Posts with tag: RICS

Housing market sees post-Brexit slowdown

Published On: August 11, 2016 at 10:30 am

Tags: Brexit,residential property,RICS,UK housing market

A new report has revealed that the UK housing market slowed slightly following the Brexit vote. However, the Royal Institution of Chartered Surveyors (RICS) believes that the market could well take off again in the next year.

The investigation from RICS revealed that house prices in Britain slowed substantially during the three months to the end of July. In addition, new buyer inquiries, property sale transactions and new instructions also slipped.

More pleasingly, there was renewed confidence in commercial property.

Resilience

In the residential property market, the number of surveyors that recorded price increases fell to its lowest for 3 years. This meant they outnumbered price falls by 5%, in comparison to a margin of 15% evident in June.

Prices were found to have fallen outright in London, East Anglia, the North and the West Midlands.

RICS said that results from the survey suggest that house price inflation could rise within a year. One month ago, just after the historic Brexit decision, surveyors were divided on what would happen to prices in the next twelve months.

Housing market sees post-Brexit slowdown

Now, 23% believe that values will increase over the period. This said, any such growth is likely to be modest in comparison to last year.

A separate survey from commercial property company CBRE reveals that demand for office space in the capital has recovered since the vote. The amount of space taken by businesses in London rose to fractionally under a million square feet in July, a 24% rise on June’s figures.

Subdued

Simon Rubinsohn, chief economist at RICS, said, ‘it’s not altogether surprising that near-term activity measures remain relatively flat. However, the rebound in the key 12-month indicators in the July survey suggests that confidence remains more resilient than might have been anticipated.’[1]

[1] http://www.bbc.co.uk/news/business-37037964

RICS calls for mandatory licensing for agents

Published On: April 8, 2016 at 11:53 am

Author: Em Morley

Categories: Property News

Tags: estate agents,licensing schemes,money laundering,RICS

The Royal Institution of Chartered Surveyors has called for the introduction of a mandatory, legally recognised licensing scheme for all estate agents in Britain.

This call was prompted after anti-money laundering campaigners proposed harder sanctions against estate agents who assist rogues to hide their assets.

Expulsion

Transparency International said that all professional bodies should remove licences from individuals and companies found to be aiding corruption.

However presently, agents do not have to be a member of any professional body and could theoretically continue to practice following expulsion. Currently, The National Trading Standards Estate Agency Team are only allowed to ban estate agents.

In the wake of the leak of millions of documents detailing over 200,000 offshore entities set up by Panama-based law firm Mossack Fonseca, Transparency International has called for stronger action.

‘The Government should establish more effective administrative sanctions on professional enablers by encouraging professional bodies to withdraw licences from those implicated in such cases, in addition to prosecuting those who are personally involved,’ the firm stated.[1]

Risks

Head of advocacy and research for Transparency International, Rachel Davies, said, ‘if corrupt individuals are allowed to continue to buy up luxury property and enjoy life in the UK, then the Government risks its credibility in leading efforts to tackle corruption on the global stage.’[1]

In the wake of a television programme entitled From Russia With Cash, which showed estate agents dealing with an apparent corrupt Russian buyer, the NAEA and RICS called for an investigation into the findings.

RICS calls for mandatory licensing for agents

Investigation

Members of both firms were involved in the dealings, with an actor playing the part of the ‘businessman.’ After the calls from Transparency International, a spokesperson for RICS said, ‘RICS demands the highest standards from our members and where those high standards fall short, we will use the full weight of our regulatory powers to take action.’[1]

‘A full and thorough investigation into those named by the From Russia With Cash programme is currently ongoing. While it would be inappropriate to comment on an ongoing case, we will be making a full statement once our investigation has concluded. RICS will always take stringent action against our own members that are found guilty of wrong-doing.’

‘However at this present time, UK estate agents are not legally required to be licensed and many are not members of a professional body. We are calling for the introduction of a mandatory recognised licence for all estate agents,’ the report concluded.[1]

[1] http://www.propertyindustryeye.com/new-call-professional-bodies-counter-money-laundering/

UK housebuilding delayed due to lack of skilled workers-RICS

Published On: January 14, 2016 at 2:30 pm

Author: Em Morley

Categories: Property News

Tags: bricklayers,housebuilding,housing,housing market,property,RICS

The hold up in construction of new homes is being driven by a shortage of skilled workers in the sector, according to the Royal Institution of Chartered Surveyors (RICS).

It fears that a lack of construction skills is threatening work on new homes and infrastructure projects.

Short

In a survey conducted by RICS, six in ten respondents said that they had difficulty locating bricklayers and quantity surveyors for specific tasks.

Wages for construction workers increased by in excess of 6% in the year to October, which was more than three times the average wage increase for UK workers. However, RICS’ latest market survey, assessing the final quarter of 2015, suggests labour shortages were considered to be the largest barrier to growth by almost two-thirds of industry professionals.

