House prices slipped by 0.4% in May compared with April – but were largely held up by the continuing boom in London.

The average house price in England and Wales now stands at £161,823, according to the latest Land Registry figures.

In Wales, house prices fell harder month on month, with a 3.5% decrease. In London, the South East and parts of the Midlands, there were small monthly rises, but it is the yearly changes that are most marked.

Overall, house prices are down 2.2% over the year, the largest annual decrease since October 2009. But in London they are up by 2.9%. It is the only region where there has been an annual increase.

In the North-East, annual house prices are down by 6.9%, in Wales by 5.6% and in the North-West by 4.9%. Even in the relatively buoyant South-East outside London, house prices have taken a yearly tumble of 2.1%.

Sales volumes reported by the Land Registry make dispiriting reading, although they are not up to date. For the three months from December 2010 to March, the monthly transaction figure was 44,314 – a drop from the average of 52,060 per month for the same period a month earlier.

Seventy per cent of properties put on the market so far this year are still for sale, Rightmove reported this morning.

The number of unsold homes per estate agency branch stands at 78, the highest Rightmove has ever recorded in July.

Rightmove said the figure is “a sobering reflection of current marketing conditions”.

It said the high number is an indication that many equity-poor sellers are unwilling or unable to cut their prices – although they may have to, as Rightmove also reported that, for the first time this year, asking prices have been dropped by sellers new to the market.

The fall is to the tune of 1.6%, equating to an average of £3,797, which goes some way to eating into the gain of 8.1% over the first half of the year.

Even in London, asking prices have fallen for properties new to the market, down by 1.4% to an average of £432,641.

The number of new sellers also fell, down by 12% on this time a year ago, with many owners unable to raise the deposit to fund their next move.

The asking price on Rightmove now stands at £236,597.

The site said that the fall in asking prices this month is the highest drop in three years, since 1.8% in 2008.

But even with a fall in asking prices, a huge gulf persists between Rightmove’s asking prices and those of around £163,000 being quoted by Halifax, Nationwide and the Land Registry.

Rightmove director Miles Shipside said that with seven out of ten properties marketed this year still unsold, sellers in the second half of this year would need to do something different to catch elusive buyers.

He said: “Many equity-poor aspiring sellers will be trapped in their current homes, either unable to come to market or stuck on the market and unable to reduce to a price that will attract buyer interest.

“Those that are equity-rich have an opportunity to increase their chances of success by launching to the market at a price below their over-priced and stale competition.”

A second survey by Rightmove, due out next week, is set to show a fall in housing market sentiment among consumers.

A Bristol agency has had its windows smashed in by a group of anarchists.

In a post by Act for Freedom, the demonstrators said their vandalism was an expression of rage against all estate agents.

They picked on Maggs & Allen because of their part in trying to evict squatters who have occupied a pair of buildings since April 2010.

It is understood that the buildings’ owners are registered on the Isle of Man and that Maggs & Allen started possession proceedings last November.

The buildings were at the heart of the Bristol riots that rocked the city this April.

Maggs & Allen is a highly reputable firm, with NAEA, RICS, NAVA and Ombudsman memberships.

The post said: “We did this in response to Maggs & Allen's part in the threatened eviction of the Freeshop and the Emporium, two squatted spaces on Stokes Croft. Our solidarity goes out to all people being threatened with eviction, from those in squats to those who can't afford their rent.

“To those who seek to criminalise squatting – a law designed only to protect property, which will make it harder for anyone, squatters or not, to house themselves: let this be an indication that we will resist.

“Our actions last night were an expression of our rage against all estate agents and all others who profit from people's need for shelter.

“For those who profit from inflating rent prices and benefit from rising instability and the increasing lack of control in our lives, we have nothing but rocks and anger.

“We refuse to wait for your bailiffs and intend to take the fight to those who attack us. Our struggle for freedom is one of our own choosing.”

The Act for Freedom campaign against Maggs & Allen comes at a time when campaigners are trying to making squatting an illegal act.

This is a further Article on the subject supplied by Property Drum:

Sweet & Maxwell says that the number of Possession Orders issued in the county courts in London to evict squatters has risen 58% since before the credit crunch. There were 112 Possession Orders issued in London in 2006 rising to 177 in 2010.

Sweet & Maxwell says that this rise in the number of property owners having to resort to the courts to evict squatters is down to a number of factors:

· Rising residential rents in London
· An increase in levels of graduate and youth unemployment
· An increase in the number of vacant properties in central London
· The recent resurgence of lifestyle squatters who regard squatting as a political statement

Interstingly, squatters prefer posh pads, the new data suggests that squatting is more prevalent in urban areas than in suburban areas. There have been high profile squats in Mayfair and the West End and central London’s prime properties are now regularly targeted by a savvy international network of ‘lifestyle squatters’. They often target the homes of London’s super rich whose properties are especially vulnerable because their owners spend significant amounts of time overseas. but squatters are also now targeting the area surrounding trendy Clerkenwell and Shoreditch, which saw a 52% increase in the number of Possession Orders issued from 50 in 2009 to 76 in 2010.

The statistics from the Clerkenwell and Shoreditch county court shows that this area accounted for a massive 43% of the total number of possession orders issued in London during 2010. By contrast, suburban Bromley accounted for just 3% of the total number of Possession Orders in 2010.

The property market is still in difficult times and 2012 presents a challenge for us all. You need the best advice and informed opinion you can get.

Who can help? Those who know what they are talking about – and the PROPERTYdrum conference team has been working hard to bring you the best in the business.

The programme for 2012: Raising Your Game, the PROPERTYdrum National Conference is now complete and the excitement is rising!

It takes place on 27 September 2011.

It is a business focused, hard hitting, and challenging, inspiring and really useful event to help you develop your business and portfolio in 2012.

Speakers include:

Dr James Bellini, one of our keynote speakers and the moderator for the whole event. Dr Bellini is well known for his work on the BBC on The Money Programme, Newsnight and Panorama, but he is also a Futurologist who speaks at events across the globe on scenarios for the next 20 years; the global shift – the changing balance of world economic power; the impact of emerging technologies and the key to future business success.

Michael Portillo will join us for the lunchtime break, meeting delegates before his presentation which looks at the politics of property. With a highly acclaimed political career followed by an extremely popular television career, and a new role as Chairman of a government backed £55 million Arts Scheme, Michael is a brilliant and entertaining speaker.

Alan Collett is President Elect at the RICS, Chairman of ARIM (Allsop Residential Investment Management) and former Chairman of Allsop, one of the UK’s leading property consultancies. Alan will discuss what residential investors expect from their management agents and how your business can benefit from this special sector.

Grenville Turner is Group CEO of Countrywide, arguably the only property firm in the UK that truly ‘does it all’.

There is plenty more in this action packed programme, from Social Media guru, Tracy Falke, to advertising campaign management expert Charlie Varley, and Peter Bolton King, with Tim Hyatt and Wendy Evans Scott who will review the opportunities for development in other property sectors.

Finally, a highlight of the day (amongst a series of highlights!) the PROPERTYdrum Panel take part in Question Time with Dr James Bellini. Who’s on the panel? Mark Milner, CEO Digital Property Group, Miles Shipside, Commercial Director, Rightmove and Alex Chesterman, CEO Zoopla – each of whom has strong opinions on the property market, but who don’t normally share a platform… do not miss it!

The PROPERTYdrum National Conference is the only annual conference supported by RICS, BPF, NAEA, ARLA and NAVA. 

A senior surveyor married to a police officer is said to have taken part in a £10m mortgage scam in exchange for cars and money.

Mary-Jane Rathie, on trial at the Old Bailey, allegedly overvalued a string of five upmarket London properties in return for gifts of more than £1m from a woman known as Joanne Pier.

Pier used the valuations to secure mortgages from the Bank of Scotland. Altogether, Pier – who has since vanished – obtained £10m of mortgages, of which £9.5m relied on Rathie’s valuations.

In return, Rathie, 43, was said to have received £900,000 in cheques and money transfers plus a Bentley Continental and a Range Rover Sport.

The vehicles, together worth nearly £200,000, were both registered in the name of her husband David, 47, a Metropolitan Police officer.

David Durose, prosecuting, said: “This was payment to Mrs Rathie for her dishonest valuations.”

Rathie, of Waltham Cross, Hertfordshire, denies five allegations of fraud between May 2007 and June 2009. Both she and her husband, of Cheshunt, Hertfordshire, each deny a charge of concealing criminal property.

Rathie, who worked for Ashdown Lyons in Finchley, North London, and whose RICS membership was suspended for one year last November, came across Pier in 2007. Pier went to Ashdown Lyons with a list of properties that she owned and that she wanted valued.

The court was told that in June 2007, Rathie – who had married the month before – told her employers that Ms Pier had offered her £100,000 as a wedding present, which was twice her annual salary, but that she had declined it.

Mr Durose said: “In June 2007, Mrs Rathie was able to refuse such an offer, and not only refuse it, but report it. Unfortunately six months later, the position had changed.”

He said Rathie valued one property in Cheyne Walk, Chelsea, at £4.2m, which was nearly twice the £2.35m value given by an independent surveyor later instructed by the Bank of Scotland to investigate the alleged fraud.

A property at Cadogan Gardens was valued at £3m by Rathie, twice the figure later reached by the independent surveyor.

Mr Durose told jurors it would be ‘ludicrous’ to expect every surveyor to come up with the same value for a property, but that the defendant’s valuations were outside the range that could be expected.

New mortgage deal would give buyers 20% deposits

An extraordinary plan has emerged to revolutionise the mortgage market by bankrolling house buyers.

Aimed at both house movers and first-timers, it would give them a 20% deposit in return for a 40% share of any profits from an eventual sale.

It would also share any losses if house prices fell.

Behind the venture, Castle Trust, is Sir Callum McCarthy, a former chairman of the Financial Services Authority, and US private equity firm JC Flowers.

McCarthy chaired the FSA between September 2003 and September 2008, and at one stage was hauled before Parliament to defend the FSA’s handling of the Northern Rock crisis.

JC Flowers entered Britain’s financial services sector last year by investing in Kent Reliance Building Society and turning it into a bank. It has made clear its plans to do more deals.

McCarthy became European chairman of JC Flowers in November 2009.

Under the new plan,  Castle Trust would raise the money for the deposits by selling bonds to investors. Their returns would be dictated by the Halifax house price survey. Investors could take out stakes from £1,000.

While the business model has yet to gain approval from the FSA,  it would not need a full banking licence.

Castle Trust says its management team has “extensive investment and mortgage industry experience”.

McCarthy has recruited a heavyweight board, including John Gummer, now Lord Deben, who is chairman of the Association of Independent Financial Advisers. Dame Deirdre Hutton, a non-executive director of the Treasury and ex-chairman of the National Consumer Council, is also on the board.

McCarthy says that Castle Trust is structured in such a way that JC Flowers will make money regardless of whether house prices go up or down. JC Flowers has pumped £100m into the venture.

McCarthy said: “This is something genuinely innovative.

“There are thousands of people struggling to get on the housing ladder, or struggling to raise the deposit to move into a bigger house to cope with a growing family.

“Then there are people who want to invest in the housing market but don’t want to get caught up in the complications of a buy-to-let property.

“We’ve found a way to intermediate between those two groups of people, and that could become something quite powerful.

“It does sound too good to be true. We all had the same reaction when we looked at it. But we’ve spent two years modeling this.”

The number of repossessions in the first quarter of 2011 rose for the first time in a year, and were up 17% to 9,613.

Meanwhile, the mortgage drought continues.

The statistic on possessions is in the Financial Services Authority mortgage lending data covering the first three months of this year and published yesterday.

The data paints a picture of a housing market that remains stubbornly at a standstill, with new advances totalling £33bn, 10% lower than in the last quarter of last year although 3% up on the first quarter of 2010.

House purchase mortgages accounted for just 54% – a reduced share – of new mortgages.

Only 2% of all new mortgages were given with a loan to value above 90%.

Borrowers with impaired credit histories struggled to get anywhere at all with lenders, receiving just 0.3% of all loans.

While possessions were up, the number of new arrears in the first quarter was down 8% on the last quarter of 2010. The total number of arrears cases stands at 337,000, 2% down on the last quarter of 2010 and 7% down on quarter one 2010.  
 
The National Association of Estate Agents issued an uncharacteristically gloomy report which referred to ‘stagnation’ in the housing market.

Wendy Evans-Scott, President of the NAEA, said: “Our members have likened the housing market to an obstacle course, with many falling at the first hurdle as the finance required to buy just isn’t available.

“The banks must find a balance between the loose lending of the boom and the rigidity of the current lending rules. House buyers need the Government to act in a sensible and proportionate way by encouraging the banks to offer adequate financial help to buyers.”

In 2006, there were 1.66m housing transactions. Last year, there were 886,000. This year, the Council of Mortgage Lenders has lowered its prediction to 840,000.

Almost a quarter of first-time buyers expect to spend at least five years saving up for a deposit on their first home, according to Santander mortgages.

More than half FTBs (54%) say they will be using savings as their deposit for their first home with the average time expected to save around 40 months. Around one in 10 (11%) think they could save fast enough to accumulate their deposit in one year - that's down from a fifth (19%) three years ago.

Hardly surprising then that first-time buyers are looking for opportunities to increase their income.

Just over one in four (28%) are now taking on second jobs or overtime to boost their deposit fund and another 27% are hoping to boost their deposit by taking out a loan.

Phil Cliff, Director of Santander Mortgages, said: "Saving for a deposit is no easy task, especially in today's financial climate, with many customers, especially in recent years, having to put down larger deposits to secure their mortgage."

A new and permanent reform of stamp duty would mean that the tax would be paid by sellers and not buyers.

The call for reform has come from HSBC which found that 85% of non home-owning young adults (18 to 34-years-old) want to own their own home, but only 19% of the 85% expect to be able to do so within the next five years.

And almost half – 45% of aspiring home-owners – do not ever expect to be able to purchase.

In its report, First Time Buyers: Roadblocks and Ways Forward, HSBC found that the younger, 18 to 24-year-old age group was the more optimistic.

Around 22% expect to purchase within five years. However, 21% do not expect ever to be able to purchase.

For each of the past three years there have been around 200,000 first-time buyers, according to the Council of Mortgage Lenders. This is less than half of the 400,000 to 500,000 of those recorded in more typical market conditions, before the credit crunch hit.

The key reasons holding aspiring home owners back from house purchase are:

69% cited “raising the required deposit”

59% cited “insufficient income to support the mortgage.”

27% said “concerns over unemployment”

12% said “concern over future falling house prices”

The current average FTB house price of £136,842 is 6.6 times a young single person’s average earnings of £20,654 (source: Nationwide Building Society and National Earnings Survey).

In order to afford a 90% LTV mortgage, a typical FTB would need to earn £30,800 – 49% higher than current average earnings for a single young adult.

Even then, a 10% deposit of £13,684 is equivalent to 42% of this higher annual income, a major impediment to home purchase without external financial assistance. It is therefore not surprising that 84% of young FTBs are buying with assistance, mostly from parents. This compares to 38% in 2005, according to the CML.

Stuart Beattie, HSBC’s head of mortgages, said: “Our study proves that the aspiration to be a home owner continues to be exceptionally strong. Over 80% of young non-home owners are aspiring to buy a home but are being prevented from doing so due to lack of affordable homes.

“The key to helping buyers back into the market is to help them obtain the cash deposit that responsible lenders require before granting a mortgage.

“To this end, both government and private sector interested parties need to come up with innovative schemes to help aspiring FTBs.”

The report says that government-supported initiatives have helped around 22,000 FTBs a year in each of the last three years.

HSBC is also suggesting that Stamp Duty should be applied to sales, not purchases. This would mean that FTBs would be excused it when the £250,000 stamp duty holiday ends next March.

The bank also suggests that 95% mortgage lending could be deemed prudent, if it could be backed by insurance to cover both lenders and borrowers.

The number of property sales in England and Wales has almost halved over the last three years – but the drop has been worse in the north than in the south.

In 2010, there were 649,957 home sales in England and Wales – 47% less than in 2007, when there were 1,222,402.

But in the north, sales are down by 51%, whilst in the south, they have dropped by 42%.

In Birkenhead on Merseyside, sales have declined by an astonishing 69%, whereas in

Esher, Surrey, sales have declined by just 14.6%.

According to a new review by Lloyds TSB, based on Land Registry figures, there was a modest 6% rise in transactions between 2009 and 2010. But the rise was to an extent skewed by the 22% increase in London.

Whether the trend for slowly rising transactions will continue or go into reverse is open to question.

Suren Thiru, Lloyds TSB housing economist, said: “The decline in housing market activity over the past three years has been substantial. The current level of activity remains significantly below historic levels despite most regions seeing some increase in transactions in 2010.

“Looking forward, the overall level of activity in the housing market is likely to remain somewhat subdued for the foreseeable future, although regional differences are likely.”

Growing concern has been expressed about the activities of ‘fly by night’ letting agents who run off with landlords’ and tenants’ money. 

The Property Ombudsman, Christopher Hamer, said of one case, where his investigation had revealed systematic misappropriation of client funds affecting at least 64 landlords that Trading Standards and police had to be put under pressure to take action.

