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Most UK landlords won’t use pension freedoms to invest in property
The majority of landlords in the UK don’t plan to take advantage of pension freedoms to invest in property, according to new research. Of those with a pension in place, just 5% are planning on withdrawing a lump sum to invest or expand their portfolio, the research from the National Landlords Association (NLA) shows. It also found that 14% of landlords would consider using a lump sum to invest in further properties, while 11% said they didn’t have enough of a pension to withdraw a lump sum at all, 7% already had other plans for withdrawing a lump sum and 19% were undecided. The research from the NLA, which asked landlords about their plans at retirement, also found that 3% plan to sell up completely, 19% have no retirement provisions in place and 25% plan to sell at least some properties. On top of this some 61% plan to live off portfolio income at retirement and 34% are undecided and will assess the market when they reach retirement age. ‘There has been a lot of talk around pensions being used to invest in buy to let since the announcement on pension freedoms was made last year. While the changes may be attractive to those considering a move into buy to let, it’s clearly not that popular an option for landlords,’ said Carolyn Uphill, chairman of the NLA. ‘Those currently in the market already have an asset to use if they want to expand, their property, and therefore, depending on circumstance, will have the means to put a lump sum towards other investments or plans; that is if they want to withdraw it at all,’ she explained. ‘The NLA offers invaluable advice, guidance and support for both existing and new landlords to help ensure the smooth and successful running of a letting business. It would be advisable for anyone considering or already planning on using a lump sum from their pension for investment in buy to let to look into how the NLA can help,’ she added. Continue reading
Newly listed properties in UK hits eleven year low
There is no sign of the supply issues in the UK housing market abating with estate agents reporting that the number of new properties has dropped to an eleven year low. The data from the National Association of Estate Agents (NAEA) shows that the number of properties available to buy per estate agent branch fell by a third in the last month. There are now 38 houses available per branch in August, compared to 55 in July. This is the lowest level of supply seen since January 2004, when 38 properties were also available. The NAEA monthly data report also shows that August saw a dip in house hunters, with an average of 408 house hunters registered per member branch, compared to 462 in July, a 12% drop. The number of sales completed in August rose by one to an average of 10 properties per branch in August, however, sales made to first time buyers fell to the lowest level since July 2014. One in five sales, 20%, were made to first time buyers in August, compared to 23% in July and 24% in June, indicating movement in the market is taking place higher up the ladder and it’s second and third steppers pushing through sales. ‘We’ve been banging the drum about the dwindling supply of housing for a while and this month’s report reiterates what we’ve been saying that there simply aren’t enough houses to match demand and we’re reaching crisis point,’ said Mark Hayward, NAEA managing director. ‘There are now 11 house hunters fighting after every available house which isn’t sustainable. First time buyers are finding themselves being squeezed out of the competition, which of course means it’s taking young buyers longer to get their foot on the first step of the ladder, which will in turn increase pressure on the rental market,’ he added. Continue reading
Falling property prices make Dubai a more mature real estate market
Falling property prices in Dubai are not totally bad news as it will make the emirate’s real estate market more mature, a new analysis report says. The report from international real estate firm Knight Frank explains how over the past decade, Dubai has been on a real estate rollercoaster ride of boom, crash and recovery. Indeed, property values halved between 2008 and 2010, but then rose phoenix like from the desert to regain most of their losses by 2014. However, the rallying prices of 2013 and 2014 set off the alarm so authorities had to react to prevent a market boom and crash cycle. At this point Dubai’s market regulators, wielding mortgage caps and a doubling of transaction fees, stepped in to reduce speculation and the report points out that this combined with other factors such as deteriorating oil prices, currency fluctuations and a series of economic and political failures in different parts of world, means lower levels of demand from most regional and international group of buyers looking to purchase properties in Dubai. On top of this there has been an excess of new build supply and the net impact has been a 12% fall in mainstream property prices over the 12 months to June 2015. ‘Nevertheless, falling prices are not totally bad news. With the government stepping in to curb speculative activity through tightening mortgage regulations and capping price increments, it is evident that lessons has been learnt from the 2008 downturn and the market is heading steadily to be more mature and better controlled,’ says the report. ‘More interestingly, with price falls continuing to outpace rental value declines, initial yields are rising. Reaching more than 7% in rental yields in the mainstream property segment, Dubai still stands tall among real estate capitals in the world for investor seeking income generating properties,’ it adds. It also points out that the rate of decline in prime residential prices of 4.5% in the year to June 2015 was smaller compared to the mainstream segment while in sub-markets, the picture is a bit more positive as well. In demand areas are mostly in the prime segment including villas, townhouses and apartments in the Palm, Emirates Hills, Dubai Marina and Downtown for example. ‘Even during the 2008 downturn, prime properties saw lower levels of declines compared to less established areas,’ Diaa Noufal, of the MENA research unit at Knight Frank Dubai office. The report also looks at the wider region. In Qatar foreigners have been able to buy property since 2004, although restricted to a few specific areas. Demand has been rising, albeit with a slowdown this year following the oil price crash and regional instability. Buyers tend to be residents of countries within the Gulf Cooperation Council, although the number of European buyers is rising. Demand for Oman property from across the Middle East and from India and Pakistan has risen in recent years. Knight Frank says this is partly due to… Continue reading
