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UK house price growth falls in UK for sixth month in a row
UK house price growth in November dipped for the sixth consecutive month but changes to the Stamp Duty property tax is expected to boost sales, according to the latest report from the Royal Institution of Chartered Surveyors (RICS). The tax changes announced last week in the Chancellor’s Autumn Statement could result in a sales boost of between 2% and 5%, according to the RICS Residential Market Survey. Despite 15% more surveyors reporting a decline in new buyer enquiries and a fourth consecutive fall in supply to the market, surveyors are expecting more house sales in response to the reforms, although expectations in the capital were more muted. As speculation continues over how much the new changes will encourage existing property owners to put properties on the market, the reforms come in a month that saw house price growth fall to its slowest pace since May 2013, a 13% net balance, and the number of houses for sale per branch fall back to its second lowest reading of 56. It was also clear from member comments that uncertainty surrounding the outcome of the forthcoming general election is providing potential purchasers with a reason to sit on their hands and new buyer enquiries have now declined for five consecutive months. Across the UK, price growth was strongest in Scotland and the South West, both with a net balance of 37%, and weakest in the North of England and London. Meanwhile in the rental market, tenant demand was steady in November, but landlord instructions declined for the eighth successive month and member' forecasts for rent over the next 12 months now stand at 2%. ‘The Stamp Duty reform could reverse the softer trend in buyer enquiries that has been visible in recent months but a critical issue in terms of how it plays out with prices is whether it also encourages more vendors to consider putting their properties back onto the market,’ said Simon Rubinsohn, RICS chief economist. ‘The expectation from members that transactions could increase by up to 5% over the next year on the back of this measure suggests that there is a belief that supply will indeed respond to the tax change. This is all the more important given that the latest RICS data suggests that the average level of inventory on surveyors' books is close to a historic low,’ he added. According to Jeremy Blackburn, head of policy at RICS, it is no surprise that surveyors are expecting an uplift in the market in response to the long overdue reforms to the stamp duty tax system. ‘Removing the dead zones will reduce the distortion in the market and ensure that those at the top end of the market will now contribute fairly, while those at the bottom will be given a fairer chance to get on the ladder,’ he explained. Continue reading
UK house prices predicted to rise by 6% in first quarter of 2015
UK house prices are predicted to rise by up to 6% in the first quarter of 2015 but then start slowing as the May general election approaches, according to one forecast. Prices could even start to drop by around 2% in the last half of the year and it could be a worse scenario if the current opposition Labour party wins, says the prediction report from low cost online estate agents Hatched. Hatched also predicts growth to continue at somewhere around 4% to 5% in 2015, whilst warning home owners to be prepared for a rocky spell around April, May and June, with the uncertainty that a general election inevitably brings. According to Adam Day, the firm’s managing director, a Labour victory in May could potentially have a hugely disruptive effect on the property market as the party is known for surprising voters with unexpected measures and excessive red tape. He pointed out that the last Labour win led to the introduction of Home Information Packs which then had to be scrapped. ‘The way they were introduced wasn't thought through. The government announced the specific date that HIPs were to become a legal requirement, which led to hundreds of thousands of home owners rushing to put their house on the market in an attempt to avoid the cost and bureaucracy associated with their production,’ he explained. ‘It was this slapdash strategy, which consequently led to an oversupply of properties that brought on the beginnings of the crash in 2008,’ he added. Interest rates are also expected to rise in 2015, although for many home owners it will not have a huge impact. But it is likely to affect first time buyers who tend to spend a higher percentage of their income on home costs. However, Hatched expects interest rate rises to be a contributor to the slowdown for the housing market in the final half of the year. Day also expects there to be a significant reduction in high street agents. ‘Many agents will have over staffed themselves this year because it has been so busy, so when the property market does begin to slow in the middle of the year, they will have over extended themselves,’ he suggested. He believes that 2015 will see online estate agencies continue to prosper and traditional agents who decide to join the online revolution and thus respond to customer demand by driving efficiencies with the aim of lowering their fees, should also enjoy success and stand out in a market which is likely to get tougher as the year progresses. Continue reading
Landlords facing serious court delays on evictions due to cuts
Under resourced county courts in England are exasperated by the number of possession claims being put forward, resulting in costly delays for landlords, it is claimed. According to tenant eviction service Landlord Action it has become such a problem in the last three months that chasing up cases with the courts is now a full time role for one member of their in-house legal team. The vast majority of residential possession claims are dealt with in the county courts and enforced by county court bailiffs. However, government spending cuts, an ever growing number of possession cases which have increased around 15% on last year, are leading to overload. On top of this the firm points out that some courts are insisting that bailiffs must no longer act alone, only in pairs, and this has added to serious delays in the eviction process. ‘We are forever chasing courts for updates on possession orders, Notice of Issues or bailiff appointments. By the courts' own admission, cases are getting overlooked, administrative errors are being made and there are simply not enough bailiffs to support the number of cases, leading to long delays,’ said Julie Herbert, head of legal at Landlord Action. This is having serious implications for landlords who are not only losing thousands of pounds in unpaid rent but racking up more legal costs the longer a case goes on. Some landlords, who are unable to meet mortgage payments as a result, even face possible repossession, in addition to the added risk of their property being left uninhabitable by current tenants, where communication has broken down. One landlord, Mr Waller, has had severe delays with his case as a result of the courts losing his claim, twice. Landlord Action finally obtained a hearing date, which took place on 24 November. ‘Our eviction case has been delayed for almost a year due to severe maladministration by the courts. Files were repeatedly lost and the inefficiency we and Landlord Action encountered was astounding,’ said Waller. ‘This has been a deeply frustrating experience for us as landlords, but an even more harrowing one for our tenant who desperately wants to be rehoused by the council and needs a court order. We're in an impossible catch 22 situation, which only the courts can resolve. The negligence and insouciance of certain individuals are quite literally destroying people's lives,’ he added. Herbert of Landlord Action said another common frustration is when a possession order has been granted and a bailiff appointment confirmed, but the tenant makes a last minute application because they have nowhere else to go. ‘The standard procedure is that a hearing has to be considered by a judge. We recently learnt that many of these applications don't even reach a judge, who would have the authority to strike out an application based on the information already provided,’ she explained. ‘Instead, the knee jerk reaction of court staff is to set down a hearing date, in which everyone is dragged to court,… Continue reading
