LANDLORD NEWS
London leaseholders win rare victory in battle over service charges
Leaseholders in Canary Riverside Estate have won a case against their landlord relating to £1.6m in excessive charges for insurance-related services in what could prove a significant case for leaseholders across the UK.
Financial Times
Number of households renting soars
The 2021 census has revealed that the number of households in England and Wales who are renting increased by 1.3m to 9.3m in 2021, from 8m in 2011. Figures from the Office for National Statistics reveal that at the same time the proportion of owner-occupied households fell to 62.5% in 2021, from 64.3% ten years earlier. However, the actual number of owner-occupied homes rose from 15m to 15.5m in that period. Analysis also shows that the proportion of households living in flats, maisonettes or apartments increased by 500,000 over the decade to 5.4m. Across the two countries, 900,000 fewer people live in houses and bungalows than in 2011 and there was also a rise of 19,000 in the number living in caravans or other temporary or mobile structures. Dan Wilson Craw, the deputy director of the campaign group Generation Rent, said: “Despite an array of supposedly pro-home ownership policies over the past decade, the private rented sector was the fastest-growing tenure. A million more households are paying high rents to private landlords, face a much greater risk of living in a poor quality home, and live with the threat of eviction at short notice without the chance to appeal.”
The Daily Telegraph The Times The Guardian
COMMERCIAL
CBRE to delay ‘around half’ of UK property fund withdrawals
CBRE Investment Management is to delay by three months several third-quarter redemption requests from investors looking to depart its UK Property Authorised Investment Fund, due to “ongoing market conditions. A spokesperson said that investors who put in requests to withdraw money from the fund will receive “around half” of their redemption payments in January, with the remainder to follow “as soon as practically possible”. CBRE will pay out all the redemption requests received in the second quarter “in the coming weeks”, adding that the fund was seeking to preserve liquidity in “a very challenging environment.”
Daily Mail
AUCTION NEWS
Historic Bungay property to be sold at auction
Auction House East Anglia is marketing a grade two listed vacant shop and three-bedroom maisonette in Bungay with a guide price of £110,000 to £130,000 plus fees. The property is due to be sold on a freehold tenure at an online auction on February 8, with the auction listing stating: “This historic three-storey mid terraced property comprises a vacant 33sq m ground floor commercial premises and a vacant 114sq m three-bedroom maisonette with accommodation arranged over three floors. It has electric heating and could become self-contained with access from the rear courtyard.” It is described as “An ideal purchase for an owner occupier or investor.”
Eastern Daily Press
Valleys primary school fetches six time guide price
Queen Street primary school in Abertillery, Wales has been sold at auction for six times the guide price of £50,000. Gemma Vaughan of Paul Fosh Auctions remarked: “There was phenomenal interest before the sale in the former school site which was reflected in the figure achieved from the online auction. The bidders must have done their sums prior to auction and taken a view on what this site was worth.” She went on: “Bidding started at £50,000 and just rocketed from there with five bidders vying for the property who between them made a total of 140 bids. The buyer, who is local, hopes to develop the site but hasn’t revealed any details as yet.”
Wales Online
PROPERTY FINANCE
Mortgage price war begins as property sales slump
Two of the UK’s biggest high street lenders have announced steep cuts to their fixed rate mortgage deals following a slump in property sales and four months of house price falls. Nationwide introduced fixed-rate reductions of up to 0.6 percentage points across its range on Friday while TSB cut its five-year fixed rate by up to 1.3%. According to analysts at Moneyfacts, the average two-year fixed-rate mortgage cost 5.75% on Friday compared with a high of 6.65% last October. Independent mortgage adviser Jane King told the Telegraph lenders are just not getting any business. “The bottom has fallen out of the purchase market.” Ms King added that many of her clients were holding off making a decision on purchasing a property until February or March. “So if lenders continue not to get any business, or very little business, then they’ve got no option but to reduce their rates still further.”
