2020 – The Year of NO Excuses!

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As we rapidly approach the end of the year, and the end of this Decade, I would like to help you to get a flying start to 2020, because I believe it is going to be a great year to invest in property

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Jenrick spends Christmas evening at Birmingham Shelter

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Communities Secretary Robert Jenrick spent the evening volunteering on Christmas Day at Birmingham Christmas Shelter, which was open throughout the day and night during Christmas week and welcomes up to 150 guests daily.

The team at the shelter provide hot food and drinks as well as entertainment

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No second reading date yet for Renters’ Reform Bill 2019-20

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Considering how long it took for the Tenant Fees Act to come into force, it is probably best not to hold your breath for the Renters’ Reform Bill 2019-20 announced before Christmas in the Queen’s Speech. It has been confirmed that no date is yet available for the second reading.

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Buy-to-let mortgage rates set to fall…

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Buy-to-Let Mortgages:

Online mortgage
broker Property Master is predicting a fall in the cost of fixed rate
buy-to-let mortgages now that the Conservatives have been elected,
and a settled Brexit course is set.

The cost of fixed
rate buy-to-let mortgages is already down on the rates prevailing at
this time last year, in some cases by up to £38 per month for the
average mortgage.

Before the
Conservative victory the downward trend was beginning to stall, but
is now likely to resume again thinks Property Master.

Angus Stewart, chief
executive of Property Master, has said:

“Now that the
uncertainty created by last week’s General Election has ended and
as we appear to be moving more swiftly toward Brexit at the end of
January, we believe there is every chance rates will fall still
further.

“Firstly, the
Conservative victory, even before it happened, strengthened the pound
so removing one factor that could have encouraged the Bank of England
to increase rates.

“Secondly, two
members of the Bank’s Monetary Policy Committee voted for lower
rates last time around which makes us think downward is more likely
to be the next movement in the base rate. The stars are aligned for
lower mortgage rates for hard-pressed landlords in the New Year.”

The latest
comprehensive survey of the market for fixed rate buy-to-let
mortgages has shown the downward pressure on cost is continuing with
just a couple of exceptions. Landlords struggling to maintain profit
against a rising tide of new regulations and the end of many tax
benefits will find some very good deals are on offer. As ever the
question is for how much longer says Property Master?

Commenting on the findings of recent research and written before the election Angus Stewart said:

“There have been a
slew of rate cuts amongst lenders along with new offers being
launched that are looking very attractive to landlords wanting to
expand their portfolios or needing to remortgage. Good news on rates
may well entice some landlords back into the market by helping them
offset the many recent regulatory and tax costs they have been
struggling to absorb.”

“In terms of
predicting the outlook on interest rates it clearly has never been
more difficult. Brexit uncertainty is continuing, and it would appear
the financial markets are taking the latest comments from the Bank of
England to signal a cut in rates in the light of a disorderly exit
from the European Union. If Brexit goes smoothly and some kind of
deal is reached then we are more likely to see rates rise in line
with the plans to normalise interest rates that the Governor of the
Bank of England outlined some time ago.”

The Bank of England Monetary Policy Committee (MPC) last met on the 19^th of December and decided to maintain the base rate set on August 1st at 0.75%.

©1999 – Present | Parkmatic Publications Ltd. All rights reserved | LandlordZONE® – Buy-to-let mortgage rates set to fall… | LandlordZONE.

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Most read call of the weeks from 2019

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There are just days to go until it is time to ring in a new year-and a new decade, so it is a good time to reflect on the last twelve months. Every week, we shine a light on some of the things our members give our advice team a call about, and how we […]

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Berkshire estate agents fined for price fixing

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Price Fixing Cartel:

Three Berkshire estate agents have been fined by The Competition and Markets Authority (CMA) more than £600,000 for agreeing between themselves to fix minimum commission rates they charged their customers.

Following an investigation by the CMA, the companies involved in the illegal cartel, Michael Hardy, Prospect and Richard Worth, along with a fourth company, Romans, broke competition law by taking part in the price-fixing cartel, which began in September 2008.

The CMA claims that for almost 7 years the 4 companies conspired to set minimum commission rates for the sales of residential properties in Wokingham, Winnersh, Crowthorne, Bracknell and Warfield, locations where these companies were the leading estate agents at that time.

The firms were found to be exchanging confidential information on pricing and holding meetings between themselves to ensure the cartel members enforced and maintained the agreed minimum rates. The result was, says the CMA, that local home-owners were denied the chance of securing the best possible deals when selling their properties because they were unable to meaningfully shop around locally for a competitive price on commission rates.

Romans escaped a fine as it brought the illegal activity to the CMA’s attention and fully cooperated with the investigation, under the CMA’s Leniency Programme.

The fines imposed, according to the CMA, “take into account the behaviour of the companies involved. Michael Hardy’s and Prospect’s fines have been discounted to reflect the fact they admitted to illegal behaviour and agreed to cooperate with the CMA, thereby shortening the length of its investigation.”

In the case of Romans, which is part of the national Leaders chain, with 140 branches across the UK, was exempted from the fines as it had come clean and reported the matter to the CMA.

