UK property buyer demand wanes as housing stock hits record low

(qlmbusinessnews.com via telegraph.co.uk – – Thu, 8 Mar 2018) London, Uk – –

The average number of properties on estate agents’ books has hit a record low and is “unlikely to improve”, according to a survey by the Royal Institution of Chartered Surveyors (Rics).

While a typical estate agent has 42 homes on their books per branch, in London – where the nation’s chronic housing shortage is most concentrated – the figure is just 33.

Rics’s monthly residential market survey, which gathers the views of more than 300 chartered surveyors across the country, also found that there was a prevailing trend in the lack of new buyer enquiries, new instructions and newly agreed sales.

New buyer enquiries fell for the eleventh consecutive month, with 16pc more survey respondents seeing a fall rather than rise in new customers, while the number of agreed sales was also down, continuing a six-month trend.

Buyer demand has fallen most dramatically in London and the south east, Rics said, while it has risen in Scotland, Northern Ireland and Yorkshire and the Humber. Figures in most other regions remained broadly flat.

As market activity continues to slow, prices remained flat in February for the ninth month in a row, although there was an uptick in headline prices in Wales, the north west, Northern Ireland and the East Midlands.

Rics said the five-year indicator for house price growth will be approximately 15pc by the end of the 2023.

Simon Rubinsohn, Rics chief economist, said: “The divergent regional picture is becoming increasingly pronounced with key Rics indicators across huge swathes of the country still showing considerable resilience, but data for London, the south east and East Anglia are rather more subdued.”

Russell Quirk, chief executive of online estate agent Emoov.co.uk, said that it was important to note that only a “tiny proportion” of Rics members were actually estate agents and so their views “aren’t entirely typical of the overall industry”.

Earlier this week Theresa May said young people unable to climb onto the property ladder had a “right to be angry” and that developers were partly to blame for the nation’s chronic housing shortage.

Announcing reforms to planning rules, the prime minister said developers had a “perverse incentive” to hoard land once it had been approved for development rather than actually build on it, meaning much-needed houses were not being built. She added that they should step up and “do their duty to Britain”.

Previous research has suggested that more than 423,000 new homes in Britain have been granted planning permission but are still waiting to be built.

Councils are approving nine in every 10 planning applications, but sites are being left empty as developers fail to build quickly enough, and councils are unable to step in.

Brian Murphy of the Mortgage Advice Bureau said that it “stands to reason that if fewer properties are on the market for sale, buyer choice is restricted”. He said: “This means that those who are actively looking are likely to view fewer properties, hence why we would see a reported reduction in new buyer enquiries.”

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London’s first capsule hostel opens in Borough

When was the last time you stayed in a youth hostel? It probably didn’t look like this one – London’s first ‘capsule hostel’. It’s a dormitory with just enough room for a bed and everything you need inside a self-contained pod. They’ve been popular in Japan for years – reporter Thomas Magill goes to Borough to see if they’ll take off here.

 

Persimmon housebuilder to cut controversial bonuses to top three executives

(qlmbusinessnews.com via theguardian.com – – Fri, 23 Feb 2018) London, Uk – –

Housebuilder cuts controversial bonuses to top trio following public outcry

Persimmon is reducing bonus payouts to three top executives by £51m, including a £25m cut for its chief executive, after the UK’s second largest housebuilder was strongly criticised over its huge payout plans.

The FTSE 100 firm said a bonus of £100m for its chief executive, Jeff Fairburn, would be cut to £75m under the company’s long-term incentive bonus plan.

Finance director Mike Killoran will receive £24m less than the £78m he was originally due, and managing director Dave Jenkinson will see his bonus cut by £2m to £38m.

Persimmon has come under intense pressure both publicly and privately from politicians and shareholders for planning record-breaking bonus payouts to bosses after the company benefitted from the taxpayer-backed help-to-buy scheme.

This week the company’s sixth-largest shareholder, Aberdeen Standard Investments, labelled Fairburn’s bonus as “grossly excessive”, and said it remained “a huge concern” despite the executive’s recent pledge to donate some of his package to charity.

Last year, the Guardian revealed that Fairburn’s pay deal could be used to provide a council house for every homeless family in Yorkshire where Persimmon is based.

Announcing the bonus reduction, the company said its remuneration committee was “fully supportive” of the decision. Persimmon’s chairman, Nicholas Wrigley, resigned in December over his role in orchestrating the pay scheme.

Fairburn said earlier this month he decided some time ago to give some of his bonus awaybut that he had wanted to take an “old-fashioned approach” and keep the decision private.

