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Over half of landlords letting to Universal Credit tenants experiencing arrears

Universal Credit is causing tenants to fall behind with their rent, according to new research for the Residential Landlords Association.

It reports that 54% of private landlords who have let to tenants on Universal Credit in the past 12 months have seen them fall into rent arrears.

Of these, 82% said that the arrears only began after a new claim for Universal Credit or after a tenant had been moved from housing benefit.

Almost seven in ten (68%) landlords said that there was a shortfall between the cost of rent and the amount paid in Universal Credit.

Private landlords renting to Universal Credit claimants can apply to have the housing element paid directly to themselves when a tenant has reached two months of rent arrears.

This is known as an Alternative Payment Arrangement (APA).

The RLA’s research shows that it took landlords an average of almost 8.5 weeks for an APA to be arranged – meaning that landlords can be left with almost four months of rent arrears before they begin to receive the rent they are owed.

The research further found that 36% of landlords said that they had buy-to-let mortgage conditions which prevent them from renting to benefit claimants.

The RLA is calling on the Government to do more to prevent rent arrears occurring in the first place, including:

Giving all tenants from the start of a claim for Universal Credit the ability to choose to have the housing element paid directly to their landlord.
Ending the five week waiting period to receive the first Universal Credit payment.
Ending the Local Housing Allowance freeze to ensure it reflects the realities of private sector rents.
David Smith, policy director for the RLA, said: “Today’s research shows the stark challenges the Government still has in ensuring Universal Credit works for tenants and landlords.

“The system only provides extra support once tenants are in rent arrears. Instead, more should be done to prevent tenants falling behind with their rent in the first place.

“Only then will landlords have the confidence that they need that tenants being on Universal Credit does not pose a financial risk that they are unable to shoulder.

“Without such changes, benefit claimants will struggle to find the homes to rent they need.”

By ROSALIND RENSHAW

Source: Property Industry Eye

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House prices are going up – yet properties becoming more affordable in priciest cities

Property buyers in UK cities and major towns are having to pay up to 13 times their salaries to get a home.

London is the most expensive city in terms of the salary to house price ratio, but Cambridge, Oxford, Bournemouth and Bristol are not far behind.

Across 20 UK cities and major towns, buyers are paying a house price that is an average of 6.7 times their earnings.

In all of these cities, with the exception of Aberdeen, house prices have risen.

However Zoopla – which produced the figures – says that affordability is actually improving in 12 cities, including the most expensive four, where earnings growth is outstripping house price inflation.

Richard Donnell, research and insight director at Zoopla, said: “Housing affordability is slowly starting to improve in London as earnings growth outstrips house price inflation.

“There has been a clear downward trend in the ratio of house prices to average earnings over the last two years.

“However, the scale of improvement is relatively modest.

“While welcome news, the gap between earnings and prices needs to close further in order to make a material difference to would-be purchasers.

“The changing picture is not limited to London. There are 12 cities where the annual growth in house prices is below the growth in average earnings which is running at 3.7%.

“Lower-priced cities in northern England are actually getting less affordable than their southern counterparts when you consider that the annual percentage growth in house prices is outstripping earnings growth.”

By ROSALIND RENSHAW

Source: Property Industry Eye

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New figures show UK economy a little larger than thought

Britain’s economy is slightly larger than previously thought, according to new official estimates published on Tuesday that take into account new methodology and data.

The Office for National Statistics added around 26 billion pounds to the size of the world’s fifth-biggest economy in 2016, a rise equivalent to around 1.3% of gross domestic product and bringing total output to just under 2 trillion pounds.

The ONS regularly updates its methods for measuring the economy, which usually results in slight increases to its size.

The latest estimates used new surveys on costs faced by businesses and “significant” changes to the way capital assets such as buildings and machinery are measured.

Average annual growth in the economy between 1997 to 2016 is now estimated at 2.1%, up from 2.0% previously.

“These new figures are produced using new sources and methods, giving significantly improved estimates of how money moves around the UK economy,” Rob Kent-Smith, head of GDP at the ONS, said.

“While these figures are calculated using more and better information than was previously available, overall, they paint a very similar picture about the size and growth in the economy to our current estimates.”

