Real Estate

UK Cities House Price Index

◼ UK city house price inflation +2.8% – all cities recording positive house price growth.
◼ London growth rate edges higher to 0.4% – there has been a decline in the number of London postcodes registering price falls since October 2018.
◼ Regional cities continue to post above average price growth but there are signs that the rate of price inflation will slow further in the months ahead.
◼ Housing transactions and mortgage approvals holding up despite Brexit uncertainty.

Cities Index report

All cities record price rises for first time in 3.5 years
The latest UK cities house price index reveals that average prices increased +2.8% over the last year. Annual price inflation ranges between +6.8% in Leicester to +0.2% in Cambridge  This is the first time annual price growth has been positive across all 20 cities for 3.5 years (August 2015), primarily a result of growth finally turning positive in Aberdeen.

Annual growth rate edges higher in London

The annual rate of growth in London has increased slightly to +0.4%. While market conditions remain weak, there are signs of a pick-up in demand following a 3-year repricing of London homes.
This repricing process has come in two forms –1) absolute price falls which have been concentrated in higher value markets, and 2) a widening in the discount between asking and achieved prices, with the largest discounts in inner London.

Market decline in London postcodes with price falls

Our granular house price indices for London reveal that the proportion of postcodes registering price falls is starting to reduce. The latest data reveals that prices are falling across 55% of London postcodes, down from almost 70% last October.
The rate at which prices are falling in these markets is relatively low – 0% to -5%. Prices continue to increase in 45% of London City postcodes, typically lower value, more affordable areas in outer London.

No rebound in prices but a positive for market activity

Buyers who have delayed purchases and stood on the side-lines since 2015, are starting to see greater value for money, perhaps seeking out buying opportunities while Brexit uncertainty impacts market sentiment.
This is supported by a willingness of sellers to be more realistic on pricing and accept offers from buyers. While we do not believe London prices will rebound, the closer alignment of buyer and seller expectations is a positive for market activity and sales volumes, which are still 25% lower than in 2016. We talk specifically on the ‘Brexit impact’ later in this report.

Prices up 17% in two regional cities since Brexit vote

While London has registered weak growth, regional cities outside southern England have recorded above average price inflation over the last 3 years. This is a result of better affordability and rising employment which has boosted demand.
Leicester and Manchester have recorded price growth of 17% since the Brexit vote in June 2016, followed by a 16% increase in Birmingham. The latest index finds prices rising by 5% or more in seven cities led by Leicester, Manchester and Glasgow.

Slower growth in regional cities over 2019

These trends are all part and parcel of the unfolding housing cycle. However, house prices cannot keep rising ahead of earnings indefinitely. The rate of price inflation in regional cities has started to moderate. We believe this will continue over the remainder of 2019.

Birmingham and Manchester start to lose momentum

For example, our granular price indices for Birmingham and Manchester, reveal a significant increase in the proportion of postcodes registering growth of 0% to 5% and fewer areas recording growth over 5% per annum. This is a result of growing affordability pressures as well as increased uncertainty.
We expect prices to keep rising in these cities but at a slower rate, closer to earnings growth. This follows the pattern recorded in cities such as Bristol and Bournemouth in southern England.
Brexit impact on the housing market?
Brexit uncertainty is often cited as the cause of weaker house price growth over the last 12-18 months. We believe it is more complex than that and see Brexit uncertainty as a compounding factor in markets where fundamentals have weakened.
Price growth is just one measure of relative market strength. Levels of housing transactions are another important measure for businesses operating in the market. The willingness and ability of households to move home underpins revenues and business plans.
Data on transactions remains resilient with no obvious Brexit impact at a national level. Transaction volumes over 2018 remained in line with the 5-year average. The same is true for mortgage approvals for home purchase. There has been no material drop in activity over 2018H2 as the Brexit debate has heated up. The very latest data from HMRC shows that housing transactions have increased slightly in the first 2 months of 2019.

 

Source: Zoopla Research

Read more

The Home (Fitness for Human Habitation) Act 2018 finished its parliamentary journey in December 2018. From 20th of March all social and private landlords, including letting agents, in England will be required to comply.

Homes Act comes into force on 20 March 2019

Originally introduced by Karen Buck MP, ARLA Propertymark supported the legislation during its passage through Parliament.

Known as the Homes Act, landlords and letting agents acting on their behalf will be required by law to ensure that a home is fit for human habitation from the beginning and throughout the duration of a tenancy.

If a home is found to be hazardous, and the issue is not resolved, tenants will have the right to take direct legal action in the courts for breach of contract. Certain exemptions apply where the landlord or letting agent will not be held responsible.

We are using the 29 hazards of the Housing Health and Safety Rating System (HHSRS) as a basis to check against hazards in the home. Earlier this month the Government released Guidance on the legislation.

