The Latest Property News
Tenant demand at all-time record high
July 2010
Rocketing demand for rental accommodation has prompted the UK's largest letting agent to call for more incentives to encourage buy-to-let landlords to invest in the market.
According to Countrywide, tenant demand is at a record high, with up to nine tenants competing for properties.
The 211 branches had 50,480 new tenants register in the second quarter of this year a 16% rise on the first quarter.
The sharpest increase was in June, with over 18,000 new tenants registering, the highest number in a single month since Countrywide records began in 2003, and 22% more the previous month.
However, the rise in tenant demand is in sharp contrast to the fall in the number of new properties being offered to rent. They have fallen 6% in the last three months.
The excessive level of demand has led to marginal increases in rental prices. As more families turn to renting, four-bedroom properties have seen the highest increase, with the average rent rising to £1,090 per calendar month.
There is now an average of 5.5 tenants vying for each property compared to 4.9 tenants in the first three months of the year. The highest demand is for two-bedroom houses in the South-West where 8.9 tenants competed for each property.
This level of demand is having a significant impact on the market, with properties being snapped up on average within two weeks three days less that in Q1 and six days less in Q4 2009.
John Hards, Countrywide Residential Lettings co-managing director, said: "The number of tenants entering the market is at unprecedented levels and we have yet to enter the peak season. Student demand for private rental accommodation will increase further with university applications at record levels.
"The buy-to-let sector remains a good source of investment. However, the Government needs to do more to incentivise new landlords in order to ease the current shortage of properties. If tenant levels continue to rise at the same rate, this will be further exacerbated."
A new report from specialist lender Paragon also confirmed the huge growth in tenant demand.
Nigel Terrington, Paragon Group chief executive, said: "Tenant demand has been rising consistently for two years and shows no signs of slowing down. Would-be home buyers continue to be unwilling or unable to step on to the property ladder, whilst longer-term social changes, such as greater numbers of single-person households and economic migrants, are also creating more demand for rented property.
"Strong tenant demand is great news for landlords, but will lead to rental inflation for tenants unless the private rented sector is able to expand to meet this demand. Pressure is building on the finite number of properties in the sector, because the lack of buy-to-let mortgage availability has prevented landlords from growing their property portfolios.
"It is clear that confidence is high amongst the landlord community, which is reflected in the greater appetite for investment. There is obviously a dislocation between landlords' intention to purchase and their actual ability to do so, given the continued scarcity of buy-to-let mortgage finance. Landlords still value residential property as an investment vehicle."
Expert says housing minister must think again over planning regulations decision
Monday 21st June 2010
A leading residential lettings expert has warned that the market has been left open to 'cowboys' after the new Government's decision not to press ahead with plans to regulate the sector.
Will Linley, whose company Linley & Simpson is Yorkshire's biggest residential letting specialist, including offices in Ilkley and Horsforth, has urged housing minister Grant Shapps to think again.
He said Mr Shapp's decision to scrap planned regulations would leave a growing number of landlords and tenants exposed to unscrupulous agents.
He has written to the minister urging a rethink and for the long-awaited regulation to go ahead.
Mr Linley said: "This U-turn is another missed opportunity to clean up the industry in an unprecedented way. Compulsory licensing would be easy to achieve and deliver far-reaching protection to customers.
"There are professional bodies, such as ARLA, already setting the standard; membership of such a body should be mandatory for all agents. At the moment, anybody or any organisation can set up as a letting agent.
"Until that is changed by a licensing system, then unqualified, unethical and unprofessional operators will continue to operate, putting people's money at risk."
He said Linley & Simpson, which last month was crowned the UK's best small letting agent chain at the industry's 'Oscars', was keen to demonstrate its commitment to raising industry standards through its membership of the Association of Residential Letting Agents, the National Approved Letting Scheme and the Property Ombudsman.
Mr Linley emphasised that a mandatory licensing scheme was the only way to raise standards across the letting industry.
