10 Predictions for the UK Property Market in 2017

10 Predictions for the UK Property Market in 2017

Rob Moore and Mark Homer, co-founders of Progressive Property, discuss their predictions for the UK property market in 2017. 

New bidding software available to letting agents for first time

By Graham Norwood

Bidding software that provides a new revenue stream for letting agents has been unveiled by a start up called Letsbid4lets.

The bidding software allows tenants to bid for rents, and was launched last evening at The Shard in London.

“We believe LetsBid4Lets is a game changer that provides agents with a whole new revenue stream and tenants with a level playing field. Three billion pounds worth of residential property was sold by auction last year and 10m people regularly use online auction sites” explains Spencer Rose, chief executive and founder of the firm.


“Our logic with this business is that auctions are a tried a tested way of selling property and people understand it, but no one has applied it to the lettings process yet. We believe LetsBid4Lets can provide transparency to both landlords and tenants” he adds.

He says Letsbid4lets can assist agents to let properties and can be used as a stand-alone marketing tool or in conjunction with traditional marketing.

All tenants that use the site will be pre-referenced before bidding, by FCC Paragon.

These references will last for 60 days so if a tenant doesn’t win on one property then they will be able to use the same reference to bid on another; tenants can also be prevented from bidding without first having viewed the property with the instructed letting agent.

https://www.lettingagenttoday.co.uk/breaking-news/2017/6/new-bidding-software-available-to-letting-agents-for-first-time

Prosecution - but no fine - over unlicensed buy to let properties

A council has taken a landlord to court for failing to license his two buy to let properties under its selective licensing scheme - but there has been no fine issued and only the council’s costs and a victim surcharge has had to be paid.

Rotherham council took Simon Nicholls of Worksop to court but the landlord was given a conditional discharge at the Sheffield magistrates’ hearing. He was ordered to pay just £361.48 costs and a victim surcharge of £15.

The court was told that in December 2015 the council wrote to Nicholls, requesting information relating to the two properties he was letting out. Despite further contact in January and February this year, no application for a license was received.

Nicholls, who pleaded guilty to the offense, told the court he was apologetic and informed them that he would be applying for his licenses.

A council statement after the hearing claimed that the authority would not allow “irresponsible landlords to persist with their actions indefinitely” and that the case “should be a warning to other landlords.”

Letting Agent Today asked the council whether the case was worthwhile given the small return as a result of the prosecution.

Karen Hanson, Rotherham Council’s Assistant Director for Community Safety and Street Scene, told LAT: “Each case is taken on its own merits and individual circumstances of landlords can be very different. In this case the defendant claimed he was not living at home following a divorce, as a result he had did not have knowledge of the issues surrounding the licensing of his properties. He also stated that he had properties in another area of Rotherham that did not fall under the jurisdiction of selective licensing and as a result thought his properties in Maltby did not need licensing.

“However the council takes a firm line on all selective licensing cases; we will give landlords fair opportunity to register with the scheme, along with the opportunity to pay monthly for their licenses; but if they do not register then we will prosecute. Inevitably, in some cases, this will cost the council money that is not recouped from costs awarded by the court, but this is a price we are prepared to pay to get the message across to those landlords who are failing to license.”

https://www.lettingagenttoday.co.uk/breaking-news/2016/10/prosecution--but-no-fine--after-failure-to-licence-buy-to-let-properties

Buy-to-let mortgage lending rockets despite stamp duty hike

From a landlord’s perspective, it has been a tough year, with a raft of changes designed to bring the booming housing market under control and create what the former chancellor George Osborne described as a “level playing field” between homeowners and investors, and yet there has been a significant increase in buy-to-let mortgage activity over the last two months, according to Connells.

Despite the huge turmoil in the market caused by the introduction of the stamp duty surcharge in April, the scrapping of the 10% Wear and Tear tax relief for landlords who rent out furnished homes and the fact that mortgage tax relief is set to be phased out from next year, the company’s valuation department reports that valuations for buy-to-let mortgages are up 0.4% on last year.

“Despite a bruising period of government intervention, the buy-to-let sector has been finding its footing over the last couple of months, recovering from the 3% stamp duty surcharge, the restriction of tax relief on mortgage finance costs to basic rate tax only, and the removal of 10% 'wear and tear' allowance,” said John Bagshaw at Connells Survey & Valuation.

“The government’s intervention had a significant effect in the short term but we appear to have recovered the lost ground now,” he added.

Connells also report that remortgaging valuation activity rose 14.7% year-on-year, while significantly more first-time buyers are entering the market to take advantage of the Help to Buy mortgage guarantee scheme which ends in December.

https://www.landlordtoday.co.uk/breaking-news/2016/10/sharp-rise-in-buy-to-let-mortgage-lending-despite-stamp-duty-hike

Dubai sees property sales rise as it builds up to Expo 2020

Property, mortgage and land transactions in Dubai have been picking up with the latest data showing there were 15,500 transactions worth AED60.5 billion in the third quarter of 2016.

Overall, the data from the Dubai Land Department suggests that sales have been increasing steadily in the first eight months of the year.

