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Controversial Armagh housing scheme to be recommended for approval

A controversial plan for a new housing development in the Ashley area of Armagh is to be recommended for approval two years after proposals were first revealed.

As Armagh I reported in November 2017, an application had been submitted to build 47 houses at a cost close to £3.5 million.

Amended plans were brought forward almost a year later with a new application on a smaller scale.

And it is this – consisting of a total of 38 properties – which planning officials at Armagh City, Banbridge and Craigavon Borough Council are poised to recommend for approval.

The new development would have access from Ashley Gardens.

It is described currently as a site made up of “agricultural lands”.

The exact location is given as “lands at Ashley Park (adjacent and west of No’s 7-9 11 12 14-16 Ashley Gardens adjacent and south of No’s 2 3 4 and 4a Ashley Heights adjacent and east of No’s 88 90 92 94 96 and 98 Newry Road and adjacent and north of No’s 8 10 12 and 14 Ashley Avenue)”.

A total of 13 objections had been received in response to the original application, some from the same objectors.

The applicant behind the proposals is Silverbridge-based Blackgate Development Ltd.

The development would consist of two-storey semi-detached and detached homes.

Among those objecting are residents who feel their properties will be impacted upon as they are living in bungalows.

One wrote that they were “deeply unhappy and distressed” by the proposals and insisted that “the surrounding properties are all bungalows”.

She claimed there would be a “loss of natural light”, “loss of privacy” and “loss of view” if proposals proceeded.

The objections and the amended plans have now been considered and planners are of the view that the scheme should be allowed.

That is the opinion which will be presented to the planning committee of ABC Council when it sits on Wednesday.

Councillors there will be tasked with making final decisions.

By Micheal McKenna

Source: Armagh i

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Halifax says annual house price inflation slows to lowest growth so far this year

Average house prices were £232,249 in October, Halifax has reported.

The lender said this brought annual inflation to 0.9%.

Halifax managing director Russell Galley said: “Average house prices continued to slow in October, with a modest rise of 0.9% over the past year. While this is the lowest growth seen in 2019, it again extends the largely flat trend which has taken hold over recent months.

“A number of underlying factors such as mortgage affordability and wage growth continue to support prices, however there is evidence of consumers erring on the side of caution.

“We remain unchanged from our view that activity levels and price growth will remain subdued while the UK navigates economic uncertainty.”

The Halifax, which has recently changed how it calculates prices after criticism that its indices were out of sync with others, is still at odds with Nationwide, which also bases its numbers on mortgage approvals.

Nationwide puts the average house price in October at £215,368, saying that annual house price inflation was 0.4%.

By ROSALIND RENSHAW

Source: Property Industry Eye

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Brexit and mortgages: how to protect your mortgage against interest fluctuations

What is happening with Brexit and mortgages, and is there a way you can safeguard yourself against the unpredictable effects of Brexit on your repayments? Moreover, given the latest projections of further interest rates cuts by the Bank of England, should you be looking at remortgaging to find the best mortgage deal?

For first-time buyers and those who are coming to the end of their fixed-term period, the announcement that interest rates are likely to remain low will come as a relief – a sudden hike in interest rates resulting in more expensive mortgages is highly unlikely at least in the next year. People remortgaging now are still going to enjoy historically record low interest rates on their mortgage repayments. However, do bear in mind that the rules for remortgaging still mean that you would have to be able to make the repayments if the interest rates were to rise.

The longer term prognosis for what’s going to happen to interest rates remains far less certain. There are two main scenarios you need to bear in mind as a mortgage holder: one is an economic recession, while the other is a strong economic recovery (following, for example, a successful Brexit deal negotiation or the UK revoking Article 50).

If the former were to happen, say as a result of the UK crashing out of the EU without a coherent deal (still a possibility despite the current delay), the pound could take a hit. While this would again mean low interest rates to try and stimulate the economy, it could also mean a loss of jobs – which, of course, would render low interest rates meaningless to someone who is unemployed.

To safeguard your mortgage against this case scenario, it’s a good idea to: 1) reduce your debt; 2) increase your savings; 3) consider income protection insurance that would give you a safety net for your mortgage repayments in case you were to be out of work or have to take on lower paid work.

