House prices in ‘Brexit limbo’ - Plus all the latest property news
Posted by The Oracle Group on 1st August 2019 -
INDUSTRY
House prices in ‘Brexit limbo’
UK house price growth fell to 0.3% annually in July, remaining below 1% for the eighth consecutive month, according to Nationwide’s latest data, leaving the average UK house price at £217,663. Jeremy Leaf, north London estate agent and a former Rics residential chairman, warned that favourable conditions are being curtailed by the continuing Brexit uncertainty: "The market is very much in limbo," he said. Howard Archer, chief economic adviser to the EY Item Club, noted that London and the south east have dragged down the national picture - with year-on-year falls of 0.7% and 1.6% respectively. Nationwide’s data also revealed that over-65s are blocking young buyers from purchasing family homes, as it found two-thirds have at least two spare bedrooms.
Potential homeowners worry about house prices
Potential homeowners are worrying more about house prices and saving for a deposit than about mortgage affordability, One 77 Mortgages has found. House prices are still the second biggest concern for 88% of adults, also up 4% since 2015, with saving for a deposit the next biggest concern for 87% of adults. “It makes sense that wider influences of affordability outside of the control of home buyers and sellers are amongst some of the biggest concerns within the property market and with prices still on the up despite wider political uncertainty, this is likely to remain the case for the future,” said Alastair McKee, managing director of One 77 Mortgages.
MORTGAGES
76% of homeowners cannot define “remortgaging”
Recent data has revealed that many homeowners lack a full understanding or mortgage paperwork, with three quarters being unable to define the term “remortgaging”. The study, carried out by Trussle, also shows that 61% of current and soon to be homeowners in the UK do not fully review their mortgage agreement before signing it, and 50% only understand “some” of the language used in the paperwork.
RENTAL
More tenants are entering the rental market
New figures from Haart have revealed that more tenants have been entering the rental market across England and Wales. The estate agent’s National Housing Market Monitor for July showed that the number of new entrants has risen by 9.2% from last month and 23.1% from last year. The report also revealed that average rent is down 0.4% on the month, and by 4% on the year, and now sits at £1,239 per calendar month across England and Wales. “Nationally, there are 23% more tenants looking to rent properties annually, but rental supply is down by 19% over the same period,” said Paul Smith, chief executive of Haart. “We are now at risk of pricing young Londoners out of renting, as well as owning a home. I urge Boris to relax taxation against landlords to encourage investment in housing stock again,” he added.
Tenant fee ban sees rents rise in June
Over half of UK estate agents (55%) have reported that landlords increased rents in June, resulting in the number of tenants experiencing rent rises increased to the highest figure on record. ARLA Propertymark said this was a 22% increase from May - a previous record high. “Unsurprisingly, rent costs hit a record high in June as tenants suffered the impact of the tenant fee ban. Ever since the government proposed the ban, we warned that tenants would continue to pay the same amount, but the cost would be passed onto tenants through increased rents, rather than upfront costs,” said David Cox, ARLA Propertymark chief executive.
FIRMS
Countrywide cuts losses and strikes new debt pact in turnround bid
Countrywide reduced its losses to £37.7m from last year’s £206.4m in the six months to June and agreed a new debt deal with lenders as it attempts a turnaround following an emergency share issue last year. The firm’s chairman, Peter Long, has also hit out at the constant reshuffling of housing ministers on Wednesday after the ninth new face since 2010. Mr Long’s comments came as Esther McVey returned to Government in the role of housing minister, which sees her attend Cabinet but as minister of state, meaning it will be seen as a stepping stone for a politician aspiring to full Cabinet rank. Writing in the Evening Standard, Ms McVey revealed that other industry figures have also expressed concerns over the ‘revolving door’ of the housing minister position.
Intu shares tank amid heavy losses
Retail landlord Intu’s shares plummeted on Wednesday morning as it fell to a near £900m loss for the first six months of 2019 - almost double the £486m losses it racked up in the same period last year and leaving investors without an interim dividend. New chief executive Matthew Roberts admitted that the property developer requires “radical transformation”. Net rental income fell 18% to £205.2m, while like-for-like net rental income dropped 7.7%, taking revenue down to £315m from £322.1m last year. Net debt dropped to £4.7bn however, as Intu paid down its debts with £153m from the sale of its Derby shopping centre.
Higher costs eat into Taylor Wimpey profits
Housebuilder Taylor Wimpey has posted a 9.4% fall in profits for the first half of the year, to £299.8m from £331m in 2018, due to higher costs. Though revenue rose slightly, from £1.72bn to £1.73bn, its build cost per unit increased to £152.500 from £143.700 in the first half of 2019. “There continues to be pressure on labour and materials, reflecting wider industry trends,” the company said in its half-year results announcement.
PLANNING
Councils urged to protect ancient woodlands
The Woodland Trust has warned that changes introduced in last year’s national planning policy framework to protect ancient woodland and trees from developers are not being fully implemented by councils. The framework says “irreplaceable habitats” must be protected except for “wholly exceptional reasons,” and the Trust said councils and developers “are not implementing the level of protection” afforded by the policy. Elsewhere, a report by Solihull Council has suggested that doubling the amount of tree cover in the West Midlands could prevent 140 deaths linked to poor air quality each year.
New villages for Lincolnshire
Plans to build almost 6,000 homes in Lincolnshire have been given final approval. The £1.2bn Lincolnshire Lakes scheme, near Scunthorpe, will create six new waterside villages complete with care and community facilities, and schools. North Lincolnshire Council leader Cllr Rob Waltham said it was a "milestone" for the project and housing in the region.
Councillors reject green belt housing plans
The development management sub-committee of City of Edinburgh Council has unanimously rejected Springfield Homes’ plans to build 701 homes on green belt land in the south east of the city, close to the Royal Infirmary of Edinburgh. The proposal would have seen more than 300 homes built on council-owned land, which Springfield said would generate a windfall of around £5m for the council. Planning officers advised councillors that “housing on the site is not justified in terms of need,” and that the developer had failed to act on fly-tipping on the land it already owned.
LEGAL
UK unexplained wealth order targets suspected paramilitary links
The UK’s National Crime Agency has issued a UWO to a Northern Irish woman with suspected links to paramilitary criminals after she purchased six properties worth around £3.2m.
OTHER
WhatsApp programme for estate agents revealed
A new WhatsApp service is being rolled out that will allow estate and letting agents to use the messenger service to respond to their leads. Lead response technology firm Olivia utilises a team of real people to respond to agents' online enquiries in under two minutes, 24/7, in an effort to speed up response times and move away from outdated communication channels. It hopes that being able to interact with consumers via WhatsApp will allow agents to improve their lead management, customer experience and communication.
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