A respected buy to let mortgage monitor is suggesting that investors in the sector may be more successful if they allow pets.
The independent Moneyfacts service admits there are some disadvantages.
Landlords may have to take out additional insurance, although it says they can mitigate this by pet-proofing the home, such as removing rugs and expensive furniture from the property.
“As well as this, landlords should keep in mind that tenants are normally obliged to return the property in the same state in which it was initially rented, as such tenants should pay for any damage their pet causes or the money can be removed from their deposit.”
However, it suggests that in hard-nosed financial terms, allowing pets may outweigh the disadvantages: it gives three ways this could be the case.
Firstly allowing pets means a property is advertised to a wider audience – pet and non-pet owners, potentially reducing void periods.
Secondly, it seems like that allowing pets may encourage good tenants to stay in the property for longer, especially if finding a new rental property is a struggle.
And thirdly, in appropriate sized properties, allowing pets may encourage families – who in turn are likely to stay longer and may be seen as more reliable tenants than some singletons.
Moneyfacts adds that the pandemic period has seen a boom in pet ownership, but government statistics estimate that just seven per cent of private rental properties are advertised as pet-friendly.
Earlier this year the government introduced a revised Model Tenancy Agreement that makes it easier for tenants with well-behaved pets to find rented accommodation – however, this agreement is voluntary and it is widely thought relatively few agents and landlords use it.
Original Article from Letting Agent Today 26/07/21
The latest version of the government’s guidance to agents over how to operate during the continuing pandemic suggests that virtual viewings should still be the first priority before physical ones – even as we emerge from lockdown.
Update guidance for the industry and landlords and tenants, put on the government website just before the start of the weekend, says: “There are no legal limits on the households which may view a home in person. We would, however, continue to recommend that buyers take advantage of any opportunities to view homes remotely before committing to view in person.
“It is important that everyone continues to follow the safe hygiene practices as described above. You should consider wearing a face covering while you are viewing a property. If you would like people to wear a face covering when they view your property, you should make this clear to your agent.”
And for tenants and their agents, the updated guidance says: “Once you have exchanged contracts or signed a tenancy agreement, you have entered into a legal agreement to purchase or rent the property. We encourage all parties to be as flexible as possible and be prepared to delay moves if necessary, for example if someone involved in the transaction becomes ill with Covid-19 during the moving process, or has to self-isolate.”
It continues: “If you are about to enter into a legally binding contract, you should discuss the possible implications of Covid-19 with your legal professional and consider making contractual provisions or other necessary measures to manage these risks.
“You should not expect to immediately be able to move into any home where people have COVID-19 or are self-isolating. There is a greater risk that home moves may need to be delayed if someone in the transaction shows symptoms of COVID-19 or is self-isolating.”
The guidance is also emphatic that decisions on how far precautions should be taken should be up to the tenant or vendor.
It says additional measures they could request include “requesting those visiting your home to wear face coverings as a condition of the sale. [Those] opening their home for viewings may want to place a cap on the number of visitors at any one time. These measures are at the discretion of the homeowner and we would ask [agents] to accommodate their wishes.
“Agents and other industry professionals should ensure their clients are aware of and comply with these additional requirements, where they do not discriminate against protected characteristics.”
Original Article from Letting Agent Today 26/07/21
A bank’s latest study suggests that self employed people are increasingly pessimistic about the chance of them being able to get on the property ladder.
The survey showed that one in five self employed renters say they are more motivated to buy due to the lockdown experience and one quarter are currently actively saving for a deposit.
However, many now believe that conditions for buying as a self employed worker have worsened.
Just over a quarter say saving up for a deposit is more of a challenge now due to the financial impact of the pandemic and one in five have delayed their home buying plans.
Despite some 27 per cent of self employed renters now seeking to improve their credit to boost their home buying chances, 14 per cent say their credit score has been negatively impacted due to the pandemic.
