Monday 29 April 2013

Housing Market Forges on with April Price Rise


Further evidence of a recovery in the housing market emerged today, with figures showing house prices rose 0.3 per cent in April – the third consecutive month that values have increased across the country.
The monthly survey by Hometrack – which tracks sentiment among over 5,000 estate agents and surveyors – also found demand in London has grown three times faster than supply over the last quarter.
London also boasts the shortest average time on the market with just over four weeks, while the national average is more than double that at just under 10 weeks – a level last seen in London in October 2007.
'A lack of housing for sale is a key feature of the market,' the survey reads. 'For the last three months supply of new housing has failed to keep pace with demand. The supply-demand imbalance continues to put upward pressure on prices.'
Today also saw the release of figures from Halifax that showed the average price of a new build property in the UK has increased by 12 per cent over the past five years and now stands at £233,822, outstripping a rise of 9 per cent for all properties.
Over the past 10 years there has been a national rise of 40 per cent, with London leading the way with a rise of 57 per cent to £415,540.

Craig McKinlay, new mortgages director for Halifax said new homes were an important part of the market.
'In a relatively flat housing market, the new homes market has changed enormously over the past five years,' he said. 'We have seen a lot of positive sentiment towards the new homes market, with various schemes launched to get the house building industry moving and changes in policies and deposit requirements allowing shared equity buyers to participate more fully in the new build market.'

Thursday 25 April 2013

Mersey Landlords Group Renews Call for Licensing of Whole Sector


A plan by the Government to allow tenants and landlords to challenge “rogue letting” agents is a “step in the right direction” but more needs to be done to regulate the industry.

That’s the view of Richard Globe, founder of the Wirral-based Residential Property Landlord Letting Support Group, who has long campaigned for greater regulation of the residential lettings sector.

Last week the Government, which has so far resisted calls for greater regulation, backed an amendment to the Enterprise and Regulatory Reform bill that would require letting agents to sign up to an ombudsman scheme.

It would also give power to the Office of Fair Trading to ban those agents who act improperly.

The residential lettings sector has a significant presence in Merseyside where many people have embraced the buy-to-let boom.

There has also been a sharp increase in the number of what Mr Globe calls “accidental landlords”, people who perhaps have been unable to sell a property and have decided to rent it out instead.

Renting out a property requires knowledge of a number of legal responsibilities towards tenants and so many property owners will turn to letting agents.

However, when the agents are not up to the job then trouble ensues.

The above proposals could become law as early as next spring but Mr Globe wants the Government to go further and consider full licensing of both agents and landlords.

He told Post Business: “This announcement means the first cracks are starting to show in the Government’s opposition to mandatory licensing.

“It is welcome as far as it goes but there is an urgent need to tackle rogue landlords as well as rogue lettings agents.

“Voluntary or self-regulation has clearly not worked.

“What we need is blanket regulation that covers the whole spectrum.”

The British Property Federation, Roya Institution of Chartered Surveyors and other groups have all backed the latest proposals.

Click here to read the original article: "Mersey Landlords Group Renews Call for Licensing of Whole Sector"

Wednesday 24 April 2013

Court of Appeal Decision in Johnson v. Old – Good News for Landlords

The background to the case

As you may remember, at first instance, the District Judge held that Mrs Old’s sucessive payments of six months rent up front were in reality deposits – which as the landlord had failed to protect them, prevented him from being able to serve a valid section 21 notice.

The matter then went to HHJ Simpkiss on appeal on the 31st July 2012, when he overturned the decision saying that the payment was rent and not a security. 

Ms Old then secured legal aid which allowed the decision to be sent to the Court of Appeal – unfortunate for poor old Mr Johnson (although it rather looks as if he may have had insurance cover), but very helpful for the rest of us.

The Court of Appeal decision

Landlords everywhere will be relieved to hear that the decision was in favour of the landlord – the leading judgement which was made by Sir John Chadwick upheld the decision of HHJ Simkiss.

The appeal was in three parts – the first part looking at whether the tenancy agreement required the tenant to pay six months rent in advance.

The first part of the appeal

Much of the judgement looks in tedious detail at the minutiae of the tenancy agreement between Mr Johnson and Ms Old, which it seems was not happily drafted. However as it is only really relevant for the parties I will spare you this. Suffice it to say that the Judge said in para 31

"It seems to me that His Honour Judge Simpkiss was correct to hold that, read as a whole, the May 2010 tenancy agreement did require that the first six months’ rent be paid, in advance, on or before 1 May 2010."

The Judge goes on to point out that

"there are various ways of dealing with the perceived risk that a tenant who is the subject of an inadequate credit reference will not pay his rent month by month; and one of those ways is to require payment of the rent “up front”.

