this problem. Locking landlords and tenants into a minimum of three years has been described as restrictive, while not actually solving issues like rising rents across the UK.
For example, the shadow housing secretary John Healy described Mr Brokenshire's plan as "meaningless", as landlords would still have the ability to raise rents and force tenants out if they do not consent to the price increase.
The National Landlords Association (NLA) also commented on the proposal, as it does not fit with the organisation's own findings. NLA research has consistently found that, while 40 per cent of renters would like longer tenancies, another 40 per cent would not. Furthermore, more than half of renters told the NLA they were happy with the length of tenancy they were offered.
Richard Lambert, CEO of the NLA, said: "This is a policy which the Conservatives derided when it was put forward by their opponents in the past two General Election campaigns. It's hard not to see this as more of a political move aimed at the renter vote than a genuine effort to improve how the rented market works for all those involved."
The general criticism from the rental property market seems to be that the government's one-size-fits-all solution is not fit for a market with a lot of variation. As such, this move seems set to be an unpopular one.
UK housing market outperforms in May
The UK housing market has shown an impressive amount of improvement recently, with May seeing more mortgage approvals than expected. This is according to new data from the Bank of England (BoE), which suggests that activity might be perking up again after a relatively slow 2017.
Growth in both purchases and house prices slowed down significantly in 2017, and the first few months of 2018 showed no sign of this trend reversing. However, the latest figures hint that things could be speeding up again, as the number of approved mortgages hit a four-month high.
In total, 64,526 mortgages were approved in May, up from 62,941 in April; an increase of just over 2.5 per cent. Not only is this an impressive boost, it is also a much better performance than expected. A Reuters poll of economists predicted that the market would continue to slow, with mortgage growth slowing to around 62,000 approvals.
Alongside this, the number of approvals for remortgaging also increased, to 50,979 from the 47,295 approved in April. This equates to growth of around eight per cent, and is the highest number of remortgaging approvals seen since November 2017.
In total, the amount lent as part of mortgages increased by £3.9 billion. This is a rise of 0.3 per cent compared to April. The total value of mortgages has been growing at a steady rate for several months now, and May's figures do not mark a significant change in this regard.
However, while all this news is positive for the property sector, there are reasons to be cautious. The prospect of Britain leaving the EU - which is scheduled to occur in just nine months - has led to a downturn in consumer confidence. A recent survey revealed that Britons in general are more downbeat about the economic prospects of Brexit.
While current data shows the housing market seems to be on the up, economists warn that this could only be temporary. The months leading up to Brexit - and whatever deal is agreed with the EU - could have negative effects on this industry in the near future.
South London town centre set for 518-home development
The recent slowdown in the property market, particularly in London, might lead some to imagine that housebuilding levels might fall in the capital. However, it seems the pressing need for more homes is helping to drive activity forward.
Nowhere is that more true, it appears, than in Bexley. The outer London suburb is set for a 518-home development in the town centre, constructed by Bellway Homes.
The project, which also includes shops and commercial space, will include 110 affordable homes. The multi-block development will cover the vacant land that has been empty since the council moved out of its old headquarters there and into a new building in 2014.
Speaking about the plans, a spokeswoman from Bexley Council remarked: "There is a need for local housing in the borough with many Bexley residents and their families struggling to find good quality, affordable accommodation, which is why the council is committed to providing more affordable homes, and has approved the 518 homes on the former Civic Offices site in Bexleyheath town centre."
The council vote was a close one, with some concerns about the scale of the project and the number of homes available for affordable rent or purchase. At 110, this is way below the 50 per cent level desired by London mayor Sadiq Khan, who will now make a final judgement on whether the scheme can go ahead. If it does get the green light, site clearing work will start as early as next month.
Bellway Homes itself has certainly been busy in London and the south east. In March, it issued a half-yearly statement revealing its order books were up 7.7 per cent compared with 12 months earlier, and that it will build 600 more homes in 2018 than last year. This will take the annual total past the 10,000 mark for the first time in the company's history.
Construction firm announces flight to the suburbs
Homebuilder Crest Nicholson has announced it is to shift its attention away from London, with its south-eastern work being focused on the home counties instead.
The company has revealed it is closing its central London office amid ongoing concerns about the state of the property market in the capital.
Stating that is its "less likely" to buy land in the metropolitan area in the next 18 months, the firm has moved its regional office to Kent and will now concentrate on the regions.
Explaining the decision, chief executive Patrick Bergin said the company has already been "moving away from central London" over the past couple of years, due to an overheating market.
However, he said, even in outer London "the pricing momentum is not with us, and absolute affordability is quite stretched".
The news saw Crest Nicholson's share price drop by over six per cent and other builders by lesser amounts, amid concerns that the news might herald an end to the recent boom in housebuilding.
However, property investors might take a different view; after all, across the country as a whole Crest is still expanding its operations, ẃith more building in the Chilterns and Midlands. That might suggest the firm is simply moving in line with what recent surveys have shown - that there is still plenty of strong growth, just not in London.
Earlier this week the chairman of Knight Frank Alistair Elliott told the South China Morning Post that London is still a good longer-term prospect, but less so in the short term. All this, he noted, was because of the impact of Brexit. Even so, he suggested, the impact on investors of the knowledge that Britain will soon withdraw from the EU has not been nearly as severe as suggested.
Indeed, it may be that a combination of a market correction and Brexit, while making London a less attractive place to build in just now, will not prevent it from being a good investment prospect for those looking at long-term returns.
South London district hints at long-term gains
Dulwich has been identified as a bright spot in what has otherwise been a relatively bleak London property landscape, according to research by Knight Frank.
The district was highlighted by the Daily Telegraph as an attractive proposition as a place to live, in addition to its long-term price growth. According to Knight Frank's data, between January 1995 and September 2017 prices there rose by 1,150 per cent, outstripping the fast-emerging east London hotspots like Hackney.
Such long-term success might not be immediately apparent for a few reasons, only one of which is the high profile of east London emanating from the 2012 Olympics and associated efforts at urban renewal.
Another factor may be the fact that in recent months, Dulwich has suffered like the rest; Knight Frank's Spring 2017 Residential Review has revealed the district endured a 0.5 per cent dip in prices over the last three months and a 1.5 per cent drop on an annual basis.
These figures are not unusual, of course. The review showed that only a handful of places, such as Wimbledon and Queen's Park, have seen price growth in the last 12 month, while many have witness larger declines than Dulwich.
Indeed, this is backed up by the latest Hometrack figures for prices in cities, which, like so many other recent surveys, has placed London at the wrong end of the table.
These showed London third bottom with growth of 0.8 per cent, compared with a national average increase of 4.9 per cent. Cambridge was the one English city to do worse at just 0.1 per cent growth, while Aberdeen prices plunged by 7.2 per cent as the Granite City continued to suffer from the oil price slump.
