LANDLORD NEWS
Rents throughout Britain reach record highs
Rightmove has revealed the average rent outside London has reached £1,172 per calendar month, an increase of nearly 10% since the start of 2022. Meanwhile, the average rent now stands at a record £2,480 a month in London, while inner London rents have broken the £3,000-a-month barrier for the first time. Rightmove also said that compared with this time a year ago, there are 13% more homes available to rent, the biggest annual rise since 2013, while the number of would-be renters leaving their details with lettings agents is up by only 7%. Demand from tenants is still 53% above where it was before the pandemic, while the number of properties available to rent has fallen by 38% since 2019. Tim Bannister, Rightmove’s head of data, said the pandemic had triggered a once-in-a-generation rethink of how and where people lived. He added that more recently, higher mortgage rates had prompted many would-be purchasers, especially first-time buyers, to put their plans on hold and to look at renting. As a result, Rightmove is forecasting that rents in the UK will climb a further 5% this year.
The Times
Landlords facing tax return charges
A survey by property platform Hammock reveals that one in five landlords have yet to complete their tax return days before deadline. Landlords who earned more than £10,000 in property income (before expenses) or more than £2,500 (after expenses) in the 2021-22 tax year will need to complete a tax return and pay their tax bill by 31 January. Otherwise they will incur an automatic penalty of £100 – with bigger fines the later they file. Many are also at risk of being hit by even bigger charges as 45% have not saved any money for their tax bill, Hammock’s survey shows. Late payment results in a charge of 5% of the tax due. Mike Hodges of accountancy firm Saffery Champness said landlords may be struggling to find the funds to pay their tax bills this year due to changes in tax relief rules which only came into effect in 2020. Landlords used to be able to deduct mortgage interest from rental income to reduce the tax they pay, effectively giving higher-rate taxpayers 40% tax relief on mortgage payments. Instead landlords now receive a tax credit of 20%.
The Sunday Telegraph
BUY TO LET
Increase in mortgages available for holiday let owners
Analysis shows the number of mortgages available for holiday let owners has more than doubled since October amid renewed confidence amongst banks and building societies. According to Moneyfacts, investors can now choose from 411 deals, up from 173 three months ago, while the number of lenders in the sector has increased from 26 to 34. Joe Stallard of House and Holiday Home Mortgages said the price war between lenders came as investors who would have traditionally chosen to purchase a buy-to-let property instead turned to the holiday let market. Mr Stallard said: “We’re definitely seeing more serious investors right now. There is increased demand for city-based properties, such as in Cardiff, York and Liverpool, and clients are keen to invest in properties that can be let all year round.” It comes as the number of available holiday lets in the UK increased by 14% year-on-year to almost 340,000 in December, up from just under 297,000 in the same month in 2021.
The Daily Telegraph
COMMERCIAL
Britain’s commercial real estate sector feeling the pinch
The Royal Institution of Chartered Surveyors (RICS) has revealed that 83% of respondents to its quarterly commercial property survey believed the market was already in a downturn, an increase from 81% a quarter before. Tarrant Parsons, senior economist at RICS, said the investment side of the commercial property market was “significantly affected” by the Bank of England’s tighter monetary policy, and that higher borrowing costs were weighing on investor demand and hurting valuations. RICS said investor enquiries fell across all sectors for the first time since the start of the pandemic, with a net balance of -30 of respondents citing lower investment demand.
Daily Mail
Landsec to sell London office property
Land Securities has revealed it has sold its One New Street Square office property in London to Hong Kong-based Chinachem Group for £349.5m, as it continues its strategy to offload mature office spaces in the capital. Landsec, after a strategic review undertaken in late 2020, had planned to sell about £2.5bn worth of mature London offices. With the latest sale, it is just £400m short of that target and will use the proceeds to repay debt.
Reuters
Wetherspoons struggles to find pub buyers
Dozens of pubs put up for sale by Wetherspoons remain unsold as turmoil in the commercial property market and nervousness over the cost-of-living crisis puts off potential suitors.