‘Real estate transactions in Dubai have demonstrated strong momentum since the beginning of this year, with growth increasing month by month, activity which substantiates that a positive correction in the domestic market is already well under way,’ said Sultan Butti Bin Merjen, DLD director general.

‘This comes despite the usual state of market tranquillity expected in the summer months, and there is a marked improvement in activity in comparison with the same period last year,’ he added.

Residential property sales amounted to 46% of total transactions, with more than 28,077 with a combined value of AED71 billion. Mortgages came in second at 8,482 transactions with a value of AED66 billion. Other transactions reached a value of AED20.5 billion.

‘There are a lot of positive signs contained within this report, which collectively demonstrate how the Dubai market is drawing great strength from a number of big infrastructure projects announced by the government,’ said Bin Mejren.

He believes that the most important contributing factor to these robust figures remains the preparations by the government along with leading developers to deliver a number of mega-projects which ahead of the World Expo 2020, the largest trade fair of its kind in the world.

Construction work has already started on the main site for the six-month long event which will combine science, technology, art, education and cultural exchange with participants from all over the world.

It is widely predicted that the event will attract even more real estate investors to the emirate and also push up the prices of property. The project will see new hotels and residential apartments built with cutting-edge designs being used to build on reclaimed land and on the beachside.

http://www.propertywire.com/news/middle-east/dubai-sees-property-sales-rise-builds-expo-2020/

Landlords need support to deal with changing ‘illegal immigrants’ legislation

The Deposit Protection Service (DPS) wants to see more ‘support and information’ offered to landlords to help ensure that they properly understand the changing rules around illegal immigrants.

From December, it will be a criminal offence for landlords to rent out property to people who are in the UK illegally under new measures being introduced by the government, it was announced this week.

In her first speech to the Conservative Party conference as Home Secretary, Amber Rudd told activists that the government will attack illegal immigration by going after the landlords that provide them with accommodation.

She said: “From December, landlords that knowingly rent out property to people who have no right to be here will be committing a criminal offence. They could go to prison.”

But the DPS is concerned that there is not sufficient information and support available to landlords to help ensure that they do not unwittingly fall foul of the law.

Julian Foster, managing director at the PDS, said: “Although landlords will always want to operate within the law, changes in the regulatory environment can mean that many fall foul of legislation without realising it.

“Pressures on landlords can be significant, particularly those who are also in fulltime work, so it’s vital that they receive sufficient information and support whenever the rules change.

“Anyone letting out property must fully understand regulations that affect them as well as their obligations as a landlord to both their tenants and the authorities.”

https://www.landlordtoday.co.uk/breaking-news/2016/10/landlords-need-support-to-avoid-unwittingly-falling-foul-of-illegal-immigrants-legislation

Landlord association hits back at Corbyn's 'misguided' accusations

The Residential Landlords Association (RLA) has hit back at accusations made by Jeremy Corbyn in his Labour conference speech that private landlords are being subsidised by more than £9bn of housing benefit.

Corbyn attacked the Tory government’s record on housing and slammed the fact that official figures show that private landlords pocketed in the region of £9.3bn in housing benefit last year – double the amount they received a decade ago.

The Labour leader (right) said: “Look what’s happened to housing under the Tories: housebuilding has fallen to its lowest level since the 1920s; home ownership is falling as more people are priced out of the market; evictions and homelessness go up every year; council homes are sold off without being replaced.

“And another consequence is that we’re paying over £9bna year to private landlords in housing benefit.

“Instead of spending public money on building council housing, we’re subsidising private landlords. That’s wasteful, inefficient, and poor government.”

But the RLA defended private landlords and the role that the private rented sector plays in providing people with much-needed housing in this country. It was also quick to point out that total housing benefit spending for social rented tenants in 2014/15 hit £15.2bn, which was significantly more than the amount paid for those residing in the private rented sector, despite the private rental market being larger.

The RLA’s policy director, David Smith, said: “Millions of tenants rely on housing benefit in both the private and the social housing sectors, but proportionately far more is spent on social housing tenants than those in private accommodation.

“With the private rental market having doubled in size since 2002, it is inevitable that more housing benefit claimants will be living in the sector.”

https://www.landlordtoday.co.uk/breaking-news/2016/9/landlord-association-hits-back-at-corbyns-misguided-accusations

Prime property prices in UK mostly unchanged but showing positive outlook

Prime property prices in the UK were largely unchanged in the third quarter, falling by 0.1% over the three months to the end of September, the latest index shows.

It is the second quarterly fall but on an annual basis growth remains positive at 0.5%, according to the data from Knight Frank while the prime market in London has seen a fall of 1.8%.

However, the current growth in the prime market outside of London is notably slower than the peak of 5.2% in 2014. The Knight Frank report says that the current moderation in price growth is largely a result of recent stamp duty increases being factored in to asking prices and offers.

The report also shows that there are signs that prime property buyers are looking outside of London to the Home Counties and overall while the headline figures suggest that the market has been relatively subdued, activity has remained resilient in the wake of the UK’s vote to leave the European Union, with some leading indicators of activity remaining strong.

The positives include a 13% increase in new instructions between July and August compared with the same period of 2015 and Knight Frank says this means that stock levels across the prime market have started to tick up, an early sign that vendors, many of whom had delayed putting their homes on the market as a result of the referendum, are returning to the market.