Hamer has made a fresh call for more control over the actions of residential lettings agents, saying there is appetite in the industry for formal regulation.

Whilst the number of lettings offices voluntarily covered by his scheme climbed to almost 8,000 by the end of 2010, he said he remains concerned that agents who do not sign up to the TPO Code of Practice can continue to operate, potentially to customer detriment.

“Many agents conduct their business by following the TPO Code of Practice, but there are still too many who are operating without that commitment to standards and without any external controls over what they do with client money,” Hamer said.

He also revealed that the Code of Practice for letting agents has still not been approved by the Office of Fair Trading despite his submitting it three years ago.

It means that, unlike estate agents, letting agents cannot display the OFT logo.

From this summer, the Code of Practice will include a requirement for lettings agencies to hold a separately designated client account to protect money the agencies receive.

Hamer said: “There can be no excuse for client money not being held in separate and properly audited client accounts, so that it is less easy for unscrupulous agents to misappropriate it. Furthermore, there needs to be an obligation that such monies are protected by suitable client money insurance.

“An appropriate regulatory regime could ensure that the necessary separation of client and business money is enforced.

“An agent who uses client money because they are operating on the edge of viability and needs to bolster the business, or more worrying still is using the money for personal enjoyment, is entirely unacceptable and against the law.”

Last year, Hamer investigated 1,338 new referrals – 646 sales and 672 lettings, with the remainder related to HIPs and residential leasehold management.

It was a record number of complaints – the highest ever recorded in the 20 years of the scheme’s existence and 28% above the previous peak in 2008 of 1,043. They arose from a total of 11,794 enquiries, compared with 11,165 during 2009 and 11,201 during 2008.

The largest single cause of complaint was communication failure between the agent and consumer (214) followed by complaints handling by agents (163) and sales details / advertising / marketing (138).

South-East England was the source of most complaints (26%), followed by South-West England (13%) and the eastern region (12%). Wales generated only 3% of the total, a figure matched by Northern Ireland and Scotland combined.

At the end of 2010, TPO had 8,008 member firms operating 11,321 sales and 7,851 lettings offices. This compares with 7,332 member firms operating 10,577 sales and 7,276 lettings offices at the end of 2009 and 6,322 member firms with 11,215 sales and 5,100 lettings offices at the end of 2008.

Of the 525 lettings cases closed last year, there were 323 awards made to the complainants.

Ian Potter, operations manager of ARLA, backed Hamer’s call for regulation, calling it well overdue.

Potter said: “The absence of regulation means the consumer is left vulnerable, with nowhere to go when there is service failure or fraud.

“We believe that the Government must look again at introducing regulation, in order to eradicate unprofessional, unqualified and unethical agents from the marketplace and increase protection for both tenants and landlords.”

Mandatory tenancy deposit protection is now four years old this month – and yet the RLA helpline continues to deal with a number of calls which show that both landlords and agents still misunderstand the requirements.

One recent call was from a licensed HMO landlord who believed that, as such, he was exempt from the law.

Another HMO landlord felt he did not need to protect his tenants’ deposits until all the rooms were taken. Most worryingly, a managing agent looking after nearly 200 properties did not know of the requirements.

The RLA’s magazine, Residential Property Investor, regularly looks at the law on tenancy deposit protection and the next issue will carry a special feature, which will spell out the exact requirements whilst taking a look at the different schemes. If you are a new landlord, or are still uncertain as to the exact requirements, do look out for it.

Meanwhile, the Tenancy Deposit Scheme says it has protected over £2bn in deposits since the law was introduced in April 2007. There have been 17,134 tenancies ending in dispute.

A second scheme, mydeposits, has protected £1bn of tenants’ deposits and has handled nearly 14,000 disputes.

The housing market is not waving but drowning in some parts of the UK.

Nicholas Ayre, a director of buying agents Home Fusion, was speaking after this morning’s Nationwide house price index showed that house prices had risen fractionally in February, by just 0.3%, to reach an average of £161,183.

He said that pressures such as growing youth unemployment meant that even the smallest hike in interest rates would cause local housing markets to unravel at speed.

The Nationwide index showed that house prices today are just 0.1% lower than this time last year.

However, critics say the survey is based on such a tiny number of sales that it is not particularly meaningful.  

Robert Gardner, Nationwide’s chief economist, said: “The overall picture is still one of a market treading water. Indeed, the three-month on three-month measure of house prices, a better measure of the underlying trend, was basically flat in February at -0.1%.

“This shouldn’t come as too much of a surprise. Housing market trends are closely linked to wider economic prospects. Given that the recovery hit a soft patch at the turn of the year and looks set to remain sluggish in the year ahead, the property market is likely to follow suit, with relatively low transaction levels and prices moving sideways or modestly lower through 2011.

“Demand for homes has levelled out, supported by historically low interest rates and some stabilisation in the labour market. The continued uncertain outlook for the economy is likely to keep many potential buyers on the sidelines for some time yet.

“Nevertheless, there are few signs of a glut of unsold homes building up on the market. Sellers remain reluctant to accept lower prices to secure a sale. In fact there are tentative signs that the volume of homes coming on to the market is slowing.”

Ayre said: “The Nationwide is right that, overall, the property market is treading water, but in some areas of the country the market is drowning not waving. The marginal increases and decreases we are seeing from month to month reflect a market unsure of its buoyancy.

“Also, the fact that nearly one million 18 to 24-year-olds are unemployed will raise questions about the longer-term prospects for the property market with first-time buyers such a crucial element of the property chain.

“Demand for property remains weak due to concerns about unemployment, rising living costs and interest rate rises, which may not be too far off given the minutes of the Monetary Policy Committee’s latest meeting.

“The effects of rising unemployment and interest rate rises will vary from region to region, but in some areas even the smallest rate rise could cause the property market to unravel at a rate of knots. 

“Increasingly, people are questioning whether now is the best time to buy and this, coupled with the still difficult borrowing conditions, is stopping the property market in its tracks.

“Many prospective buyers are putting their purchases on hold, as highlighted by the Land Registry’s figures out yesterday showing a decline in the number of property transactions. This trend will accelerate in the months ahead.”

This is an article from The Letting Agent Today.

Renewed pressure is on the private rented sector after new Government figures show that almost one in six homes is now a private rental property, as both home ownership and social housing decline.

The English Housing Survey from Communities and Local Government shows that the number of households renting privately has shot up by one million in the last five years.

In 2005-06, there were 2.4 million private rental households, which rose to 3.4 million in 2009-10.

The private rented sector now accounts for 15.6% of all households in England, up from 14.2% in 2008-09 and 11.7% in 2005-06.

Commenting on the survey, Grenville Turner, chief executive of Countrywide, the UK’s biggest chain of estate agents, said:  “The UK has traditionally been a nation of home owners, and whilst millions still aspire to buy their own property, current market conditions make that more challenging than usual. Our agents saw a 17% increase in new buyer inquiries during 2010, but market transaction levels remained flat.

“Successive governments have widely encouraged home ownership, but the impact of the recession has led to a structural change in the market, with record levels of tenant demand. As the UK’s largest letting agent, we have seen a 37% increase in new tenant applications during 2010 with 4.5 tenants vying for every available property.

“We are now beginning to see a shift in attitude, as a whole new generation is growing up choosing to rent long term, and the average age of a first-time buyer has risen to 37. Record levels of tenant demand and a severe shortage of stock in the private rental market is a national issue which needs addressing.”

Other key findings from CLG’s survey include:

There has been a decrease in the number of owner-occupied households from a peak of 14.8 million in 2005-06 to 14.5 million in 2009-10. The proportion of households in owner occupation has been in decline since 2003, falling from 70.9% to 67.4% during the period

*The proportion of social renting households is also in decline, falling from 19.5% in 2001 to 17.0% in 2009-10

*Overall, social sector homes are in better condition than private sector homes. However, the private sector is improving. In percentage terms, the number of non-decent homes in the private rented sector has fallen from 46.8% in 2006 to 40.8%

*60% of all private rented households are living in decent homes, up from 56% in 2008, whilst the energy efficiency of homes in the private rented sector has improved more over the period than the owner-occupied sector

*Couples with no dependent children are the most common type of household in the private rented sector (26%), with one-person households under 60 being the second largest household type at 23%

*Lone parent households are more common in the private rented sector; 12% of private renters compared with 3% of owner occupiers

*Half of all private renters are aged under 35 with half a million (15%) aged 16-24 and 1.2 million (35%) aged 25 to 34

*The private rented sector encompasses a wide range of economic status: 60% of households are in full-time employment, 9% in part-time work, 7% are unemployed, 8% are retired and 11% are classed as ‘other inactive’

*24% of private renters receive housing benefit compared with 62% of social renters
 
*There are 3.4 million properties in the private rented sector, 60% of which are located in suburban residential areas compared with just 4% in the city centre
 
The implications for estate agents, letting agents and the lending market are huge, with tenant demand currently outweighing supply in most areas of the UK.

Yet the sector is unregulated, with no legal requirement to join the Property Ombudsman Scheme, nor for letting agents to keep client money in separate accounts.

Under the Estate Agents Act, letting agents are not even recognised, whilst buy-to-let mortgages are not only currently in short supply but are not regulated by the Financial Services Authority. The FSA sees buy-to-let mortgages as a business sector, where the customers are business people who can make up their own minds.

Because letting agents and landlords are not required to join the Property Ombudsman Scheme, private tenants have very little access to redress.

Complaining to voluntary bodies may not bear fruit, as although ARLA boasts 6,000 or so members, these are individuals and not firms. ARLA membership used to be a combination of corporate and individuals, but no longer.

Attempts to regulate both letting agents and private residential landlords have fallen to the voluntary sector, but take-up of membership of bodies such as ARLA and the National Approved Letting Scheme by agents is low – although how low is uncertain, given the lack of regulation, and complicated by the fact that ARLA positions itself as the crème organisation.

The two main landlord bodies are the NLA and RLA, which dominate the sector. But the two together would not begin to claim that their members have 3.4 million properties between them, in England alone.

Nigel Terrington, of respected buy-to-let specialist lender Paragon, said: “CLG’s figures highlight the growing number of people relying on the private rented sector to provide their housing needs. The sector’s importance to UK housing continues to grow as increasing numbers of people opt to rent privately rather than step on the housing ladder.

“Demand for privately rented property is at an unprecedented level and far outweighs supply. The resulting rental inflation is leading to people, including the most vulnerable households, being priced out of the sector at a time when the supply of social housing is in decline.

“With Capital Economics estimating that the private rented sector will be home to nearly one in five households by 2015, it is crucial that adequate levels of buy-to-let mortgage finance are available to enable landlords to expand the number of properties in the PRS.”

This is an article from The Estate Agent Today.

Northern Rock is to offer 90% home loans – but there is a big question mark as to whether first-time buyers would actually be able to afford the mortgage.

Critics such as the Daily Mail inevitably criticised the 90% deal as  “a return to the risky lending that saw it implode in 2007”.

The nationalised bank will  roll out mortgages of up to £450,000 in return for deposits of 10%. The previous minimum deposit required was 15%.

The Mail went on: “The decision comes three years after a humiliating bail-out by taxpayers that was a defining episode of the credit crunch and global financial meltdown.”

In 2007, Northern Rock received £3bn in taxpayers’ cash.

It had previously offered a mortgage called Together that let customers borrow 125% of the value of their home.

But Northern Rock has insisted its new loan will bear little comparison with Together, and says it will be extremely careful about which home buyers would be allowed to take out one of its new 90% LTV products.

Ron Sandler, executive chairman of Northern Rock, said: “The first-time buyer market is the one that needs most assistance. We see this as a very responsible form of lending.”

He added that customers will be “appropriately screened for risk and affordability”.

Northern Rock’s new mortgages are fee-free but they are certainly not cheap, and they are aimed at making profits for the lender as it tries to gear up for a sale, possibly later this year.

The deals will cost borrowers considerably more than 0.5% base rate and will fuel arguments that lenders have apparently 'good' deals on offer, but are actually so expensive, that borrowers would not be able to fund monthly payments.

The new Northern Rock range includes a five-year fix at 6.59%, a three-year fix at 6.49% and a two-year fixed rate at 5.99%.

Melanie Bien, director of mortgage brokers Private Finance, said: “Borrowers should not assume it [the new 90% mortgage] will mean rock-bottom rates.”

A first-time buyer taking out a £150,000 loan with a five-year fix would be paying just over £1,000 a month.

Ray Boulger, senior technical manager at mortgage broker John Charcol, said: “I would not regard the new Northern Rock mortgages as reckless at all.”

Nationwide reported house prices hardly changed last year. The overall move was only 0.4% throughout 2010. The average house price was £162,763.

The Land Registry average house price at November 2010 was £164,773.

With mortgage availability set to become even tighter this year, as Government lending targets are abolished and lenders set their own targets, the number of new mortgages is unlikely to rise. Mortgage availability could reduce.

Predictions:

• Savills:                         - 3%
• Knight Frank:              - 3.3%
• Capital Economics:     - 5%
• Hamptons:                  No Change
• Hometrack:                 - 2%
• Charcol:                      + 2%
• Halifax:                        No Change
• C M L:                                     - 2%
• Edenvale-UK:                        Who knows!

On a positive note, the lack of buyers does mean more tenants so rental demand is expected to stay strong.

Housing and homelessness charity Shelter has revealed the nation's repossession hotspots.

Its research shows the places in England with the highest proportion of homeowners who have been issued with a possession order for their home, and are therefore at serious risk of repossession.

With experts predicting repossessions will rise to 45,000 next year, the charity is highlighting the research to encourage homeowners who will be hit when interest rates rise to start preparing now for higher mortgage costs so they don't find themselves at risk later down the line.

Shelter conducted the research by analysing the latest Ministry of Justice data on the rates of claims leading to possession orders per 1000 households across every local authority.

Some 65 local authorities have been identified as repossession hotspots because they are in the top fifth nationally.

The analysis shows that Corby in the East Midlands is the country's top hotspot, having the highest rate of at-risk homeowners, closely followed by Barking and Dagenham and Newham in London, Knowsley in the North West and Thurrock in East of England.

The results also reveal worrying groups of local authorities in parts of the country, including a red ribbon of repossession hotspots across the North from Merseyside to the Humber, large parts of Tyneside, a cluster of Kent and Essex coastal towns and a collection of areas around the Wash in East Anglia.

The research also found a strong link between unemployment and rates of possession orders with unemployment having risen at more than double the rate in hotspots, compared to the least at-risk areas.

Campbell Robb, chief executive of Shelter said: "This research paints a frightening picture of repossession hotspots across the country where homeowners are literally on the brink of losing the roof over their head.

"We know only too well that the combined pressures of high inflation, increased living costs and stagnant wages are really taking a toll on people. All it takes is one thing like job loss to tip people over the edge and into the spiral of debt, repossession and ultimately homelessness.

"And with interest rates due to increase in the near future this research is a clear warning sign of difficult times ahead for many thousands of homeowners across the country."

Student homes produce highest rental yields

Students and young singles generate the highest yields for landlords, buy-to-let mortgage specialist lender Paragon has revealed.

Paragon used independent research from The Landlords Panel from BDRC Continental and found that students generated an average yield of 6.45%, while young singles generate 6.22%.

Retired people are also high up the table (6.16%), followed by white collar/professional workers and executive or company lets (both 6.13%). At the other end of the scale, non-Housing Benefit claimants generate the lowest yields at 5.78%, followed by young couples and manual workers (5.94%).

Yields - a property's annual rental income as a proportion of its current value - are an important factor for landlords when making a property purchase decision. The average yield across the market currently stands at 6.2%.

Paragon Group Chief Executive Nigel Terrington said: "Yields are an important component of a landlord's overall business plan because they give a good indication of the income that the property generates. Of course, returns for many landlords will often be higher than stated yields as these are calculated at the current rental income against the property's value today, not taking into account capital appreciation since the landlord purchased the property or their loan-to-value.

"Student yields typically outperform the wider market because they are let on a per room basis, which can generate higher rental income. On the downside, they tend to require a higher degree of maintenance, so landlords have to factor that cost into their overall business models."

Elsewhere, the research shows that the number of properties in a landlord's portfolio has little bearing on its overall yield. For example, landlords with one property generated the same average yield as those with over 20 properties (6.2%), while those with between two and four properties in a portfolio generated a yield of 6.5%.

However, there was clear contrast at a regional level, with yields in the West Midlands outstripping the rest of the UK at 6.5%. These were followed closely by Yorkshire & Humber (6.4%) and the North East (6.2%). Central London lagged in the yield stakes (5.5%) due to the high cost of property in this part of the UK.

Zoopla’s research shows that Britain is now home to 220,131 Property Millionaires, down from 223,119 this time last year, and has 5,922 Million Pound Streets, where average house prices are over pounds 1 million. London tops the list of places with the most Million Pound Streets by far with 2,290, followed by commuter hotspot Guildford with 89 and footballer's paradise, Cobham, in third place with 78.

