Monday, 31 October 2016

London house prices forecast to fall next year

Residential property prices in London are set to fall next year as uncertainty about the UK’s exit from the European Union weighs heavy on the market, according to the Centre for Economics and Business Research (Cebr).
With the Prime Minister Theresa May planning to invoke Article 50 of the formal Brexit process by the end of March, the economics consultancy believes that uncertainty surrounding Brexit negotiations is likely to have an adverse impact on the market in the capital causing home prices to decline by an average of 5.6% in 2017, with the city’s prime and most expensive areas expected to be most affected.
But despite the anticipated fall in London property prices next year, Cebr expects to see house prices across the UK as a whole increase in 2017, albeit at a reduced rate of 2.6%, down from 6.9% this year.
The housing market was already facing headwinds from tax changes before June’s EU referendum, but now it would appear that the greatest concern for investors appears to be that the government could opt for a so-called hard Brexit, which could see the UK give up membership of the Europe’s single market for goods and services to regain control of immigration.
“Nervousness and uncertainty are starting to show,” said Kay Daniel Neufeld, an economist at Cebr. “We expect to see house price growth across the UK slowing considerably in the fourth quarter of 2016, a trend that is set to continue in 2017.”
Increasing inflation, falling employment levels, a weaker business investment environment, and a likely fall in demand from international purchasers due to curbs on migration, are also expected to place downward pressure on home prices, particularly in London.

UK housing market sees a ‘reverse ripple’


Historically, UK property prices have demonstrated a distinct spatial pattern over time, rising initially in a cyclical upswing in prime central London, then wider London and the south east, before spreading out nationwide. This is known as the ripple effect, and a glance at the property market suggests that history is repeating itself, according to haart estate agents.
As many areas struggled to recover from the 2008 global financial crisis, the north-south divide returned to plague the British housing market, as London, which has long operated in its own microclimate, recovered strongly from the downturn, with house price growth in recent years outpacing the national average by some margin, adding to wide regional differences between the capital and the rest of the country.
But house price growth in London, widely considered to be the boiler room of the residential property market, is no longer roaring as buyers find properties increasingly unaffordable, face stricter mortgage affordability checks and higher taxes.
“Typically resilient, London was the quickest to recover following in the 2008 recession. However, the multitude of blows that have befallen its property market over the last couple of months are obviously proving too much to bear,” said Paul Smith, CEO of haart.
In contrast to the slowdown in the capital, the estate agency reports that the market is seeing a ‘reverse ripple’ effect, as a revival in activity in England’s regions begins to filter through into outer London areas.
Smith continued: “The evidence from our branches is that areas around 100 miles from the capital are where the market is reviving, and this is spreading towards the South East and London – a complete reversal of the traditional ‘London first’ pattern we’ve grown used to.
“This could be a historic realignment of our property market away from central London, or a purely post-Brexit ‘flash in the pan’ phenomenon. What is clear is that since June, Britain’s property market has been turned on its head and London, for a change, is beginning to rely on the rest of the country for life-support.” 

Sunday, 30 October 2016

Landlord jailed for remortgaging his parents’ house to expand BTL portfolio

A man has been sentenced to almost three-and-a-half-years in jail after being found guilty of remortgaging his elderly parents’ £1.5m house in Hammersmith, west London, to fund his own buy-to-let portfolio, according to a report in the London Evening Standard.
Nicholas Leroy Forrestver, 50, conned his father into signing papers for a £300,000 loan on the six-bedroom family home in Hammersmith in 2006, and subsequently used the funds to acquire three buy-to-let properties in east London.

However, his 83-year-old father Ivor took his son to the High Court to remove his name off the family home deeds, and then gave evidence against him during a criminal trial.
Forrester denied obtaining a money transfer by deception, but was found guilty by a jury at Isleworth Crown Court following a five-day trial.
He also pleaded guilty to wrongly claiming £10,000 in benefits while earning income from the rental properties.
Judge John Denniss told him: “Your behaviour as far as your father’s property was concerned was profoundly dishonest and false representations were used towards your father and almost certainly your mother.
“It was well-planned, taking advantage of vulnerable individuals.
“You became fixated with the opinion that this house was your house and when the equity rose you were determined to strip it out to pursue your own commercial ventures, which did not go well.
“Your family has now effectively rejected you and your father feels let-down by you and defrauded.”
The court heard that a High Court order has put the family home back in his father’s name, while Forrester’s buy-to-let property portfolio has now been repossessed.
Sam Bonner, defending, said Forrester was “very stressed and extremely remorseful”, adding that the incident had “taken a toll on him physically and mentally as well as financially”.
But his father has still been saddled with £1,100-a-month repayments of the loan wrongly taken out by his son, the court heard.
Forrester, of Perham Road, West Kensington, must serve at least half his sentence before being considered for release.

