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Wednesday 31 December 2014

UK house price growth slows in last three months as property market cools

The pace of house price growth slowed sharply in the last three months of 2014, according to Nationwide Building Society, although prices ended the year 8.3% higher than in the same period of 2013.
In more evidence of the rapidly cooling property market, three regions of the UK – north-west England, Yorkshire and Humberside, and Wales – recorded price declines in the final quarter of the year.
Across the UK, average prices edged up 0.2% in December and 1.1% in the quarter, taking the average price to £189,002. In London the typical home changed hands for £406,730, up 2.5% on the quarter and up 17.8% over 12 months. Prices in the capital are now 35% above their former peak in 2007.
Among large towns and cities, St Albans recorded the highest increase in prices, up by 24% over the year to an average of £494,777, closely followed by a 19% rise in Reading and a 17% rise in Belfast.
The Northern Ireland capital recorded a dramatic boom and bust in its property market during the neighbouring Republic’s Celtic Tiger years but it is now showing signs of recovery, albeit from a low base.
However, several cities in the UK recorded zero or very low house price growth over the year. In Manchester prices failed to rise over the year, while in Leicester the rise was 3% and in Liverpool it was 5%.

Monday 29 December 2014

Fully refurbed 2 bed in upper shirley yields 5.7% and is in fantastic condition.

This exceptionally well presented Victorian house has undergone full refurbishment to a very high standard, offering two double bedrooms, large four piece bathroom, living room, dining room and a stunning fully integrated kitchen. The property also benefits from UPVC double glazing, gas central heating, fully insulated and cavity wall insulation. This desirable location falls in the very popular Shirley Primary School and Upper Shirley High catchments and is within walking distance to St James's Park and Southampton General Hospital. Tenant pool will comprise medical staff and profexxional couples. 
Properties like this don't come up that often, its in a fantastic condition and will let well at £925pcm which will return a gross yield of 5.7% based on the asking price of £195k. It won't hang around for long - a nice one to get the New Year off to a good start.

Wednesday 24 December 2014

Happy Christmas to all the readers of the Southampton Property Blog

I hope you have enjoyed the bog and I look forward to blogging more next year. Have a Happy and Safe Christmas.
Kind regards
Brian and the team at Belvoir Lettings Southampton

Excellent value in Southampton buy 2 let, why buy new?

This fourth floor two bedroom apartment is a good size at 780 sq.ft and comes with parking and some views. It has an ensuite and bedroom 2 is a good double making it ideal for professional sharers. The property was first listed in early 2014 at £200k but has been reduced to £180k and at that level would be well below its 2010 new build price. It will let well at £950pcm which will yield 6.3% gross. Service charge and ground rent are £1911 p.a. and there are 170 years left on the lease. Net yield is attractive at 5.3%

You have to ask yourself if it is worth paying £60k or £70k more to get into the new towers in Ocean Village or even buy some of the older stock in phase 1 of Ocean Village. Rents maybe higher but a lot of stock will be hitting the market and the new build premium will fade over time. The buy 2 let for the wise man perhaps?

Enfield licensing scheme quashed in judicial review, what will happen in Southampton?

The High Court has quashed Enfield Council’s plans for its additional and selective landlord licensing scheme - the first victory for landlords in the recent sagas of local authority licensing initiatives.
The High Court ruled earlier this month that the judicial review called for by landlord Constantinos Regas challenging Enfield Borough Council's licensing scheme was to be upheld.
The council's scheme would have required landlords to hold a £500 five-year licence from the authority for each property they owned. Failure to comply could see landlords fined up to £20,000 while breaching licence conditions could result in a fine up to £5,000.
High Court judge His Honour Judge McKenna said that "the implementation and operation of an unlawful designation is a continuing unlawful act". 
He found that Enfield council had failed to consult the persons who should have been consulted (including in the six surrounding boroughs) and did not consult for the required time. At the end of the hearing at the Royal Courts of Justice, HHJ McKenna refused permission for Enfield to appeal against the decision. 
The case came about after a long-running bid by Constantinos Regas, the landlord of just one property in the borough. 
He brought the case against the council after repeatedly speaking against the proposals at council meetings. Most recently he spoke at the council's cabinet meeting in November, where he warned councillors the council's cabinet that a judge had already found that part of the scheme was "arguably unlawful" and that they should not go ahead with it.
Speaking after the judgment was handed down, Regas said: "I have always maintained my view that good housing standards are a human right. But Enfield council have not gone about this the right way. They have accused tenants of being antisocial and have sought to criminalise landlords for tenants' behaviour. The Council have now been found acting unlawfully.” 
Regas claims the council's cabinet and senior officers have “demonised tenants, defiled democracy and disgraced themselves. They threw good money after bad in defending this case, despite me putting them on notice in June that they were not acting properly.”
He says he will be taking steps to encourage landlords to improve housing standards in the borough, although he did not specify how this would be done.