The average home for sale in Kensington now costs £1,737,862 according to the study by Zoopla.co.uk, which provides free online value estimates for every home in the UK. And whilst this is £400,000 more than its nearest rival Chelsea, SW3 where the average pad will set you back £1.32m, all of the top five neighbourhoods on the list boast average property prices of over £1m and includes Knightsbridge, SW7 (£1.31m), Notting Hill, W11 (£1.17m) and West Brompton, SW10 (£1.05m).

The top 10 most expensive neighbourhoods in the country are almost entirely in the capital, with the only exception being seventh placed Virginia Water, Surrey GU25, home to exclusive Wentworth Golf Club, where average house prices are £936,653. And nine out of the top 10 on the list have seen average house prices fall over the past 12 months, with the only exception being Hampstead, London NW3.

Topping the list of the most expensive streets in Britain once again is Kensington Palace Gardens, W8 – also known as Billionaires Row - where the average property price is a staggering £19.2 million. This exclusive gated street is home to Saudi and Brunei royalty, Russian oligarchs and Britain's richest man, Lakshmi Mittal, who owns not one but three properties on the street.

But the eye-watering house prices in Britain's most expensive neighbourhoods reflect a premium for their location, not necessarily the space they offer. With the average cost per square foot in Kensington now at £1,193 and the average UK house price at £205,985, a move to W8 might provide a fancy address but would only get the average homeowner 173 square feet, barely enough room to swing a cat.

The most expensive area to live in Britain is Windsor & Maidenhead where average house prices stand at £389,120, just ahead of the average in London (£387,119). Rounding out the top 5 most expensive areas are Surrey (£371,984), Hertfordshire (£300,914) and Oxfordshire (£284,402). Whilst more than half of the Property Millionaires in Britain reside in London, outside the capital the county with the highest number of Property Millionaires by far is Surrey with over 15,000 currently.

Nick Leeming, Business Development Director, Zoopla.co.uk said, "Despite the recent property market uncertainty, Brits remain obsessed with the value of their home as well as those of their neighbours, friends and family. This year's Property Rich List shows an ever-widening North-South divide and whilst house prices in some of the most expensive areas of the country have fallen a little over the past 12 months, they have held up far better than in many of the less expensive areas."

What £1m+ can get you in some of Britain's most expensive neighbourhoods,
Kensington (W8) – 3 bed house, Callcott Street, London W8 - £1,800,000
Chelsea (SW3) – 3 bed flat, Cadogan Gardens, Chelsea, London SW3 - £1,450,000
Knightsbridge (SW7) – 3 bed flat, Stanhope Gardens, London SW7 - £1,300,000
Virginia Water, GU25 – 4-bed house, Virginia Water, GU25 - £1,150,000

For the full Zoopla.co.uk Property Rich List 2011 visit
www.zoopla.co.uk/richlist

Nearly half of landlords reported that tenant demand rose during the first quarter of 2011, buy-to-let mortgage specialist Paragon's Private Rented Sector Trends Report has revealed.

The quarterly snapshot of the private rented sector and buy-to-let market shows that 49% of landlords recorded growing levels of tenant demand during the period, compared with just 5% who said it was falling.

The proportion of landlords reporting growing tenant demand was up from 40% during the final quarter of 2010. The proportion of landlords reporting increasing levels of tenant demand has now risen for seven consecutive quarters.

Looking forward, landlords expect tenant demand to continue strengthening with over half (52%) expecting demand to increase over the next 12 months, and only 6% forecasting a decline.

Nigel Terrington, Paragon Group Chief Executive, said: "Landlords are experiencing high levels of tenant demand, and this is expected to rise due to a number of factors, including social housing reforms, lifestyle choices, low numbers of first-time buyers and wider demographic changes.

"We are seeing evidence that strong tenant demand is feeding through to higher rents. A lack of available mortgage finance is restricting the sector's ability to expand and needs to be addressed to create a healthy and vibrant buy-to-let market in the UK."

Paragon's Q1 2011 PRS Trends Report, which covers the three months to March 31, also shows:

* Buy-to-let mortgage finance availability remains low - 64% of landlords said that availability was limited;

* Landlord confidence strengthened, with 23% of landlords saying they were more optimistic regarding the performance of their property portfolio;

* Yields increased to 6.2%, the highest level since Q4 2009;

* Average number of properties in a portfolio stood at 13, with an average weighted portfolio value of £1.51million;

* Average gearing - the level of borrowing as a proportion of the property's value - stood at 41%;

* Average void period fell for third quarter in a row to 2.8 weeks a year.

Terrington added: "Landlords have experienced a positive start to the year. Tenant demand continues to strengthen, yields are rising and confidence is high. Prospects for landlords in the private rented sector are high and they can expect this to continue throughout, and beyond, 2011."

Sellers are chopping their asking prices by increasing amounts. The average price reduction is now £18,790, or 7.1%, off the original asking price, and over one-third of all properties for sale have been discounted at least once.

The information is from property portal Zoopla, which has a feature allowing users to search by discount.

This shows that 36.9% of all properties currently on the market in the UK have been discounted at least once. Although this is very slightly less than the 37.4% in February, the average discount is now £494 higher than in February, and £2,576 higher than last August, as sellers try to shift their properties.

Sellers in the North are generally having to reduce their prices by more and far more often than those in the South.

The highest asking price discounts are in Bolton where the average price reduction is 8.5%, followed closely by Rotherham (8.4%), Newcastle (8.2%), Huddersfield (8.2%) and Glasgow (8%).

In Doncaster, almost half (46.4%) of all properties on the market today have been reduced in price at least once from the original asking price.

Other areas of the country with the highest proportion of price-reduced properties include Wolverhampton (44.6%), Stockport (43.2%), Birmingham (42.8%) and Chelmsford (42.8%).

At the other end of the scale, properties in Croydon (5.7%) have the lowest average discount to the original asking price.

However, the story is quite different at the top end of the market for properties listed at £1m-plus where the average price reduction is at one of its lowest levels of the past 12 months, a sign that demand at the upper end of the market is strengthening.

Third of buy-to-lets headed for negative equity

Nearly a third of buy-to-let landlords could be in negative equity by the end of next year if house prices continue to fall, a rating agency has warned.

More than 30 per cent of buy-to-let borrowers could find themselves owing more on their mortgage than their property is worth by the end of 2012, if house prices drop by five per cent this year and a further five per cent next year, according to Standard & Poor's (S&P).

The group said investment landlords would be far more affected by the price slide than owner-occupiers. S&P based its opinion on the assumption that buy-to-let landlords typically had higher loan-to-value ratios on their mortgages.

It said that while 30 per cent of investors were expected to be in negative equity by the end of next year, only 17 per cent of owner-occupiers were predicted to be in the same situation, despite levels being similar at the end of 2010.

The report warned that the fall in house prices would reduce landlords' flexibility to remortgage and could lead to higher arrears levels in the sector, with higher interest rates likely to make the situation worse.

It added that while arrears in the buy-to-let sector had been consistently lower than in the wider mortgage market before the credit crunch struck, the situation had deteriorated sharply during the recession, as many investors found themselves unable to remortgage, leaving them stuck on high reversion rates.

Mark Boyce, credit analyst at S&P, said, ‘In the near term, the buoyant UK rental market should continue to support buy-to-let borrowers, but interest rate rises are a risk on the horizon’. ‘Furthermore, even relatively mild house price declines over the next two years could place more than 30 per cent of buy-to-let borrowers in negative equity, reducing their financial flexibility and thus risking a rise in arrears’.

A gradual improvement in the availability of buy-to-let financing is being seen.

New bank Aldermore has increased the maximum number of properties it will accept on residential buy-to-let mortgage applications from two to three, subject to a total exposure of £1m.

Applicants must own at least one existing buy-to-let property.

Aldermore works with clients to assess affordability, and rental coverage should be 125% at the product pay rate or reversion rate, whichever is higher.

Aldermore has been making waves amongst the financial community because, although it has a traditional approach to underwriting and does not rely on automated processes, it will consider applications from borrowers turned away by other lenders.

Meanwhile, Skipton Building Society has made a cautious return to the buy-to-let market after a two-year break. It is offering two- and three-year fixed rate mortgages at 60% LTV.

There is an application fee of £245, and a completion fee of £1,250 which can be added to the loan.

Also, Whiteaway Laidlaw Bank is launching a commercial lending arm offering loans for property investors.

WLB, which has had a banking licence since 1971, used to be part of the Manchester Building Society but is now owned by Royal Bank of Scotland.

More complaints about rogue landlords have been reported by the charity Shelter.

Over the past 12 months, Shelter says it has seen overall complaints about landlords increase by 23%.

Complaints regarding dampness and disrepair have risen by over 40% and complaints of harassment by private landlords have soared by nearly 25%. 

The rise coincides with the boom in the private rented sector. Official figures put the number of households privately renting at 3.4 million, a 40% rise over the past five years.

Shelter said its figures raise serious questions about how rogue landlords are still able to operate freely, preying on the most vulnerable and leaving them to live in properties that could be a serious danger to their health and wellbeing. 

While they represent only a minority of landlords, the charity is concerned by the sharp increase in complaints and the impact this is having on tenants’ lives.

Campbell Robb, chief executive of Shelter, said: “The housing minister’s claim that ‘the vast majority of England’s three million private tenants are happy with the service they receive’ has been seriously thrown into question.

“Our figures clearly show a worrying increase in the number of people seeking our help regarding problems with their landlord. The idea that just one rogue landlord could be harassing a family in their home is completely unacceptable and it’s shocking that the minister still refuses to tackle the issue.

“It’s frightening to see that complaints about bad landlords are increasing at such a rate, at the very time that renting a home is fast becoming the only option for thousands of families across this country. 

“It appears that rogue landlords are cashing in on this growing market.”

Shelter said housing benefit cuts and changes to the homelessness safety net will push many more vulnerable families into the private rented sector, where rogue landlords could exploit the lack of accommodation.

There was also a 19% rise in complaints about rent rises which tenants thought to be unfair.

Robb continued: “With Government policy directing more vulnerable people towards the private rented sector, it seems entirely negligent of the housing minister to have not yet produced any clear commitment to clamp down on rogue landlords.

“It is imperative that the minister sits up and recognises the growth of this sector and his responsibility to 3.4 million households in this country.”

The charity is urging the housing minister to produce a clear plan to tackle rogue landlords and show his commitment to private tenants by ensuring that all local authorities sign up to a minimum standard accreditation scheme.

This is a set of standards relating to the running or condition of private rented accommodation which good landlords can sign up to on a voluntary basis.

Last June, Grant Shapps rejected the idea of mandatory licensing for both landlords and letting agents, saying that most private tenants were satisfied.

Tenant demand for privately rented property hit a two-year high during the fourth quarter of 2010, according to the latest Private Rented Sector Trends report from Paragon Group.

The quarterly snapshot of developments in the PRS and buy-to-let market showed the proportion of landlords reporting growing levels of tenant demand was at its highest level since the final quarter of 2008.

Four out of 10 landlords said tenant demand grew during the quarter, compared to 36% during the third quarter. The proportion of landlords reporting growing levels of tenant demand has now risen for six consecutive quarters, which has coincided with a shortage of mortgage finance in the owner-occupied mortgage sector.

Just 4% of landlords said tenant demand fell during the quarter, the lowest proportion since the third quarter of 2008 and the second lowest level since Paragon started collating the data in 2004.

Nigel Terrington, Paragon Group chief executive, said: "Tenant demand shows no signs of slowing down and in some busy markets, such as London, there is anecdotal evidence of sealed bids being used for certain properties.

"This will become more commonplace across the UK unless the PRS is able to expand to meet higher levels of demand. Four out of 10 landlords say that tenant demand grew during the period, which is a significant number and has major implications for renting in the UK if the issue of rental property supply cannot be addressed."  

The Q4 2010 PRS Trends Report, which covers the three months to December 31 also shows:

* An improvement in the availability of buy-to-let mortgage finance - 19% of landlords said that mortgage finance was either widely or reasonably available, up from 17% during the third quarter. Conversely, the proportion of landlords stating that mortgage finance was very restricted dropped from 29% in the third quarter to 26% in the fourth;

* Landlord confidence remained healthy during the period, with 17% of landlords saying they were more optimistic regarding the performance of their property portfolio;

* Yields remained static during the period at 6.1%. Yields remained between 6% and 6.1% throughout the whole of 2010, offering landlords stability;

* The average number of properties in a portfolio stood at 12 during the quarter, with the average weighted portfolio value standing at £1.51 million. The average gearing - the level of borrowing as a proportion of the property's value - stood at 37%;

* The average void period fell for the second quarter in a row to an average of 2.9 weeks a year.

Terrington said: "The prospects for landlords are strong. Tenant demand continues to strengthen, yields are healthy and stable and confidence is high. The housing market is presenting some strong buying opportunities and landlords are well placed to take advantage."

Communities Secretary Eric Pickles is bringing an end to heavy handed rules that can mean people who leave their house empty for more than six months risk having it seized by their local authority.

In 2006, the previous Government introduced 'Empty Dwelling Management Orders'. They allow councils to take over properties that have been empty for as little as six months.

* the home does not have to be blighted or boarded up to be taken over, just empty for six months - including homes of the deceased
* councils have the right to seize furniture, fixtures and fittings, when the home is taken over, including where the home has been left empty for a period after the owner has died
* homes already on the property market can be seized if councils believe the asking price is "unrealistic".

In order to protect civil liberties, Mr Pickles is today introducing powerful safeguards to restrict the use of Empty Dwelling Management Orders.

* they will be limited to empty properties that have become magnets for vandalism, squatters and other forms of anti-social behaviour - blighting the local neighbourhood
* a property will have to stand empty for at least two years before an Empty Dwelling Management Order can be obtained, and property owners will have to be given at least three months' notice before the order can be issued.

Mr Pickles is concerned that councils have used the Orders to instigate action against homeowners that is inappropriate, including against people in vulnerable situations. Councils have, for example, attempted to use the powers against a homeowner whilst she was caring for her injured daughter in France; to take over an Order being used against the house of a 96 year old as soon as he passed away in a nursing home; and against a divorcee, who faced action because he only lived in the property at weekends to visit his estranged children.

These new safeguards will ensure that responsible homeowners do not face having their properties seized. Mr Pickles said it is wrong that a bereaved family could face having their loved one's home seized for a period if there is a delay in them deciding what to do with it.

The move comes as the Government prepares to introduce wider plans to bring back into use many of the 300,000 properties in England that have been empty for a long period of time.

From next year, councils will have a new incentive to bring empty properties back into use through a New Homes Bonus, under which the Government will match the council tax raised from any council tax collected from a property that previously stood empty.

Communities and Local Government Secretary, Eric Pickles, said: "There is a case for action to put boarded-up and blighted properties back into use. But these draconian and heavy-handed state powers have allowed councils to seize private homes in perfect condition, including their fixtures and fittings, just because the homes have been empty for a short while.

"The Coalition Government is standing up for the civil liberties of law-abiding citizens. Fundamental human rights include the right to property. People suffering the loss of a loved one should not have to endure the added indignity of having their home seized because of a delay in them deciding what to do with it. That's why the new Government is introducing new safeguards that mean the rights of responsible homeowners will be protected, while allowing action to be taken against genuine derelict buildings which blight neighbourhoods."

The Council of Mortgage Lenders this morning warned that a critical new era of even tighter lending would be ramped up from spring onwards.It is forecasting the lowest levels in lending for 30 years in 2011.

In an unusual break with tradition – housing ministers do not normally predict markets – Shapps said in the House of Commons: “House prices have doubled in the last ten years, putting home ownership beyond the reach of many potential first-time buyers.

“This Government believe that what is needed now is not a return to rapid house price growth but a period of house price stability.”

He said that house price forecasts from the Office of Budget Responsibility and the Treasure “suggest there will be modest falls in house prices in 2011 and rises beyond”.

Shapps did not address the crucial issue, as to whether lenders would actually start lending again.

This is, however, confronted head-on in forecasts published today by the CML.

The CML warned: “From April next year onwards, lenders will begin to have to repay the funding advanced through official support schemes. This is likely to limit the availability of credit to support mortgage lending next year and beyond.”

The CML also took another swipe at the Financial Services Authority, saying that its ongoing Mortgage Market Review – intended to herald an era of ‘sensible lending’ (which some fear will mean ‘no lending’) – “continues to be a major and unhelpful source of uncertainty for the lending industry”.

It went on: “Firms do not know when the FSA will issue firm rules or whether it will modify its current excessively risk-averse approach. This uncertainty will itself reinforce lenders’ caution.”

The CML is predicting 0.86 million housing transactions next year, down from this year’s estimate of 0.89 million.  It thinks the number of loans will shrink to £6bn, down from an estimated £9bn this year. It also thinks that arrears will climb from 175,000 to 180,000 and that possessions next year will creep up from 36,000 to 40,000. It has also forecast that remortgaging will remain subdued.

The CML’s forecasts are in line with what the RICS is saying. It said that in November, the number of first-time buyer inquiries fell for a sixth month, with some individual surveyors predicting that the flat picture will continue into next year.

The Bank of England's Monetary Policy Committee today voted to maintain the official Bank Rate paid on commercial bank reserves at 0.5%. The Committee also voted to maintain the stock of asset purchases financed by the issuance of central bank reserves at £200 billion.

The Committee's latest inflation and output projections will appear in the Inflation Report to be published at 10.30am on Wednesday 10 August.

