Rental supply at lowest for a year, says ARLA

Supply of rental accommodation is the lowest in a year.

It also reports that three in ten tenants had rent rises.

ARLA managing director David Cox said: “Supply of housing continues to be a problem and tenants bear the brunt of this with more people competing for properties at higher prices.

“The majority of tenants find that it is impossible to save very much at the end of the month to put towards buying their own home.”

Nearly two-thirds (63%) of ARLA members think the Chancellor’s Stamp Duty reforms for buy-to-let properties will push landlords out of the market, which will in turn cause supply to drop further.

However, nearly half (47%) of ARLA agents reported that they have seen an uplift in interest from buyers looking to invest in rental properties before April 1 – a rise from the 24% reported for December.

Cox said: “The April deadline for the Stamp Duty surcharge is looming.

“The final details will be revealed at the Budget in March but we are not expecting to see the Government back down on this policy.”

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House building increases – remains below Government target

Property Industry Eye reports that the supply of new homes is improving, with both starts and completions up to their highest levels since 2008.

Meanwhile new home planning permissions have reached their highest level since 2008.

In the December quarter of last year, starts were 37,080, up 6% on the previous quarter and up 23% on the same quarter a year earlier.

Completions in the December quarter stood at 37,230, also 6% higher than the previous quarter and a 22% annual rise.

The number of starts are now 116% above the trough of March 2009, but 23% below the March quarter 2007 peak. Completions are 23% below their March 2007 peak.

Altogether, says the Department for Communities and Local Government, there were 132,560 starts last year, up 6% on 2014.

Annual housing completions totalled 143,560 last year, a 21% increase on 2014 but still 29% short of the Government’s annual target of 200,000 new homes a year.

The rise in completions was entirely due to private house building activity.

Out of the total completed, 119,210 were private sector (up 8%), 22,680 were built by housing associations (down 1%) and 1,670 built by councils (down 36%).

Separately, the Home Builders Federation and Glenigan reported that planning consent was granted for 242,819 homes in the first nine months of last year, the highest moving annual total since early 2008.

All the figures relate to England only.

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Transactions lowest for almost a year, says HMRC

There were 83,590 transactions in January, HMRC has reported – although the number magically rises to 105,940 when “seasonally adjusted”.

The 83,590 figure compares with 115,310 transactions in December, and is the lowest since February last year, when there were 78,540.

According to HMRC, there were 1,230,380 transactions last year.

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First-time buyers outnumbering buy-to-let purchasers by three to one

There were 311,700 mortgages issued to first-time buyers last year. While the figure was the same as 2014, the amount borrowed – £46.7bn – was the highest since 2007.

Home movers took out 365,800 loans for house purchase, down fractionally (0.2%) on 2014. Again, though, the amount, at £72.1bn, was the highest since 2007.

Buy-to-let lending rose by both volume (up by 28%) and by value (up 39%), and that too was at its highest since 2007.

Despite the rise in buy-to-let lending, last year first-time buyers outnumbered buy-to-let purchasers with mortgages by three to one.

Only 41% of buy-to-let mortgages were for house purchase, a total of £15.6bn. The bulk of buy-to-let lending was in the form of re-mortgaging – something which buy-to-let borrowers constantly do as they seek out better deals.

Separately, the Office for National Statistics has said that average house prices ended last year at £301,000 in England, £175,000 in Wales, £193,000 in Scotland and £148,000 in Northern Ireland.

The highest average house price in England was in London at £536,000, and the lowest was in the north-east at £155,000.

The ONS puts annual house price inflation last year at 7.3% in England, 1.0% in Wales, -0.2% in Scotland and 1.5% in Northern Ireland.

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Rents and landlords’ returns both rise – but the big challenge is Stamp Duty

A recent report said rents are accelerating this year, with rents up 3.6% in January on an annual basis. Further, taking into account both rental income and capital growth, the average landlord in England Wales saw total gross returns of 12% in the 12 months to January.

That equates to an average of £21,988. The average capital gain contributed £13,594 while rental income made up £8,394.

Apparently stamp duty premiums on new buy-to-let purchases are the big challenge.

The 1st April deadline and the extra purchase costs are perceived as a potential threat.

Landlords are long-term investors and generally take good advice before making a new purchase so any disruption to investment in supply is likely to be short term.

Separately, the Council of Mortgage Lenders said the buy-to-let sector is going through an uncertain period as it is unclear how changes to the tax treatment of the sector will affect it.

It said that current demand for homes was being led by buy-to-let landlords. It expects to see a “modest fall” in total activity in the second and third quarters of this year.

The CML also reported an estimate of £17.9bn mortgage lending in January, 21% up on last year and the highest lending total for a January since 2008.

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‘Most home owners would choose traditional agent to sell their home’

Most home owners would choose a traditional estate agent if they had to sell today, a poll has found.

However, a significant proportion would go the online route – and younger people would actively choose an online agent rather than a full-service one.

The poll asked: “If you were choosing an estate agent today, do you think you would go for an online estate agent with lower costs, or a traditional estate agent with local premises that you can visit?”

Out of the 1,000 who were polled, 349 said they would choose an online agent, 592 said they would go with a traditional agent, and just 59 said they would choose neither – suggesting that the private sales route has yet to get much traction.

The online option was slightly more popular with men than women (178 to 171), while 318 women compared with 274 men favoured traditional agents.

Because of the small number of home owners aged between 18 and 24, only a total of 26 views could be garnered in this age group.

However, 13 would choose an online agent, compared with 11 who would go with a traditional agent, and two would choose neither option.

The poll also asked the home owners what they wanted most from an estate agent.

Most chose getting the “right price” as most important – 461; a further 216 wanted knowledge and experience, and 188 chose excellent communication.

The remainder chose other options.

All the older age groups chose the agent’s ability to value and get the right price for their home as their top priority.

However, the top priority for the youngest age group was excellent communication. This was also the age group least likely to rate knowledge and experience – something which counted heavily with the oldest age group of 55 pluses.

The survey was carried out last summer by OnePoll for its client, Face for Business, a telephone answering service.

A spokesperson for Face for Business said: “Online estate agents are experiencing more rivalry/competition than ever, but traditional is still the preferred choice of home owners.

“People want to see estate agents and need face to face communication.”

She added that the firm may recommission the survey.

http://ffb.co.uk/

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It’s a stampede! Investors rush to beat Stamp Duty deadline

There is resounding new evidence that buy-to-let investors are ramping up activity as they try to beat the April 1 Stamp Duty surcharge deadline.

Also, more individuals appear to have turned themselves into companies in order to be exempt from an earlier clampdown announced by George Osborne last year.

According to specialist broker Mortgages for Business, limited companies accounted for 43% of all buy-to-let cases in January – up from 38% at the start of the year.

Overall buy-to-let applications were up 27% in January from the month before.

From April 1, a 3% Stamp Duty Land Tax surcharge will be levied on the purchasers of second homes, including buy-to-let properties.

Also looming is the start of the phased introduction by which landlords’ ability to offset mortgage interest against tax is to be cut to the lowest rate. However, buy-to-let companies will be exempt from this.

David Whittaker, managing director of Mortgages for Business, said: “Landlords have woken up to the fact that transacting via a corporate vehicle is a feasible option, and in many cases, the most prudent route going forward.

“I wouldn’t be surprised if the percentage continues to rise as landlords, especially those paying the higher tax rate, prepare for the forthcoming changes to relief on finance costs.”

The total number of buy-to-let mortgage applications (made by both individuals and limited companies) rose by 27% in January compared to December 2015.

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