He added: "The last year has seen a rise in the number of reported cases where some rogue agents have used customers' money as an overdraft or, worse still, absconding with it completely. Many hard-working tradespeople have been left a trail of unpaid bills."
Mr Shapps's decision was welcomed by the National Landlords' Association, which described the national plans for a national register of landlords as "well-meaning but flawed."
Shapps accused of reneging on HMO planning rule
Friday 11th June 2010
Housing minister Grant Shapps has been accused of reneging on pledges to ditch new rules on House in Multiple Occupation.
The rules were rushed through Parliament in April, via a Statutory Instrument, and without any consultation despite their wide-ranging effect on both home-owners and landlords.
The rules have brought in a new planning class. This means it is now mandatory for any home-owner or landlord who lets out or shares a property to between two and six unrelated people to have to apply for planning permission to turn the property into an HMO.
Planning permission is not guaranteed and costs money. If HMO status is granted, the property owner might have to pay more to have it licensed.
Local planning officers would have powers to inspect any property where they thought the rules are being broken.
The move was heavily criticised by landlords and the National Union of Students and the Conservatives. David Cameron, then in opposition, tabled an early day motion for it to be reversed.
While in opposition, Grant Shapps said: "While councils need powers to tackle the excesses of slum landlords, this is a state sledgehammer to crack a nut. Labour have already kicked the housing market by imposing the red tape of Home Information Packs. Now they want to cripple the fragile market with even more regulation. Tenants will lose out, as these new costs will reduce the supply of housing and drive up rents. There is already public alarm at Labour plans for an intrusive council tax revaluation and inspections of family homes. Now Labour are giving even more powers for town hall snoopers to barge into peoples bedrooms and rifle through their underwear drawers."
However, in Parliament yesterday, Shapps said he was keen to have HMO controls in areas with "studentification" problems, but wanted to review the current legislation to ensure it is not too overarching and leading to problems in areas with no issues.
Ian Fletcher, director of policy at the British Property Federation, said: "Revoking the half-baked HMO planning legislation slipped in at the death by the previous Government was a pre-election pledge of the Conservatives.
"We hope this will be pursued swiftly as it is leading to confusion, unnecessary bureaucracy and expense at local level, and ultimately restricts affordable homes for those in need.
"If the minister wants to replace it with something better targeted, then that is his prerogative, but the clear message from landlords is that the current system is a dogs dinner and time is therefore of the essence."
Rightmove strikes deal with Google
Friday 29th January 2010
Rightmove has done a deal with Google maps, ahead of Google's own launch into the UK property online market.
The deal, announced yesterday with immediate effect, takes the property internet to a new level, with the two huge players now literally on the same page.
The deal also ends speculation as to whether Rightmove would co-operate with Google on a 'if you can't beat them, join them' basis. As a result of the deal, Rightmove becomes one of the largest users of Google maps in Europe.
From yesterday, Rightmove properties are now placed on a Google map on each 'detailed view' page.
However, the application will be expanded over the next month so home-hunters will be able to see initial search results plotted out within their search area just as they will be able to do on the Google property mapping service.
Google's own offering, expected to launch in the UK in the first quarter of this year, is likely to be a search engine based on its maps. Property searchers would then be diverted to the agent's own website in order to see property details. The facility would be free for agents.
The Rightmove deal appears to try to head off this potential threat, relying on its own brand for property searchers, who would not only see the mapping but also the details of several properties all on one site, as Rightmove does not divert to agents' own websites.
Rightmove has been running a new TV ad campaign and attracted over 1m visits in a single day for the first time this Monday.
A Rightmove spokesman told Estate Agent Today: "Google are about to launch their own UK real estate offering, which will be based on maps. Rightmove can now offer something quite similar.
"However, we have two very different business models: Google is a search engine, and users will click through on each property to the agent's own website. On Rightmove, users can see everything they want, all in the same place not just the location, but the complete property details.