Tenancies

All new or renewed domestic tenancies on or after 20 March 2019 will apply to the new rules. This includes any tenancies that are significantly changed, such as a Change of Sharer.

Existing Fixed-Term Tenancies will fall under the requirements of the Act when they are renewed or become Periodic.

Existing Periodic Tenancies have 12 months until they will need to comply on 20 March 2020.

Commenting on the legislation coming into force, David Cox, ARLA Propertymark Chief Executive: “We’re pleased the Homes Act is coming into force tomorrow and congratulate Karen Buck MP on her work to provide a better private rented sector for all. This new legislation will give renters greater protection against criminal operators and means they will now be able to take direct legal action if their agent or landlord does not comply.”

Further help and information

Homes Fitness for Human Habitation Act – news article

Government Releases Homes Act Guidance – news article

Source: www.arla.co.uk

Read more

The Tenant Fees Act sets out the government’s approach to banning letting fees paid by tenants in the private rented sector and capping tenancy deposits in England.

The aim of the Act is to reduce the costs that tenants can face at the outset, and throughout, a tenancy, and is part of a wider package of measures aimed at rebalancing the relationship between tenants and landlords to deliver a fairer, good quality and more affordable private rented sector.

Tenants will be able to see, at a glance, what a given property will cost them in the advertised rent with no hidden costs. The party that contracts the service – the landlord – will be responsible for paying for the service, which will help to ensure that the fees charged reflect the real economic value of the services provided and sharpen letting agents’ incentive to compete for landlords’ business.

The ban on tenant fees will come into force on 1 June 2019.

The government will shortly be publishing guidance for tenants, landlords and letting agents to help explain how the legislation affects them. Keep an eye on our Blog for further updates.

Source: https://services.parliament.uk/Bills/2017-19/tenantfees.html

Read more

Houses in Multiple Occupation* are facing new rules starting 1st of October. Landlords have just a couple of days more to apply for the licence.

Landlords urged to apply for new mandatory HMO licence as deadline approaches

*HMO criteria:

• is occupied by five or more persons
• is occupied by persons living in two or more separate households
• and meets:
o the standard test under section 254(2) of the Act
o the self-contained flat test under section 254(3) of the Act but is not a purpose-built flat situated in a block comprising three or more self-contained flats, or
o the converted building test under section 254(4) of the Act.

Read more

A good first impression is always a long term benefit, but can it actually be a short-term win. And by ‘win’ we mean a sell! 🙂

Our experience says ‘Yes’ and we’re giving you one extra tip:

make sure the bathroom of the selling property is very clean and in the trends!

Here are some good aspects to consider improving in the bathroom:

Contemporary Bathroom Design: Elegance is Always in Vogue

Ready to make the necessary changes?

Read more

1. Did you know that trespass is not just confined to people? If climbing plants such as ivy or wisteria extend into a neighbouring garden it is considered trespass and if damage is reported the home owner could be liable.

Photo source: https://bit.ly/2MObtzi

2. Movement due to the proximity of trees to a building is a common problem. A mature poplar can take up to 50,000 litres of water from the sub soil each year.  The root radius of a tree is often equal to or greater than its height above ground level. In some cases, e.g. willow, poplar, elm the radius can be up to twice the height.

3. Did you know that it’s possible to remove a chimney breast from a bedroom to make way for a fitted wardrobe, for example, and leave the chimney stack above?  But you can’t just leave it hanging there – it will need to be properly supported, usually with a substantial concrete or steel lintel.

4. Efflorescence is a common sight in new brickwork. It’s caused by soluble salts in solution being brought to the surface as waste in the wall dries out. It is usually a harmless, temporary problem often occurring in spring following a wet winter. The main concern is the unsightly appearance caused by the white staining that it produces.  Persistent efflorescence may indicate a design or construction fault.

 

5. The problem with wood worm is that it can fly! Woodworm isn’t a worm at all, rather it is the larva stage of the common furniture beetle. The female beetle starts the life cycle process by laying eggs directly into the timber through cracks, crevices and existing flight holes. The larval stage can last up to 5 years. The holes associated with woodworm are the flight holes of the emerging adult beetles.

Photo source: https://bit.ly/2D5ZqO0

6. If a chimney was built before 1965 the construction would have been controlled by local bye-laws. It was only with the 1965 Building Regulations that there was a requirement for all chimney flues to be built with liners. That is not to say older chimneys would have been unlined – often the flues were rendered with a lime render – but the approach was not consistent.

7. Radon gas is a radioactive gas, but you can’t see, smell or taste it!  Because it is radioactive, it has considerable implications for people’s health.  It originates from the rocks and soil found everywhere in the UK. The radon level in the air we breathe outside is very low but can be higher inside buildings because it can accumulate in confined spaces. Public Health England has produced a map showing the areas where there is a greater risk of radon gas.

Source: 7 facts about property that you (probably) didn’t know….

Read more