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UK’s new housing minister urged to get on with tackling major challenges
The new housing minister Gavin Barwell has been urged to tackle the major challenges facing the property industry including lack of supply and new home building. Estate agents and letting agents welcomed his appointment in the new government under new Prime Minister Theresa May and said that his appointment as Minister for London should help tackle the housing issues that particularly affect the capital city. ‘This is a crucial time for housing, with demand greatly outstripping supply and an urgent need to reshape Britain’s housing mix,’ said David Cox, managing director of the Association of Residential Lettings Agents (ARLA) and Mark Hayward, managing director of the National Association of Estate Agents, in a joint statement. ‘We worked closely with the previous administration to increase transparency in the UK property and sector and remain very supportive of the need for a beneficial ownership register,’ they pointed out. ‘Property transparency is particularly a problem in London where housing stock has increasingly become a vehicle for money laundering operations, so we applaud the decision to provide the Minister with a duel oversight for London,’ they added. The statement pointed out that the Government’s decision to sell the Land Registry risks reversing its good work on transparency and they are calling on the new minister to work with the new Business, Energy and Industrial Strategy Department to think again on this proposal. They say it is also essential to honour the commitment of the previous Housing Minister to bring forward a review of the need for mandatory Client Money Protection (CMP) for letting agents, following the discretionary powers that were brought in as part of the Housing and Planning Act as they believe that only this can provide the adequate level of protection for landlords and tenants alike. ‘These challenges are not insurmountable and we greatly look forward to working with the new Minister to find a solution to these issues in the months and years ahead,’ the statement concluded. Barwell said that he is looking forward to working with councils, housing associations, developers and investors to ensure ‘we build the homes people need and deserve and to working with the Mayor of London to ensure the continued success of our wonderful diverse capital and that all Londoners share in it’. Barwell has previously held various parliamentary private secretary roles, including to the Minister of State for Decentralisation and Planning Policy and Secretary of State for Education, and has more recently been Assistant Government Whip and Lord Commissioner of HM Treasury. He is taking over from Brandon Lewis who has moved to the position of Minister of State for Policing and Fire Service. Barwell joins the team at the Department for Communities and Local Government (DCLG) which is led by Sajid Javid, who was appointed Communities Secretary last week. Continue reading
London residential rental market disparate due to Brexit uncertainty
Rents in London have peaked in many locations with the market currently stagnant and facing uncertainty due to the UK deciding to leave the European Union, the latest analysis suggests. While Benham & Reeves Residential Lettings' Heat Map generally shows relatively consistent trends across the capital, second quarter results show a disparate market. For example rents were up more than 4% in Chelsea but in nearby South Kensington they were down more than 4%. Similar contradictory results were to be found across London with adjacent areas showing wildly different fortunes. The report explains that even in the early part of this year, uncertainty over Brexit was affecting the prime central London rental market. Non-nationals were awaiting the result of the referendum while UK nationals were finding better value in East London and the suburbs. Rents in central London were falling, much to the frustration of landlords who were also suffering from the double blow of stagnating capital growth. Rental value growth was to be found in outer London until recently. However, the most recent figures from Benham & Reeves Lettings demonstrates that rental values have finally peaked there, as well. Most areas outside of prime central London saw rents plateau or boast only nominal growth. The report says it is perhaps noteworthy that there is a lack of definable trends. Hampstead Garden Suburb saw growth of over 4.5% while adjacent North Finchley saw rents fall by over 10%. The report suggests that the contrast may be due in part to the reopening of the Northern Line interchange at Tottenham Court Road. The eastern part of the City also saw double digit growth, thanks in part to the release of some highly anticipated new developments in the area, while the western part of the City saw rents fall by over 4%. ‘There is nothing the property market hates more than uncertainty. While the referendum result may not have been what many London residents wanted, it has provided us with an answer,’ said Marc von Grundherr of Benham & Reeves Lettings. ‘Our quarter two results are a reflection of what was happening in the market in the run up to the vote. If anything, the referendum result could be just what the market needed. The rental market always benefits in financially volatile times as people would rather rent than commit to buying a property,’ he explained. ‘Demand is still strong and since the referendum, we are receiving an average of 17 applicants per property compared to 13.9 at this time last year. Notably, many of the applicants have been from the EU,’ he added. Continue reading
UK housing market sees marked drop in activity, particularly in the south
Uncertainty fuelled by the European Union referendum has resulted in a marked drop in activity in the UK housing market with new buyer enquiries down significantly across the country. In June some 36% more chartered surveyors nationally reporting a fall in interest, the lowest reading since the middle of 2008, according to the latest month residential market survey from the Royal Institution of Chartered Surveyors (RICS). The South of the UK has been the hardest hit, with anecdotal evidence suggesting both the EU result and the tax changes, which took effect at the beginning of April, as having an impact on sentiment. There was a further fall in the supply of properties coming available for sale across the UK in June, with the exception of Northern Ireland. This highlights the continuing challenge presented to the market by the lack of stock, according to Simon Rubinsohn, RICS chief economist. The report also shows that 45% more chartered surveyors saw a fall in new instructions in June from a net balance of -31% in May, the steepest fall on record and extends a trend that has been in place since 2014. The market has also seen further decline in sales this month with a third successive monthly drop in activity. Contributors expect this trend to continue with 26% more respondents anticipating a further drop in sales across the UK over the next three months. This is the most negative reading for near term expectations since 1998. House price growth saw a reduction in June and although prices are still rising, they are doing so at a more moderate pace with 16% more respondents reported having seen prices rise rather than fall across the UK. London remains the only region where respondents are seeing prices fall with a -46% net balance but this is largely being concentrated in the central zones. ‘That said, near term price expectations are now in negative territory across the whole of the UK with 27% more respondents across the UK expecting to see prices fall rather than rise over the next three months,’ Rubinsohn pointed out. He also pointed out that looking further ahead over the next 12 months, sales expectations have turned negative for the first time in four years with 12% more contributors expecting transactions to fall rather than rise. Significantly, over the next 12 months the dip in prices is only expected to persist in London and East Anglia with net balances of -39% and -34% respectively, and longer term, prices are still expected to rise, albeit a little less than previously anticipated, with a cumulative increase of 14% projected for the next five years. Rent expectations over the same time horizon remain more resilient and are still broadly consistent with an increase of just over 20%, the report also shows. ‘Big events such as elections typically do unsettle markets so it is no surprise that the EU referendum has been associated with a downturn in activity. However, even without… Continue reading