"We also liked the Google maps because they are the best maps around. They're clear and easy to view."
Sanjay Patel, of Google Enterprise, said: "With this technology on their site, Rightmove will be able to provide property searchers with a faster, more accurate and more comprehensive mapping system to help them find that perfect home even more efficiently."
UK homeowners now adopting European rental habits
Thursday, 07 January 2010
UK homeowners are increasingly adopting the habits of Continental Europeans who often rent their homes, as 1.75 million state they would now consider selling their home and renting because of the housing market crash, according to research from Unbiased.co.uk.
Of these 1.75 million homeowners, 32% stated they had not considered doing this in the past. A further 31% said they would consider selling their home and renting but weren't able to do so at the moment as the price they would get for selling their home was too low.
Almost a third (31%) of those who already rent their home, believe that with the recent volatility in the housing market, renting gives them more freedom without the hassle of owning their own home.
More than one in ten (12%) state they now no longer aspire to the status symbol of owning their own home after the recent property market crash. Some 6% of renters have been put off buying due to the property market crash and 7% have been financially unable to buy due to the property market crash.
Only just over one on ten renters (13%) state the property market crash has not put them off buying, and they are still hoping to purchase their own house.
Owning their own home appears most important to the younger generations, with 22% of those aged between 18 to 34 still hoping to buy. The older generations of renters are less interested in buying after the property market crash, with only 6% of those aged between 35 to 54 and 2% of those aged 55 or over stating they are still keen to stop renting and buy their own home.
Karen Barrett, Chief Executive of Unbiased.co.uk said: "While there are mixed messages as to whether house prices are now starting to rise again, it is clear that the property market crash has had a profound effect on the way people view their homes. For many who own their own home, the worry and stress of this through the property market volatility has caused them to re-think about whether long-term renting is a viable option for them.
"It has also caused renters to think about their long-term options, and while some still want to get on the property ladder despite the recent crash, many have now decided that the British status symbol of owning your own home no longer has the same importance."
Rise in new mortgage sales hides 'two-speed market' as homeowners fail to refinance
Rebecca O'Connor, Property Correspondent, The Times - December 11, 2009
The number of mortgages taken out to buy a home rose to the highest level for almost two years in October as the housing market continued to rally.
The Council of Mortgage Lenders said that 55,000 mortgages were taken out for purchases in October, the highest monthly total since December 2007. The figure is more than double the January 2009 low of 23,000 and is a 9 per cent rise on the previous month.
The number of home loans advanced to remortgage borrowers and first-time buyers remained unchanged between September and October. However, the figures were viewed as a sign that low interest rates for those with large deposits, together with recent house price rises, are encouraging those who are able to move to take advantage of the favourable market conditions.
The number of loans to home movers - a group that does not include first-time buyers - rose by 15 per cent between September and October, with the bulk of borrowers opting for tracker mortgages as evidence grows that interest rates are set to remain low for the long term.
Michael Coogan, director-general of the Council of Mortgage Lenders, said: "We are still in a two-speed mortgage market. It appears that low interest rates for those with substantial deposits, coupled with this year's sustained increases in house prices, are encouraging more people to buy or move.
"But the same low rates that are driving house price activity provide little incentive for borrowers to refinance their loans. This, coupled with tightness in lending criteria, continues to hold back the remortgage market."
Signs from the mortgage market indicate that credit conditions are easing and that lenders are more willing to lend.
Friday 4th December
In the last eight months, while bank base rate has been kept on hold, the total number of residential mortgages available has increased from 1209 to 1624, the majority of which being two-year fixed-rate deals.
Average rates on two-year fixed deals continue to see significant falls, standing at 4.93% today.
Rates remain less favourable on longer term deals, where the average five-year fixed stands at 6.15%. The average three-year rate continues to increase, standing today at 5.60%.