There was also a 7% increase in the number of properties going under offer over the same time, however, Knight Frank sales agents note that sensible pricing remains key, especially for properties valued above £1.5 million where the highest rate of stamp duty applies.

‘The strongest markets continue to be affluent towns and cities which have outperformed their more rural counterparts, although the differential has narrowed in the last six to 12 months,’ said partner Oliver Knight.

He also pointed out that average values for properties in urban locations have risen by nearly 2% annually and are around 5% above the previous market peak. In comparison, annual price growth for rural properties was 0.5% and remains 12% below peak levels.

‘Prime urban markets benefit from good schools and amenities as well as excellent transport links to London, which make them among the first port of call for buyers from the capital,’ he explained.

‘Our figures show a 43% increase in the number of sales to Londoners in the Home Counties in the first nine months of 2016 compared with the same period the previous year,’ he said.

‘We will continue to keep a close watch on key market indicators in the coming months to assess any potential longer term impacts of the referendum result,’ he added.

http://www.propertywire.com/news/europe/prime-property-prices-uk-mostly-unchanged-showing-positive-outlook/

Tory housing policy overhaul could include rent-to-buy

Proposals to tackle the country’s housing crisis expected at party conference next week

The government is considering a shift in its housing policy away from a primary focus on home ownership in an acceptance that many people on lower incomes cannot afford to buy a property and instead need help with renting, the Guardian has been told.

An announcement on housing is expected at the Conservative party conference, sources connected to housing policy have said. While it remains unclear what this will involve, ministers are understood to be interested in the idea of rent-to-buy schemes.

This general trend has already been signalled, with housing minister Gavin Barwell saying in a speech earlier this month that the country needed more homes for rent below market rates, as well as homes to buy.

On Thursday the chancellor, Philip Hammond, confirmed the closure of George Osborne’s help-to-buy mortgage guarantee scheme by the end of the year, saying it had a “specific purpose that has now been successfully achieved”.

Sources say that officials from Barwell’s department have been in discussions with Downing Street colleagues in advance of a possible announcement at the Conservative conference, which begins in Birmingham on Sunday.

While it remains unclear if this will contain a new policy or be more of a restatement of the move towards a more varied housing policy, it is seen a possible precursor of more radical proposals to come.

One recent report known to be circulating among ministers, produced by Renewal – a relatively small internal party pressure group that aims to make the Conservatives more relevant to working class voters, has called for the government to build 75,000 rent-to-buy homes a year.

These would be intended as affordable to people on low incomes, with rents set at no more than a third of the average local low income, allowing renters to live in the home while saving for a deposit to eventually buy it.

David Skelton, the founder of Renewal, said he believed Theresa May’s government was actively thinking about the issues raised in his report.

“There is an awareness that this is one of the greatest domestic issues facing the country, the fact that a lot of people are stuck in low-quality, private rented accommodation and can’t afford to put aside any money towards a deposit,” Skelton said.

“Given the language being used about the economy needing to work for everybody, it’s an absolutely essential part for that.”

James Cartlidge, the Conservative MP who chairs the all-party group on housing and planning, wrote a Guardian comment piece on Friday calling for a “one-nation housing policy” that took renting more seriously.

Cartlidge – who said he knew nothing about the upcoming announcement – said Conservative policy since the election had been “very much been from a home-ownership basis”, and that this should now change.

“I don’t think in doing that we recognise enough publicly that the extent of the housing crisis is not just about home ownership,” he argued. “It’s about a lack of palatable options for huge numbers of people. There are people who cannot buy or don’t want to buy, or it’s not realistic for a long time, and yet they’re still in the housing crisis.

“This crisis is the overall expense of all options, and therefore a response needs to have a multiplicity of tenures, and cater for those people in different circumstances.”

The Department for Communities and Local Government, in which Barwell is a minister, said it had no comment to make.

https://www.theguardian.com/money/2016/sep/30/tory-housing-policy-overhaul-could-include-rent-to-buy

Landlords set to be hit with a hefty ‘green tax’

Up to 330,000 buy-to-let landlords will be required to pay a “green tax” of up to £5,000 to make their properties more energy efficient, according to a report in the Telegraph.

The newspaper has learnt that many landlords will have to pay upfront for measures such as insulation, cavity wall filling and new boilers from 2018.

It had previously been suggested that landlords would be able to apply for loans from the Green Deal scheme to make the necessary improvements, which would then be repaid by tenants who benefit from lower bills. However, the new Department for Business, Energy and Industrial Strategy is now proposing that homeowners provide the money.

Landlords who let out homes from the Victorian and Edwardian eras are likely to be most affected by the green tax as these types of properties are typically less energy efficient compared to homes built over the past decade or so.

"Unless they make funding available, landlords will be forced to pass these costs on to tenants in the form of higher rents. It could also make being a buy-to-let landlord prohibitive. They could struggle to find such a large amount of money upfront," said Richard Jones, policy adviser at the Residential Landlords Association.

"Landlords have been harshly treated. This is an extra stealth tax on top of all the other measures that threaten the finances of the sector," he added.

