angus roberts

Shrinking mortgage market

So just how far has the mortgage lending market shrunk? Accoprding to the CEO of the Mortgage Advice Bureau, Peter Brodnicki it will fall to a new low this year of £125bn.

That compares to £135bn last year and is massively below the £360bn figure at the property market's height a few years ago.

There are several factors according to Brodnicki; the decline of the interest only loan, lenders demanding higher deposits, some lenders such as Santander bringing less funding to the market (£10bn less in 2012) and the ending of the Stamp Duty holiday for first-time buyers in March.

Another factor he doesn't mention, but must surely be an important one, is confidence. When there is so much uncertainty for many people around job security and the possible knock-on effect of the troubles in the euro-zone, who wants to risk taking on a mortgage?

Prosecutions against landlords and agents in Yorkshire

A fellow letting agent in our region, Linley & Simpson, have used Freedom of Information requests to ask local authorities both the number and nature of prosecutions made over the past ten years.

The key findings of their research revealed:

• Leeds has mounted the most prosecutions, with more than 135 in the last two years alone. A total of 132 cases were against private landlords, with just three against letting agents. In Bradford, all but one of the 19 prosecutions brought in the last two years were against private landlords.
• Bradford has witnessed the biggest increase in complaints – rocketing from 263 in 2000 to more than 1,313 in 2010. A total of 1,130 of these complaints were against individual property owners, and 183 against letting agents.
• The biggest reported fines included £20,000 plus costs for a case brought by Bradford District Council; £17,000 for breaching rules concerning Houses in Multiple Occupation in a prosecution made on behalf of Leeds City Council; and £10,000 plus costs resulting from action taken by York Council.
• The most common breaches which lead to legal action involved the failure to license HMOs; not meeting strict health and safety regulations; financial mismanagement of tenants’ deposits; and harassment and illegal eviction by landlords.

Sellers are discounting house prices

Apparently one third (34%) of the properties listed on Zoopla have reduced in price since first coming to market.

The average discount is a 7.5% or £19,012 reduction. Zoopla estimates that £2.9bn has been knocked off asking prices since the previous month.

The bigest discounts are being given in Newcastle at 11.1% (£22,151) off, and in Liverpool they are reducing by an average 9.2% (£14,031).

Housing market rally runs out of steam

The UK’s recent housing market rally has run out of steam, according to the latest poll from the Royal Institution of Chartered Surveyors (RICS).

Following the upturn in activity seen towards the expiry of the stamp duty holiday in March, prices edged lower in April with 19% more surveyors reporting falls rather than rises.

Looking ahead, respondents were far from upbeat – a net balance of 17% more surveyors were predicting further drops.

Demand from potential buyers remained flat during April as did the supply of new properties coming onto the market.

However, transaction levels entered negative territory for the first time since September 2011; London was the only region to see a rise, albeit at the slowest rate since mid-2011.

The West Midlands and Wales experienced significant declines in sales in April but surveyors’ expectations for transaction levels across the UK do remain positive for the current quarter.

RICS housing spokesperson, Peter Bolton King, comments: “Renewed concerns over the economy and talk of a double dip recession dominating the headlines in recent weeks may well have served to undermine consumer confidence.”

Adding: “What’s more, the continuing lack of affordable mortgage finance is still hindering many first time buyers who cannot afford to get a foot on the property ladder.”

via HomeMove

 

UK rental prices set to rise, again

There is set to be a further rise in UK rental prices in the weeks and months ahead, it has been predicted, which may result in people considering moving to other areas.

UK property expert James Davis (founder of online agency upad) said he "strongly believes" that rental values will continue to increase in the UK and does not see a reason why the situation will change, on the back of the fact that there are still limitations on stock.

"There are more landlords coming into the space at the moment and there is an increasing quantity of tenants who don't have the deposits to purchase a property or just can't get a mortgage, which will put even more pressure on the rental sector," he explained.

Mr Davis added that, rather than this resulting in rents evening out, some tenants may have to move to their second choice area, at least for the time being until rental costs fall.

He explained that tenants who would like to live in West Hempstead, for example, would have to move to Cricklewood or Kilburn.

His comments followed the publication of a new report showing that households are spending an average 38 per cent of their take-home income on rent, with those in London shelling out 71 per cent.

The average asking price for renting in the UK is now £868 per month – one per cent up on the same time last year - but below the record high of £890 in September 2011.

via Zoopla property portal

Last chance for landlords!

Landlords and Agents have until this Sunday, May 6th, to ensure that all existing tenancies comply with the new deposit protection rules introduced by the Localism Act 2011, which came into force 6th April 2012.

Everyone was given 30 days to get their houses in order. The new rules do not apply to tenancies that ended before the 6th April, but they do apply to all those still continuing after that date, even if they started before the 6th.