These increased challenges have meant over a third of self employed renters say they feel buying a home is unobtainable for them right now.
Over half of those questioned think mortgage lenders do not do enough to support the self-employed – a situation made worse because only 14 per cent of self employed workers having consistent income month to month.
The number one reason for a mortgage application rejection for the self employed was being self-employed, with a third citing this as the reason for a rejection.
Jon Cooper, head of mortgage distribution at Aldermore Bank – which undertook the study – says: “The UK is an entrepreneurial nation, and the growing self employed workforce is integral to our economy, so it is disappointing to see persistent barriers for them when seeking to secure a mortgage, which appears to have been exacerbated by the pandemic.
“The self employed need not despair, however, as the growth of specialist lenders has opened up an increasing number of options that can provide pathways to home ownership.
”Our research shows 52 per cent of the self employed workers in the UK have seasonal or extremely variable income streams month to month, which may not fit the tick-box approach of many high street lenders, but specialist lenders can dig into the detail to understand complicated income streams ensuring the self employed have opportunities to get on the housing ladder.”
Residential transactions jumped exponentially in June 2021, compared to the same month last year when the property market was impacted by the coronavirus pandemic.
The latest statistics from HMRC show a 219.1% increase in residential transactions from June 2020 to June 2021, 74.1% higher than year-on-year figures to May this year.
However, when analysing the figures, HMRC advises caution due to the ‘substantial negative impacts’ of the pandemic on property transactions in June last year.
HMRC reports significant evidence of forestalling in the property market in June, whereby taxpayers completed property transactions early to take advantage of the stamp duty holiday, which ended for properties up to £500,000 on 30 June.
The provisional seasonally adjusted estimate of UK non-residential transactions in June 2021 is 10,850, 58.7% higher than June 2020 and 6.8% higher than May 2021.
Mortgage Engine managing director Cloe Atkinson says: “Today’s figures reflect how well the housing market has adapted to the unprecedented circumstances over the past year. Technology has played a significant role in this adaptation, but these figures are also a reflection of the Stamp Duty holiday, with thousands of buyers rushing to beat the deadline in June. There needs to be a balance in the market, with brokers and lenders working collectively towards a sustainable future.
“The stamp duty holiday has been an overwhelming driver in the housing market since its introduction in 2020. However, we need to keep an eye on the long term and how we are going to sustain a positive market as normal life resumes and activity begins to slow down. The potential affordability and vulnerability challenges for many buyers will also need to be addressed as the furlough scheme, along with other government schemes, come to an end later this year.”
Smartr365 chief executive Conor Murphy says: “The end of June brought closure to the first phase of the stamp duty holiday and one of the busiest periods ever witnessed by the property market. Today’s fantastic findings are testament to the success of the scheme in sparking further interest in an already busy market and positioning the industry as a key driver in the UK’s economic recovery.
“We have championed the stamp duty holiday as ‘the great equaliser’ since its introduction in July 2020 and will continue to do so long after its conclusion in two months’ time. The tax break has reduced the amount of upfront capital needed to get on the property ladder, made homeownership a more viable goal for thousands and provided a much-needed form of economic relief in a period where finances are increasingly strained.
“However, with brokers, conveyancers and lenders all juggling sky-high demand, it’s important that advisors manage client expectations and assess how mortgage tech can be used to streamline transactions before the holiday draws to an end in just 10 weeks’ time. Mortgage tech can act as an additional team member if used correctly. There’s no better time than today to see how features like one-click DIPs, task automation and digital ID verification can remove the legwork in your business, leaving you with more time to focus on what truly matters: providing clients with expert advice.”
A 360-degree virtual tour supplier says there’s been a 600 per cent increase in use of the technology since late 2019 – yet even after the pandemic, only seven per cent of properties to let are listed with such a feature.
The proportion for homes on sale is twice as high, at 14 per cent.
Made Snappy, which has produced the figures on the basis of Rightmove listings, says that the percentages are up from one per cent for rentals and two per cent for sales in November 2019.