From April 2018, buy-to-let landlords must raise the energy efficiency of their rental homes to at least Band E. That means that around 330,000 residential properties currently in bands F and G will require major works.

https://www.landlordtoday.co.uk/breaking-news/2016/7/landlords-set-to-be-hit-with-a-hefty-green-tax

Landlord avoids jail after fire leaves tenant fighting for life

A Coventry-based landlord has avoided a prison sentence over fire safety offences after his tenant suffered life-threatening burns to 40% of his body when he was trapped in his room in a multi-occupancy house due to a fire deliberately started by another tenant.

At Warwick Crown Court landlord Simon Fox escaped jail after pleading guilty to not having proper fire safety precautions in place at his buy-to-let property in Humber Road, Coventry.

The arson incident, which happened in January 2011, occurred after an intoxicated ground-floor resident, who has since been jailed for three years, started a fire in her room.

Most of the other residents were asleep, and two were trapped in their first-floor rooms and had to be rescued by the fire brigade, with one tenant, David Lennon, suffering severe burns.

Mark Jackson, prosecuting on behalf of the West Midlands Fire Service, explained: “He [Lennon] opened his door, but by then the fire had taken hold and he could not get down the stairs. He was beaten back by a blast of heat and was trapped in his room.

“He tried to get out of the bedroom window, but the gap was too small; and the next thing he could remember was waking up in the burns unit of a London hospital.”

Lennon was rescued by firefighters who had discovered him unconscious in his room and was rushed to University Hospital in Coventry before being transferred to a specialised burns unit in London, while other residents had to be treated for smoke inhalation.

Jackson added: “He was in a critical condition, and his family were told he might not make it. He had burns to 40% of his body.

“He has had eight operations and 17 skin grafts, and he has lost his employment and his relationship has broken down as a result.”

An investigation revealed there was no interlinked automatic fire detection system, and although there were some individual smoke detectors, the one in the kitchen, where there was no fire blanket, had no battery in it.

There were no smoke detectors in one of the ground floor bedrooms and two of the first-floor rooms, including Mr Lennon’s.

Fox was sentenced to four months in prison suspended for two years and ordered to do 250 hours of unpaid work.

Judge Stephen Eyre QC also fined him £25,000 to be paid by the end of August 2017, with 15 months in prison in default, and £24,300 costs.

The judge told Fox: “The ensuring of proper fire precautions in properties in multi-occupation is a matter of life and death. It is no exaggeration to say that, it is a literal truth.

“This is far from a reckless disregard for the safety of tenants, but you did not take the precautions you should have taken,” he added.

https://www.landlordtoday.co.uk/breaking-news/2016/9/landlord-avoids-jail-after-fire-leaves-tenant-fighting-for-life

Refocus housebuilding on towns and villages to solve crisis – report

Housing-zone funding is skewed towards London, which has been given 100 times more than the rest of England combined

London has been given almost 100 times more housing zone funding than the rest of England combined, but has only built twice as many houses, new research has revealed.

Calling for housebuilding investment to be more fairly distributed across the country, the Housing and Finance Institute thinktank concludes that it is a “cultural myth” that the greatest need for homes is in the biggest cities.

The organisation cited figures that show nearly 80,000 more people are on housing waiting lists in regional local councils than in the capital and metropolitan areas combined.

The IHF report used housing-zone funding – money awarded to councils by central government to aid development on specific brownfield sites – to support its argument that funding is skewed towards major urban centres.

London has secured £600m of housing-zone funding, which will be used to build 75,000 homes, while £6.3m has been allocated to the rest of England in the same period that will be used to build 34,000 new homes.

The privately funded body was launched by the coalition government in March 2015 to provide advice to local authorities on housebuilding. It argues that the housing crisis should be solved by refocusing government funding efforts on coastal communities, country villages, market towns and the historic cities and counties of England.

“Undoubtedly there is more that can be done in London and other major urban centres to build more homes, but those areas already have huge resources to do more,” the report says.

“The demand for new homes is as great in the regional local areas, the opportunity to turn planning permissions into new homes is greater, and they need a fairer share of funding. They should not be asked to pay over a greater and greater share of their, much smaller, resources.”

The institute argues there has been a longstanding emphasis on funding housebuilding in big cities and metropolitan areas, while they were only responsible for building about 30% of new homes planned and built in 2015/16. Some 70% of homes planned and built over the same time period are in district and unitary councils.

HFI chief executive, Natalie Elphicke, said energetic local councils that were working hard to build houses without the help of comfortable cash flow or big balance sheets should be rewarded. “Too often it has been the noisy major metropolitan cities or the massive housing associations already awash with cash who ask for even more,” she said.

“Yet the beating heart of sustainable housing delivery is in the counties, ordinary towns and districts of England. It’s time to harness the energy across the country in building homes and regenerating communities. The government needs to put more of its housing money where the opportunity to deliver is, and that means right across the country.

“If a council can show it is housing-business-ready, has a good track record and will commit to minimum housing targets, why shouldn’t it get the type of individual deals, powers and money given to the big devolved city authorities.”