Financial Times
AUCTION NEWS
South Wales property auction business acquires competitor
A South Wales property auction and lettings business has acquired a competitor. Newport-based Paul Fosh Auctions and Lettings swooped for Everything Lettings in a deal which will see the business more than double the size of its lettings arm. The value of the acquisition has not been revealed. Paul Fosh Auctions, which consistently tops the charts in Wales for the number of properties sold and the cumulative annual total value of the sales, stages monthly online property auctions as well as managing an expanding stable of properties for clients.
South Wales Argus
Clive Emson auction to feature houses and land in Cornwall
The assets up for auction in Cornwall next month include a ten-acre parcel of land and two houses that are being sold for the first time in thirty years. The houses of multiple occupancy (HMOs) Roslyn Villa and Selsdon, both located on Barncoose Terrace, Illogan Highway, are both up for sale separately. They are among the lots in the Clive Emson regional land and property auctioneers’ first sale of 2023.
Falmouth Packet
PROPERTY FINANCE
Property prices fall in January
New data from Nationwide is expected to show that house prices fell for a fifth month in a row in January. Increasing borrowing costs and the weak economy are deterring buyers and the market expects the data from Nationwide to show that house prices followed up December’s 0.1% decline with another fall. Andrew Wishart, senior property economist at Capital Economics, said that 2023 is likely to be the “most difficult year for the housing market since 2008”, as demand will not pick up until the Bank of England starts cutting its base rate. The Bank has hiked its base rate nine times since December 2021 in a bid to tame inflation and is not expected to cut it until perhaps next year. As a result, Wishart said that house prices could drop by a further 10.5% and sales volumes fall by 30%.
Sunday Express
Sales of £5m-plus London mansions reaches record high
Savills has revealed that over 600 homes over the value of £5m were sold in London in 2022, the highest level the property business has seen since records began in 2006. Over 50 London neighbourhoods saw activity in the over-£5m price range in 2022, with the reach of this price tag likely grow even further in 2023. Savills data showed that over 60% of second hand sales took place in traditional prime central London hotspots, led by Chelsea (12.6%), Kensington (10.3%) and Knightsbridge (9.0%). However, Savills noted the £5m-plus price tag is now increasingly being achieved in outer prime locations – including Clapham, Battersea, Bayswater and Putney – primarily driven by wider regeneration and redevelopment, the opening of new tube and Crossrail stations, and demand for larger family homes with more space inside and outside of the home. Frances McDonald, research analyst at Savills, said: “High value properties continue to outperform across the board as unique quality homes remain sought after by buyers, both domestic and overseas.”
London Evening Standard
LENDING CONDITIONS
Rise in first-time couples buying
Analysis by Lloyds Banking Group reveals that 63% of first-time buyers on their books last year were couples providing joint incomes to secure finance, compared with 37% who relied on a sole income. This compares to the trend in 2014 when 43% of first-time borrowers did so jointly and 57% bought on their own. Analysts said the lack of affordability for first-time buyers had been accelerated in the past six months by rapidly rising mortgage interest rates. Kim Kinnaird, mortgages director at Halifax, said: “Today, getting your own place for the first time will likely mean paying over £300,000 for that new home and putting down, on average, a £62,000 deposit. The length of time needed, and cost of raising a deposit, are likely having an impact on the profile of the average first-time buyer over time. Almost two thirds of people are now getting their first mortgage in joint names.”
The Times The Daily Telegraph
ECONOMY Central banks set to raise rates
The Bank of England (BoE), the US Federal Reserve and the European Central Bank (ECB) are all expected to hike interest rates this week, with officials set to continue efforts to tame soaring inflation. The BoE is forecast to lift rates 50 basis points to 4% in what will be the tenth successive rise. However, analysts think this may mark the end of steep increases, with Sanjay Raja, senior economist at Deutsche Bank, saying he expects the Bank’s Monetary Policy Committee to “lay out the groundwork for a downshift in the pace of hikes going forward.” In the US, the Fed is expected to add 25 basis points to rates. Investec economist Ellie Henderson believes future increases will be less steep, saying it is “now clear that we are heading into the final stages of that fight, with less aggressive blows needed to coax inflation lower.” Meanwhile, markets predict that the ECB will up rates by 50 points.
City AM
