Victor Michael

Despite rising inflation and the end of both the furlough scheme and stamp duty holiday, UK house price growth continues to deny economic gravity as we head into the festive period. However, what goes up must surely come down – eventually.

The latest market analysis from Estate Agents show that a combination of rising interest rates and a much-needed increase in housing supply are the likely culprits to end the seemingly never-ending streak of stronger than usual house price growth.

 

Nationwide reported that the average UK price exceeded £250,000 in October for the first time. Indeed, new analysis shows the total value of the housing stock in England and Wales was £7.68 trillion in July 2021, which was an uplift of £720 billion from March 2020, when the total value was £6.96 trillion. The study, which puts a number on the total value of all private housing, factors in exchange prices as well as changes to house prices. A higher overall figure can reflect a larger number of households in a given local authority as well as higher-value properties.

 

The combined housing stock in the top ten local authorities by value also broke through the trillion-pound barrier over the course of the pandemic, rising to £1.007 trillion from £978 billion. However, there were not increases everywhere.

 

The highest total in July this year was £157.8 billion in the central London borough of Westminster, which was down by 10.1% from March 2020. The decline was the highest in England and Wales but is understandable given the area’s high proportion of flats and the fact fewer international buyers were able to travel to the UK.

 

However, it was one of only three local authorities in England and Wales that saw the value of its housing stock fall over the period, together with Lambeth (-2.2%) and Wandsworth (-1.1%).

There were other interesting changes in the top ten most valuable areas over the course of the pandemic. Cornwall leapfrogged Richmond-Upon-Thames into eighth place while Leeds replaced Ealing at number ten. Both changes can be explained by the growing demand for space and we have previously explored how Yorkshire, in particular, has benefitted from this trend.

 

The top three largest increases over the period were all in northwest England: Rossendale (24.2%), Wirral (21.6%) and Liverpool (21.6%).

 

Two things will curtail this strong level of growth. The first is rising interest rates. Last week, the Bank of England held the base rate at 0.1% but a rise is clearly coming.

 

However, it would be wrong to overstate the short-term impact on the UK housing market. Rates were 0.75% before Covid struck and any effect is likely to be limited while rates remain below this level. What’s different between now and early 2020 is the presence of inflationary pressures, which may cause demand to start fraying around the edges depending on how elastic the definition of “transitory” becomes. Longer-term, there will need to be a readjustment as rates normalise, a process that has been delayed by the pandemic.

 

Over 3.5 million first-time buyer mortgages have been issued since the base rate dropped to 0.5% in March 2009. That is a large group of homeowners who don’t know what it’s like when interest payments rise meaningfully.

The other thing to watch closely is supply, which will put downwards pressure on prices as it increases. The housing market is famously seasonal, so can we tell yet what is likely to happen next spring?

 

Source: www.propertyreporter.co.uk

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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.

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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….

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Photo source: Pixabay http://bit.ly/2pcBFtF

The inflation for house prices reached a 5 years low: 4.9% this April compared to the average of 6.9% in the last 5 years.

Considering the fall from the last quarter of 2017, what the housing market is feeling now is actually a rise of 2.9% for prices. But this is mainly because the last quarter of 2017 consisted of a fall of 0.5%, instead of a growth.

Large regional cities are the strongest perfomers with signs of slower growth across the south coast. The pace of overall city level growth is losing momentum, partly due to static prices in London.

One of the cities with the fastest growth rate is Manchester, but the situation is unique in each UK large city.

London is actually the most particular: most of the authorities signalized a growth, but there is still a consistant number (16 out of 46) that are registering a negative growth and prices falling.

Details and an overlook in this very good analysis on Hometrack:

UK Cities House Price Index – April 2018

 

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Photo source: https://bit.ly/2HBT7iT

The market always anticipated the trends for anyone willing to ‘listen’ carefully to it. The build-to-rent trend is one of the many activities that appeared when (and where) a gap appeared between demand and supply.

Now someone has to address Generation Rent:

” those under 35 years old in full employment stuck in overpriced housing and earning too much to qualify for social housing”

But what do they need? More affordable private rental properties. And here’s where build-to-rent comes to meet the demand!

In recent years, smart investors speculated upon these trends and needs and have created new homes. Usually we are talking about flats that are designed to be rented on the long term, instead of actually bought fast by first time buyers.

Now, the figures are saying there is a 30% of the population renting in London.

Recent forecasts by PwC property consultants expect to see 60% of Londoners living in rented accommodation by 2025.

The growth in renters can only be supported by private investors. More helpful information and forecasts for investors in this article on Property Reporter:

Build to rent investments to become the mainstream by 2025

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Photo source: EUGDPR https://bit.ly/2GZg6TZ

GDPR is an acronym for General Data Protection Regulation and it is one of EU’s measures to ensure that an individual data is well protected by companies. The GDPR takes action starting these days and it might affect you more than you think.