It seems to me plain that that is what the landlords, perhaps on the advice of their agents, decided was the appropriate way to deal with the perceived risk in the present case. The fact that they chose to deal with the risk in that way – rather than taking a guarantee or a rent deposit – is no reason for refusing to give effect to the terms of the tenancy agreement."

He also makes the point that the fact that the agents held on to the money and only passed it over to to the landlord on a month by month basis is irrelevant. He cites HHJ Simpkiss

“the arrangements between the agents and the landlord are neither here nor there” and

“whatever the arrangements between the landlord and [the agents] the [tenant] would have been able to argue successfully that she had paid the full rent for the term”.


going on to add that the Consumer Credit argument does not help Ms Old either.


"It would not be for her benefit to treat the £6,000 paid on 29 April 2010 (or any part of that sum) as security for the payment of future rent (rather than as, itself, payment of rent that had become due) in circumstances where the tenant was liable (under paragraph 1.7.5) for interest at the rate of 6% per annum on unpaid rent: her interests were best served by treating the rent as paid rather than as unpaid but secured".

A nice argument I think. The Judge then turned to the second ground of appeal which was on the allegation by Ms Old that the payment was actually a ‘security’ or deposit.

The second ground of appeal

The Judge does not accept this argument either. For two reasons

1. There is a difference between money paid to discharge an existing obligation and money paid to be held as security for some other obligation. Or as the Judge put it

"Money paid in order to discharge a current liability is not paid with the intention that it be held as security for the discharge of that liability.

The payer’s intention is that the liability will be discharged by the payment itself; and so there can be no need to provide security for the discharge of the liability in the future."

He goes on to point out:

"The point can be tested by asking, rhetorically, how the tenant would have responded to a demand, on 1 September 2010, for rent in respect of the month of September 2010.

It is, I think, impossible to avoid the conclusion that her answer would have been: “why are you asking me for rent which I have already paid?”.

And, if it had been suggested to her that she would be liable for interest at 6% per annum on rent for the month of September 2010 if she did not meet that demand by payment of £1,000 forthwith, her answer might have been expressed in stronger terms of indignation."


2. The Judge also points out that in any case this money could hardly be held to be security at the time the section 21 notice was served as the rent this money was allegedly paid as security for had fallen due (ie by 31 October 2010) – a long time before the section 21 notice was served on 15 August 2011.

So we proceed to the third ground of appeal

The third ground of appeal

This was that the landlord had failed to comply with the tenancy deposit regulations with respect to the payment. However as the court had held that this was not a deposit – there was no need to consider this.

So the landlord won, and the threat of having to pay back 18 months worth of rent to the tenant plus a penalty of up to three times that sum, is removed, hopefully for good.

Tessa Shepperson's thoughts on the case

I have to say that I am relieved that a bit of common sense has been applied here. Lots of landlords take payments up front from tenants who fail referencing, as happened in this case. If these payments were all at risk of being treated as a deposit, all sorts of ridiculous results would follow.

Thankfully the Court of Appeal has knocked these on the head.

However it also shows that landlords and their agents need to take care when drafting their tenancy agreements. It is generally accepted that the agreement in question here was a bit of a dogs dinner. Had it been a bit clearer this litigation could probably have been avoided.

So this case does not take away the requirement for people to be clear in their tenancy agreements so that ordinary people reading them will be able to work out what they mean, and it won’t need a Court of Appeal Judge to work it out for them.

