Written By Em

Em Morley

Investor demand for UK commercial property recovering

Published On: January 30, 2017 at 10:42 am

Tags: Brexit,commercial property,foreign investment,property demand

In spite of some concern over the potential relocation of companies based in the UK following Brexit, demand from overseas purchasers in the commercial property sector rose during the final quarter of 2016.

This was the second quarter in succession where growth was recorded, with enquiries for purchase also rising. However, expectations for rental and capital growth switched back to negative territory in central London, according to the latest data released by the Royal Institute of Chartered Surveyors.

Rising Demand

21% more respondents saw an increase in demand during the final quarter of 2016, a rise of 9% from Q3. The number of foreign investors also rose, with the weaker exchange rate a prominent factor.

20% more respondents experienced a rise in foreign investment enquiries, up by 7% quarter-on-quarter. What’s more, this was a significant change from the -27% recorded in the second quarter of the year.

In the capital, investment trends remained fairly mixed. Industrial assets saw a substantial rise in interest, but overall enquiries were stagnant in the officer sector and declined in the retail market.

Investor demand for UK commercial property recovering

Foreign investment did grow strongly in all sectors in London, with the fall in sterling since the referendum vote prominent in enticing demand.

Forecasts

During the next 12 months, those questioned feel that capital values will rise through the majority of sectors. 14% more respondents feel that values will rise rather than fall in the next three months.

This said, occupier demand is less optimistic than that of investors, with demand only marginally increasing at this level.

A lack of demand has encouraged landlords to up the value of incentive packages on offer to would-be tenants in the office and retail sectors. For the office sector, inducements have risen in each of the last two quarters for the first time since 2013. 14% more respondents saw a rise in the final quarter of 2016.

Landlord and Letting Agent Hit with £26,000 Fines for HMO Breaches

Published On: January 30, 2017 at 10:11 am

Author: Em Morley

Categories: Landlord News

Tags: HMO's,landlord law,letting agents,rogue landlords

A landlord and their letting agent have been hit with fines over £26,000 after being found guilty of HMO breaches on two properties in Luton, following a multi-agency operation.

Landlord and Letting Agent Hit with £26,000 Fines for HMO Breaches

Adrian Simion, 30, and his letting agent, Altavon Property Management, were found guilty at Luton Magistrates’ Court of a series of management regulation breaches relating to the safety and organisation of illegal Houses of Multiple Occupation (HMOs).

Neither Simion nor the letting agent attended the hearing, but were convicted of the HMO breaches in their absence.

Magistrates imposed fines totalling almost £7,000 on Simion for two offences of failing to licence a HMO and nine separate management regulation breaches. He was also ordered to pay £500 in costs and a £110 victim surcharge.

Alvaton Property Management was fined £10,000 for the HMO breaches, £2,500 for each of four management breaches, along with £500 costs and a £120 victim surcharge.

Luton Borough Council, which brought the prosecutions, reported the occupants found at the address, and was supported by the Romanian Embassy, Bedfordshire Clinical Commissioning Group, Citizens Advice Luton and various charities.

Councillor Tom Shaw, the Portfolio Holder for Housing at Luton Borough Council, says: “We hope that this prosecution sends a very strong message that we will act on information we receive, especially if we suspect that people are being exploited.

“Our rogue landlord project, in partnership with the police, fire and rescue service, and other organisations, is taking action against these landlords who expect people to live in overcrowded and unsafe conditions.”

Superintendent David Cestaro, the Bedfordshire Police Lead for Modern Slavery, also comments on the HMO breaches: “While no offences under the Modern Slavery Act were identified from this particular operation, we have managed to safeguard people who were taken advantage of by being provided substandard living arrangements.

“We continue to ask members of the public and professionals in public-facing roles to trust their instincts and report anything which they believe could be a sign of someone being exploited, whether that be for labour, domestic servitude, sex or crime.”

Landlords, remember that HMO breaches carry significant penalties – Always stick to the law and protect your tenants.

Lending falls at Paragon during Q4 of 2016

Published On: January 30, 2017 at 9:45 am

Author: Em Morley

Categories: Finance News

Tags: Buy-to-Let,lending,Mortgage lending,rental accommodation

Paragon Bank has become the latest buy-to-let lender to announce a fall in its buy-to-let lending in the final quarter of 2016. This has once again been attributed to the introduction of more stringent conditions for buy-to-let property purchasers.

In Q4, the Bank agreed mortgages for rental accommodation worth £185.2m, which was less than half of the £400.9m leant during the opening quarter of the year.

Clampdown

Alongside the more stringent stress tests for buy-to-let investors, the Government has also moved to clamp down on buy-to-let lending by removing wear and tear allowance, introducing a 3% stamp duty surcharge and phasing out mortgage interest tax relief.

Despite the fall in completions during the last three months of the year, Paragon feels that the market will improve significantly. This is due to the fact that more private rental properties are needed to meet increased demand from tenants.

Lending falls at Paragon during Q4 of 2016

Nigel Terrington, Paragon Group’s chief executive, noted: ‘We have made a strong start to a year that will see the group continue its transition to a lending and operational model that is orientated around Paragon Bank.’[1]

‘The lending growth we haven’t seen in asset finance is encouraging and reflects the increasing diversification of the group. Lending across all divisions and the strong growth in the buy-to-let pipeline bodes well for the year as a whole,’ Mr Terrington added.[1]

[1] https://www.landlordtoday.co.uk/breaking-news/2017/1/lending-to-buy-to-let-lending-falls-after-introduction-of-new-rules

[1]

Tenant Demand Falls to Two-Year Low, Reports ARLA

Published On: January 30, 2017 at 9:28 am

Author: Em Morley

Categories: Landlord News

Tags: letting agents,private rental sector,rent prices,rental supply,tenant demand

Last month, letting agents recorded the lowest level of tenant demand for two years, according to the latest report from the Association of Residential Letting Agents (ARLA).

