LATEST: Property values jumped by 9.8% during 2021, reveals Halifax

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Record house prices in 2021 mean many landlords will have made more money out of their homes in capital appreciation than in annual rent.

The latest Halifax House Price Index reports that house prices soared by more than £24,500 last year – the largest annual cash rise since March 2003 – to hit a record high of £276,091, with prices climbing again in December for the sixth consecutive month, up 1.1%.

Wales remains by far the strongest performing region in the UK with house price inflation of 14.5%, taking the average house price to £205,579. In England, the North West was the strongest performing region (11.8%), followed by the South West, while London remained by far the weakest (2.1%).

Halifax says the stamp duty holiday and the race for space due to widespread homeworking encouraged buyers to bring forward home purchases, while a lack of available homes for sale and historically low mortgage rates have helped drive annual house price inflation to 9.8%, its highest level since July 2007.

Barely budged

Landlord demand for properties has also contributed to competition in the market. Despite the Bank of England’s surprise increase in the base rate last December from 0.1% to 0.25%, the average cost of buy-to-let fixed rate mortgages favoured by landlords has barely budged, according to Property Master.

Its Buy-to-let Mortgage Tracker found that the average rate for a buy-to-let mortgage for a typical loan was as low as 1.69% which, once fees are included, translates into a monthly cost of £262 for a two-year fixed-rate loan of £160,000, representing 60% of the value of the property.

Halifax expects house prices to maintain their current strong levels, but believes that growth relative to the last two years will be at a slower pace.

But Stuart Law (pictured), CEO of investment outfit, Assetz group, reckons there could be continued house price growth throughout the year in the region of 8-10%.

He says: “There is going to be much speculation around rising interest rates this year especially given inflation and rising living costs, but I think we will see far less in terms of actual movement over the coming year than would be needed to slow house price inflation materially.”

Read more about mortgages.

©1999 – Present | Parkmatic Publications Ltd. All rights reserved | LandlordZONE® – LATEST: Property values jumped by 9.8% during 2021, reveals Halifax | LandlordZONE.

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Can I make a stand by stop paying ground rent or service charge?

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Dear all, We bought a leasehold ground floor flat (no basement below) in a mansion block a few months ago. During the conveyancing process, our Home Buyer report highlighted possible rising damp in the flat and suggested us engaging a damp specialist surveyor to carry out an independent Damp and Timber Decay survey

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LATEST: Jersey landlords fighting off ‘licensing by back door’ plans

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Jersey’s Reform Party proposals for open-ended tenancies and rent controls will only increase and accelerate the problem of tenants getting notice to vacate, says the Jersey Landlords Association (JLA).

Landlords’ real fears about rising red tape and the increasing costs of renting property are already biting, according to the group, which believes the introduction of the Health & Safety (Rented Dwellings) (Jersey) Law and its poor implementation over the last three years has caused landlords to sell their rental properties.

It now hopes to quash fresh plans to introduce compulsory licensing; despite it being voted against twice by the States, Senator Kristina Moore wants to make the current voluntary Rent Safe scheme compulsory, which the JLA has labelled, “licensing by the back door”.  

The Jersey government has also announced a shake-up of the rental market to give private renters recourse against unfair or unjustified rent increases.

Rent controls

Its Fair Rents Plan includes moves to reinstate the Rent Control Tribunal this year, giving private renters the opportunity to appeal to an independent body if they believe their rent is excessive.

The JLA says it was not consulted about the plan. Scotland has recently published similar proposals that include a controversial system of rent controls while the English government is due to strengthen renters’ rights in the upcoming Renters Reform Bill.

JLA member Emma Paul (pictured) says: “Jersey’s public health and safety legislation already provides mechanisms for rented properties which are in poor condition and present a health and safety issue to be served with improvement or prohibition notices coupled with the ability to fine landlords.

“The argument that the environmental health department does not know where these properties are, should be being addressed in that the States have passed a proposal for all property to be registered – so they will know which properties are rented.”

©1999 – Present | Parkmatic Publications Ltd. All rights reserved | LandlordZONE® – LATEST: Jersey landlords fighting off ‘licensing by back door’ plans | LandlordZONE.

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Build to rent investment hit record £4.1 billion in 2021, says CBRE

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Investors ploughed £4.1 billion into build-to-rent (BTR) last year, betting that purpose-built flats would provide more reliable returns than other sectors, according to global real estate advisor CBRE.

The firm says activity was evenly split between London and the regions with notable deals that completed in Q4 2021 including Greystar’s acquisition of a minority stake in the Fizzy Living platform, Patrizia’s £100m forward commitment of Oliver’s Place, Huntley Wharf in Reading, Cortland’s forward funding of Colliers Yard, Manchester for £158m, as well as Legal & General’s £500m investment into schemes in London, Glasgow and Southampton.

Lloyds is also aiming to expand aggressively into the sector while last year retailer John Lewis announced plans to build a residential property portfolio to offset weakness in its high street stores.