Monday 22 April 2013

Landlords Actively Add to Buy-to-Let Portfolios



There was a surge in the number of landlords trying to raise enough capital to take advantage of high gross rental yields by adding to their portfolios during the first quarter of this year, according to detailed research released by Mortgages for Business, the specialist buy to let broker.
Remortgaging rose significantly from 43% in the last quarter of 2012 to 69% of all residential buy to let transactions in Q1 - the highest on record for a single quarter since the start of the broker's Complex Buy to Let Index in Q1 2011. Refinancing also accounted for over two-thirds of transactions on Houses in Multiple Occupation (HMO) and Multi-unit Freehold Blocks (MUFB).
The latest survey of estate agents, conducted by the Royal Institution of Chartered Surveyors (RICS), shows that the increased availability of cheaper home loans, boosted by Funding for Lending Scheme, has helped more investors gain access to home loan funding.
Housing transactions 
Surveyors sold an average of 17.4 homes in February - up from 16.8 in February, led by a rise in home sales in the West Midlands and London, according to the RICS survey.
"A buoyant, healthy property market is central to economic recovery and, while these are still very much early signs, it is encouraging that sales are beginning to pick-up," said Peter Bolton King, Rics' global residential director.
Looking ahead, respondents to RICS' survey said that they are optimistic that the recent increase in transactions is set to continue. A net balance of 19% more surveyors expect sales to rise further over the coming three months.
Howard Archer, economist at forecaster IHS Global Insight, said: "Recent signs of modestly improving housing market activity, supported by the Funding for Lending Scheme, and a moderate recent overall firming of prices suggest that there is a growing prospect that 2013 could be a slightly better year for the housing market."
However, transactions are still significantly below the levels reached in the early-mid 2000s, at the height of the last property boom, reflecting the fact that many would-be homebuyers are still struggling to gain a foot on the housing ladder.
Help to Buy 
Launched at the beginning of April, the ‘Help to Buy' scheme, which was announced in this year's Budget, could dramatically help to boost the number of people able to buy property, most notably new build.
‘Help to Buy' gives people on all stages of the property ladder the opportunity to purchase a new home with a deposit of just 5%. Under the scheme, the government will lend up to 20% of the value of the property through an equity loan. The purchaser will have to pay just 80% the cost of the property - made up of a 75% mortgage and 5% deposit.
Susan Young, sales and marketing director at Crest Nicholson, said: "Help to Buy is a great opportunity for everyone looking to buy a new property. What's so great about the scheme is that the lower deposit is available for all purchasers, whether they are first time buyers or looking to make the steps into their next home."
Various government backed incentive schemes have helped various purchasers acquire property in recent years, and many experts believe that continued investment in these schemes are exactly what is needed to inject further movement into the housing market and help fuel economic recovery.
Stephen Stone, chief executive at Crest Nicholson, commented: "Help to Buy has been billed as a real game changer for the housing market, and it's absolutely essential that we continue to offer purchasers some much-needed financial support to help bridge the deposit gap and secure an affordable mortgage."
Inevitably, despite serious efforts by the government to help homebuyers, many prospective purchasers will continue to struggle to raise the deposits needed to access a mortgage or fail to qualify for Help to Buy or any equivalent scheme, placing greater pressure on the private rented sector.
Strong rental market 
With Savills forecasting that around 20% of all households in the UK will be renting a property by 2016, resulting in a requirement for an additional 1.1m rental homes, there is growing demand for new buy-to-let landlords to enter the market and existing landlords to add to their portfolios.
It is estimated that there are 4.8m privately rented homes in Britain, up from just 2.5m in 2002. In London, private renting already accounts for 27% of all homes, some 900,000, having overtaken social renting in 2010, which now accounts for just 24% of tenure or 783,000 homes.
Increasing rents and lower capital values are giving a much better return on cash than the banks, particularly for those investors who are snapping up the right property, in the right location and at the right price with the right financial structure. 
Charles Brittain, Business Development Director of Invest Connect commented: "Rents have risen over recent years and interest rates are low providing the potential, depending on finance structure, for greater monthly returns."
Capital growth 
Residential property has historically doubled in value every 7-10 years and has done now for over half a century, as it did from 2000-2010. During this period the market experienced what was described as ‘the 2007 property crash'. In the last 10 years from 2002-2012, properties have seen around 50% increase in value across the UK.
Brittain added: "This could suggest that in the next 10 years we are going to see property values rise by at least 50% again if not more than double that figure, as per the historical 7-10 year double in value timescale. The 20 year rolling cycle of prices shows an increase in property annually averaging each year by 7% over the worst period since 1952 to 66% a year at best [1989-2009].
Research shows that rent increases over the past year have averaged 5.2%, Savills forecast 20% rental growth over the next five years, while research from Rightmove indicates that almost two-thirds of tenants are expecting their rents to rise over the next year.
Rental yields vary enormously depending upon where the property is located, with the highest yields generally achieved for the lowest value properties. But consider: Any investment carries some inherent risk.
The riskier investments, most notably high-yield properties, have the potential to make you the most money, but they also have the greatest chance of losing you money. The trick is to balance risk against reward when investing in property.

Friday 19 April 2013

Top Buy-to-Let Locations Revealed

Southampton takes the crown for the best location for buy to let, offering savvy landlords an impressive 7.82% rental yield.

The research, which was compiled by HSBC, found Blackpool was hot on the heels of Southampton, offering rental yields of 7.81%. Kingston upon Hull took third spot with 7.77%.

The rental yield is calculated as the percentage of the price of the house returned to an investor over a year's rent.

Southampton takes the top spot thanks to a combination of high monthly rents (averaging £901) and relatively low house prices, with the typical property coming in at £138,311.