When it came to housing delivery, Elphicke said biggest was not always best. “Some of our coastal communities, country villages and market towns, post-industrial heartlands and historic cities and counties of England are absolutely brilliant at making housing delivery happen and are delivering the majority of our new homes.”

https://www.theguardian.com/business/2016/sep/27/refocus-housebuilding-towns-villages-housing-finance-institute

The tenants paying the price so landlords don’t have to

A charity has spoken out against the high fees being charged to tenants who, as Felicity Hannah has been finding out, can’t take their business elsewhere

Holding fees, deposits, tenancy agreement fees, payment for reference checks, inventory charges, check-out costs. It’s an expensive time to rent a home in the UK, even before you consider figures from referencing firm HomeLet that show rents rose by more than 5 per cent in the 12 months to April.

This week a major charity added its voice to growing demands that letting agents be banned from charging fees to tenants. Citizens Advice has warned that letting agent fees have risen 60 per cent in the last 5 years alone and that tenants are suffering as a direct result

It has argued that all UK letting agency fees should be paid by landlords as they can shop around, whereas renters have to deal with whichever agency is marketing the home they want. Not only are tenants paying higher bills but there’s also concern that high letting agent fees discourages tenants from moving out of unsuitable homes, because the cost of fees and deposits can be so significant.

Last year it became a statutory duty for letting agents to fully publicise fees in advance, but the Letting Fees campaign organised by Generation Rent has found that 14 per cent of agents still do not list their fees publicly.

But even with greater transparency, the issue of fees is a pressing one for the UK’s 11 million private renters that in spring this year there was a Commons debate on the subject.

Conservative MP Maria Caulfield said then that increased competition for properties has led to rocketing agent fees. In her constituency of Lewes alone the local Citizens Advice charity has found fees ranging from £175 to £922. She told the House: “Not only has the amount charged by letting agents increased, but there has been an increase in the types of fees charged.”

However, the Government does not agree that an outright ban on fees for tenants is necessarily the answer. Such a ban already exists in Scotland and Marcus Jones, under-secretary of state in the Department for Communities and Local Government, says the evidence strongly suggests a connection between banning fees and higher rents for tenants.

Despite that, campaigners say it is the only solution. A spokesperson for the Letting Fees campaign argued: “A landlord is more able to ‘shop around’ than a tenant and so has a more powerful position to avoid and force down uncompetitive charges. Even if the costs are returned to the tenant through higher rent the total amount paid would be reduced – and importantly spread over the length of the tenancy, which reduces the financial shocks of renting.”

An outrageous example

The Citizens Advice research will come as no surprise to tenants, who have been paying these rising fees for years. Just last week one Twitter user, Magnus Jamieson, posted an example of the various fees chargeable through one agency, opining that “letting in London “is ****ing bananas”.

His succinct outrage was easily explained by the fees listed by the agent. There would be a non-refundable holding fee of £500 to secure the property (although this would be deducted from the first month’s rent). Referencing fees of £60 per tenant plus £60 each for any guarantors, there was also a tenancy agreement fee of £250. To renew their tenancy the household would pay £120, and when the tenants came to leave there would be check-out fees of up to £175.

With fees that high, a couple with two guarantors who remained in a two-bedroom property for two years would pay almost £800 in fees alone. That’s a substantial amount for tenants who face paying high fees when they move again, potential before any remaining deposit has been released. What’s more, it’s on top of what the agent charges the landlord.

That is not even a particularly extreme example. We found agents charging tenants all that and more, including £30 and more for a right-to-rent check and check-out fees exceeding £250.

Paying but not the customer

Tenants are also in a peculiar position as they are paying for a service when the landlord is the customer. The landlord is also able to shop around for an agent, while tenants are forced to use whatever letting agent is advertising the property that best suits their needs.

Gillian Guy, chief executive of Citizens Advice, says: “Letting agents are hiking up their fees for a service that’s often not up to scratch.

“With fees rising year on year for letting agents, many tenants will rightly be wondering why they are paying hundreds of pounds for a simple contract renewal or for management services that leave them waiting months for essential repairs…

“Private renters shop around for properties, not for letting agents. Landlords are better able to choose agencies based on performance and cost and it should therefore be landlords paying letting agent fees, not tenants picking up these rising costs.”

How much? Tenants rights group The Tenants’ Voice suggests tenants should not pay more than £50-100 for an inventory fee in a furnished tenancy, £50-100 for a tenancy reference, and £100 for an administration fee. Unreasonable charges might include: a penalty payment if you don’t pay the rent by standing order, a reservation fee to hold a property while you get a reference or deposit, and both moving in and moving out charges.

http://www.independent.co.uk/money/spend-save/the-tenants-paying-the-price-so-landlords-don-t-have-to-a7320206.html

UK housing market ‘remains alive and active’ three months after EU poll

Three months on from the EU referendum and economists are still trying to assess what impact the decision to leave the 28-member state will have on the UK economy, but as far as the housing market is concerned it “remains alive and active”, according to Jackson-Stops & Staff.

Fresh analysis of the UK housing market by the national estate agency, based on a daily sample of more than 500,000 actual properties for sale in the UK over the last three months, shows that the volume of homes on the market in the UK has increased since the vote, while the proportion sold subject to contract has only fallen by just 2.5%.

The marginal decline in residential property sales has contributed to a 2% fall in average asking prices across the UK, from £297,508 in mid-June to £291,547 today, led by a 3% drop in London.