The minutes of the meeting will be published at 9.30am on Wednesday 17 August.

The previous change in Bank Rate was a reduction of 0.5 percentage points to 0.5% on 5 March 2009. A programme of asset purchases financed by the issuance of central bank reserves was initiated on 5 March 2009. The previous change in the size of that programme was an increase of £25 billion to a total of £200 billion on 5 November 2009.

Banks and supermarkets are to be able to sell consumer legal services in England and Wales for the first time following a change in law. The Government says that the new Legal Services Act will offer more choice and better value for the public. It says it also means law firms will benefit from investment and allow them to explore new markets.

But critics have said it would undermine the quality and independence of advice and that it may bring cut-throat competition to large-volume services such as probate, will-writing, estate administration and divorce, as well as property conveyancing.

Justice Minister Jonathan Djanogly said it was a "landmark day" for the legal industry. 

"Our legal services are already rated among the best in the world, used by millions of people around the globe as well as in the UK, and these changes will set them up to move to new heights. They will enable firms to set up multi-disciplinary practices and provide opportunities for growth," he said. "Potential customers will find legal services become more accessible, more efficient and more competitive." 

Legislation and regulation has restricted the management, ownership and financing of firms providing legal services for hundreds of years. Under new trading bodies, known as Alternative Business Structures (ABS), lawyers will be able to work in mixed-practices offering financial, legal and other advice, or be based at different kinds of businesses.

The first of the new legal businesses will be conveyancer-led, covering services such as property law and probate. Solicitors will not be able to participate in the new arrangements until licensing by the Solicitors Regulation Authority takes place. Currently, solicitors chambers are owned by the lawyers themselves under partnerships.

The changes could also see barristers, who are currently self-employed, eventually form partnerships themselves, or take on individual roles within the new legal businesses, the Bar Standards Board says.

The Council for Licensed Conveyancers will license the first tranch of externally-owned and managed law firms. Its chief executive, Victor Olowe, said, "We have over 20 years' experience in regulating the licensed conveyancing profession and we will be extending the same rigorous but proportionate approach to the regulation of ABS.

"We believe that ABS is good news for consumers. Opening up the market will offer people a greater choice of legal service provider, while at the same time our new risk-based and outcomes-focused approach to regulation will help ensure high standards of service, and will maximise consumer protection."

Critics have dubbed the act, first drafted under the previous Labour government, ‘Tesco Law’. The move came under attack from some lawyers, including a coalition of about 100 firms, when it was first announced in 2009.

Despite the title Tesco Law, the supermarket has said it has "no current plans to offer legal services". But the Co-operative was among the first stores to say it was interested in offering a legal business.

The Property Summit is held in association with the International Property Awards sponsored by Bloomberg Television and Google. Many attendees will be collecting awards at this event, making it the ideal time to promote your business. Would you like to meet them?

• Network and do business with leading property companies from across Europe.
• Business networking tables
• Seminars
• Exhibition

The majority of attendees at our networking events come from the highest echelons of their companies.

They include chairmen, CEOs, presidents, managing directors, CFOs, sales and marketing directors, investment officers, planning & strategy directors and global business leaders.

Attendees will include many representatives from developers, architects, real estate agents, interior designers, engineers, marketing consultants, investors, property professionals and more.

Can Students afford University and Accommodation?

An all-time high of nearly 600,000 new students, five per cent up on last year, will await their A Level results on Thursday in the hope that they have secured a place at university.

Many of those, plus thousands of others already studying, will be looking for rented accommodation for the coming year. The latest research from accommodationforstudents.com, the student accommodation website, reveals the latest picture across the UK in terms of the average weekly rent these students can expect to pay, based on nearly 86,000 properties in 78 cities across the UK.

The average weekly student rent is currently £67.11, up three per cent on last year. London leads the way with a whopping £108.03 average weekly rent, up five per cent on last year.

There have been some significant moves in the rent league table over the past year, with several cities showing 10 per cent+ increases on last year.

Leamington Spa (Warwick University) has seen its average student weekly rent rise 16 per cent, from £60.24 to £70.47. Newcastle-under-Lyme (Keele University) and Sunderland have seen 13 per cent increases, to current weekly rents of £64.65 and £61.05 respectively.

Even the largest campuses have seen significant rises. Manchester, the UK’s largest student population, has experienced a 12 per cent increase from last year, from £58.58 to £67.04.

Other movers are Bangor, up 11 per cent, and Stoke-on-Trent, Cheltenham and Exeter up nine per cent, the latter now being the second most expensive place after London to rent accommodation in the UK, at £94.61.

Other cities that have seen an increase more than double the national average of three per cent include Edinburgh, 8 per cent, Bournemouth, Coventry and Bolton, all seven per cent, and Cardiff, York, Reading, Crewe and Stafford, six per cent.

Even bottom of the table, Middlesbrough, with an average weekly rent of £43.68, has seen a five per cent increase from last year, £41.47.

Simon Thompson, co-founder and director of Accommodation for Students, said, “The rent increases for some cities reflect two key factors. One is the changing nature of accommodation coming on the market. The trend is for hi-spec, better quality student accommodation, and some locations are leading the way in this area.

The other key factor is the popularity/desirability of attending some universities that puts pressure on the accommodation available and hence, the charging of higher rents. Universities like Exeter, Warwick (Leamington Spa), Edinburgh and, more recently, Manchester, would come into this category, as have, in the past, Newcastle, Bristol and Durham.”

Increasing optimism from landlords - Paragon

Almost a quarter of landlords are feeling more optimistic about the prospects for their property portfolios, rental income and yields, buy-to-let mortgage specialist Paragon has revealed.

The Q2 Private Rented Sector Trends Report, which gives a detailed overview of the PRS sector and buy-to-let market, showed 23% of landlords feel more optimistic about the prospects for their portfolios. Optimism was particularly high among professional landlords, with 30% stating they were more optimistic, compared with 15% of smaller-scale landlords.

On average, landlords expect to have 13.1 residential properties in their portfolios in a year's time, compared with 12.6 properties currently. This is the first time in two years that landlords have predicted an increase.

Rental income is particularly healthy, with three out of ten landlords (29%) having increased their income during the second quarter, the majority of which reported an increase of between 2% and 4%.

Landlords are also more optimistic about the net value of their portfolios, with a growing proportion expecting an increase in value (14% Q2 vs 13% Q1), and fewer forecasting declining values (12% Q2 vs 19% Q1). The majority of landlords expect net values to remain the same.

Also highlighted in the report was an interesting shift in the types of property that landlords are looking to add to their portfolios during the third quarter. Of those looking to purchase, terraced houses are the most popular choice with more than half of landlords saying they expect to buy this type of property.

However, there have also been significant increases in the popularity of semi-detached houses (up from 28% to 41%) and detached (up from 9% to 22%).

Nigel Terrington, Paragon Group Chief Executive, said: "Our report emphasises the fact that there is significantly more optimism among landlords in the private rented sector and the buy-to-let market, and that looks likely to increase during the coming quarters."

Paragon's Q2 2011 PRS Trends Report - which covers the period from April 1 to June 30 - also shows:

• An improvement in the perception of the availability of buy-to-let finance - 22% said that it was reasonably available, compared with 17% in Q1;
• Yields remain unchanged and healthy at an average of 6.2%;
• Average weighted portfolio value stood at £1.42million;
• Average gearing, the level of borrowing as a proportion of the portfolio's value, was 40% during the quarter.

Terrington said: "Landlords are still experiencing high levels of tenant demand which is set to rise further in the coming quarters. It is encouraging to see yields remaining at a healthy level, low void periods and general confidence across the sector."

New scheme to combat mortgage fraud

A new mortgage verification scheme to combat fraud is being launched nationwide in the UK from Thursday 1st September following a successful pilot.

HM Revenue & Customs, the Council of Mortgage Lenders and the Building Societies Association have worked together on the development of the Mortgage Verification Scheme and see it as an important additional tool to help beat fraud.
 
The National Fraud Authority estimates the cost of mortgage fraud was £1 billion last year, so measures to tackle it are important.

The scheme was announced in the March 2010 budget and has been refined during the pilot period since. Use of the scheme will be limited to cases where lenders reasonably suspect, following their own rigorous checks, that mortgage fraud may be taking place.
 
Mortgage lenders will send relevant details of mortgage applications where they have inadequate evidence of declared income and suspect fraud using a secure electronic platform to HMRC, which will check income details declared to lenders against information provided in income tax and employment returns. HMRC will then advise lenders whether or not the details correspond, which will inform lending decisions.
 
As well as aiding mortgage fraud prevention, the scheme will help HMRC to risk assess whether the information it has been given on applicants' tax affairs is correct. In return, lenders gain access to a source of data that helps them to lend responsibly and manage risk. Financial institutions use a variety of sources to help them assess fraud risk, however, and will not rely solely on responses provided by HMRC to reach a decision where the lender suspects fraud.

HMRC has set up a specialised unit to deal with the requests. Any mortgage lender who wishes to use the scheme may do so. Other than a fee of £14 plus VAT per case to cover HMRC's costs, lenders face no additional fees to participate. It is not anticipated that the scheme will have any significant impact on the time taken to reach a lending decision.

‘Lenders have found during the pilot that the scheme has been very useful in helping them to lend responsibly. It has helped them to avoid lending in some cases where there is a risk of fraud, at the same time as giving them confidence about the borrower's credentials in some cases that they might otherwise have felt compelled to refuse,’ said CML director general Paul Smee.

BSA director general Adrian Coles said that the new scheme is an excellent example of HMRC working proactively with business to provide a valuable service which could significantly decrease mortgage fraud and give an additional check to bolster responsible lending. ‘Mortgage fraud is a cost to the industry, and ultimately the consumer, so this scheme benefits both lenders and consumers alike,’ he added.

According to Colin Barclay, assistant director, HMRC Risk and Intelligence Service, the Mortgage Verification Scheme is an unprecedented opportunity for HMRC and lenders to work together to combat fraud in the mortgage industry.

source: INEA via Propertywire

House prices are falling across much of Scotland.

The Edinburgh Solicitors Property Centre reports that in Edinburgh itself, house prices are down 3.6% annually and in East Lothian have dropped 5.3%.

Some property types have dropped particularly badly. The ESPC says three-bed suburban semis are now 15% lower in value than a year ago.

The ESPC also reports that there is a glut of properties for sale on the market, and says that 68% of properties which have sold went for less than the ‘fixed’ asking price – up from 56% a year ago.

ESPC analyst David Marshall said: “House prices rose in 2010 but are now starting to ease back, meaning home values in most areas are now back in line with levels we were seeing two years ago.

“The market is most challenging for sellers of smaller properties, with low demand from first-time buyers and buy-to-let investors, meaning that those wanting to secure a quick sale at this end of the market will probably have to be willing to accept a lower offer than they might have hoped.”

Whilst the ESPC has reported house price rises in the Lothians, it is forecasting that these will be short-lived, with the number of transactions around half of those at the peak of the market.

Allsop held their first residential auction for the second half of 2011 yesterday at the Park Lane Hotel, London. In total 293 lots were offered from across the UK, achieving a success rate of 86% and raising approximately £40m.

Despite UK inflation being at its highest level for decades and reports of a double dip for the housing market, buyers at this significant auction sale were undeterred and rejected gloomy market predictions. Bidding remained strong throughout the day.

Gary Murphy, partner and auctioneer at Allsop, commented "There is always opportunity in every stage of a market cycle. It was encouraging to see bidders competing so aggressively and with such conviction. This is the market at the coal face and there was little evidence of gloom".

Murphy's comments were made as the RESI 2011 Conference was getting underway.

Frederik Norbrands, Global Head of HSBC, had forecast that the UK was in for sustained sluggish growth, even if it avoided a double-dip recession. He said a second downturn was becoming more likely every day. The global economy, he said, was suffering from a "negative feedback loop where everyone thinks the same", encouraging markets to spiral downwards in parallel.

"We have to be careful that we don't talk ourselves into an unnecessary downturn" said Murphy. "Current auction activity is evidence of a sustainable and important market place".

The sale concluded with a session of 34 ground rent investments. All lots offered in this part of the sale were sold.

House prices: average deposit now £66,000

The average homebuyer's deposit has risen tenfold in the last twenty years, showing the increasingly difficult task first-time buyers face to get on the property ladder. Research from bank first direct found that the average deposit has leapt from £6,600 to £66,000 since 1990 due to increasing house prices, and a reduction in mortgage levels. The average household income has risen 2.3 times in the same period, meaning that people must save for far longer to buy a home.

Bruno Genovese, Senior Savings Product Manager from first direct - part of HSBC - said that 2010 was the most difficult year to buy a house in the last twenty years. The average house price is 6.3 times the average household income, and the average deposit is 1.7 times the average income. In 1995 and 1996 - the easiest years to buy a home - the average deposit was 3.4 times the average income, and the average deposit was 0.3 times the average income.

"Much has been made of rising house prices, but the average deposit needed in the first place has actually risen more than twice as fast as house prices and almost four times as fast as income," he said. "This is why we are seeing first time buyers getting older, with more and more people struggling to get on the property ladder."

The average age of a first-time buyer has risen to 35, and over half of those who are not on the property ladder think that they will never be able to afford to buy a home, according to recent research from Post Office mortgages. In contrast, those who bought their first home in the early 1960s were on average just 23 years old,

Source: Telegraph and The Independent Network of Estate Agents

The latest official UK house price statistics claim that the average house price now stands at £208,476.

The figure is from the Government’s Communities and Local Government department and covers the month of August.

But the figure is a baffling £46,129 higher than the average house price figure for the same month, reported by the Government’s other official index, the Land Registry.

The Land Registry quotes an average price of £162,347 for England and Wales.

But the CLG index concedes that if you stripped out London and the South-East house prices, then the average UK house price in August was £171,640.

According to CLG, house prices have come down by 1.3% over the year – in England by 1.2%, in Wales by 0.3%, in Scotland by 1.5% and in Northern Ireland by 4.3%. The only region where house prices increased was London, where they rose by around 3%.

The CLG index also claims that prices paid by first-time buyers were 1.8% lower in August than a year ago, but that prices for new properties were 9.2% higher.

The CLG report was immediately attacked as misleading.

Nick Hopkinson, director of property company PPR Estates, said: “The latest Government analysis shows average house prices falling nationally over the last year by around 2%.  

“This headline data is very misleading as it includes the millionaire enclaves in London where prices have boomed due to cash-rich foreign investors buying to protect their wealth.  

“New-build house prices are only up because developers are starting to focus more on larger, more expensive family homes. Most new-build city centre flats are worth 20% less than they were three years ago.
 
“The hidden reality behind the national average numbers is that many properties outside London have seen prices fall by over 10% in the last year.  

“With the current Euro debt uncertainties, the wider economy flirting with recession again and inflation squeezing the Great British middle classes ‘till the pips squeak’, it’s difficult to see any real prospects of house price growth in the foreseeable future for most of us.”

ENERGY-DEFICIENT PROPERTIES FACE BAN

Landlords may have as little as five years to upgrade their properties to a minimum energy standard or have them banned from the market.

They would face criminal prosecution if they marketed a rental property with an EPC rating of less than E. They are being told to wake up to a new regime, where they must look on higher EPC requirements as part of an essential health and safety regime.

Around 30 organisations have called for a minimum energy efficiency standard to be legally required of all private rented homes in 2016, and are demanding that a new law is introduced.

Over 180 MPs have so far supported the demand – which would affect an estimated 150,000 rental properties – via an Early Day Motion.

The new law would make it an offence to market rental properties with an EPC rating lower than E, with both landlords and letting agents facing prosecution, although it is not clear yet what the penalties would be.

The organisations demanding the change include charities such as Child Poverty Action Group, local authorities, consumer groups and environmental campaigners including Friends of the Earth and the World Wildlife Fund.

If they get their way, the new law would accelerate the Government’s existing proposed timetable by two years.

The Energy Bill, due back before Parliament in the autumn and which ushers in the Green Deal, has had a new clause added to it, outlawing colder rental properties by 2018.

But the campaigners say this is unacceptably late and that the Green Deal proposal leaves too much to chance.

They also argue that it has loopholes. They claim that as long as landlords undertake the improvements for which finance is available under the Green Deal, they would be able to carry on letting out unacceptably cold properties indefinitely: this is because the property might not have been improved to the E banding on an EPC.

The campaigners also say that the Green Deal proposal to allow tenants to ask the landlord for energy improvements would lead to tenants being evicted.

The groups are therefore arguing for a new law requiring basic standards of insulation and heating in private rented properties. 

Audrey Gallacher, director of energy at Consumer Focus, one of the groups calling for the change, said: “With almost 12 million people expected to be living in fuel poverty when the latest round of price rises hits, tackling this problem is a major issue. Private rented housing is among the coldest and most likely to leak heat – meaning bigger bills and a greater risk to renters’ health."

“Bringing this requirement into law would save private renters almost £500 a year on average off their energy bill and cut carbon emissions by almost 200 million tonnes a year. Current legislation isn’t enough to make this happen, so we need the UK Government to act to help the many vulnerable households affected.”