The new figures showed the economy contracted by 6.0% during the financial crisis, a smaller drop than the 6.3% estimated previously. The economy also returned to its pre-crisis peak in early 2013, slightly sooner than thought beforehand.

Reporting by Andy Bruce; Editing by William Schomberg

Source: UK Reuters

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Five innovative ways to combat the housing crisis

From modular commuter villages to innovative finance models, developers are finding new, inventive solutions to tackle the UK housing crisis.

Modular commuter villages

Located on the periphery of overcrowded urban centres, can provide affordable new housing stock while alleviating the inner-city housing crisis, according to Project Etopia.

Its first modular village, under development in Corby, Northamptonshire, includes 47 turnkey homes equipped with in-home internet of things technology, renewable energy, and intelligent heating and cooling systems.

The houses, which are fully mortgageable and have a lifespan of 60 to 100 years, are constructed offsite – four houses can be built in 34 days – and shipped worldwide. They are also affordable; a four-bedroom house in the Corby development costs between £320,000 and £350,000, compared with £450,000 to £575,000 for new, nearby brick-and-mortar houses, according to the company.

“Modular commuter villages the wage benefits of working in the capital, but without the high property costs,” says founder Joseph Daniels.

Etopia Corby is the company’s first project, but it is already developing others in the United States, Spain, Namibia and Kuwait. Mr Daniels says the company is also acquiring land in the UK to build a series of connected eco villages that will facilitate smart energy-sharing.

Specialist senior housing

Providing good quality accommodation for over-65s can free up large under-occupied family homes for younger generations to help tackle the housing crisis. Yet only around 3 per cent of homes in the UK are built specially for older people, even though around 18 per cent of the population, around 12 million, are aged 65 and over.

ExtraCare Charitable Trust has developed that it claims have freed up more than 750 local family homes.

To make its projects viable, the trust has focused on economies of scale and being a dedicated healthcare provider, which means it has access to government funds to help pay for often uneconomic communal spaces.

For example, it’s £48-million Longbridge Retirement Village in Birmingham, built on a disused car factory, comprises 260 one and two-bed apartments, plus a village hall, bar, bistro, gym and more.

“Good retirement living requires community spaces, but funding this while . However, we’re seeing exciting models enter the market, such as providing other services such as healthcare,” says Louise Drew, head of real estate at law firm Shakespeare Martineau, which worked on the Longbridge development.

Besides freeing up housing stock, senior housing can have other benefits. According to a recent study with Aston University, ExtraCare residents reduced their dependence on GP and hospital services, resulting in a 38 per cent reduction in NHS costs per person each year.

Building up, not out

Using existing rooftops to build upwards instead of outwards and provide 180,000 new homes, including 60,000 atop public assets, in London alone, according to housing developer Apex Airspace.

The company currently has plans to build 3,000 new homes in the capital, half of which will meet the government’s affordability guidelines.

By mitigating the need to purchase land for development, airspace projects are on average 35 per cent cheaper, according to the company. Furthermore, units are developed 95 per cent offsite using modern construction methods and then craned on to buildings which reduces construction costs.

A project under consideration in Bermondsey aims to deliver 31 residential apartments on two Lambeth and Southwark Housing Association-owned and currently occupied buildings by incorporating a double-storey rooftop extension and “bookend building” at either side.

As well as adding value to existing buildings for councils and private owners, managing director of the company Val Bagnall, says rooftop development can help pay for or share the cost of building upgrades, such as

Apex aims to deliver 10,000 homes over the next ten years, but Mr Bagnall says the potential for airspace homes could be increased by 25 per cent with a revision in planning permission law.

Pocket homes

Housing developers Pocket Living are helping the so-called squeezed middle get on the housing ladder by offering specially designed “Pocket homes” at a 20 per cent discount compared to the market rate.

The 38-square-metre modular factory-built apartments are cleverly designed for compact living. Each has an open-plan kitchen-living room, separate double bedroom and a wet room.

The company subsidises these homes by selling two and three-bedroom properties in the same developments at full market price. Costs are kept down with and modern manufacturing methods, according to the company.

