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Prime central London property market sees second quarter of sales decline
The prime central London property market is seeing further adjustments with the latest figures showing that the overall value of properties transacted is down 21.1%. Properties under £2 million saw a decrease of 20.8%, while those in the £2 million to £5 million bracket went down by 27.1% in the third quarter of 2014 compared to the same period in 2013. The data from Strutt & Parker also shows that £5 million plus homes performed slightly better, but still saw a decline of 15.2%. A similar pattern emerged in terms of volume sales, which were down 26.8% overall, with all price bands seeing a reduction in the number of transactions. However, the firm points out that when looking back over the past five years, these statistics are not so concerning as the volume of transactions are actually up by 3.1% compared to the rolling five year quarterly average. Over the past five years, the £2 million to £5 million price bracket has seen a 20.9% increase, and the £5 million plus bracket is up by 19.6%. In contrast, the sub £2 million price bracket is marginally down by 2%. ‘Whilst total values transacted in central London are markedly down on this time last year, we must have a sense of perspective and accept that 2013 was an exceptional year. It is really not surprising that prices are stabilising after the dramatic price increases we saw over the past 12 months,’ said Stephanie McMahon, head of research at Strutt & Parker. ‘Sales volumes are also showing a slowdown and two quarters of data do suggest a trend of decline. This is as we predicted. We have seen these conditions before in the run up to a General Election when speculation mounts. It is a recognisable pattern and we do not believe it spells doom for the property market in the long term,’ she added. According Lulu Egerton, Partner at Strutt & Parker in Chelsea, there is no doubt that prime central London property is in the midst of a price correction. ‘Properties which are priced competitively and realistically are still selling and we are achieving good figures,’ she said. ‘After a spectacular year in 2013, asking prices had become inflated and they are now in a period of correction where prices are being adjusted down by around 5% to 10% as buyers become far more price sensitive,’ she added. Continue reading
New online services launches to help UK landlords with immigration checks
A new service for UK landlords has been launched to help them cope with the new legislation that means they must check the immigration status of potential tenants before agreeing a rental. The first groups of landlords will be required to undertake the checks from December 2014 under a pilot scheme in the West Midlands with the requirement being rolled out across the rest of the country in 2015. The new online Ready Rentals system has been created to help landlords who will have to ask those applying to live in one of their properties for proof of their right to reside in the UK such as a passport, right of abode certificate, or alternative documents that confirm their immigration status. Under the Immigration Act a landlord failing to comply could receive a fine of up to £3,000 and the new rules have already stirred up much feeling amongst the private rented sector, making it a controversial topic, with some questioning whether it is the landlord's place to act as 'immigration officer' in this way. Others fear the additional weight of responsibility on private landlords might negatively affect the industry, putting people off renting out their properties as they struggle to cope with the changing legislative demands. ‘The immigration issue is a hot topic at the moment, with the government and opposition openly debating their approach to the nation's growing problem, but I don't see this new legislation merely having been presented as a vote-winner. Checking a tenant's immigration status is not only beneficial to the country as a whole, it also helps the landlord to feel more assured that they will receive their rent successfully,’ said Neil Woodhead, founder of Ready Rentals. ‘For some it can feel as though the legislation that private landlords have to follow is constantly changing, and this can be daunting for many. Yet it is important that private landlords face this, and other legal demands placed upon them, in a thorough manner. The result is legal compliance and a professional service for tenants, a win-win for all,’ he added. Just one of the issues that Ready Rentals will address, the new immigration laws will be fully supported by the service, providing landlords in the West Midlands and further afield when it is rolled out, with access to all the advice and referencing systems needed to ensure that they meet the new demands of the immigration legislation. Woodhead explained that the online system will be available for an affordable annual fee and aims to make the life of a private landlord easy and the service they offer legally compliant and seamless, addressing concerns and providing invaluable answers to problems faced by individual landlords. This is achieved by providing access to all the documentation needed to become a private landlord, a tailored system to suit individual needs; continually updating advice on statutory regulations and letting a property; providing the ability to market online to major portals; giving information on general marketing and advertising;… Continue reading
Affordability is the most important factor for UK tenants, research finds
When looking for rented accommodation in the UK the overriding priority for tenants in every age group and in every region is affordability, new research shows. Nearly two thirds of respondents in the Knight Frank UK Tenant Survey, one of the largest of its kind ever carried out, said this was their main concern when compared to location or space in the property. Around a quarter said that location was the most important factor when choosing a rental property, while 10% said that the size of the property was the key consideration. Those earning between £30,000 and £35,000 a year were slightly above average in their concern about affordability with 67% citing it as an issue but moving up the income scale location becomes a bigger priority, with 39% of those earning between £50,000 and £60,000 a year citing this as their main concern. When asked how much of their gross income they would be willing to pay on rent, the average response was 40% but there are some significant regional variations. Only 17% of those in the North East would spend more than 40% of their salary on rent, but this more than doubles in the South West, to 32%. In London and the South East, around a fifth, 22% and 20% respectively, of respondents are prepared to pay between 40% and 50% of their income on rent, while 11% of Londoners are prepared to pay more than 50%, underlining the cost of renting in the Capital. Some 23% of those aged under 25 are also prepared to pay between 40% and 50% of their monthly pay on rent, highlighting the relatively weaker earning power of those just starting out in their careers against the cost of renting a property. There is also evidence of a rent ‘ceiling’, even for those on higher earnings. While a third of those earning between £20,000 and £25,000 a year said they would pay a maximum of between 30% and 40% of their income on rent, only 24% of those earning between £45,000 and £50,000 a year said the same. ‘Even if their income rises, there is still a natural limit to what tenants are prepared to pay on rent,’ the report says. After affordability is factored in, it is clear that location plays a crucial role. Some 55% of respondents said that having a rental apartment or house close to where they work or study was important, with more than a half also identifying proximity to transport links, shops and other amenities as a priority. Breaking down the results by age, it is clear that young professionals value living close to their office, fitting with the trend for demand for city centre private rented sector accommodation. Some 73% of those under 25 and 66% of 25 to 34 year olds said that when looking for a rental property, being within reasonable proximity of where they work and study was a key priority. Around 58% of those… Continue reading
