14/05/08 - Local Housing Allowance
April saw the replacement of Housing Benefit with Local Housing Allowance for all new claims. The system has been piloted for a considerable period of time by initially a small group of local authorities and then a larger sample. The feed back from these authorities was very positive and no significant change in the overall number of properties available to tenants receiving support was reported despite initial scepticism from agents in particular.
The main difference is that landlords can no longer receive the allowance direct from the local authority but have to collect it, however is deemed appropriate from the tenant. This was the area of greatest concern and although the pilot showed no significant arrears problems it remains to be seen how the scheme will work out.
Should a tenant get into arrears the landlord can still request payment direct after eight weeks arrears have been accumulated and many local authorities have actually indicated they would like to know as soon as arrears occur and this would include a tenant failing to pay a top-up. Landlords and agents are advised to check with their individual local authorities so find out how they intend to approach that situation. Local authorities will also in many cases agree to pay a landlord direct if the tenant has a history of not being able to handle their rental matters in the past.
The purpose of the change is to make individuals more accountable for their own lives, and all local authorities have had to produce a table of the level of payment a tenant will receive in there area. This is based very simply on the size of the property and the level of accommodation to which the tenant is entitled. If a tenant is entitled to receive £120 per week allowance and can secure a property for less then the tenant may keep up to £15 per week. Should arrears arise in this scenario the tenant will not be able to keep the excess either until any arrears have been recovered.
As the landlord or agent will not be receiving the rent direct from the authority. Clawback will no longer apply.
In conjunction with Housing Allowance many local authorities are also now offering a deposit guarantee scheme. A few local authorities have set this scheme up in conjunction with Citizens Advice Bureau for certain types of case. Again the rules vary and local advice should be taken as appropriate.
29/04/08 - Landlords in the East Midlands continue to invest in buy-to-let
Landlords in the East Midlands continue to believe in the financial benefits of letting, despite fears that many would sell their properties in order to cash in on the recent tax changes, according to the RICS Residential Lettings Survey.
The survey, which asked surveyors in the region to estimate the percentage of landlords who are planning to sell at the expiry of tenant leases, found that only two per cent are intending to put their properties on the open market.
It seems that the shifting dynamics of the housing market, dropping house prices and the problems many potential purchasers are having trying to find a mortgage, has discouraged landlords from selling.
The results also suggest that sharply rising rents are giving landlords another reason to hold onto their properties.
David Potter, RICS East Midlands operations director, said: "Fears that landlords would take advantage of the more favourable capital gains tax regime to bail out of the buy-to-let market appear misplaced.
"Significantly, with the reduction in loan to value ratios by lenders leaving first-time buyers struggling to access the housing market, rents remaining steady and the expectation is that this trend will continue. Only two per cent of landlords are currently planning to sell properties at the expiry of tenant leases. The incentive to cash in on the lower tax rate is being outweighed by attractive yields."
29/04/08 - Tenant demand drops across the East Midlands
Tenant demand in East Midlands has fallen at the fastest pace for more than six years, whilst rental confidence has fallen at the fastest pace for a decade, according to the latest RICS' Commercial Property Survey. In Q1 of 2008, 30 per cent of Chartered Surveyors reported a fall in demand compared to only 15 per cent in Q4 2007.
19/04/08 - Economic Factors Underpinning Housing Market are Strong
NAEA SAYS ECONOMIC FACTORS UNDERPINNING HOUSING MARKET ARE STILL STRONG |
14 / Apr / 2008 |
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Following the release of the RICS housing market survey, Peter Bolton King, Chief Executive of the National Association of Estate Agents (NAEA) called for steadiness amongst property market professionals and said that there are still strong economic factors underpinning the market that have not changed and that there is some good news.
“The positive news is that the RICS survey showed that just under a quarter of its respondents appear to have reported a rise in house prices, which shows how regionalised the picture is. We are already aware from our own members that house prices are being affected differently throughout the country so to find such regional discrepancies comes as no surprise.
“No one is denying that the housing market is in a tricky situation but it is important to keep it in perspective and we do need to exercise discretion in the figures, for instance the report states that the East Midlands is showing falling prices, yet the recently released Halifax house price index showed a 2.2% rise in the same region. This also needs to be set against the fact that these areas have seen huge price rises over the last ten years.
“The market is battling with the credit crunch, which has undoubtedly had an effect on confidence. However, the key factors that underpin the housing market still exist – low unemployment, historically low interest rates and a pent-up demand for houses. We can see from the figures that it is not all doom and gloom out there and we need to tread very, very carefully before making long-term judgements on the market at this current, unsettled, time.”