Modular off-site construction has also enabled it to develop heavily constrained sites. Pocket Living’s latest project, a 27-storey, 89-home tower in Wandsworth, London, called Mapleton Crescent, was possible to develop because the housing units could be craned into the heavily restricted riverside site.

“Modular homes are better quality than traditionally constructed ones because they are made in factory-controlled conditions and they also create less disruption for neighbours as they come completely finished,” says associate and project architect on Mapleton, Jonathan Drage.

To date the company has developed 650 Pocket homes and plans to build thousands more over the next 18 months.

Mortgage-free part-home ownership

A house in the UK typically costs eight times more than the average wage, which means mortgage deposits are often prohibitively expensive for average earners.

Startup Unmortgage hopes to tackle this problem and help alleviate the housing crisis by offering first-time buyers gradual home-ownership without a mortgage.

Instead of saving for a full mortgage deposit, which at 20 per cent of the house price can be around £80,000 in London on average, Unmortgage customers can enter into a shared-ownership partnership with the company to purchase as little as 5 per cent – at a minimum cost £12,500 – of an Unmortgage-approved home. They then pay market-rate rent on the rest of the property.

Buyers can then increase the equity they own in their home by up to 5 per cent a year and, when they have enough to secure a mortgage, the property can be purchased outright.

Conrad Holmboe, chief information officer at Unmortgage, says the finance model can bridge the gap between renting and buying, while also providing long-term housing security.

“We aim to create a virtuous cycle where the more someone buys, the less rent they pay and the more equity they have,” says
Mr Holmboe.

Unmortgage is financed by Allianz Global Investors, which is reported to be providing £500 million, connecting pension funds and properties in a new way in the UK. With the first tranche of money, Unmortgage intends to fund “a couple of thousand” properties.

Source: Raconteur

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Number of property transactions decrease

Property transactions decreased for both residential and non-residential in July, according to the latest statistics from HMRC.

The UK property transactions statistics report shows that non-residential and residential property transactions saw a 5.8% and 12.4% year-on-year decrease respectively.

The provisional seasonally adjusted UK property transaction count for July was 86,630 residential and 9,760 non-residential transactions.

Declining transactions began at the end of 2007 after the financial crisis, prior to this transaction counts had risen steadily reaching its peak in mid-2006.

Kevin Roberts, director at Legal & General Mortgage Club, said: “Our research shows only one in ten borrowers plan to delay buying or selling as a result of Brexit, so it’s clear there are other barriers preventing a boost to transaction levels.

“While government schemes have helped thousands of first-time buyers onto the property ladder – we need to think about those further up the ladder too.

“To stimulate the market, the government needs to build more housing across all types of tenure.

“This will provide second steppers and last-time buyers with more choice and in turn, families can up or down-size accordingly.”

Mark Harris, chief executive of mortgage broker SPF Private Clients, added: ’HRMC reveals a further slip-sliding of transactions compared with the same period last year as buyers and sellers continue to put big decisions like moving house on hold.

“For those who are brave enough to take the plunge, or who have simply had enough and want to get on with it, mortgages remain incredibly cheap.

“With fewer transactions happening, lenders are having to compete harder for business. With the exception of 10-year money, Swap rates have ticked up with three, five and 10-year swaps now cheaper than their two-year equivalents.

“Compared to where swaps were three months ago, lenders have been able to reduce their rates, and to some extent, maintain or make better returns.’

Gareth Lewis, commercial director of property lender MT Finance, commented: ’While HMRC is reporting nothing as dramatic as transactions falling off a cliff, the picture for the housing market is not that rosy either.

“However, one would expect a seasonal lull – it will be interesting to see where these numbers are at the back end of October and whether we get the bounce back that you would expect at that time of year.

“It is not all doom and gloom: as a lender we are reasonably busy – getting enquiries in and money out of the door, which are two barometers as to whether things are going ok.

“What is interesting is the spike in commercial property transactions, suggesting investors are diversifying into other areas.

“There isn’t enough detail here about what these transactions are but more activity is encouraging none the less.”