We asked Consumer Focus to comment on speculation that landlords would simply sell properties that they felt were too expensive to upgrade, bringing an influx of cold homes into private owner-occupation – private owners being under no compulsion to upgrade their properties.

Gallacher responded: “The need to invest in energy efficiency might put off some landlords, particularly those with older properties. However, we hope responsible landlords will recognise the benefits, not only to their tenants’ health and safety from warmer and cheaper to run homes, but also the long-term improvement to their property, its saleable value and their ability to rent it out."
 
“Landlords must start to view these energy efficiency moves as standard health and safety requirements, and incorporate them into their renovation and maintenance programmes, to sustain their property’s marketability."
 
“Older housing can be more difficult to make energy efficient. However, Green Deal finance will remove the barrier of upfront cost, and there will be additional support for properties with solid walls. We also urge landlords to, where possible, take advantage of current insulation offers for loft and cavity wall insulation."
 
“We would also like to see action to remove barriers for leaseholders; clear planning guidance for listed buildings and conservation areas which are harder to treat; and improved Energy Performance Certificates which make the value of energy efficiency clear to tenants and buyers.”
 

Without doubt, rents are going up.

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It is beyond me why Landlords and Agents go to the expense of marketing a property then fail to complete robust checks.

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It is generally recognised that Rightmove is the largest website. It may attract more leads for your property than other sources. Why do I still meet Landlords who advertise their properties on low quality websites, in local newspapers and at corner shop?

Our advance marketing techniques mean we offer your property TO LET many weeks in advance of its availability.

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Record rent at £7,857 a day rent for London

Demand to let prime London property is surging with rents reaching £55,000 per week for the cream of homes.

Wealthy visitors settling in London from overseas are driving the market – with cash-rich tenants from Russia, the Middle East and Asia battling for the best properties.

Harrods letting agency set the record with £55,000 a week- £7,857 a day – to rent a Central London flat to an Arab billionaire. His name and the flat location are closely guarded details as he demanded complete confidentiality.

“The prime property market in London is the fastest growing area in the UK. We have not only seen an increase in demand from buyers but also those looking to rent which in turn is pushing prices up,” said Shirley Humphrey, sales and marketing director of Harrods Estates.

Source: Property118 & The Independent Network of Estate Agents

Ministers have been asked to reconsider regulating private residential landlords – but have made it clear they consider selective licensing in certain areas is the way forward.

In Parliament, Labour MP Chris Williamson accused  housing ministers of allowing slum landlords to flourish.

But CLG minister Andrew Stunell made it clear that instead of regulating landlords, local councils could choose to introduce their own selective licensing schemes.

Williamson, who represents Derby North, said: “With more than one million people living in sub-standard privately rented accommodation, and with massive front-loaded cuts to council budgets making it harder to tackle slum landlords, the Housing and Local Government Minister is clearly failing in his responsibilities.

“However, as Henry Ford once said: ‘Failure is only the opportunity to begin again more intelligently.’

“Will the Minister therefore adopt a more intelligent approach and abandon his laissez-faire attitude to regulation, which is creating a charter for slum landlords, by implementing the light-touch licensing system recommended by the Rugg Review, adopted by Labour and welcomed by the National Landlords Association and the Association of Residential Lettings Agents?”

The Rugg Review recommended compulsory licensing of all letting agents plus a mandatory register of all private landlords.

Stunell had earlier told another Labour MP, Graham Jones, who represents Hyndburn in Lancashire, where the local council’s bid to introduce selective licensing was overturned as being unlawful by a collective of local landlords, with RLA support, that the Government has not carried out any assessment of the effectiveness of selective licensing.

Stunell said that local authorities would be encouraged instead to carry out their own reviews.

Jones said: “The main problem with selective licensing, of course, is that it does not deal with stock condition, and we see many properties in selective licensing areas that are squalid. Can the Minister assure local communities that the Government will allow councils to include the most recent decent homes standard as a licence condition?”

Stunell replied: “Licensing conditions are matters for local authorities when they draw up their proposals.”

Rents rose by their fastest rate in a year in August, bouncing up 1.2%, whilst tenants arrears grew by 19.5%.

The findings are in the latest buy-to-let report from LSL, which owns national chains Your Move and Reeds Rains.

It says that 10.7% of all UK rent was unpaid or late by the end of August – up from the 9% of rent unpaid or late in July. 

Unpaid rent totalled an estimated £300m across the UK in August, up 19.5% from the £251m unpaid in the previous month.

The mounting arrears come as the average rent in England and Wales rose by 1.2% to £713 per month, surpassing the previous record high of £705 in July. It means the average rent was £27 pcm higher than in August 2010. 
 
On a monthly basis, rents increased fastest in Wales and the South-East, where they rose by 2.1%. The next biggest increases were in London and the South-West, where they rose by 1.5% and 1.3% respectively. Rents only declined in the Midlands compared to July, falling by 0.4% in both the West and East Midlands.
 
David Brown, commercial director of LSL Property Services, said: “We are in the thick of the busiest time of year for the rental market, and red-hot demand for properties is driving rents up at their fastest monthly pace in the last 12 months.

“Recent graduates moving for their first jobs have further exaggerated the long-term and growing demand from frustrated buyers. In the last two years, average rents have risen by more than £50 a month.

“With significant improvement in the number of buyers able to secure a mortgage unlikely in the foreseeable future, competition for rental accommodation will not drop and further rent rises remain on the cards.” 
 
Brown said the scale of tenant arrears showed the pressure on tenant households.

He said: “With rents rising so quickly, soaring inflation and an uncertain economic outlook, over the long term we anticipate that rental arrears will become a growing financial problem for landlords.”

A London borough could become the first local authority in England and Wales where every single private landlord and rental property within its boundaries must be licensed.

Other local authorities are expected to follow suit, by applying selective licensing across their entire areas.

Newham Council has launched a consultation on compulsory borough-wide licensing. Inviting views, the council says: “Newham has a thriving private rented sector that provides affordable housing options for local people; but the council is concerned about possible overcrowding and anti-social behaviour in some properties.
 
“Therefore, the council is thinking of licensing private landlords and properties in the borough – in order to ensure that landlords, managing agents, tenants and owners operate legally and professionally."

The consultation runs until December 4.

Newham estimates that around one-third of households in the borough are in the private rented sector, numbering around 35,000 homes. It has already piloted a smaller scale licensing scheme for over a year.

Sir Robin Wales, mayor of Newham, said: “We want to ensure that private sector rented properties are well managed and meet a good standard. We also want to deal with the crime and anti-social behaviour that is sometimes associated with bad private sector rented housing.

“There are good landlords in Newham and we want to work with them. Unfortunately there are also some unscrupulous ones – which these proposals would target.”

Shelter welcomed the Newham move. Kay Boycott, director of communications, policy and campaigns, said: “We urge other local councils to follow Newham’s lead in sending a clear signal that enforcing the law against rogue landlords is a priority.”

Agents in city centres are reporting running out of rental property.

In London, WA Ellis said it urgently needed more stock, while in Leeds, agents reported that city centre apartments – of which there was a glut just a couple of years ago – are now in short supply.

In Birmingham, Major Mahil, of Belvoir,  said: “The Birmingham city centre rental market has just gone crazy. We recently rented out 45 properties in one month and tenants are actually now taking on properties without even viewing the property, but simply agreeing to apartments after looking on our website. 

“In particular, some of our international tenants are securing properties whilst still abroad in case they miss out before they arrive in the UK for their studies. We are working incredibly hard and making sure that the property pages on our website are updated every 24 hours to ensure all properties are current and still available.

“I have spoken to some of our competitors and there are hardly any rental apartments left on the open market.

“This is in complete contrast to the market about four years ago when we were flooded with apartments and would have about 100 on our books at any one time.

“We are now down to our last few properties and unfortunately have been forced to turn tenants down as we have no rental properties left.”
 
Mahil said the problem was worsened by landlords being unable to access the funds needed to expand their portfolios. 

He said: “Landlords are often unable to secure a buy-to-let mortgage, and when they do, the underwriters are requesting higher deposits of 20% to 30%, which can work out at about £40,000 and is too expensive for many landlords to afford.”

New property HEATMAPS can be found on all maps across the Zoopla website and may be viewed at varying zoom levels include down to individual postcodes.

In addition to the new heatmaps, Zoopla has also added a variety of other valuable local property information that provides an essential research tool for potential house hunters. Located on the ‘market overview’ pages of Zoopla.co.uk the stats include, for any geographic area, the number of properties on the market and average asking prices, the average size of properties in the area as well as the average price per square foot and much more.

Alex Chesterman, Founder & CEO of Zoopla.co.uk said, "The addition of heatmaps to our site allows users to easily visualise the relative property values in any area of the country. Together with the unique market data we are now making available, this is all part of our mission to empower users with the information they need to make the right property decisions and to become the most useful property resource in the UK.”

Activity in the housing market remained flat during July, with house prices slipping further, according to the July 2011 UK Housing Market survey published by the Royal Institution of Chartered Surveyors (RICS).

The survey reports that 22% more Chartered Surveyors reported that prices fell rather than rose in July. While this represents a slight improvement on June's net balance of -26, this reading has now remained in negative territory for over a year. Large deposits required by lenders appear to be a stumbling block for many would-be buyers.

New instructions, which saw a slight upturn during the early part of the summer, fell back in July, with seven per cent more surveyors reporting falls rather than rises in new houses coming onto the market. With prices continuing to slip, it appears that many potential vendors are unwilling to accept reduced selling prices, so are reluctant to enter the market.

Elsewhere, demand edged up during July, with new buyer enquiries moving to a net balance of +5% (from 0%). Interest from potential buyers has now been relatively flat since the start of the year.

Across the country, London continues to buck the national trend as the only region to report a positive net balance for house prices, with 30% more surveyors reporting rises rather than falls. The West Midlands and the East of England saw the most negative readings, with net balances of -44 and -40 respectively. Meanwhile, the capital recorded the strongest level of new buyer enquiries, again outperforming the rest of the UK.

Significantly, the average number of sales per surveyor over the past three months dipped to 14.2, the lowest level since June 2009. Alongside this, the average number of properties presently on surveyors' books increased to 70.2 (from 69.7 in June).

Looking ahead, pessimism still surrounds future house price expectations, with 13% more surveyors predicting prices to decrease rather than increase over the next three months. However, sales expectations are rather more upbeat, with a net balance of 15% more respondents predicting sales to rise over the coming three months.

RICS spokesperson, Ian Perry: "The UK housing market continued to stall during July; prices edged lower and sales levels remained subdued. While the holiday season appears to have had some impact on the market, the continual problem of inaccessible mortgage finance is still preventing first time buyers from accessing the market. Unsurprisingly, with prices continuing to fall, many would-be sellers seem unwilling to lower their expectations and are reluctant to place their property on the market."

Halifax House Price Index – July 2011

The latest House Price Index has been published by Halifax, showing that:

• House prices in the three months from May to July were 0.5% higher than in the preceding three months. This is the first increase in this measure of the underlying trend since May 2010 (0.1%)
• The average UK house price in July was marginally higher (0.7%) than in December 2010 on a seasonally adjusted basis, at £163,981
• On an annual basis, prices in July were 2.6% lower as measured by the average for the three months to July against the same period a year earlier. This was the second successive improvement in the annual rate from a low of -4.2% in May
• There has been little change in housing activity trends.

Royal Albert Hall private box for sale at £550,000

The box, which can seat five people, is located on the second tier of the Grade I listed building in Kensington, central London, which opened in 1871.

The private box is the only remaining one in the hall to retain the original timber veneer and mirrored panels, estate agent Harrods Estates said.

Earl Spencer and the Duke of Devonshire have previously owned the box, but the current owner has not been revealed.

The box is located on the eastern side of the auditorium and has about 865 years remaining on the lease.
Queen Victoria's seats

When the building was being constructed in the 19th Century, several seats were offered for sale to private individuals on a 999-year lease.

Queen Victoria bought 20 of the 1,300 privately-owned seats for £100 each, in addition to the Queen's box.

The seats and the box, located on the Grand Tier, are still owned by the monarchy.

Shirley Humphrey, sales and marketing director for Harrods Estates, said: "The boxes at the Royal Albert Hall are extremely rare, and those with original features are even rarer, so we anticipate to receive a high level of interest."

The estate agent said it had sold other private boxes in the past, including a 10-seater Grand Tier box - one of the largest at Royal Albert Hall - for £1.2m in June 2008.
source to INEA: BBC

The kitchen comes first

It seems that the kitchen is the heart of the home. In a recent poll conducted by leading property maintenance and refurbishment company, aspect.co.uk, one quarter (25 percent) of homeowners stated that they would renovate their kitchens first, if given £10,000 towards refurbishing their property.

This was followed by 20 percent of homeowners who would choose to do a general paint and refresh, and 13 percent who would do up their bathrooms. Re-roofing and updating the garden were the choices of 11 percent of property owners questioned, followed by nine percent who would choose to put a loft extension in.

Commenting on the survey findings, William Davies, managing director at aspect.co.uk, said: “Clearly the kitchen is an integral part of the home, and it would be true to say that we are seeing increasing numbers of people looking to refurbish and update their kitchens and bathrooms.

“Despite the recession and continued economic uncertainty, the home refurbishment market has remained buoyant throughout. We have noticed a particular trend for bathroom renovations during that period, possibly because of the lower overall cost of updating the bathroom by comparison to the kitchen.”

source: INEA via PWWeb

Estate agents are selling property at the rate of just one home a week, says the RICS.

The institution’s new report, out this morning, says that the number of sales per estate agency member has slipped to an average of 14 in the three months to the end of August – taking transaction levels to a 26-month low.

The RICS asked its members why they felt sales levels are so low.

The most commonly cited reason was general economic uncertainty (79%). In addition, nearly three-quarters of surveyors (70%) felt a lack of mortgage finance was impacting negatively on transactions, and 40% felt that fear of price falls was keeping buyers and sellers out of the market.

New buyer inquiries also fell back in August, and surveyors reported that house prices dipped during the month, other than in London.

The majority also expected house prices to fall further.  
 
RICS housing spokesperson Alan Collett said: “For the time being, our indicators suggest that demand for homes remains broadly steady, albeit at relatively low levels, despite the renewed bout of economic gloom.

“However, the risk is that the worsening economic picture will gradually begin to have a more material impact on sentiment and discourage potential house purchasers even where mortgage finance is available.”

Agent Tim Brown, of George F White in Bedale, North Yorkshire, said: “Property must be priced realistically if it is going to sell this year or in the future. The sooner vendors come to terms with this the better. Too many agents continue to set unrealistically optimistic guide prices in order to gain instructions, but are doing their clients no favours by doing so.”

Another agent, Simon Hickling, of Maxey & Son in Wisbech, Cambridgeshire, said: “Mortgages are still very difficult to obtain, leading to a lack of first-time buyers: we have not had one for over 12 months.”

A separate report from the Home website paints a picture of a lucklustre housing market going into autumn, with asking prices falling back slightly and houses typically taking 120 days to sell – 15 days longer than last September.

The site, which lists properties taken from virtually all the property portals and websites in the UK, warned of slides in property prices, trapping more people in negative equity.

It said: “The consequences for the UK property market are that fewer and fewer properties will change hands.

“Even those people who must move through work, divorce or a growing family will choose to rent out their property rather than accept the financial loss required to make a sale.”

The prime Central London lettings and sales market remains strong with continued interest from abroad, according to the latest research from W A Ellis.

Richard Barber, Partner in Residential Sales, said: "The Central London property market has continued to confound pundits despite the huge volatility within stock markets across the globe and the continuing debt crises throughout the Eurozone and the United States.

"Thankfully, the widespread rioting does not seem to have had an impact on people's appetite for London property either. The level of interest in high-quality flats and houses remains strong and the past three months’ performance has been impressive. Whilst we have experienced the usual slower period throughout August (particularly with Ramadan diminishing Middle Eastern interest), we have continued to agree sales, and, contrary to the statistics of national websites, have not experienced sales falling through or dramatic reductions in asking prices. With 70% of overseas buyers completing on purchases in prime Central London, international wealth continues to underpin values.

"The lack of high-quality stock is still obvious: home owners are seeing capital growth of around 10%, and, with volatile stock markets and low interest rates, it currently makes sense to hold on to property. A client of ours who owns two extremely good properties (occupying one as his principal residence) has decided to continue to let the other property as the yield, compared with other investments, is still good (at approx 3.2%) so he does not wish to crystallise the capital gain at this time. This is, I am sure, a commonplace occurrence amongst potential Central London vendors.

"Naturally, there will always be vendors with property to sell and whilst the traditional 'drivers' of the market have been death, debt and divorce, we are now faced with the relatively new phenomenon of the discretionary seller. This is effectively a vendor who has no need to sell but could be tempted by a ground-breaking offer and if he or she is lucky enough to be the

owner of a highly desirable 'special' property, they may well receive one, or in some cases, two such offers, a scenario we have witnessed on several occasions recently.

"Whilst it would be foolhardy to make rash predictions against the background of continued financial turmoil, it would appear that good-quality Central London property remains a relatively safe haven in these difficult times, so those who do put their property on that market are likely to achieve a good price."

