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Tories pledge to ‘re-balance’ housing market towards home ownership – and Labour to fine bad landlords £100,000

The Tories will help people buy and rent with the market ‘re-balanced’ towards home ownership, the Conservative manifesto declared yesterday. Meanwhile Labour is today set to unveil detailed new policies on the private rented sector.

The Tory policies – all widely leaked beforehand – contained no surprises but confirmed that if re-elected, the Conservatives will abolish ‘no fault’ evictions – a process already under way.

The manifesto, which devotes comparatively little space to housing, says: “This will create a fairer rental market: if you’re a tenant you will be protected from revenge evictions and rogue landlords, and if you’re one of the many good landlords, we will strengthen your rights of possession.”

It goes into no details as to how these would be beefed up. There is also no mention in the manifesto of reversing recent ‘landlord bashing’ moves, such as tax changes.

A new Tory government would also require only “one lifetime deposit” from tenants.

The manifesto will have major implications for the burgeoning deposit replacement market and also for how disputes are resolved at the end of tenancies.

The manifesto does not mention whether there could be a possible ‘topping up’ of lifetime deposits if the tenant’s first rental home was, for example, a studio but if the tenant progressively moved to larger and more expensive rental homes.

The manifesto also promises to encourage a new market in long-term fixed rate mortgages, which “will slash the cost of deposits, opening up a secure path to home ownership for first-time buyers in all parts of the United Kingdom”.

New homes developers will be used via the planning process to discount homes “in perpetuity” for a third of local people who cannot afford to buy in their areas.

The manifesto says that this could be used to prioritise key workers such as police, nurses and teachers.

Right to Buy will be maintained for all council tenants, while it will be “voluntary” for housing associations, with new pilot areas testing out the scheme.

Shared ownership will be reformed, and there will also be reforms to leasehold – all flagged up under the previous Tory administration. The Tories would also bring forward a Stamp Duty surcharge on foreign buyers, again already flagged up. There does not appear to be any other mention of Stamp Duty.

A new Conservative government would deliver at least a million more homes “of all tenures” over its lifetime, and they would be “beautiful, high-quality” properties.

The Green Belt would be protected and self-build encouraged.

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Labour meanwhile is today due to announce the detail on new policies which will “put bad landlords out of business”.

Jeremy Corbyn and housing spokesman John Healey will announce that all landlords must complete an annual property inspection, with all rental homes compulsorily meeting a decent standard.

It will be illegal to let homes without a rental inspection being completed and passed. Fines of up to £100,000 will be levied for a single offence, with landlords having to repay rent.

Labour would also cap rents in line with inflation.

Corbyn says: “Labour will be on the side of tenants and take on dodgy landlords who have been given free rein for too long.”

Healey says Labour would legislate in its first year.

By ROSALIND RENSHAW

Source: Property Industry Eye

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Manchester’s rental market booming

Lettings agency Manchester Apartments has achieved its highest number of lets ever.

As of November 2019, 99.5% of 800 studio and 1-3-bedroom apartments in the Manchester Apartments portfolio have been let to students and professionals in Manchester.

This is in comparison to 75% in the same period last year.

According to research from the Manchester Brain Drain, 51% of students from Manchester’s universities remain in the city after graduation.

In addition to this, 57% of students from Manchester who left the city for their studies, returned to Manchester after graduation.

Source: Property Wire

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Proportion of homes bought with cash falls to record low

The proportion of homes in Great Britain bought without a mortgage fell to 28% in H1 2019, the lowest level since records began in 2007, Land Registry data shows.

This is significantly lower than the peak of 36% recorded in 2009.

Over the last two years the proportion of homes purchased across Great Britain with cash has fallen by a further 5%.

Aneisha Beveridge, head of research at Hamptons International, said: “The fall in cash purchases not only reflects tighter affordability, but also a decrease in activity amongst downsizers, the group of people most likely to have built up enough equity to purchase property with cash.

“It also reflects a drop off in the number of homes bought by investors, many of whom used cash to purchase their properties.”