In the case of an orderly Brexit (or no Brexit – who knows?) and the UK economy regaining confidence, we can expect wage growth. When that happens, inflation rises, which leads interest rates to rise too. Hopefully, in this case scenario, your salary will increase in line with interest rate rises, making mortgage repayments manageable. However, having a decent savings pot for this case scenario is still a good idea – as is being prepared to downsize in case you live in a property with a large mortgage.

BY ANNA COTTRELL

Source: Real Homes

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UK job growth slows as Bank of England entertains interest rate cut

The demand for staff from UK employers grew at its slowest rate for almost eight years in October, according to a survey revealed on Friday, appearing to justify two Bank of England rate-setters backing an interest rate cut yesterday.

A monthly index of job vacancies from the Recruitment and Employment Confederation and accountants KPMG fell to 51.7 from 52.6 in September.

It is the index’s lowest level since January 2012 and highlights concerns from the Bank of England that the UK’s labour market may be losing its strength.

It comes a day after two of the Bank of England’s nine interest-rate setters voted to cut interest rates again.

The pair cited signs that the labour marker may be on the turn, despite it being one of the economy’s strong points since the Brexit vote.

The REC report released on Friday showed permanent job placements fell for an eighth consecutive month and at a faster rate than last month.

It comes as official data showed job creation was waning ahead of the previous end of October Brexit deadline.

Vice chairman at KMPG, James Stewart, said the uncertainty around Brexit and the upcoming general election on 12 December had dampened companies’ hiring plans.

“It’s not just businesses that are being cautious, however, and over October we’ve seen job-seekers become increasingly nervous about making a career change,” he said.

By Michael Searles

Source: City AM

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Brexit turmoil drags UK property price growth to lowest this year

UK property price growth has slowed to its lowest this year, with experts blaming Brexit turmoil for killing off the typical autumn bounce.

New figures from Halifax show 0.9% growth in average prices in October compared to a year earlier, the weakest year-on-year growth of any month in 2019 so far.

Russell Galley, managing director of Halifax, said sales and price growth will remain “subdued’ for as long as political and economic uncertainty continues.

News of the sluggish growth compared to trends over the past few decades came as Britain teetered on the brink of crashing out of the EU without a deal on 31 October.

Many businesses and analysts have warned a no-deal Brexit would be catastrophic for UK firms, jobs, consumers, and homeowners, rupturing decades of increased trade ties overnight with the EU, Britain’s biggest trading partner.

The Brexit deadline was pushed back after parliament forced prime minister Boris Johnson to delay Brexit and an election was called for 12 December.

“Perhaps a tad predictable that as we receive yet another Brexit-based encore from Westminster, the UK housing market also delivers the lowest rate of house price growth so far this year,” said Marc von Grundherr, director of London letting and sales agent Benham and Reeves.

Jeremy Leaf, a north London estate agent and a former RICS residential chairman, said: “Although the market remains fairly subdued, which may actually be a good thing in view of wider political and other concerns, we are finding it continues to be supported by fewer but more serious buyers.”

Adrian Anderson, director of mortgage broker Anderson Harris, said it was “not all doom and gloom” as mortgage rates are cheap.

“Lenders have to be more competitive than ever to attract business, resulting in a price war with mortgage rates falling significantly this year, benefiting borrowers,” he said.

The Halifax data showed a 0.1% month-on-month drop in prices in October, with the average price in the UK now just over £232,000.

By Tom Belger

Source: Yahoo Finance UK

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UK house prices: Growth slows in October

Annual UK house price growth slowed last month due to ongoing political and economic uncertainty.

House prices were up just 0.9 per cent in October – the lowest growth seen so far this year – as the new uncertainty of a general election and the impending Brexit deadline hit consumer confidence.

Analysts said activity in the housing market picked up over the summer, after the date for the UK to leave the European Union was pushed back to 31 October, but growth has since slowed as potential buyers hold off making purchases.

On a monthly basis, house prices fell by 0.1 per cent, while house prices grew 0.2 per cent between August and October compared to the previous quarter.

The average house price in the UK last month was £232,249, according to the latest Halifax House Price Index.

Halifax managing director Russell Galley said: “A number of underlying factors such as mortgage affordability and wage growth continue to support prices, however there is evidence of consumers erring on the side of caution.

