Wednesday, 30 November 2016

Large number of UK home owners sell for less than expected, research suggests

November 29, 2016

Some 41% of home owners selling in the UK in the past five years have had to settle for price cuts on their original valuation with one in 12 selling for a much lower price, new research has found.

But there is considerable regional variation with just 6% of sellers in London having to sell for less than expected while in Yorkshire and Humberside it was 56%, the study from the Nottingham Building Society shows.

Nottingham believes the research demonstrates how a lack of sound estate agency advice could cost home owners thousands of pounds and highlights the variations in advice around the country and the need for realistic valuations.

The research also found that 25% of home owners who tried to sell during the past five years, did not complete the deal and Su Snaith, head of estate agency at the Nottingham, said that while price is not all that matters when you are selling it can be absolutely vital if you are relying on a certain price for your next purchase.

‘The research emphasises the need for independent advice focusing on what is important for sellers at the start of the process and particularly so when so many are taking substantial price cuts,’ she pointed out.

The research also shows that overall 27% of sellers achieved a higher prices than expected, led by London at 56%, then Scotland with 43% doing so and Wales at 42%.

One on five landlords experience lengthy initial void periods

By Marc Da Silva
November 30, 2016

More than one in five landlords have to wait longer than four months before signing up their first tenants after completing their buy-to-let property acquisition, fresh research shows.

The study, conducted by independent researchers Pollright for the Nottingham Building Society (The Nottingham), reveals that 21% of landlords across the country had to wait four months or more after completing their buy-to-let mortgage before they had their first paying tenants.

The research also found that more than half - 53% - of landlords have paying tenants within a couple of months of purchasing their buy-to-let property but substantial numbers are facing delays which pile the pressure on their finances.

The Nottingham says that the costs involved in setting up as a landlord on top of mortgage finance amount to an average of £2,000 on their first property before they find tenants, although 35% manage to spend less than £1,000.

“Becoming a landlord remains attractive for thousands of people, but it is clear landlords need to think carefully before making the decision and also to plan ahead,” said Stephen Reade, lettings operations manager at The Nottingham.

“Having to wait four months or more before getting tenants in can put a strain on finances and landlords need to ensure they have spare money to invest in their property over and above basic mortgage costs,” he added.

Tuesday, 29 November 2016

Advice from a letting agent where fees are already banned

By Graham Norwood
November 29, 2016

The managing director of one of the most prominent letting agencies in Edinburgh and Glasgow - where agents’ fees on tenants are already banned - has given his view of how his sector adapted to the law change in Scotland back in 2012.

In the Autumn Statement last week, Chancellor Phillip Hammond said he was banning letting agents’ fees levied on tenants in England, although this is subject to further clarification and a consultation process expected to start in the new year.

David Alexander of Alexander Lettings says: “As is the case in England just now, established Scottish agents were initially strongly opposed to the change.

“Most took the view that fees were fair and reasonable and that the problem lay with a relatively small minority within the industry who charged tenants more than was necessary.”

However, Alexander says that without abandoning the basic principle that up-front fees were justified, the reputable end of the sector – comprising the majority of firms – ‘rolled up its sleeves’ and got down to complying with the new law.

“Individual agencies, of course, adapted in different ways. In our own case, with circa 5,000 properties under management in Edinburgh and Glasgow and with a substantial number of tenants coming from the corporate sector, we were able to pursue various alternative revenue options.

“Indeed, the need for change opened a number of new doors and led to an overall increase in the efficiency of the company” he says.

“Four years on, the markets in Scotland’s two biggest cities are buoyant but with supply and demand reasonably balanced, to the general benefit of both landlords and tenants. And established bona fide letting agents, who learned to live with the legislation, are continuing to thrive.”

Rents increases in England and Wales levelled off in October

November 29, 2016

Residential rent increases in England and Wales levelled off in October, with the average property being let for £900 per calendar month, down slightly from £907 in September.

However, despite the slight drop in rents compared to last month, this is the second highest rent ever recorded by the buy to let index from Your Move which also shows that rents have grown by 12% in the year to October 2016.

Wales has seen the fastest growth in the last year with rents up by 8% with a typical property let for £591 while the East Midlands and the East of England both saw average rents increase by 6% in the last year up to £628 and £805 respectively.

London has the highest rents overall with the average property let for £1,289 which is 1% higher than a year ago but remains below the levels recorded in the spring months of 2016.

At the other end of the scale, the North East of England was the only place to see rents fall compared to last year, down 1% compared to October 2015. The region also remains the cheapest place to rent a property in England with the average tenant paying £541 per calendar month.

The only other region surveyed which showed no growth in the last 12 months was the South West where the average rent of £668 was flat compared to a year ago.

There was more of a mixed picture when looking at rents on a monthly basis. Across England and Wales the average rent dropped 0.8%, from £907 down to £900 and in the South West rents were down 2.5% compared to September 2016, the biggest fall.

The areas showing the fastest growth between September and October were Wales and London, up 2% in Wales and 1.4% in London.

The index also shows that the average gross rental yield for properties in England and Wales continued to hold firm in October, despite falling average rents. The typical return during October was 4.7%, exactly the same as in the past two months. However, it is down compared to the 5.1% recorded in October 2015.

As in recent months, the North East was home to the highest yields in England and Wales with properties in this region typically returned 5.3% during October, exactly the same as both the previous month and the same point a year ago.

Elsewhere, property investors in the North West and Wales both saw higher yields than the national average. In the North West a typical property returned 5.1% which was flat month on month while homes in Wales saw a yield of 5%, up from 4.9% in September, and Wales was the only area to boast higher yields than the previous month.

Eight of the other nine regions were flat compared to September, while in the South West yields fell slightly to 3.5% while the lowest yields continued to be found in areas with the highest house prices. London landlords saw a return of 3.3%, well below the national average. Despite high rents in this area, the large initial investment means returns are more limited compared to northern regions.

The South East and South West both saw average yields of 3.5% in October, the next smallest in England and Wales.

The index shows that tenant finances improved compared to the previous month with a lower proportion of renters in arrears. Some 9.3% of all tenancies had arrears of a day or more in October, well below the 11.7% recorded in the previous survey.

In addition to this positive monthly result, the long term trends continue to be encouraging. The proportion of tenants in arrears remain well below the all-time high of 14.6%, recorded in February 2010.

On an absolute basis, the number of households in serious arrears, defined as two months or more, was 22,686 in October 2016, well below the 36,502 cases recorded in the previous month.

‘After a turbulent year for the economy it is no surprise the rental market has paused for breath this month. Despite economic uncertainty and the European Union referendum result, the lettings market has powered through the year so far,’ said Adrian Gill, director of lettings agents at Your Move.