“Creating a 360 tour used to be an expensive process and one that meant involving a third party to photograph the property and create the tour, with all the associated delays that entailed” according to company founder and chief executive Mark McCorrie, who says agents can now use current technology to have a high-quality tour online within an hour of setting foot into the property.
His company cites one of its clients – Kevin Hall, director of Martin & Co in Ashford, Kent – saying that with 50 to 200 leads for every rental property, he uses virtual tours on all his lettings portfolio so that he can run the business with a single negotiator, with in-person viewings becoming far more like second viewings.
Original Article from Letting Agent Today 20/07/21
A Bill is being introduced into both Houses of Parliament this week which will ramp up the pressure on the private rented sector to become even more energy efficient.
The Minimum Energy Performance of Buildings Bill is described by its supporters as being vital for the achievement of net zero – a buzzword term which means that the amount of carbon dioxide added by the country is no more than the amount taken away as a result of significant reductions in emissions.
Backers of the Bill say it will help the government see that all private rental homes are EPC band C or below by 2028, and that all homes – including owner occupied ones – should be EPC band C by 2035. In addition mortgage lenders should ensure an EPC band C average for their portfolios by 2030.
Leading for the Bill in the House of Lords, Lord Foster says: “I have been campaigning on this Bill for over two years: it puts in place government policy, so I call upon ministers to support it and give time for it to receive a 2nd Reading in the House of Lords. This is essential for the achievement of net zero targets.”
And leading in the House of Commons, Sir David Amess adds: “This Bill will help my constituents to have lower fuel bills and it will help the government to achieve its net zero targets. I hope Ministers will support it.”
The measure is backed by the Sustainable Energy Association and its chief executive, Jade Lewis, comments: “We are incredibly hopeful that the Minimum Energy Performance Bill will receive the support it rightfully deserves so that it can deliver a lasting impact on the energy efficiency of homes up and down the country whilst addressing key public interest concerns such as unemployment, fuel poverty and climate change.
“The SEA is proud to have campaigned for this policy certainty over the past few years and I believe that we are closer than ever to the breakthrough we have been working towards.”
Original Article from Letting Agent Today 20/07/21
The average asking price for a property in the UK has increased by £21,389 over the past six months alone, while the sales frenzy has resulted in a shortfall of properties available to buy, figures from Rightmove reveal.
The website says it has been the busiest half-year ever recorded and asking prices have broken new records for the past four consecutive months to reach an average of £338,447.
Over the past six months, prices have climbed by 6.7% and compared to June they are 0.7% higher, which is the strongest month-on-month growth at this time of year since 2007.
Annual growth of 5.7% was not quite as high as the past six-months’ rapid acceleration, which has been impacted by buyers rushing to complete before stamp duty reliefs were stepped down at the end of June.
Rightmove notes that the first half of 2021 saw 140,000 more sales being agreed and 85,000 fewer new listings than the long-term average.
This surge in activity has created a shortfall between demand and supply of 225,000 homes.
The property website says that if these homes had been available for sale it would have corrected the imbalance and stabilised price growth.
The greatest shortfall is in the availability of homes with four or more bedrooms, as there has been a 39% surge in sales versus a 15% fall in availability of homes coming to market compared to 2019, resulting in an average price hike of 6.7% in the last six months.
Sales of three-bedroom homes have jumped by 28%, while supply has fallen by 10%, resulting in prices climbing by 6.9% so far in 2021.
Sales of first-time buyer properties, with two bedrooms or fewer, were up by 26%, while prices rose by 3.4% for the half year.
The average number of available properties for sale per estate agency branch is at a new record low of 16 properties, compared with the previous low before 2021 of 25 properties and a longer-term average for this time of year of 31.
With the ongoing need for housing, high activity levels despite the June stamp duty deadline now passing, and with residential property prices appreciating more strongly than many other asset classes, Rightmove expects positive sentiment to continue.
