Tag Archives: house
UK housing market optimism at lowest level for 18 months
House price optimism in the UK fell to its lowest level for 18 months in January as lending got off to sluggish start. While the Halifax House Price Index found prices increased 2% to £193,130 in January, some 60% of those surveyed for the lender’s latest housing market confidence tracker report expect the average property price to be higher in one year’s time. This means that house price optimism has fallen from 62 to +52, the lowest this figure has been since June 2013, when 52% expected a rise in property prices. In June 2013 inflation was at 2.9% compared to 0.3% currently, employment was just over 30 million compared to 30.9 million, and lending levels were at £15 billion compared to 17 billion. Despite the fact that GDP for 2014 grew at 2.6% and all nine members of the Bank of England’s Monetary Policy Committee voted to hold interest rates at 0.5% the dip in confidence levels over house prices mirrors that over the economy in general. ‘More than half of consumers still believe house prices will be higher than they are now in a year’s time; however optimism has continued to weaken. Despite this the fundamentals remain in place and we’re now seeing a return to the seasonal trend for house price activity,’ said Craig McKinlay, mortgages director at the Halifax. ‘Traditionally, a slow start builds to the summer before another lull and then a further period of increase followed by a gradual easing at the end of the year,’ he added. But he pointed out that of more concern are the figures from the Department of Communities and Local Government showing a slowdown in the number of new homes being built. ‘It’s widely acknowledged that the UK needs an increase in the amount of new housing being built,’ said McKinlay. ‘The Lloyds Banking Group Commission on Housing targeted 2 to 2.5 million new homes built by 2025 new homes to be built before 2025. If we are to address demand the increase in new homes coming onto the market needs to be sustainable,’ he explained. Continue reading
PRS issues further guidance on unfair lettings agent fees in UK
The Property Redress Scheme (PRS) has issued further guidance on unfair fees being charged by letting agents in the UK. The PRS is one of three consumer redress schemes authorised by the government whose role it is to provide fair and reasonable resolutions to complaints between members of the public and property agents and professionals. In England and Wales, letting agents are able to charge prospective and existing tenants for services and administration in addition to any rent or deposit paid. Such practices are illegal in Scotland where tenant fees have been outlawed since 1984. In a report issued by the PRS last month, it was revealed that of the complaints about agent members raised with the scheme, the most common grievance involved unfair or excessive fees being charged to the consumer. This has been reinforced by figures recently issued by Citizens’ Advice, who have hit out at agent’s ‘inexplicable fees’. In order to aid fee transparency and educate Member Agents, the Property Redress Scheme has issued two guides, one for agents and their landlords and another for agents and their tenants. It is not the role of redress schemes to prescribe or prohibit any fee in general. However, agents must be able to provide evidence to support the fees that they charge. A PRS Ombudsman may choose to make an award to the consumer if it is decided that the Member’s fees are unfair or have not been presented in a clear and transparent way. The guides have been summarised from the Competitions and Markets Authority Guidance (CMA) for lettings professionals on consumer protection law and are designed to help each party understand what may be deemed as an obscure or unjustifiable fee. ‘As a scheme, we felt that the subject of agent fees needed to be looked at in an objective and reasoned way and that agents should be provided with guidance on what they can and can’t charge. Tenants and landlords also need help understanding what they can complain about and which practices are legitimate and legal,’ said Sean Hooker, head of redress for the PRS. ‘Given the importance of this area and the fact that the redress schemes are now a major part of the mainstream lettings industry, it would have been remiss of the scheme to duck the issue and not make our agent members fully aware of their obligations,’ he added. The main purposes of the Property Redress Scheme are to allow agents to comply with their legal requirement to be a member of a government authorised consumer redress scheme and to settle or resolve complaints made by consumers against members. It is authorised by the Department for Communities and Local Government to offer redress to lettings and property management agents and the National Trading Standards Estate Agency Team (formally the OFT) to… Continue reading
Stamp duty changes in UK push first time buyer deposits to 18 month high
First time buyer deposits in the UK have increased by 15% in a year to average almost £30,000, driven by lower stamp duty bills for new buyers, according to the latest analysis. The average first time buyer deposit was £29,127 in January, up 7% compared to December 2014 and 15% higher than £25,314 in January 2014, the first time buyer tracker report from estate agents Your Move and Reeds Rains shows. The data also shows that first time buyers are saving the largest amount for their deposit since July 2013, some 18 months ago, as savings from December’s stamp duty changes take effect. This has also helped drive rising purchase prices for first time buyer homes, which have climbed to a new record. New buyers paid an average of £160,304 in January, 12% more than £143,343 a year ago. Revisions to the stamp duty slab system have reduced the upfront costs for many first time buyers, allowing them to divert that cash into a deposit fund. First time buyers paying the average purchase price would have been liable for stamp duty fees of around £1,600 before the graduated system was implemented, but this would now have been reduced to £700, saving them roughly £900. The report also says that simultaneously, as wages start to see a significant pick-up in real terms, growing purchasing power is reflected in the average first time buyer Loan to Value ratios and these have fallen 1.1% over the last three months, suggesting deflation and growing wages are allowing first time buyers to put together slightly larger deposits. Despite this, the average loan to income ratio for first time buyers has risen on an annual basis. On average, deposits now represent 75.4% of a first time buyer’s income, compared to 70.6% a year ago. ‘A fusion of economic factors is alleviating some of the financial burden of forming a deposit. Wages are starting to recover and inflation has fallen to a record low, meaning buyers have slightly more cash to play with day to day. And stamp duty fees were slashed for many new buyers when the government reformed the old slab system, freeing up further funds. It’s still difficult to save, with savings rates tied closely to the low base rate. But it’s easier to put cash aside than it was a year ago,’ said Adrian Gill, director Your Move and Reeds Rains. ‘However, property prices have pushed a new record for first-time buyers, meaning these extra funds are being diverted directly into larger deposits. Putting together a deposit to buy a property remains one of the most arduous tasks for prospective home-buyers, and schemes like Help to Buy are essential to allow the swathes of buyers reliant on higher LTV mortgages to get onto the housing ladder,’ he explained. The data also shows that there were 21,200 first time buyer… Continue reading