The South West is the region with the highest proportion of cash sales; 34% of homes were purchased with cash in H1 2019.

Meanwhile London had the lowest proportion of cash sales – just 19%, which is 8% lower than 2009 when cash buyers in the capital peaked.

Every region in Great Britain recorded a fall in cash sales over the last two years.

The West Midlands recorded the biggest decrease in the proportion of homes bought with cash since H1 2017 (-9%), followed by London (-7%).

Scotland recorded the smallest fall, with the proportion of homes bought mortgage free decreasing 1% since 2017.

Source: Property Wire

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Labour housing policy: Social housebuilding, rent controls and action on leaseholds

The Labour Party has launched its manifesto, which pledges to vastly increase social housebuilding, introduce minimum standards in the private rental sector, and reform Help to Buy.

The manifesto has made the following pledges:

  • Spend £75bn on building 150,000 council or housing association homes a year, with 50,000 being “genuinely affordable” based on local incomes.
  • Set up a English Sovereign Land Trust, with powers to buy land more cheaply for low-cost housing.
  • Tax second homes used as holiday homes to help deal with homelessness.
  • Introduce rent controls capped by inflation. Cities would have powers to cap them further.
  • Bring in open-ended tenancies to stop ‘no fault’ evictions.
  • Introduce minimum standards in the private rental sector, enforced through nationwide licensing.
  • Toughen up sanctions for landlords who break the rules.
  • Fund renters unions to allow renters to organise and defend their rights
  • Get rid of the rules that require landlords to check people’s immigration status or that allow them to exclude people on housing benefit.
  • Give councils powers to regulate short-term lets, through the likes of Airbnb.
  • Reform Help to Buy to focus on first-time buyers on ordinary incomes.
  • Tax overseas companies buying houses.
  • Give locals the first option on newly built homes in the area.
  • Give councils powers to tax properties left empty, to bring new homes back into use.
  • End the sale of new leasehold properties, and allow leaseholders to buy their freehold ‘at a price they can afford’.

Reaction:

Brian Berry, chief executive of the Federation of Master Builders, said: “This country is in dire need of a housing revolution to address the critical lack of homes that is hampering the very fabric of our society.

“It is therefore pleasing that Labour are placing the delivery of housing at the forefront of their manifesto commitments.

“However, if supply is to meet demand, there needs to be a strong collaboration between the public and private sectors as neither can deliver the required upsurge in delivery alone.

“Labour’s manifesto places an overemphasis on the role of the state in supplying homes with very little detail on the role of the private sector in this endeavour.”

Joseph Daniels, founder of modular developer Project Etopia, said: “By going after landbanking developers and focusing on the crucial element of land supply, Labour have really shown they are determined to look properly at the real causes behind periodic declines in housebuilding.

“This is what the industry needs, far more than housebuilding pledges that lack any real roadmap for how they will be delivered, which is what we’ve seen from parties in the past. Talk is often cheap and the industry is crying out for meaningful change to allow developers to unlock land and bring it forward for development. If this is acheived the country could see a real turning point in public policy to help solve the housing crisis.

“These pledges have to be balanced with the commitment to cut carbon emissions and the Liberal Democrats’ proposal that all homes should meet the Passivhaus standard shows the major parties are becoming more creative when it comes to housing policy.

“A requirement to build to the Passivhaus standard would set a world-leading benchmark for housebuilding in Britain and send a strong message to developers about how quickly they need to make their construction process more carbon neutral.”

Source: Property Wire

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UK house prices won’t match low inflation until 2021

UK house prices will not match low inflation until 2021 and are set to fall in London this year as buyers are put off by continuing Brexit uncertainty, according to new research.

House prices in the capital will fall 1.5 per cent this year and only hold steady in 2020, a poll by Reuters found.

However forecasts for this year ranged from a drop of three per cent to no change, while in 2020 forecasts were between a two per cent fall to growth of five per cent.

