Tag Archives: autumn
Lettings industry unhappy about proposed tenancy changes in Scotland
Every summer on top of the thousands of tourists that arrive in Edinburgh there are thousands more seeking short term rentals for the duration of the city’s famous International Festival and Fringe. But concern is being expressed that proposed changes to the lettings market in Scotland put forward by the government could adversely affect the private rented sector’s ability to cope with the influx. On top of this there are students seeking properties to rent when the university term starts and this too could be affected by the plans, according to an analysis report from Lettingstats, part of the online property lettings firm Lettingweb. The Scottish Government has proposed that assured and short assured tenancies should be replaced by the Scottish Private Rented Tenancy (SPRT) for all letting in the private sector. It would make the current situation where a landlord rents to students during term time then to tourists and Festival workers during the summer without having to end and start a new tenancy impossible. Lettingstats believes that these new tenancy rules will stop the ability of key providers in the private rental market to offer guaranteed accommodation for both students and festival visitors. It could also affect landlords around the country who rent to students. It says that the legislation, scheduled for the autumn, will force private landlords, Edinburgh’s universities, and PBSAs to offer unlimited tenancies with no clear end dates, instantly removing these landlords’ capacity to know when they can market their properties to festival performers, visitors and students alike. ‘Private rented housing stock and university accommodation is critical to the success of Edinburgh’s festivals. The new tenancy reform proposals may be well intentioned, but the Scottish Government and City of Edinburgh Council have so far ignored the dire warnings consistently presented to them from across the entire private rented sector,’ said Lettingweb’s head of research, Dan Cookson. ‘Given that the identification of additional Festival accommodation was seen as a key recommendation in the city’s recent festival strategy, it is bizarre that the city would support tenancy reform changes that will immediately put at risk much needed accommodation capacity within the city,’ he explained. ‘Just the prospect of this legislation being introduced is already having a wider impact on the private rented sector. Landlords are starting to move to protect themselves by either transferring their tenancies over to short term only, or even considering disinvesting which would be a disaster as falling supply will inevitably push up prices,’ he pointed out. ‘Ultimately this legislation will have an unintended negative impact upon the availability of housing stock for residents, students and visitors alike. It is hugely disappointing that policy makers are ignoring the stark warnings of the sector,’ he added. Letting agents are also expressing concern. Stuart Montgomery, director of Rettie & Co, believes the legislation is based on a fallacy that landlords evict tenants from their homes… Continue reading
Prime London property prices up 1.6% in second quarter of 2015
Values across London’s prime housing market grew by an average of 1.6% in the three months to the end of June, but remain 0.7% below where they were a year ago. Increased stamp duty rates and unsold stock levels restricted a bounce in property values after May’s general election, according to the latest analysis from real estate firm Savills. The report also says that buyer caution has been most evident at the top end of the market, with prices in the prime central London market barely showing any net house price growth over the quarter with a rise of just 0.3%. This means that house prices in this market are down by an average of 4.3% year on year. According to Lucian Cook, head of UK residential research at Savills, there was a feeling prior to the autumn statement last year that the prime markets of London were looking fully priced following a sustained period of growth. ‘The stamp duty increases introduced in December 2014 mean they now also looked fully taxed, despite mansion tax fears being confined to history,’ he explained, adding that this effect has not been confined to prime central London. Indeed, across the remainder of the prime London market homes worth over £2 million saw values fall by an average of 0.9% over the past year, despite rising by an average of 2.4% in the quarter. Across London, the market below £1 million, where buyers benefitted modestly from the stamp duty reform, recorded annual price growth, albeit of just 2.4%, as the mortgage market review continues to restrict the amount people can borrow, whether because of the stress testing of affordability or the income upon which this is judged. ‘In the early part of the year we could put buyer reluctance to commit down to political uncertainty pre-election. Only now is the dual effect of taxation at the top end of the prime market and mortgage regulation at entry level becoming clear,’ said Cook. ‘These constraints are keenly felt by buyers, while some sellers are clinging to expectations that values can keep on rising. That has created a gap in price expectations in parts of the market which is likely to hold back any recovery in transaction levels,’ he pointed out. ‘With those transactions having been suppressed prior to the election, it seems inevitable that high value sales will have peaked, at least in the short term, in 2014. That means current constraints on the market could have a negative on impact on stamp duty receipts from most expensive housing upon which the Treasury has become increasing reliant,’ he concluded. Continue reading
Average prices in England and Wales up 0.4% in May to new high
Average house prices in England and Wales increased by 0.4% in May to reach a new high of £277,178, the fourth price record set this year, the latest index data shows. However monthly property price growth is still only a third what it was a year ago, according to the LSL house price index. Year on year price were up 4.5% and excluding London the annual growth was 4.4% as London was knocked into fourth place with price rises accelerating in North of England. Only a few months ago price rises in London were skewing the annual figure, but not anymore. Indeed, the data shows that home values in Kensington and Chelsea are now 16% below their peak in the autumn 2014. The LSL index data also shows that home sales were down 14% year on year in May as a lack of supply suppresses housing market activity. Adrian Gill, director of Reeds Rains and Your Move estate agents, pointed out that the 0.4% boost in compares to 1.2% at the same point 12 months ago, but he believes that the recovery is still underway. He also pointed out that there are now only four regions across the country where house prices are still dallying below 2007/2008 benchmarks and it is those areas which have most catching up to do and where price increases have typically been smaller, where growth is now accelerating. For instance, while average property values in the North are still 4% lower than during the pre-crisis years, this region has experienced the fastest increase in the rate of annual growth recently, up from 2.3% in March to 3.6% in April. Price rises in the North West, South West, and East Midlands are also on the up, at the same time that growth in London is waning. ‘This has knocked the capital back into fourth position in the rankings of regional house price growth over the past 12 with the annual rise in London estimated to now be less than 12% of what it was in of July last year and 2.4% in May 2015, down from 20.7% in the summer of 2014,’ explained Gill. He also explained that on a monthly basis, London house prices have dropped for the third successive month since the start of the year. It is the higher priced boroughs which have seen the biggest price falls, and Gill said this is a side effect of costlier stamp duty on top-end properties. For example, home values in Kensington and Chelsea, the most expensive London borough, have dropped 6% in the past year, and are now 16% below their peak in September 2014. This falloff at the top tiers of the market has cooled activity levels too. Home sales in London have dropped 16% year on year in the three months to April 2015, the most significant drop-off of all regions. Continue reading