Wednesday, 26 October 2016

Research reveals private rented sector in Ireland is buoyant

25th October 2016

The private rented sector has expanded rapidly in Ireland with 24.5% of all households in Dublin now tenanted, a rise of over 60% since 2011, a new analysis shows.

There are 328,700 now living in rented homes in the Irish capital, up 61.3% since the first quarter of 2011, according to an analysis of data from the Central Statistics Office (CSO) by Savills Ireland.

It also shows that the stock of housing units in the private rented sector has expanded by 43,120 in Dublin and by 24,128 nationally, which Savills points out contradicts claims by some estate agents and business associations that landlords are fleeing the market and the sector is contracting.

‘With rents back to boom-time levels, income yields on residential property are much more attractive than the returns that are available to investors who leave their money in the bank or buy a bond,’ said Savills director of research John McCartney.

‘On top of this, investors are generating wealth from capital appreciation so it’s a no-brainer for people with the cash,’ he added.

The analysis report points out that while the stock of rental properties in Dublin has risen by 54% since the first quarter of 2011 and this expansion has not been sufficient to keep pace with the growth in demand.

‘House price inflation, sluggish wage growth, weakened household balance sheets and tight mortgage lending have conspired to drive people who would otherwise have been owner-occupiers into the rented market. At the same time social housing tenants are increasingly being housed in private rented accommodation. This has driven a huge increase in rental demand,’ McCartney pointed out.

For the first time Savills’ research reveals the vacancy rate for private rented housing in Ireland. This peaked at over 10% in the middle of 2009, but has now fallen to below 1.5% both in Dublin and outside the capital.

Savills has calculated the long term mathematical relationship between vacancy rates and rental growth. This is then used to forecast residential rents into the future. Based on three alternative vacancy rate scenarios the model predicts compound rental growth of 22% to 26% between the third quarter of 2016 and the end of 2018.

How to create an eco friendly farmhouse kitchen

By  Tory Kingdon
25 October 2016

A farmhouse kitchen with bespoke timber cabinetry designed by Halstock

Country houses aren’t known for their energy efficiency. Often bestowed with drafty windows, aged plumbing and an oil-fueled Aga, they are the kitchen equivalent of the “Chelsea tractor” 4x4. While there is an undeniable charm to these sorts of historic buildings (and most would be thrilled to find a range cooker already installed in their new home), high utility bills aren’t part of it.

In fact, one of the reasons so many large country houses were lost in postwar Britain is that they became too expensive and inconvenient to run. The British public wanted modern, well-insulated homes regardless of character. But today there are ways to make a country home more sustainable and there is no better place to start than in the kitchen.

The Aga is undoubtedly the predominant feature of the country kitchen aesthetic, but older versions that run on gas, or kerosene oil in the absence of a main gas supply, don’t have a reputation for being very green.

An AGA Total Control from £11,295

Some argue that Agas have a dual purpose, acting as a heating system as well as a cooker, and that they last a lifetime, meaning that there are no additional carbon emissions from the manufacturing, delivery and installation of a new system. It’s a contentious issue, but it seems that if you’re lucky enough to have one already installed you can justify keeping it.

If you’re buying a new range cooker, the latest generation of Agas now includes electric versions and dual-fuel models, which allow the hotplates to be turned off to reduce energy consumption. The fully electric, three-oven Aga Total Control starts from £11,295 (

According to Aga’s energy report, this model uses 34.5kW of energy to cook dinners during the week and breakfast, lunch and dinner on the weekend. By comparison, the modern gas equivalent – which now allows you to program the Aga to come on when you need it and leave it sleeping when you don’t – uses 159kW.

Plugged in: the Everhot 100i range cooker runs on electricity and prices start from £7,225 (

Alternatively, Everhot range cookers claim to use a third of the energy of an Aga and can even be run from a solar panel, water mill or wind turbine. The company founder designed them as such because he wanted a range cooker that he could run from a small water turbine driven by a stream on his property. The electric Everhot 150i, which has independently adjustable oven and heating surfaces, and includes an induction hob, is priced from £9,020 (

If you’re happy to go without a range cooker, then opt for an A+++ rated electric oven, which the Energy Saving Trust says will consume 60 per cent less energy than other models.