Lucy Morton, Senior Partner and Head of Lettings at W A Ellis, said: "July and August can traditionally be quiet months in the lettings calendar followed by September heralding a blitz of activity. This year has been a very different story: in both months, activity and completed lettings have been 50% up on this time last year and we go into autumn with this continued frenzy of activity.

"Demand continues to outweigh supply and the press is once again highlighting the fact that we are well into generation rent with the average person having to wait ten years to save a deposit for a purchase. We not only have those tenants who are forced to rent for financial reasons, but also the frustrated purchaser who is simply unable to find a suitable property to purchase due to the lack of stock. In addition, high net worth students arrived in London in their droves this month, together with the latecomers into the family market who have left it to the last minute to get settled.

"This has led to heightened demand in the rental market and, as such, bidding wars are commonplace. It is increasingly very much a landlords’ market with landlords dictating the terms. Void periods are well below the three-week mark on a desirable property presented in first-class condition and tenants are paying substantial increases to stay in their current homes.

"The short-term lettings market also continues to see heightened activity due to the impending Olympics. With the major hotels being fully booked, there is a rush to reserve short-term lettings from next July at as much as six times the normal lettings values. It remains to be seen how many landlords will be tempted, but they should be aware that they may well be in breach of planning regulations which stipulate no lettings under 90 days. Our concern is that some may fall into the trap of making a short-term gain and suffer heavy wear and tear on their property with voids either side and turning away a stable, long-term let."

More estate agencies will close as transactions stay at drought levels, Winkworth has told its shareholders – whilst also revealing that it has had approaches from 35 agents this year which want to sell up.

The firm is predicting just 575,000 housing transactions this year.

Reporting on its results for the first six months of this year, CEO Dominic Agace said that the downturn would lead to consolidation. He said: “UK residential transactions fell in the first half of 2011 on mixed sentiment towards the housing market but are still set to match 2010 levels for the year as a whole, with the prime central London market outperforming national trends.

Fewer vendors put their homes up for sale during September, as fears over the economy continued to impact negatively on the housing market, according to the latest UK Housing Market survey for September 2011, from the Royal Institution of Chartered Surveyors (RICS).

New instructions, which indicate supply levels to the market, fell back during September, with 5% surveyors reporting supply of property fell rather than rose. Surveyors report fragile consumer confidence and continuing fears over the economy are causing many to think twice before putting their properties up for sale.

Despite this, new buyer enquiries actually increased marginally during September; with 3% more Chartered Surveyors reporting an increase rather than decrease in demand (from -2%). However, although surveyors note that more mortgage products are becoming available, the large deposits required by lenders continue to act as a barrier for many would-be buyers.

Stocks on surveyors' books rose slightly during September to an average of 68.9 (from 66.9). Meanwhile, the number of sales per surveyor over the three months to August also increased fractionally, from 14.1 to an average of 14.5 (on a seasonally adjusted basis). Although the sales market remains challenging, respondents report that sales are still taking place on realistically priced properties.

The house price balance remained unchanged during September, with 23% more surveyors still reporting prices fell rather than rose. Price expectations also remained unmoved from August; with a net balance of 23% anticipating prices will decline rather than rise over the next three months. Every part of the UK, including London, recorded some degree of negative price expectations during September.

Only sales expectations continued to be positive for the coming months (+12%), although they fell back from the previous month's reading (+16%). Surveyors predict investors in some parts of the UK will now begin to return to bricks and mortar as a haven from the turbulent financial markets.

RICS housing spokesperson, Michael Newey: "Falling supply of fresh stock is indicative of general fears overhanging the economy, with many potential sellers preferring to stay put for now. As a result, the UK housing market remains pretty flat with activity level generally subdued.

"Although it is hard to see what will give the market a lift in the near term, the announcement of a further raft of quantitative easing from the Bank of England will help to at least keep mortgage rates down. This, if nothing else, should ease the pressure on existing homeowners and limit the risk of a material pick-up in repossessions."

Although repossessed property purchases can make good investment opportunities, just because it is cheap doesn’t mean to say that it is worthwhile buying as a rental investment.

A client was looking recently into the feasibility of purchasing a couple of newish luxury repossessed apartments in Manchester City Centre. They represented good value when comparing the values in a previous era. However, whilst there would be strong rental demand, the rental values were insufficient to generate a good yield, especially when considering an expensive service charge. The risks assigned to the revenue income rendered this a poor deal.

Conversely, I recently sourced and helped two clients secure a very nice property through auctions. This resulted in apartments on popular developments sourced at sub £80,000 with rental values at £650.00 pcm.

Opportunity Lead or Finding a Suitable Property

This is a massive subject and one I could write a book on. It is my opinion that many investors see a property ‘bargain’ and then evaluate it to make it work for them or fit into their portfolio. Without doubt, the best way to acquire a new investment property is comprehensively evaluate your objectives and then go looking for the property that matches your criteria.

I can often assist clients to identify suitable property criteria and through our network of property and investment contacts, source potential property opportunities.

Should you wish to discuss your property requirements please call me on 07702 649 623

Regards, Alison O’Connor

New research has shown that whilst all retail sectors are suffering to varying degrees, it is the traditional high street that is experiencing the most pain, since it is being buffeted by a ‘perfect storm’ of stalled national economic growth, accelerating on-line spending, multiple retailer branch consolidation and impact from both in-town shopping centres and out of town retail, including the supermarkets.

The first Footfall Focus from Colliers International has shown that high street footfall, excluding Central London, has fallen, on average, by more than 10% in just three years and that footfall on primary high streets has, on average, fallen at double the rate of that for secondary streets, albeit from a much higher base.

Footfall in High Streets has declined particularly rapidly during the second half of each year (H2), which includes the important pre-Christmas run-up, traditionally the busiest time of the year for retailers. The Footfall Focus also revealed that there huge differences in footfall between the strongest and weakest high streets, suggesting that local factors may be as important as national ones.

For example, over the past couple of years, footfall has fallen by up to 25% in some High Streets including Commercial Street in Leeds and Eastgate Street in Gloucester, whereas in other locations, such as Regent Street in Swindon and Commercial Road in Bournemouth, flows have actually risen by up to 7%.

Dr Richard Doidge (pictured), Director of Research Consultancy at Colliers International commented: “Footfall is a good but under-researched measure of the health of a centre. Levels have fallen along most of our high streets in recent years, especially outside of

Central London, mirroring the trends in other indicators such as voids and rents.

“To halt the decline of the high street as a retail destination, falling footfall levels have to be reversed. This will require an improvement in the economic fortunes of country and consumer. In addition, national planning policy must continue to support in-centre retail development over out of centre. High streets must also be made more desirable places at which to shop, or carry out other activities, with particular attention being given to streets that find themselves out of favour following the opening of a new purpose built shopping centre.”

No Deal Noel could lose £1m

Noel Edmonds lost a High Court battle yesterday in a dispute with a friend over property schemes.

The Noel’s House Party presenter accused his business partner Ulrik Lawson of reneging on a property deal which left him £500,000 out of pocket.

In turn, Mr Lawson sued Edmonds to recoup cash for apparent building work on another £2million house bought by the Deal Or No Deal host.

Edmonds could be left £1million out of pocket after being ruled against in both aspects of the case.

In the first claim, the 62-year-old said property tycoon Mr Lawson owed him over a business venture in which they bought a £2.1million country estate in South Tawton, Devon, in 2006.

The court heard that Edmonds and Mr Lawson each initially invested £300,000 in the deal, planning to build houses on the site.

However permission was never granted. And Edmonds told the court he had lost £572,000 in total, in part because the property was sold two years later at a loss.

At that time, a court heard, Edmonds received just £52,000 back, while Mr Lawson got his full £300,000.

Edmonds told the court that Mr Lawson had persuaded him to ‘come on board’ by agreeing that his investment would be ‘repaid in priority’ in the event of a sale.

Edmonds said Mr Lawson owed him more than £370,000 overall and told a court he had been ‘betrayed’ by his friend.

But in a written judgment, handed down in London yesterday, Judge David Wilcox, who heard evidence in Bristol in September, ruled against Edmonds, saying he was not entitled to a payout from Mr Lawson.

Mr Lawson had also made a £260,000 counter-claim against Edmonds for alleged unpaid work on an Exeter property.

Edmonds said Mr Lawson had agreed to manage the refurbishment of the property for free.

But Mr Lawson, 50, denied this, arguing that he was a ‘construction professional’ who ‘could not afford to work in such a way’.

And yesterday Judge Wilcox said: ‘I do not accept that [Mr Lawson] agreed to undertake the [work] for no cost as alleged by Mr Edmonds.’

Edmonds had told the court that Mr Lawson was like ‘the brother he never had’.

But Judge Wilcox said: ‘The close relationship...later became an impediment.’

A hearing to decide costs will be held at a later date, but Edmonds could be liable to pay more than £800,000.

Source: Mail on line and INEA

Land Registry Latest Figures

New Land Registry quarterly sales figures show house prices across England and Wales were 2% down in the third quarter of this year, compared with the same period last year.

But once again, prime central London bucked the trend, with prices in the boroughs of Kensington & Chelsea, and Westminster, hitting new records.  

The average price of a property in Westminster rose by 7% in the third quarter to £1,006,407, breaking the £1m average price barrier for the first time.

Property prices across central London as a whole rose 8.7% on the previous quarter and 13% on Q3 last year.
 
Naomi Heaton, CEO of property investment fund managers London Central Portfolio, said: “Average prices in prime central London now stand over 15% above the pre-credit crunch peak.

“It is clear that investors still recognise the value of London’s premier real estate as a safe haven investment, as well as a hedge against inflation and politico-economic instability elsewhere in the world.

“For the time being, Eurozone buyers are likely to be leading the pack.

“Nevertheless, transaction levels are still down by almost a third against the long-term levels. This is a symptom of vendors sitting tight, rather than a reduction in buyer appetite, ensuring continued upward pressure on prices.”
 
She warned: “The traditionally buoyant autumn market has failed to materialise and we do not expect much action in the market for the rest of the year. Investors around the world seem browbeaten by the incessant stream of negative news.”

Lending Down

Lending for house purchase slumped for the second successive month in October, it has been forecast.

Valuers e-surv say that house purchase approvals fell from 50,967 in September to 50,382 in October, a 1.1% decline. It said that first-time buyers and those with smaller deposits were hit worst.

The business, which is part of the LSL group, makes its monthly forecasts based on its own data, and claims to be within 1% of official figures when they are published.

The firm says that although house purchase mortgage approvals rose 6.7% year-on-year in October, the same month in 2010 was a weak comparator.
 
The latest month-on-month fall was triggered by the tightest lending conditions seen since February.

The average deposit size was 40% in October, with lower income buyers struggling to meet criteria for high LTV products. Loans with a deposit of 15% or under accounted for less than one tenth of all lending in October, compared to almost a quarter in 2007.

e-surve said that lenders are targeting low LTV borrowers because of their fears over restricted credit conditions and the protracted crisis in the eurozone.
 
This has sparked a fall in the number of lower income buyers, with purchase approvals falling fastest in the cheapest property brackets.

Loans for purchases below £250,000 fell from 36,187 in September to 35,772 in October.

Loans with a deposit of 10% or under – a typical deposit size for first-time buyers – accounted for just 1% of total lending for house purchases in October. By way of contrast, this figure was 13% in October 2007.
 
The overall decline was cushioned by consistent activity in the wealthier price brackets. The number of loans for properties over £375,000 remained stable.

As a result, these wealthier buyers continue to represent a disproportionate share of the market.
 
October’s figures confirmed the reversal of the positive summer trend of higher LTV lending and increasing numbers of first-time buyers.

They also help justify the latest Credit Conditions Survey from the Bank of England, which said a sustained period of tight funding conditions would prevent lenders from growing their loan books in Q4 2011.
 
Richard Sexton, director of e.surv, said: “With perhaps the notable exception of buy-to-let lending, lenders are in no position to begin growing their loan books in the current climate, although noises coming from some sections of the market would have you believe otherwise.

“Credit conditions are sclerotic, and banks are under intense pressure.
 
“Banks are becoming more cautious, having upped their high LTV lending over the summer in a bid to increase their market share. They are now focusing on wealthier borrowers.

“It looks like they are still pushing high LTV mortgages, but the truth is, the criteria are so strict, most first-time buyers aren’t eligible.”

This was not a statement filled with good news.

Since the Chancellor has sat down, it has emerged from a close reading of today’s reports that:

• 710,000 public sector jobs will be lost, rather than the 400,000 predicted in March
• National debt is set to be nearly 9 percentage points higher in 2015/16 than predicted in March: 77.7% versus 69.1%
• The OBR has confirmed that two thirds of the impact of low interest rates is offset by lower tax receipts
• The IFS states that living standards in 2015 will be no higher than they were in 2001

There will, undoubtedly, be more details to come.

The main good news came in the form of significant investment in infrastructure in this spending review period and next, as set out in the revised National Infrastructure Strategy. However, no matter how ‘shovel ready’ these projects are, questions will undoubtedly be raised in the coming hours and days about whether the Chancellor has done enough to deliver the Government’s promises on growth.

Housing

As announced in the Housing Strategy, the Government will:

• introduce a new build indemnity scheme to increase the supply of affordable mortgage finance for new build homes
• reinvigorate the Right to Buy
• launch a new £400 million Get Britain Building investment fund, and will issue a prospectus to interested developers by the end of the year.

The Autumn Statement also stated that the Government will not be extending the current stamp duty exemption for first time buyers purchasing properties worth £250,000 or under, so this exemption will end on 24 March 2012 as planned.

The Autumn Statement says that the policy has been “ineffective in increasing the number of first time buyers entering the market”.

Planning

The Government will:

• introduce a 13-week maximum timescale for the majority of non-planning consents, to speed up the consenting process and give certainty to developers
• ensure that there is a more effective mechanism for applicants to obtain an award of costs, if there is an appeal against refusal of a planning permission where a statutory consultee has acted unreasonably, through measures to be implemented in summer 2012
• build more flexibility into the new major infrastructure planning process, particularly in the pre-application phase, by summer 2012
• ensure that compliance with the Habitats and Wild Birds Directives does not lead to unnecessary costs and delays to development. The Government will review the directives by Budget 2012
• review planning appeals procedures, putting forward proposals for implementation in summer 2012
• consult on a proposal to allow the reconsideration of those planning obligations agreed prior to April 2010 where development is stalled
• consult on proposals to allow existing agricultural buildings to be used for other business purposes such as offices, leisure and retail space, to make it easier for rural businesses to find the premises they need to expand.

Chancellor George Osborne has not extended the Stamp Duty holiday for first-time buyers despite massive lobbying from the mortgage and estate agency industries.

The decision has provoked fury, with critics saying that the Government had not meant what it said about kick-starting the housing market.

The Government, however, says the Stamp Duty break has proved “ineffective” and it will end, as planned, on March 24. It intends to produce proof of how it has not worked.

The RICS warned that ending the Stamp Duty holiday could distort the market with a mini boom and bust.

It said: “By choosing to end the relief in four months rather than immediately, there is a clear risk that there will be a spike followed by a dip in the housing market as buyers rush to take advantage of the relief before March.”

It said it was “hardly surprising” that the Stamp Duty break had failed to help first-time buyers, given the lack of affordable mortgages and homes on the market.

In walking away from the Stamp Duty concession, the Government will instead concentrate on other measures announced in its new housing strategy, notably its controversial mortgage indemnity scheme on which it has now unveiled a few more details.

The Chancellor revealed that the Government will underwrite the 95% mortgage scheme, which is available only for new-build purchases, by up to £1bn.

The Autumn Statement said: “The Government will take on a contingent liability which will build up in line with purchases under the scheme, to a maximum of £1bn.”

Under the scheme, taxpayers will be responsible for 5.5% of the value of each home purchased. Builders will put 3.5% of the value of each home sold under the scheme into a funding pot, which will be called upon by lenders if the properties are repossessed at a loss.

The initiative aims to help 100,000 households purchase a new-build home with a 5% deposit.

But it is unclear how many first-time buyers have succeeded in getting on to the housing ladder because of the current Stamp Duty holiday, although evidence is that they have melted away.

According to the National Association of Estate Agents’ latest and possibly ill-timed report, the proportion of first-time buyers fell to just 16% in October from 23% the month before – despite the Stamp Duty holiday exempting first-timers on purchasers of up to £250,000.

The Government says it will publish analysis showing that the tax break has not helped boost first-time buyer numbers.

Calls to extend the break had come from various organisations, including the Council of Mortgage Lenders, Nationwide, Legal & General and others.

The NAEA said there was little in the Autumn Statement to give comfort to the property industry, while Robin King, director of asset management firm Movewithus said the Chancellor had failed to tackle the “first-time buyer crisis”.

He said the mortgage indemnity scheme would be of little help to most people, and said the Government should have tackled lending practices.

Veteran estate agent Trevor Kent said that taking away the Stamp Duty break was a 'kick in the teeth' for first-time buyers now faced with having to find £2,500 on top of their 'inflated deposits', simply for the 'privilege of paying for a roof over their heads'. He said that it would make the difference between first-time buyers deciding to move or stay put.

Peter Rollings, CEO of London estate agents Marsh & Parsons, accused the Government of giving with one hand and taking away with the other.