Nick Leeming, chairman at Jackson-Stops & Staff, commented: “Three months after the UK’s historic vote to leave the EU, the property market remains alive and active.

“There are more properties on the market today than on the day of the Brexit vote, and there has only been a marginal decline in the number of properties under offer. House prices have also declined only moderately.

“The normal events – families growing, the desire to downsize, a new job, a change of lifestyle – the fundamental drivers for people buying and selling property, have remained unchanged.”

But while the overall housing market remains broadly stable, the data does show that high stamp duty rates are having an adverse impact on the top end of the housing market, particularly properties priced £2m-plus, with just 7% of homes in the capital priced above £2m currently under agreed offer.

Leeming continued: “London has always been an island when it comes to the housing market and is governed by a range of forces that are not as strongly at play across the rest of the UK, such as significant international investment and high net worth buyers.

“The fact that there is a freeze around the higher value properties in the capital is due to a number of factors, not just confidence levels following the Brexit vote, but also the impact of stamp duty at the very highest levels.”

“We anticipate that the market will correct itself as we head into the final quarter of this year,” he added.

https://www.propertyinvestortoday.co.uk/breaking-news/2016/9/uk-housing-market-remains-alive-and-active-three-months-after-eu-poll

Prime London property prices to fall 9% this year, says Savills

Uncertainty over Brexit plans and stamp duty on second homes have driven down central London prices, says estate agent.

Post-Brexit uncertainty and tax changes mean a typical multimillion-pound, “prime” central London house could end this year worth £360,000 less than it was at the start of 2016, according to the upmarket estate agent, Savills.

The firm defines the prime central London markets as those where the average property price is around £4m, which includes Mayfair, Knightsbridge and Belgravia. It said these markets had been heavily impacted by changes to stamp duty, including April’s 3% surcharge affecting landlords and second-home buyers, and by uncertainty over the government’s Brexit negotiations.

As a result, prime central London property prices were expected to end this year down 9%, said Savills. That would be on top of the 3.3% fall registered in 2015, and would equate to a £360,000 drop in value for a £4m property in 2016.

The firm predicted that property values in these top-end enclaves would then stay flat during 2017 and 2018, with 0% growth, as Brexit negotiations continued, before bouncing back in 2019 with an 8% jump.

“Post-referendum uncertainty has compounded the impact of successive tax rises on values in London’s prime housing market, and will delay the sector’s return to growth,” said Savills.

Lucian Cook, its UK head of residential research, said that early signs from the autumn housing market were that committed sellers of top-end properties had “adjusted” their prices by between 5% and 10%. “The current situation is reminiscent of the 2002-to-2004 post-bull-run period, when a less significant financial shock combined with an uncertain geopolitical backdrop. Prices then fell a total of 10%,” he said.

Savills said a return to growth in 2019 was forecast, and that it was anticipating total price growth of 21% in the five years from 2017 to 2021.

In the lower-value outer London markets, where the average house price is £2m, total price falls of 5% are forecast for this year, which would more than wipe out the 2.3% gain notched up in 2015. A further fall of 1% is then predicted for 2017, with total price growth of just under 15% anticipated for the five years ending December 2021, “reflecting mortgage-lending constraints and greater caution around financial sector job security”.

Earlier this month, official government data revealed the average price of a London home was £485,000, and that typical values in the country’s most expensive area, London’s Kensington & Chelsea, had fallen by 3% in the year to July, putting it in the “bottom five” of all local authorities for house price growth.

https://www.theguardian.com/money/2016/sep/21/prime-london-property-prices-fall-9pc-this-year-savills

The young prioritise property over pensions

There was more bad news for the pensions industry after a new study found that young people feel saving for property is more important than a pension.

The research, conducted by independent market research firm Consumer Intelligence, found that under-35s are three times as likely to prioritise saving for a residential property than for retirement.

The report, which was commissioned by Nottingham Building Society, revealed that 24% of under-35s rate saving for a home as their top priority compared with just 8% who prioritise retirement saving.

Retirement saving has long been the main saving and investing priority for the population as a whole, but this latest study shows that attitudes are changing and that getting a foot on the housing ladder is now the main priority for many people, especially those under the age of 35.

The research shows that 34% of under-35s are either saving for the first home or to move home compared with 18% of the population as a whole, which partly reflects the fact that return on investment in residential property continues to outperform all other mainstream investments.

Only last month, Andy Haldane, the Bank of England’s chief economist, said that investing in property is a better investment for retirement than paying in to a pension.

“The importance that younger savers place on buying their first home or moving home demonstrates that there is strong demand for help with saving with under-35s saying owning a home is three times more important than saving for a pension,” said Ian Gibbons, senior mortgage broking manager at Nottingham Mortgage Services.

https://www.propertyinvestortoday.co.uk/breaking-news/2016/9/the-young-prioritise-property-over-pensions

Property auction calendar – 19th-25th September

Property auctions are a good place for investors to pick up a bargain, and every week these events are taking place at venues across the UK, offering a wide range of properties for sale. Here are details of the property auctions taking place this week.

Here is the full list of property auction dates for September 2016.