The Daily Telegraph
Boxing Day sees rise in sellers putting homes on the market
The housing market experienced a Boxing Day bounce, with the number of sellers putting homes on the market up by 46% compared with the same day a year earlier, according to Rightmove. The website said the number of sellers putting their properties up for sale on December 26, 2022 was the highest it has ever recorded for any Boxing Day. In further signs that people may be preparing for a move in early 2023, Rightmove said the number of people contacting estate agents to value their home between Boxing Day and New Year’s Day was the highest number recorded in a week since early September. Valuation requests were 29% higher than a year earlier. Rightmove said: “Boxing Day is traditionally the start of activity ramping up into January and the spring selling season after Christmas, as people return to their search or consider a new year move.”
London Evening Standard The Independent UK
House prices fall for fourth consecutive month
Halifax has revealed that house prices across the UK fell for the fourth consecutive month in December. According to the latest figures, the average price of a home in the UK fell by 1.5% last month to £281,272. This leaves prices 2% higher than where they were this time 12 months ago and takes them back to where they were in February and March last year. Meanwhile, the annual rate of house price inflation fell for the sixth month in a row, having come in at 4.6% in November. It had hit 12.5% in June. Halifax said that all regions saw a slowdown in year-on-year house price inflation in December, while the northeast of England was the worst affected, with annual growth dropping to 6.5% from 10.5% in the previous month. Kim Kinnaird, director of the Halifax mortgages division, said: “As we’ve seen over the past few months, uncertainties about the extent to which cost of living increases will impact household bills, alongside rising interest rates, is leading to an overall slowing of the market.” Tom Bill, head of UK residential research at the estate agent Knight Frank, said that the narrowing of the monthly declines was because the market was steadying after the initial shock of the mini-budget at the end of September. He added that a fall in the annual rate of price growth “appears imminent”.
The Times The Guardian The Independent
Ikea home buyers facing costly delays
Property buyers in Ikea’s flatpack housing development in Bristol say they have been left homeless and seen their mortgage deals soar in cost as they have endured continual false promises from the developers about when they can move in. Bristol was chosen as the flagship first development in the UK by BoKlok, a flatpack housing company created by Ikea and Skanska, the Swedish construction firm. The first buyers began to exchange and pay their deposits in summer 2021, and were told by BoKlok they would be in their new homes by October or November that year. However, it wasn’t until May 2022 that the first 27 homes were completed and people moved into them. Since then, none of the other 71 homes have been completed. The majority of the customers are first-time buyers relying on the Help to Buy loan scheme to afford their homes. However, the Government scheme is ending on January 31 and if the building works are not completed by then, many people will not be able to complete their purchase, after a year of waiting to move in.
The Times
Last year was the optimum time to sell a property
New data from Hamptons reveals that 2022 was the optimum time to sell a property, with homeowners cashing in on rising house prices to make more money than ever before. Analysis by the estate agent found that the average profit made by sellers in England and Wales who bought their property within the past 20 years and sold it in 2022 was £108,000. This is the first time that the average gross profit has hit six figures, well ahead of the £96,220 made in 2021. Figures show that 94% of those who sold a home last year did so at a profit, while the average seller in 2022 had owned their home for 8.9 years. Overall, in 173 local authorities across England and Wales the average homeowner made a gain of over £100,000. Nearly 90% of those were in the southeast and there were 17 London boroughs where the average gain exceeded £200,000. Aneisha Beveridge, of Hamptons, said: “Soaring house price growth has boosted the money homeowners have made when they sell. However, most of these profits are never seen by sellers as they are reinvested into the market when they make their next purchase, which has also risen in value.”