At the other end of the scale, Manchester tops the growth list at 7.7 per cent, followed by Leicester on 7.4 per cent.
As ever, the question arises over whether London is simply suffering from the uncertainty over its future as a major global centre of trade and finance as Brexit approaches. In time, the picture will become clearer and that may be when the best long-term investments start to bear fruit.
London property costs spell double trouble for first-time buyers
First-time buyers seeking to get on the housing ladder in London have to pay twice as much as they would in the rest of the country, new data from Lloyds Bank has revealed.
The typical home bought by a first-time buyer in the capital now costs £420,132, compared with £210,515 in the rest of the country. The London price represents a two-thirds increase on the average price of five years ago.
Deposits have risen by almost as much, with the typical first-time buyer in London now needing to find £92,833 - 62 per cent more than in 2013.
It is not just first-time buyers who are suffering, as outer London boroughs have seen a 47 per cent rise in prices for all buyers over the past five years.
However, it is in the suburbs that getting on the ladder appears hardest. Across London as a whole the average first-time buyers age is 34 years old, compared with the national average of 31. One inner London borough - Tower Hamlets - actually beats the national average as the typical first-time buyer there is 30. By contrast, the figure rises to 39 years old in the outer boroughs of Barnet, Harrow and Sutton.
Lloyds Bank mortgage products director Andrew Mason said: "Despite the recent slowdown in London house prices, this latest data shows how expensive it has become to live in the capital, particularly for young people trying to get on the ladder for the first time.
"As a result, first-time buyers have to wait until they are 34 before getting their first foot on the property ladder."
He added that the price gap between inner and outer London is "closing", with the rise in house prices all over the metropolis over the last five years easily exceeding the 20 per cent average increase seen in the rest of England and Wales.
While many people in London will have to rent for longer before buying, this is also much costlier than elsewhere.
According to the latest Landbay Rental Index, published in April, the typical monthly rent in London is £1,879, or 89 per cent of average take-home pay, compared with £761 (52 per cent of net income) in the rest of Britain.
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Construction firm tipped for major London property development
Construction firm McClaren has been tipped to win the race to build a £100 million development in north London, which will comprise two high-rise buildings offering more than 250 homes.
The Hale Wharf Project will be based in Tottenham, located on a strip of land between the River Lea navigation channel and the natural river.
Construction Enquirer stated it had spoken to a source close to the situation, who revealed the firm was close to beating off competition for the contract from Bouygues and Galliford Try.
It quoted the unnamed individual as saying: “It is now looking like McLaren will secure the project.”
The property scheme is being developed by Muse and the Canal and River Trust. Built in two storeys, the project will feature blocks of 21 and 16 storeys respectively.
It is a part of a wider redevelopment of the Hale Wharf area, with plans for 505 homes to be built. Outline planning permission already exists for more apartments, over a third of them available at an affordable rent. The development will also include a new pedestrian access bridge from nearby Ferry Lane.
The scheme is part of a wider trend for apartment developments and high-rise schemes to be built outside of central London. Although Tottenham Hale is not particularly suburban, the area around the river is a comparative oasis, with reservoirs, canal and river channels and several parks.
Indeed, New London Architecture's Tall Buildings Survey recently revealed the capital had 510 buildings of more than 20 storeys in the pipeline by the end of 2017, up from 455 a year earlier. Of the 2017 towers, 458 were for residential use, comprising 106,000 units.
As well as the London-wide number increasing, the survey emphasised the widening geographical spread of taller buildings. Indeed, not only have more of these appeared in outer London boroughs, but in some cases - such as Bromley and Waltham Forest - this is now happening for the first time. Overall, a third of of tall buildings in the pipeline are in outer London.
This clearly indicates that property investors in London will be increasingly looking at hitherto unfamiliar parts of the capital in years to come as high-density developments become an increasingly common feature of the suburbs.
Developer expands Birmingham rental developments
The growth of private rental scheme (PRS) developments outside London is continuing at a growing pace, with the acquisition of a site in the centre of Birmingham by the High Street Group of Companies.
It has just completed the £120 million acquisition of a site in the heart of Birmingham, where it plans to build 500 one, two and three-bedroom apartments.
Located near the Mailbox development on the west side of the city centre, the site is centrally located within short walking distance of New Street station, with the future HS2 hub at Curzon street also within easy walking distance.
The Midland Metro tram system is also easily accessed, a situation that will be enhanced further when the lines running through the city centre are extended westward out towards Edgbaston.
Group chairman Gary Forrest commented: "Birmingham is a dynamic city currently undergoing significant regeneration and therefore it represents a great place to invest. Almost 17 per cent of the UK population is renting privately and this figure is expected to grow significantly.
"In response, we are creating high-quality living spaces in town and city centres, future proofed through the use of the latest SMART technologies."
For this reason, he noted, the company will be investing around £200 million in its projects around Britain for the foreseeable future.
Indeed, the company is already eyeing up two other Birmingham sites, all of which is happening at a time when a plethora of apartment developments are taking place in the city. Among the factors driving this is the growth of the city itself, its population is now likely to have surpassed the historic record 1.1 million recorded in the 1961 census.
The High Street Group, which is based in Newcastle, is already developing that city's tallest building, a tower featuring 162 PRS apartments. It also has extensive interests in the north west, the largest hotbed of PRS development outside London, with schemes in Salford and Trafford in Greater manchester and another in Warrington.
Stamp duty break for first-time buyers 'helps 69,000'
The stamp duty exemption announced for first-time buyers in the November Budget has already benefited 69,000 people, according to new official figures.
Chancellor Philip Hammond's announcement meant that any home worth up to £300,000 could be purchased stamp duty-free by first-time buyers, while the first £300,000 would be free on any home above that price, up to a maximum of £500,000. The government estimated at the time that 80 per cent of first-time buyers would end up paying no stamp duty at all.
Official figures that have just been released show that up to the end of March, 69,000 first-time buyers have made the most of this exemption. It is now estimated that over the next five years a million more buyers will have benefitted from this scheme.
The measure is just one of several the government has introduced in a bid to help first-time buyers get out of renting and into home ownership. Others include Help to Buy and Lifetime Isas, the later aimed at helping raise funds for deposits.
Official figures have shown 387,000 people have benefited from Help to Buy and 1.1.million Lifetime ISAs have been opened.
Financial secretary to the Treasury Mel Stride said: "I’m proud that the cut to stamp duty for first-time buyers is helping to realise the dream of home ownership for a new generation, alongside building more homes in the right areas, and generous schemes such as the Lifetime ISA and Help to Buy."
Commenting on the data, Aldermore Bank's commercial director Charles McDowell said the news was "encouraging" and backed up the bank's own research that predicted 30 per cent of first-time buyers would speed up their initiate purchases if stamp duty was axed.