Monday, 28 November 2016

Meet the entrepreneur solving pollution and homelessness at the same time

By Lauren Davidson
November 28, 2016

Concepticos Plásticos was founded in 2010
Waste not, want not might be an old-fashioned axiom confined to the lexicon of finger‑wagging grandparents, but a 34-year-old from Colombia has turned it into his life mission.

Bogota-based Oscar Méndez is, to borrow another saying, killing two birds with one stone.

His company, Concepticos Plásticos, transforms discarded plastic into construction material to build permanent homes, tackling two of the biggest environmental, economic and social challenges facing the world today: pollution and homelessness.

“Plastic waste is a global problem, and the housing deficit is also a major problem in many countries,” says Méndez, who trained as an architect. “Concepticos Plásticos provides a solution to both of these issues.”

Oscar Méndez is an architect who lives in Bogota
In Bogota, Méndez says, 6,300 tons of rubbish are sent to the landfill every day. Meanwhile, in some areas of Latin America, more than 40 per cent of people are inadequately housed.

These problems are not limited to Colombia, and the effects of waste and homelessness have ramifications all over the world.

“The problem is the negative impact of plastic in the environment and the existence of fragile housing in vulnerable communities, which accelerates global warming and the inequality gap,” Méndez says.

“Our materials contribute in the fight against extreme poverty, improve informal settlements (such as refugee camps) and create sustainable living conditions,” he adds. “Closed plastic recycling is one of the best ways to fulfil a social task and benefit vulnerable communities.”

What’s more, by turning plastic waste into Lego-like building blocks, Concepticos Plásticos also empowers these disadvantaged and displaced groups by enabling them to build their own homes.

Méndez says more than 70 countries are interested in his product
The enterprise, which was started in 2010, recently won $300,000 from The Venture, whisky brand Chivas Regal’s annual search for the most innovative start-ups. It beat more than 2,500 applications from other scalable and sustainable social enterprises.

Alexandre Ricard, the boss of Chivas Regal owner Pernod Ricard and a judge at The Venture, called Concepticos Plásticos “a great example of how innovative, passionate and forward-thinking the social entrepreneurship movement is.”

It hasn’t been an easy ride for the company. The first challenge, Méndez says, was “breaking the barriers of the traditional construction market that is saturated with old systems”. The second was even tougher: getting polluting manufacturers to admit responsibility and start including Concepticos Plásticos’s processes so their waste could be recycled into bricks.

But Méndez is – brick by brick – making progress. The fact that he has caught the attention of investors is in itself a major step towards success. As he puts it: “Indifference is the biggest challenge facing global warming and extreme poverty.”

Méndez says he has more than 70 countries interested in his product. Let’s hope this opportunity doesn’t go to waste.

Will banning letting agency fees lead to higher rents? We ask the experts

By Rupert Jones and Donna Ferguson
November 26, 2016

The autumn statement saw the Conservatives try to lessen the fees pain for renters, but will it work? Photograph: Dominic Lipinski/PA
So will the ban on lettings agents charging fees to tenants push rents up? That’s the question many renters will be asking after the government’s autumn statement announcement.

The good news is that this is more than a proposal: the chancellor, Philip Hammond, said ministers “will” bring in a ban, which means that tenants will no longer have to pay fees that can run into the hundreds when they sign a new tenancy agreement. But some felt there was a worrying lack of detail – Hammond merely said it would happen “as soon as possible”, while the Treasury said the government “will consult on this in due course”. So it’s far from clear when the fees will be outlawed.

But how much do people actually pay? There are varying figures. The latest English Housing Survey, published in July, found that 40% of private renters were charged a fee by a letting agency or landlord in 2014-15, at an average of £223. Citizens Advice last year put the total average tenancy fee at £337, while a 2013 report from housing charity Shelter said one in seven (15%) renters using an agency forked out more than £500.

However, the biggest area of debate was whether the ban will drive up rents, on the grounds that landlords will now have to pay these costs and will simply pass them on to tenants. Or will landlords or letting agents absorb the costs?

Guardian Money decided to round up the views of experts and commentators on the key question of whether the ban will mean higher rents.

No it won’t/most likely won’t
Generation Rent, which campaigns for better privately rented homes, says: “We don’t think it will [push up rents], mainly because rents are really just set by what people are prepared to pay in the market. Rents have been rising because demand has been so high.” The organisation says the fact that there is such huge variation in the level of fees charged shows there is a lot of scope for getting these costs down. It adds that landlords will have the power to shop around for lower fees.

PricedOut, the group campaigning for affordable house prices, believes it is “very likely that landlords and agents will bear most of the costs, as they have done in Scotland, which banned fees years ago”. It adds that even if all fees were to be passed on in the form of higher rent, “this will still benefit tenants, as their costs will be spread and they will find it easier to move home, giving them more bargaining power”.

Shelter published a report in 2013 that looked at what had happened in Scotland. There, it has been illegal to charge “premiums” – fees charged at the start of a tenancy, in addition to rent and the deposit – to renters since 1984. However, the law wasn’t enforced until 2012, when it was clarified. Shelter said its research had shown that landlords in Scotland “were no more likely to have increased rents since 2012 than landlords elsewhere in the UK”. In fact, only one landlord in 120 surveyed said they had noticed an increase in agency fees and had passed this on to their tenants.

easyProperty, the online estate agent, says: “Any sensible agency won’t pass on the charges to landlords due to competition in the sector, so we don’t foresee rent rises, as there is no need to add the fees to rents.”

Yes it will
Housing minister Gavin Barwell was asked two months ago whether he would follow the Scottish example and ban letting fees. He tweeted: “Bad idea – landlords would pass cost to tenants via rent. We’re looking at other ways to cut upfront costs & raise standards”. It’s not clear whether Barwell has since changed his mind… or had it changed for him.

Beresfords, a chain of estate agents, says: “Ultimately landlords will be expected to pick up most, if not all, of any fees lost by agents. However, landlords will want to recoup such increases, and the most obvious way to do so is by increasing the rent. Unfortunately, over time, tenants could end up paying much more in uplifted rent than what they would have expected to pay in initial fees at the outset.”

The Residential Landlords Association says: “This will not help tenants, especially those who are ‘just managing’. Agents’ fees have to be paid by somebody. If any extra fees are passed on to landlords, tenants will end up paying them for ever, as rents will increase.”

Simon Gerrard, MD of London estate agency Martyn Gerrard and a past president of the National Association of Estate Agents, says yields for landlords are already low, “so lowering them further means landlords will simply sell rather than rent, which will push rents up even higher because there will be less stock”. He adds: “The landlords that do stay in the market will have to increase rents to cover these new costs.”

Maybe …
Lord Bourne of Aberystwyth, a communities minister, said during a House of Lords debate on 18 November that Gavin Barwell has “been clear that we must be mindful of the potential impact on rents from banning fees paid by tenants… This is not a straightforward issue, and we have to be careful that any changes do not have impacts elsewhere”.

