TSI
UK govt announces new measures for residential lettings sector
New measures are being introduced in the UK that will create a bigger, better private rented sector for tenants and landlords aimed at getting rid of rogue operators. There are more than 4.4 million households renting privately in the UK and Housing Minister Brandon Lewis said the measures that will ensure tenants know their rights and where to go if they have a problem in their home. He explained that these changes aim to root out the small minority of rogue operators who shirk their responsibilities and make people’s lives a misery without hampering the efforts of the vast majority of landlords who are diligent and responsible. But they also aim to avoid strangling the industry in red tape which would deter much needed investment, increase rent and reduce choice for tenants. ‘We’re determined to create a bigger, better private rented sector that meets the needs of tenants and landlords well into the future, and encourages investment along the way. The measures we’ve taken give tenants the information and confidence they need to rent, allows the vast majority of landlords to provide a good service to continue doing so and are enabling developers to build specifically for private rent,’ said Lewis. ‘But they also mean we’re also rooting out the minority of rogue landlords who blight the lives of their tenants, providing peace of mind for people seeking a place to call home,’ he added. A new guide for tenants has been published so they know what to look out for when renting a home. The guide makes clear the standards people should expect and the signs of a poorly managed property. This includes testing that windows and doors can lock properly, how to recognise potential health hazards like damp and mould, and to check the temperature of the property and what heating is available. This comes on top of new measures announced a few days ago in which landlords will be required by law to install working smoke and carbon monoxide alarms in their properties. From October, anyone renting out a property will be required to install smoke alarms on every floor, and carbon monoxide alarms in high risk rooms. Councils can also benefit from revised guidance on dealing with rogue landlords in their area. In particular, the new guidance gives advice on building up an effective case in court, demonstrating how a rogue landlord has caused misery for their tenants, to ensure the full effect of their poor practices can be revealed. The guidance also covers new rules which require letting agents to belong to one of three approved redress schemes so people have somewhere to go if they have a complaint, and how to successfully prosecute a bad letting agent. New laws currently before parliament will also end so-called ‘retaliatory evictions’, giving tenants greater security, and will require letting agents to publish full details of the fees they charge tenants so people can know what to expect to pay. Continue reading
Property stamp duty revenues up over 20% in England and Wales
Stamp duty revenues in England and Wales raised on residential properties are projected to have risen by over 20% in 2014/2015 to a record £8 billion, according to new research. Three quarters of all home buyers are liable to pay stamp duty, ranging from nearly all sales in London to around half in northern England and Wales, says the study from the Halifax. London’s share of all revenue raised in the UK increased from 28% in 2006/2007 to 42% in 2013/2014 and two thirds of all first time buyer purchases in London are above £250,000 compared with only 1% to 2% in many regions. The research also suggests that there is no evidence so far of a dampening in activity at the very top end of the market following the recent reform of stamp duty. The Halifax estimates that the increase in revenues from stamp duty on residential sales from £6.45 billion in 2013/2014 to a record £8 billion comfortably exceeds the previous high of £6.68 billion at the peak of the last housing market boom in 2007/2008. This is more than a 15 times as much as the £520 million raised by residential stamp duty 20 years ago’ in 1994/1995. Under the new progressive structure of stamp duty introduced at the beginning of December 2014, no tax is paid on any of the value of a property below the starting threshold of £125,000. Above the first threshold, tax is charged at the relevant rate on the amount by which the selling price exceeds the threshold. This is continued through the various thresholds to the top rate. Based on the current average house price in England and Wales of£259,708, a typical home buyer pays a total of £2,985 in stamp duty. Under the old flat structure, a buyer paying this price would have been subject to stamp duty payments of £7,791, a saving of £4,806. In all regions, buyers are often making large savings. In cash terms the largest savings are in London at £4,830 and the South East at £3,843. The ‘tipping point’ price is £938,000, at which point the buyer is worse off under the new structure. The Halifax says that while it remains very early days, so far there are no signs of any marked changes in behaviour as a result of the changes made to stamp duty at the start of December. Indeed, the proportions of all sales in each of the bandings in December 2014 and January 2015 are almost identical to those in the preceding three months of September to November 2014. This equally applies at the top end of the market where the proportion of sales in London above £925,000 is unchanged at 9%, suggesting that the increase in stamp duty on such sales is not significantly deterring purchases in this market segment. Continue reading
Fewer loans for first time buyers and home movers in UK
First time buyers in the UK saw a drop in lending in January compared to the previous month and the same month in 2014, according to the Council of Mortgage Lenders. There were 19,000 loans advanced to first time buyers January, down 27% on December and 14% compared to January 2014. These loans by value were £2.8 billion, which was down 26% on December and 10% down on January last year. The data also shows that home movers were advanced 22,400 loans, a decline of 24% compared to December and 17% down year on year. These loans totalled in value £4.2 billion, 24% down on December and 14% down compared to January 2014. However, remortgage lending increased month on month with 25,600 loans advanced, up 15% on December but 12% down on January 2014. The value of these loans at £4.1 billion also increased month on month by 21% but was down 5% year on year compared to January 2014. There were 18,200 buy to let loans in January, up 6% on the previous month and up 12% on the same period in 2014. These loans came to £2.5 billion in value, unchanged compared to December but up 14% on January 2014. ‘The traditional beginning of year seasonal lull in lending is slightly more prominent in house purchase lending than in previous years, especially in comparison to the particularly strong levels at the start of 2014,’ said Paul Smee, director general of the CML. ‘Affordability constraints remain a factor for would-be borrowers, but we are still projecting lending to pick up over the next few months. Increases month on month in remortgaging, both for home owners and in the buy to let market, are welcome given the recent static nature of remortgage activity. Interest rates are looking unlikely to go up in the very near future and the greater availability of good mortgage rates has probably motivated people to look at a change,’ he explained. As previously reported, gross mortgage lending reached £14.8 billion in January. This represents an 11% decrease from December’s gross lending total and is 8% lower than lending in January 2014. The CML also pointed out that the data on which the results are based on the Financial Conduct Authority's statutory reporting, which is currently in a transition phase following the implementation of the Mortgage Market Review. As a result this month's data may be subject to greater revisions than usual reflecting the transition arrangements. According to Adrian Gill, director of Your Move and Reeds Rains estate agents, the data shows how the mortgage market has changed its’ spots in the last year. 'Lending has been tamed as new regulations and affordability checks have strengthened the borrowing process. Mortgage brokers are doing a more robust job and buyers are get sturdier solutions at the end of it. Although mortgage approvals are now running at more manageable levels than they were this time last year, the first time buyer market… Continue reading