However, he cautioned, the lack of affordable housing remains a key issue to be resolved, concluding that the projection of a million beneficiaries over five years "won’t become a reality for those taking their first step on the property ladder if they are priced out of the market".
Thinktank paper seeks 'capitalist' solution to rental shortage
Britain's housing crisis - including the challenges faced by the private rented sector - can best be solved by a good old-fashioned dose of free market capitalism, according to a new paper by the Adam Smith Institute.
The thinktank - named after the famous free market economist - published a paper authored by top architect Patrik Schumacher. He argued that, far from helping matters as intended, restrictive regulations over planning and construction and stipulations concerning the number of 'affordable' properties developments should have are actually making matters worse.
As an example, he said London mayor Sadiq Khan's imposition of a rule that 50 per cent of homes in developments in the capital must be classed as 'affordable' is deterring development and leading to higher prices elsewhere.
Focusing in particular on the capital, he said that the lack of new homes in the metropolis has led to the typical property price rising from four times the average salary in the early years of this century to ten times earnings now.
Rising prices have also spilled over into rental costs, with the rent-to-income ratio climbing from 1:5 to 1:3.
As well as curbing restrictive practices in planning and development, the government should also avoid the temptation to introduce mandatory long-term tenancies or rent controls, Mr Schumacher argued, claiming these will cut the supply of properties and reduce labour mobility.
Such ideas have been widely advocated recently; the Scottish Labour Party is seeking to introduce a new 'Mary Barbour law' - named after the 1915 Glasgow rent strike activist - as a means of controlling rents. Meanwhile, a Resolution Foundation Report published this month argued that millennials who have less chance of buying a home than the previous generation would be given more security through a system of long-term or indefinite rents, similar to the situation in Germany.
Commenting on the report, research associate at the Adam Smith Institute Sophie Jarvis said: “Millennials already know that they are at a massive disadvantage to their parents in terms of getting on the housing ladder. What they don’t know is that rent caps and restrictive planning laws are holding them back, not helping them out.
Government seeks tougher penalties for empty homes
The government is seeking to give local councils the right to impose double the normal rate of council tax on homes deliberately left empty by their owners.
In a legislative move that will have significant implications for property investors in London and throughout England, the Rating (Property in Common Occupation) and Council Tax (Empty Dwellings) Bill will enable local authorities to slap 200 per cent council tax charges on any home that has been left empty for more than two years.
Moreover, the funds raised can be used to keep council tax rates down for everyone else, providing a direct incentive to local authorities to take a firm line on empty properties.
Local government minister Rishi Sunak said: "While we should celebrate the number of long-term empty homes dropping by a third since 2010, there are still 200,000 vacant properties across the country.
"This bill hands councils further tools to bring much-needed homes back into use and provide thousands of families with a place to call home."
The actual tally of empty homes peaked in 2004 at 318,000, with the coalition government making extensive efforts to reduce this number from 2010. This included legislation in 2013 to allow councils to impose a 50 per cent council tax surcharge on empty properties, a power the new law will beef up.
While the number of empty homes fell to 200,000 by October 2016, it rose again to 205,000 a year later.
The legislation may place more pressure on landlords with empty properties who have not made a decision on what to do with them to act swiftly. That could mean renting them out, while the alternative is to sell them on - a move that will in turn provide investment opportunities for others.
Under the legislative timetable set out for the bill, the new council powers should pass into law next year.
High rise 'providing the solution' to London's housing issues
The mass construction of high-rise towers for residential use appears to be gaining increasing acceptance as a viable means of solving London's housing shortages, a new survey has suggested.
New London Architecture's Tall Buildings Survey found that by the end of 2017, there were 510 buildings of more than 20 storeys in the pipeline. Of these, 115 were under construction.
These numbers were up on 2016, when 455 towers were in the pipeline and 91 were being built.
Significantly, 458 of the new tall buildings were for residential purposes, with the potential to deliver 106,000 new homes. The organisation said this was evidence that high-rise living, once regarded as a highly unfashionable existence, is now becoming mainstream.
Chairman of New London Architecture Peter Murray said: "We continue to see a steady increase in the number of tall buildings coming forward and with London’s population continuing to increase and the demand for new homes only getting higher, our view remains that well designed tall buildings, in the right place, are part of the solution."
Landlords involved in the London property sector may increasingly make properties in high-rise buildings part of their portfolios, for a range of reasons.
Among these is the fact that tall buildings are now increasingly being constructed in outlying boroughs. Indeed, the 2017 list includes high-rises in Bromley and Waltham Forest for the first time.
Moreover, the high population density of the capital means space is already at a premium. Quite simply, the amount of available land to build on is increasingly limited, not least as parks and other open spaces will become increasingly vital as green lungs in a more crowded metropolis. As such, the only way to go in much of the capital will be up.
While London continues to rise ever higher as its population soars, the same thing is happening on a smaller scale in other cities with rapidly growing populations.
Manchester is a prime example, with a plethora of tall buildings currently under construction or planned in the city centre.
Later this year, the 658 ft South Tower at Deansgate Square will overtake the nearby Beetham Tower as the tallest skyscraper in the UK outside London.
London popular student accommodation city
London has come top in a new survey of popular worldwide student destinations.
Research from Student.com examined 426 popular destinations and discovered demand is highest in the UK’s capital.
Other cities that proved popular for students included a number in the UK - Liverpool, Nottingham, Sheffield, Birmingham and Glasgow.
“Our data indicates that there is still significant interest in the UK as a destination for international students, particularly from Asia and Europe. However, this is not an excuse to become complacent,” said Luke Nolan, chief executive officer of Student.com.
“With global competition for international students increasing year after year, the UK should do everything it can to support the internationalisation objectives of its universities and maintain its attractiveness as a study destination,” he added.
The study also looked at how far students travel for their accommodation and last year, they combined a total of more than 95 million kilometres to study.
UK’s most expensive flats all in London
The country’s most expensive one-bedroom flats are all for sale in the capital, reveals new research.
HouseSimple concluded the UK’s most costly apartment has a price tag of almost £5 million - making it 22 times the average price of a UK property.
There is a total of 585 one-bedroom flats for sale in London valued in excess of £1 million, with the smallest measuring just 416 square feet.
Examining the Zoopla property listings, 27 per cent of these £1 million plus flats are located in the borough of Lambeth, with 23 per cent in the City of Westminster, and 22 per cent in the Kensington and Chelsea.
It was also discovered there are four studio flats on offer in the city with an asking price of more than £1 million.
Sam Mitchell, chief executive officer of HouseSimple, explained: “Though prices in London have stalled for the time being, and foreign buyers are more cautious about investing here, the average price of property in the capital still means it’s one of the most expensive cities in the world to buy.
“These one bed flats sourced in our research aren’t ever going to be on the radar of the typical first-time buyer. They are more likely to be purchased by wealthy business travellers commuting to the capital,” he added.
