Ten Percent of Landlords Plan to Buy Residential Properties

According to figures compiled by Paragon Mortgages, 10 percent of all residential landlords expect to purchase new rental properties within the next three to four months. Those in the buy-to-let sector that plan to expand their portfolios hope to do so during the first quarter and the most sought-after properties are terraced homes.

Landlords with only a small handful of properties increasingly prefer well-built terraced houses, as they tend to be easier to maintain and rent. In fact, 65 percent of all landlords expecting to add to their list of properties are looking to purchase terraced homes, while only one in four would like to buy a semi-detached house. An even smaller proportion (one in five) is looking to extend their rental business by purchasing a flat. But at the moment, Paragon found that the least popular option among landlords is to purchase a fully detached house.

Nevertheless, the continued lack of financing in the buy-to-let sector not only limits the ability of landlords to expand, but also to provide Britain’s growing tenant population a wide array of rental options. Yet this appears to be the ideal time to buy, with John Heron—Paragon’s managing director—noting that home values remain “soft,” while tenant demand is still high, and outstrips supply in much of London. The growth in the private rental sector, however, is not a new phenomenon. Over the past 17 years, the proportion of Britons renting homes rose from 9 percent to over 14 percent.

London Mayor Launches 'London Rents Map'

The London Rents Map shows average private sector rents for different types of home across London. A range of further information is also provided for tenants and landlords.

The data on average rents is given at postcode district level (SW19 or E7, for example), and is based on a sample covering the last 12 months so does not fully reflect the most recent short-term trends in the market.

London Rents

Property Supply and Demand Tips in Landlords Favour

A growing number of Britons who sold their homes last year but are finding it difficult to purchase a new property or receive a new mortgage are instead turning to the private rental sector in order to address their accommodation needs. According to statistics compiled by the Association of Residential Letting Agents (Arla), 54 percent of residential landlords found that more Britons are becoming tenants, including many former homeowners. Some observers have referred to these renters as “reluctant tenants,” in that they struggle to purchase a new home due to the low supply of properties in some areas, and very strict mortgage conditions throughout the country.

But Ian Potter, Arla’s operational manager, noted that there are benefits to renting, and an increasing number of Britons are taking advantage of the flexible lifestyle that being a tenant, rather than a homeowner has to offer. During a time of continued high unemployment and recession, for example, renting a flat or home makes it easy to relocate on relatively short notice, if one finds a job in another city or region. Homeownership, however, ties one down much more to a specific city and neighbourhood.

Another piece of good news for residential landlords is the finding that 41 percent of all Arla members found that they had more interest from prospective tenants than they had properties available for rent. This is in contrast to the 24 percent figure recorded last fall. As such, the balance between supply and demand has tipped in the favour of landlords and buy-to-let investors.

Barratt Developments Prosper On The Web and in London New Builds

Barratt is to build thousands of homes in booming London.Barratt Developments chief Mark Clare today hailed the London property market and outlined plans to build thousands of homes in the capital.

He said: "The London market is the strongest in the country. Even with the economy as it is, demand is outweighing supply." Barratt plans to start building 3700 homes in London in the next six months.

Barrats also reported that the recent bad weather had led to a flurry of online enquiries as it reported stronger first-half trading, adding to hopes the worst is over for the sector.

Online enquiries more than doubled in recent weeks as a countrywide cold snap forced many people to stay indoors or work from home.

"People haven't been able to get to the sites, but the good news is that people have been doing an awful lot of shopping online," said Clare.

"I'd hope that once the snow clears, those people will visit our sites," he said, adding nearly all house purchases now originate from web enquiries, with 4,000 leads on average a week from its websites.

Buy To Let Landlords Confidence High For 2010

The Young Index for the last quarter of 2009 reveal that buy to let landlords view 2010 as a good year for further investment;

99% of investors intend to hold their residential property investments for the next 12 months.

49% intend to hold their assets for at least 10 years (up from 44% in Q3 2009) and 22% of private residential property investors intend to retain their property investments for the next 20 years or more.

On average, residential property investors now expect to hold their property investment assets for the next 12 years, two years longer than this time last year.