First of all, if you are a real estate operator, you should be implementing GDPR concerning your customers. Private data are no longer at anybody’s disposal and security measures are a must. Otherwise, you – as a company, or as an individual, are facing high penalties.

Secondly, if you’re a buyer/ a landlord/ a tenant or any individual interested in a property, most probably your data is already at multiple real estate operators. You have to make sure your data protection rights are respected. But first you have to know them…

GDPR – How will it affect the property sector?

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Photo source: ARLA https://bit.ly/2HOCYH5

The Tenant Fees Bill can soon be a reality for tenants in England. The Government also answered upon the HCLG Select Committee report on the draft Tenant Fees Bill.

The main changes the Tenant Fees Bill can be read here. The most important provisions in the document that are to affect tenants (and landlords) are:

  • Maximum security deposits: six weeks’ rent.
  • The upper limit for holding deposits can be of no more than one week’s rent.
  • The landlords can charge more than £50 for sharer charges only after they prove that the costs were greater than the amount mentioned.
  • Landlords will not be able to issue a Section 21 notice until they have repaid any unlawfully charged fees.
  • Letting agent transparency requirements will be included in The Consumer Rights Act 2015. This will also be applied to websites and portals that do lettings.

Moreover, the Trading Standards should help tenants to recover unlawfully charged fees via the First-tier Tribunal.

To sum up, there are only some limited extra-charges a landlord or an agent can charge the tenant with:

  • a change or early termination of a tenancy when requested by the tenant
  • utilities, communication services and Council Tax
  • payments arising from a default by the tenant such as replacing lost key

What is your opinion upon the bill? Does it help enough tenants? Are landlords and agents too restricted?

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Photo source: https://bit.ly/2HBT7iT

Moving house can be a long and tedious process, but the day that you finally wake up and realise you’re moving into a new property can be incredibly exciting. A new house comes with new adventures, new possibilities and a new place to put down roots, but depending on your situation it can be weeks or months after buying a property before you finally get to move in.

 

Moving day can be quite complicated, and there is a lot to get done. Delays can only add to any potential stress, so it is important to make sure your move goes as smoothly as possible. Here are some tips to avoid any moving house delays:

 

Communication

 

You will speak to many different people while moving house, including estate agents, solicitors. surveyors, removal companies, and more. Filling out any paperwork quickly and replying to any enquiries can really speed up the process of moving.

 

Make sure you have copies of your ID, bank statements and any planning permission needed throughout the process, so you can be ready to hand anything over when needed. Keeping everyone updated throughout your move means any problems or concerns should be quickly fixed and the whole move should go smoothly.

 

Book in Advance

 

Ideally you should start arranging a removals van around four weeks before your moving day. Contact three or four companies and get a consultation with each. They will all provide you with quotes and you can decide which one works best for you.

 

Once you have that booked you can make any other arrangements you need, such as parking. If you are moving to a house that only has road-side parking, you will have to give notice to anyone it may affect, and let them know a removals van will be parking up for a few hours.

 

Avoid Exchanging and Completing on the Same Day

 

Although it may seem like an obvious option and a good thing to do, exchanging and completing on the same day can actually cause problems if you are part of a chain – it only takes one person to be unable to complete for the whole chain to break.

 

Try and leave a week or two between exchanging and completing, as this should give you enough time to resolve any potential complications that could come up. It’s good to have a bit of breathing space when moving house, as you never know what might happen.

 

Packing Preparation

 

One of the key things that will prevent delays on moving day is to have everything packed up and organised. The last thing you want is to be rushing around packing up some last minute items when you have a hundred other things to think about.

 

Start a month or so before you move, and keep everything as orderly as possible. Chuck out any clutter or take it to a charity shop, and pack a few boxes each night, carefully labelling them and wrapping anything delicate in bubble wrap. Having everything packed and ready to go will be a huge time saver when you get round to moving.

 

Arrange Child/Pet Care

 

Even though they are moving with you, children and pets can be quite distracting on moving day, and it can be quite an unsafe environment for them to be in with heavy boxes being carried back and forth to your new home.

Try and arrange for someone to look after them while you move, as this will allow you to concentrate fully on the task at hand and allow them to move into a new house afterwards with all their belongings in place. If you have older children you can find age appropriate tasks to enable them to help out with the move.

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Awards for the Victor Michael team at the 2018 ESTAS

Last night was a very important night for Victor Michael. The team at Victor Michael was awarded two gold awards at the Estate Agent of the Year Awards (ESTAS) 2018.

The two gold prizes received by Victor Michael were for:

  • Best Estate Agents Group in London
  • Best Agent in London East

The ESTAS awards 2018 happened under the tagline “Because Service Matters” and it highlighted regional and nationally services like real estate agents, brokers, conveyancers, home-builders for the excellent standard of customer service they deliver throughout the year.

You can watch the moment of the announcement of the Gold Winner on our Facebook page.

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