“We remain unchanged from our view that activity levels and price growth will remain subdued while the UK navigates political and economic uncertainty.”

Mike Scott, chief property analyst and estate agent Yopa, added: “We expect a resumption of more normal levels of housing market activity once the Brexit outcome is more settled, which may then give a short-term boost to house prices, since the stock of houses for sale is quite low, and demand can react more quickly than supply once the uncertainty is lifted.

“However, affordability continues to be stretched, especially in the south and east of the country, and we do not expect any sustained above-inflation increase in house prices. But neither do we expect a house price crash, with a no-deal Brexit now looking unlikely and the economic fundamentals remaining strong.”

By Jessica Clark

Source: City AM

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Limited company structure becoming standard for all BTL

Purchasing a buy-to-let property through a limited company is now the preferred route for all landlords regardless of portfolio size or type of property, research has shown.

The data, published by Foundation Home Loans yesterday (November 6), showed 62 per cent of landlords with one to 10 properties would purchase via a limited company, almost equal to the 65 per cent of those with 11 or more properties who said the same thing.

Previously landlords with larger portfolios were more likely to purchase properties through a limited company while those with smaller properties typically took out a buy-to-let mortgage in their individual name.

I think it will be the standard way the majority of landlords buy a property in the near future as the knowledge that limited companies are the most tax efficient way is filtering down and will soon become common knowledge

Nick Morrey

Overall almost two thirds (64 per cent) of the 888 landlords polled in September planned to make their next purchase within a limited company vehicle — up from 55 per cent of those asked in June.

The buy-to-let market grew rapidly after the financial crisis but has since taken a beating as a number of tax and regulatory changes have hit landlords’ pockets.

How the rules changed:
An additional 3 per cent stamp duty surcharge, introduced in April 2016, was closely followed by the abolition of mortgage interest tax relief for landlords.

Landlords then took a further hit when a shake up of rules by the Prudential Regulation Authority meant buy-to-let borrowers were now subject to more stringent affordability testing.

The changes to mortgage relief have been phased into the system since April 2017, but by April 2020 landlords will be unable to deduct any of their mortgage expenses from taxable rental income.

Instead, they will receive a tax-credit based on 20 per cent (the current basic tax rate) of their mortgage interest payments.

Following the changes, landlords who were higher or additional-rate taxpayers would now only get refunds at the 20 per cent rate, rather than top rate of paid tax.

On top of this, landlords could also be forced into a higher tax bracket because they would need to declare the income that was used to pay the mortgage on their tax return.

Based on a property yielding £950 in rent and a £600 mortgage per month, the landlord’s income could drop by 57 per cent after the rule changes, from £2,520 to £1,080, as shown in the table:

Tax yearProportion of rental income falling under previous systemProportion of rental income falling under new systemTax billPost-tax and mortgage rental income
Prior to April 2017100%0%£1,680£2,520
2017-1875%25%£2,040£2,160
2018-1950%50%£2,400£1,800
2019-2025%75%£2,760£1,440
From April 20200%100%£3,120£1,080

Due to the tax shake up, limited company status is more attractive to landlords as changes would not affect them and they can offset mortgage interest against profits which are subject to corporation tax instead of income tax rates, which is cheaper.

Interest coverage ratios on limited company applications are also lower than for most individual landlord applications.

Nick Morrey, product technical manager at John Charcol, said the research was “very much” in line with what he saw in the mortgage market at the moment.

He put the latest surge in limited company popularity down to the fact more buyers and advisers were aware of the benefits and that from April this year only 25 per cent of interest qualified for tax credit.

He added: “I think it will be the standard way the majority of landlords buy a property in the near future. The knowledge that limited companies are the most tax efficient way is filtering down and will soon become common knowledge.”

By April 2020, no mortgage interest will qualify for tax credits on the old system.

Jeff Knight, director of marketing at Foundation Home Loans, said: “The rise in limited company usage by landlords shows no sign of tailing off, particularly as we have a more professional landlord community who recognise the benefits of using such a vehicle.

“It’s therefore perhaps no surprise to see a growing number of landlords signalling their intention to make their next purchase through a limited company.”

With a general election set for December 12, the housing market and buy-to-let in particular is likely to be a topic during the campaign.

Last month advisers urged the potential future government to tackle the fact successive pieces of regulation had made it harder for landlords to operate economically.