Tenants resent not being able to buy
Many renters would love to own their own home and resent having to be tenants, claims new research.
A total of 44 per cent of those involved in a new survey admitted they were unhappy renting but are not in a financial position to buy their own property.
The poll commissioned by home interior firm Hillarys concluded the main reason for disliking being a tenant was having to ask permission to make basic changes, such as putting up shelves.
Other concerns included the landlord being slow to get things fixed or showing up unannounced, while some felt uncomfortable with the idea the landlord could sell their home with little notice.
However, five per cent expressed pleasure with renting and said they preferred being a tenant rather than having the responsibility of owning their own home.
“When you’re renting, a good relationship with your landlord is what everyone’s hoping for. Unfortunately, that’s not always the case and some landlords can be difficult,” said spokesperson Tara Hall.
“The results here are clear, landlords need to be easier to work with for the sake and tenants and harmony on both parts,” she added.
Landlords facing new energy standards
Landlords are being reminded that by next month they will have to ensure their properties meet minimum energy efficiency guidelines.
From the start of April, new tenancies arranged in England and Wales will have to be supported by a certificate showing the property has a minimum EPC rating of E.
The government hopes the rules will see tenants paying lower energy bills, as well as generally improving the quality of residential rental properties on offer.
Some properties are exempt from the initiative, including listed buildings, and those classed as “hard to treat” because of structural issues.
However, the government believes landlords will not have to spend more than £2,500 to ensure their properties achieve the minimum rating, with some homes qualifying for grants for certain improvements, such as cavity wall insulation.
Figures show the average annual energy bills for a property in band G are £2,860, compared to £1,710 for a property classed in band E - resulting in significant savings for tenants if improvements are made.
David Cox, chief executive of the Association of Residential Letting Agents (ARLA), believes the majority of landlords have already made improvements to their portfolios, but there may be some who are unaware of the new standards.
He added: “After the deadline passes at the end of this month, landlords face fines of up to £4,000 for flouting the law or losing money on empty properties which can’t be let until they meet the standards.”
ARLA is advising landlords to find out more about Green Deal finance plans or seek advice from Propertymark’s industry supplier ECO-Energi to find out what changes need to be made.
First-time buyers “forced” to live with parents
There has been a rise in the number of potential first-time buyers who are moving in with their parents to save for a deposit, reveal new figures.
According to research from Which? Mortgage Advisers, around 250,000 people purchased their first property last year, but 22 per cent had to live with family in order to do so.
In addition, many worked overtime to save more money for a deposit, with 37 per cent putting in extra hours at work to add to their savings pot.
Some wannabe property owners also sold their personal belongings to help afford their first property.
The average property price in the UK now stands at £234,794, which often requires a deposit of around ten per cent or more, as well as the other costs needed to purchase a home.
“For many, the prospect of saving a deposit for a first home can be daunting, unrealistic and even downright depressing,” said David Blake, principal mortgage adviser at Which? Mortgage Advisers.
“However, there are various options out there for first-time buyers, from Help to Buy ISAs to equity loans, and even shared ownership. Consider speaking to an independent expert who can offer advice tailored specifically for you,” he added.
Data from the Institute for Fiscal Studies shows over the last two decades there has been a sharp fall in homeownership among young people in the UK.
Practical help may benefit first-time buyers
First-time buyers could benefit from a number of practical initiatives to enable them to take their first steps on to the property ladder, claims a key industry body.
The National Association of Estate Agents (NAEA) believes the introduction of longer fixed-rate mortgages, increased affordable housing stock and more relaxed mortgage criteria could play a key role in transforming the UK property market.
According to the NAEA, many first-time buyers often delay purchasing a home because they want to ensure they have the largest budget possible, especially following the recent stamp duty changes.
However, the association is recommending a number of other options that could provide the practical help needed to convince first-time buyers to make an offer to secure a home.
It is estimated first-time buyers need to save £33,000 for a deposit on their first property.
The NAEA suggests the introduction of longer fixed-rate mortgages with lower monthly commitments could help reduce the need for such a large cash boost upfront.
“The government’s announcement to abolish stamp duty for first time buyers has helped buyers feel like the process is more affordable. They are struggling, particularly when it comes to saving for a deposit, and this needs to be addressed,” said Mark Hayward, NAEA’s chief executive.
In addition, the association has called for more affordable housing to be made available, with 58 per cent of NAEA members believing the government needs to do more to increase house building activity across the UK.
London sees increase in “super prime” tenancies
More people are renting “super prime” properties within the capital, according to a new report.
Data shows a total of 137 homes in London were rented out at over £5,000 per week in 2017 - an increase of 34 per cent on 2016 levels.
The LonRes report, produced by Knight Frank, also revealed during the three months from July to September a record number of 49 properties were rented out - the highest number in a quarter for more than a decade.
Tom Smith, Knight Frank’s head of super prime lettings, explained there has been a number of factors which have encouraged people to move away from buying and opt for renting instead. In addition, more homeowners are looking to become landlords rather than sell up.
“Demand is resilient due to higher rates of stamp duty and the associated uncertainty over the short-term prospects for price growth in the sales market. A lack of clarity regarding Brexit has also been a factor,” said Mr Smith.
Data also showed the super prime letting market is seeing long-term tenancies being arranged, with the average length in 2017 standing at 589 days, compared to 548 in 2016 and 528 in 2015.
In addition, the research found there has been a rise in the number of tenants adding a contract clause allowing them to be given first refusal to buy at the end of the tenancy.
“Many landlords have nothing to lose with this try before you buy route,” explained Mr Smith.
London set to be home to innovative property
The Croydon area of London is set to see an innovative 21-storey modular block of homes.
Constructed off-site, the building will be dropped into place and could help to speed up delivery of much needed homes in the capital.
A total of 153 homes will be provided by the scheme being developed by Pocket Living and the project could be replicated elsewhere in the capital to meet the growing demand.
“Tackling London’s housing crisis requires bold new approaches. We know turning things round will take time, but offsite construction is an innovative way to speed up building the affordable homes our city needs. I invested in Pocket Living to help them build genuinely affordable homes that are sold to local people first,” said London Mayor Sadiq Khan.
The project in Addiscombe Grove will deliver homes that can only be purchased by those who live or work in the borough.
Richard Brown, research director at the Centre for London, explained the body is researching the benefits of modular off-site construction methods.
He added: “Manufactured homes are often more talked about than built, so it is positive to see how they can contribute to taller buildings on complex urban sites. We hope this announcement will help to shift preconceptions about off-site construction.”
Landlords express reservations over pets
Landlords have reacted with caution over potential plans to allow all tenants to have a pet, according to industry bodies.
The Labour Party is set to introduce a new draft policy document that would allow people renting to be able to have a pet by default, as long as it does not cause a nuisance.