“Until we have greater certainty regarding the political environment it isn’t possible to forecast what might happen in London with the greatest accuracy,” Rod Lockhart at property finance hub LendInvest told Reuters.

“We do not anticipate a material price rebound in London until at least 2022, although we may experience some recovery from 2021 – if and when the political ‘dust’ begins to settle.”

Last month, Foxtons, the London-focused estate agent, said revenue dropped in the third quarter as Brexit uncertainty continued to weigh on the residential property market in the capital.

Elsewhere in the UK, house prices are predicted to rise one per cent this year, 1.5 per cent next year and 2.3 per cent in 2021, according to the poll of 27 property market analysts.

Meanwhile, inflation is forecast to be 1.9 per cent, 1.9 per cent and two per cent respectively.

“Regardless of what happens with Brexit in the months ahead, a revival in the housing market is unlikely,” said Hansen Lu at Capital Economics.

“Indeed, even if a Brexit deal is implemented soon, we expect to see only a small improvement in housing market transactions and house price growth over the next two years.”

By Jessica Clark

Source: City AM

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UK home prices to lag inflation on Brexit uncertainty

Annual home price rises in Britain won’t keep pace with already-low inflation until 2021, a Reuters poll found, and will fall in the capital London this year as uncertainty around the country’s departure from the European Union continues to deter buyers.

Britons voted in a June 2016 referendum to leave the EU but there is still no clarity about how, when or even if the two sides will finally part ways.

That uncertainty is likely to continue even if Britain leaves by Jan. 31 as is currently scheduled as there is another tight deadline – by the end of 2020 – for both parties to hammer out a new trade deal, though many doubt that target can be met.

Prices in London, for decades a magnet for foreign investors and speculators, will fall 1.5% this year and only hold steady in 2020, the Nov. 5-18 Reuters poll found.

But highlighting the ambiguity, forecasts for this year ranged from -3.0% to no change. For 2020, the range was even wider, from -2.0% to +5.0%.

“Until we have greater certainty regarding the political environment it isn’t possible to forecast what might happen in London with the greatest accuracy,” said Rod Lockhart at property finance hub LendInvest.

“We do not anticipate a material price rebound in London until at least 2022, although we may experience some recovery from 2021 – if and when the political ‘dust’ begins to settle.”

London-focused real estate agent Foxtons Group (FOXT.L) reported a fall in third quarter revenue late last month and said ongoing political uncertainty continued to weigh on volumes and prices in the London residential sales market.

Nationwide, home prices will rise 1.0% this year, 1.5% in 2020 and 2.3% in 2021, the poll of 27 property market specialists predicted. Inflation is forecast for those years at 1.9%, 1.9% and 2.0% respectively. [ECILT/GB]

“Regardless of what happens with Brexit in the months ahead, a revival in the housing market is unlikely,” said Hansen Lu at Capital Economics.

“Indeed, even if a Brexit deal is implemented soon, we expect to see only a small improvement in housing market transactions and house price growth over the next two years.”

Based on recent public opinion polls, British Prime Minister Boris Johnson looks set to win a Dec. 12 election and secure the backing in parliament he needs to get his new Withdrawal Agreement passed and take Britain out of the EU on Jan. 31.

Johnson’s Conservative Party has extended its lead over the opposition Labour Party during the past week, an opinion poll by ICM for Reuters showed on Monday.

BREXIT DEAL BOUNCE

Economists in another Reuters poll last week overwhelmingly said Britain would eventually strike a free-trade deal with the EU. The second-most likely resolution was Britain remaining a member of the European Economic Area. [ECILT/GB]

But third most likely in the poll of economists was the country leaving the EU without a deal and trading under World Trade Organization rules – something the housing market experts polled by Reuters said unanimously would have the most deflationary impact on home prices.

Economists said the least likely outcome was Brexit being cancelled. Housing watchers – again, unanimously – said that outcome would be the most inflationary for house prices in the coming year.