By Imogen Tew

Source: FT Adviser

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Bank of England Surprise sends Pound Sterling Lower

The British Pound was put on the back foot on Thursday, November 07 after two members of the Bank of England’s Monetary Policy Committee unexpectedly voted to cut interest rates at the Bank’s November policy meeting.

Michael Saunders and Jonathan Haskel became the first MPC members to vote for lower interest rates since the Bank last cut rates in August 2016.

The surprise votes suggest the Bank is leaning towards delivering an interest rate cut in the first half of 2020, unless a notable pick up in the UK’s economic trajectory is reflected in the data.

The Pound fell on the news, as currencies tend to fall when their issuing central bank enters an interest rate cutting cycle.

“Sterling was shocked lower by a dovish Bank of England, which voted 7-2 to leave rates on hold. It was a bit of a surprise in that two members voted for an immediate cut – Saunders and Haskell both opting to cut now. This leaves the door open for a cut to come soon, signals the direction of travel and was the first split since the summer of 2018,” says Neil Wilson, Chief Market Analyst at Markets.com.

Saunders and Haskel said their vote to cut interest rates was largely owed to their view that the UK’s jobs market has begun to deteriorate somewhat – while the UK retains an ability to generate wages and employment is at all-time records, the number of vacancies in the economy has shrank dramatically of late.

The drop in vacancies suggests the jobs market could soon deteriorate and cutting interest rates would offer the economy some support under such conditions.

However, for the majority of MPC members, the economy continues to perform along a path that is consistent with keeping interest rates unchanged at 0.75%, at least for now.

“If global growth failed to stabilise or if Brexit uncertainties remained entrenched, monetary policy might need to reinforce the expected recovery in UK GDP growth and inflation,” the MPC said in a statement.

But this in itself marks a departure from previous guidance at the Bank, where the expectation was that interest rates would rise in the future, particularly under an orderly Brexit scenario; now the talk is of rates having to be cut.

In short, the Bank has flipped into rate-cutting mode and this should offer some downside to Sterling, at least in the near-term.

The Bank’s MPC will have also noted that their commitment to raising rates in the future puts them out of step with their global peers, an outcome that might disadvantage the UK economy. The U.S. Federal Reserve has been cutting interest rates of late, the European Central Bank has restarted its money printing programme and the Bank of Japan this month signalled it was looking at cutting short-term rates.

“The Bank of England seems to have finally accepted that the world is in an easing cycle and it can’t fight this tide. We can safely say the hawkish bias has gone. Because we are at the start of an election campaign the Bank was never going to vote for a cut today. But had we not been, there could have been more members calling to ease. There is the age-old debate of whether it’s best to go for an insurance cut now to see off weaker growth etc, or to keep the powder dry for when/if it goes completely wrong,” says Wilson.

“The message from the BoE is pointing to the downside for the Pound. Surprising votes for rate cuts voicing concern over domestic & global risks.Given how the UK is such an international economy, this is understandable,” says Neil Jones, head of hedge fund FX sales at Mizuho.

Markets had been anticipating the BoE would not only leave rates unchanged but that it would do so unanimously, which might explain why Sterling tumbled when the decision was published.

Dissent on the MPC brings closer a majority that might be in favour of a rate cut, and markets are not prepared for that to happen any time soon.

The Bank of England also released their Monetary Policy Report today, which contains the Bank’s forecasts for economic growth, inflation and other economic variables.

These in themselves can have an impact on the Pound as it suggests how the Bank sees the economy evolving over time.

“Looking through Brexit-related volatility, underlying UK GDP growth has slowed materially this year and a small margin of excess supply has opened up. That slowdown reflects weaker global growth, driven by trade protectionism, and the domestic impact of Brexit-related uncertainties,” the report noted.

Compared to the earlier forecasts, the Bank has this month forecast end-2019 economic growth to be at 1.0%, up from 0.9% forecast in August.

The end-2020 growth forecast was lowered to 1.6% from 1.8% expected back in August.

Inflation for end-2019 is forecast at 1.4%, down from 1.6% forecast in August, while inflation for end-2020 has been cut from 2.1% to 1.5%.

These inflation forecast cuts are sizeable and will certainly in themselves present to markets a signal that the Bank is no longer looking to raise rates.