When it comes to fixtures and fittings for your kitchen, an easy way to go green is to repurpose something that has previously been used. There are good reclamation yards and salvage companies across the UK where you can buy second-hand sinks, handles, dressers and kitchen furniture (try You can find beautiful vintage taps, too, but it may be worth investing in a modern water-saving or automated tap, which can cut water consumption by as much as 40 per cent (visit

Conchetto tap From £261, by Grohe (

At Tavy House, a six-bedroom home in Tavistock, Devon, for sale through Strutt & Parker for £700,000 (01392 229405;, the kitchen has been crafted using reclaimed floorboards from the rest of the house. This creates a rustic look while being sustainable.

A similar style can be sourced from the aforementioned reclamation yards or through specialist companies, such as English Salvage ( If you’re not using reclaimed wood, ensure any timber is FSC or PEFC-certified. These classifications are awarded to wood from socially and environmentally responsible forests that are economically managed.

Recycle: the kitchen in Tavy House is made from reclaimed floorboards taken from the rest of the house

Halstock, the kitchen designer and cabinetmaker, works with sustainably sourced and reclaimed timber ( The company prides itself on creating built-in cabinetry to fit around the uneven walls or traditional beams commonly found in country homes. Bespoke cabinetry can also conceal the less aesthetically pleasing parts of being green, such as recycling bins or energy-efficient but unattractive fridges. Energy ratings now run from A+++ to F, with A scores using the least energy and F the most. Fridges and freezers must be at least A+, but the better the rating, the more energy efficient they are.

Bristol-based company Sustainable Kitchens will plant a tree for every kitchen it builds ( Its designs focus entirely on sustainably sourced timber, usually oak and birch wood, and it re-uses and recycles as many materials as possible in the production process. According to founder Sam Shaw, wood is also the most sustainable option for worktops. “It’s very versatile,” he says. “With the natural oak, we can lighten it using a lye solution or use a natural eboniser made from vinegar and wire wool to darken it.”

Wall to wall: using reclaimed tiles is one simple wayto make your kitchen greener

For areas that require a little more durability, Shaw suggests quartz. “It’s not as sustainable as timber, but the industry is catching up quickly with good eco options that use natural polymer resins and recycled stone.” Quartz generally has a lower environmental impact than traditional granite or marble because it is in more plentiful supply. Alternatively, opt for a worktop made from recycled glass waste mixed with a solvent-free resin. The effect is a unique polished surface embedded with fragments of glass that catch the light. It is hard wearing and resistant to heat, scratches and stains (

For walls and splashbacks, try the Reclaimed Tile Company, which specialises in encaustic tiles but also offers glazed, ceramic and terracotta options sourced from across Europe (

Recycled glass worktops £400 per m, by Resilica (

To bring colour to your walls or cabinetry, you can use an eco-friendly paint that is low in volatile organic compounds, such as Farrow & Ball, or ideally free of them: try Earthborn Paints ( or Ecos Organic Paints (, which also has a colour-matching service.

Of course, it’s not just how you design your kitchen but also how you use it day to day. According to the Energy Saving Trust, people waste an average of £40 per year in the home by leaving electrical appliances on standby. One of the simplest green moves you can make is to invest in a standby saver plug, which automatically switches off appliances when they’re not in use.

Claypaint: £36 for 2.5l, by Earthborn (

Invest in an eco kettle, too. The average UK household boils the kettle 1,500 times a year – so doing it inefficiently can have a big impact. The Bosch Styline kettle saves up to 66 per cent more energy than a conventional one (£39.99,

Lighting accounts for 18 per cent of a typical household electricity bill. This can be decreased by making more of an effort to turn lights off but also by replacing traditional incandescent lightbulbs, which waste up to 90 per cent of their energy through heat, with more modern energy-saving ones. Philips offers both spotlights and bulbs that are energy efficient and can last a lifetime (

This is the key, according to Shaw. “It’s not just about making sure that the products and materials are non-polluting, ethical and sustainable,” he says. “It’s also about ensuring that we use and create things that will last, or even be passed on.”

Perhaps the excuse you were looking for to order that range cooker – guilt-free.

Monday, 24 October 2016

Let’s move to Hotwells, Bristol – ‘It’s enchanting’

By Tom Dyckhoff  (@tomdyckhoff)
October 21, 2016

The old Bristol of radical politics, Rastafarian culture, 60s concrete beside Tudor beams still lurks beneath the fresh paint
Hotwells: ‘Bristol has an energy I’ve never seen in the place before.’ Photograph: Alamy
What’s going for it? The multicoloured terraces of Hotwells, as lurid as M&M’s, cling to the hillside like a hipster favela. They have become a symbol of the city, reproduced on promotional material and Instagram accounts celebrating nu-look Bristol. I hadn’t been to the city for a couple of years and, yes, maybe it’s time to believe the hype. Bristol has an energy I’ve never seen in the place before, alive with creativity, waistbands bursting with its proliferating food and drink scene. Mercifully, it has yet to fall in love with itself, the old Bristol of radical politics, Rastafarian culture, rusting boats or 60s concrete beside Tudor beams still lurking beneath the fresh paint. In enchanting Hotwells, which in a 17th-century form of urban regeneration was once a spa to rival Bath, you’ll still find community playgrounds, quiet, crumbling lanes tumbling down the slope, proper boozers and snatches of weedy space un-built-upon-by-property-developers. Long may it last (but, miseryguts, I doubt it will).