Rising prices would not be welcomed by first-time buyers struggling to get on the property ladder since, despite very low borrowing costs, scraping together the minimum 10% deposit demanded by most lenders poses a huge challenge.

The average asking price nationally for a home was 302,808 pounds ($391,652) this month, property website Rightmove said, around ten times the average British salary. The average price was double that in London.

When asked to describe the level of London house prices on a scale of 1 to 10 from extremely cheap to extremely expensive, the median response was 8. Nationally they were rated 6.

FILE PHOTO: Estate agent’s signs hang from houses in the Selly Oak area of Birmingham, Britain September 25, 2018. REUTERS/Darren Staples
“While house prices in London and the surrounding regions have been falling over recent months, prices are still significantly higher than elsewhere in the country, making buying a property in the capital unaffordable for many people,” said Jamie Durham at PwC.

“But this affordability problem is not constrained to just the capital, and house prices are high relative to wages right across the country.”

Polling by Sarmista Sen and Khushboo Mittal; Editing by Ross Finley/Mark Heinrich

Source: UK Reuters

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General Election Uncertainty Keeping Homes Off the Housing Market

The amount of properties entering the UK housing market is falling at its fastest rate in ten years, as sellers are being put off by the upcoming General Election.

According to Rightmove, the number of new properties on the housing market fell by 14.9% this month compared to November 2018, the largest annual drop since August 2009. In London, the drop in new homes put on sale was even more pronounced, with a fall of 26.9% recorded in the capital.

The property website also revealed that average house prices in the UK fell by £3,900 in November, a 1% drop compared to October. In London, average prices fell by £8,926, or 1.4%, compared to the previous month. The average asking price for a property in the UK now stands at £302,808.

Rightmove said that although asking prices tend to drop slightly before Christmas, this latest slump is more to do with sellers waiting until the uncertainty surrounding the upcoming General Election, and of course Brexit, subsides. It also warned that the housing market could be subdued throughout next year if sellers’ reluctance to sell doesn’t ease up.

“I’ve seen lots of unusual events affecting the property market in my 40-year career, but a Brexit deadline followed by a snap general election six weeks later is obviously a new combination for me and for many thousands of buyers and sellers,” said Miles Shipside, director and housing market analyst at Rightmove.

“Elections normally dampen activity as uncertainty causes a degree of hesitation, but this one is being called to try to break the deadlock after three years of uncertainty. A more certain outlook, whatever it may be, would be a welcome change for those who are contemplating moving.

“Our monthly poll of the housing market shows a clear swing towards hesitation for prospective sellers, with buyers losing the extra choice that thousands more newly marketed properties would bring. In spite of this, buyers are continuing with their purchasing plans, with the number of sales agreed only marginally down on a year ago.”

Glynis Frew, chief executive of Hunters estate agents, said: “The reality is that the market will continue to experience the Brexit jitters until the impasse in Westminster comes to an end. Nobody really knows what’s around the corner so it’s understandable that some buyers have been sitting tight and sellers haven’t been itching to bring their properties to the market.

“The general election has now been thrown into the mix too so that will add another layer of uncertainty, or even opportunity for the more audacious buyers.”

Source: Money Expert

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Double-whammy of Brexit and election hits UK housing market – survey

The number of properties put up for sale in Britain has fallen by the most in any month in more than 10 years as the combination of Brexit and an election weighs on the market, a survey showed on Monday.

There were 14.9% fewer properties put on sale in the four weeks to Nov. 9 than in the same period last year, property website Rightmove said.

That was the biggest annual fall since August 2009, shortly after the global financial crisis.

“I’ve seen lots of unusual events affecting the property market in my 40-year career, but a Brexit deadline followed by a snap general election six weeks later is obviously a new combination,” Miles Shipside, Rightmove director, said.

Prime Minister Boris Johnson has called a Dec. 12 election in a bid to break a deadlock in parliament over his plan for taking Britain out of the European Union, the deadline for which has been delayed until Jan. 31 from Oct. 31.