But it says that there is an urgent need for the low stock of property to recover in order for price stability to return.
Rightmove expects that the number of sales completed in the first six months of the year and due to be reported by HMRC later this week is on course to be around 800,000, which could just beat the previous record of 795,000 set in 2007.
The 2007 record was set under very different circumstances, at a time when mortgage lending criteria were much less stringent than in today’s more controlled market.
Rightmove director of property data Tim Bannister says: “We predict that the number of completed sales will be the highest ever seen in a single month when June’s data is released by HMRC later this week.
“This means it’s likely that the first half of 2021 has seen a record number of moves when compared with the first six months of any other year, induced by the pandemic’s side-effect of a new focus on what one’s home needs to provide.
“That is one of the driving forces behind four consecutive months of new record average property prices.
“Demand has also been boosted by the ongoing creation of new households, and property being seen as an asset to hold, with historically low returns from many other forms of investment.
“New stamp duty deadlines in England and Wales for sales completed by the end of June have also helped to exhaust the stock of property for sale and concentrate activity.
“This has left prospective purchasers with the lowest choice of homes for sale that we’ve ever recorded, continuing price rises, and stretched affordability.”
Bannister adds: “First-time buyers are currently benefiting from their sector having the most buyer-friendly conditions.
“Choice is still more limited when compared to the same period in 2019, but price rises are the most subdued of any sector.
“Saving a deposit is still very hard, but 5% is now an option, and with many paying rising rents, buying your own home on a lower deposit is becoming an opportunity again.
“The opportunity is also there for property owners to come to market, as it’s still a great sellers’ market despite the recent end of the tax holiday in Wales and its scaling back in England.
“We’ve also seen a much more efficient housing market over the past year, with the strong buyer demand and faster churn of homes leading to a much higher percentage of sellers finding a buyer for their home, and fewer unsold homes being withdrawn from the market.
“Buyer sentiment remains strong, and the growth in new households combined with people living longer and having changed housing needs is exacerbating long-term housing stock shortages.”
Miles & Barr group director Rob Sabin says: “East Kent’s property market continues to be very active over the first six months of 2021 with buyers continuing to purchase the limited housing stock available.
“The number of sellers coming to market has slowed as the year has progressed, which means we’ve seen the level of new listings coming to the market significantly decrease year on year, whilst in turn total available stock levels across the market is at the lowest we have seen in a number of years.
“While the number of new listings has dropped, our results remained strong with 945 homes listed accepting an offer.
“East Kent has also seen the number of buyers looking to relocate to either the countryside or by the coast increase with a fifth of applicants registered coming from Greater London.”
Benham and Reeves director Marc von Grundherr says: “The UK property market continues to defy expectation, with house prices reaching yet another record high despite whispers of a decline in values as a result of the tapered stamp duty holiday deadline.
“There’s no doubt the stamp duty holiday has been the catalyst for this impressive market performance.
“However, it isn’t the driving factor behind the intent to purchase for UK homebuyers and so a robust level of activity will remain long after it has expired.
“When you couple heightened demand with a severe shortage of stock, it’s very likely that property values will remain buoyant for the remainder of the year, at the very least.”
Properties with professional marketing packs sell up to 48 per cent quicker than those without, according to an experiment conducted by Your Move and Reeds Rains.
The exercise was undertaken with supplier FocalAgent and monitored over 3,500 properties over a three month period.
Those with professional photography, floorplans and 360° tours, alongside Facebook advertising and premium listings, sold on average 48 per cent faster than those listed without.
The research reveals notable savings in marketing efficiency, increasing the overall volume of viewings by 13 per cent on average. Those properties given professional marketing of this kind also sold for an average of £1,600 more.
Oliver Blake of LSL Property Services – parent company of Your Move and Reeds Rains – says: “There’s no doubt that technology such as 360° tours and hosted virtual viewings became an established part of the COVID-19 property market.