The case against I hope you have good brakes/a good clutch and are deft at reversing backwards up a hill and round corners; narrow lanes and ratruns. Hotwell Road is busier than the M5.

Well connected? A half-hour walk from Bristol Temple Meads, 15 minutes from the centre, five minutes from the Avon. Driving: only if you have to. Bring stout thighs and titanium calves.

Schools Primaries: Hotwells is “outstanding”, says Ofsted, with nearby St George C of E and Christ Church C of E “good”. Secondaries: independents like Clifton College and Bristol Grammar dominate locally, so it’s a walk to the “outstanding” Bristol Cathedral Choir School, the “good” Cotham School or across the Avon to the “good” Ashton Park.

Hang out at… The Lion: the perfect local. And explore Bristol’s burgeoning food scene, much celebrated by our own Marina O’Loughlin.

Where to buy Like a labyrinth of lanes uphill and down dale. Just get lost. And end up at the Lion for a pint. A few detacheds and smaller town houses, £600,000-£800,000. Terraces and cottages, £350,000-£600,000. Flats, £200,000-£350,000. Rentals – not much: a one-bed flat, around £800pcm; a three-bed house, £1,500-£1,600pcm.

Bargain of the week On the plus side, this Georgian town house is gorgeous. On the minus, it’s on Hotwell Road. Five bedrooms for £645,000 with

Buy-to-let ‘remains resilient’ despite tax changes

By Marc Da Silva
October 24, 2016

Buy-to-let property remains an attractive income investment at a time of low saving rates and stock market volatility, according to Together.

Despite the introduction of higher stamp duty purchasing costs, the recent scrapping of the wear and tear allowance, and the pending removal of landlords’ mortgage interest tax relief from next year, the specialist lender reports, based on its own lending activity, that investors continue to be drawn to the buy-to-let market as the returns routinely outperform those of other investments.

“Buy-to-let has proved to be a resilient sector this year, despite the tax changes introduced by the government,” said Together’s commercial CEO, Marc Goldberg.

He continued: “Buy-to-let lending continues to perform well for us here at Together, and we’ve been able to grow whilst maintaining a high quality customer base. Given this growth, we want to ensure that we offer a variety of products to meet the continued demand.”

Together has just introduced a new five-year fixed buy-to-let mortgage to meet the demand from this growing market, with the maximum loan size increased to £500,000, while offering landlords and property investors the opportunity to fix their costs.

Goldberg explained: “Our new fixed-rate product, as well as bigger loan sizes, will help us deliver more funding to property investors, through our network of broker partners.

“We offer both interest-only and repayment options, with loan-to-values of up to 75%, and we’ll accept projected rental incomes, so landlords don’t need to have a tenancy already in place to secure the funding needed.

“We also lend to limited companies, and have seen an increase in applications from limited companies for buy-to-let funding, as a result of the various tax hikes.”

Together recently announced record trading results, with annual new lending for the year to 30 June 2016 surpassing £1bn for the first time in its 42-year history, and a current loan book in excess of £1.8bn.

Friday, 21 October 2016

Ireland’s decision to scrap buy-to-let tax is a warning to Britain

By Marc Da Silva
Last October 20, 2016

As the UK prepares to change the way landlords are taxed by scrapping the existing rules that permit them to offset all of their mortgage interest from property investments against tax, Ireland has announced that it is reversing its policy that prevented landlords from claiming full mortgage interest tax relief on rental income to help stop rents soaring out of control.

In his Budget statement made last week, Ireland’s minister for finance, Michael Noonan, said landlords would be able to claim 80% tax relief from next year, up from an existing level of 75%.

Tax relief will then increase by a further 5% a year until it reaches 100% again.

Noonan highlighted the fact that the policy, which is similar to the tax changes due to be introduced in the UK from April next year, was introduced in Ireland in 2009 to “rescue the public finances” but with investment in Ireland’s private rented sector falling now is an “appropriate time” to revisit it.

Around 440,000 basic-rate tax payers will be forced into a higher tax bracket from April next year once planned changes to landlord taxation comes in to force, according to the National Landlord Association (NLA).