Indeed, these inflation expectations suggest the Bank could quite comfortably justify a rate cut over coming months.

The Bank’s forecasts are however conditioned that a Brexit deal, of the kind struck between the UK and EU, is ultimately passed in coming months.

“Reflecting government policy, the MPC’s projections are now conditioned on the assumption that the UK moves to a deep free trade agreement with the EU,” said the Bank in its MPR statement.

“For our economic base case, we expect Prime Minister Boris Johnson and the Conservative Party to win a majority of seats at the election. That should enable an orderly Brexit to happen on 31 January next year. In line with the MPC’s latest guidance, we look for the BoE to hike the Bank Rate in Q3 2020 followed by another hike in 2021, by 0.25bp each time. That would take the bank rate to 1.25% by end-2020. Of course, if the election ends in a hung parliament the BoE would change its tune fast and, could, as signalled in the updated guidance, even cut rates,” says Kallum Pickering, an economist with Berenberg Bank in London.

Written by Gary Howes

Source: Pound Sterling Live

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Buy-to-let purchases through limited companies on the rise

Almost two-thirds of landlords plan to make their next purchase within a limited company vehicle, Foundation Home Loans has found.

This is up from 55% of those surveyed in the second quarter of 2019.

Jeff Knight (pictured), director of marketing at Foundation Home Loans, said: “The rise in limited company usage by landlords shows no sign of tailing off, particularly as we have a more professional landlord community who recognise the benefits of using such a vehicle.

“It’s therefore perhaps no surprise to see a growing number of landlords signaling their intention to make their next purchase through a limited company, and as a lender it’s incredibly important that our product range reflects this, and we can offer advisers and their portfolio landlord clients access to quality products, an excellent underwriting process and a high level of overall service that taps into the needs of limited company borrowers.

“There has also been a notable uptick in limited company remortgaging at Foundation, and whether these are larger portfolio landlords or not, it’s quite apparent where the market has moved to and the growing need for limited company expertise.”

Previously, landlords with larger portfolios of 11 plus properties were more likely to say they would purchase in a limited company, but now landlords with smaller portfolios are equally likely to use the strategy.

Some 62% of those with one to 10 properties said they would purchase via a limited company next, while 65% of those with 11 plus properties would do the same.

Of those landlords who said they would purchase via other methods, 26% said they would purchase as an individual, up from 24%.

Some 8% said it would depend on the circumstances at the time, down from 13% while 6% said they would purchase in the name of a partner or spouse, a drop from 10%.

The rest said they would either purchase via another means or they didn’t know.

The research also revealed a potential step-change in the type of properties landlords were adding to portfolios and where they were likely to concentrate in the future.

HMOs continue to generate the highest rental yield for landlords at 6.5%, with 20% of landlords now having an HMO property within their portfolio.

HMOs are particularly popular in Wales where 31% of landlords have at least one. This was followed by the East Midlands at 26%.

By Michael Lloyd

Source: Mortgage Introducer

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North Ayrshire Council expands house build scheme

North Ayrshire Council is expanding its ambitious masterplan to build hundreds of new council houses.

The newly-approved Strategic Housing Investment Plan (SHIP) will secure investment in a total of 1,695 properties across North Ayrshire over the period 2020-2025, working alongside Registered Social Landlords.

The plan includes a commitment for more new-build homes on top of the council’s already ambitious proposals as well providing a catalyst for the regeneration of towns and communities across the area.

Yvonne Baulk, Head of Service (Physical Environment), said: “We already have one of the biggest council house building projects in the UK and our new Strategic Housing Investment Plan really underlines that commitment to provide modern, affordable homes for our residents.

“Our ambitious house-building programme has delivered 345 news homes so far and, by 2025, we will have built 1,575 high-quality, new council homes, with the Registered Social Landlords adding to that total.

“These new homes will be built in every single part of North Ayrshire, from Irvine to the Garnock Valley, from the North Coast to the Three Towns, and even on our islands of Cumbrae and Arran.

“This is all part of our transformational ambitions for North Ayrshire. Major construction projects like this are crucial in our drive to regenerate our towns and will also secure new and existing jobs and training opportunities for North Ayrshire businesses and residents.”

By Adam Todd

Source: Ardrossan Herald