UK housebuilding delayed due to lack of skilled workers-RICS

This will come as a blow to the Government, which has pledged to increase housebuilding in an attempt to tackle the growing housing shortage. Despite the number of homes being constructed rising from lows after the financial crisis, they are well below their 2007 highs. In addition, they are well short of the 250,000 that many experts feel are required to satisfy unwilting demand.

Further research from the Guardian suggests that major firms have secured land for 600,000 homes, all of which have yet to built. The Local Government Association said that the total number of unbuilt homes that have already been given planning permission are at record highs.

Just last week, the LGA called for tougher sanctions on slow building.

Unattractive

RICS noted that the building industry lost many skilled workers on the back of the economic crisis, many of who cannot be tempted back into the sector. The orgnaisation believes there is not enough being done to attract new trainees, despite the recent wage increases.

‘While workloads are still growing at a relatively healthy pace, labour shortages in the construction sector are causing delays at different stages in the development process and leading to significant problems with project planning,’ noted Simon Rubinsohn, chief economist at RICS. ‘More than 60% of our survey respondents said that these resulting planning delays were an impediment to growth.’[1]

‘That said, industry wages are becoming increasingly attractive, and I would hope that over time this will encourage skilled workers to return to the sector, as well as drawing school leavers and graduates towards construction-industry careers, he added.[1]

[1] http://www.theguardian.com/business/2016/jan/14/uk-housebuilding-held-up-lack-bricklayers-report-rics

House Prices Continue to Rise as Lack of Homes to Sell Hits Record High

Published On: December 10, 2015 at 2:39 pm

Author: Em Morley

Categories: Property News

Tags: home sales,house prices,property demand,property values,RICS

November saw house prices continue to rise as British property valuers reported a record shortage of homes for sale, according to the latest research from the Royal Institution of Chartered Surveyors (RICS).

Some members of the organisation believe that incentives for first time buyers could lead to more sales in the coming months.

House Prices Continue to Rise as Lack of Homes to Sell Hits Record High

LSL Property Services and Acadata also released their house price index for England and Wales today, reporting a new record high in house prices. The study found that the average property value in November was £290,640, a 6% increase on last year and 0.6% up on October.

The report also says that home sales dropped by 15% in November compared to October, with completed sales for the past 12 months sitting 3.4% behind the same period in 2014.

The RICS found that high demand for homes is not leading to greater supply, as the number of homes for sale per surveyor has continued to decrease for the tenth consecutive month to a new record low.

Chief Economist at the RICS, Simon Rubinsohn, says: “I can’t recall a set of comments which have so frequently drawn attention to lack of stock on the market. Given this, it is hard not to envisage prices continuing to climb upwards.”

Official data shows that house prices rose by 6.1% in the year to September and last week, Halifax predicted that they could rise by as much in 2016. Read more: /house-price-forecast-for-2016/

House prices have risen more slowly in London, where the RICS reports the rate of growth has slowed for a fourth consecutive month, as last year’s increase in Stamp Duty for properties worth more than £925,000 cools the top end of the market.

Most economists agree that Britain’s property market is suffering from a long-term lack of house building, particularly in the south of England, fuelled by planning constraints and a shortage of skills and finance.

In his Autumn Statement, Chancellor George Osborne revealed that he will support builders in selling 200,000 new homes at 20% below market value over the next five years.

First time buyers in the capital will get access to larger Government-funded loans and loans will also be offered to those buying a shared ownership property.

The RICS says that this has led to its members predicting the greatest increase in sales in over two years. Initially, it believes this will lead to higher prices, not a rise in construction.

Rubinsohn adds: “With the best will in the world, it is likely that the boost to demand will come through rather more rapidly than the expansion of the development pipeline.”¹

¹http://uk.reuters.com/article/uk-britain-houseprices-rics-idUKKBN0TT00420151210

Does the letting industry have effective regulation?

Published On: December 3, 2012 at 9:45 am

Author: Em Morley

Categories: Property News

Tags: letting industry regulation,RICS

A recent report from the Royal Institution of Chartered Surveyors seems to suggest that irresponsible landlords and agents are exploiting a ‘total lack of effective regulation,’[1] within the industry. The RICS is appealing for a total crackdown and new legislations to prevent unscrupulous landlords from turning the letting sector into, ‘the property industry’s Wild West.’[1]

Worrying

The survey showed that over two-thirds of more than 1,000 people that have rented a home over the last two years in England did not have an inventory when moving in. Responding to this statistic, the RICS said that this highlighted the, ‘worryingly low standards,’[1] that tenants now expect.

Rental sector demands have soared, with people unable to purchase their own homes. Toughened borrowing rules and the economic crisis have contributed to a rise in the cost of renting.

Concern is growing about the number of people setting up letting agencies without the correct qualifications. Their lack of knowledge, plus no compulsory codes of conduct, is highly detrimental to the sector.

Does the letting industry have effective regulation?

