Tag Archives: asia
Pending home sales in the US down slightly, latest index data shows
Pending home sales in the United States fell slightly in November for the third time in four months as buyers continue to battle both rising home prices and limited homes available for sale. Overall modest gains in the Midwest and South were offset by larger declines in the Northeast and West, according to the latest pending home sales index from the National Association of Realtors (NAR). The forward looking indicator based on contract signings decreased 0.9% to 106.9 in November from an upwardly revised 107.9 in October but is still 2.7% above November 2014. The data also shows that although the index has increased year on year for 15 consecutive months, November’s annual gain was the smallest since October 2014 when it was 2.6%. Lawrence Yun, NAR chief economist, said that November's dip in contract activity continues the modestly slowing trend seen ever since pending sales peaked to an over nine year high back in May. ‘Home prices rising too sharply in several markets, mixed signs of an economy losing momentum and waning supply levels have acted as headwinds in recent months despite low mortgage rates and solid job gains,’ he said. ‘While feedback from realtors continues to suggest healthy levels of buyer interest, available listings that are move-in ready and in affordable price ranges remain hard to come by for many would be buyers,’ he pointed out. Continue reading
Income producing potential of UK property set to top the agenda for investors in 2016
The income producing potential of various property asset classes is expected to be top of investors’ agendas in 2016, according to a new outlook analysis report. Average UK house prices are set to rise 5% in 2016, but the speed and timing of interest rate rises will dictate the pace and sustainability of price growth, according to the predictions from real estate advisors Savills. In the commercial market, average total returns on UK property investments are likely to slow to approximately 7.5% while in the agricultural market Savills has downgraded its forecasts for the next five years given recent market evidence and the short to medium term expectations for commodity prices and therefore farm profitability. The firm says that income and the ability to unlock the latent value of individual assets through active management are likely to be priorities, due to the current stage of the property cycle and the medium term prospect of interest rate rises, regulation and tax policy in the residential sector, and the outlook for commodity prices in the agricultural sector. In the commercial and residential markets Savills expects a shift towards investment in regional markets, given where recent capital growth has left yields. The referendum on membership of the European Union (EU) presents the greatest uncertainty for UK real estate in 2016/2017, according to Savills, as the outcome has potential implications for all three sectors. The prospects for a pre-referendum investment slowdown may well depend on how close polling companies believe the outcome will be, the report suggests. The report explains that annual house price growth stood at just 3.9% at the end of October, with annual housing transactions appearing to have peaked at 1.2 million per year so the forecast for 2016 is 5% for average UK house prices. It points out that stamp duty changes have left the top end of the London market looking both fully priced and fully taxed suggesting a further delay in the return to trend rates of house price growth. Meanwhile, the mainstream market is more dependent on what happens to the cost of borrowing. ‘Capacity exists for short term price growth if rate rises are delayed further, but rising interest rates will squeeze affordability, making house price growth dependent on earnings and the pace of economic growth,’ the report says. It adds that in some areas in London, for example Ealing, Acton, Greenwich, Lewisham and Waltham Forest, may buck this trend as they attract more affluent buyer groups. Attractive commuter towns will also continue to offer good medium term price growth, particularly where travel times are shortened by rail improvements. Also demand for private rented accommodation will continue to rise. The restriction in tax relief and additional 3% stamp duty charge for buy to let landlords may result in rising private rents and shift investor focus towards higher yielding sectors of the market, particularly key regional cities, it suggests. While Government policy… Continue reading
Unauthorised residential sub-letting costing UK landlords thousands
The practice of unauthorised sub-letting is still rife in the UK's private rented sector (PRS) and subsequently damaged properties are costing landlords thousands of pounds, it is claimed. The warning from the Association of Independent Inventory Clerks (AIIC) comes after the National Landlords Association (NLA) recently reported that almost half of tenants who sub-let their property do so without their landlord’s consent. The NLA's findings come in response to government proposals to introduce minimum room sizes in order to crack down on problems such as unauthorised sub-letting. The study also found that of those tenants who approached their landlord about sub-letting, a fifth had their request permitted. The AIIC says that any tenants who are interested in sub-letting must speak to their landlord as if approached officially and properly, there is a chance the landlord will be willing to hear any requests. ‘Unfortunately, the practice of unauthorised sub-letting remains rife within the PRS and can cost landlords thousands of pounds in damages,’ said Pat Barber, chair of the AIIC. ‘There are countless horror stories related to sub-letting. For example, I know of a new two bed flat in which a total of 12 adults lived, although it was only rented to two male tenants. Another case concerned a three bed furnished flat, let to a restaurant and a total of 27 people were sleeping there, on shifts, all workers for the restaurant business,’ she explained. ‘These were both properties that I personally checked-out and needless to say both were wrecked, leaving the landlords thousands of pounds out of pocket,’ she added. It is hoped that the government's new proposals will limit the scope of unauthorised sub-letting but Barber pointed out that it also remains vitally important for landlords, agents and service providers like independent inventory clerks to remain vigilant for the signs of unauthorised sub-letting. She also explained that in the case of unauthorised sub-letting, an inventory carried out by an independent inventory clerk could provide the landlord with the opportunity to recoup some of the costs incurred by property damage. An independently compiled inventory will comprehensively detail the condition of the property at the beginning of the tenancy and it is very difficult for a tenant to argue against such firm evidence of check-in condition. Continue reading