The existing rules that permit landlords to offset all of their mortgage interest against tax will, from April 2017, be phased out, restricting the amount of mortgage interest landlords can offset against tax on their property investments.

By 2020, landlords will not be able to deduct any of their mortgage interest from their rental income before calculating their tax bill.

The changes to tax relief will make it harder to make a profit from letting property, which in turn could deter investment in the sector.

Campaigners against the mortgage interest relief changes argue that Ireland’s change of policy demonstrates that the levy does not work.

Rents in Ireland have increased significantly since 2013, with recent figures from the Irish Residential Tenancies Board revealing that rents in Ireland have risen by almost 10% since last year.

Here in the UK, many landlords will have no alternative but to recoup their losses through higher rents, with tenants paying the price of the government’s tax-grab.

Research conducted by Property118 earlier this year revealed how up to 4.6 million tenants could be affected by the now former chancellor George Osborne’s tax attacks on buy-to-let landlords.

Mark Alexander, founder of Property118, told the press this week: “Ireland has got a really big problem with reduced investment in property at the same time as rents have increased dramatically.”

Thursday, 20 October 2016

London landlords advised not to be greedy and value tenants in period of stagnation

October 20, 2016

Landlords in London are being advised not to seek rent increases and to even consider reducing rents for particularly good tenants as the sector is currently stagnating.

The key to surviving in the current market is to retain good tenants and even undertake work on the property to keep them happy and avoid void periods, according to London wide agents Benham & Reeves Residential Lettings.

The firm says that despite forecasts of doom and gloom, Britain’s economy and housing market have proved to be surprisingly resilient in the face of the referendum vote but the London rental market is stagnating.

According to lettings director Marc von Grundherr there has not been any widespread panic amongst investment buyers eager to offload their buy to let properties but instead stagnation characterises almost the entire market.

‘Rents have flat-lined across most of the capital. We are advising all our landlords not to ask for rental increases and if the tenant has been particular good then to even consider a slight decrease or some works to retain them and avert any void,’ he said.

According to the letting agent’s latest market appraisal most tenants are readily agreeing renewals. This is particularly noteworthy for this quarter when transactions are normally at their highest just prior to the start of the school year.

Only a few small pockets saw significant change this quarter, the report points out. Wapping, which is undergoing a huge regeneration with the development of the former News International site to create 1,800 new homes and 20,000 square feet of commercial space, is having a transformational effect on the area.

Although residents have yet to move into the first phase of St George’s London Dock, rents in the area have gone up by 4.1%. Other new property developments nearby on the eastern fringes of the City have also introduced the area to a new breed of residents and the luxury flats are proving to be highly desirable.

But the report also points out that rental prices in prime central London have fallen for the second quarter. An oversupply of rental properties in Belgravia, Chelsea and Knightsbridge continues to have a negative effect on rental values in the area.

Already, Benham & Reeves Lettings has identified a number of apartments in these areas that are actually less expensive than equivalent properties in what might be considered emerging rental locations.

‘Prime central London arguably has the best value properties in the capital at the moment and transformed pockets of North West London such as Colindale continue to offer excellent returns for investors who got in there early,’ van Grundherr said.

He explained that rents have stayed the same over the past quarter. ‘We’re in a period of uncertainty and fortunately, our landlords are listening to our advice when we tell them not to be greedy and simply value the tenants they have,’ he added.

Jail sentences for fake letting agents after elaborate scam

By Graham Norwood
October 20, 2016

Three men have received prison sentences of up to 28 months after a nationwide lettings scam was unearthed by trading standards officers, the police and a local authority.

The three used false aliases and made up business names to convince unwitting landlords and tenants that they were running a legitimate agency, before taking large deposits and never returning them.

Adam Coote was sentenced to 28 months in prison; Andrew Rickard received 18 months in prison; and Sahila Kauser was also sentenced to an 18 month custodial sentence suspended for two years, with 140 hours unpaid work and a 12 month supervision order.

All three were sentenced for conspiracy to commit fraud.

Victims were shown around properties and told that a credit check was required before they could move in. Potential tenants were then told that they had failed and were asked for six-months of rent in advance.

A number then got access to the properties, but the money was not passed on to the landlords. Tenants were also told that their utility bills were covered but in actual fact these were not being paid.

Serviced offices in Mayfair, Birmingham and Bristol were used, giving the impression of established businesses; these were often left quickly and payments defaulted on.

A number of different business names helped hide the fraud, including Belgravia Property Group, Carlton Residential, Park Lane Residential Ltd and Mayfair Residential.