By Jessica Nangle

Source: Mortgage Introducer

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The only way is down for UK interest rates, say City economists

The UK economy is in contraction mode, but the Bank of England isn’t greatly worried. GDP fell by 0.2 per cent by the second quarter of the year as Brexit uncertainty and a global slowdown held growth back.

Policymakers at the BoE are reluctant to fiddle with interest rates as the Brexit date of 31 October looms. New Prime Minister Boris Johnson has made it abundantly clear that Britain could be crashing out of European Union without a deal.

Noises from the British economy last week will have comforted bosses at the Bank and cemented their “wait and see” position. Inflation was shown to have picked up to 2.1 per cent, wages grew at their fastest pace in 11 years, and July retail sales delivered a pleasant surprise.

It looks, then, like only the shock of a no-deal Brexit would cause Threadneedle Street to tamper with rates, which currently sit at 0.75 per cent. Yet the BoE has repeatedly said that in such an event rates could move “in either direction”.

City economists are not convinced by this argument from Mark Carney and co, however. Peter Dixon, economist at Commerzbank, says: “There would appear to be no good arguments in favour of a hike”.

The Bank’s logic is that a tumbling pound could push up the cost of imports and drive up prices. But Dixon says the effects would only be felt “over a six to 12 month horizon”.

Eventually, he says, the BoE will have “to weigh up” the risks to inflation versus the risks to growth. “But that will not be a calculation they have to make anytime soon”.

Oliver Blackbourn, portfolio manager on the multi-asset team at Janus Henderson, concurs. “In the higher-inflation, lower-growth environment expected,” he says, “the Bank of England will choose to primarily worry about the latter”.

He says lower availability of goods, services and workers for industry as well as consumers worrying about their incomes will weigh on economic growth. “This is likely to be the Bank’s main focus in its decision making.”

Turning the taps back on

Institute of Directors chief economist Tej Parikh says: “The precise shape of a no-deal Brexit and the scale of the government contingencies will play into the Bank’s final decision.”

Sajiv Vaid portfolio manager at Fidelity International takes a similar view, saying that in the event of a no deal, “the lesson to learn is that you cannot rule anything out”.

The shock could be so severe that policymakers might turn to the bazooka of stimulus bond-buying, or quantitative easing (QE), rather than the pistol of interest rate cuts. In even the relatively benign scenario modelled by the International Monetary Fund (IMF), Britain would enter a recession in 2020 and unemployment would rise by 1.5 percentage points.

Dixon says: “The BoE can always resume asset purchases. After all, the BoE balance sheet is only around 28 per cent of GDP – a full 10 percentage points lower than [European Central Bank] levels”

Government help

Craig Erlam, senior market analyst at foreign exchange firm Oanda, says a no-deal Brexit would force “at least one rate cut and perhaps additional quantitative easing”. He says the Bank will be hoping that “unlike in the aftermath of the crisis, the government also plays a role in providing an economic buffer”.

Vaid agrees. “I think this time will be different and expect fiscal policy to play its part,” he says. Blackbourn also says he thinks rates would be lowered, “likely alongside a large fiscal easing from the government”.

Almost all economists disbelieve the Bank when it says interest rates could move either way if a no-deal Brexit comes around. Blackbourn says: “Despite the inflation-targeting mandate, the Bank’s first reaction will be to support growth and later worry about inflation.”

By Harry Robertson

Source: City AM

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House prices would flounder in six months after no-deal Brexit – Reuters poll

Britain’s drifting property market would probably take a hit from a disorderly Brexit, with average prices slipping about 3% nationally in the ensuing six months and as much as 10% in London, a Reuters poll of housing experts found.

Roughly 85% of respondents said both UK and London house prices would fall in the six months subsequent to leaving the European Union without an agreement.

But if Britain departs the EU with a transition deal – the scheduled leave date is Oct. 31 – house prices are due a mild 1.5% lift over the following two quarters. They would rise 1.4% in the capital.

Results from the Aug. 13-20 survey show an otherwise tepid outlook for national price rises in coming years, at rates not far off an already-mild consumer price inflation rate and despite the recent sharp fall in sterling.

Indeed, the results suggest that foreign demand for property will be weaker than in previous years where declines in the pound have spurred buying, particularly in London, as it makes housing cheaper for those holding stronger currencies.