‘We’ve nothing to save after £2,300 on rent and childcare’

Over the past decade Sarah Cross has become an expert on London’s rental market, having moved every year between 2007 and 2015 – often not out of choice. So she was pleased at the government’s decision to ban letting agents’ fees to tenants. “That’s a really positive thing – previously we’ve paid nearly £1,000 just in fees and charges.”

Sarah Cross and her son Oliver. Photograph: Martin Godwin for the Guardian
Like many young couples in the capital, Cross and her partner work full-time but are still priced out of buying. They rent a “very compact” two-bedroom house in Leytonstone, east London, where they live with their son Oliver who is nearly two and attends nursery.

She and her partner both earn above the national average – their household income is £80,000 – but they still can’t afford to buy a family house in London. “We have no money to save after rent and bills,” says Cross, 31, who works as an operations specialist for a major company. This also means the couple’s plans to grow their family are currently on hold. “We’d like another child, but living in London limits your funds – and we don’t really feel like we have enough behind us to have a larger family.”

The couple pay around £1,300 a month in rent, with childcare swallowing a further £1,000. They are clearly not financially destitute – “We go on holiday” – but Cross adds: “One of us basically pays the rent and bills, and the other pays for childcare and essentials.”

Having had to move so often in the past, the birth of Oliver in 2014 saw them negotiate a two-year contract “to ensure we wouldn’t have to disrupt our whole lives one year later”.

Cross says that, like many people, they are in a catch-22 situation: house prices are stratospheric because too few homes have been built in London to sustain the number of people, but they don’t feel they can move out because “the employment wouldn’t be there”.

She says something needs to be done to get the capital’s housing market working properly. She is “intrigued” by the news of 40,000 additional affordable homes, but says: “It’s really important we build more affordable homes that are fit for purpose – we’ve viewed several shared ownership schemes and haven’t found one appropriate for family living - and that maybe we limit the price that we pay on rental properties.”

Cross is a supporter of the charity Shelter, which also welcomed the decision to ban letting agent fees.

Friday, 25 November 2016

Online agency makes league table of highest/lowest tenant fees

By Graham Norwood
November 25, 2016

Online letting agency Urban says it has created a league table of fees that tenants are charged by agencies in different locations across the UK.

It says it has accessed 400 agencies in total - including some online - in 150 cities and towns.

On average, it claims the five most expensive areas for tenant fees are Basingstoke on £621.67, Slough on £543.33, Cirencester on £535.00, Reading on £530.62 and Alnwick on £530.31.

In contrast the five cheapest areas on average for tenant fees are Habrough on £136.67,  Worksop with £139.00, Market Harborough at £153.00, Lees on £162.98 and Newham in London charging just £164.00.

These costs include preparation of a tenancy agreement, contract fees, referencing for two people, guarantor fees.

It did not name the most expensive agencies to surface in the survey but the highest figures were up to £1,198 for an agency in Slough and £1,100 at a Basingtoke firm.

Meanwhile a statement from Purplebricks says the government’s ban on letting fees levied on tenants - which will be the subject of a consultation in the New Year - “represents a significant opportunity to further highlight to landlords the value that Purplebricks is already renowned for offering sellers.”

London tops cost-of-housing survey at 14 times average earnings

By Hilary Osborne
November 25, 2016

Cambridge and Oxford follow the capital at over 13 times earnings while Glasgow and Liverpool have lowest income-to-price ratio.

London prices rose by 86% since 2002 due to lack of supply and low mortgage rates, according to property consultants Hometrack. Photograph: Alicia Canter for the Guardian
The average cost of a home in London is more than 14 times average earnings – the highest level on record, according to figures from property consultancy Hometrack. Oxford and Cambridge are not far behind, the company’s latest index of city prices indicates, with house prices at 13.5 and 13.6 times local earnings respectively.

A lack of homes for sale combined with demand fuelled by low mortgage rates has pushed up average prices in London by 86% since 2009, according to Hometrack, to an average of £482,000. The increase is far in excess of wage growth and means prices are 14.2 times the average London wage packet of £33,720 a year – the highest multiple since 2002.

Prices in London did falter during the credit crisis but it was not long before they resumed their upwards march. The boom is slowing however, Hometrack said, with the annual rate of growth in the capital falling to 9.1%, and the firm forecasting a further drop to “low single digits” in the next six to 12 months.

The figures highlight how tough the housing market has become for prospective buyers in cities around the UK, with prices in all 20 tracked by Hometrack higher than their post-crash low. In Oxford, prices have increased by 72% since their nadir, to an average of £415,000, while in Cambridge the average has risen by 84% to £420,600 and in Bristol prices are up by 61% at £259,400. Glasgow has shown the smallest increase, with prices 13% above their low at £114,700.

Prices in Glasgow are typically just 3.7 times local earnings, making it one of three cities where the ratio is below its long-run average, Hometrack said. The other two are Liverpool and Newcastle. At £112,700 the average price in Liverpool is 4.4 times earnings, while in Newcastle it is 4.8 times earnings at £122,600.

Graph showing average house prices in relation to earnings
Richard Donnell, insight director at Hometrack, said he expected Oxford and Cambridge to see falls in growth similar to that in London.

“The impetus for house price growth is shifting from the affordability-constrained cities in southern England to cities in the midlands and the north of England,” he sad. “Regional cities have more attractive affordability levels and house prices have significant potential upside for growth in the near term subject to the outlook for the economy.”

Wednesday’s autumn statement included the announcement of a £2.3bn fund to pay for infrastructure that would unlock sites in areas of highest demand, in a move the government said would enable up to 100,000 more homes to be built.

Donnell said the statement had focused on the longer term challenges of addressing housing supply. “This will have limited impact on the current profile of housing affordability in the near term which will be dictated by market forces and households’ expectations for jobs and the cost of borrowing,” he said.

Figures from the Office for National Statistics indicate that saving for a deposit will get harder for those living in rented accommodation in many parts of Great Britain. The ONS’s latest private rental index suggested that in the year to October private rents in England increased by 2.5% in England, while in Wales they went up by 0.4%. Only Scotland recorded a fall, with rents down by 0.2%.

Rent inflation was highest in the south-east of England, where tenants are paying 3.4% more than a year ago, and lowest in the north-east where costs have gone up by 1.1%.

Thursday, 24 November 2016

Agents fear fees ban will damage quality of references and services

By Graham Norwood
November 24, 2016

Many agencies have spoken out in dismay at the announcement by government that letting agency fees on tenants would be banned in England in the near future.