Peter Kavanagh, the chief executive of Romans told The Guardian newspaper:

“In June 2017, senior directors of Romans became aware that some years ago a small number of Romans residential sales executives across a few branches had acted in a manner totally contrary to the standards and values of the company. We immediately alerted the CMA.”

Michael Hardy’s and Prospect’s fines were reduced discounted to reflect the fact they admitted to illegal behaviour and agreed to cooperate with the CMA. Michael Hardy’s managing director, Neal Mackenzie, said: “A very poor decision was made and it is difficult not to conclude that a line that should not have been crossed was.”

Mark Hayward, chief executive of the National Association of Estate Agents told The Guardian:

“We are very aware of the implications of forming an estate agents’ cartel and have been vigorous in our promotion of the CMA’s Stop Cartels campaign to educate agents about price-fixing, market sharing and bid rigging. We continue to urge all our members to adhere to current legislation to ensure best practice to avoid falling foul of the law.”

CMA: Michael Hardy is being fined £142,843. This includes a reduction of 10% for settlement. Following the CMA’s provisional decision in June 2019, Michael Hardy agreed to settle the investigation with the CMA. By settling with the CMA, Michael Hardy admitted being part of the cartel, and agreed to pay the penalty and to a streamlined procedure. Prospect is being fined £268,765. This includes a reduction of 50% under the CMA’s Leniency Programme and 10% for settlement. As in the case of Michael Hardy, by settling following the CMA’s provisional decision, Prospect admitted being part of the cartel, and agreed to pay the penalty and to a streamlined procedure. Richard Worth is being fined £193,911.

Michael Grenfell, CMA Executive Director of Enforcement, had said:

“It is disappointing we’ve found yet another case of estate agents breaking competition law. We trust that the fines issued today (Wednesday 18 Dec 2019) will reinforce our message that we expect the sector to clean up its act and make sure customers are not being ripped off in this way. The industry needs to take note: this kind of behaviour will not be tolerated. If you break the law, you risk similar consequences.”

The latest case is the third one in recent years that the CMA has taken against estate agents. Others include the fining of three members of the Three Counties Estate Agent Association £735,000 and fining 4 estate agents in Somerset over £370,000 for similar offences.

©1999 – Present | Parkmatic Publications Ltd. All rights reserved | LandlordZONE® – Berkshire estate agents fined for price fixing | LandlordZONE.

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House prices and rents to rise next year…

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Rent Increases:

Landlords can perhaps be forgiven for rejoicing at the prospects of an early Christmas present, after all the uncertainty endured pre-election 2019.

House
prices are
expected to grow
twice as fast, and
rents
will accelerate next
year, following the decisive December
General Election
result,
that’s
according
to a new
RICS survey.

The
Royal Institution of Chartered Surveyors thinks
that house
prices will
grow
by 2% next year, more than doubling
the current
0.8
per cent growth rate. Likewise,
rents are likely to increase
by around
2.5%.

The
RICS
forecast
is
backed-up
by Rightmove’s
own assessment of the market for 2020. The
leading property listing website is also
predicting an
average UK house
price increase
of 2%
next year.

Rightmove
expects
a bumper demand
for the spring selling season. The
biggest price increases
are
expected in
the
north
of
England. Here
prices may rise between 2
and
4%,
whereas
in London
and the South East rises
could be more modest at around 1%.
Here,
prices may still be under a cloud, awaiting the outcome of the trade
negotiations with the EU.

A
RICS economist is quoted as saying:

“Challenges
around affordability and low stock levels will continue to drag on
the market, and Brexit uncertainty could resurface as the next
deadline draws closer. As such, we expect house prices to rise by
just 2 per cent next year, with the outlook for overall sales volumes
broadly flat”

RICS
says
that the continuing uncertainty
over
the final trade agreement with the EU would
still
have a slowing effect on sales numbers,
with
overall sales expected to flatline for the whole of next year.

Sales
figures actually fell between September
and December, according
to official figures, and there was a shortage of rental properties
coming
on
the
market. Landlord
instructions are down according to RICS
members
surveys, for the 14th
successive quarter. As
a result, average rents
are expected to rise by an average of 2.5%, and
in London this figure could be 3%.

©1999 – Present | Parkmatic Publications Ltd. All rights reserved | LandlordZONE® – House prices and rents to rise next year… | LandlordZONE.

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BLOG: What does the Conservative victory mean for the Welsh Parliament election in 2021?

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RLA Welsh Policy & Public Affairs Officer Calum Davies shares his thoughts on the political landscape in Wales post-general election. Readers will be forgiven for thinking the General Election result will lead to seismic change everywhere. However, with housing and much more devolved to the Welsh Assembly – which has recently backed a law that […]

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Boris pledges £260m to eliminate homelessness and rough sleeping

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As part of his drive to tackle homelessness, over £260 million has been committed for local authorities to support people who are homeless or at risk of losing their homes. The funding will empower councils across England to provide the best services for local needs

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Housing Forecast 2020 highlights need for Government to prioritise housing policy

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The Royal Institution of Chartered Surveyors (RICS) Housing Forecast 2020 highlights the need for Government to prioritise housing policy, in order to inject activity into the market and create a favourable environment for developers to help address the housing crisis.

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