19/09/2016         Savills (London - National)            London

19/09/2016         Bagshaws Bakewell         Derbyshire

19/09/2016         Rendells Chagford           Devon

20/09/2016         Countrywide Property Auctions                South Yorkshire

20/09/2016         North West Property Auction - iam-sold                Lancashire

20/09/2016         Cumbrian Properties - The Agents Property Auction        Cumbria

20/09/2016         REA Leinster Auction      County Kildare

20/09/2016         David Plaister Ltd             Avon

20/09/2016         Stags Honiton    Somerset

20/09/2016         Stags Taunton   Somerset

20/09/2016         Stags Wellington              Somerset

20/09/2016         The County Property Auction     Lincolnshire

20/09/2016         Kivells Callington              Cornwall

20/09/2016         Andrew Grant   Worcestershire

21/09/2016         East Midland Property Auction - iam-sold             Lincolnshire

21/09/2016         Smith & Sons     Merseyside

21/09/2016         Fisher German Denton Clark       Cheshire

21/09/2016         Shonki Brothers (London Road) Leicestershire

21/09/2016         Allitt Auctioneers             Lancashire

21/09/2016         Bagshaws Leek Staffordshire

21/09/2016         Graham Watkins & Co    Staffordshire

21/09/2016         Tayler & Fletcher Bourton            Gloucestershire

21/09/2016         Tayler & Fletcher Stow on the Wold        Gloucestershire

21/09/2016         Bagshaws Uttoxeter       Staffordshire

21/09/2016         Steve Gooch      Gloucester

21/09/2016         Astleys West Glamorgan

21/09/2016         Romans                Berkshire

21/09/2016         Auction House Devon & Cornwall             Devon

22/09/2016         North West Property Auction - iam-sold                Lancashire

22/09/2016         Tamlyn & Son    Somerset

22/09/2016         Morris Marshall & Poole               Powys

22/09/2016         Auction House Bristol & Somerset North               Bristol

22/09/2016         Whittaker & Biggs - Macclesfield               Cheshire

22/09/2016         McCartneys        Shropshire

22/09/2016         Nesbits Hampshire

22/09/2016         Wilsons (Scotland)           Ayrshire

22/09/2016         Besley Hill            Avon

22/09/2016         Whittaker & Biggs - Congleton   Cheshire

22/09/2016         Countrywide Property Auctions                Devon

22/09/2016         Bowen Son & Watson    Shropshire

22/09/2016         Greenslade Taylor Hunt Langport             Somerset

22/09/2016         Kivells Launceston           Cornwall

22/09/2016         Whittaker & Biggs - Biddulph      Staffordshire

22/09/2016         Nock Deighton  Shropshire

22/09/2016         Cooke & Arkwright      

22/09/2016         Durrants              Suffolk

22/09/2016         Boultons              West Yorkshire

22/09/2016         Gascoigne Halman Altrincham    Cheshire

22/09/2016         Andrews & Robertson   London

23/09/2016         Phillips Smith & Dunn Barnstaple              Devon

23/09/2016         Phillips Smith & Dunn Bideford  Devon

23/09/2016         Phillips Smith & Dunn Braunton Devon

23/09/2016         Phillips Smith & Dunn Torrington               Devon

23/09/2016         Auction House Symonds & Sampson       Dorset

23/09/2016         DNG Maxwell Heaslip & Leonard          

https://www.propertyinvestortoday.co.uk/breaking-news/2016/9/property-auction-calendar--19th-25th-september

Bank of England leaves interest rates unchanged, but could cut in November

The Bank of England, as expected, opted to leave UK interest rates unchanged at 0.25% yesterday in the wake of recent upbeat economic data, but admits that another cut is still a possibility before the end of the year.

Last month the Bank halved its bank rate from 0.5% - the first rate cut since 2009 - as it tried to ward off a Brexit-fuelled recession. But the Bank said that it might cut rates further in the coming months, even though the near-term economic activity have been somewhat stronger than expected following the outcome of the EU vote.

Economists predict that the Bank of England is likely to announce a further cut to the base rate in November, bringing it down from 0.25% to just 0.1%.

“Whilst the base rate has been held as predicted, it is fair to say we can watch this space for further fiscal intervention in the weeks and months ahead,” said Simon Checkley, managing director of Private Finance. “What is becoming apparent is that despite rates being at an all-time low, they cannot be relied upon solely as the means by which to secure economic growth.”

He added: “With finance being so cost effective at present, there are also ample opportunities to be taken advantage of; particularly for first-time buyers and buy-to-let investors.”

Mortgage borrowing rates are currently at an all-time low with lenders across the board continuing to shave percentage points off their best deals in an effort to attract greater business from those buying or remortgage property.

Santander, Virgin Money, Nationwide, NatWest, TSB are among the main lenders to have slashed rates in recent days, but many experts are now suggesting that it is unlikely that mortgage rates will fall much further, as lenders look set to sustain existing rates, or possibly even increase pricing to boost profits.

Samuel Tombs, chief UK economist at Pantheon Macroeconomics, last week reported that the anticipated reduction in the base rate in November has already been factored in to most mortgage lenders’ pricing.

He said: “The rates that banks can borrow at in the wholesale market have been at record lows for a while now.