Chancellor Phillip Hammond, in his Autumn Statement yesterday, said the ban would apply to England and be introduced “as soon as possible”. It is thought this may be after a consultation period with the industry and other interested parties, starting in the New Year; primary legislation will also be required, which may take some weeks after the consultation has been completed.

Stephen Ludlow, chairman of London-based agency Ludlowthompson, says there is a danger that some letting agencies will cut back on investment in marketing, training and quality control, therefore diminishing customer service delivery.

"Without reputable letting agents fully committed to the sector we will potentially see more lettings back in the hands of unregulated private landlords, and leaving tenants with far lower levels of protection than at present” he says.

"The last 30 years has seen service standards in the private lettings market increase quite significantly. Cut off the income of this sector and it risks creating a race to the bottom in levels of standards” Ludlow warns.

“It is essential that agents do not cut corners and fail to carry out stringent referencing checks” warns Lucy Morton, the former ARLA president who is now head of agency at JLL.

Hunters - which in September and October commissioned a survey on fees - says it resulted with 75 per cent of tenants stating they did not want rents to increase to cover the cost of banning lettings fees.

“Agents perform both a service and a paralegal role when assisting tenants to move home. Unfortunately, it is very likely rents will increase in response to these changes” says Hunters’ managing director, Glynis Frew.

Nick Leeming, chairman at Jackson-Stops & Staff, reflects the views of many in the industry when he says this “short sighted” measure means costs will simply be passed on to tenants through higher rent by landlords.

“While the ban still requires a government consultation before it is implemented, its impact on the UK housing market could be far reaching. Affordability issues which surround purchasing homes means that for many, the only option is to rent. We’ve seen a consistent reduction in the number of landlords buying investment properties since April this year which means that fewer rental properties are now coming on to the market to serve the growing rental population” says Leeming

“A better solution would have been to create a more competitive fee environment and ensuring that landlords are not further discouraged from the market” he adds.

Traditional London estate agency STANLEY Chelsea, run by former NAEA London region chairman Patrick Bullick, already has a policy of not charging tenants and says it passes no judgement on other firms in the industry which choose to charge - “as long as fees are transparent, reasonable and representative of the actual costs incurred by the agent.”

And 60-strong London agency chain Dexters says it is in favour of the ban.

“Whilst we await the exact detail of the legislation we broadly welcome the government's action on this. We would prefer to see compulsory regulation of letting agents but this is a step in the right direction, as it will lead to more transparency and make life difficult for rogue estate agents” explains chief executive Jeff Doble.

easyProperty chief executive Rob Ellice also says he welcomes the Chancellor's decision.

“Any sensible agency won't pass on the charges to landlords, due to competition in the sector, so we don't foresee rent rises as there is no need to add the fees to rents. Having the Government step in to abolish these fees is another example that the industry cannot self-regulate and be fair to consumers. The greed of a few has cost the many as it’s a minority who have charged excessive fees rather than the majority of agents” says Ellice.

Countrywide warns over profits amid housing slowdown

By Angela Monagham
November 24, 2016

Estate agency says stamp duty changes and uncertainty after Brexit vote are leading to fewer sales, particularly in London

Countrywide said transactions were ‘significantly’ lower than last year. Photograph: Andrew Matthews/PA
UK estate agent Countrywide said changes to stamp duty and uncertainty following the Brexit vote meant transactions were significantly lower than last year and were likely to fall further in 2017.

Shares plunged another 14% after the company warned in a trading update for the third quarter that profits in the full year would be at the lower end of market expectations.

“We now expect transaction volumes for 2016 to be 6% down on 2015 and while too early to say definitively, it is likely that the level of market transactions in 2017 will be lower than 2016,” the company said.

The gloomy update came a day after Philip Hammond dealt a blow to estate agents, revealing plans to clamp down on upfront letting fees charged to tenants. Delivering his autumn statement on Wednesday, the chancellor said fees often amounted to hundreds of pounds.

He said: “This is wrong. Landlords appoint letting agents and landlords should meet their fees. We will ban fees to tenants as soon as possible.”

News of the policy wiped millions off the value of Countrywide on Wednesday as the share price of the company, along with others in the sector, fell sharply.

Alison Platt, Countrywide’s chief executive, said on Thursday: “In light of the chancellor’s announcement yesterday regarding letting agents’ fees, we look forward to working with the government through this consultation process.”

Revenue in the third quarter fell by 4% to £188.5m. The number of homes sold in London over the three months fell by 29% to 2,484.

Countrywide said changes to stamp duty in the first quarter resulted in a larger-than-usual supply of rental properties, weighing on rental growth. In some areas, rents fell.

Wednesday, 23 November 2016

Bad news for landlords as fees charged to tenants look set to be scrapped

By Marc Da Silva
November 23, 2016

Rumours are rife that the government plans to abolish letting agents’ fees charged to tenants as part of a series of measures to be announced as part of today’s Autumn Statement, leaving agents with little alternative but to charge fees to landlords instead, if they wish to maintain existing profit margins.

Baroness Olly Grender, Liberal Democrat peer and a former senior figure at Shelter, is among those that have long pressed the government to ban letting agency fees and clampdown on rogue landlords.

Baroness Grender introduced the Renters’ Rights Bill to protect the growing number of private renters who currently face what was recently described as ‘face huge costs’ every time they move.

The Renters Rights Bill, which seeks to amend the Landlord and Tenant Act 1985 by stopping letting agents from charging tenants or prospective tenants - things like registration fees, administration fees and inventory check fees, among other charges - had an unopposed second reading in the House of Lords earlier this month.

One senior letting agent told Landlord Today last night that it was conceivable that the government, “with no credible opposition in place”, seems intent on “screwing landlords, investors and agents over” and can “basically get away with it”.

While we do not wish to get involved in politics, it would seem that being perceived to hit 'greedy' agents and 'rogue' landlords where it hurts is a vote winner with the majority of the electorate.

The question now is whether letting agents will seek to pass costs onto landlords, which coupled with various tax changes, would make even harder for buy-to-let investors to make a profit.

UK house price sentiment stable after Brexit vote low

November 22, 2016

Households across the UK are more optimistic about property prices than they were just after the country voted to leave the European Union, the latest sentiment index shows.

The House Price Sentiment Index (HPSI) from Knight Frank and IHS Markit has been above 50 for four months in a row following a low recorded in July although November’s reading was a slight decrease from the 55.7 recorded in October but looking ahead the outlook is even more positive.

November is also the second consecutive month during which household perceptions eased, but the index report says this mirrors the wider trend in house price growth since the referendum vote and suggests stability but there is north/south divide.

Households in seven of the 11 of the regions covered by the index perceived that the value of their property rose in November, with households in the South East reporting the biggest rise at 61.9, followed by those in London with a figure of 60 and the East of England at 59.4.

