Written By Em

Em Morley

Renters being pushed out of London due to record rents

Published On: January 27, 2017 at 10:37 am

Tags: Buy-to-Let,London,rental values in London,renters

Despite the growth in rental values in London slowing recently, the capital remains by far the most expensive region to rent in the country.

As such, a large number of Londoners renting property in the South of England has risen sharply, as more tenants are leaving London to try and get more value for money elsewhere.

Record Highs

With rents in the capital reaching record highs, many renters have been convinced to seek more space and value in other regions of the South. More specifically, these renters are looking to rent in areas offering a commute back to London and proximity to amenities such as good schools.

Michelle Niziol, Managing Director of IMS Property Solutions observed: ‘Growth in rent in the South of England is being fuelled partly by an increase in the number of people who are leaving London, seeking more affordable areas within the commuter belt. This is particularly so for young professionals and families and is likely to continue in 2017 and the foreseeable future.’[1]

Renters being pushed out of London due to record rents

‘More than four million households rent privately in the UK and this figure is set to grow as people continue to struggle to get on the housing ladder. However, there is also the growing trend of people choosing to rent rather than buy because of the flexibility it offers them. This means that despite the Government having announced a series of policy changes aimed at landlords, investing in bricks and mortar will still remain a worthy asset class for investors,’ Niziol added.[2]

[1] https://www.landlordtoday.co.uk/breaking-news/2017/1/high-prices-push-renters-out-of-the-capital

Mortgage Values Reached Highest Level Since 2008 Last Year

Published On: January 27, 2017 at 10:17 am

Author: Em Morley

Categories: Finance News

Tags: homeowners,mortgages,property market,property sales

Although house purchase mortgage approvals dropped in 2016, mortgage values rose to the highest level since 2008, figures suggest.

Data from the British Bankers’ Association (BBA) for December show that banks approved 43,228 mortgages last month, up from 41,003 in November, but down by 4.1% on an annual basis.

Mortgage Values Reached Highest Level Since 2008 Last Year

Meanwhile, estimates on mortgage values from the Council of Mortgage Lenders (CML) claim that gross mortgage borrowing reached £20.4 billion in December. Although this is 4% lower than November’s figure, it takes the total mortgage values of 2016 to a post-2008 high of £246 billion.

An Economist at the CML, Mohammad Jamei, says: “The UK housing market, much like the wider UK economy, ended 2016 on a generally positive note.

“Approvals for house purchase have recovered strongly of late, and this should feed through to lending figures in the early months of 2017.”

He continues: “The current availability of mortgage credit is benign, and the real issue continues to be a dearth of properties on the market, which adds to the challenges facing would-be buyers.

“Uncertainty associated with political factors and prospective changes to the tax treatment of landlords will weigh on prospects for the year ahead.”

The Chief Executive of haart estate agent, Paul Smith, also comments: “The surge of housing purchase approvals seen in December suggests the New Year should be off to a flying start, so long as the industry does not get run off track by being bogged down with the ins and outs of Brexit negotiations.

“The upcoming Housing White Paper has the potential to uplift this, however, the bungling over its release date does not inspire much confidence that we’re on the cusp of a homeownership revolution.”

He insists: “The Government needs to start listening to the voices within the property industry if we are to avoid leaving a generation of aspiring homeowners behind by inaction and policy failures.

“It is crucial that we see greater Government incentives for housebuilders to build the right type of housing, and for older people to downsize their family homes. Only then will we see the level of fluidity in the market needed to combat a growing population and a lack of supply.”

Smith’s pleas arrive as construction experts insist that the sector is experiencing a severe shortage of skilled workers, which will naturally impact housebuilding levels across the country.

February the peak month for boiler repairs

Published On: January 27, 2017 at 9:59 am

Author: Em Morley

Categories: Property News

Tags: boiler,boiler repairs,claims,property

New analysis from Direct Line for Business has revealed that February is the main month for boiler repair claims. The firm state that claims rise by 163% compared to the typical monthly average.

