Weekly Property Newsletter - Week Ending 06/03/16

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.

January saw highest total approvals for home buying in UK for a year

Monday 29th February

The number of loan approvals for house purchase in the UK increased by 22% in January with the month seeing the highest number of total approvals since the beginning of 2014.

The data from the Bank of England also shows that the number of remortgage approvals increased by 33% year on year.

A breakdown of the data shows that purchase approvals reached 74,581 in January compared to the average of 70,221 over the previous six months while those for remortgaging was 42,228, compared to the average of 40,306 over the previous six months.

Steve Povall, Director of Residential Estates said, ‘Interest rates aren’t expected to change for a while and with cheaper mortgage deals around, buyer demand is increasing.'

What is happening to the UK property market?

Friday 4th March

House prices increased last month by just 0.3%, according to Nationwide, but slid 1.4% according to Halifax.

According to Nationwide, the average UK house price is now £196,930, up from £196,829 in January.

Halifax puts the average price at £209,495 in February, but says this is down from January.

Nationwide economist Robert Gardner said there were almost 75,000 mortgage approvals in January, up from 71,000 in December. He said: “Much of the increase is likely to be related to the impending increase in Stamp Duty on second homes, due to take effect in April. This is likely to have brought forward a significant number of purchases, which in turn will probably result in a fall back in approvals during the spring/summer.”

Martin Ellis, the Halifax economist, said there remains a “significant imbalance between supply and demand” but felt there were tentative signs that the supply situation may be beginning to improve.

One in six tenants has sub-let with more likely to do so

Friday 4th March

Research by landlord insurance provider Direct Line for Business has shown

that one in six tenants in the UK admits to having rented out part or all of their property to someone not on the lease agreement.

It found that 25% off tenants who sub-let their property did not check their tenancy agreement to find out whether it was permitted and over 30% had not informed their landlord of the decision.

Of those who did not inform their landlord, a fifth got found out anyway. In 11% of cases the tenants named on the lease were evicted with 6% losing their deposit in the process. Other repercussions include increased rent.

David Gascoyne, Sales and Lettings Manager at Residential Estates said ‘sub-letting is not covered by most insurance policies and it is also becoming one of the major reasons for a tenant to be evicted.’

Broker says Rightmove operates ‘most robust business’ it has ever seen

Thursday 3rd March

Analysts at brokers Jefferies have upgraded Rightmove to “hold” from “underperform” and lifted the share price target from 2,131p to 3,600p – although its closing price on the 2/03/2016 was 3,997p.

Jefferies also upped Rightmove’s profits forecast after costs for this year by 7% to £161.1m, and for 2017 to £178.7m.

Jefferies, which advises Zoopla, said Rightmove operates the most robust business model it has ever seen.

It said that its offering is increasingly seen as integral to the operation of its clients – agents – and that sellers expect to see their properties on Rightmove.

Rightmove last week delivered strong results showing increases at every level – in revenue, profits, traffic and advertiser numbers. Revenue increased by 15% to £192.1m. Underlying operating profit increased by 16% to £144.3m and operating margin improved to 75.1%.

More over 55s investing in buy-to-let

Wednesday 2nd March

Research from a leading pensions provider has indicated that 20% of over 55’s are thinking of purchasing their desired retirement home now, then letting it out until they reach retirement age.

Data from the report conducted by Prudential also found that more than half of would-be potential investors plan to use their pension savings to fund their property purchase.

Of those over-55s who have already made a buy-to-let investment, nearly one in three (32 per cent) said they did so to secure a property to live in one day.

Findings from the report also show that the popularity of buy-to-let among older people is growing. 29% of over 55’s surveyed said that intended to make a buy-to-let investment in the next two years. Of these, 70% said that this would be their first investment in the sector.

Stan Russell, retirement expert at Prudential, said, ‘the advent of older people opting to buy-to-let-retire is an interesting development and in a post-pension freedoms world its appeal is understandable. However, there are a number of risks involved for anyone looking to take money from their pension savings, irrespective of the reasons.’

‘Before making decisions that could reduce retirement income in the future, not mention increase this year’s tax bill, it is important to make the most of the advice and guidance available. The Government’s Pension Wise service provides free and impartial guidance on accessing pension savings, while a professional financial adviser can help retirees navigate the pros and cons of using pension savings for property investment. The simplest approach for most people looking to give themselves choices and secure their ideal home when they retire is to save as much as possible into a pension as early as possible in their working life,’ he concluded.