The survey also indicates in the near-term at least that housing, the bedrock of British household wealth, is not likely to give a lift to the economy, which contracted for the first time in 6-1/2 years in the second quarter.

Indeed, an overwhelming majority of respondents who answered an additional question in the first Reuters UK housing market survey since Boris Johnson took over as prime minister said risks to the housing market were skewed to the downside.

“Despite the new PM and team in government there are big icebergs ahead, not least the apparent willingness to leave the EU without a deal,” said property market consultant Henry Pryor. “This is likely to spook the markets before it reassures them.”

At the same time, there are fundamentals cushioning the market from falls. Hansen Lu, analyst at consultancy Capital Economics, notes the ongoing shortage of homes, which nearly always underpins British house prices.

Mortgage rates are also very low and not set to rise any time soon despite hawkish rhetoric in past months from Bank of England policymakers, and recent wage gains have lifted household spending power somewhat.

“Both factors are helping to prevent the current slump in house price growth from developing into an outright fall in prices. Yet on the other hand, Brexit uncertainty, as well as the high level of house prices relative to incomes, continues to weigh on buyer demand,” said Lu.

Others, like Tony Williams of Building Value, are more sanguine about the overall housing market’s prospects following Britain’s impending departure from the EU, no matter how rough.

“With no-deal, there will be a knee jerk action in which demand will fall followed by prices over the first six months of the UK’s new status,” notes Williams. “That said, life after a no-deal Brexit will revert to type.”

Average UK house prices are forecast to rise 1.0% this year, 1.8% next and 2.7% in 2021, little changed from 1.2%, 2.0% and 2.5% in a survey taken in May.

London house prices, already down 5% from their recent peak, are due to fall 2.0%. They are not due to rise at all next year, followed by a 2.0% lift in 2021, a slightly weaker view than what was predicted a few months ago.

Capital Economics’ Lu notes that with these recent falls and some recent wage gains outstripping inflation, London’s average house-price-to-earnings ratio has slipped to 12 times from a recent peak of 13.4.

“That adjustment, while welcome, is still small relative to past house price gains. With Brexit uncertainty set to bite further and mortgage interest rates at their floor, we think London’s fall in house prices has further to run.”

Polling by Manjul Paul and Richa Rebello

Source: UK Reuters

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Interest in Right to Buy grows

There has been a growing interest in the government’s Right to Buy scheme as data showed brokers searched for lenders’ criteria on the scheme more times in July than any other previous month.

The data from Knowledge Bank, a criteria searching system for mortgage brokers, showed Right to Buy was the fourth most searched for lender criteria in July — the first time it had ever appeared in the top five searches.

According to the searching system, the rise in searches followed prime minister Boris Johnson’s hints earlier this month that he wanted to extend the Right to Buy scheme to housing association tenants, having previously suggesting it had no place in modern housing policy.

The scheme currently exists for council tenants to buy their properties at a discount, the size of which is determined by how long the tenant has lived in the property.

Tenants can apply to buy their council home if it’s their only or main home, they are a secure tenant, have no legal issues with debt and they have had a public sector landlord for three years.

The discount for a house ranges between 35 per cent and 70 per cent depending on how long the tenant has been a resident there, while for a flat the discount sits between 50 per cent and 70 per cent.

Chris Sykes, mortgage adviser at Private Finance, thought consumers were asking their broker about Right to Buy because they were looking for security in the lead up to Brexit, coupled with low house prices and attractive mortgage deals increasing the number of consumers who could potentially afford their property.

But Sarah Drakard, independent financial adviser at Cruze Financial Solutions, thought it was more likely down to a rise in the number of young potential property owners who had struggled to get on the housing ladder, trying “any means possible” to achieve that goal.

She said: “I have experienced young professionals, who may have been tenants within a family member’s council home for a few years, try and get on the housing ladder using Right to Buy.

“Perhaps where younger people are seeing there are no other options and they’re just trying to make Right to Buy work.”

Knowledge Bank’s findings also showed interest-only mortgages appeared for the first time in a year, mirroring research earlier this month which showed brokers thought interest-only products were still popular and accounted for about a fifth of sales.