Adam Coote used the names Jordan Lawson, Elliot Portman and Lewis Goldman to conceal his identity, while Sahila Kauser posed as Jasmine Khan, Zara Khan and Zara Kauser. Andrew Rickard used Andrew Rommel and Joshua Benson.

Coote has also changed his name via deed poll on a number of occasions, going from Adam Coote to Elliot Joshua Wilson in 2006, then becoming Elliot Portman before his latest offence.

He has previously served a sentence of four years for fraud in 2009 and it is believed that he met Andrew Rickard in prison when they hatched the plan.

Twenty-one victims provided statements to the Westminster city council investigation with losses amounting to roughly £26,000. A multi-region trading standards team and the Metropolitan Police were also involved.

Wednesday, 19 October 2016

Foxtons' property sales tumble by a third as London house buying cools

by Kate Palmer, Business Reporter
October 19, 2016 09:30 AM

Foxtons issued a profit warning in June, blaming uncertainty following the EU referendum
Foxtons’ property sales have plunged by a third in just three months as London homeowners shy away from transactions in the wake of higher stamp duty rates and fears over the Brexit vote.
The estate agency, which blamed a profit warning in June on the EU referendum, said revenue from property sales dropped 34pc in the three months to September 30 to £12.2m as it contended with lower transactions in the capital.

Higher rates of stamp duty, announced by the former Chancellor George Osborne last year, took effect in April, adding a 3pc surcharge on second-home buyers and buy-to-let investors.

It has hit London property owners in particular: average prices in the capital have now reached £489,000, compared with a country-wide average selling price of £219,000 in August 2016.

“We have built Foxtons to withstand sales market cycles,” said Nic Budden, chief executive. “The long-term fundamentals of the London property market remain very attractive and represent a huge opportunity for growth.”
Foxtons, which relies on its central London offices, also clocked lower demand from tenants but said its lettings division, which makes up more than half the business, helped buck the decline in property sales. Overall, the FTSE Small Cap group said revenue fell 14pc to £37.5m throughout July to September.
Despite worries that Brexit would hit the London property market, house prices continued to soar following the EU referendum in June. Prices increased 12.1pc in the capital in August, outpacing the annual rate of growth of 8.4pc across the country, according to the Office for National statistics.

However, some observers argue that the impact of Brexit is yet to affect official transaction figures, as sales can take several months to complete.

Foxtons insisted it would hit full-year sales and profit forecasts. Analysts currently predict the estate agency, known for the branded Minis driven by its agents, will post slightly lower sales of £145.2m in 2016 and profits of £27m, down from £41m the previous year.

Foxtons’ shares remained buoyant in morning trading, rising 1.5pc to 96p. But they remain 42pc below their level before the June 23 referendum.

Sales of luxury London properties collapsed by 86% in past year

Monday 17 October 2016

Developers scale down most opulent projects, with newbuilds divided into smaller homes, as increased taxes blamed.

Just five properties were sold for more than £10m in the three months to August 2016. Photograph: Jack Taylor/Getty Images

