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Property valuations increased in UK in June despite EU referendum
The pace of property valuations conducted in June 2016 in the UK increased both an annual basis and month on month, according to the latest research. The total number of valuations carried out in June rose by 4% compared to June 2015, and 24% compared to the previous month, the report covering the month of the European Union referendum from Connells Survey and Valuation shows. John Bagshaw, corporate services director of Connells Survey & Valuation, pointed out that the background to the figures is one of uncertainty and shock in the days after the UK decided to leave the EU, yet the property landscape appears surprisingly stable which he believes is encouraging. ‘Initial solidity from the post-Brexit housing market may not be enough to answer all the new legal and financial questions in light of the vote or to offset a likely blow to confidence on the near horizon. But this should bring such fears into perspective. Life will go on and the property market will continue to function,’ he said. Leading the June housing market, activity from first time buyers accelerated last month, making up for a considerable slowdown in buy to let valuations. Numbers taking their first step onto the property ladder rose 23% year on year, whereas buy to let valuations decreased by 40% over the same period. This is on the back of 27% month on month growth for first-time buyer valuations, ahead of the general seasonal pick-up in total activity while buy to let valuations increased by 17% since May, considerably slower than the overall picture. ‘First time buyers continue to drive activity in the housing market, an emerging trend since the start of the year and now reaching a new peak. Government schemes such as Help to Buy continue to be significant. But now a slowdown in the buy to let sector may be adding an extra short term boost for new buyers, as competition from landlords diminishes a little, easing the hunt for a home for sale,’ Bagshaw explained. Remortgaging has also seen a significant boost in valuation activity in June. The number of valuations carried out in June for those looking to remortgage rose by 18% on a 12 month basis and 19% month on month. Home movers were more cautious. Valuations for existing home-owners looking to move to a new property decreased by 7% on an annual basis since June 2015. However the number of such home owner valuations rose by 29% since May. ‘Home movers have once again had a stable month, and this section of the market has enjoyed the strongest seasonal acceleration from May. Meanwhile, remortgaging is the other major winner from a time of consistently low mortgage rates and a possibility of even lower borrowing costs over the summer,’ Bagshaw pointed out. ‘As seen in recent months many people are taking… Continue reading
Signs that currency volatility could boost UK market, especially in London
Currency volatility sparked by the decision in the UK to leave the European Union could create a scenario where overseas investors make major profits by continuing to invest and store their wealth in prime property in London, it is suggested. Market conditions are ripe for opportunistic foreign investors, which could create a welcome increase in the level of sales enquiries received by London developers and give a lift to the British property sector, according to a report from Arcadis. Since the result of the EU referendum was announced, sterling has fallen relative to the euro and the US dollar with further falls forecast before the end of the year. The report suggests that buyers from Europe, Asia, and the Middle East are now well placed to secure bargains in the London prime housing market by exploiting both a softening of property values and a favourable currency situation. Furthermore, with some Banks forecasting a recovery of sterling during 2017 and agents predicting some recovery of prime London house prices during 2018, those investing £2 million now may see their investments rise by as much as £250,000 in value, according to Mark Cleverly, head of commercial development at Arcadis. Although the appetite for opportunistic investment will depend on forecasts of further depreciation of sterling in the short term, the London prime market could soon see another influx of foreign investment. This would provide a timely boost for the UK construction sector in the long term, particularly if increased competitiveness is also matched by government funding for infrastructure, helping to underpin confidence in the new build sector. ‘The market volatility we’ve seen as a result of the Brexit vote is, perhaps ironically, going to re-open the luxury property market to overseas investors, as several of our clients have already reported a bounce in enquiries following the referendum. This influx of investment coming into the UK could boost British construction again in the future as well as giving shot in the arm to the Treasury through increasing stamp duty receipts,’ Cleverly explained. ‘For a market that, in some areas, has been stuttering for some time due to ongoing stamp duty hikes taking the steam out of buyer demand, the buying opportunity presented by recent events could be a big plus. More buyers means a more buoyant market which can only be good news for the industry,’ he added. Already there has been a surge in interest from overseas buyers, according to Benoit Properties International due to the plunge in the value of sterling. The firm says buyers could make a saving of around 12%. Matthew Lavin of Benoit Properties International said there has been a surge in interest in buy to let property from investors in the Middle East, Hong Kong and other countries with currencies pegged to the dollar. Within days of the referendum result the firm sold… Continue reading
Research suggests a third of UK tenants sublet without consent
Around a third of private rented sector tenants in the UK say they are currently subletting without the landlord’s consent and four out of 10 tenants plan to do so in the near future, new research has found. The survey from online lettings agents PropertyLetByUs, also shows that the vast majority of tenants, 96%, are subletting the property for short time to help a family member or friend out and 82% claim they are subletting to help pay the rent. Over half of tenants, 52%, say that they planning to sublet their property in the near future, with the landlord’s consent and 78% think they should be able to sublet the property without the landlord’s approval. According to Landlord Action, there is a growing number of instructions from landlords who want to start possession proceedings against tenants who have sublet, via Airbnb, without their consent. Subletting is fast becoming one of the leading grounds for a tenant eviction. According to Jane Morris, managing director of PropertyLetByUs, it is very worrying that so many tenants are subletting without telling their landlords. ‘It is imperative that landlords make regular checks on the property to check for additional occupants. Many tenants will try to hide the fact they are subletting, so the warning signs can be excessive rubbish and accelerated wear and tear,’ she said. ‘When there is multiple occupancy in a property, wear and tear and damage is dramatically accelerated. There can be increased mould and condensation with more occupants. Landlords can also face expensive repairs for damage and redecoration costs, to bring the property up to the standard it was at check-in,’ she pointed out. Morris also pointed out that illegal subletting falls under tenant fraud and renting a property makes landlords vulnerable to fraud. ‘It is vital that landlords and agents carry out thorough pre-letting checks. The purpose of referencing a tenant is threefold; to check the person is who they say they are, that they can afford the rent and that they have honoured past commitments,’ she explained. Last year, the government said it planned to make it easier for tenants to sublet a room by legislating against the use of clauses in private fixed term tenancy agreements that expressly rule out subletting, or otherwise sharing space on a short term basis. However, it has not yet set a date for a consultation on the plans. PropertyLetByUs recommends that landlords make regular checks on their property, ideally every three to six months and when doing so should look out for additional clothing and shoes, excessive rubbish for the number of registered tenants, additional bedding like sleeping bags and pillows, suitcases and rucksacks and extra toothbrushes ‘Before taking on a new tenant, make sure you carry out a thorough reference to ensure you know who your tenant is,’ added Morris. Continue reading