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02/04/08 - Energy Performance Certificates
Energy Performance certificates (EPC) will be required on all rented properties from the 1st October 2008 onwards. PWR Property Consultants will be accredited to carry out the EPC's and will therefore be able to provide the full service to clients looking to let their property. What is clear is that any tenancy commencing after 1st October in England & Wales will require an EPC and that it will be valid for 10 years. The tests required to provide the EPC are agreed and therefore there is nothing to prevent an EPC being commissioned now when the prices are competitive rather than wait till the rush at the end. However any property currently tenanted does not require a retrospective EPC if the tenancy is due to run beyond 1st October.
11/03/08 - RICS residential lettings survey Q4 2007
RICS residential lettings survey Q4 2007
Demand for rental properties continued to grow as landlords saw their yields increase says the RICS Lettings Survey.
However, access to the buy-to-let market became harder for would-be-landlords as mortgage products became scarce.
16% more Chartered Surveyors reported a rise than a fall in tenant lettings, down from 20% in the last quarter.
Significantly, demand for family homes still remains stronger than for flats due to an oversupply of new build.
23% more Chartered Surveyors reported a rise than a fall in demand for houses compared to 12% Chartered Surveyors who reported a rise in demand for flats, down from 15% last quarter.
New landlord instructions (an indicator of supply) declined for the first time in the survey’s history (1998).
1% more Chartered Surveyors reported a fall than a rise in landlord instructions compared to 11% in the previous quarter.
The credit crunch has restricted the number of buy-to-let mortgages approved as well as the number of mortgages available to investors.
However, established investors are reaping the benefits. Gross yields increased at their fastest pace since Q3 2005.
Rising yields may have stopped the recent retreat of landlords from the market.
The percentage of landlords selling their properties when tenant leases expire fell from 6.5% to 4.6%.
Rental expectations also picked up sharply and are more than double the survey’s long run average.
Key areas enjoying rental growth also picked up sharply in the North, South East and Midlands while London and the South West experienced moderate rises.
RICS spokesperson Barry Hall commented:
"While banks remain cautious about offering loans, demand for rental property will continue to increase with many would-be-buyers unable to make the jump to home ownership.
"Established investors continue to reap the benefits of the current uncertainty in the housing market and have been enjoying the fruits of rising rents, but new investors are struggling to get the necessary finance to enjoy this buoyant sector.
However, some landlords at the margins may desert the market after the drop in capital gains tax occurs in April."
01/03/08 - Buy To Let
New survey data from the Council of Mortgage Lenders shows that buy-to-let lending totaled £24.1 billion in the second half of 2007, up from £21.2 billion in the first half of the year and £20.8 billion in the second half of 2006. The number of loans (including remortgages) to buy-to-let landlords in the second half of the year was 179,100, up from 171,800 in the first half of the year and 177,200 in the second half of 2006. The total number of outstanding buy-to-let mortgages has now passed the million mark, standing at 1,038,000 at the end of 2007 -nearly 23% up on the 846,900 a year earlier.
19/02/08 - RICS UK Housing Market Survey Jan 08
The balance of surveyors reporting house price falls increased again in January, says RICS’ UK housing market survey published today.
The RICS house price balance dropped for the sixth month in succession signalling half a year of negative market sentiment.
54.7 percent more Chartered Surveyors reported a fall than a rise in house prices an increase from 49.1 percent in December.
According to surveyors, the only part of the UK where prices continue to rise is Scotland with the net balance of surveyors in that country reporting price rises edging up from 3% to 7%.
The decline in demand picked up speed as new buyer enquiries fell at the fastest pace since October. Prior to October, the previous occasion when buyer enquiries reached this level was August 2004. 35 percent more chartered surveyors reported a fall than a rise in new buyer enquiries, down from 25 percent in December.
The fall out from credit crunch continues to prevent many would-be-buyers from entering the market and it is likely that demand will remain subdued while mortgage lending criteria is tight.
07/01/08 - RICS House Price Report
The RICS house price balance declined at the fastest pace since July 2005 but limited supply is still propping up the market, says RICS’ UK Housing Market Survey.
Surveyors reported that house price growth remained negative for the third month in succession.
22.2% more Chartered Surveyors reported a fall than a rise in house prices, down from 14.9 in September - the fastest decline in sentiment since July 2005 when 30.9%Chartered Surveyors reported a fall than a rise.
However, new instructions declined for the fifth consecutive month. 17% more Chartered Surveyors reported a fall than a rise in new instructions to sell property.
Those on the property ladder remain under little pressure to sell while the economy remains fundamentally sound. The supply side of the market remains tight and continues to provide some support.
Interest rate rises, the recent credit crunch and the subsequent tightening of lending conditions have all had an impact upon demand.
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Mansfield,
Nottinghamshire,
NG18 3ED