Last Winter, the insurer saw a 27% rise in claims for broken boilers in comparison to 2015. It is feared that this Winter could see even more claims made.

Costly

It is thought that the average cost to repair a broken boiler is around £1,200. Landlords are being warned that they must do all they can in order to prevent damage occurring to their system in the below-freezing temperatures:

Keep heating set low: An exposure to extreme low temperatures can lead to your boiler’s condensate pipe freezing, which in turn will stop your boiler from working. Keeping heat on a low temperature will eliminate this issue.

Lag the pipes: Freezing temperatures can also make your pipes susceptible to cracking or bursting, which can lead to all sorts of problems for your property. Prevent this from happening by lagging pipes to cold air getting in. Pay special attention to pipes in lofts, eaves and cupboards.

February the peak month for boiler repairs

Bleed the radiators: Should you feel your property is not getting warm enough, there could be air being trapped inside your heating system. In order to release it, you will need to bleed your radiators. In order to do this, you need a key to put into the valve. If this doesn’t solve the issue, call professionals.

Christina Dimitrov, Business Manager at Direct Line for Business, noted: ‘Being caught out without heating in the winter can be particularly unpleasant, so landlords should make sure their properties have fully serviced boilers to help ensure their tenants don’t have heating issues. Landlords are legally responsible for securing a safety certificate for gas appliances each year and they also need to ensure the heating and hot water systems are maintained and functioning properly.’[1]

[1] http://www.propertyreporter.co.uk/landlords/landlords-beware-february-revealed-as-peak-month-for-boiler-repairs.html

Welsh Assembly Yet to Make a Decision on Banning Letting Agent Fees

Published On: January 27, 2017 at 9:28 am

Author: Em Morley

Categories: Property News

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

The Welsh Assembly is yet to make a decision on whether banning letting agent fees in Wales is a good idea.

Welsh Assembly Yet to Make a Decision on Banning Letting Agent Fees

Following Chancellor Philip Hammond’s announcement in last year’s Autumn Statement that letting agent fees charged to tenants will be banned in England, the Welsh Assembly has debated whether to introduce the same measure in Wales.

Carwyn Jones AM, the First Minister of Wales, has written to David Cox, the Managing Director of the Association of Residential Letting Agents (ARLA), confirming that no decision has yet been made on banning letting agent fees in the country.

The letter reads: “The Cabinet Secretary for Communities and Children has made a commitment to review the evidence currently available, before deciding what action should be taken.

“He will be taking into account the impact of the Scottish legislation and will also be reviewing the proposals in England, taking into account the findings of their consultation, which is due to be held in the coming months.

“The review will also consider the different approach Wales has taken, by introducing Rent Smart Wales, and how this will impact on and inform any further regulation in the sector.”

ARLA insists that it will continue to communicate with the Welsh Assembly on the matter.

In an email to its members, ARLA says: “We urge all members to complete our monthly surveys and respond to the UK Government’s consultation when it is released.

“It’s clear that further widespread changes are in the pipeline for the private rented sector across the UK, but what’s important is that governments listen to the industry and follow the evidence.”

A number of proposals from Welsh Assembly Members were put forward to commence the banning of letting agent fees for tenants. None of the proposals have yet been successful.

Do you believe that Wales should follow England in banning letting agent fees?

Date for publication of White Paper could have been decided

Published On: January 26, 2017 at 2:36 pm

Author: Em Morley

Categories: Property News

Tags: government,housing market,Housing White Paper,landlords,White Paper

The long wait for the Government’s long-awaited White Paper on Housing is seemingly coming to an end. It is now thought that this paper is likely to be aired on Monday February 6^th 2017.

Tipped to include major reforms that will impact on the lettings and construction sectors particularly, the White Paper is eagerly anticipated by all property market peers.

Delays

At the Conservative Party conference last September, Communities Secretary Savid Javid and Housing Minister Gavin Barwell indicated the document would be released before the end of 2016.