HSBC says seaside towns, such as Brighton, Bournemouth and Eastbourne, scored highly thanks to holiday rentals and season work. Other cities to score in the top 10 included Liverpool, Slough and Coventry.

London boroughs were mid-table due to the high cost of housing: Southwark was top with an average property price of just over £400,000 and monthly rents of £2,058, creating a typical rental yield of 6.15%.

Peter Dockar, head of mortgages at HSBC, said: "Buy to let remains a good investment for those looking for above average returns, with 23 of the top 50 areas offering yields above 5%, significantly more than is available from more traditional saving options.

"However, it is clear there is a fine line between a property in a desirable area, the rents that can be achieved and the returns that can be yielded so it is key landlords do their research as often the most popular locations may not offer the best return."

Thursday 18 April 2013

Lettings Agents are to be Regulated for the first time - What will it mean for Tenants and Landlords?


MPs are today set to approve rules that are hoped will banish rogue lettings agents, forcing them to sign up to schemes that provide victims of unscrupulous practices with compensation.

After years of calls for regulation of the lettings industry the Government is set to bow to pressure to implement rules, via an amendment to the enterprise bill, that will compel agents to repay tenants and landlords they have cheated.
While estate agents already abide by a strict set of rules, this will mark the first time that the lettings industry has seen statutory regulation after years of self-regulation.

What's the problem?

There are two redress schemes currently run in the UK - The Property Ombudsman (TPO) and Ombudsman Services: Property - but they are voluntary only.
Trade bodies such as the Association of Residential Letting Agents (ARLA) and the UK Association of Lettings Agents (UKALA) are covered by these redress schemes and have their own forms of insurance protecting tenants and landlords, but again membership is not compulsory for agents.

Many small agents are reluctant to hand over subscription fees to the trade bodies so will not have access to the schemes. 
Most of the major lettings agents, often attached to estate agent companies, will be members of these bodies and offer these protections. However, it impossible to say with any accuracy what proportion of agents are signed up because anyone can start a lettings business without any form of registration or licence.

There are 4.7million households in the UK private-rented sector and particularly in areas of growing demand - such has London -  it has led to a rise in the fees and charges that renters and landlords have to hand over on top of hefty deposits and exorbitant levels of rent.
In some cases charges for things such as credit checks, inventories and 'administration' can total as much as £540, which are levied on tenants even before a deposit is laid down.
And sometimes agents sneakily double-charge fees, with tenants and landlords being hit with charges for the same work.

The ombudsman services also rule on complaints about poor service, repairs and maintenance, security deposits and unfair business practices, but cannot do anything currently if the agent in question is not signed up with its scheme.
In 2012 TPO receive 8,334 lettings complaints - a rise of nine per cent on 2011 - but some 2,121 were about agents unregistered with the service.

What will the rule change mean for tenants and landlords?

When implemented - although it will first have to go through a consultation process - it will mean all lettings agents would have to be part of a Government-approved redress scheme.
Currently they only have to join voluntarily and as such hundreds, and maybe thousands, of agents are not subjected to any form of self-regulatory body.
It will mean that any tenant and landlord that has fallen foul of unscrupulous practices, exorbitant and unfair charging, and poor service can complain to an ombudsman who, if they find fault with an agent's actions, can order them to provide financial redress.

















What happens to agents who fall foul of the rules?

Approved ombudsman services will be able to order agents compensate tenants and landlords they have wronged.
In more serious cases orders can be made banning someone from engaging in lettings agency work or property management work.
What's more, criminal offences will be created to tackle anyone who breaches their orders.  Those found not to have signed up to a redress scheme will also be banned from operating.

Does it go far enough?

The Office of Fair Trading (OFT) has previously called on rules that force lettings agents to reveal a breakdown of their fees and charges to prospective tenants and landlords, but there is no mention of this in the amendment to the bill.
That is not to say it will not follow, with the National Landlords Association (NLA) telling This is Money that details of the implications of the amendment are yet to emerge.

The Advertising Standards Agency (ASA) has taken a stand on this issue recently, last month rapping Your Move for not making clear that non-optional fees and charges would be added to a quoted price.
The ASA said that although the law had not been changed, advertisers would have to make it clear in quoted prices if there are compulsory fees and charges.

Will the changes work?

Which? executive director Richard Lloyd said: 'With renting now the only housing option for millions, we're pleased the Government will now give tenants and landlords access to a complaints scheme.  Our research revealed an alarming lack of consumer protection in this market so it's vital the Government puts these plans into action as soon as possible.'

Chris Norris, head of policy at the National Landlords Association (NLA), said: 'The Housing Minister’s announcement that the Enterprise and Regulatory Reform Bill will be used to provide a basis for future, specialised regulation of letting agency standards is very welcome as it will provide the best means to ensure that landlords and tenants who choose to use professional letting services receive adequate protection.'