At present, many landlords do not allow tenants to keep animals because of concerns about damage to property and the potential cost of repairs. In some cases, tenants can appeal to landlords about keeping a pet, often offering to pay a larger deposit to cover any additional expenses.
“Recognising that currently for the majority of people under 30, buying a home is sadly less and less of an affordable option, Labour would seek to improve the rights of renters to own pets that do not cause a nuisance,” explained MP Sue Hayman.
However, the National Landlords Association (NLA) believes landlords should be given the right to prevent tenants from keeping pets if they so wish, as well as the ability to draw up their own tenancy agreements if they do want to allow renters to keep animals.
Richard Lambert of the NLA explained: “For example, common properties such as high-rise flats or those without gardens, may simply not be suitable for keeping some animals nor beneficial to their welfare.
“However, tenants who keep pets do tend to stay for longer periods of time, and there are a few simple steps that landlords can take in order to mitigate the perceived increased risks, such as by inserting specific clauses and policies into their tenancy agreements.”
The Residential Landlords Association (RLA) has also expressed concern that landlords could find by allowing tenants to keep pets their insurance policies may be invalidated or they could struggle to balance the needs of all their tenants, especially in shared accommodation.
Rise in people making a property move
There was an increase in the number of people moving home in 2017 compared to the previous 12 months.
Figures from the Lloyds Bank Home Mover Review show there was a two per cent rise in home moves during 2017 – up to 320,300 people – the highest level since 2007.
Experts believe the increase in movers is due to relatively low mortgage rates and high demand for homes which is allowing existing homeowners move up the property ladder.
“We’ve seen a slight increase in the number of home movers following a weak 2016. This could be down to low mortgage rates, rising house prices and high employment levels. House price increases will have boosted equity levels for many home owners, enabling movement along the housing ladder,” said Andrew Mason, Lloyds Bank mortgage products director.
He added there has been an increase in home movers paying more than £100,000 in a deposit - with those in London paying almost double this to secure their next home.
The region with the highest number of house movers was the south east, followed by the south west. Northern Ireland saw the lowest people choosing to move in 2017.
Govt moves towards digital property process
The government is moving towards digital land registration with new changes coming in April.
In a few months, a new rule will come in to force that will allow the land registry to introduce fully digital conveyancing documents such as mortgages and transfers.
It is hoped the changes will allow the buying and selling process to be quicker and more efficient and follows a public consultation.
Chief land registrar Graham Farrant believes the move will also reduce costs, but there have been significant safeguards put in place to tackle the issues of cyber-attacks and digital fraud.
“Our customers are central to everything we do and we want to make dealing with us quicker and simpler by providing more services through digital technology. These changes are an important enabler for our digital transformation and I want to thank our customers for their positive responses to the consultation,” Mr Farrant explained.
RLA warns about viewing scams
Potential tenants are being warned about fraudsters who are pretending to be landlords and charging for viewings.
The Residential Landlords Association (RLA) has raised concerns unsuspecting people are paying a significant amount of money to view a property that is apparently available to rent at a very attractive price.
A number of advertisements have appeared in recent months on websites such as Gumtree describing appealing properties in key areas. These listings often feature various official logs, making it seem the landlords are above board.
However, when replying to such ads, prospective tenants are being encouraged to pay a deposit to secure the right to view - in some cases, this amount is around £1,500.
However, once the deposit has been paid, the so-called landlords do not reply to any further contact and disappear with the money.
“We would like to make it clear that no genuine landlord will ever ask for money to secure a viewing. Often the victims in this type of fraud are young foreign students, who have limited knowledge of how the rental market works in the UK,’ said Andrew Goodacre, chief executive of the RLA.
He added: “The fact that our DepositGuard logo is being used in this manner is something we are taking extremely seriously and we have approached Gumtree asking for clear warnings about scams of this type to be included on its website.”
Govt plans new anti-rogue landlord measures
Rogue landlords could face further measures to ensure they provide tenants with appropriate living conditions.
MP Karen Buck is leading a Private Members Bill to introduce new rights for renters to allow them to take legal action if they are forced to reside in homes unfit for human habitation.
The new powers could work alongside existing powers granted to local authorities to crack down on the small number of landlords who lease unsafe properties. At present, landlords can be fined up to £30,000 and from April, councils will be able to issue banning orders to repeat offenders.
“Everyone deserves a decent and safe place to live. Councils already have wide ranging powers to crack down on the minority of landlords who rent out unsafe and substandard accommodation,” said housing secretary Sajid Javid.
He added public safety is “paramount” and it is vital to protect tenants by giving them the right to take legal action.
The bill aims to ensure landlords must only rent out properties that are in an acceptable condition at the beginning of a tenancy and throughout. If they fail to do so, then they can be sued for breach of contract.
In the coming months, the government’s plans to compile a database of rogue landlords and property agents will go online, allowing potential tenants to check their landlord out before committing to a tenancy agreement.
Government does not plan downsizing stamp duty relief
The government has confirmed it does nor plan to offer stamp duty holidays to encourage downsizing.
It had been suggested that offering older people the option to take a stamp duty holiday could encourage them to move to smaller homes and therefore, free up larger family homes on the market.
However, the Treasury has confirmed that it will not offer a tax break for those who are already generally a wealthy group of society.
“The financial gain that property owners are likely to receive from downsizing will likely outweigh the costs of doing so, particularly as there is no Capital Gains Tax (CGT) on someone’s main residence. Introducing a stamp duty relief for those looking to downsize would likely incentivise few genuinely new transactions, and would incur large deadweight cost,” said the government department.
A recent survey conducted by the International Longevity Centre revealed the most common reason for not downsizing was that the owners could still manage the maintenance of their home with 49 per cent citing this factor while 13 per cent stated the financial implications of moving.
Mortgage market not impacted by rate rise
The decision by the Bank of England to increase the base rate of interest does not appear to have had a significant impact on the mortgage market, reveals new data.
Figures compiled by residential surveyors e.surv conclude the mortgage market saw a 2.5 per cent rise in approvals between October and November.
This increase may partly be a result of homeowners making the decision to switch from variable rate loans to lower fixed rate deals to offset the impact of any future rate rises, but the central bank’s move does not seem to have dampened short-term demand.
However, mortgage approvals remain one per cent lower than the same point in 2016 and there are fewer first-time buyers with small deposits being approved - they accounted for just 16.1 per cent of the loan sector, compared to 20.3 per cent in August.
“After months of speculation, the Bank of England base rate increased to 0.5 per cent and this prompted many people to switch their mortgage and lock in a low rate,” explained , e.surv director Richard Sexton.
He added: “Overall approvals have increased month on month and we expect this to continue as those on variable rate mortgages see their monthly payments increase. Many will be able to switch elsewhere and save.”
London launches rogue landlord database
A new database has been launched in the capital that will name and shame rogue landlords and letting agents.
