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Prime central London rental values up for eighth month in a row
Rental values in prime central London rose for the eighth successive month in October, recovering to a level last seen two years ago, the latest index report shows. Rental values climbed 0.5% in October as the UK economic recovery strengthened and yields saw the strongest improvement in three years, according to the report from Knight Frank. Annual growth was 2.6%, the highest rate since December 2011 and in the third quarter of 2014 tenancies agreed rose by a quarter while tenancies started increased by a third. Rental yields rose to 2.9%, recording the biggest monthly gain in more than three years, the report also reveals. It explains how in October 2012, rental values were at the early stage of a shallow decline that took place against the background of a tepid economy and a strong sales market. Now the International Monetary Fund has forecast that UK economic growth will outpace other developed countries in 2014 and at the same time demand in the sales market shown signs of cooling ahead of next May’s general election and uncertainty surrounding the possibility of a mansion tax. ‘With UK economic data remaining mixed, the prime central London rental market is still not in full-blown recovery mode,’ said Tom Bill, head of London residential research. ‘Though the number of new prospective tenants and viewings rose in October compared to the same month last year, the number of tenancies started is likely to end the month down, which reflects the hesitant nature of the recovery,’ he added. He pointed out that the positive IMF forecast should be balanced against data from accountant Ernst & Young that showed the number of profit warnings issued by UK companies between July and September was the highest in the period for six years. ‘In a further move that may dampen demand in the short term, mortgage lenders have cut rates as the likelihood of an imminent interest rate rise recedes. Lenders are also attempting to bolster their loan books after a slower period that followed the introduction of stricter lending criteria earlier this year,’ said Bill. ‘In positive news for investors, rental yields recorded their biggest monthly increase in more than three years, rising to 2.9% in October. Also, the spread between prime central London yields and the so-called risk free rate of a 10 year government bond has widened notably in recent months,’ he added. Continue reading
Poll reveals large number of UK home owners think their home is haunted
A large number of home owners in the UK think there are some ghostly goings-on happening behind their front doors, with 15% saying that they think their property is haunted. Of these, some 47% said they’ve felt a ‘presence’ in their home, 29% claimed they have experienced strange and unearthly chills around the property, and 16% of those living in a suspected haunted house revealed that they had actually seen a ghost there. Whilst there were some who claimed to have seen a spectre haunting their home, others had experienced the aftermath of spiritual activity, according to a Halloween poll from Ocean Finance. A fifth said they had seen items around their property move on their own, whether actually witnessing things flying around or finding that items were not where they had left them. However it is not something home owners should boast about if they are selling as another survey for Ocean found that 30% of people would be put off buying a property if someone had recently died there. Nearly a quarter, 23%, said that a property’s proximity to a graveyard could dissuade them from buying, and 9% even admitted that they would decide against a house if its address was ‘unlucky’ number 13. However, superstitious and psychic beliefs are not all bad news for sellers. Some 26% said that when they had been to view a house or flat they were interested in buying, they felt an aura around the property and 77% of these said that the property’s aura had been positive, with the remaining 23% sensing a negative aura. A property’s aura even influenced some people’s decision to buy. Of those who claimed to have felt an aura at a property, 58% said that it had encouraged them to move in. Just 20% said that the presence of an aura had dissuaded them from buying a home, showing that in general, house sellers can be thankful for these ‘feelings’. ‘It seems that some people in Britain are less pragmatic than they seem. With so many convinced that they have a ghostly guest at home, it’s not surprising that it’s influencing some house buyers’ decision on whether to move into a property,’ said Ian Williams, spokesman for Ocean Finance. Continue reading
Worrying number of home owners plan to use pension to pay off mortgage
More than half a million 40 to 70 year olds in England intend to use part or all of their pension to repay their mortgage, according to new research. While 58% take a more traditional approach to managing their mortgage by making monthly repayments until it is paid off and 22% making lump sum payments in addition to monthly contributions some have other ideas. One in 10 intend to use their tax free pension lump sum to repay the outstanding balance on their mortgage and 5% plan to use their pension to repay the outstanding balance on their mortgage. In addition, 7% claim to have savings or investments set aside to meet this cost which suggests that they may hold one of the estimated 2.2 million interest only mortgages outstanding on lenders books. The firm says that it is worrying that 6% plan to use an inheritance to repay their mortgage and 3% to take in a lodger to help them meet this cost, neither of which are guaranteed sources of finance. ‘It is worrying to see that over half a million people in England plan to use all or part of their pension to repay their mortgage. This suggests that the number of people who actually need to do this is likely to be far higher as unexpected events such as redundancy, illness or family financial emergencies cause issues,’ said Mark Stopard, head of product development at Partnership. ‘While it is natural for people to want to retire debt-free, the purpose of these savings is ideally to provide an income for their retirement which can last up to 30 years or more. Although the state pension will provide a very basic safety net, it is unlikely to be sufficient for people to have as comfortable a retirement as they might wish,’ he explained. ‘This research clearly highlights that people need to focus on repaying their mortgage as early as possible and avoid traps such as remortgaging for the full period each time they take out a new deal,’ he pointed out. ‘Even those who are currently retiring have options such as working longer, downsizing or taking out an equity release plan, all options that will help to keep their pension funds intact,’ he added. Continue reading