Sharp rise in new housing permissions will help supply side

 There has been a significant increase in the volume of housing permissions by local authorities in the last year, according to new figures published by the Home Builders' Federation (HBF) and Glenigan.

The latest HBF/Glenigan Housing Pipeline report reveals that 194,820 residential property permissions have been granted in 2014, ensuring the year saw the highest level of new housing starts in the UK since 2008.

“Increasing housing delivery will provide the high quality homes our next generation needs, support thousands of companies up and down the land and create tens of thousands of jobs,” said Stewart Baseley (left), Executive Chairman of the HBF.

However, he added that efforts still need to be made to ensure that the number of housing starts continue to rise in the years ahead, as the UK is currently still behind on the level of development needed to meet rising demand for new homes, fuelled in part by the Help to Buy scheme.

Speeding up the rate at which permissions are granted is one of the keys to a significant, sustainable increase in housing supply, according to Baseley who highlighted that too many sites are ‘stuck’ in the planning system, with an estimated 150,000 plots at ‘outline permission’ stage awaiting full sign off by local authorities.

Since its introduction in 2012, the National Planning Policy Framework (NPPF) has helped ensure an increase in the number of local plans coming forward with allocations of land to meet housing needs. Some 60 per cent of local authorities now have an adopted plan in place. Where local authorities fail to meet their housing needs or keep plans up to date the NPPF provides a route for the Secretary of State to step in and take decisions on applications. This process has helped to deliverever increasing numbers of permissions since its publication in 2012.

Figures in the latest report show a slight drop in the number of permissions for new homes granted in the third quarter (Q3) of this year, compared to Q3 2013: 41,746 permissions were granted in England, down from 44,251 in 2013. The majority of the fall has been in the affordable housing sector with just 3,908 dwelling permissions granted compared to 6,419 last year. Private permissions fell very slightly to 36,690 from 36,708.

In his Autumn Statement, Chancellor George Osborne acknowledged the need to make changes to the planning application process, with a view to introducing new measures to speed up the time taken and reduce the cost of getting planning permissions.

Similarly, the Department for Communities and Local Government (DCLG) Select Committee report into the operation of the NPPF, which was published last week, concluded that the NPPF was the essential base from which consistent decision making could occur, delivering an increase in land for housing. The report has made some recommendations to tweak the NPPF to iron out some initial teething problems, but categorically states that fundamental changes to the NPPF are not only unnecessary but would be harmful to the emerging trend of positive planning reflected by the long term trends within HBF’s Housing Pipeline figures.

Baseley continued: “Since its introduction, the NPPF has delivered steady increases in the number of planning permissions. Allied to an increase in demand, primarily down to Help to Buy, this has enabled house-builders to ramp up much needed housing delivery.

“Government cannot though be complacent. It is imperative it monitors the planning system closely and ensures it evolves so that it delivers planning permissions at the rate required to address our housing crisis.

He pointed out that developers are still only building around half the number of new homes the country needs. Getting the required number of permissions, in a timely manner, is absolutely key to the industry’s ability to deliver.

“In addition more needs to be done to speed up the plots that are awaiting final approval to allow construction to commence,” he added.

The HBF/Glenigan report, a strong forward indicator of future levels of home building, suggests that there will be a rise in the volume of homes which will be built over the next two to three years.

Allan Wilén, Glenigan’s Economics Director said: “The flow of private sector projects remains firm. The current year has seen a number of larger schemes gaining approval and this has contributed to a 30 per cent rise in the number of homes approved on private sector projects during the first nine months of 2014. In contrast, social housing approvals remain on a downward trend and tempered growth in overall planning approvals to 20 per cent during the first nine months of this year.”