Most searched-for lending criteria by brokers, in each mortgage market
 RESIDENTIALBUY-TO-LETSECOND CHARGEEQUITY RELEASE
1Maximum age at end of termFirst-time landlordMaximum loan-to-valueGrade II listed buildings
2Self-employed – one year accountsLending to limited companiesMortgage or secured loan arrears or defaultsEx-local authority houses
3Defaults – Registered in the last three yearsMinimum income – interest only/Part and part single applicantCapital raising – business purposes on second chargesSolar panels
4Right to BuyRequirement to be a homeownerMixed-use properties/part commercialEx-local authority flats
5Interest-onlyFirst-time buyersPayday loansNon-standard construction

Ms Drakard said she was “increasingly seeing” older and more experienced borrowers opting for interest-only mortgages, while Mr Sykes said there was “definitely more flexibility” with lenders in the interest-only space.

Mr Sykes said: “It’s more of a professional client or an older borrower opting for interest-only products. I think it’s down to people wanting to make sure they have affordability in the future if anything does happen, to keep their monthly costs down.”

In the buy-to-let sector ‘first-time landlord’ and ‘first-time buyers’ both made the top five search in terms of buy-to-let. 

Mr Sykes thought this was down to the fact first-time landlords market was very niche, so brokers had to do more research, but also because more first-time buyers were opting for the buy-to-let sector over the residential market at the moment.

He said: “I’ve got a few clients who cannot afford to buy in London, particularly the type of property they want, but are keen to get on the housing ladder.

“One way they get around this is to purchase a buy-to-let property up North, perhaps in their university city, and rent it out. This way they’re on the property ladder and get an income from it, but get to stay renting somewhere central in the city.”

According to Ms Drakard, the reason more first-time landlords were coming to the market was because more experienced landlords were holding off on increasing their portfolios due to the “tricky” buy-to-let landscape at the moment.

Landlords have experienced multiple tax and regulatory changes in the past few years — from a 3 per cent surcharge in stamp duty to reduced mortgage relief — which has triggered a number of landlords to sell up.

Nicola Firth, chief executive of Knowledge Bank, said: “Our tracker reveals a few shifts this month with interest-only making an appearance in residential searches for the first time this year, most likely as a result of a several new products and criteria changes to this sector.

“It was outstanding to discover that we have seen almost 30,000 mortgage criteria changes year to date, which just goes to show the pace at which our industry is making changes.”

Ms Firth said it was “simply not possible” for any broker to remember the 91,000 pieces of criteria, and that even the best help desks would struggle to update the 28,524 changes the industry has already had in 2019.

By Imogen Tew

Source: FT Adviser

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Stamp Duty Land Tax changes ‘won’t address housing market issues’

Proposed changes to stamp duty land tax rates and ways of charging will not address housing issues and could make things worse, a property management firm has argued.

Apropos by DJ Alexander said that the recent suggestions given by Prime Minister Boris Johnson and his Chancellor Sajid Javid about where stamp duty begins and who pays for it, are using the tax system to deal with larger issues in the property market. Rather than helping to fix the problems, such suggestions will create greater uncertainty which will make problems worse, the firm argued.

The Prime Ministers’ suggestion of removing stamp duty for all property under £500,000 and the Chancellor’s idea of making the seller pay all of the Stamp Duty Land Tax (SDLT) are ideas which often resurface and are then rejected when their impact is realised. Both politicians propose using a UK wide legislative change to address a London property market problem. The results in both cases would be inflationary, unfairly punitive to parts of the market, and unsuccessful.

David Alexander, joint managing director of Apropos by DJ Alexander Ltd, said: “Politicians seem to be clutching at straws in an attempt to reform the housing market and are using simple means to address complex issues. Changing the level at which SDLT in England and Wales starts will not resolve anything other than potentially provide a short-term boost to the currently flagging London property market. But this is the wrong solution for the wrong problem. There will also be a knock-on effect on the rest of the UK which we can see in the growing disparity in property tax levels between Scotland and the rest of the UK.”