“As we come out of the pandemic, our agents now have a very exciting suite of tools that help win us more instructions by giving vendors a choice of products to maximise the number of viewings and help their property sell more quickly – while at the same time reducing the inconvenience of a large number of physical viewings in their home, if that’s what they wish.”
Lee Wainwright, a former agent and now chief executive of FocalAgent, adds: “Consumer expectations have changed permanently and this is what will drive the adoption of professional property marketing over the long term, particularly tools such as 360 tours and guided virtual viewings which have been invaluable to agents during the last eighteen months.”
More than 4.6 million properties, amounting to more than a fifth (21%) of all UK homes, have risen in value by more than the average annual salary in the past year, according to new research from Zoopla.
The data found that there are 4,635,000 private homes in the UK that rose in value by more than £30,500, the average UK salary, in the past 12 months.
On a more local basis, homes in the South West are most likely to be earning more than the average salary in the region. In the past 12 months alone, 29% of homes in the region increased in value by more than the average regional salary, which currently stands at £29,000.
Homes in the South East are the second highest top earners compared to the average salary. 28% of properties increased in value by more than the average regional salary of £32,900 over the last 12 months.
London, which many may have expected to come top, comes third on the list, due to the higher than average salaries earned there. Nearly a quarter (24%) of homes in the capital went up by more than the average London salary of £37,300 in the past year.
Despite homes in the North and Midlands rising less in monetary terms than their Southern counterparts, the lower house prices in these regions and the pace of house price growth means a notable proportion of homes are still rising at a higher level than local salaries.
Nearly one in five homes (18%) of homes in the North West, 17% of homes in the East Midlands, 14% of homes in the West Midlands and one in ten homes (9%) in the North East have gone up in value by more than the average salaries in these areas in the past year. In Scotland, the figure is 9%, whilst in Wales it is 22%.
Home values in some commuter hotspots have also outperformed local salaries over the last 12 months. In Mole Valley, Surrey, more than half (54%) of homes increased more than the average local salary, and in St Albans, that figure stands at 46%.
The shift among some homeowners from urban to more rural living during the pandemic has also resulted in house prices rising faster than local salaries in more rural and coastal areas. In Hastings, East Sussex, 62% of homes increased in value more than the average salary in the area of £25,800 in the past year. The figure is 60% in Adur, also in Sussex. Meanwhile, Dorset saw 47% and the Cotswolds saw 46% of homes increase more than the average salary.
Andy Marshall, chief commercial officer at Zoopla, commented: “As our agent partners know better than anyone, there’s been strong demand from home buyers since the market reopened after the first lockdown in May last year, compounded by the search for space and the stamp duty holiday.
“The impact this has had on house prices means that one in five homes in the UK have risen in value by more than the equivalent of a years’ salary over the space of 12 months.”
Across Great Britain the pace of rental growth continued to climb in June, with rents rising 8.5 per cent year-on-year.
The data comes from Connells-owned agency Hamptons.
The firm says four of the 10 fastest months for rental growth over the last decade have been since the onset of the pandemic.
Stock scarcity has become a pressing issue, with 46 per cent fewer homes on the market than at the same time two years ago.
In rural and suburban areas, the drop in rental homes on the market has been even greater.
Outside London, rents rose 10.9 per cent annually – the fastest rate of growth recorded during any time since 2014. Six regions saw rental growth hit double digits in June, up from five in May.
Last month eight of the 11 GB regions recorded the biggest annual increases since the lettings index began in 2014. Wales, the West Midlands and London were the only regions not to register record rental growth.
Aneisha Beveridge, head of research at Hamptons, says: “Nationally, the last 12 months have seen five years of pre-pandemic growth squeezed into a year.
“Rents are rising at such a pace that monthly rental growth figures could, in more normal times, be mistaken for annual ones. While this growth is underpinned by a lack of stock, it will ultimately be tapered by affordability.”
Original Article from Letting Agent Today 12/07/21