Caroline Kenny, of the UK Association of Letting Agents (UKALA), said: 'At UKALA, we have long been of the opinion that a bespoke solution was needed to address the issue of accountability and transparency within the lettings sector and that a poorly devised regulatory approach could do great damage to the sector at a time when it’s growth is essential to providing a healthy housing market.  We must not forget that the vast majority of letting agencies are small and medium sized businesses which will face greater hardship complying with additional burdens.


Tuesday 16 April 2013

Landlords Welcome 11th Hour Regulation of Letting Agents

Housing Minister Mark Prisk tabled the amendment in reaction to changes made to the Bill in the House of Lords, which would have given letting agents the same level of regulation as estate agents.

Instead the government proposes to oblige letting agents to belong to an approved redress scheme, or ombudsman, which will give landlords and tenants an avenue for dealing with complaints when they arise.

While the BPF feels this is a step in the right direction, it believes further action will be needed to remove all rogue letting agents from the sector.

Ian Fletcher, director of policy at the British Property Federation, said: “The Housing Minister has listened to the sector’s representations and reached the right conclusion. Clearly this is an eleventh-hour amendment to a Bill that is not housing in scope; as such there is a limit to what can be realistically achieved.
“Independent review of a complaint by an Ombudsman is good practice already pursued by many agents, and it is excellent that all tenants and landlords should now have access to such schemes.

“There are still issues left on the table, however, and we should not kid ourselves that this will expunge the sector of bad letting agents. For example, we will continue to campaign to have client money protection insurance extended so that money paid over by landlords and tenants to an agent is properly accounted for and not at risk.

"As is the case with regulation, government support and resource for its enforcement to ensure agents are not paying lip-service to it, will also be vital.”

The government stopped short of backing an amendment introduced in the House of Lords by Baroness Hayter which called for a change to the law to give the Office of Fair Trading, which regulates property sales, stronger powers to ban rogue letting agents.

Click here to read the original article: "Landlords Welcome 11th Hour Regulation of Letting Agents"

Monday 15 April 2013

Selling Your Own House: Could it Save You a Fortune?


For thousands of people the start of spring means the beginning of the house-hunting season.
It is also time to ponder one of life's unanswered questions: How do estate agents have the cheek to charge a king's ransom for selling a house?
If that is your view, have you thought of trying to sell it yourself?
This year that should become easier, as the government is changing the rules on selling houses over the internet.
Private sale websites that help you find a buyer for your property will be given new freedom to operate.
As a result, sellers could save thousands of pounds. But is it really a good idea, or could you end up wasting, rather than saving, money?
Selling your house DIY style means exactly that.
When you sign up with a private sale website, they will send you a "For Sale" sign with your phone number on it to erect outside your house.
Get used to the graft of banging the sign into the ground, because from now on the task is only going to get harder.
You take the photographs, you show potential buyers round the property, you organise Energy Performance Certificates (EPC's), and above all, you negotiate on price with any potential buyer.
In return for the website posting your photos, and matching you with buyers, you will pay anything from £300 to £600.
At the higher end of that price range, your property details will also be advertised on the big portals like Rightmove and Zoopla, which dominate the market.
Some sellers, like David Dexter, are ecstatic at the potential savings on offer.
"I think that an estate agent is a service that I can do. And I think it's a really great opportunity to get the house out to as many people as possible. And essentially, to save a lot of money," he explains.
He is selling a three-bedroom house near Reading in Berkshire for £265,000.
His local estate agent quoted a fee of around £4,800, including VAT.
But he has opted to pay £600 for a premium service with The Little House Company, one of many private sale websites.
If he manages to sell it, he will therefore save himself over £4,000.
Estate Agencies are having to defend their reputations like never before.
They point out that selling a house is only a small part of the service they offer.
"Selling the house is the easy bit," says Mark Hayward, of the National Association of Estate Agents.
"Much more difficult is dealing with the offer, checking the chain, and talking to lawyers," he says.
Many estate agents will try and establish whether potential buyers are who they say they are, and whether they can really afford to buy your house.
In particular they say price negotiation is a skill that many people think they have, but in reality do not.
Peter Bolton King, of the Royal Institution of Chartered Surveyors (RICS), says private sale websites offer a totally different level of service to that of an estate agent.
"There is a huge difference between paying a few hundred pounds just to put the property on to the internet, compared with all of the services that should be provided, and the security that should be offered, by the good traditional local estate agent," he told the BBC.
Estate agents are also members of the Property Ombudsman scheme, which provides for financial compensation should things go wrong.
For anyone thinking of selling privately, the key question is how many houses have actually been sold through such websites.
Houseweb, which has been going for 17 years, claims to have sold 15,000 homes over that time.
But some of the other websites the BBC tried to contact were not so forthcoming with figures. One of the best known did not return our calls.
This may be because the current legal limitations prevent them operating effectively.
When the law that defines an estate agent is changed later this year, these private websites will be relieved of certain obligations placed on estate agents, like having to visit the property concerned.
The government hopes the greater freedom they then will enjoy will allow them to flourish, and the market to grow.
In the United States it is thought around 10% of house sales are carried out through private sale websites.
RICS estimates that the equivalent figure for the UK is currently around 5%, which suggests that de-regulation could make a significant difference.
The danger for sellers is that they may pay several hundred pounds to a private sale website, but still fail to find a buyer. If they then resort to an estate agent, they will have spent more money, not less.
One alternative is to use an online estate agency instead. They tend to have a larger reach, and so attract a larger number of potential buyers.
Ask yourself whether anyone looking for property in your area is really going to be able to find it on the internet.
Maybe do a web search in the area, and see which property site comes up first.
Or consider a private sale alongside an estate agent sale.
But be careful to get the agreement right with the agent, in case you end up selling privately, but still paying the agent.
"If you get the contract right, if you're absolutely up front with both sides, you could advertise privately, but then you can also work through an estate agent as well," advises Kate Faulkner of the website Property checklists.
"But you need to get the contract absolutely watertight to make sure you don't end up paying both fees."
Even if most house-sellers fail to embrace the new websites, the forthcoming deregulation could still end up changing the market.
Some believe that estate agents may be forced to introduce fixed fees for their services, rather than taking an average 1.5% commission.
That could be particularly advantageous for those with larger properties, who historically have faced steeper bills from estate agents.