He added: “The downturn in the London property market is driven by a number of reasons including the loss of confidence of overseas cash investors who find the uncertainty over Brexit of concern; a correction to an overheated market; and affordability issues. Investors believe there are other, safer, investment opportunities which they are attracted to and consequently these investors, who made up a disproportionately large percentage of buyers, have moved their cash elsewhere. Is this a permanent change to the London market? No. This market will pick up again. It may take a few years but anyone buying now will see an increase in their property value over the next five years. When the market fell 17.8% from its peak in January 2008 it took until April 2012 for average prices to recover. London prices began to fall from their July 2017 and so far, the lowest month was March 2019 when average prices had fallen 5.2%.”

Mr Alexander said: “The issue is that you cannot develop policy which benefits one part of the country at the expense of the rest of the UK. Changes to SDLT might make London more attractive in the short term but could have the unforeseen consequence of driving more people to the capital and consequently increasing prices in the medium to long term which will resolve nothing.”

He further explained why making the seller pay the stamp duty would be inflationary. He argued that sellers would be determined to recoup the additional cost of selling their home and would be tempted to add on whatever the SDLT cost would be.

Mr Alexande added: “There is also the issue of fairness. Why should someone who has paid SDLT to buy a property then have to pay it again to sell? This is penalising those who have owned a property for some period and benefiting those who are new to the market which is clearly unfair. First-time buyers moving to their new home would find they had lower funds to put into their new property which would clog up the lower to middle end of the market while those who had accumulated large sums in their property might delay selling to avoid the additional tax. Rather than free up the market it would make it very stodgy indeed.

“The housing market is a complex mix which requires sensitive handling. It is market-driven and sentiment is important. Sending signals out about rising costs, higher taxes, and penalties for accumulating value do not instil confidence. These constant suggestions and proposals are detrimental to the market, making buyers and sellers even more uncertain. The property market, like most markets, needs certainty and assuredness. Postulating and hypothesising on different changes will make things worse.

“Politicians would be better served liaising with property professionals for solutions to taxation, housing supply, and market behaviour rather than pouncing on single ideas and running with them in the media for a few days until they are shot down in flames. The Prime Minister and Chancellor are clearly testing out potential ideas for the Autumn Budget, but these need to be clearly thought through with more than cheap headlines in mind. Better to develop a long term, stable approach to the property market which involves private ownership, the private rented sector and social housing to create a housing system which is fair, provides homes for everyone, and is sustainable in the long term. This requires sensible debate among all interested parties and appropriate planning for the future.”

Source: Scottish Housing News

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UK house sales stronger than normal in August – Rightmove

August, normally a quiet month for Britain’s property market, has seen a surge in sales, possibly due to buyers seeking to conclude transactions before the country leaves the European Union on Oct. 31, property website Rightmove said on Monday.

Rightmove said sales in the August period, which cover the four weeks to Aug. 10, were 6.1% higher than a year earlier and their strongest for the month since 2015, bucking a generally sluggish trend since June 2016’s referendum on leaving the European Union.

“While the end of October Brexit outcome remains uncertain, more buyers are now going for the certainty of doing a deal, with some having perhaps hesitated earlier in the year,” Rightmove director Miles Shipside said.

New Prime Minister Boris Johnson has promised to take Britain out of the EU by Oct. 31, even if that means leaving without a transition deal – something most economists think will cause major disruption to businesses and overseas trade.

But British consumers have largely shrugged off Brexit worries so far, bolstered by a strong labour market and the fastest increases in wages in 11 years, in contrast to businesses, which have held back from making major investments.

House price inflation has slowed since June 2016, according to official figures. But this has largely been driven by price falls in London and surrounding areas, which have been most affected by higher property taxes on expensive housing and fears of post-Brexit job losses in the financial services sector.

Rightmove said asking prices on its website were down 1.0% on the previous month – a smaller fall than normal for August, when many buyers are away on holiday – while prices were 1.2% higher than a year earlier.

Sales rose fastest in northeast and eastern England, and the biggest fall in asking prices was in southeast England excluding London.

Rightmove based its data on more than 130,000 prices collected between July 7 and Aug. 10 from its website, which it says advertises 90% of residential property on sale in Britain.

Reporting by David Milliken; Editing by Cynthia Osterman

Source: UK Reuters