Under the new rules tenants are able to bring claims for compensation for up to 6 years after their tenancy has ended. The courts are obliged to award compensation, the only discretion is how much, with the minimum amount being 1 x the deposit, the maximum being 3 x the deposit, for each breach.

Can you say, "no-win-no-fee?"

House prices rise in UK, by a bit

UK house prices increased by 0.3 per cent in the 12 months to February 2012, according to the latest report from the Office for National Statistics.

The data shows that the UK mix-adjusted house price was £224,473, with the seasonally adjusted UK house prices increasing by 0.2 per cent over the month.

In the 12 months to February 2012, average house prices increased in both England and Scotland by 0.4 per cent and 1.1 per cent respectively.

The ONS estimates that the annual increase in average house prices in England was driven by rises in both London and the south-east, where values increased over the year by 1.7 per cent and 1.2 per cent respectively.

Decreases in houses prices were observed in Wales, where home values fell by 0.5 per cent, as well as Northern Ireland, where average prices fell by 9.7 per cent.

Prices paid by first-time buyers in February were 1.3 per cent higher on average than 12 months before, while prices existing owners were unchanged.

The data also revealed that the cost of buying new homes rose by 7.7 per cent during the 12 months to February 2012, while the price of pre-owned housing fell by 0.2 per cent in the same period.

Landlord and Agent hostility coming to an end?

The ‘them’ and ‘us’ antagonism between landlords and tenants is disappearing, thanks to the introduction of mandatory tenancy deposit protection five years ago.

The claim is due to be made today by TDS boss Steve Harriott, speaking at the Property Business Show.

He is also due to forecast an increase in the number of authorised deposit protection schemes, together with widened use of Alternative Dispute Resolution.

Harriott will say: “No longer is it automatically believed that private sector landlords will regard the deposits they hold as part of the rent, nor that tenants will withhold the last rent payments for fear of not getting their deposits back.

“And, both landlords and agents have become much better at managing disputes at the end of a tenancy.”

Harriott will cite the low level of tenancy deposit disputes of around only 1% over the last five years as evidence of this.

According to the English Housing Survey, some 2.75m households have assured shorthold tenancies and the latest CLG statistics show that around 2.36m deposits are now safeguarded.

According to Harriott, the two existing insured tenancy deposit protection schemes, the Tenancy Deposit Scheme and mydeposits, are bidding to renew their contracts, and it is possible that additional schemes will be authorised.

In 2016, the custodial scheme, the Deposit Potection Service, will also have to re-tender. This process may also bring more competition to the market place.

Pointing out that three custodial protection schemes are likely to be operating in Scotland from this summer, Harriott will say that this might lead to the liquidation or takeover of some letting agents.

He will claim: “In Scotland – as in England – there has been no requirement to keep deposits in a client account and almost certainly some of this money may no longer be readily available. When the requirement comes to transfer deposits to one of the deposit protection schemes, some letting agents may find themselves in difficulty.”

Harriott also predicts: “Alternative Dispute Resolution could be extended further in the private rented sector to include possession cases, rent arrears and housing disrepair.”

via Letting Agent Today

Real competition for Rightmove, at last!

The Office of Fair Trading (OFT) has given the go-ahead this week for the merger between the Digital Property Group and Zoopla., which is expected to complete over the next few weeks.

The OFT decided, after investigation, that the merger would not result in reduced competition and therefore did not need to be reffered to the Competition Commission.

We believe this will be a big win for agents with the new company competing with Rightmove and the resulting price-cutting war that may follow.

Alex Chesterman, founder and CEO of Zoopla, said: "We have always been firmly of the view that this transaction is pro-competitive and is good news for both our users and customers. We are glad to be in a position now to be able to get on with the business of making the proposed benefits a reality. We have much work to do to integrate our businesses and are looking forward to the opportunities ahead.”

Mark Milner, CEO of the Digital Property Group, said: "This is an important day for the industry, given the long-awaited balance in the market that this deal will deliver. It has been a long time coming and the enhanced value that the combined business will provide will make this deal a clear win for UK estate agents, letting agents and housebuilders.”

A Rightmove spokesman said: "The property portal market has always been highly competitive. Rightmove have always embraced this level of competition, using it as a key driver to consistently improve the services we offer to advertising members and the home moving public, and maintain our position as the UK's number one property website."

Let battle commence!

Flourishing rental market

The UK rental market is flourishing with an additional 58,000 properties marketed in 2011 compared to 2010, according to Experian’s “Movers’ Index”, which offers insights across the housing market.

The number of properties put up for rent rose in every quarter of 2011, with Q3 seeing the most significant year-on-year increase, at 14.46%.

Unsurprisingly, seasonal trends were prevalent in both the rental and resale markets – August was busiest month for rentals, possibly as a result of students preparing for university, and May was the busiest month for resale properties.

Also of note, the number of properties for sale dropped by around 12,000 in 2011 but at 769,077 the total was well ahead of the 692,766 homes to rent.

Full article on HomeMove website.