Billionaires are shunning the London luxury property market, with sales of “super prime” £10m-plus homes in the capital collapsing by 86% over the past year.
Just five properties were sold for more than £10m in the three months to August 2016, according to an analysis of Land Registry data, compared with 35 in the same period a year earlier. Outside of London, not a single property was sold for more than £10m, compared with ten last year.
The average price paid also fell steeply, from £22m to £16.3m, said property group London Central Portfolio, which carried out the analysis.
It blamed increasing property taxes, such as the sharp hike in stamp duty and new obligations onnon-dom foreign buyers, rather than Brexit, for the decline in prices and activity.
Worried developers are now scaling down the most opulent projects, with one newbuild Mayfair block reworked to provide more, smaller, flats in a bid to find buyers. 
Newbuild sales have slumped in particular, said LCP, which runs investment funds of high-end central London apartments. No super-prime newbuild units were sold over the three-month period, compared with last year where they made up 23% of sales.
Naomi Heaton of LCP said: “A price correction was inevitable and is widely reflected in reports of price discounting. Whilst the long term outlook remains compelling, the luxury market is likely to experience continued instability especially in the face of the forthcoming ‘look through’ non-dom inheritance tax ... it may take some years before growth returns.”
Many will cheer any downturn in the London property market after years in which price rises have far outstripped local incomes, even of the well-off. Separate research by estate agents Jackson-Stops & Staff has found that homes for sale at less than £100,000 are now extinct in the capital, and suggests that this year homes under £120,000 will completely vanish.
Guardian graphic | Source: London Central Portfolio
But Heaton said the slowdown in the luxury property market should be “very concerning” for the Treasury as it would lead to a decline in stamp duty receipts. She estimated that the reduction in super-prime activity in the last three months alone meant the government could face a £45m fall in stamp duty receipts. The government’shaul from stamp duty, particularly in London, has soared over the past year, but Heaton said that may now hit the buffers.
The sudden disappearance of super-rich buyers is forcing developers to reconsider their plans. “Many are looking to divide large, high-priced property into smaller flats to increase their attractiveness. Clivedale, for example, is reworking its flagship Hanover Square development to create four times more units, whilst the green light has been given to Citygrove Securities and McClaren Properties to replace seven Chelsea townhouses with smaller units,” said LCP.
Rents are also falling, partly as sellers unable to find buyers choose to rent out their properties instead. Separate data from upmarket property agents Knight Frank found that rents in prime central London locations fell by 4.7% in the year to September, although the number of tenancies agreed reached a record high. But it said the sales market had not fallen as steeply as the LCP figures suggest. It found that price falls were 2.1% in the year to September, noting that the amount of time it took for a property to sell was 14% higher than at the start of the year.
Sterling’s 20% devaluation since the EU referendum may bring foreign buyers back into the luxury London market. According to Juwai, which claims to be the biggest international property website for Chinese investors, inquiries were up 12% in August to a record high as the yuan-rich scout around for bargain buys in London.
“Ironically, the rapid devaluation of sterling, now attracting foreign investors back to London, may be the biggest hope of salvaging a potentially embarrassing and costly situation,” said Heaton.
But the chances of normal people picking up a bargain is remote. The single most expensive residential property sold in the UK during the past three months still went for £25m despite the slowdown – and even then it was a “fixer-upper” requiring total renovation. 
The six-storey house, 112 Eaton Square, went for just £1.5m less than its £26.5m asking price. The property, famous as the location where a group of rebel Tory MPs plotted to topple wartime prime minister Neville Chamberlain, has been empty for 20 years and the buyer will have spend millions on a restoration.

The top five highest-priced UK home sales June-August 2016

  1. £25m for a terraced house: 112 Eaton Square, City of Westminster, SW1
  2. £16.9m for a terraced house: 6 Grosvenor Gardens, City of Westminster, SW1W
  3. £16m for a flat: 79 Grosvenor Street, City of Westminster, W1
  4. £13m for a semi-detached house: 11 Chelsea Square, Kensington and Chelsea, SW3
  5. £10.2m for a terraced house: 32 Thurloe Square, Kensington and Chelsea, SW7

Britain's rental crisis: Extra 1.8 million homes to rent are needed by 2025 but buy-to-let landlords are in retreat

  • UK households renting doubled from 2.3m in 2001 to 5.4m in 2014
  • A balance of 58% of estate agents saw a drop in buy-to-let sales since May
  • 86% of landlords have no plans to increase their rental portfolio this year
Almost two million more households will need a property to rent within the next decade, new figures suggest, as they are squeezed out of buying by high house prices.
But a warning has been sounded that this could trigger a further crisis in the property market, as landlords are retreating after being hit with new taxes. 
The Royal Institution of Chartered Surveyors said the rise would occur as a result of home ownership becoming 'increasingly unaffordable', but warned that supply of rental homes is falling and that the situation will only worsen as demand increases.

In demand: But RICS said that 86%of landlords have no plans to increase their rental portfolio

It said that the number of households renting property had already doubled from 2.3 million in 2001 to 5.4 million in 2014.
RICS warned that within 10 years, there could be 'rental supply crisis' following changes to the buy-to-let sector that made it less attractive for landlords to invest.
These have included a reduction in tax relief that landlords can claim and higher stamp duty payable on buy-to-let properties.
RICS is urging the Government to back a new 'build-to-rent' sector where properties are built specifically for letting.
A balance of almost three in five estate agents have reported a drop in buy-to-let sales since May, according to the research, which follows the arrival of a new 3 per cent stamp duty surcharge for buy-to-lets and second properties.
RICS also found that 86 per cent of landlords have no plans to increase their rental portfolio this year nor over the next five years.
Jeremy Blackburn, RICS' head of policy, said: 'We are facing a critical rental shortage and need to get Britain building in a way that benefits a cross section of society, not just the fortunate few.
'With increasingly unaffordable house prices, the majority of British households will be relying on the rental sector in the future. We must ensure that it is fit for purpose, and the Government must put in place the measures that will allow the rental sector to thrive.
'Any restrictions on supply will push up rents, marginalising those members of society who are already struggling.'
In addition to tax rises, landlords are also finding that lenders are tightening borrowing criteria for mortgages, looking for bigger deposits, more rent to mortgage payment cover and checking landlords' own earnings not just rental income. 
Landlords face a further test after watchdog the FCA announced tougher rules to ensure they can survive a rise in interest rates. They will be stress tested against mortgage interest rates rising to a higher level than previously.
The measures mean investors will be forced to find larger deposits – or increase rents charged to tenants – if they want to take out a mortgage.
In some cases, landlords will have to put down an extra £15,000 deposit before they can get a home loan.
Thousands of borrowers could be prevented from buying rental properties when the changes come in next year. 
It could also affect existing landlords who want to borrow more money by cashing in equity on properties they already own. 
David Hollingworth, of mortgage broker London & Country, said: 'These rules could prove fatal for small landlords hoping to invest in buy-to-let properties to boost their incomes. Many are not going to be able to find the extra money they need for a deposit or increase rents by enough to cover the shortfall.' 
RICS is calling on the Government to address the current rental shortage by reversing the rise in stamp duty and pioneering a new build-to-rent sector for the long-term, where the private sector is encouraged to build properties specifically for residential letting.