He said: “The failure to extend the holiday for first-time buyers will undermine the Government’s own attempts to kick-start the first-time buyer market across the country.

“While the new mortgage indemnity scheme may improve the accessibility of mortgage finance to many credit-worthy borrowers, first-time buyers will need to save for longer to pay the Stamp Duty bill as they move.

“If the Government aimed to stimulate the national first-time buyer market in spite of the wider economic conditions, combining the extension of the Stamp Duty holiday with the new indemnity scheme would have boosted the chances of a significant increase in first-time buyer activity. In effect, Osborne is giving with one hand and taking away with the other.
 
“But the Chancellor has also missed an open goal by failing to address the outdated and iniquitous Stamp Duty tax system.”

CML director general Paul Smee said: “It is disappointing to see the Government withdrawing the stamp duty concession that currently benefits first-time buyers.

“While the concession may not have stimulated additional demand, it was a significant help to home owners entering the market and its removal runs counter to the themes of the new housing strategy. It is likely that we will see a bunching of eligible first-time buyer transactions early next March to beat the expiry date on the concession.”
 
Grenville Turner, chief executive of Countrywide, the UK’s estate agency and financial services chain, also said he was disappointed at the ending of the Stamp Duty holiday – and cast doubts on whether the mortgage indemnity scheme would really deliver. He said: “It is disappointing that the Chancellor did not take the opportunity to extend the Stamp Duty holiday for first-time buyers and has instead added another barrier for first-time buyers to get on to the property ladder.

“A positive antidote to assist the vast majority of home movers and the resale market would have been a Stamp  Duty holiday for all home buyers up to £250,000.
 
“Whilst the measures announced in the Government’s housing strategy are a step in the right direction, they only scratch the surface of  the fundamental issues that have restricted the housing market in recent years – housing supply and the high level of deposits required.

“The prediction that 100,000 families will benefit from the Mortgage Indemnity Scheme may be optimistic, as we are yet to hear the detail of whether it enables lenders to offer cheaper rates.”

Charles Haresnape, managing director of Aldermore Mortgages, said: “First-time buyers need as much help as possible and the reintroduction of Stamp Duty on purchases below £250,000 will be a significant disincentive.”

Mortgage borrowing costs are likely to rise next year, the Bank of England has warned, whilst revealing that between 5% and 8% more households than known about are in trouble with their mortgages – but lenders are showing them forebearance and so their woes are not showing up on official figures.

It means that official arrears figures are being ‘significantly’ masked, according to a new report from the Bank of England.

Its Financial Stability Report has released the findings of a review by the Financial Services Authority, which – at the Bank’s request – looked at the potential scale of the problem.

The Bank was increasingly concerned that the true arrears picture was being masked by lender action.

The Bank’s FSR says: “FSA estimates indicate that around 5% of these households would have been in arrears of six or more months if they had not received forbearance.

“That suggests that, in the absence of forbearance, the mortgage arrears rate might have been 0.5 percentage points higher at 1.7%, even at near-zero official interest rates.”

The report warns that “lenders who have exercised greater forbearance could be more exposed to losses in the event of a sharp deterioration in macroeconomic conditions”.

Yesterday's gloomy report also warned that mortgage borrowing costs are set to rise next year, as banks which are heavily exposed to risk in Eurozone countries raise the costs of lending to each other.

Consumers have given a decisive clue as to why asking prices have been slow to register any decline – most simply do not believe that house prices will go down.

Indeed, more than one in five confidently expect them to go up.

Whilst Rightmove has finally reported a dip (of 3.1%) in asking prices within the last month, asking prices have still held up remarkably well. They are 1.2% up on a year ago, and at £232,144 are some £70,000 ahead of ‘actual’ prices reported by the Land Registry.

But while agents have been in the firing line for alleged over-pricing, a new survey –ironically by Rightmove, which frequently tears its hair out over the issue – goes some way towards solving the mystery of the reality gap.

The massive poll, of over 26,300 consumers, shows that two-thirds (63%) do not believe house prices will be lower in a year’s time than they are now. They expect them to remain the same or, according to 22%, to be higher.

Less than one-third (three in ten) expect lower prices – unchanged from a year ago.

Despite ongoing economic gloom, the optimism among consumers is almost universal. While Londoners are the most optimistic, with 29% of consumers expecting higher house prices in 12 months’ time, in Wales – the most pessimistic regions – only 35% are predicting price drops over the coming year.

A baffled-sounding Miles Shipside, director of Rightmove, said: “The public’s belief in the value of bricks and mortar seems to defy the deteriorating economic situation. This is a clear message that the majority of consumers view the property asset class to be as ‘safe as houses’ in these times of economic uncertainty.”

He added: “It should be remembered that in spite of the overall confidence expressed in this survey for property prices, transactions volumes are still well down on historic norms. Economic stability in the UK and Eurozone will be needed before many are willing or able to re-engage with the property market.”

The survey did, however, reveal some extremely localised opinions.

For example, in the North-West 26% of respondents in Preston expect prices to be higher in 12 months’ time, compared with just 14% in Lancaster only 20 miles away.

Shipside said: “Local variations highlight how patchy confidence can be, depending on an area’s housing mix and wealth demographics.

“The wealthier middle-to-upper price brackets may be feeling fairly blast-proof from any further economic eruptions, and see a less turbulent outlook.

“Meanwhile, some of the more cash-strapped terrace and semi dwellers may feel far more exposed to the negative pressures of reduced mortgage availability and job uncertainty.”

Traditional applicants have vanished from estate agents’ offices, with nine out of ten prospective buyers now booking viewings online only when they want to see a specific property.

Instead of registering with agents when they want to start looking in a particular area, house buyers now wait to see a particular property pop up online, and only then contact the agent.

Yet apparently very few first spot their next home on Rightmove.

The extraordinary claims appear factual and are based on statistics gathered by software supplier Expert Agent from its 1,200 member branches.

The website has analysed the 209,000 applicant registrations made to its members since August 1.

Of these, just half (105,000) made one or more viewing appointments – but of that number, over 90% booked a viewing at the same time they registered.

Mike Griffiths, founder of Expert Agent, says: “That means that almost all of the viewings were made with applicants who didn’t bother to register until they saw something that interested them enough to book an appointment.”

Intrigued, Expert Agent looked at where applicants are finding the properties they decide to view, but admits that statistics are not particularly accurate nor that easy to analyse, as each member branch can change their inquiry and status prompts.

Nevertheless, the statistics it has come up with are startling: it found that just 4% of the total 209,000 applicants are recorded with Rightmove as the source.

A further 9% show the source as ‘our website’.

In dismaying news for other portals, only 2% show sources that include Zoopla, Prime Location, FindaProperty or ‘other national portals’.

But the most extraordinary statistic is that getting on for half of agents do not know where the applicant first spotted the property: 44% are ‘not known’ or ‘I forgot to ask’.

Nor do agents appear that keen to follow up on an applicant’s interest: 29% do not have an email address recorded and 36% do not have a mobile number.

Griffiths admits that it is difficult to draw conclusions, with a diverse number of member agents all operating differently.

However, he says: “We’re surprised that the inquiries from ‘own sites’ is so much higher than Rightmove.

“However, Rightmove visitors that request full details on an Expert Agent hosted property get redirected to the member’s own website, so maybe this skews the figures.

“Our members’ stats suggest that old-fashioned applicants have disappeared and that house buyers now sit on the virtual fence till they see something they like and then reveal themselves to the agent in question
 
“It is so significant that we’re making changes to Expert Agent to accommodate this.
 
“Currently, our product assumes that applicants register, are sent details and then make viewing appointments.

“However, our figures suggest that we need quicker and better ways to manage the sudden appearance of a potential buyer who just wants to make viewing appointments.”
 
EAT would be interested in your views: do you still get people ringing up to say, ‘We’ve just started to look for a property, please can you put us on your lists’? Or has the traditional applicant well and truly vanished?

Banks approved 6% fewer house purchase mortgages in September than in August, with 17,000 would-be first-time buyers left out in the cold.

The figure of 33,130 house purchase approvals was, however, 8% higher than in September last year.

Figures from the British Bankers Association show that the number of remortgage approvals in September was also down on the August figure, by 8%, although about the same as in September 2010.

Despite the monthly dips in new approvals, banks’ gross mortgage lending totalled £8.4bn in September, up 7% on September 2010.

The BBA reports that growth in gross mortgage activity is being driven by the buy-to-let market.

David Dooks, statistics director, said: “A modest stimulus to gross mortgage lending is coming from the buy-to-let sector as rental yields continue to improve.”

Jonathan Moore, director of online rental accommodation website Easyroommate, said: “The recent improvement in gross lending may seem like welcome news to buyers, but the increase has more to do with buy-to-let landlords taking advantage of the current rental market than a much-needed surge in lending to first-time buyers.

“Strict lending criteria and absurdly high deposit requirements are continuing to keep mortgage finance out of the hands of the average first-timer, and this is flooding the private rented sector with demand.

“Each month there are 17,000 more frustrated buyers than before the downturn having to rely on rental accommodation because they are unable to buy.

“This is driving up competition for accommodation in both the flatshare sector and the wider rental market. For many investors, these conditions are too attractive to ignore, and we are seeing growing investment in buy-to-let.

“While this may well alleviate some of the pressure on the current stock of rental homes, the supply will have to increase at a much faster rate to match growing demand and limit further rent rises.”  

Moore based his claim of 17,000 first-time buyers per month being left out in the cold on Council of Mortgage Lenders figures.

The CML says that in the 12 months to August an average of 15,800 first-time buyers a month secured mortgages, compared to an average of 33,100 a year between 2002 and 2007.

Richard Sexton, director of valuation firm e.surv chartered surveyors, said: “The mortgage market is doing its best to stagger on.  

“The ailing economy is entering a state of rigor mortis, and the crisis afflicting Europe makes any resurrection of growth look unlikely.  

“The temptation for lenders to pull back from the market and recoup equity over the winter is becoming overwhelming.  

“First-time buyer numbers have fallen to their lowest since November 2010, and purchase approvals with a deposit of 25% fell to their lowest level in six months in September, both of which are tell-tale signs of a struggling mortgage market.  

“Supply of credit is painfully restricted, meaning there is almost no margin for lenders to grow their loan books, so they are being understandably cautious and focusing on targeting borrowers with big deposits.”

Someone had to be first, and as November comes around, Hamptons International is off the starting blocks with its housing market forecasts specifically for next year.

There are no great surprises – and the biggest surprise will be if at least one  of the wildly varying house price indices doesn't manage to prove Hamptons’ forecasts by the end of next year.  

The firm is predicting that prime London will continue to power ahead, with a 4% rise in house prices, but the rest of London will have a rise of just 1%, and the South of England market will remain flat. Across the UK generally, it forecasts a drop in house prices of 2%.

Marc Goldberg, head of sales at Hamptons International, said: “Set against a backdrop of continued economic uncertainty, we are expecting the 2012 property market to be a more conservative re-run of 2011.” 
 
The firm is also expecting to see a rising rental market with 2% growth in rents across the South, a 5% rise in London, and 3% in prime London.

Lesley Cairns, head of lettings at Hamptons International, said: “For the first time ever, the private rented sector will house more people in the UK than the social rented sector, which will put continued pressure on prices.”

Strangely, there is no mention of the effect the Olympics will have on house prices. Or widespread snowfalls in July. Or a royal divorce.

EAT’s advice is, expect the unexpected. Which you can be sure won't stop other contenders coming up with surprisingly detailed 2012 forecasts over the next few weeks.

Property industry contributes more to UK economy than banking

Commercial property is larger than the banking industry, employs close to one million people and represents 5% of the £2.4 trillion invested by insurance and pension funds a new report from the Property Industry Alliance has revealed.

The Property Data report published this week, sets out key facts about commercial property, a sector which makes up a major part of the UK economy in its own right as well as providing a platform for virtually all other economic activity including the provision of work places, shops and leisure facilities.

The data reveals:

- The sector contributes £46 billion to UK GDP, equivalent to 3.5% of the UK's GVA which is a comparable contribution to that of the engineering industry;

- Commercial property's value in 2010 increased to about £516 billion, equivalent to approximately a quarter of the London Stock Exchange;

- Commercial property continues to play an integral role in the financing of retirement with £116 billion invested by insurance companies and pensions funds;

- The sector employs over 800,000 people, with over half a million employed in the construction, development and repair of buildings alone.

Sir Robert Finch, chairman of the Property Industry Alliance, commented:

"The report shows the importance of the commercial property industry to the overall UK economy should not be underestimated and the crucial role it will play in our economic recovery.

"From providing places for people to work, shop and play through to playing a major role in funding retirement, the sector is a crucial cog in the UK economy. In legislating the Government must be mindful of this."

Source: my introducer and INEA

UK property most sought after in the world

The findings of the 2011 Property Frontiers' Investor Survey reveal that Capital Growth is by far the most important investment criteria with the UK the top destination for a third of potential property buyers.

Conducting the annual survey, the investment agency asked their client base what they wanted to invest in, why and where in 2012. For 46% Capital Growth was of the upmost importance followed closely by High Yield at 33% and Security at 11%.

In terms of global destinations, the UK, perceived as a safe haven for real estate investment, was the top choice for nearly a third of potential buyers followed by the USA and interestingly the BRIC economy of Brazil in joint second and rising star, Turkey in fourth position. Traditional lifestyle favourites including France, Spain and Portugal did rank within the top 10 destinations however a number of Asian nations including Malaysia, China and Singapore also ranked highly.

Interestingly despite fears of a double-dip recession, the investment sector in 2011 has seen signs of life with over half of survey respondents revealing that they had made an investment in the last 12 months with the UK, USA and eco products the most popular.

Landlords look to the North West

The UK buy-to-let sector is continuing to present itself as one of the best areas of investment according to latest data from Halifax.

Recent findings collected from the Halifax have indentified that UK house prices increased during 2011. We now have an average UK house price of around £163,311. While the increase shows that the UK housing market has proved resilient in recent months, those entering the property market, particularly first time buyers will be less likely to afford homes in the UK, forcing many to rent instead.

Almost four million properties (2010) are now in the Private Rented Sector providing homes for 1 in 6 households and, as demand for rented property continues to grow.

On average it now takes just 12.7 days to let a property, with an average of five prospective tenants competing for each property and rental rates reaching record highs of £718 a month.

The Buy-to-Let arena is benefitting from some of the highest monthly returns on record. Big rental returns from UK property have alerted overseas investors to the UK, attracted not only to a solid market from which to reap weighty returns, but also a safe and reliable place to invest.

In terms of location, the North West of England has been pinpointed as offering some of the best opportunities for investment within the UK. Recently seeing a 20 per cent rise in rental rates in some areas this year alone due to the unprecedented demand for rental accommodation.

In the city of Liverpool, demand is fast outstripping supply due to the reduction in home ownership and the number of new homes being built. This has led to an increase in landlords purchasing apartments in Liverpool at below market values in order to capitalise on the growing buy-to-let market.

Meanwhile, demand for accommodation in and around both Manchester and Liverpool city centre also continues to rise as more students and young professionals enter the cities.

EU threatens to end buy-to-let mortgages

The RLA has spoken out strongly against a proposed EU Directive that threatens to severely damage the private rented housing sector.

The draft directive is aimed at tackling irresponsible lending on mortgages following property booms and busts in countries such as Spain and Ireland.

Under its provisions, lenders will not be able to take account of rental income when assessing the ability of the applicant to afford mortgage repayments.

Given that almost 90% of English landlords are private individuals and that most purchases are made on the basis that the rental income will pay off the loan and its interest, this would cause serious damage to the private rented market.

The proposed Directive affects 'consumers', but currently they are defined in such a way as to catch small landlords who have just a few properties. There is no clear definition, but it will affect a part-time landlord who has bought two or three properties as his or her pension fund – which constitutes the vast majority of the private rented market.

Alan Ward, chairman of the RLA, said: “This Directive is nothing short of a disaster for housing in the UK. And the RLA is working to have it aborted.

"It would effectively kill off buy-to-let mortgages and would lead to a collapse in the market, with far fewer properties being available for rent.

“It is imperative that the Directive is amended to take buy-to-let mortgages out of its scope.”

House prices are perceived to have fallen again this month, for the 19th consecutive month.

The Knight Frank/Markit report this morning said that in its latest survey of 1,500 households, property values were perceived to have fallen throughout the UK, including London.

Only 5% of people thought the value of their home had risen over the last month.

More house price falls are widely expected, although a small majority of households in London, the South-East and Scotland think they will rise. The biggest price drops are anticipated in the North-East and Wales.

People who are particularly pessimistic about house price falls are those working in the banking and business services sectors.

Grainne Gilmore, head of UK residential research at Knight Frank, said: “There is little cheer among households this month, perhaps reflecting the wider economic uncertainty throughout the UK, with fears that the country may be back in recession compounded by this week’s alarming unemployment figures.”

The great sell-off: Property tycoon to raise £3bn by selling 1% of ALL UK homes to clear his debts

250,000 homes are up for grabs in the sale. The portfolio has 15,000 homes in London alone.

The largest portfolio of homes in the UK is up for sale, and could be yours for just £3 billion.

