Weekly Property Newsletter - Week Ending 14/02/16

Our weekly newsletter on the property market will keep you up to date with all the latest news and legislations!

Our newsletter is published every week reporting on the most important news over the past week.

Research shows hundreds of thousands of UK landlords are not protecting tenant deposits

Wednesday 10th February

Despite the fact that it is a legal requirement for landlords to protect their tenant’s deposits, new research suggests that 284,000 landlords fail to do this.

A report from the Centre for Economics and Business Research (Cebr) says that these landlords are sitting on £514 million of deposits that should be protected by an official third party service such as The DPS.

Even with the risk of fines for landlords who do this, 15% are running the risk of a £2,400 penalty and furthermore, the report adds that these landlords could cumulatively be earning up to £8.5million per year in interest on the unprotected money which has no third party protection with the agreement ends.

‘The majority of landlords are following the legislation and are protecting deposits, however there is still a large sum of money which is unprotected and therefore leaving many tenants vulnerable to losing it,” said David Gascoyne, Sales and Lettings Manager of Residential Estates.

ARLA boss says rents are becoming ‘alarmingly unaffordable’

Friday 12th February

A new report by ARLA found that the average first-time buyer this year will already have spent £52,900 on rent.

The Cost of Renting, assembled by ARLA with the Centre for Economics and Business Research, shows that this year’s average first-time buyer in England will have spent 16.4% of their earnings on rent during the time they were renting.

The report also says that most people who leave the family home at the age of 18 will typically rent for 13 years before buying.

Ellis Bradshaw, Sales and Lettings Coordinator at Residential Estates said that “rises in rent is becoming a worsening issue as it is really impacting on people’s ability to save to buy their own home. This is only get worse as interest rates start rising which puts further pressure on renting.”

Concerns voiced about lack of flood awareness among UK home owners

Tuesday 9th February

Another storm has hit the UK and the high winds have prompted a new approach to home building on flood plains and also to increase awareness for home owners.

Reports reveal that one in three home owners are unsure as to whether their homes are built on a flood plain or not. This is a startling amount as almost 10,000 homes a year are built on floodplains, with an average of one new home in every 14 constructed on land that has a significant chance of flooding, either from a river or the sea.

Furthermore, another survey found that 35% of home owners are unaware whether their home is at risk of flooding and 21% confessed they would have no idea how to tackle it if their home was to flood, with 14% even admitting to not knowing which emergency service they should contact should it happen.

“After the recent flooding devastation, it’s shocking to hear that so many people are still unsure even whether their homes are situated on a flood plain. People need to know what to do should the worst happen,” said Jason Dodd, Sales & Lettings Coordinator at Residential Estates.

Survey finds over half of buy let landlords unaware of mortgage changes

Monday 8th February

A new survey has revealed that over half of buy to let mortgage applicants in the UK are unaware of forthcoming changes to mortgage tax rules and other changes that could affect their application.

According to research from the insure provider Direct Line for Business, accidental landlords who did not intentionally set out to let a property are most at risk to be unaware of legislation changes. Their research found that 62% of applicants were unaware of either the changes to mortgage tax relief or the European Union’s Mortgage Credit Directive (MCD), both of which could impact their ability to secure a mortgage. This lack of awareness rises to 71% amongst accidental landlords.

This comes as it is estimated that accidental landlords account for around 17% of new mortgage applications, with overall buy to let mortgage applications growing by 29% in the past year.

Help to Buy deposit saving financial product proving popular in UK

Friday 5th February

With a quarter of a million people opening the UK Government’s new Help to Buy ISAs savings scheme, it is one of the most popular financial products that have launched.

The Help to Buy ISA helps people to save for a deposit for their first home and it has attracted around 250,000 first time buyers, more than half of whom are aged 30 and under.

The Help to Buy ISA is already helping people onto the housing ladder as there have already been claims to the Help to Buy government bonus this week.

The scheme gives first time buyers the opportunity to save up to £200 a month in a dedicated ISA that the government will top up by 25%, up to a maximum of £3,000. First time buyers eager to make the most of the scheme can also open their account with a one-off lump sum of up to £1,000 in addition to the monthly maximum.

The government’s other schemes, the Help to Buy mortgage guarantee and Help to Buy equity loan, have also been popular with over 100,000 buyers involved.

David Gascoyne, Manager of Sales and Lettings at Residential Estates said “house prices are shooting up; in order for first time buyers to be able to get on the housing ladder supply needs to increase.”

Valuation activity in UK property market increased in first month of 2016

Friday 12th February

According to the latest research, the UK housing market has increased in value by more than half on an annual basis.

Compared to January 2015, the number of housing valuations carried out this year in January climbed 52% which is the fastest annual uptick in total valuation activity since July 2015 when volumes rose by 57% on July 2014.

Many buy to let investors are rushing to buy before the Stamp Duty increase in April, however there are also newcomers to the market who are investing regardless of the tax raise.

Michael Holliday, Manager of Investments at Residential Estates said “it is not unreasonable to expect a peak in the activity in the buy to let sector as some investors rush to avoid any negative impact in their profit margins.”

Annual valuation activity among home owners looking to move grew by 27% in January, while between December 2015 and January 2016 there was a 15% uptick in the number of valuations for home movers.