Tuesday 23 December 2014

Property Eye Candy - so what will £6.25m buy you in London?

You can see most of London’s most famous landmarks from the roof terrace and glass walls of this three-bedroom triplex. It’s a shame that the vista is preserved for the super rich. From £6.25m

Monday 22 December 2014

Landlord receives maximum £20,000 fine for not applying for a selective licence

A London-based landlord, previously fined £15,000 for failing to comply with selective licencing, has again been fined £20,000 for renting out a property without a selective licence.  
Rudolph Pink was prosecuted by Thanet Council and the fine is the largest handed out for a selective licensing offence in Thanet.
In 2011, Thanet District Council designated certain parts of Cliftonville West and Margate Central as a selective licensing area. Unless subject to exemption, all privately rented properties within the area must be licensed with the council. Selective licensing was introduced to help tackle low housing demand and anti-social behaviour, and is part of the council’s wider regeneration activities in Margate. The scheme requires landlords to comply with a range of conditions to ensure good property management.
Pink of Clapham Road, London, failed to make a selective licence application for a rented house in Warwick Road, Margate despite council requests that he comply with the scheme. 
He did not attend Canterbury Magistrates’ Court on Tuesday 16 December 2014, but the prosecution case was proven in his absence. Pink was fined £20,000 and ordered to pay a contribution of £120 towards the council’s prosecution costs and a victim surcharge of £120.
Cllr. Richard Nicholson, cabinet member for housing and planning services, said: “Selective licensing cannot simply be ignored. This fine of £20,000 is the maximum possible for this type of offence and sends out a strong message to those landlords who are continuing to ignore the scheme. Officers are actively investigating all addresses in the designated area and will be doing everything they can to ensure 100% compliance with the scheme.”

Thursday 18 December 2014

A Southampton student buy 2 let with your kids as the tenants returns 6.4%

One of my landlords who lives just outside Manchester dropped into the office last week enquiring about student property. His son has just completed his first term in Southampton Uni and is staying in halls of residence and he is trying to sort out accommodation for next year. He has looked at some properties and they are pretty bad, mould, damp, bad smells and poor décor and he was looking for some guidance.

Student properties in the Southampton market are let at rents ranging from £68 per person per week to £95pppw in shared houses plus bills. Locations vary considerably as do the quality of kitchens, bathrooms etc. It’s also hard to find a decent 1 bed unit for less than £550 per month and 2 beds tend to start at around the £750pcm, however these may be some distance from the Universities. Some private operators and the universities are offering purpose built studios at around £150 per week all inclusive, however they tend to be small at 200 to 250 sq.ft. and heavily policed – no posters on the wall, small fridges, no music etc. – not a student’s idea of fun!

One option I put on the table was to buy a unit for his son to use over the next 2 or 3 years and then either sell or keep it long term as an investment. This has many advantages including:
  • You are investing in property rather than giving dead money to another landlord
  • You know your child is living in a nice, safe well looked after property complying with all current regulations (fire safety, furnishings, gas, electrical etc.)
  • Your will benefit from capital appreciation during your child’s time at university
  • You can structure the transaction to help with inheritance tax planning which may help your child to get started on the property ladder
Here’s a nice two bed house which is only 10 mins walk to Southampton University, its 100 metres from a new Sainsbury’s and Portswood high St and Waitrose are less than 5 mins walk.

He could share this property with a friend. It falls outside of Southampton additional licencing requirements for small HMO's ( Houses in Multiple Occupation). It needs no work, has a garden and even a summer house and is on the market at £160k, I think a deal could be done at the £150k level. With each person paying £400pcm - £92pppw they would have great accommodation, no hassle and the parents would be happy knowing there kids were in good accommodation for their time at Southampton Uni. From the investment side of things monthly rent of £800 equates to a Gross Yield of 6.4% - not too shabby at all when you consider all the benefits.

Guess what? landlords has booked a viewing. I hope we get asked to some of the student parties next year!

If this is something you would like to consider we can help pick the right property which will help keep the kids happy and also make solid financial sense.