Speaking this month, he said: “It’s now clear that this belief was misplaced and so I am making my plans public and recognise that I should have done so sooner. I am setting up a private charitable trust which I plan to use to benefit wider society over a sustained period of time by supporting, in a very meaningful way, my chosen charities.”

By Angela Monaghan

Mid-earners 25 to 34-year-olds ‘locked out of Home-ownership’

(qlmbusinessnews.com via bbc.co.uk – – Fri, 16 Feb, 2018) London, Uk – –

The extent to which young people are locked out of the British housing market has been revealed in new figures from economists.

The biggest decline in home ownership in the last 20 years has been among middle-income 25 to 34-year-olds, the Institute for Fiscal Studies said.

In 1995-96, 65% of this group owned a home, but just 27% do in 2015-16, with the biggest drop in south-east England.

Middle earners are defined as having take-home pay of £22,200 to £30,600.

This can be either as an individual or as a couple.

A third of them are university graduates, while 30% left school at 16. Three-quarters of them live with a partner, and around 60% have children.

The proportion of these middle earners owning a home (27%) has moved closer to the likelihood of those with a low income (8%) than those on a high income (64%).

‘Money down the drain’

Tom Bourlet pays £535 per month to rent a room in a flat in central Brighton.

“I’ve been renting it for two-and-a-half years. It really is money down the drain,” the 30-year-old says.

“I don’t really see much for it – it’s not the biggest room.”

The location is handy for work, and is close to the railway station, but Mr Bourlet would prefer to have somewhere “to be proud of, and build up myself”, he adds.

However, buying somewhere is “completely beyond budget at the moment”.

“It’s absolute Mission Impossible,” he says.

“From rent, to paying for trains… all the utility bills keep shooting up. I mean, I’m nowhere near, I’m not even slightly close. I’m saving every month, but the deposit is so high that it just seems beyond reach at the moment.”

Andrew Hood, a senior research economist at the IFS, said: “Home ownership among young adults has collapsed over the past 20 years, particularly for those on middle incomes.

“The reason for this is that house prices have risen around seven times faster in real terms than the incomes of young adults over the last two decades.”

Property price rises were significant in the South East of England. As a result, the region has seen the proportion of homeowners among 25 to 34-year-olds fall from 64% to 32% in two decades.

Every region of Britain had seen a 10 percentage point drop over the same period, the IFS said. This will lead to some tough decisions for today’s 20 to 30-somethings, according to Iona Bain, founder of the Young Money blog.

“It is really hard to see how we can make this better when we are still seeing a huge demand for housing and that housing demand is not being met with the right number of houses,” she said.

“Individuals are having to decide for themselves: do I want to rent and have the flexibility but pay more for it, or do I want make a lot of difficult decisions to get on the property ladder sooner and potentially stay put for many, many years to come?”

Housing minister Dominic Raab said that schemes such as Help to Buy and the removal of stamp duty for most first-time buyers had helped people to buy their first home.

He also said that £45m would be invested into community projects that would help kick-start the building of thousands of new homes.

 

Stoke-on-Trent Council to sell off derelict houses for £1 to regenerate property market

(qlmbusinessnews.com via telegraph.co.uk – – Thu, 16 Nov, 2017) London, Uk – –

Stoke-on-Trent is hoping to once again regenerate its property market with a programme to sell off derelict houses for £1 a pop.

First-time buyers who live, work or have family ties to Stoke are being offered the chance to get onto the property ladder for a quid, with 25 houses in the Portland Street area of Hanley up for grabs.

It is the second time Stoke City Council has launched a scheme to sell off dilapidated properties, having first introduced the initiative in 2013, when 33 council houses in Cobridge were sold for £1, with each buyer then given a £30,000 loan to help renovate the property.

Rebecca Dennis and Chris Benn were one couple to take advantage of the scheme, buying the house for the cost of a bottle of water. After spending four months restoring the property, they managed to increase its value by around £60,000.

While the council previously bought derelict council homes to sell on, the latest scheme involves buying empty privately-owned properties from absentee landlords. It then sells these at rock-bottom prices with a loan of around £60,000 for the buyers to renovate the property, which has to be repaid over 15 years, with interest, before they then become the outright owner.

In order to qualify for the scheme, buyers must have been in continuous work for at least a year and earn a maximum income of up to £27,000 if single, £33,000 if single with children, and up to £54,000 for a couple, or £60,000 for a couple with dependants.

Randy Conteh, Stoke’s council’s cabinet member for housing, communities and safer city, said: “The project… not only enables hardworking people on modest salaries to buy homes they would not otherwise be able to afford, it helps to regenerate rundown parts of the city – adding to a sense of community for residents and helping to tackle social issues.”

Average property prices in Stoke-on-Trent are just shy of £130,000, Rightmove data shows, making it an affordable place for first-time buyers. The UK average is £211,085.