59% of investors are considering purchasing additional residential property assets within London over the next 12 months, compared to 43% who are looking at opportunities in the UK outside of the capital. This compares to 33% and 8%, respectively, in Q4 2008 and is a continuation of last quarter’s upward trend.

The outlook for London property prices remains stable and is stronger than for the rest of the UK . 76% of investors believe that London prices will be at current levels or higher by this time next year (up from a low of 36% this time last year).

An increasingly large proportion of respondents (60% in Q4 2009, compared to 51% in the previous quarter) believe that UK property prices outside of the capital will rise within the next 12 months.

The expectation for the pace of property price recovery remains conservative. Landlords predict that average property prices across London will stand 0.7% higher by the end of 2010 – but that outside the capital, the UK will see a fall of 1.0% over the same period.

Perhaps unsurprisingly, 76% of respondents expect the Bank of England base rate to be higher than the current all time low of 0.5% by the end of 2010. But only 6% of respondents believe that it will have risen to more than 2.0% by the end of 2010, well below the long term average of 5.0%.

Despite reports of mortgage finance becoming more widely available of late, 39% of respondents cite a lack of appropriate mortgage finance as their current main concern, compared to just 28% this time last year.

Pointing to an increasingly positive outlook towards property prices, currently only 16% of landlords are hoping to see greater house price stability in the New Year, a marked swing from the 36% who hoped for increasing stability in Q4 2008.

Marylebone Lettings

Letting Agents; Beware of The Dodgy EPC

Dodgy Energy Performance Certificates are being issued that are not worth the paper they are written on.

They are ‘strewn with schoolboy errors’ and ‘glaring omissions’, according to Communities and Local Government, in a warning to the accreditation schemes that are meant to police the regime.

CLG has accused the schemes of failing to catch unacceptable or invalid EPCs, and of allowing Domestic Energy Assessors (DEAs) to lodge reports when their membership has run out, or if they have been expelled from other accreditation schemes for disciplinary reasons.

In a letter from CLG, written to the accreditation schemes and leaked to the website Home Inspectors Forum, CLG also announces tougher disciplinary procedures that will now face the schemes if they fail to uphold standards.

There will now be spot checks and mystery shopping.

According to one of the accreditation schemes, NHER, more than half its DEAs have lodged less than 75 EPCs.

Separately, a leading EPC provider has warned that false economies are being made on ‘cheap as chips’ Domestic Energy Assessor (DEA) services and that it is unclear where the agent’s liability stands, if the agent has commissioned the EPC.

London's West End Dynamic Property Market

The West End’s most quirky and bohemian quarter has never commanded the status that its location, at the very heart of London, deserves. One reason is the virtual absence of grand period architecture (Fitzroy Square is the exception). Much of the area was developed by small landowners rather than a single aristocratic estate. This led to a predominance of small and irregular streets rather than a grid-like network of roads and squares, which now gives Fitzrovia a distinct villagey charm.

Today, the area is popular with media companies, especially around the Charlotte Street heartland of bars, brasseries and boutique hotels, and it is here that Fitzrovia’s “first genuine loft apartments” have arrived on the market. A Twenties office block has been remodelled to provide eight rental apartments. It is a tasteful transformation by niche developer Urban Evolution, which is returning to its West End roots after undertaking a string of projects in Belgravia. Its trademark is classy, not opulent, architectural interior design.

Called Rathbone Lofts, the Fitzrovia scheme is a handsome brick-façade building with new factory-style, grey-framed Crittall windows. The apartments are above new ground-floor commercial premises already let to an advertising agency and have antique parquet flooring throughout, as well as bespoke oak joinery, column radiators, marble-clad bathrooms, handmade kitchens, exposed beams, high ceilings and double doors. It is a warm, comfortable and stylish look.Perched at the top of the building is a three-bedroom duplex penthouse with floor-to-ceiling windows, a big open-plan living space and a wrap-around terrace with views over the Soho rooftops. Rents range from £575 to £1,950 a week. For more information, call 020 7580 1010.