But it was a different story further north with households in the North East at 49.3 and Yorkshire at 49.9 believing that prices fell over the course of the month, while those in Scotland and the North West at 50 perceived no change in the value of their homes over the course of the month.

The future House Price Sentiment Index, which measures what households think will happen to the value of their property over the next year, rose in November to 64.6 from 62.9 in October.

However, Grainne Gilmore, head of UK residential research at Knight Frank, pointed out that while the headline index rose month on month, there were still significant regional variations in terms of household expectations, with those in the South of England comfortably more confident that prices will rise than those in the North, Scotland and Wales

‘Sentiment in the housing market is finding a post-EU vote stability. While households are confident that the value of their home is rising and will continue to do so over the next 12 months, they expect the velocity of this change to be lower than before June’s vote,’ she said.

‘This chimes with the increased economic uncertainty as the UK starts to negotiate its way out of the EU. However, opinions on the housing market are also formed at a local level, and in many cases markets are characterised by a lack of supply of homes to purchase, which is underpinning pricing,’ she added.

According to Tim Moore, senior economist at IHS Markit, it is good news that optimism is up sharply from its post-referendum lows. ‘However, the strength of the rebound moderated since October and confidence levels are now comparable with those seen in the middle of 2013, when UK house price inflation was running in the low single digits,’ he explained.

‘Households are also relatively cautious about the outlook for house price growth in 2017, suggesting that heightened economic and political uncertainty remain headwinds to confidence. Meanwhile, the influence of supply constraints on house price expectations appears evident in latest figures. Most notably, people living in London and its commuter regions were far more likely to anticipate higher property values in 2017 than the rest of the UK,’ he concluded.

Tuesday, 22 November 2016

End London’s role as a clearing-house for dirty money

November 20, 2016

London, that great cesspool into which all the loungers and idlers of the Empire are irresistibly drained” was what Sherlock Holmes’s companion, Dr Watson, thought of the capital. Well, this week a cross-party coalition of MPs will be trying to drain the mire of its dirtiest elements.
Rocketing house prices in wealthier parts of London such as Kensington have been blamed on foreign laundered money. Photograph: Andrew Michael/Alamy

The government’s criminal finances bill, with its crackdown on unexplained foreign wealth, secretive shell companies and high-level tax evasion, is a smart attempt to end London’s culture of money-laundering. But if we are really going to stop the capital’s property being used as a reserve currency by global kleptocrats, we have to go further. For London’s historic place at the heart of the empire has endowed it with the networks and skills, from the Square Mile to Caribbean tax havens, to become one of the world’s leading hubs for the dispersal and camouflaging of dubious funds.

In the late 19th century, as the scramble for Africa extended the British empire, London’s banks and accountancy firms funnelled cash around the colonies. Joseph Chamberlain called the City “the clearing-house of the world”, financing mining in New South Wales and tea plantations in India. In EM Forster’s Howards End, Henry Wilcox is said to have the “colonial spirit” as he successfully enriches himself at the Imperial and West Africa Rubber Company. With the capital flowed the ships and steamers out of the Thames, sitting on board one of which was Joseph Conrad’s traumatised Marlow, with his Congo tales of venturing “into the heart of an immense darkness”.

The National Crime Agency says up to £90bn is laundered through the UK each year, while an estimated £120bn worth of UK property is owned by offshore shell companies. Some 75% of properties whose owners are under investigation for corruption made use of offshore corporate secrecy to hide their identities. And according to the director of the National Crime Agency, “the London property market has been skewed by laundered money. Prices are being artificially driven up by overseas criminals who want to sequester their assets here in the UK.”

Those assets are far too often being extracted from developing nations desperately in need of tax revenues. A century on from Heart of Darkness, the Democratic Republic of the Congo still ranks near the bottom of the UN Human Development Index, with one in seven children dead before the age of five. And, as in Conrad’s time, London’s imperial connections are helping to facilitate the exploitation of this asset-rich nation. Diamond and mineral wealth is being extracted by political elites, funnelled via London to old remnants of empire in the overseas territories, then repatriated via Kensington townhouses back to the UK. Our financial, accountancy and property agents are the beneficiaries, the people of the DRC and househunters of London the losers.

A century on from Heart of Darkness, one in seven children is still dying in the Democratic Republic of the Congo before the age of five, says the UN. Photograph: Eduardo Soteras/AFP/Getty Images
When the Panama Papers revealed the extent of global tax haven exploitation, the government responded with the criminal finances bill. It introduces unexplained wealth orders to unearth the sources of suspect assets, gives crime agencies more time to investigate complex networks behind shell companies and goes after companies that assist with criminally facilitating tax evasion. I want to do more, with amendments that urge the publication of a list of UK property held by foreign companies so we can find out the real owners. We need companies convicted of a failure to prevent tax evasion to be excluded from public procurement. And I am supporting an annual parliamentary report on unexplained wealth orders so we create a culture change at the top of government.

We are told that much of London’s success is because of its unimpeachable legal system and absence of corruption. But that is no good if, under the banner of the rule of law, we are also aiding and abetting exploitation.

In Surrey mansions and Mayfair sit the lost wealth, the never-built hospitals and unopened schools of too many developing nations. London still houses the loungers and idlers of empire, growing rich from the spoils of exploitation. It is time today’s Sherlocks had the tools they need to straighten out the City’s finances.

Council request to extend To Let board ban rejected by government

By Graham Wood
November 22, 2016

Brighton and Hove council has failed in its bid to win government backing to ban To Let boards.

The council sought government agreement to a ban on boards in part of the city - if agreed, agents would have had to win planning consent to put up a board - but the government chose not to support the authority’s plea.

Instead the council now wants letting agents to agree to more discreet To Let signs following complaints about the effect of boards in a student area.

The Brighton and Hove News reports that the council is considering asking agents to agree to make smaller signs and mount them on walls instead of board poles in a bid to smarten up the Lewes Road area, which has many privately rented flats.

Brighton and Hove City Council has already banned the use of estate agents’ signs within the city centre’s conservation areas.

The Brighton and Hove News says the council’s environment and sustainability committee is to consider implementing a voluntary agreement with estate agents to reduce the impact of the signs.

A report written by council officers for elected members says: “The Brighton & Hove Estate Agents Association have met with council officers and are supportive of better management of residential lettings boards and will continue to work with officers to this end.

“It is recommended that committee agrees to a pilot of a voluntary management scheme of residential letting boards for a one year period in a selected area of the Lewes Road corridor which would link into ongoing work around the private rented sector and would include a collaborative approach between community groups, residents, Partnerships, letting agents and other relevant organisations.

“This is considered to be a suitable location due to the proliferation of stand-alone boards relating to high levels of HMOs.

“After a year of operation the outcome of this pilot scheme would be brought back to this committee to review further options and ways forward.”