The Rogue Landlord and Agent Checker has been backed by London’s mayor and could help to protect more tenants.
The database is available on the City Hall website and will allow prospective tenants to check out a landlord or letting agent before signing up to a tenancy agreement.
So far, the database will include records provided by a number of London boroughs - Camden, Greenwich, Islington, Kingston, Newham, Southwark, Sutton, Waltham Forest, Westminster and the London Fire Brigade.
It is expected more data will be added over the coming weeks to include the boroughs of Barking and Dagenham, Croydon, Enfield, Hackney, Haringey, Lewisham, Redbridge and Tower Hamlets.
Tenants will be able to view prosecutions and enforcement action, as well as being given advice on how to report landlords who may be breaking the law.
“The housing market in London is difficult enough for Londoners to navigate, without those landlords and letting agents who behave unscrupulously leaving tenants living in appalling conditions, despite often paying sky high rents. I promised to do everything within my powers to help Londoners facing this problem. I will not stand by while they are exploited,” explained the mayor.
“Many landlords and agents across London offer a great service but sadly some don’t. My new database is about empowering Londoners to make informed choices about where they rent, and sending rogue operators a clear message: you have nowhere to hide.”
Young people struggle to rent
Many young people are struggling to get on the rental ladder in the UK, claims new research.
A survey from credit report provider Noddle suggests there are a number of reasons 700,000 people aged between 18 and 34 can not secure a rental property.
With average rents now standing at £927 per month and £1,593 in London, many people are unable to secure their first rental property because of financial reasons. In addition, poor credit histories and landlords being wary of letting to young tenants means many are struggling to move out of their parents’ homes.
The average property is now attracting four interested tenants - meaning landlords often opt to rent to professionals or older renters.
Jacqueline Dewey, managing director of Noddle, explained: “Our latest research suggests that it’s not just buying property that’s become increasingly difficult for young people today as renting is also out of reach for many. As demand for rentals becomes greater, especially in the big cities, landlords can pick and choose who they want in their properties.”
Young people are advised to start saving to ensure they can comfortably afford a deposit and ensure they have a good credit rating, so they present a more attractive tenant.
More properties selling below asking price
The UK has seen a record number of homes being sold for less than their asking price as demand falls at the end of 2017.
Traditionally, the UK property market slows down as the end of the year approaches and November saw 85 per cent of homes being sold for less than their asking price.
A survey from the National Association of Estate Agents (NAEA) revealed this is the highest percentage since records began and is up on the 78 per cent recorded in the previous month.
Supply of properties also fall by 19 per cent, with the average estate agent having 34 homes on their books, compared to 42 in October.
This was matched with a fall in demand with a five per cent drop in the number of those registering to look at properties.
“A record number of properties sold for less than the original asking price last month, but despite this, demand for housing and the number of homes available decreased,” said Mark Hayward, NAEA chief executive.
“We usually see a slowdown in the property market around Christmas time but our November data shows this happened much earlier this year. It’s clear that more and more potential buyers and sellers have put their plans on hold early so they can start afresh next year,” he added.
Average deposit rises above £50k
Average first-time buyers need to put down a deposit of more than £50,000 to secure a home, claims new research.
Figures from mortgage advisor L&C Mortgages show the average deposit is now £51,821, which could rise to £65,930 in five years and £81,468 in a decade.
London buyers are also expected to need to increase their deposit substantially to around £250,000 within the next ten years.
However, the study also revealed 25 per cent of first-time buyers have not yet saved anything towards a deposit and are not optimistic about stepping on the property ladder in the near future.
“With this research predicting that the size of deposits required could rise considerably across the country, first-time buyers could be forgiven for giving up hope on owning their first home,” said David Hollingworth from L&C.
He added it makes sense for buyers to save as big a deposit as possible because of the more favourable mortgage deals for those with a larger down payment – although Mr Hollingworth saving is “easier said than done in today’s current climate”.
Interest rate rise deterring young homeowners
Many young homeowners are being put off moving up the property ladder because of concerns over future interest rate rises.
eMoov found 56 per cent of those aged 25 to 34 are worried about the financial impact of making monthly mortgage payments.
The recent decision by the Bank of England has seen the base rate of interest rise from 0.25 per cent to 0.5 per cent - the first increase in a decade.
However, a number of property owners have not been deterred by making a purchase, although 60 per cent of London owners said they do not plan to move in the future.
Russell Quirk, chief executive officer of eMoov, explained there are some young property owners who have fears about the interest rate hikes, but he added the “majority have weathered the financial implications and the marginal hike has made it easy enough to do so”.
Govt announces new fund for homes
A new £25 million fund has been created to encourage the building of high-quality and well-designed homes.
Housing minister Alok Sharma revealed local authorities can now benefit from the Planning Delivery Fund which will support developments aimed at creating new properties in areas where supply is limited, but demand is high.
The fund is part of the government’s overall plan to create 300,000 new housing each year by the mid-2020s. Other initiatives include the creation of 14 garden villages to provide areas of attractive housing, strong infrastructure and accessible transport links.
“Locally led developments have enormous potential to deliver the scale and quality of housing growth that we need. By supporting our local authorities, we will be able to unlock more homes where people want to live,” said Mr Sharma.
It is expected the first allocation of the funds will total £11 million and cover the financial years 2017/2018 to 2018/2019.
Buyers fail to get their dream home
Many house buyers realise within three months of moving that their new home is not their dream home.
New research from home interior company Hillarys concluded one in three buyers have regret after buying a property - with five per cent then seriously considering selling up and moving again.
A number of issues were the reason for turning a dream property into a nightmare home, including noisy neighbours, poor condition and heavy traffic.
“There’s nothing more exciting that finding your dream home, but then there’s nothing worse than moving into your dream home and realising it’s not as much of a dream as you had hoped,” said Tanya Irons, spokesperson for Hillarys.
She added: “Whether your neighbours are unbearable, the house is falling down around you or the traffic outside is loud and constant, the smallest thing can make the dream come crashing down. It’s always worth being realistic as nothing’s ever perfect and you need to make the most of the situation.”
Longer tenancies could bring benefits
Incentives to encourage landlords to offer longer tenancies could play a key role in boasting the UK rental market.
Chancellor Philip Hammond has announced plans for a consultation to assess the impact of encouraging more landlords to offer long-term tenancy agreements, as well as whether it will support the Build to Rent sector.
David Cox, chief executive of the Association of Residential Letting Agents (ARLA) believes more support for secured tenancies could be a possible move for the industry.
“We are pleased that the government will consult on longer term and more secured tenancies, this feels to be in line with the holistic approach they are taking towards the rental market,” said Mr Cox.
Fareed Nabir, chief executive officer of online lettings app LetBritain, believes may landlords could be tempted by tax incentives and it could offer stability for the country’s long-term renters, especially younger people who feel they are unlikely to become homeowners.