Several more false hopes have followed, with varied speculation on release dates. It was thought that the Paper may appear on the 16^th January. Now, Government sources have indicated to journalists that the document is now likely to be released on the 6^th February.

The issues set to be addressed in the White Paper are expected to include incentives and planning for Build To Rent. What’s more, there could be incentives for older owners to leave their properties and new attempts to highlight Government-owned sites considered good enough for new housing.

In addition, many property peers expect a wholesale re-shaping of policy for starter properties.

Date for publication of White Paper could have been decided

Brexit

There is more pressure to get the White Paper published after the Supreme Court decided that Parliament must vote on whether to trigger article 50.

A Labour spokesman said: ‘We now want to see the timing and it is clear the white paper needs to come to parliament in time for the debate … MPs have a right to be able to see what the government’s plan of action is. The speech is not adequate. It set out a wish-list of options.’[1]

‘As we’ve said many times, Labour respects the decision of the British people to leave the EU and therefore will not frustrate the will of the British people. But respecting the will of the British people is very different from respecting the will of the British government. We need to see the plan and make sure the process is held to account in parliament at every stage,’ they added.[1]

[1] https://www.theguardian.com/politics/2017/jan/25/government-to-publish-brexit-white-paper-theresa-may-tells-mps

What Does the Article 50 Ruling Mean for Property Investors?

Published On: January 26, 2017 at 11:31 am

Author: Em Morley

Categories: Landlord News

Tags: Article 50,Brexit,property investment,property investors

Earlier this week’s, the Government’s appeal in the Article 50 case to trigger the country’s departure from the EU was dismissed by the Supreme Court. So what does this ruling mean for property investors, both at home and abroad?

The triggering of Article 50 will be the UK’s landmark event of the year when it comes to the economy and politics.

The latest ruling by the Supreme Court means that the Prime Minister, Theresa May, will need the Parliament’s support to trigger Article 50.

What Does the Article 50 Ruling Mean for Property Investors?

To see this through as quickly as possible, the Brexit secretary, David Davis, promised to bring legislation before MPs “within days”, highlighting yet again that the Government is still committed to start Brexit negotiations by the end of March.

While the ruling also means that the Government has no need to consult regional parliaments, the Scottish National Party (SNP) has already hinted at plans to lay out up to 50 amendments, including a stronger role for Nicola Sturgeon.

Since the Article 50 case was first heard, several other Brexit developments have happened, the most significant being May’s crucial Brexit speech. During the address, the Prime Minister made her commitment to pulling out of the single market fairly clear.

After Tuesday’s Article 50 ruling, sterling dropped once again against the US dollar, down to lows of $1.2438, before ending the day flat against the US currency.

How will this affect property investors?

Generally, property investors can be divided into two groups: domestic investors and foreign investors. Although this is a worthwhile distinction to make, in most cases, the biggest influencing factor when it comes to investing in property remains the same – the level of uncertainty that comes with an investment.

The Article 50 ruling was the first stepping-stone to removing some of this uncertainty. With the Government now promising a very quick turnaround to get the bill before Parliament, even more clarity is expected shortly.

For domestic investors, very little will change, especially considering the extremely quick turnaround the Government is hoping for. And while Parliament is right to scrutinise and debate the legislation, Davis insists that it won’t be used as “a vehicle for attempts to thwart the will of the people, or frustrate or delay the process of our exit from the European Union”.

In addition, the recent decision has changed very little, if not nothing, about the two basics of the UK’s property market – high demand and low supply.

For foreign investors, the hunt for cheap property may have already begun. Those hoping to buy using foreign currency will be wise to keep an eye on the exchange rate, especially since sterling has already experienced a drop.

Considering the Brexit decision itself, although not all property investors will agree with the plans May and her Government have set out, uncertainty is slowly being removed from market sentiment.

In addition, the Government appears to have already started working on new trade relations and partnerships with countries outside the EU, cementing Britain’s position as a stable investment location.

Has the Article 50 ruling affected your confidence in property investment?