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Em Morley

Rents Rise at Fastest Rate Since Records Began

Published On: August 21, 2015 at 1:32 pm

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Rents in England and Wales have risen faster in July than any month since records began in 2009.

The latest buy-to-let index from estate agents Your Move and Reeds Rains reveals that rents increased from an average of £789 in June to £804 in July, 1.9% growth.

Annually, tenants are paying 6.8% more than they did last July, which is the largest yearly rise on record.

Rents Rise at Fastest Rare Since Records Began

Rents Rise at Fastest Rate Since Records Began

The index believes the increase was fuelled by record rents in Yorkshire and the Humber, the East Midlands, West Midlands and London.

Director of Reeds Rains and Your Move, Adrian Gill, comments: “Just when you think the rental market is accelerating at full throttle, it finds a way to shift into a higher gear.

“We’re seeing rent rises manage to hit record-breaking speeds on both monthly and yearly timeframes as far back as data can go.”

Annually, rents have risen in all regions.

In the West Midlands, rents have increased by 3.6% in 12 months, making the average rent £583 per month. Rents in the East Midlands were up 2.5%, taking the average rent to £584.

Renters in Yorkshire and the Humber now pay an average of £582 a month, after a record 2% annual rise.

In the capital, a huge 12% year-on-year increase takes monthly rent to £838 on average.

Just two regions experienced falling rents on a monthly basis, Wales and the East of England, where rents decreased by 0.1%.

Gill continues: “The fact that rents are purring along at higher than ever speeds is a sign that the rest of the economy is picking up.

“An engine can’t use fuel it doesn’t have. These rent rises are a reflection of heavier wage packets being fed back into the economy now that the rust from the recession has been cleaned off the cogs.”1

The proportion of rent in arrears has improved monthly, from 8.6% in June to 8.4% in July. However, this is still much higher than 7.3% in July 2014.

1 http://www.propertyindustryeye.com/rents-rising-at-fastest-level-since-records-began/

Mortgage Lending Highest in July for Seven Years

Published On: August 21, 2015 at 12:36 pm

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Mortgage lending levels were the highest in July than any other month in the last seven years, according to the Council of Mortgage Lenders (CML).

The CML estimated that gross lending in July hit £22 billion.

Economist at the CML, Mohammad Jamei, says: “At £22 billion, our estimate of gross lending in July is the highest monthly total for seven years, but is in line with our expectations that lending would strengthen in the second half following subdued activity earlier in the year.”

Mortgage Lending Highest in July for Seven Years

Mortgage Lending Highest in July for Seven Years

The CML’s calculation contrasts to e.surv’s estimates, which said July experienced a drop in the amount of mortgage approvals. Read more here: /e-surv-estimates-drop-in-mortgage-approvals-for-july/

The CML says its £22 billion estimation is up by around £2 billion on June’s actual figure.

Jamei continues: “We expect lending activity in the rest of the year to be underpinned by improving economic fundamentals, but kept in check as any upward pressure on house prices further stretches affordability for some buyers.

“Today’s data is in line with our forecast that gross lending will rise to £209 billion this year, 3% higher than in 2014.”1

The CML also predicts:

  • Housing and mortgage market activity will continue to be supported by a strong economy as we enter the second half of the year, with low levels of unemployment, near zero inflation and healthy wage growth.
  • A lack of properties on the market and house price rises that surpass earnings will halt activity.
  • After an interest rate rise was suggested for 2015, expectations of the first increase have moved to the middle of 2016.

The CML market commentary report states: “Over the past few months, activity has picked up and approvals data suggests this is likely to continue into the second half of the year. This was in contrast to 2014 where activity started the year strongly and began to slow after the first quarter.

“Demand in the housing market looks set to remain strong, underpinned by a recovery in the economy. Consumer confidence has bounced back recently with people more confident about personal finances and the economy, mortgage rates remaining close to historic lows, wage growth continuing to be robust and approvals for house purchases at their highest level since the start of 2014.”1

GDP grew by 0.7% in the three months to June and the Bank of England (BoE) now expects the UK economy to grow by 2.8% this year, up from the previous forecast of 2.5%.

Regular pay has also risen by 2.8% on last year and alongside zero inflation, the CML says that workers and potential buyers have experienced “the highest boom in real terms since 2007.”1

1 http://www.propertyindustryeye.com/mortgage-lending-highest-in-seven-years/

 

Landlord Fined £75,000 for Unlicensed HMOs

Published On: August 21, 2015 at 11:34 am

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A landlord has been fined a total of £75,215 for several offences, including failing to license four Houses in Multiple Occupation (HMOs).

Gunapalan Vamathevan was prosecuted for nine offences at Ealing Magistrates’ Court on 6th August 2015.

Landlord Fined £75,000 for Unlicensed HMOs

Landlord Fined £75,000 for Unlicensed HMOs

The prosecution followed an investigation after reports last year that Vamathevan was managing a number of unlicensed HMOs.

Ealing Council’s regulatory services also discovered breaches regarding the management of the properties, including dangerous staircases and other hazards.