Thursday 11 April 2013

55% Think it's a Good Time to Buy as Housing Market Optimism Rises


Optimism in house price prospects has risen significantly over the past three months, according to the latest quarterly Halifax Housing Market Confidence tracker.
The survey, which was conducted during the week of the Government's budget announcement, revealed that the headline House Price Outlook balance (i.e. the difference between the proportion of people that expect house prices to rise rather than fall) stood at +33 in March. This was much higher than the +20 recorded in the last survey in December 2012 and is the highest since the survey began in April 2011.

More than four in ten (45%) respondents predict the average UK house price will rise over the next year. Only one in eight respondents (12%) forecast a decline in prices - the lowest proportion in the survey's history.

A significantly higher proportion think that it will be a good time to buy (55%) than believe that it will be a good time to sell (21%) in the next 12 months.  The proportion thinking that it will be a good time to sell has, however, risen significantly since the last survey in December 2012 (13%).

Despite the rise in those believing that it will be a good time to sell, fewer than one in six (16%) believe that it will be a good time to both buy and sell over the coming 12 months.

Concerns about job security (58%) and the challenges in raising a deposit (57%) are highlighted by respondents as the main barriers to buying a home. There has been a slight rise in respondents identifying challenges in raising a deposit from 55% in December 2012. The proportion identifying concerns about job security is unchanged from three months' ago.

Martin Ellis, housing economist at Halifax, commented:

"There has been much more optimism about the prospects for the housing market over the past few months, particularly as the recent UK budget announced big plans for housing, and this seems to be reflected in the attitudes of the respondents. Sentiment regarding the outlook for house prices has improved markedly over the past quarter. This is likely to reflect the modest improvement in house prices nationally over recent months. A clear north / south divide exists with significantly higher proportions of people expecting prices to rise in the south than elsewhere in the UK.

"Only a small number think that it will be a good time to both buy and sell over the coming months. This finding indicates that the level of housing market activity is likely to remain subdued in 2013 despite the growing optimism regarding house price prospects."

Ben Thompson, MD Legal & General Mortgage Club comments:

“The rise in house price optimism recorded by Halifax is a positive sign for the market as a whole. These results support the findings of our latest Mortgage Mood Survey which reveals that 70% of UK homeowners believe the current price of their property reflects its actual value.

“Value is all down to demand, so this belief that house prices are ‘fair’ highlights a shift to a more realistic attitude. Hopefully a combination of buyer and seller optimism, alongside a more diverse range of mortgage products, will help to drive a much needed boost in the market.

“These findings also indicate that price concerns are not the primary stimulus for the recent market stagnation. Issues surrounding the availability of suitable housing stock and the accessibility of appropriate mortgage finance need to be addressed if a true recovery is to take place.”