Michelle Slade, spokesperson for Moneyfacts.co.uk, said: "In such uncertain times, borrowers and lenders alike seem to prefer shorter-term deals, where changes can be made relatively quickly if market conditions change dramatically.
"If lenders maintain the increased margins they have placed on mortgage deals, this short-term view is likely to prove more expensive for borrowers in the long run.
"Increased competition in the two-year market has increased the competitiveness of the deals available, but at £928, the average arrangement fee remains more than £100 higher than on longer deals.
"Borrowers' love affair with shorter-term deals means lenders benefit from the increased frequency with which arrangement fees become payable.
"Lenders appear to be discouraging borrowers from taking medium to longer term deals by charging higher rates, as extended periods of repayment, together with uncertainty over the economy in the medium term, bring a higher risk of default.
"By opting for a five-year deal, borrowers are likely to benefit from a more stable mortgage market when they come to remortgage. Increased equity in their homes from rising property prices will increase their chances of being eligible for a more competitive deal at a lower LTV band."
Buy-to-let lending increased in the third quarter of 2009 - it was ten per cent higher than in the previous three-month period.
Friday 20th November 2009
That is according to the Council of Mortgage Lenders (CML), which said this data represents the first increase in gross lending in the sector for two years.
Lending totalled £2.1 billion in total, while the number of buy-to-let loans advanced grew from 21,600 to 23,700 between the quarters.
The CML's director general Michael Coogan said the figures show that buy-to-let is here to stay.
"Buy-to-let lenders are among those facing some of the biggest challenges in raising mortgage funding, so the improved figures are all the more welcome." he added.
John Heron, managing director of Paragon Mortgages, said the data shows how strong and resilient the buy-to-let market is. He claimed that the sector has proved it can cop in a tough economic period
The recession is now officially over for buy-to-let as mortgage lending to the sector picks up once again and landlords look to take advantage of more affordable property prices and high tenant demand.
Friday 20th November 2009
That is the claim from website Lettingsearch.
Buy-to-let investors are beginning to fight their way back into the property market as prospects for the sector improve following a sustained period of restricted financing and, until recently, weak rental yields.
With banks finally increasing their buy-to-let lending in quarter three, a period of sustained investment in the industry is set to follow.
Many professional landlords still have liquid cash available to invest and are now likely to look to expand their portfolios over the next few months, buying property at the more affordable levels before prices climb too far. Investments in other asset classes continue to under-perform, and as a result, City bonuses will also be channelled into investment property, bolstering the buy-to-let sector further.
Investment in the sector will be underpinned by strong and rising tenant demand for lettings accommodation, as homeowners and first-time buyers turn away from the sales market and will fuel heightened activity in the property market as a whole.
Phil Calderbank, Director at lettingsearch.co.uk, said: "Mortgage lenders are once again recognising the important role lettings has to play in the property market and as investors with liquid cash make a move to take advantage of affordable property, strong tenant base and improving returns, I think we can safely say that the recession is now over for buy-to-let.
"Many so-called reluctant landlords have discovered a new income stream and we believe some of these people will stay in buy-to-let and even expand their portfolio. This will further strengthen the buy-to-let sector.
"The current rate of house building cannot meet the demand from potential buyers, and while lending to homeowners remains scarce and the uncertainty over unemployment looms on the horizon, we will see people choosing lettings from every rung of the ladder."
The recent reduction in rental market stock could lead to "quite strong rental growth" in the long term, according to one property industry expert.
Friday 20th November 2009
Lucian Cook, director of residential research at estate agent Savills, said that there are various other reasons why the private rented sector is set to increase in size.
He explained that a number of would-be first-time buyers will be "effectively excluded" from buying property due to mortgage constraints and deposit requirements.
These people will therefore spend more time renting homes, which will boost demand for landlords' services.
His comments came after various industry organisations - such as the Association of Residential Letting Agents - claimed that the so-called accidental landlord phenomenon from earlier in the year has started to fade away, with those who were forced to rent out property now looking to sell it instead.