First-time buyers underestimate buying costs
Many first-time buyers do not accurately estimate the cost of buying a home, according to a new study.
Research from Aldermore revealed often those stepping on to the property ladder underestimate the cost of buying and the associated costs of become a homeowner.
The deposit remains the top obstacle for first-time buyers, with many underestimating the amount needed by 31 per cent.
Other unexpected costs come in the form on solicitors and home surveys, with 40 per cent spending an additional £2,334 on such services.
The time it takes to save a suitable deposit was also underestimated by potential homeowners, with 58 per cent believing they would reach their goal within five years, with just 51 per cent achieving this and 16 per cent taking more than eight years.
“It is clear there is a divergence between perception and reality when it comes to the house buying process. This often means those looking to buy are under estimating the associated costs as well as the time it could take to complete, especially with first time buyers expecting it to take four years on average to save for a deposit,’ said Charles McDowell, commercial director of mortgages at Aldermore.
“This lack of understanding clearly has financial implications but it can also take its toll emotionally.”
Fall in landlords accepting Universal Credit tenants
There has been a fall in the number of landlords willing to let to tenants who are claiming housing benefit or universal credit, shows new research.
Figures from the National Landlords Association (NLA) reveal just two in ten landlords will let properties to those in receipt of benefits – down from 34 per cent in 2013 to 20 per cent.
The NLA’s study also showed two in three landlords who did let to housing benefit recipients say tenants have fallen behind in rent payments over the past year.
Landlords represented by the NLA have already expressed concern about having to deal with the Universal Credit administration system, as well as the time it takes to secure direct payment of the housing part of the Universal Credit.
Richard Lambert, chief executive officer of the NLA, said: “Underlying all the problems with Universal Credit is the freeze on housing benefit rates, which means that the housing element of Universal Credit is simply insufficient for many tenants to be able to cover their rent.
“The decline in social housing means that some of the most vulnerable in society can only turn to the private rented sector. We have long called for the freeze to be scrapped as it creates a barrier that prevents claimants from securing the housing they need.
“If the government is serious about helping then it needs to press pause on the roll out of Universal Credit, and fix its underlying problems. Otherwise more and more people will find themselves homeless as the proportion of landlords who consider themselves able to house those who need it most will keep on falling.”
Get your home show ready
If you plan to start 2018 with the prospective of selling your property and moving, then it may be worth thinking about the changes you need to make now to make your home attractive to buyers.
With the market remaining competitive, it is key to make sure your house is looking its best to ensure it attracts those purchasers who are motivated to buy.
While you may think your home is perfect, it does pay to take an objective look at the property. Maybe the wallpaper has seen better days or is the lawn looking a little overgrown? Just smarting up a few things can have a real positive impact on buyers’ first impressions.
Small little DIY or touch-up projects can undermine a home and often buyers do not want a whole host of tasks to tackle when buying a property.
It is a good idea to ask yourself what sorts of things you'd want to see in a prospective home and compare how your property measures up.
Neutralise the decor
The perfect home for a potential buyer is a blank canvas, so make sure you take steps to neutralise the property, so it appeals to the most buyers.
Decluttering and removing anything that makes your home seem too quirky is a good start. While beige walls may be boring, it could make it easier for people to imagine themselves living there.
Also remember to make sure your home is tidy - buyers can often take a negative view of homes that are untidy and may perceive it as being smaller than it is.
It could be those little extras that convince a buyer to put in an offer. Invest in some new cushions or replace those tired curtains. Popping a bunch of nice fresh flowers in a vase can also be a good way to add an extra welcoming detail to those looking for their next home.
How do tenancy deposit schemes work?
Tenancy deposits have become something that tenants simply see as part of the reality of renting a home over the last few years, particularly since they have become a legal requirement of the private rented sector. However, despite the fact that all new tenants are having to pay a deposit before they move in - normally amounting to around six-weeks worth of rent - the majority of people are still not all that clued up on how the schemeswork.
For example, did you know that landlords have a legal obligation to have the money secured throughout the tenancy, or that there is an official route for disputing any deductions from your deposit at the end of your tenancy?
Here, we take a look at the deposit protection schemes, and all that tenants need to know before they pay a deposit on a new rental property.
In 2007, the government brought in a new change to the rental market that meant all deposits paid by tenants in the private sector had to be protected under a government-approved scheme. In England and Wales, if you are renting a property, your deposit should be protected under one of three schemes; the Tenancy Deposit Scheme, MyDeposits and Deposit Protection Service.
Your landlord or letting agent should also let you know which of these schemes they are using. If you have not received details within 30 days of your payment being made, get in touch with the landlord to make sure your deposit has been correctly protected. It is a legal requirement that they let you know.
Where is your deposit?
As well as knowing what scheme is being used to protect your tenancy deposit, it's important that you know how it is being held. In England and Wales, there are two methods of protection, known as custodial and insurance schemes.
Insurance schemes are the rarer of the two, and see the landlord pay a fee to make sure the deposit is protected. They keep the money in their own account throughout, allowing them to accrue any interest, and deal with the tenant directly when it comes time to move out.
The more common method of protection is known as custodial. In these schemes, landlords and letting agents see the money from a tenant held in a secure account. This means that neither landlord nor tenant has access to the money at any time until the tenancy comes to an end, at which point the landlord can authorise the payment be released to the tenant, minus any deductions.
For any number of reasons, there are times when a tenant moving out will not receive all of the money they put down as a tenancy deposit. In these cases, deductions are often made for things like damage, loss of property, unpaid bills or professional cleaning.
However, tenants should know that they have the right to dispute these deductions under the deposit protection schemes. If a landlord says they are taking money off for damage to something the tenant knows they didn't damage, they can provide evidence to a third-party mediator, who decides whether or not the deduction is fair.
Arguing against a deduction can increase the time it takes to get any of your money back from your tenancy deposit, but it's important for tenants to know that they do have a vehicle for challenging rulings to protect their money.
How to avoid common pitfalls when marketing a property
When it comes to selling a property, it's more important than ever that you get your marketing messages, and your ability to carry out viewings, absolutely spot on. Low supply means that sellers are in competition more than they've ever been in the past, and to get ahead, you need to make sure you have the best strategy in place.
One way to undo all your hard work, however, is to fall into some of the most common pitfalls that can emerge in property sales. Here, we take a look at a few of these and how falling victim can negatively affect your ability to sell your home this year.
If you've lived in your home for any time at all, chances are you'll have developed a bit of an emotional attachment to the place. But it's important not to let this get the better of you when you are looking to sell.
Do your homework to work out what properties in your area, and similar houses, have been selling for in recent times, as well as taking into account the current state of the market. And don't let your heart lead your head. At the end of the day, you want to make that sale, and overpriced properties tend to hang around on the market for far longer.