Wednesday 10 April 2013

Brent Landlord Fined £1.5 Million for Flouting Planning Laws


A landlord has been fined for building 12 flats in Willesden without the necessary planning consent.
A fine is not that unusual but this fine - almost £1.5m - is believed to be Britain's biggest confiscation order for a planning offence.
Salah Ali was taken to court by Brent Council, which claims he has flouted regulations in the borough for the past 10 years. More now from Paul Brand.

Tuesday 9 April 2013

Landlord Left to Clean up Mountain of Rubbish


These are the conditions in which three children were made to live in a house in Burton – and has left a furious landlord with the bill to clean it up.
Piles of bin bags and rubbish accumulated by the house’s previous tenant have left the property resembling a tip.
There has hardly been a space left untouched, with bags and various items of rubbish spilling out into the garden.
After the tenant decided to leave the premises, landlord Jagjit Singh has been left to clean up the mess.
Mr Singh had been locked in a battle to evict the mother from his property in St Mark’s Road, Horninglow, after she had failed to pay rent for nearly a year, which he says has cost him thousands of pounds.

But Mr Singh only discovered the full scale of the condition the house had been left in after finally regaining access to his house, which the woman and her children had been living in for the past two years.
He told the Mail: “It has been left absolutely ruined. There has been a lot of damage done.
“The lady stopped paying rent last year, and I’ve been trying to get her out ever since. I had to go to court to get an eviction notice. It’s taken nearly a year.”
Despite finally getting rid of his troublesome tenant, Mr Singh has been left with nothing to smile about after being left with the bill for cleaning up the mess left behind by the family, as well as losing out on rent payments which date back to May 2012.
Mr Singh was horrified about what he discovered after getting back into his house and has been left with the headache of sorting out the mess that has been left behind.
He also said he had given up any hope of recouping any of the money lost.
Mr Singh added: “I’ll have to pay to clean it. It will be coming out of my pocket. I won’t be getting any money back. I’ve lost that money.
“I can’t understand how someone could live like that. I've never seen a house like it.”

Monday 8 April 2013

Selective Licensing Could Pose Problems for Lenders

Historically imposed on single street or single block areas that have been hit with anti-social behaviour, Councils can now decide for themselves if they want to impose a selective licensing scheme – which makes landlords have to apply for a license for each property and meet certain conditions.

Already the London Borough of Newham – home to Stratford’s plush multi million pound Westfield shopping centre and the Queen Elizabeth Olympic Park – has introduced the scheme covering the entire area in a move it hopes will make it fairer for tenants and landlords alike.

But lenders like state-owned Royal Bank of Scotland – which also owns NatWest – have already said that they will not lend to landlords with properties covered by selective licensing, effectively ruling themselves out of lending on properties across a vast geographical area worth millions of pounds.

A 2-bedroom flat in Stratford’s plush Icona Point overlooking the Queen Elizabeth Olympic Park is currently on the market for £440,000 according to Rightmove. Meanwhile a 4-bedroom terraced property on Stratford’s Torrens Square is on the market for £399,950. Both would be ideal investment properties with Stratford just eight minutes away from the City of London but would-be landlords would now have to sign up to the scheme.

A spokesman for NatWest Intermediary Solutions said; “I can confirm that it is our current policy, and has been for some time, to not accept applications for Buy-to-let mortgages where the landlord requires a selective licence.

“We will continue to monitor and regularly review our policies in accordance with changing market conditions.”

The London Borough of Newham is the first to apply the scheme blanket-style across the whole borough but there are other councils in consultation over the issue. Liverpool, Cornwall, Hastings, Waltham Forest, Salford and Bristol are all believed to be considering Newham’s approach while Oxford is expected to have completed a phased roll-out of the scheme by the end of the year.

Steve Olejnik, head of sales at Mortgages for Business, warned: “If the long term plan is to make all private sector landlords become licensed then good landlords will survive. But my fear is that if other councils start to impose a licensing scheme on all landlords there will be a knee jerk reaction from lenders.”

Olejnik said RBS had taken a typical lender’s view that if there is a designated area with a specific issue it is easier not to lend in it.

“In my view lenders should stick to their normal lending principles regardless of the need for a license; is the property a sound security and is the borrower a good risk,” he added.

Chris Norris, head of policy at the National Landlords Association, said he thought lenders are concerned that the existence of a licensing scheme may have a long-term downward effect on the value of the property.
“Also lenders do not want to become the licensee themselves should they have to repossess the property as they will have to comply with the all the conditions of that license and deal with the costs that entails,” he said.

But Charles Haresnape, managing director of residential mortgages at Aldermore disagrees that the scheme will have a detrimental effect on the marketability of such properties.