The Times
Mortgage-free homeowners to enjoy unearned income surge
A report from the Resolution Foundation claims homeowners with mortgages will be among those squeezed the tightest by the ongoing cost of living crisis, while the affluent will benefit from higher interest rates. The thinktank said 3m households face a £3,000 a year increase in their mortgage costs by the end of the 2023-24 financial year. A rise in mortgage rates and the broader impact of inflation on food and transport prices will amount to a 12% decline in real incomes for a typical mortgage household between 2021-22 and 2023-24. Meanwhile, older, more affluent people who own their home outright, will makes gains as rising interest rates cause an upswing in savings and investment income next year. “Much of this unearned income surge will be captured by the richest 5% of households, and is significant enough to cause their incomes to rise by 4% this year and next – even while the rest of the country gets poorer,” the report said.
Financial Times The Guardian
LENDING CONDITIONS
Halifax offering tracker mortgages
Halifax is to offer tracker mortgages for the first time in four years as demand increases among homebuyers. Halifax now has a two-year deal that charges the Bank of England’s base rate (3.5%) plus 0.59 percentage points, so a starting rate of 4.09%. This means monthly repayments on a £250,000 mortgage over a 25-year term would be £1,332, although they could go up as soon as next month if the Bank rate increases. There is a £999 fee and borrowers need at least a 40% deposit to qualify. Meanwhile, those with a 10% deposit can get a two-year deal which tracks base rate plus 1.09 percentage points, giving a starting rate of 4.59%. Currently, the best tracker rate is from Barclays, which is 0.34 percentage points above base rate, giving a total now of 3.84%. On a £250,000 25-year mortgage this would mean monthly repayments of £1,298.
The Sunday Times
Mortgage approvals sink to lowest level in two years
Mortgage approvals fell to their lowest level in two years as interest rate rises put off buyers, new Bank of England figures suggest. They slumped to just over 46,000 in November. This is down from 57,875 in October and 68,969 in November 2021 – a 33% fall year-on-year. Economists polled by Reuters had expected a more buoyant total of 55,000, despite the turmoil in the housing market after the September mini-budget. Remortgaging approvals fell 37% in November compared to the previous month, and down 30% compared to November 2021. The value of net mortgage debt owed by individuals in November increased from £3.6bn to £4.4bn. “The sharp fall in house purchase mortgage approvals in November comes as no surprise, given the tentative fall in quoted mortgage rates from October’s high levels and the withdrawal of some lenders in the wake of the mini-budget,” Samuel Tombs, chief UK economist at Pantheon Macroeconomics, said. The fall in mortgage approvals was “another indicator of slowing demand for UK housing as the rising interest rate environment bites”, said Daniel Mahoney, economist at Handelsbanken.
Sky News BBC News Financial Times The Times City A.M. Daily Mail
ECONOMY
Haldane: Sunak has no plan for growth
The Bank of England’s former chief economist has said the Prime Minister has failed to provide a plan for economic growth. Andy Haldane, who is now chief executive at the Royal Society of Arts, accused Rishi Sunak of allowing pessimism to hold back the recovery with his refusal to outline his plans for boosting GDP. Labour is also failing to provide a convincing plan, Mr Haldane added. Speaking with the BBC’s Laura Kuenssberg, Haldane said: “Stabilising the ship was absolutely the priority at the end of last year. But this is the year where optimism and innovation and investment will only happen if we have some sense of a brighter economy for tomorrow.” He added: “Last year I started with hope and ended with despair. This year kicks off with despair, and I’m hopeful we might have a hope by the end of the year.”
The Daily Telegraph
The interest rate peak is in sight
David Smith outlines in the Sunday Times why he thinks the end is in sight for interest rate rises. He points to several different markers, including the recent survey of CFOs by Deloitte which found investment intentions were down, along with appetite for debt. The impact of the Bank’s monetary tightening can also be seen in the recent slump in mortgage approvals and a very weak performance from manufacturers. A continuation of the recent fall in gas and oil prices would also bear down on inflation, says Smith. “Whichever way you look at it, I think we do not need much more of a foot on the monetary brake, which would risk boiling the frog. It has been quite a climb, but the interest rate peak is in sight.”
The Sunday Times