£2 billion

CBRE reports that last year’s figure is £500m higher than 2020’s previous record, while almost £2 billion worth of deals are already in the pipeline for this year, fuelling growth that looks set to continue due to a chronic lack of homes in the UK.

“The build-to-rent investment market had a stellar performance in Q4 with more than £2 billion of capital committed,” says Jason Hardman (pictured), executive director, residential valuation & advisory services.

“This underlines the growing maturity of the UK build-to-rent market and reflects the phenomenal bounce back we have seen in the occupational market over the second half of the year. 2021 represents an undeniable record for the sector and with almost £2 billion of assets under offer, we expect this momentum to continue into 2022 as the sector continues to go from strength to strength.”

Read more about BTR.

©1999 – Present | Parkmatic Publications Ltd. All rights reserved | LandlordZONE® – Build to rent investment hit record £4.1 billion in 2021, says CBRE | LandlordZONE.

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London borough scales back selective licensing after success so will others follow?

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Hammersmith and Fulham Council has scaled back its renewed selective licensing scheme from 128 to just 24 streets after declaring that anti-social behaviour has improved in parts of the borough’s private rented sector.

A council report says it believed that focusing on specific streets was a more targeted approach than applying the scheme to the whole borough or to whole wards.

It added that a recent consultation and its research had both shown that a number of streets in the previous scheme no longer met the threshold of need for inclusion so would not be included, but would now include eight new streets which did meet the threshold.

It added that anti-social behaviour including noise nuisance, poor waste management and public health nuisance in the 24 selected streets was above average.

Councillor Lisa Homan (pictured), cabinet member for housing, says: “Things have improved in the last five years but when we set out with our selective licensing scheme we selected 20% of our properties where we thought the biggest problems were – but 16 of those streets were in the original scheme and eight new ones are coming in, following hard work with anti-social behaviour.

“Officers have walked those streets to make sure we get the right 20% in the scheme.”

Councillors approved plans to renew its borough-wide additional licensing scheme that will include all shared accommodation and bedsit-HMOs occupied by three or more people comprising two or more households, outside the scope of its mandatory HMO licensing. Both current schemes end on 4th June.

According to Geospatial technology firm Kamma, Hammersmith and Fulham is the London borough with the highest average fines of £19,800. Watch the cabinet meeting in full.

©1999 – Present | Parkmatic Publications Ltd. All rights reserved | LandlordZONE® – London borough scales back selective licensing after success so will others follow? | LandlordZONE.

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Possession claims could double this year

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I believe Possession claims will double this year, and if anyone needs assistance with evicting a tenant or debt recovery you can email me personally on paul@landlordaction.co.uk

We ended 2021 after twenty-one months since the first Covid lockdown with the new variant

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New Switch and Further advance product for incorporated and individual landlords

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Paragon has launched a range of switch and further advance products for portfolio and non-portfolio landlords for the New Year.

Across both portfolio and non-portfolio ranges, rates start at 2.95% for landlords who are looking to switch to a new product

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37sqm Flats Too Small?

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The Guardian reports that 37sqm flats are too small for property development, but this is simply not the case, exploring this with me is Andrew Roberts in this episode of Property Breaking News.

Please click on the video below:

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Deposit recovery after vexatious bullying claim and no address?

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A tenant of mine left my flat with about £7,000 rent arrears: £6,300 during the tenancy and another £750 or so after refusing to vacate, and only leaving after a possession order hearing date had been given.

I have a £5,000 CCJ

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Huge private landlord to sell 40,000 homes to City for £9 billion

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One of the largest providers of privately rented housing in the UK – Annington – is reportedly in talks over its possible sale.

The company rents out more than 40,000 family homes to critical workers, with 95% of its portfolio leased to the Ministry of Defence on a 200-year contract.

It has also helped more than 17,000 people buy their own home, with many of them first-time buyers, service personnel and key workers.

Owner, Terra Firma Capital Partners, is talking to investment banks, according to Sky News, with a deal set to value Annington at more than £9bn, including debts of more than £4bn.

An auction of the company was expected to take place in the next couple of years, but has been accelerated by a settlement reached between Annington and the MoD just before Christmas.

In a stock exchange announcement, it said that a deal on the rent payable by the MoD on the Married Quarters Estate meant a further arbitration process would not be needed.

Unusual rent deal

Unusually, each rent review seems to lead to lower rents; the MoD would, “continue to pay rent at the current prevailing downward adjustment of 58% from open market rental levels until the dates on which the new rents become payable, which fall between 2021 and 2024,” said the firm.

“Upon these dates the MoD will pay rent with a downward adjustment of 49.6% from open market rental levels until the next site review.”

Annington added that the next review due in 15 years’ time would stick to the same rent payment formula, meaning that the next full review would not happen until 2051.

Terra Firma acquired Annington in 2012 from Japanese bank Nomura for a reported £3.2bn.

The largest landlord in the UK is reckoned to be Southwark Council.

©1999 – Present | Parkmatic Publications Ltd. All rights reserved | LandlordZONE® – Huge private landlord to sell 40,000 homes to City for £9 billion | LandlordZONE.

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