Several HMO licensing application forms and warning letters were sent to Vamathevan, but he did not submit any applications.

Further inspections revealed that the required works relating to a number of improvement notices had not been conducted and prohibition orders had been breached.

Ealing Council says it has a strict approach regarding this type of offence and therefore prosecuted Vamathevan for failing to manage his properties and failing to comply with the notices served.

The landlord did submit HMO license applications for his properties, but after the prosecution had begun.

Councillor Ranjit Dheer, Cabinet Member for Safety, Culture and Community Services, says: “This case is a significant result against an unscrupulous landlord who has previously been prosecuted by the council for his disregard of licensing regulations.

“We make every effort to ensure residents in our borough are well protected and have decent living standards. We take a tough line against anyone who deliberately flouts the law and Mr. Vamathevan has quite rightly been given a very heavy penalty for his prolonged and intentional illegal behaviour.”1 

1 https://www.lettingagenttoday.co.uk/breaking-news/2015/8/landlord-fined-over-70-000-for-unlicensed-hmos

Landlords and Agents Urged to Suggest New Tax Relief Ideas

Published On: August 21, 2015 at 10:32 am

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Landlords and letting agents have been urged to offer their ideas for a new tax relief system, after unpopular plans to cut mortgage interest relief were revealed in the summer Budget.

Chancellor George Osborne announced that landlords’ mortgage interest relief would be reduced to the basic rate of tax. This is set to be phased in between April 2017 and April 2020.

The Residential Landlords Association (RLA) believes that this would mean a landlord with a £150,000 buy-to-let mortgage for a property worth £200,000 would see their profit drop from around £2,160 per year to just £960.

Landlords and Agents Urged to Suggest New Tax Relief Ideas

Landlords and Agents Urged to Suggest New Tax Relief Ideas

This caused fears that landlords may stop using letting agents and increase rents as a result.

And David Smith, Policy Director at the RLA, has revealed that following a meeting with Treasury officials, the Government will be sticking by its plans.

However, he said that the RLA was asked to propose other tax solutions to the Treasury.

He explains: “The general feeling we are getting is that a U-turn is very unlikely, but that doesn’t mean we cannot push for it and we will do that.

“There is light at the end of the tunnel, but it may not be the same tunnel. I do not think he is going to draw back but I think there is the chance that a new relief could be produced, which could be good for the industry as a whole.”

The RLA is now calling on landlords and letting agents to suggest their own ideas for a new tax relief system.

It asks: “If you have alternative ideas on tax relief, then we would be happy to hear them, particularly if you can provide reasons other than just ‘it will save the landlord money’.

“For instance, allowing energy efficiency improvements to be written off against income as opposed to capital improvements will encourage landlords to invest in energy efficient measures.”1

Additionally, Smith has denied that a petition on the website Saynotogeorge.co.uk is failing. The petition had over 10,000 signatures last week, but has only gained 4,000 more since.

He adds: “10,000 was our first target and the next target is 100,000. I do not think that is a bad number, but people do have other things to do in August. We will continue to support it and are sure it will pick up into September.”1

The RLA will inform the Treasury of any proposals that it receives next month.

Landlords and letting agents are advised to email their ideas to: campaigns@rla.org.uk

The RLA also has a tax campaign webpage, where landlords and agents can write to their MP: http://www.rla.org.uk/landlord/lobbying/tax/index.shtml

1 http://www.propertyindustryeye.com/hope-for-letting-agents-over-mortgage-interest-relief/

 

Quarterly House Price Growth Highest for 11 Years

Published On: August 21, 2015 at 9:36 am

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Quarterly House Price Growth Highest for 11 Years

Quarterly House Price Growth Highest for 11 Years

House prices increased by 4.3% in the three months to July this year.

This is the highest quarterly growth for 11 years, according to Hometrack.

The market analyst says that in cities, house price growth has risen from 7.2% in April to 8.5% in July.

The cities experiencing the greatest increases are Bristol, Edinburgh and Southampton.

However, Hometrack revealed that Liverpool’s house price inflation is 13.2% below peak levels.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Household Energy Bills Set to Rise

Published On: August 21, 2015 at 8:28 am

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Household Energy Bills Set to Rise

Household Energy Bills Set to Rise

Many households could see their energy bills increase next month, according to a price comparison website.

Eight fixed-rate tariffs from providers such as British Gas and EDF Energy are due to expire and customers will be automatically switched to their supplier’s standard rate option.

Gocompare.com states that most households will see their bills rise by an average of £77 per year, but others could experience further growth.

The site says: “Households in the East Midlands and who are on the EDF Energy Blue+Price Promise August 2015 tariff will be hit the hardest, with a huge £136.59 – 13.62% – rise when they are automatically switched to the EDF Energy standard tariff.”1

Although the switch will be bad news for the majority, some British Gas and Sainsbury’s Energy customers could see their bills drop by up to £60 when their deal ends.

Gocompare advises all customers that find themselves on a standard tariff to search for a cheaper deal online, which could cut their bills by up to £300.

1 Clarkson, D. (2015) ‘Energy bills ‘to soar as cheap deals end’’, Metro, 20 August, p.22