Rightmove said some would-be sellers of property might be waiting to see if Britain’s next government reforms the stamp duty tax on property transactions which might reduce the cost of acquiring a new home.

The average price of property coming to market rose by an annual 0.3%, in line with other measures showing house prices almost flat-lining, and the number of sales agreed was down by 2.9%, Rightmove said.

Writing by William Schomberg; Editing by Daniel Wallis

Source: UK Reuters

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Brits willing to pay more for eco-friendly properties

Brits are willing to spend £23,271 more on properties if they help the environment, research from landscaping manufacturer Marshalls has found.

Two thirds (68%) of UK residents would ensure a property had eco-friendly features before deciding on a new home.

Eco friendly features could include using sustainable materials, water conservation and solar panels.

Chris Harrop, director of sustainability and marketing at Marshalls, said: “It is encouraging to see so many people prioritising eco-friendly features in the decision-making process when looking for a new property.

“It can sometimes be a daunting experience to include additional features into a project, however the study shows that there is a clear desire in the market to see more properties embrace these features.

“The industry is already embracing this trend and we have seen strong growth is in environmental and ethical product such as low-carbon permeable paving and high ethical standards.

“However, there is always more that can be done by embracing the ideologies of Biomimicry and Urban Greening to help the UK move forward into a future of sustainable urban environments.”

The majority (62%) of people think businesses and homeowners should pay for eco-friendly changes to city centre buildings.

Source: Property Wire

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Scottish house prices projected to rise by nearly 20%

The average house price is predicted to be £35,000 higher in five years as “Brexit and election-related angst” subsides, according to a report.

Savills expects average house prices across the UK to lift from £231,000 in 2019 to £266,000 in 2024 – with the north outperforming those in the south.

There are also signs the prime central London property market could be set
for a bounce, but elsewhere in London growth in house prices is expected to lag behind the rest of Britain.

North-west England is tipped to see the strongest percentage house price growth, with values predicted by Savills to surge by 24 per cent by 2024.

In Scotland and north-east England, house prices are expected to jump
by nearly one-fifth (19.9%) over the same period, while in Yorkshire and
the Humber growth of 21.6% is forecast.

Faisal Choudhry, Savills head of residential research in Scotland, said: “In Scotland, the key fundamentals of quality of life, good schools and economic growth in the hubs of Edinburgh and Glasgow will drive local markets, but pricing remains key and sellers will have to be pragmatic.”

Wales will also perform strongly, with house prices expected to increase by around 18%, Savills predicts.

Daniel Rees, head of residential at Savills in Cardiff, said the property market in Wales had “undoubtedly” been helped by the Severn Crossing tolls being abolished in 2018.

He said: “Our forecasts affirm the long-term popularity of Wales as an attractive and affordable place to live and work.”

By contrast, property values in London, where housing affordability is often worse than in other parts of the country, are expected to increase by just 4% by 2024.

House prices in London generally recovered more strongly after the financial crisis than elsewhere, but price growth there has been more subdued in recent years as the affordability of a home has become more stretched.

However, expectations for house price growth in prime central London are more positive.

Savills forecasts that prime central London values will rise 3% next year
– the first annual price growth since 2014 – and increase by 20.5% over the next five years.

Recent falls in the value of sterling mean London’s most expensive properties will start to look relatively good value to those investing from overseas – and a build-up of recent interest from buyers indicates the market is set for a bounce, Savills said.

The firm said that while “Brexit and election-related angst” will generally continue to act as a drag on the market over the short term, house prices are expected to rise broadly in line with incomes thereafter.

It estimates that, while house prices will only increase by around 1% across 2020, 2021 will see a stronger 4.5% bounce.

Savills’ forecasts assume that the General Election on December 12 does not result in a significant shift in the policy environment, that the UK ultimately achieves an orderly exit from the EU over the course of 2020 and avoids recession.They also assume that the bank base rate increases gradually to 2.0% by the end of 2024, constraining mortgage affordability and house price growth.

Source: Herald Scotland