'Property transactions on this patch are continuing despite the wider market malaise'“They’re really cool pads and will strike a chord with local creatives,” says Laurence Glynne of estate agent LDG. “Renters tend to be a lot fussier than buyers. They want to live somewhere for a set period and if the place is not right, they won’t go for it, whereas buyers will say ‘I could do something with this’.

“I’m not saying it’s insulated from a recession but the West End is a dynamic place and much more complex than other areas; there’s always someone who wants to buy, sell, invest or rent.”

Agents In More Rural Areas Count Cost of the Snow

The snow is likely to hit agents hard in the pocket, with forecasts that the deep freeze will last for another 10 days.

Agents in the worst-hit areas of white-out Britain have had to shut up shop. Others have been reporting cancelled viewings, with a number of potential sellers deciding to delay.

Telegraph Property Market Predictions For 2010

Telegraph reports that the Home Counties will continue to be extremely sought-after, due to City bonuses and international buyers. Other strong areas include Oxfordshire, due to access to London and schooling; Gloucestershire, due to the beauty of the countryside and the pretty houses; Dorset, because of the shortage of supply over £3 million; and Hampshire because of commutability, quality houses and the existing wealth community.

Winners in 2010 will also include those with tidy rental portfolios. An undersupply of rentals in cities such as Manchester and Birmingham could drive rental values up by 10 per cent. Those who have dabbled in student accommodation (smart ensuites and studios rather than the old-fashioned digs we used to know), in the age of degrees for all, have done well. Student lettings have rewarded owners with 5 per cent increases in rental values for each of the past six years, and the year ahead promises the same.

Real Estate Values to Rise Modestly in Early 2010

Residential property values are likely to start rising again by relatively modest proportions during the first months of 2010, with the Royal Institution of Chartered Surveyors estimating an increase of only around 2%. A more significant recovery, however, is unlikely in the coming months, as the economy will almost certainly continue to stagnate and unemployment will remain high for much of the year. In fact, RICS suggests that some of the value increases in early 2010 may be negated if prices start to drop again later in the year, as mortgages remain scarce and first-time buyers find it difficult to enter the property market.

In contrast to predictions released by RICS, Hamptons International’s prognosis is somewhat more positive. The organization expects values to rise anywhere from 3% to 5%. But both Savills and Capital Economics see property prices falling, from a minimum of 6.6 percent, to as much as 10 percent. An analytical piece published in The Times, however, calls for caution when exploring these predictions, as the most respectable organizations have had difficulty deciphering the precise course of the recession and real estate slump. While many experts assumed that 2009 would bring a long series of declines in property values, most of this depreciation happened early in the year and prices began rising through much of the UK in the early summer months. Repossessions in particular were lower than what was previously predicted, in part thanks to the fact that mortgage interest rates fell by significant proportions.

Some of the most impressive growth in 2009 occurred in the London area, particularly in Chelsea. Foreign demand was strong in this area—especially among Italian investors—and Nationwide found that prices rose by around 5.9 percent nationally.

RLA

Property Developers Oppose Planning Policy

A coalition of some of Britain’s biggest property developers will launch this week to fight Tory party planning policies.

The group, called Building Futures, claims Conservative plans to hand over more power to local councils for planning decisions risks local councillors deciding applications on the basis of “political whims” rather than merit.

Land Securities, Britain’s biggest listed property company, and Countryside Properties are two of the most high-profile members of the lobby group. They argue the Tories’ localism agenda may encourage nimbyism and stifle development.

The councillors most opposed to housing developments were in the east of England — where 75% said targets were too high, followed by the southwest and southeast — areas where developers say new homes are most needed. Between 1997 and 2003 the amount of land being brought forward for development each year fell by 7%.

Building Futures plans to meet Bob Neill, the shadow local government and planning minister to present the findings from the survey and relay its concerns.

Emma Cariaga, head of strategic projects at Land Securities, told The Sunday Times the group wanted a national planning framework that could inform local decision-making.

She added that there should be a presumption in favour of development built into the planning system. “We want applications to be treated fairly and judged on merit, not on the basis of instincts or political whims. Weakness in the planning system will threaten economic recovery,” she said.