"I suspect that you will see stock on the rental market become eroded over a period from here on in [and] get back to much more normal levels," Mr Cook remarked. "I suspect that will also bring some degree of stability into rental levels."
Property website Zoopla has now successfully completed the integration of all of its websites onto a single "super portal".
Friday 20th November 2009
The firm said that it would offer enhanced services to its users with more features for consumers and greater exposure and leads for its agent members.
As a result of combining the best features from each of the websites in its stable PropertyFinder.com, HotProperty.co.uk and ThinkProperty.com Zoopla.co.uk will now offer a range of new services to the millions of home movers who visit the website each month and a far broader audience for its thousands of estate agent members.
Zoopla CEO Alex Chesterman said: "Following our acquisitions over the summer, it was important for us to consolidate onto a single brand and technology platform as quickly as possible in order to deliver the benefits to our users.
"We have taken the best-in-class features of all of our websites and combined these to deliver on our goal of offering consumers the UK's best property market resource and our agent members the most efficient source of applicant leads, appraisal leads, exposure and tools to help them win more business."
Investors have opted to buy more property over the last year, new research from the Association of Residential Letting Agents (Arla) has revealed.
Friday 20th November 2009
The study indicated that the average residential landlord investor has boosted their property portfolio from 6.3 to seven homes in less than 12 months.
According to the survey, buy-to-let investment has almost doubled in the last five years, with the average number of properties per landlord increasing from four in 2004 to its current level.
Ian Potter, operations manager at Arla, said: "Low interest rates and proportionately higher rental yields are making the buy-to-let market attractive again to experienced investors."
The 0.5 per cent Bank of England interest rates Mr Potter refers to are expected to be kept at the same level for the rest of the year and most of 2010.
Indeed, many economists are predicting that the cost of borrowing will stay at this record low throughout next year.
Buy to let landlords are now being rewarded
Tuesday 3rd November 2009
Buy to let landlords who have stayed the course over the last eighteen months, as the 'accidental landlord' phenomenon flooded the rental market with homes, are now being rewarded with rising rents and a dramatic reduction in stock levels.
According to the FindaProperty.com October Rental Index, the number of rental properties on the market plunged by 10% between September and October, following a 6% fall the previous month, bringing supply back to the level last seen almost a year ago.
An oversupply of flats has been one of the main factors distorting the rental market over recent months, and October saw a significant correction in flat rental stock which fell by 12%. This is likely to be partly due to a seasonal surge in demand from students and graduates requiring lower-cost rental accommodation.
In addition, a number of agents such as Marsh & Parsons and Townends report that the strengthening sales market, which enjoyed a further 0.7% rise in house prices this month, is now attracting a rush of sellers who have been temporarily renting their properties as they wait for house prices to recover.
Rents climbed by 0.1% this month to £830, continuing the clear trend of recovery since April as competition increases among tenants seeking homes to rent. This increased demand is also reflected in the number of days properties are taking to let, which now stands at just 58 days compared to 71 days at the start of the year.
Michael O'Flynn, Director at FindaProperty.com, said:
"Buy to let landlords have had a tough time over the last eighteen months, but those who have managed to hang on in the rental market, despite a dramatic oversupply of properties, falling rents and rising unemployment among tenants, are now breathing a sigh of relief.
"Despite the fact that the economy remains uncertain and unemployment is still rising, the oversupply of rental properties is correcting itself almost as quickly as it occurred, and as long as the sales market continues to strengthen this clear out of stock is likely to continue. Rents are on a clear road to recovery with six consecutive months of stable or rising prices. Provided the 'double dip' theory of a second fall in sale prices doesn't come to fruition, landlords could be set to enjoy a further recovery in rents over the coming months."
Property News Archive
Following the acquisition of the PropertyFinder Group from News International, Zoopla.co.uk the UK's fastest growing property portal is set to integrate all of its
websites onto a single technology platform.
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