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Average property service charges in UK 96% higher on new builds
The average annual property service charge in Britain is £1,863 with the figure 96% higher for new build than older properties at an average of £2,777, new research shows. The survey also shows that some 33% of property management companies have increased service charges in the last two years and they vary between £1.55 per square foot to £7 per square foot. The research by landlord insurance provider, Direct Line for Business, reveals that the average service charge or fees leaseholders pay to cover their share of the overall building maintenance represents more than two months of the average monthly rental income received by landlords, which stands at £906. In addition to this, they will also have other costs to think about such as paying tax on these monies, mortgage payments, management and agency fees and any ground rent fees which are now on average £371 a year for a new build and £327 for a property before 2016. The service charges for new build properties, coming on the market in 2016 are significantly greater than for older dwellings at £2,777, indeed 96% higher than the average for an older property. Service charge levels also vary markedly between developments. One new build development coming onto the market in Croydon in 2016 will see home owners paying £1.55 per square foot in service charges, while a development in Lambeth coming onto the market in 2017 is charging four and a half times more at £7 per square foot. The research report points out that there is an increasing trend for new builds to include amenities such as libraries, 24 hour concierge services, gyms and cinema rooms that is contributing to the increased cost of service charges, but also offers added value for landlords looking to invest in this type of property. Recent moves by developers have seen more private housing stock owned by freeholders subject to service charges. Owners of freehold properties situated on private roads or private estates are being charged for upkeep of roads and gardens. In one example owners of every four-bedroom property situated on a development in Guildford are charged £900 a year for upkeep of the road and communal gardens. ‘Service charges are often a hidden cost, which should be factored in when considering the affordability of a property. In some cases service charges are uncapped and can escalate rapidly. Landlords need to take into account all associated costs when purchasing a property, such as service charges, ground rent and taxes that may impact their rental yield,’ said Nick Breton, head of Direct Line for Business . The method for calculating service charges also varies between developments. In some cases it is a flat rate for all properties, while for others it is determined by the number of bedrooms or the square footage of a property. Service charges usually cover repairs to communal areas of a development such as windows, drainage and the roof…. Continue reading
Planning permission for new homes in the UK increased by 6% in 2015
The number of planning permissions for homes in the UK have increased by 6% year on year taking approvals in 2015 to the highest level since 2007. The data released by the Department of Communities and Local Government also shows that number of major applications being processed swiftly by local authorities is also at an all-time high with a record 81% decided within the required time. According to an analysis of Glenigan data published at the same time permission was granted for 253,000 homes during 2015. Government figures show that as well as rising numbers of planning permissions for homes, the number of permissions granted overall between October and December 2015 was 4% greater than a year earlier, with councils granting 92,000 decisions. ‘We’ve brought the housing market back from the brink with more than 700,000 new homes delivered since 2010 and a further one million granted planning permission,’ said Planning Minister Brandon Lewis. ‘These figures are further good news for hard working families and first time buyers wanting to achieve their dream of home ownership with constructions rates up and plenty of homes in the pipeline,’ he pointed out. He added that the reformed planning system and National Planning Policy Framework cut more than 1,000 pages of guidance to around just 50, simplifying the process for obtaining planning permission whilst maintaining safeguards for the countryside. The government is currently moving ahead with its landmark Housing and Planning Bill, which will help deliver on its ambition to build a million more homes. Measures include new affordable Starter Homes and a new legal duty will be placed on councils to guarantee the delivery of Starter Homes on all reasonably sized new development sites, and to promote the delivery of Starter Homes in their area. There will also be permission in principle for sites identified in plans and brownfield registers to give certainty around the sites that are suitable for housing, while protecting the green belt while planning reforms to support small builders will require councils to ensure they have permission shovel ready plots to match the local demand for custom build. Figures released recently as part of the English Housing Survey showed that more than a decade long decline, starting in 2003, in the number of people owning their home has been turned around with more than 14 million owner occupiers in the country last year. Continue reading
Spanish market remains stable with demand up from foreign buyers
British buyers have contributed the most to a steady growth in overseas buyers demand for property in Spain as the housing market remains stable. According to figures from the College of Property Registrars more than one in 10 properties sold in Spain is now bought by a foreign buyer, including expats and non-residents. Foreign demand as a percentage of the market was 13% last year, fractionally down from 13.5% the year before and foreigners bought 46,000 homes in Spain last year, 12,000 in the last quarter alone. Overall foreign demand was up 11% last year, and 12% in the last quarter, whilst local demand grew by only 7% in the last quarter. British buyers were once again the biggest group of buyers by a large margin with 9,956 acquisitions last year, some 21% of foreign demand last year, followed by the French with 4,116 or 9%, and the Germans with 3,445 or 7%. According to Mark Stucklin, of Spanish Property Insight, what is remarkable is how much British demand surged in the last two quarters of the year, which was not the case with other nationalities. Russian demand declined steadily throughout the year. He said that in both cases the change was influenced by exchange rates, with the Pound strengthening and the Rouble weakening. ‘The big story from last year’s foreign sales figures was the 81% increase in British demand compared to the year before. The British are clearly back to being the dominant force in foreign demand, though not yet as dominant as they were in the boom years,’ Stucklin explained. ‘Low Spanish property prices, down around 50% from the peak, plus a stronger Pound are no doubt fuelling British demand,’ he said but pointed out that fears of the UK leaving the European Union following the forthcoming referendum vote in June creating uncertainty about the UK’s future in Europe, and a weaker Pound in the short term, could encourage British buyers to sit on the sidelines for the next few months. ‘So don’t be surprised if British demand is significantly down in the first quarter of this year when the figures come out,’ he added. At the other end of the scale Russian demand was hammered last year, down 43%, thanks to serious economic problems at home pushing the Rouble down around 16% in the last year, and 50% in the last 3 years, leaving many Russians much poorer. Although the market is recovering in Spain there are still signs that pries and sales are up and down. The latest data from property portal Idealista shows that the average prices of a home in Spain fell by 0.9% in February to €1,583 per square meter. Year on year prices were down 0.8%. Only two of Spain’s regions registered increases in the average price of property with the Canary Islands up 1.5% and the Balearic Islands up 0.3%. In Galicia the prices remained stable, while the biggest declines registered were those… Continue reading