Better protection

Calls for better protection for people living in the privately rented sector have come in recent months. Charity organisation Shelter conducted a survey, which suggested that almost a quarter of people think they have been overcharged by letting agents. 23% of people questioned believed that they have been hit with unfair renting charges for aspects such as credit checks and basic administration.

More alarming figures from Shelter said in some cases, renters had been charged £150 for yearly credit checks, which in reality cost just between £8 and £25 to carry out.[1] Furthermore, some renters were charged £100 for a simple viewing of a property, with others charged £540 for ‘administration’ fees.[1]

Correct agents

Global residential director of RICS , Peter Bolton King, says the importance of a genuine letting agent cannot be stressed too much. He said, ‘A good lettings agent can be worth their weight in gold for both landlord and tenant.’

‘However, there are too many corrupt agents that do not belong to any professional body who are taking advantage of the current gap in regulation, putting consumers at risk.’

‘Choosing the wrong agent can result in tenants encountering all sorts of problems such as lost deposits, broken agreements and excessive charges.’[1]

Action

Mr Bolton King is also clear on what he wants to happen in the sector moving forwards; – ‘What we would like to see is the Government taking direct action on this and introducing a single regulatory and redress system for both sales and lettings agents to make sure they are fully accountable.’[1]

In the RICS survey, 87% of tenants supported the notion of one compulsory regulation scheme for letting agents being introduced.[1] Encouragingly, it seems that the Government is starting to follow suit.

Housing Minister Mark Prisk said that, ‘People living in private rented homes deserve to be treated fairly and honestly.’

‘While the report shows the vast majority of tenants are satisfied with their lettings agent, I’m appalled that some agents are abusing their position and giving the whole industry a bad name.’

‘We are determined that all tenants receive a good service, but we want to avoid excessive red tape that would push up the cost of rents and reduce choice for tenants.’

‘That’s why we have strongly backed industry-led schemes such SafeAgent.’[1]

Prisk also stated that letting agents are currently subjected to protection legislation that tenants with concerns should report them to the Office of Fair Trading.

[1] http://www.landlordexpert.co.uk/2012/12/03/lettings-industry-has-a-total-lack-of-effective-regulation/

RICS Warn BTL Landlords of Older Properties

Published On: January 19, 2012 at 9:09 am

Author: Em Morley

Categories: Property News

Tags: older properties,RICS

A recent study by the Council of Mortgage Lenders (CML) has revealed another boost in the buy-to-let market.

Low interest rates, high inflation, rising rents, and stable house prices have combined to increase buy-to-let loans by 16% in the third quarter of the year. These also accounted for 12% of all house purchase loans.

With the current lack of housing stock, accentuated by fewer sellers on the market, there has been increased competition for high quality homes. This has led landlords to go for properties that may need work.

The Royal Institution of Chartered Surveyors (RICS) has warned that older properties could potentially need more work than just redecoration or a new bathroom. It is important for private landlords to know what they are buying into before purchasing, to avoid nasty surprises.

Typical building or structural faults that could creep up on landlords could include dry rot, rising damp, blocked drains, fractured support beams, or subsidence.

RICS Warn BTL Landlords of Older Properties

To resolve faults, private landlords could end up paying tens of thousands of pounds, say the Building Cost Information Service (BCIS). In a four-bedroom house, a substantial damp problem could cost up to £28,000 to repair the problem and prevent it from happening again, while subsidence can cost £24,000 to correct.

RICS’ Director of Residential, David Dalby, says: “Landlords could be without a tenant for several months while repairs are being carried out, and it could be even longer if subsidence is discovered.”

He also explains the difficulty in finding problems: “Estate agents act for the seller and will not be able to advise purchasers on possible defects, and most of the time will be unaware of any issues with the property anyway. We are warning private landlords to know what they are buying and are advising agents to recommend surveys to all their clients.”

Before finalising on a property, landlords are advised to request a Condition Report, Homebuyer Survey and Valuation, or a Building Survey from a RICS accredited surveyor.

A Condition Report will provide a basic overview on the condition of the property, and highlight areas of major concern.

The Homebuyer Survey and Valuation is most appropriate for properties in a reasonable condition. It provides a succinct report that details any significant problems that could potentially make a difference to the property’s value.

Building Surveys deliver a detailed report on the property’s construction and condition, and is beneficial if the property is rundown, has been significantly altered, or if the landlord plans to majorly convert or renovate the house.

A Condition Report starts from about £200; a Homebuyer Survey and Valuation costs around £400; and a Building Survey costs from £700.

Dalby says: “The cost of a survey is a small price to pay for peace of mind and will prevent landlords from being hit with unforeseen costs. Surveys can even be used to negotiate the sale price if any significant faults are discovered. Landlords who show surveys to insurers are also likely to benefit from lower buildings insurance premiums.

“RICS surveyors are closely regulated and are required to have professional indemnity insurance, which helps to protect landlords if the surveyor fails to detect a fault which later becomes apparent.” ¹

¹http://www.landlordexpert.co.uk/blog/2012/01/17/buy-to-let-landlords-should-be-wary-of-older-properties/