“Instead of seeing lenders cut rates, we are actually seeing them widen their spreads and I think it's likely we’ll see that process continue, meaning mortgage rates aren’t going to be materially different at the end of the year from now.”

https://www.propertyinvestortoday.co.uk/breaking-news/2016/9/bank-of-england-leaves-interest-rates-unchanged-but-could-cut-in-november

London office market grinds to a halt post-Brexit

London’s office market is under growing pressure from the UK’s decision to leave the European Union as it could result in a significant corporate exodus from the capital, Deutsche Bank has warned.

Earlier this week, Deutsche downgraded Derwent London Plc and Intu Properties plc to ‘sell’, saying it remained cautious on the office market in London due the potential adverse impact that the referendum outcome could yet have on the office market.

The German broker said in a note: “This [the Brexit vote] has the capacity to increase vacancy to historical peaks and after speaking to numerous legal and political experts, we think this risk is under-appreciated.”

CBRE reported last month that City of London office values dropped by 6.1% in July on heightened economic uncertainty, particularly for financial-services firms.

The slowdown in market has already led to reports suggesting that plans for London’s tallest office tower could be scrapped. This follows on from the Brexit vote, as it is now feared that the 22 Bishopsgate project, overseen by AXA’s real estate unit, would provide in the region of 1.4 million sq ft of offices and shops, adding to a potential oversupply of office space, with about 6.4 million sq ft of office space set to be completed in the district over the next two and a half years.

Despite the fact that the market is cooling, it would appear that many investors are being left frustrated in their efforts to negotiate significant price reductions, according to Jones Lang LaSalle.

“We are seeing a lot of demand from Europeans and Asians for investment purchases in London, but we are not seeing any sales because the sellers are saying ‘I am going to wait’,” said Colin Dyer, chief executive officer of JLL. “Investment markets are much more on off, and they can react quite quickly, so they switched off very fast.”

https://www.propertyinvestortoday.co.uk/breaking-news/2016/9/london-office-market-grinds-to-a-halt-post-brexit

Housing market cools in first post-Brexit official figures, but prices are still soaring

House price growth cooled in the month after the EU referendum, according to the first official Government figures since the historic vote.

The annual rate of growth fell from 9.7pc in June to a "robust" level of 8.3pc in July, according to the Office for National Statistics.

Despite the slowdown, the 8.3pc growth rate is the third-highest measured so far this year. On a monthly basis, property prices edged up 0.4pc between June and July.

The increase in values continues to be fuelled by high levels of demand and a shortage of supply, according to the Royal Institution of Chartered Surveyors.

House prices in London soared by 12.3pc in July, only to be outpaced by the east of England, where they rose 13.2pc year-on-year. The average price of a property in the UK is now £216,750.

Samuel Tombs, chief economist at Pantheon Macroeconomics, said that July’s figures, which are based on actual transactions, only show that homebuyers already committed to property purchases didn't try to negotiate prices down in response to the referendum result.

He cautioned against reading too much into the numbers, which he said "don’t reflect the full impact of the referendum vote because it takes several months to complete a house purchase".

Mr Tombs added: "The fall in the average value of mortgages approvals over recent months and the 1.3pc fall in the Halifax measure of prices - which is based on the lenders’ mortgage offers - between June and August suggest that transaction prices will begin to fall soon."

Jonathan Hopper, Managing Director of Garrington Property Finders, described the results as “another dose of robust data", and said that "the post-Brexit bounce is starting to look less like a blip and more like business as usual for house prices”.

He added: "It is too soon, however, to dismiss the Brexit effect. The property market’s fundamentals are far from normal – with both demand and supply falling, the result is a benign limbo that is driving up prices even as the number of sales falls.”

Thomas Fisher, an economist at PwC, echoed these views, saying that "as many of these transactions will have been in motion since before the referendum, more data will be needed to make a proper assessment of how the referendum result is affecting the housing market".

The autumn selling season, which is traditionally strong, will offer a better picture as to the state of the housing market post Brexit.

"Our own expectation is that the UK housing market will cool not crash," said Mr Fisher. "In our main scenario, average UK house price growth is projected to decelerate to around 5pc in 2016 and around 1pc in 2017."

The index also reported that values of newbuild properties grew 15.6pc in the year to July, although the ONS stressed that this was based on a small sample and that the data can be volatile. The average first-time buyer in London paid £423,422 for their home.

Meanwhile, estate agency Winkworth reported that its pre-tax profits were up 8pc in the six months to June 30, while sales grew 6.7pc to £2.75m.

Winkworth, which is largely based in outer London but also has a presence in major towns and cities in south east and south west England, managed to increase its profits despite fewer transactions. This comes in contrast to Foxtons, a London-based estate agency, whose profits nearly halved in the first half of the year.

"Foxtons are in central London moving out, while we are quite embedded in those markets in the outskirts," said Dominic Agace, chief executive of Winkworth. "In part they [Foxtons] are trying to launch new offices in those markets – new and not established – and relying on central London offices, which are struggling with [lower transactions to do with increases to] stamp duty."

http://www.telegraph.co.uk/property/house-prices/housing-market-cools-in-first-post-brexit-official-figures-but-p/