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Investigation claims property redress scheme not working in London
Local authorities in London are failing to do their job stamping out rogue letting agents, according to a new investigation. Since the beginning of October letting agents and property managers have had to sign up to one of three government approved ombudsman or redress schemes. But an investigation by television channel London Live says it has found failings in the legislation which shows in its current state it just isn’t working. It also suggests that Londoners are unaware they now have more powers to hold rogue agents to account if they are ripped off. If a tenant is unhappy with the way they’re treated by an agent they can go to one of these schemes to complain. If an agent refuses to comply with decisions made by these schemes, they face fines and could be banned from trading, giving the ombudsman the legal teeth they previously lacked. It's now illegal for any agent to operate without registering with a government approved ombudsman to avoid tenants paying excess fees, having their deposits withheld, or being in fear of revenge evictions. London Live asked every local authority in London if they are enforcing this, and their response ranged from Havering admitting they're not keeping track and waiting for tenants to report rogue agents, to Merton and Richmond saying it's only when they are made aware that they seek compliance. It found that Kensington and Chelsea think the law is still going through the courts so it's not clear to them which department has to deal with this. Newham is the only local authority actively taking action. They’ve issued £5,000 fines to nine letting agents who have refused to register. London renter Alex Parsons says is long overdue. ‘Just as I was about to move into a property in Waltham Forest my flat mates and I were told to pay £300 on top of the £200 I already had to pay in admin fees,’ he explained. According to Rosie Walker from Renters Rights London the scheme isn’t working at the moment as tenants are worried that if they complain they could end up without a home. ‘The redress scheme is the final tier of the complaint process, what should be happening is that the agent should be dealing with the complaints directly with the tenant and the landlord to resolve it (the problem),’ said Sean Hooker, head of Ombudsman the Property Redress Scheme. All three redress scheme operators revealed that they haven’t received a single complaint from a London tenant or landlord because not enough is being done to let people know about their new legal powers. Continue reading
US commercial real estate activity expected to be on a firmer footing in 2015
Despite a slowing global economy, forward economic momentum in the United States should keep commercial real estate activity on firmer footing, according to the National Association of Realtors. The latest NAR quarterly commercial real estate forecast says that commercial activity should progress at a gradual pace heading into 2015. ‘Solid economic growth in the third quarter proved that the second quarter wasn’t an anomaly, as business spending increased, commercial construction rose and the labour market continued to make positive strides,’ said Lawrence Yun, NAR chief economist. ‘Job growth is the catalyst to improved demand for commercial real estate leasing and new construction projects,’ he explained but pointed out that softening in the global economy will likely widen the trade deficit in the US and could trigger some weakening in the overall economy. ‘GDP growth in the fourth quarter will be sluggish at around 2% behind stalling exports. Although GDP will likely climb to near 3% in 2015, the current pace of job growth could slow and ultimately impact commercial real estate activity if sluggishness in the global economy persists,’ he added. National office vacancy rates are forecast to decrease 0.5% over the coming year due to job growth exceeding inventory coming onto the market. Improved manufacturing activity should lead to a declining vacancy rate for industrial space at 0.4%, while retail space is forecast to decline 0.2% behind a boost in consumer spending from personal income gains and lower gas prices. ‘Low housing inventory and the sizeable demand for rentals will continue to spur multifamily construction as well as keep rents rising above inflation through next year,’ explained Yun. The report includes overall projections for four major commercial sectors and analyses quarterly data in the office, industrial, retail and multifamily markets. Office vacancy rates are forecast to slightly decline from 15.7% in the fourth quarter to 15.6% through to the fourth quarter of 2015. The markets with the lowest office vacancy rates in the fourth quarter are Washington, D.C., at 9.3%, New York City at 9.6%, Little Rock at 11.6%, San Francisco at 12.2% and Seattle at 12.8%. Office rents are projected to increase 2.4% in 2014 and 3.3% next year. Net absorption of office space in the US, which includes the leasing of new space coming on the market as well as space in existing properties, is likely to total 35.6 million square feet this year and 48.8 million in 2015. Industrial vacancy rates are expected to fall slightly from 8.8% in the fourth quarter to 8.4% in the fourth quarter of 2015. The areas with the lowest industrial vacancy rates currently are Orange County, California, with a vacancy rate of 3.6%, Los Angeles at 3.7%, Seattle at 5.8%, Miami at 6%, and Palm Beach, Florida, at 6.5%. Annual industrial rents should rise 2.4% this year and 2.9% in 2015. Net absorption of industrial space nationally is expected to total 110.7 million square feet… Continue reading
Wealthy Chinese and Russian buyers return to top end London homes market
A lowering of asking prices at the top end of the London property market seems to have led to an increase in sales of home in the £10 million plus range. Between January and October this year, the number of such properties sold by international agent Knight Frank increased by a third compared to the same period last year and was 92% higher than in 2012. This comes at a time when there is speculation over the sustainability of price growth in prime central London and the prospect of a mansion tax after next May’s general election, which have both resulted in more subdued demand. However, a large contributing factor is that vendors, who are typically discretionary sellers, have lowered their asking prices by between 5% and 10% in order to achieve a sale, according to the firm. ‘Once buyers re-priced at a more realistic level and the gap between the expectations of the vendor and the buyer closed, it triggered a flurry of activity,’ said Tim Wright of Knight Frank’s Prime Central London team. In June and July this year, Knight Frank sold as many £10 million plus properties as during the previous four months combined. ‘There has been talk of a drop in the number of transactions in the market and a slowing of price growth but this is due to the lack of data in the public domain,’ said Richard Cutt of Knight Frank’s Prime Central London team. ‘In the last quarter there have been a large number of flats bought from plan, off market, which have moved prices up and in some cases quite significantly. These sales only become public on completion and would paint a different picture of the market if they were factored in today. An example of this is the success of British Land’s Clarges Mayfair development,’ he added. The higher number of transactions is also underpinned by strengthening demand in recent months, with Russian buyers re-emerging after a period of uncertainty and Chinese buyers increasingly active in the £10 million plus price bracket. ‘The Russians are back. After a period of uncertainty and instability, they appear to have more clarity on where they stand, which has given them the confidence to get back into the market,’ said Wright. In the six months to October, Russian buyers accounted for 21% of super prime sales compared to 13% over the preceding six month period. However, given the economic backdrop in Russia, there is a marked difference between those that hold assets in roubles and those in US dollars, which is curbing the buying power of some. This year also saw mainland Chinese buyers become active in the super-prime market for the first time, accounting for 3% of sales after negligible demand in previous years. ‘We are beginning to see some serious interest from ultra-high net worth mainland Chinese buyers. Interestingly, it seems to be houses rather than flats or investment properties. These are buyers who clearly intend to spend time living in London… Continue reading