You might be a little nervous about issues that have affected your home. Damp and other forms of damage can often put off a seller, so it's understandable that divulging such information can be difficult, but it's important not to get caught up in hiding stuff. At the end of the day, the information will still come out in the buyer's survey, so it's best to be honest from the off.
The same applies to any descriptions you write about your house. There's no point, for example, marketing your home as having three spacious bedrooms if the first person to come to a viewing is going to see straight away that one is a cramped box room. Be more honest from the off, and your chances of finding success will be much higher in the end.
Don't let the camera lie
The ease of taking pictures and uploading them has made it easier than ever to advertise what your home has to offer, so it's important to take advantage of this. If you don't have images of your house in your listing, or not enough, then chances are that your potential buyer will click on a listing that does.
However, it's also important to remember not to misrepresent your home in the pictures you use. Some people might be tempted to take a photo from a flattering angle to make the room look bigger, or even to stretch a photo to enhance this illusion. But at the end of the day, the buyer is going to find out eventually what the home looks like in the end, so you need to be honest from the off.
Don't get complacent
Another common pitfall when it comes to selling a home is to get a bit too complacent with how the place looks before someone comes around to see it. It's especially easy to fall into this trap if you've had a property on the market for some time, and despite lots of people coming to see it, no one has made an offer yet.
It's always advisable to do your best to make your home look as presentable as it can. Buyers will expect a little "lived in" atmosphere to be present, but remember, you want to impress them, so you need to make sure that before any viewings, you clean up, put away any clean washing and give the place a quick once over, including using an air freshener, to make it look and smell perfect.
Why are more young people renting than ever before?
In recent years, the number of people who choose to rent homes rather than buying them has been rising consistently. One of the main drivers behind this has been young people, who are by far the largest demographic in the private rented sector these days.
According to recent Savills data, the number of tenants in the UK private market at present is around 5.3 million. Of that number, 1.5 million are aged between 25 and 34-years old, making this demographic the most prominent. But what is the reason for this, and why do young people increasingly choose to rent rather than buying properties? Here, we take a look at a few of the most common reasons.
Cost and saving
While there are many young people who prefer to rent rather than buy homes, there are also those who simply cannot afford to buy, or who see the cost as a challenge to overcome. One of the main reasons for this is that the typical buyer needs to be coming to market with a ten per cent deposit, which means needing around £20,000 before being able to buy.
For many, this is simply unaffordable, while for others renting offers them the chance to get their own place, while also being able to afford to save up to become homeowners further down the line.
Convenience and freedom
Another huge reason many people of millennial age choose to rent rather than buy is because they want the convenience that comes with being a tenant. More than ever before, young people are coming out of school and university with their eyes on building a career, and for many, this is the single most important aspect of their life.
Being a tenant rather than a homeowner allows them the freedom to do this, as they can make career choices they could not make if they were tied to an area by their house purchase. When it comes to moving home, it's far easier to move from one rented property to another than waiting to sell a house, which can prohibit the ability to further their career.
Young people are probably more financially savvy at the moment than they have been at any time in the past, and for this reason, many are adopting something of a wait-and-see attitude to the market, which means renting rather than owning property.
Whether it's the implications of Brexit on the housing market, the potential for interest rates to rise - taking mortgage payments up with them - or the uncertainty around capital gains, many young people are seeing the next couple of years in the housing market as a period that needs to be waited out. As a result, many are choosing to rent rather than buy, allowing them to make a measured decision in the future regarding when would be the best time to get on to the property ladder.
How to prepare your house for a sale in the busiest months of the year
Autumn, and in particular October and November, has become the traditional busiest period of the year for the property market. While many would probably expect the summer months to be busier, it's autumn, and its placement between the school summer holidays and Christmas, that sees more people looking to buy homes than at any other time of year.
This reality, however, means that sellers, as well as buyers, come out in force throughout the autumn period, and as a result, it's vital that anyone looking to bring their home to market stands out from the crowd. In a world of easy-access property portals hosting thousands of adverts, it's important that your home stands out, and this starts with properly preparing your home for being shown.
Here, we take a look at a few quick things you can do to make your home stand out and prepare it for the busiest time of year.
A lick of paint
The first thing anyone will see when they are looking at your home, either online or in person, is the exterior, so you need to make sure it shines and grabs the attention. This means ensuring that your garden fence and front door have had a quick lick of paint. It's an easy job, but it can make all the difference, giving the exterior of your home the ability to make the all-important first impression a good one.
Tone it down
You may well think that your unique sense of style makes your property highly desirable, but when it comes to the time to sell, it's important to be pragmatic about things. Take a step back and look at your decor, and ask if it's something that's likely to appeal to everyone. If you have a colourful home, it can be a good idea to tone it down a little to appeal to a higher number of people. White, beige and other neutral colours on the wall are easy ways to give your property the ability to wow everyone.
The photos that the estate agent takes of your home will make or break your property listing, so you need to make sure they are as attractive as possible. The best way to do this is to bring as much natural light into the rooms as possible. It makes them look more spacious and bright, which is a huge bonus in the eyes of buyers. To make this a reality, you can take out curtains and blinds from rooms that don't necessarily need them, maximising the light exposure in each room.
Another top tip for making your home stand out in images online is to ensure that you keep clutter throughout to an absolute minimum. You may have a lot of stuff at home that you treasure, but this means nothing to your buyer, and if you've got a lot of stuff sitting around, it really can make your home look cluttered. Space is the number one concern for buyers these days, and taking out any unneeded items is key to highlighting the space that your home does have to entice buyers.
Strong communities at the heart of Britain's happiest places to live
The south of England has been shown to be the happiest place to live in the UK, as part of a new survey that highlights community spirit and access to fantastic amenities as the drivers of a content resident.
Rightmove this week published the results of its latest Happiest Place to Live survey for 2017, which surveyed 17,000 people, asking them how pleased they are with the place they live. It was discovered that Leamington Spa in the West Midlands is currently the happiest town in the country, narrowly taking the lead from last year's winner, Leigh-On-Sea in the south-east.
Overall, the south of England was found to be the happiest part of the country, with six of the top ten towns and cities located in London and the south. Tunbridge Wells, Epsom and Richmond upon Thames all featured in the top ten.
The drivers of happiness in these towns was found to primarily be the sense of community that they manage to foster, while access to amenities is also an important factor. Things such as having good schools nearby and access to a doctor tend to be what people want most from their towns.
Rightmove’s Research Manager Abiola Oni comments: “We’ve looked at the connection between each of the factors and what contributes to how happy people say they are overall, and it’s the people in an area and how someone feels about living there that makes the biggest difference.
"So the strength of community spirit, people feeling like they belong and that they can be themselves are all more important than the services and money that they have, though these do still contribute to overall happiness.”
Other factors that can make people feel happy about their town include the fact that people feel like they belong in the town, which goes a long way to making sure they feel settled and at home.