Tenant demand

Tenant Demand Falls to Two-Year Low, Reports ARLA

In its December Private Rental Sector report, ARLA found that just 26 prospective tenants were registered per member branch last month. This is the lowest level of tenant demand since records began in January 2015, and is down by 19% on the 32 tenants registered in November 2016.

However, the drop in tenant demand is in line with seasonal expectations. In December 2015, 29 prospective tenants were registered per branch, a figure that was down by 15% on the previous month.

Supply of rental stock

The number of rental properties managed per member branch rose from 185 in November last year to 188 in December. While supply is still very low, this figure indicates a broadly positive picture for tenants in the short-term, believes ARLA.

Following last year’s tax hikes for landlords, including the Stamp Duty surcharge and changes to Capital Gains Tax, almost half (46%) of letting agents expect to see rental supply decline this year.

Rent prices

The amount of letting agents witnessing rent increases for tenants grew by three percentage points in December, to 19%.

In December the previous year, the number of rent rises fell month-on-month, from 23% in November 2015 to a similar 18%.

The Managing Director of ARLA, David Cox, comments on the findings: “Although December’s figures could indicate a bright future for renters, with the Government’s impending ban on letting agent fees, the future is actually rather bleak for the UK’s renters.

“Although we saw demand fall and supply rise slightly last month, these are in line with seasonal expectations and is what we expect to see in December. If the Government goes ahead with an outright ban on fees, tenants will unfortunately be the ultimate victims, as costs are recouped for the vital services fees cover.”

Landlords, have you witnessed a decrease in tenant demand over the past month?

How have property prices performed in last Chinese zodiac cycle?

Published On: January 27, 2017 at 12:56 pm

Author: Em Morley

Categories: Property News

Tags: average property prices,Chinese New Year,investors,property prices

With the Chinese New Year arriving this weekend, Knight Frank has investigated how UK house prices have performed over the Chinese zodiac cycle of the last 12 years.

Research from the firm indicates that average house price growth was greatest during the Year of the Dog, between 2006-07. Here, property values rose by 9.26% on average, making it the luckiest animal sign for property owners and investors during the last twelve months.

Good Signs

Other profitable years were that of the Ox, Snake and Horse, with prices rising by 8.72%, 8.66% and 6.66% per year respectively.

At the other end of the scale, the Year of the Rat, between 2008-09, saw average property prices plummet -16.55% year-on-year. This was obviously due to the fact the financial crash occurred between this period.

Other poor years included the Year of the Tiger, Dragon and Rabbit, with prices ranging from -1.37, -0.08% and 0.59% in these periods.

How have property prices performed in last Chinese zodiac cycle?

The full list of how property prices have performed during the Chinese zodiac cycle of the last 12 years reads:

Position	Start	End	Year	Annual Price Growth (%)
1	2006 January 29	2007 February 17	Dog	9.26
2	2009 January 26	2010 February 13	Ox	8.72
3	2013 February 10	2014 January 30	Snake	8.66
4	2014 January 31	2015 February 18	Horse	6.66
5	2016 February 8	2017 January 27	Monkey	4.4*
6	2015 February 19	2016 February 7	Goat	4.37
7	2005 February 9	2006 January 28	Rooster	4.36
8	2007 February 18	2008 February 6	Boar	4.21
9	2011 February 3	2012 January 22	Rabbit	0.59
10	2012 January 23	2013 February 9	Dragon	-0.08
11	2010 February 14	2011 February 2	Tiger	-1.37
12	2008 February 7	2009 January 25	Rat	-16.55

[1]

[1] http://www.propertyreporter.co.uk/property/which-chinese-year-has-been-the-luckiest-for-uk-house-price-growth.html

Government to Consult on Letting Agent Fee Ban in Spring, Confirms Housing Minister

Published On: January 27, 2017 at 11:31 am

Author: Em Morley

Categories: Property News

Tags: letting agent fees,letting agents,lettings fee ban,tenants

The Government will consult on the letting agent fee ban for tenants in spring, the Housing Minister, Gavin Barwell, has confirmed.

Government to Consult on Letting Agent Fee Ban in Spring, Confirms Housing Minister

Barwell responded to requests from John Healey, the Shadow Secretary of State for Housing, to find out when the Government plans to “bring forward legislative proposals to ban letting fees for tenants” and when it plans for “that ban to come into effect”.

The questions follow Chancellor Philip Hammond’s announcement in last year’s Autumn Statement that letting agent fees charged to tenants will be banned in England.

The Housing Minister has previously expressed his support of the ban.

Barwell responded to Healey’s requests: “As my Noble Friend, Lord Bourne of Aberystwyth, said in the House of Lords on 19^th January 2017, the Government is committed to introducing legislation as soon as possible to implement the ban on letting agent fees for tenants.

“We will consult in the spring on the detail of the ban and will consider the views of property agencies, landlords, tenants and other stakeholders before introducing legislation. Impact assessments will follow the consultation and support the detail of banning fees to tenants.”

Barwell will need to take into account the views of other MPs, too, with one Conservative MP insisting that the letting agent fee ban will push rents up, making it even more difficult for tenants living in the private rental sector.

Nevertheless, tenants have recently urged the Government not to forget their promises concerning the letting agent fee ban, while lobby group Generation Rent believes the ban to be great news for renters.

While it appears that the letting agent fee ban will indeed be introduced in England, the Welsh Assembly is currently making a decision on whether to bring in similar rules for letting agents.

We will keep you up to date with developments on the lettings fee ban for tenants and its effects on the sector at LandlordNews.co.uk.