Last week we reported on an impassioned plea by a local agent against the same council’s bid to introduce widespread licensing of landlords in the private rental sector.

Monday, 21 November 2016

Buy-to-let lending falls as mortgage crackdown hits landlords

By Marc Da Silva
November 21, 2016

Buy-to-let landlords have come under attack from the taxman and now also from the Bank of England, which could make landlord mortgages harder to obtain.

Lenders will now have to take into account a landlord’s  other expenses, including their tax bill, when assessing whether or not they can afford to borrow.

New affordability tests introduced ahead of mortgage interest relief tax changes from April 2017 have already made life more difficult for landlords, according to Nationwide, the UK's largest building society.

Fresh data shows that Nationwide’s buy-to-let subsidiary, the Mortgage Works, lent £2.8bn in the six months to September 2016, down from £2.9bn in the same period a year earlier, with the lender citing the new affordability tests as the main obstacle denying potential landlords fresh finance to acquire property.

“The buy-to-let sector is going through a period of substantial change resulting from new rules on landlord taxation [and] guidance on underwriting and affordability standards,” said Nationwide chief executive Joe Garner.

Like many lenders, Nationwide tightened up its lending criteria for buy-to-let landlords earlier this year by upping the rental ratio cover from 125% to 145%. It also dropped its maximum LTV from 80% to 75%.

“As a responsible lender we took the decision to lead the market in making changes to our affordability assessment criteria to ensure our borrowers do not overstretch themselves. This is expected to result in lower buy to let lending in the second half of the year,” Garner added.

Get the airy, industrial look with Crittall windows at home

By Tory Kingdom
November 21, 2016

Bakery Place, a former Victorian bakery in Battersea (prices from £625,000 with Savills) CREDIT: DAVID BUTLER
The most common feature of modern property design in recent years has undoubtedly been the open-plan layout: the desire for large multi-functional spaces flooded with light rather than smaller, separate rooms. There is, however, a limit to the number of walls that can be demolished before your home starts appearing like the Tate Modern’s Turbine Hall. Appealingly spacious? Yes. Liveable in? Perhaps not.

This is why traditional Crittall is staging a comeback – and not just as windows, but as walls and doors too. Developers, designers and canny home owners are using these steel-framed partitions to create floor plans that feel both light and inclusive but retain an element of separation.

The sturdy, slim-profile frames, as well as looking rather good, tap into the current trend for all things industrial. The manufacturing technique was introduced in the mid‑19th century when Sir Henry Bessemer developed a process for hot-rolling steel. It was in 1860 that Francis Henry Crittall, an ironmonger in Essex, first used this method to create steel-framed windows. Crittall was trademarked and continued to expand into manufacturing in the United States, China and Europe.

A home in Islington designed by architects Blee Halligan CREDIT: ROB B
The strength and durability of the metal frames trumped traditional wooden ones for industrial buildings. The malleability of the alloy also meant that, by the Thirties, Crittall was being used in a variety of different buildings, adapting to more innovative art deco and cubist designs.

Crittall was used on the Titanic and can still be found in the Houses of Parliament and the Tower of London. The look is by no means new. But it is enjoying a moment back in the spotlight, as is evident from a number of refurbishments and developments. At Bakery Place, a former Victorian bakery in Battersea (prices from £625,000 with Savills) a Crittall-type system has been used to divide spaces and create rooms within rooms.

“You can go into studies or other rooms that are entirely steel-framed and get some peace and quiet. But you’re still part of the flat and you still benefit from the natural light that flows through the space,” says Will Hermann, the developer behind Bakery Place. “You can zone things without locking them away.”

In a four-bedroom house in Pavilion Road, Knightsbridge, on the market for £5.25 million with Knight Frank, a Crittall screen separates the entrance hall and the kitchen/dining room. This works well, says Hermann.

Crittall enclosed courtyard in a Chelsea town house, for which Knight Frank is asking £37.5 million
“You have a space for hanging coats and putting away shoes, but you still get that feeling of walking into a large, open-plan space when you walk through the front door.” The buzzword for layouts like these in development terms is “broken plan” – not open but still segmented in some way.

As well as being used practically to delineate spaces and allow for a greater flow of light, steel-framed constructions are being adopted as a design feature. French doors can be replaced by Crittall walls for an art deco aesthetic and installing steel windows can create a more urban look. A Crittall construction can even be used as a shower enclosure to create a feature in a bathroom.

“Crittall references a more interesting property that might have had a previous life as a factory or an industrial building,” says Dara Huang, founder of Design Haus Liberty, a design and architecture practice based in Clerkenwell, who frequently uses Crittall in her work.

Of course, in Clerkenwell and other once industrial areas of London, original versions of the feature can be found in abundance. Savills is selling a former Victorian warehouse in Shoreditch for £2.5 million. Its authentic steel-framed windows and doors, combined with its open layout and exposed brick walls, will no doubt form a large part of its appeal.

A Crittall roof lets in the light in a north London extension designed by Blee Halligan Architects CREDIT:  ROB BATTERSBY
Modern London’s love affair with loft conversions and warehouses has contributed to the popularity of the feature elsewhere. In a less likely setting – a £37.5 million town house in Cresswell Place, Chelsea, for sale with Knight Frank – a Crittall frame has been installed around a courtyard at the centre of the house.

The design trend is unlikely to fall out of favour anytime soon. Striking but minimalist, the look complements other trends, from mid-century modern to Scandi-style, both of which show no sign of abating. What’s more, the architectural feature has good eco-credentials, with recycled steel being widely used in production. Whether in windows or partitions, it is also strong, durable and thermally efficient.

“Young buyers and even the older generation of home owners who appreciate the idea of a less traditional, more inclusive way of living are drawn to this look and feel,” says Huang.

“Crittall is not only practical but looks great. It’s lasted this long behind the scenes. I think we’re likely to see more and more of it.”

Thursday, 17 November 2016

Fleeing New York after Trumpageddon? London's most desirable neighbourhoods are waiting

By Zoe Dare Hall
November 16, 2016

The Bakery Place, Battersea  CREDIT: DAVID BUTLER
As hoards of disillusioned Democrats, including the pop mogul, flirt with the idea of heading to Britain following Donald Trump’s victory, the Marylebone-based estate agency Kay & Co have produced a handy "go to" guide for those seeking to swap New York life for London.

It may even help to refocus the search of other anti-Trump celebrities, including Samuel L Jackson, Lena Durham and Cher, who have declared their intent to leave America in favour, respectively, of South Africa, Canada and, er, Mars.

Penthouse at The Fitzbourne
Kay & Co suggest that Manhattan’s Upper East Siders will feel at home in Mayfair, an area with an average asking price of £4.78m and a long relationship with relocating Americans seeking a spot among its designer boutiques and neighbourhood restaurants such as Scott’s.