The number of households renting property has doubled from 2.3m in 2001 to 5.4m in 2014

Helen Gordon, chief executive of residential property owner Grainger, said build-to-rent would increase housing supply at a quicker pace than traditional house-building and offer tenants more stability.
Grainger said they planned to invest over £1billion by 2020 in ‘high quality, long term rental housing’.
‘In order to support us in this ambition and many others with similar plans, the Government should recognise the important role we have to play and explicitly support build-to-rent in its policies.’
The RICS findings echo those of a separate survey by the Residential Landlords Association, which said that two thirds of landlords plan to increase rents to cope with recent tax increases. 
The survey of almost 3,000 private sector landlords carried also found that the same proportion do not plan on purchasing any additional properties for their portfolio.  
More than half surveyed landlords said they planned to increase rents in the next 12 months to offset the impact of changes to mortgage interest relief.
And almost two in five said they would cut back on improvements to their rental properties because of the new taxes. 

Tuesday, 18 October 2016

Rental property supply plummets

 by Marc Da Silva

The supply of homes listed on the market to let has fallen sharply now that pretty much all of the buy-to-let properties acquired prior to the introduction of the 3% stamp duty surcharge in April have now been filled.

Research by property crowdfunding platform Property Partner shows that four out of ten of major towns and cities in the UK saw a fall in the volume of homes available to rent in September compared to the previous month.

Eight out of ten locations, which saw a drop in new rental listings in August, registered a further decrease in new buy-to-let homes for the second consecutive month, owed in part to a fall in the number of buy-to-let homes being purchased by investors following the recent tax changes in the sector.

In most areas, there was a decline in new rental homes advertised, led by Grimsby which saw rental listings fall by 26%. The next three locations were in the South East – Oxford (-24.4%), Canterbury (-23.9%) and Brighton (-18.7%) but no region was unaffected by the shortage in supply of new buy-to-let properties.

Most major English cities saw new rental property listings fall, but London bucked the trend and posted a 1.43% rise in September.

Dan Gandesha, CEO of Property Partner, commented: “You’d expect a seasonal drop off in the number of new buy-to-let properties coming onto the market during August but September has also proved worryingly slow. We’ll have to wait until next month to determine whether this is just a short-term problem or something to be increasingly concerned about.

“The new stamp duty hike in April for buy-to-let and second homes saw a rush by landlords to beat the deadline with a subsequent rise in stock levels. But now that the dust has settled, we’re seeing some significant declines in new listings, particularly surprising after the summer.”

Earlier this month, the Royal Institution of Chartered Surveyors (RICS) warned that the UK is facing a severe shortage of homes to rent, largely because of tax changes for landlords.

At least 1.8 million more households will be looking to rent rather than buy a home by 2025 mainly because of rising house prices, according to RICS.

Gandesha continued: “Like RICs, we believe Britain should be building more homes across all tenure types. Over the past decade, more and more people have moved away from home ownership and become long-term renters.

“It’s time for the new government to make build-to-rent a key priority, encouraging the private sector to build properties for residential letting with incentives for institutional and professional landlords.”

The following table shows the 29 UK towns and cities that saw the decreases in new rental property listings for both August and September:

The following table shows the 29 UK towns and cities that saw the decreases in new rental property listings for both August and September:
% change August vs July
% change Sept vs August
Yorkshire and the Humber
South East
South East
South East
North West
West Midlands
West Midlands
South West
West Yorkshire
North West
High Wycombe
South East
North West
East Midlands
North West
South East
South West
South West
South East
West Midlands
East Midlands
South West
Yorkshire and the Humber
Yorkshire and the Humber
South East