Iranian-born tycoon Vincent Tchenguiz is looking to sell the freehold for 250,000 properties, which represents one per cent of the UK's entire housing stock.

The sale has been exclusively targeted at sovereign wealth funds, according to the FT.

Forty per cent of the homes and apartments are in the South East of England, with 15,000 properties alone in London.

source: Mail On Sunday

The PRS is now a vital element of the housing mix, according to delegates attending the National Landlords Association (NLA) fringe events at this year’s political party conferences.

The NLA asked: “Where would we be without UK landlords?” and concluded that far from being a second best option, rental accommodation forms a vital part of the UK’s housing mix.

The Liberal Democrat event discussed the cultural shift away from the UK obsession with home ownership towards the flexibility that renting provides. Jake Berry MP, Parliamentary Private Secretary to the Housing Minister, told the Conservative fringe event in Manchester:

“Where would we be without UK Landlords? The answer is in real, real trouble. They are absolutely vital to the Government’s housing plans and supporting the economy. I think the future of the private-rented sector is bright, it can only expand and play a greater role in providing housing in the UK.”

Clearly this is positive news for the thousands of UK landlords and estate agents who are helping them to rent out their properties. Commenting on the discussion at Manchester, David Salusbury, NLA Chairman, said:

“A diverse housing mix in the UK is to be encouraged and the private-rented sector will play an increasingly important role in providing homes in the UK. It currently makes up 14% of all households and we expect this to rise as people move away from homeownership towards more flexible forms of accommodation.”

The Green Deal aims to revolutionise the energy efficiency of the nation’s homes and businesses. It will help people insulate against rising energy prices, creating homes which are warmer and cheaper to run.

One of the key elements of the act will mean from April 2018 it will be unlawful to rent out a house or business premises which has less than an “E” energy efficiency rating.

Anwar Harland-Khan (right) CEO of Sustain Worldwide, an elite membership organisation of developers and professionals committed to sustainability, said: "The coming Green Deal is a significant piece of legislation that will have wide-range implications for estate agents, developers and householders. The key elements of the Act will remove the upfront cost of energy efficiency measures (like loft, cavity and external wall insulation, draught proofing and energy efficiency glazing and boilers) making expensive home improvement affordable.

For the first time in the world, the energy saving work will be repaid over time through a charge on the home’s energy bill.

“Clearly, those homes that have significant energy efficient improvements will score higher on the EPC, which is mandatory when selling a home. I believe we are beginning to see purchasers take a property’s energy efficiency into account when buying a home, and that we will begin to see a value premium on those houses which score highly on the EPC. Two factors are coming into play here: rising energy costs are hugely impacting householders – especially as a cold winter is forecast and the economic downturn begins to bite ever harder for many of us.

“Secondly, RICS has recently advised valuers that a home’s sustainability characteristics should be considered within property valuations. RICS notes sustainability features can include a home’s energy efficiency rating, the materials used in its construction and other features such as an energy-efficient boiler. RICS advice to its valuers when added to the implementation of the Green Deal in Autumn 2012 is, in my opinion, the beginning of step change that will see a property’s energy efficiency and broader sustainability aspects rise up the order of “must have’s” on a homebuyer’s checklist.”

Student Lets Shrink

Falling degree applications in the wake of tuition-fee rises could have a significant impact on the rental market in university towns, warns Lorna Bourke.

Applications down Landlords who are heavily dependent on the student market for tenants would do well to keep a close eye on University admissions in their area – particularly if it is also an area of high unemployment. Early figures from UCAS, the university admissions service, indicate that to date total student applications for the 2012-2013 academic year are down 9% on last year and 11.9% for applicants from the UK.

Although demographic changes play a part in the number of student applications, with tuition fees due to rise to a hefty £9,000 a year at most universities it's hardly surprising that applications are down. Long term, the situation could certainly start to affect tenant demand in some student towns.

David Willetts, the Universities and Science Minister, is playing down the adverse effect that high tuition fees will have on student numbers. 

‘It is too early in the applications cycle for data to reveal underlying trends – the main UCAS deadline is not until January,’ he said.‘Only applications for Oxbridge, medicine, veterinary science and dentistry have closed, with numbers broadly holding up on last year,’ Willets said. ‘This s hardly surprising, as medicine, veterinary science and dentistry are al vocational subjects where students are likely to be able to find employment as soon as they are qualified, which is not the case with humanities subjects. UCAS figures show that the number of applicants for courses with a 15 October deadline (Oxbridge and the vocational subjects listed above) has fallen by a meagre 0.8%. But applications for all courses, including those for courses covered by the 15 January deadline, are down by 9%. UCAS says ‘year- on-year changes for all courses at this early stage in the cycle are often different from the position later in the cycle’.

Change ahead is true, but would you advise your teenage son or daughter to run up tuition fees of £9,000 a year, maintenance costs of at least £7,500 a year, and end up three years down the line with debts of over £40,000 for a degree in geography or theatre studies, which will be virtually useless in securing them a job? Clearly not. Inevitably the number of students will fall – possibly quite dramatically – which is what the government intends.

The UCAS figures indicate that places will not necessarily be filled by overseas students.

The number of applications from UK students so far has fallen from 59,413 last year to 52,321 this year, a drop of 11.9%. Applications from students from other EU countries are down too, at 6,520 compared with 7,192 last year – a fall of 9.3%. If you add to this reduction in the number of students the cut in Local Housing Allowance, which will begin to bite in January of next year, and rising unemployment making it more likely that young people will remain living with their parents.

Landlords in some university town such as Hull, Coventry (the dormitory town for students at Warwick University, which has one of the largest campuses in the country) Leeds, Liverpool, Durham and Newcastle could find demand falling substantially.

Fees, unemployment and rising living costs The latest figures for unemployment in Coventry, for example, show that 8.3% of those who are economically active are unemployed compared with 7.8% nationally. In Hull, where youth unemployment is the highest in the country, unemployment is at a 17-year high, with nearly 45 job seekers for every vacancy, tuition fees are going up, and that may well affect people's decision whether or not to apply to University.

But it doesn't stop there, said Matt Hutchinson of Spareroom.com, which reckons it covers 64% of the flatsharer market, where many students look for accommodation. ‘Rents are also increasing, along with food and energy costs, so the final debt the average student graduates with may well be the biggest factor for some.’

Hutchinson points out that in cities that have a mix of student and professional renters, Landlords may well not feel the effects. ‘But where the student population is a big presence such as Coventry or Durham things could be different.'

If the Universities get fewer students through the door it not only affects the number of tenants but will also have a knock-on effect on the local economy in general, as Universities are such an important factor to local economies. If they have to any staff off due to falling numbers of students the town as a whole could suffer.

Landlords who built bedroom extensions without permission have been ordered to tear them down - or face thousands in fines.

Twenty-four houses on just three streets in Fallowfield, Manchester, have been served with the council enforcement notices.

All have extensions to back bedrooms on the first floor – which the council says are 'out of keeping' with the area and must be removed.

All the extensions are to houses on Braemar Road, Brailsford Road and Moseley Road in the heart of Manchester's student area.

Eight of the houses are owned by one landlord, with two others owning five and six respectively. A further five landlords own one house each.

If an appeal is not lodged, all the landlords will have until September next year to pull the extensions down or face a fine of £20,000 per property.

Nigel Murphy, the council's executive member for the environment, said: "These extensions are not in character with the area, are of poor design quality and affect the appearance of the neighbourhood.

“Why should people play by the planning rules if they see the council not taking action against people who don't?

“The planning department are there to assist people with what they can and can't build and it's my understanding that these people have not consulted with them before putting these extensions up.”

Steve Lamb, a planning consultant acting for four of the landlords, said the appearance of the houses was 'a matter of judgement'.

He said: “These extensions were part of renovations that have improved properties.

“They are fairly small additions to provide a better lay-out.

“My clients accept they do not have planning permission, and they should.

“But if the council considers they are out of keeping then that is a matter of judgement.

“My clients are now considering appealing this enforcement because they believe they a good case to put.”

If the council enforcement action does go to appeal, the final decision will be made by Secretary of State for Communities and Local Government MP Eric Pickles.

Let Insurance Services reports that private landlords appear to prefer obtaining possession without a money order, as they are faced with cash-strapped tenants who have no way of paying back monies owed.

The number of possession cases without a money order has increased by 33 per cent on 2010, whereas the number of cases using standard procedure to obtain possession has remained fairly static at only a 3 per cent increase.

In nearly 40 per cent of the courts in England and Wales, the number of claims brought by landlords and agents which resulted in an order being made for possession has increased by between 10 per cent and 50 per cent on the previous year. Increases are being seen across the country; Aylesbury (10 per cent), Bury St Edmunds (30 per cent) and Chelmsford (45 per cent).

Across the UK, the number of court cases continues to increase by 6 per cent and the trend represents both increased risk and continuing uncertainty for landlords and agents. Let Insurance Services has seen a 24 per cent increase in rent guarantee insurance taken out by landlords in the first nine months of this year, and a significantly higher increase in arrears notifications over the same period.

Michael Portman, Managing Director of Let Insurance Services commented: “Landlords and agents are facing mounting rent arrears and with no alternative, but to seek a quick resolution in the courts. Tenants have become more savvy with rental law and much more conversant with the legal detail. This trend, combined with the fact that many tenants have fallen on bad times and have no financial resources to clear arrears debt has led many agents and landlords to pursue possession”.

“We have seen a sharp rise in demand for rent guarantee insurance as landlords and agents look to find ways to protect their rental income. It is clear that this problem is not going to go away. The labour market is starting to feel the strain of public sector job losses and the economy is far from healthy. Ever increasing fuel and food prices could place more tenants in difficulty and the labour market has much ground to make up as the private sector struggles to compensate for public service job losses”.

“Against this backdrop, as rents rise over the medium-term, a growing number of tenants will see their finances come under mounting pressure – and we expect tenant arrears cases to climb over the next 12 months”.

“The message to landlords and agents is make sure that they consider the strength of the tenant when letting the property by taking out full references and to consider specific insurance through a specialist company for loss of rent if the tenant defaults and the cost of legal expenses to obtain possession.”

THE RLA has welcomed the Government’s decision today to review the impact of paying housing benefits directly to tenants.

Says chairman Alan Ward,: “Given its commitment to individual responsibility, it seems remarkable that the Government has so far denied tenants the ability to decide how their housing benefit is paid.

"The RLA has led a campaign, along with groups representing tenants, social housing providers and mortgage lenders to champion the rights of tenants to choose. We welcome the Minister’s decision to establish a review of direct payments".

As part of the proposed changes to the benefits system, Ministers have argued that paying the housing element of universal credit directly to tenants should be the default position except where a tenant is “vulnerable”. As part of this, the Government is to announce six demonstration project areas to test payments to tenants.

Speaking to Peers following a debate on an amendment tabled by crossbencher Lord Best providing for all tenants to be given a choice over who receives their housing benefit, Welfare Reform Minister, Lord Freud has announced that the Government is to commission a review, to be led by Professor Paul Hickman from the Centre for Regional Economic and Social Research at Sheffield Hallam University, to evaluate the effects of direct payments to claimants in the six demonstration project areas.

The amendment - originally drafted by the RLA - had the support of all Peers who spoke on it from all sides of the House of Lords.

The number of people in rented accommodation who are in severe arrears has reached its highest level in three years.

According to the latest figures, there are 78,970 tenants in England and Wales who are at least two months behind in paying their rent, nearly 11,400 more than this time last year.

It is the highest level since the third quarter of 2008.

While the number of those in severe arrears is rising, the overall number of tenants in any kind of arrears is falling, however. A total of 9.3% of all rent in England and Wales was late or unpaid in November.

The number of tenants evicted through court orders has also risen, with 24,966 people served eviction notices in the last quarter of 2011, an increase of 11% from 22,558 a year ago.

There was a sharp fall in transactions last month, the LSL Acadametrics house price survey reported this morning.

It said property transactions fell almost 6% in October, and that market activity was seizing up.

Meanwhile, Savills yesterday halved its forecasts for the UK housing market and described it as ‘only partially functioning’.

It forecast that transactions this year will end up on around 850,000, or just over half the normal pre-credit crunch annual level. It warned that transaction levels over the ten years to the end of 2016 could be seven million fewer than in the preceding ten years.

The firm’s director of residential research, Lucian Cook, said: “The Government’s austerity measures have affected household finances and home buyer confidence, so the real casualty of this housing market downturn has been transaction levels.

“The combination of historically low transaction levels and interest rates continue to protect nominal house prices – particularly as measured by the transactions-based indices.”

The firm yesterday cut its forecasts for the UK housing, as a result of the worsening economic outlook. It now believes that weak economic growth and constrained mortgage funding will ‘conspire against price growth’ over the next five years. It said that inflation, not sharp price falls, would suppress house prices.

While forecasting a 6% rise in UK house prices between 2012 and 2016, it said that with inflation, that equates to a loss of 11% in real terms.

Today’s Acadametrics report, which puts the average house price at £220,056 – far higher than the Land Registry, Halifax and Nationwide – said housing transactions had picked up in August and September, but slumped 5.7% last month on September’s levels.

It estimates that there were 56,000 property sales, 6% below last year’s levels, and representing 60% of the long-term average.

Acadametrics said it would normally have estimated sales levels to have picked up around 2.5% on September’s levels.

We’ll get Britain building again, says Cameron

The property industry isn’t exactly dancing in the streets but most believe that David Cameron’s new plans will help the housing market, if the plans are promptly executed and properly managed.

A Linden Homes site in Surrey was chosen as the press venue for the launch of the Government’s new Housing Strategy.

Prime Minister David Cameron arrived in Guildford to announce the government’s new Housing Strategy which will be underpinned by a new mortgage initiative for new homes.

It means a return – for some – of 95 per cent LTV mortgages for new build homes and a mortgage indemnity scheme, in which the government will underwrite part of the risk to lenders that could help up to 100,000 people.

The Prime Minister has also committed to providing an additional 200,000 new homes by 2015 through a “build now, pay later” deal. DCLG will now work with Whitehall to release ‘as much government-owned land as possible’ for private development. Local councils will also be encouraged to make their unused land available for development.

The government says that it recognises the need for greater availability of mortgage finance and responsible lending to the significant number of home purchasers who can afford mortgage payments, but not the levels of deposit currently required by lenders.

The British Property Federation (BPF) welcomed the government’s strategy, but warned there must be no delay or timidity in its execution.

RICS was also cautiously optimistic. Spokesperson Michael Newey, said that he hopes that the proposals can go some way to boosting the stagnant housing market. “Better access to mortgage finance is essential to bring forward the new homes needed to help more achieve their aspiration of home ownership, particularly first-time buyers. The New Build Indemnity Scheme is to be welcomed but care must be taken to ensure it does not distort the market or lenders affordability calculations.

“This is a good start from the Government but more detail is needed. RICS looks forward to continuing engagement with the Government and the sector to deliver a sustainable housing market that delivers aspirations across all sections of the market, benefiting UK PLC as a whole.”

No Sellers – No Buyers

Sellers and buyers are staying away from the market, the Hometrack report revealed this morning, as sales fall away.

The number of new applicants has fallen 10.5% in the last month, after a 6.3% fall in December and a 2.2% drop in November.

The speed at which property listings are dropping has also accelerated. This month, there was a 5.4%% drop, following falls of 3.4% in December and 0.8% in November.

This month, there was also a 14.3% fall in sales agreed, following falls of 0.9% in December and 4.6% in November.

There was not a single region in January where the number of sales agreed did not fall. Sales in East Anglia held up best, with a drop of 6.3%, but fell hardest in the North-East (down 23.1%) and the South-West (down 19.2%).

Hometrack said the underlying trend is one of tightening supply and weakening demand.

Between August and January, the number of buyers registering with agents declined by 23%. Meanwhile, the supply of homes for sale has contracted by 7% over the last six months – and supply has not contracted to this extent since 2009, said Hometrack.

It also reports no change in house prices, although a rise in London prices has offset small falls across the rest of the country.

As has become usual, London’s housing market distorts the overall picture. Average time on the market is 10.2 weeks, but this is helped by London’s time on the market of 6.5 weeks. In the South, the average time on the market is 9.1 weeks – the highest for nearly three years. In the North and Midlands, time on the market is just under three months, at 11.9 weeks.

Hometrack’s director of research, Richard Donnell, said: “The latest survey reveals a market dogged by uncertainty.

“On a national basis, house prices have not increased over the last 18 months (since June 2010) – a theme carried over into January when prices were unchanged. A small rise in London offset falls in other regions.

“London looks set to buck the national trend again in 2012, thanks to overseas buyers providing a boost to prices in London’s prime areas. Elsewhere, demand remains constrained by the uncertain economic outlook.

“Some agents have also reported an increase in down-valuations as surveyors exercise growing caution.”

The Hometrack survey questioned 1,500 agents.

Separately, a Rightmove survey, also out today, shows that 60% of home movers believe it is a buyers’ market. Only in London does the percentage of people who believe it is a buyers’ market slip below 50% (to 47.1%).

Surprisingly, perhaps, 66% of the 32,111 people questioned think house prices will stay the same or go up this year – a higher percentage than those asked the same question a year ago.