Mayfair’s flagship projects include Finchatton’s 20 Grosvenor Square, the redevelopment of the former US Naval Headquarters, and – aptly, as Americans crash Canada’s immigration website in their fight to flee over the border - 1 Grosvenor Square, Lodha’s transformation of the Canadian High Commission.

Those accustomed to a good old New York brownstone should head to Notting Hill, suggest Kay & Co, where Ladbroke Square offers some handsome townhouses with an East Village-style supply of independent cinemas, galleries and music clubs on tap.

Manhattan’s TriBeCa tribe will find kindred spirits in Fitzrovia, where you can soak up the city panoramas from the rooftop terrace of the huge, open-plan £5.5m penthouse at The Fitzbourne by Oakmayne Bespoke. And those used to park life – Demi Moore, for example, who has been struggling to sell her Central Park penthouse for $75m since last year – could cash in by moving to the Hyde Park fringes, where a five-bed house on Connaught Square costs £7.5m.

Orchard Villa, Albany Street  CREDIT: TUNSTALL PROPERTY
Other suggested twinnings from Kay & Co include Brooklyn and Shoreditch, for the cool, wealthy millennials who like converted industrial spaces, and akin to New York’s Greenwich Village is Marylebone, no stranger to Americans already, who send their kids to the American school in nearby St John’s Wood.

Up their street perhaps is Galliard Homes’s The Chilterns, a rare totally new-build development in Marylebone with two-bed flats from £3.8m, or for those looking to rent first, Orchard Villa in Regent’s Park, available for £7,950 a week through Tunstall Property, is likely to appeal to a relocating American family, thinks the agency’s Mark Tunstall. “Close proximity to green space, the American school and a private driveway will be the items to swing it,” he says.

The Star and Garter in Richmond
Those seeking an American education in London may also head to Richmond, home to the American International University. It is also the location of The Star & Garter, London Square’s luxurious redevelopment of a Grade II-listed building with two-bed apartments from £1.75m, a Harrods concierge among the residents facilities and river views immortalised by Turner.

Kings Room at the The Star and Garter, Richmond
If Brexit started the ball-rolling for American buyers and renters in London, weakening the pound to tempting levels in an already deflating prime London market, Trump has triggered a full-blown skittles championship.

Agents predicts that it’s not just Americans who will see London as their safe haven but other nationalities – including Middle Eastern and Chinese – who will now think twice about investing in the US. On the morning of the announcement of the 45th US president, London Central Portfolio, who specialise in London property funds, saw a 300 per cent increase in hits from American investors compared with the previous day.

“London has always been the preferred relocation spot for the wealthy, but the Trump victory is likely to provide a further fillip to this. Would you move to the US with your family when you are perhaps Muslim and concerned that trade and tolerance are seemingly in decline?” asks Samuel Blake, partner at Montagu Evans property consultants. “More and more of the international super-rich may be prepared to invest £2m in a no-questions asked visa to secure their place in London,” he adds.
 The Bakery Place, Battersea 
Along with London’s trusted American heartlands of St John’s Wood, Notting Hill and Mayfair, Battersea could be a new draw for Trump-dodgers with the opening of Apple’s HQ and the new American Embassy there in coming years.

For buyers seeking a sanctuary of Englishness amid this new outpost of the US, Bakery Place near Clapham Common is a beautifully converted Victorian bakery with large, lateral apartments that combine original features - such as brickwork scored by Victorian children while waiting for their bread  - with Manhattan loft-style interiors. Prices start at £625,000 for one-bed apartments through Savills.

Alternatively, Americans with an eye on regenerating areas may feel a pull towards Elephant & Castle – and to Harvard Gardens in particular, named after the local clergyman who became the main benefactor of Harvard University. As a sweetener, the developer L&Q is offering to pay the stamp duty on any takers of the four-bed duplexes, costing £885,000.

The Bakery Place, Battersea 
All eyes will be on how the coming months of Trump’s presidency play out. Some may be focusing further ahead. Now that celebrities can become US president, George Clooney’s chances of becoming Trump’s successor in the White House have just shot up to 100:1 – something that may see all those Americans flock right back again.

We may have to let our house next year – will that affect our remortgage?

By Virginia Wallis
November 17, 2016

A reader needs advice on their remortgage options. Photograph: Joe Giddens/PA
My girlfriend and I got our first mortgage of £205,000 on a house in February 2015. The mortgage has a 30-year term and an interest rate of 2.3%, making our monthly repayments £790. We have made great efforts to make overpayments so that we are in a better position when we remortgage early next year.

We are looking at a remortgage of £186,000 which – assuming the house is then worth £300,000 – will mean that the LTV (loan to value) should be just over 60%. We are hoping to find a mortgage with a rate of 1%.

However, since the Brexit vote, we are keen to move to the continent. My girlfriend is French, has just finished a PhD and will be looking for work soon. I am in a secure job and it will take me a bit more time to get one abroad. Essentially, we would like to make the move next year, but there is no guarantee on timescales.

If we move, we plan to rent the house out. But as we cannot be certain about timings we were planning initially remortgage as occupiers and then notify the lender once we know when the house would actually be rented out. This would probably mean that by the time we did let the property, there would be about a year left until the next remortgage – assuming we get a two-year fixed-rate deal when we remortgage early next year.

The question is, is this reasonable or should we be looking for a buy-to-let mortgage? What rate change could we expect after notifying on an occupier rate and would this be better than a buy-to-let rate? Also, I was thinking of keeping the term on the mortgage long to maximise income on the rental to help cover for any shortfalls or repairs needed along the way. Finally, could there be issues with us living abroad? JR

A Assuming the deal is still on offer when you come to remortgage early next year, you could find one with an interest rate of 1% – or to be precise 0.99% – with the two-year fixed-rate special from HSBC. This mortgage is available to you because you want to borrow less than 65% of the value of your home and less than £500,000. But the hefty £1,499 booking fee may mean that you would be better off looking at interest rates of less than 1.5% available from other lenders.

However, as your circumstances are likely to change before the fixed-rate period is up, I would be wary of being locked into a fixed-rate deal at all. Rather than being driven by interest rates, you need to look into how a lender will treat you if you subsequently let the house. It is reasonable to remortgage with the aim of getting “consent to let” from the lender, but the consequences of this vary. Some lenders, for example, charge an administration fee and keep the interest rate the same. Others will put the interest rate up by 1%-1.5%.

Most lenders will want to know that the mortgage meets the criteria of a buy-to-let mortgage even if you are not required to switch to a buy-to-let product. So they will want to know that the mortgage is no more than 75% of the value of the property and that rental income will cover the mortgage repayments by 125%. Another thing to bear in mind is that lenders rarely give consent to let within 12 months of a residential mortgage being taken out, which could be a problem if you do remortgage early next year and then move abroad shortly after.