“I think these schemes can only have a positive effect,” he said. “They will improve the quality of landlords and the condition of the properties they own.

“We don’t have a specific policy on this and instead judge each case on its merits. Our general underwriting principles over-ride this scheme. We would not lend on a property in a poor state of repair or valued at less than £75,000 regardless of the requirement of a license. Similarly if the case passes our criteria, we would want to see the license if one was required."

Haresnape doesn’t believe there will be an en masse adverse reaction from lenders which he said usually only happens when it is perceived that the regulator will take a negative view on the issue.

“In this instance I do not think the regulator will get involved,” he said.

Precise Mortgage is another lender not concerned about the increase of selective licensing schemes and has already adopted early measures to counter the issue.

Alan Cleary, managing director of Precise, said: “We have a system already in place which would identify a postcode in Newham and then would flag this up to the underwriter who would condition the offer subject to the conditions in place on the license. Precise are comfortable lending on these properties; should these schemes become more widespread we have the systems in place to deal with this.”

Haresnape cautioned, however, that if more councils do follow suit it would warrant a wider debate with the involvement of the Council of Mortgage Lenders.

A spokeswoman for Paragon said: “Paragon has comprehensive experience in lending on all property types and we review each property on its merits. We do not distinguish between areas that have requirements for licensing. Where there is a requirement we will ensure that a licence is in place prior to advancing a mortgage loan.”

And a spokeswoman for BM solutions said: “We are naturally supportive of any scheme aimed at improving the quality of housing stock in the private rental sector and whilst we would currently consider a buy-to-let mortgage application under such a scheme we will continue to review our policy closely as further details become available to us."


Friday 5 April 2013

Buy-to-let Landlords Warned of Rise in 'Severe Arrears'


Buy-to-let landlords are being warned of a rise in the number of UK tenants in "severe arrears".
The Tenant Arrears Tracker, published by LSL Property Services, shows the number of renters more than two months behind on payments rose by 4,000 to 94,000 in the first quarter of 2013 - an increase of nearly 5 per cent. This represents 2.3 per cent of all tenants in England and Wales.
The statistics suggest an improving trend has gone into reverse. Severe arrears were running around 50 per cent higher in 2012 than in 2011 but the number had improved significantly toward the end of the year. The number of cases fell by 14.5 per cent in the final quarter.
LSL said severe arrears over the past 12 months are now 20 per cent above the long-term average and that eviction by court orders are also running at a record level and 10 per cent higher than a year ago.
In the final quarter of 2012, 25,286 tenants faced eviction notices, a quarterly rise of 5.7 per cent.





Paul Jardine, director at property receivers Templeton LPA, which is part of LSL, said: “Household finances are feeling the impact of spiralling costs, particularly energy bills, which were recently predicted to grow by an average £214 this year. And wallets are under pressure from the other side.
"According to the ONS wages are creeping along at 1.2 per cent annual growth, well behind a rebounding rate of inflation. Many tenants have finally pulled their finances back together after the strain of the festive period. But for a significant minority the situation is actually much worse than three months ago, and this is reflected in the most severe tenant arrears."
The figures reflect a divergence where more tenants are running into severe difficulty while the number a little behind on rents has improved. According to LSL’s latest Buy-to-Let Index, overall tenant arrears fell in February, to levels not seen since November 2012, with 7.4 per cent of all rent late or unpaid.
Templeton also says buy-to-let landlords are being given breathing space by falls in buy-to-let mortgage rates, thanks to the Bank of England's Funding for Lending Scheme, which has offered loans to banks and building socieities with rates
The number of buy-to-let mortgages over three months in arrears in the final quarter of 2012 fell by nearly 20 per cent on a year earlier, based on data from the Council of Mortgage Lenders (see the chart below).
Mr Jardine said: “In the first few months of 2013, lower mortgage repayments have allowed landlords more room for flexibility. As hoped, Funding for Lending has proved instrumental in lowering mortgage rates, especially for landlords with the most equity."
But he added: "While the current environment allows landlords more time in any given month to wait for a payment, it doesn’t fundamentally change the ability of tenants to pay rent. The latest rise in eviction orders highlights the need for long-term solutions that work for both parties."
Millions of Britons, faced with rock bottom returns elsewhere, have turned to property investing. Last month, figures from the Council of Mortgage showed nearly 1.5m investors held buy-to-let mortgages by the end of 2012.
As a total, £16.4bn was lent on landlord mortgage, up 19 per cent on a year earlier and the highest level for four years.
Rises in rents in recent few years - partly a result of more priced-out first-timer buyers being forced to rent - have inflated the income landlords can earn.

Eviction notices




Buy-to-let mortgages in three months arrears