You could also face difficulties if you move abroad before making the necessary mortgage arrangements because you’ll be classed as an ex-pat mortgage applicant. Only a few lenders – including HSBC and Skipton International – are willing to lend to UK expats living abroad. They won’t lend in certain countries, although that restriction doesn’t apply to those in the EU.

Wednesday, 16 November 2016

Plan to help tenants cut the burden of upfront fees - as some must find thousands to rent a home

By Myra Butterworth for MailOnline
November 15, 2016

  • Tenants can spend hundreds on references that do not guarantee property
  • Fees add to rent upfront and deposit to deliver bill that can be thousands 
  • They cannot 'carry' the references to another letting agent
  • A new 'referencing passport' aims to help reduce these costs
  • Checks could be transferrable between letting agents
Tenants could reduce the costs of renting a home by hundreds of pounds if a new 'referencing passport' scheme is introduced, it has been claimed.
The costs of renting a home - before a tenant has even stepped over the threshold - can run into thousands of pounds, including a month's rent in advance and paying for a reference.
But a new 'referencing passport' aims to help reduce these costs as the checks could be transferable between letting agents.

Tenants can pay thousands of pounds in fees before they even step foot in a rented home
Some letting agents can charge tenants as much as £500 for the referencing checks to be made.
There is currently no guarantee that the tenant will secure the property once the checks have been made.
It means they may have to pay out again if they lose that property and have to provide a reference for a different rental home.

British nationals without a passport face Right To Rent difficulties

By Graham Norwood
November 16, 2016

Right To Rent legislation means British nationals without a passport face difficulties according to the Residential Landlords’ Association.

According to its latest survey of members, some 43 per cent say they are less likely to rent to individuals who do not have a British passport because of the fear of criminal sanctions for getting it wrong.

According to the 2011 census - the latest data available - some 17 per cent of people in England and Wales do not have a passport.

Nearly two-thirds of landlords say they are less likely to rent to those who only have permission to stay in the UK for a limited period of time and 56 per cent are less likely to rent to people coming from outside the EU.

The survey found also that 63 per cent of landlords are worried that they will make a mistake or be caught out by forged documents and be unfairly fined.

Just 13 per cent report having found the Home Office’s Advice Line helpful to them.

With immigrants more likely to be in private rented housing than any other tenure, the RLA says it wants swift clarity about the status of EU nationals living in the UK to avoid landlords - or agents acting on their behalf - becoming nervous about continuing to rent to them for fear about what their status may be.

The RLA is calling also for the publication of clear guidance from the Director of Public Prosecutions to provide much greater assurance that landlords who are seeking to do the right thing, but get caught by forged documents, will not face sanctions.

“These survey findings confirm our fears. Those who cannot easily prove their right to live in the UK, whether they are British or not, are finding it harder to access homes to rent. This is particularly concerning for those UK nationals without a passport, many of them the most vulnerable in society” explains David Smith, policy director for the RLA.

“Landlords are quite reasonably becoming ultra-cautious to avoid tough criminal sanctions and need reassurance that they will not be punished when they get fooled by false documents. They are not trained immigration officers.”

Monday, 14 November 2016

Home lending industry in UK facing challenges from age and need for innovation

November 14, 2016

Home lenders in the UK face challenges from the country’s aging population with demand for mortgages past retirement age set to rise and needs to be ready to cope with innovation, the annual industry meeting was told.

The Council of Mortgage Lenders’ annual conference in London heard that carrying debt into retirement is a relatively recent phenomenon, but more than a third of all loans currently advanced will extend beyond the borrower’s 65th birthday and the proportion has been rising.

According to CML’s head of policy June Deasy traditional mortgage products remain the main option for borrowers aged between 55 and 69, while take-up of lifetime mortgages are more common in those aged over 70.

She explained that lending to older consumers presents considerable challenges, and firms would like assurances from regulators that they will not retrospectively take a negative view of sensible lending into retirement.

‘Over time, there will be a clearer understanding of the wider effects of pension reform. Meanwhile, the range of financial choices for older borrowers and the provision of services to them from different providers continue to present challenges in co-ordinating the existing advice regimes,’ she said.

‘Looking ahead, we will continue to work with the Financial Conduct Authority (FCA), the Money Advice Service, government and others to help meet these challenges,’ she added.

The conference also heard that innovation needs to be embraced enthusiastically by the home lending industry and that too presents a set of challenges going forward. According to the CML’s head of member and external relations, Sue Anderson, lenders and the FCA must take a forensic approach to analysing the pros and cons of innovation, with careful scrutiny and assessment of outlier practices.

‘The regulator has shown strong commitment to engage with, and be open to, innovation through a range of projects and initiatives. Lenders should see this as an opportunity and increase their engagement with the regulator though this work,’ she said.

Sue pointed out that historically there are many examples of new developments delivering real consumer benefit in the mortgage industry. For example, almost all borrowing was once on a standard variable rate, but the introduction of fixed rate mortgages has helped make financial planning more certain for consumers even in an era in which interest rates are generally much more stable. Today, around 90% of borrowers take out a mortgage with a fixed rate.

‘For its part, the regulator has mapped out a route based on encouraging responsible behaviour by consumers, a proper understanding of their needs and the incentivising of appropriate behaviour. Mortgage funding is now readily available, but more tightly controlled, and innovation needs to work within this context, said Anderson.

‘There are also uncertainties, in the wider economy, in bridging the gap between housing demand and supply, and in lending to vulnerable groups of consumers like older borrowers. But there is also potential for the right kind of innovation to thrive. Necessity can be the mother of invention and many mainstream features of today’s mortgage market were innovative once,’ she added.

The issue of a shortage of homes was addressed at the conference and Stewart Baseley of the Home Builders Federation (HBF) told the conference that he believes the construction sector is on target to deliver the Government’s target of one million new homes by 2020.

He said that the National Planning Policy Framework, although still too bureaucratic and costly, was now delivering permission for 275,000 homes a year and making an important contribution to increasing supply.

The sector was also benefiting from initiatives like the £3 billion home builders’ fund, the £2 billion accelerated construction fund, the promotion of brownfield land and urban regeneration and with more expected in the chancellor’s forthcoming autumn statement while on the demand side, the Help to Buy initiative had made a significant contribution in addressing affordability constraints.

He explained that the construction sector had also responded with 171,000 net additions to the housing stock in England in the year to April 2015 and the HBF was on course to deliver 200,000 new homes a year over the next 24 months.

Basely does not believe that Brexit is a game changer and told the audience that there were no reasons why supply and demand should not be sustained, adding that housing would remain at the top of the agenda, and it would be up to the construction sector to maintain quality and a positive image.