Stoke isn’t the only city to launch a programme in the hopes of rejuvenating its property market, with Liverpool launching a similar scheme in 2015.

As many as 2,750 Liverpudlians applied to buy around 120 empty and unloved Victorian homes for next to nothing, in deprived areas of the city.

In the first tranche, 20 homes were sold around Granby Four Streets and Arnside Road. That same year, Granby Four Streets won the Turner Prize because the cluster of terraced houses, based in a corner of Toxteth and earmarked for demolition, were revamped, transforming the community without resorting to “corporate gentrification”.

It was specifically recognised as a work of art rather than architecture, after judges argued it did more to “change the way people live” than other exhibitions.

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Over a third of Uk home sellers forced to cut asking price, says Right Move

Paul Wilkinson/Flickr

(qlmbusinessnews.com via theguardian.com – – Mon, 13 Nov 2017) London, Uk – –

Property website says new sellers being too optimistic by not discounting by more as overall market stalls and interest rates rise

More than a third of home owners trying to sell their house have been forced to reduce their asking price, with the number of price cuts at their highest level since 2012, according to Rightmove.

Traditionally house sellers are often forced to cut asking prices in the pre-Christmas period but this year the nation appears to be holding a collective autumn sale, said the property website.

Rightmove, which claims to list 90% of the houses being sold in the UK, said 37% of current sellers had dropped their asking price, with a typical 0.8% or £2,392 price reduction. It also warned that those who recently put their property on the market were being too optimistic by not discounting by more.

The mass price cut will be seen as further evidence that the market has slowed dramatically, particularly in London where prices have been falling. Last week the Royal Institution of Chartered Surveyors said the overall UK property market had stalled. Rics also warned that it expected the market to remain subdued in the coming months as sales stay flat or fall in most regions.

Rightmove director, Miles Shipside, said the slowdown in the housing market, the recent interest rate rise and the prediction that further rises were on the horizon suggested bigger reductions in house prices in the near future.

“Given that the market has been price-sensitive for a while and a five-year high proportion of sellers are slashing their prices, some sellers and their agents are over-pricing. These sellers may well be asking themselves if they could have saved some time and stress by pricing a lot more conservatively at the start.”

Lucy Pendleton, of the London estate agent James Pendleton, said sellers in the capital are facing some particularly tough decisions. She argues that one large price cut can work better than several small ones.

“It’s vital they don’t discount their home in dribs and drabs. By dropping the asking price in increments all you succeed in doing is making your property look stale and unwanted, with none of the surge in viewings that a keen discount can bring. There are also far too many vendors in London who think a reduction of £10,000 is enough,” she said.

By Miles Brignall

This architect firm unveiled plans to build Europe’s first underwater restaurant

 

Underwater Restaurant In Norway Looks Like It’s Right Out Of Science Fiction
A Norwegian architecture firm has unveiled plans to build Europe’s first underwater restaurant, complete with a massive panoramic window.

 

Marks & Spencer banking arm announced plans to launch mortgage range

(qlmbusinessnews.com via telegraph.co.uk – – Fri, 20 Oct 2017) London, Uk – –

You will soon be able to buy a house with Marks & Spencer, after the retail giant’s banking arm announced plans to launch a mortgage range.

The company better known for selling groceries and underwear will roll out its first mortgage products early next year, subject to regulatory approval.

The M&S Bank products will be targeted at both first-time buyers and home movers, with rates and further details to be announced next year.

Sue Fox, chief executive of M&S Bank, said: “Many of our customers have shopped with M&S their whole lives, feeling the comfort of the brand at every key life event.

“We’re now in a position to support our customers with the biggest financial decision they’ll ever make – their home.”

M&S Bank, which launched in 2012 and has four million customers, currently offers credit cards, loans and current accounts. Its number of current account customers has grown 60pc over the last two years.

The bank has its roots in the financial services division of M&S, which was founded in 1985.

It is a joint venture between HSBC and M&S, although it has its own banking licence and its own board. It has 29 branches and over 120 bureaux de change in M&S stores.

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The robot helping sick children explore the outside world

 

A rare genetic disorder often prevents 17-year-old Jade Gadd from leaving her house. Denied the normal life most teenagers enjoy, she is unable to go to school regularly and left feeling isolated. Recently, that has all begun to change with the help of a small robot, who takes her physical place in class, relays information and allows her to stay connected with her teachers and classmates.

Airbnb paid less than £200,000 in UK corporation tax last year

 

(qlmbusinessnews.com via bbc.co.uk – – Mon, 9 Oct 2017) London, Uk – –

Airbnb, the accommodation website, paid less than £200,000 in UK corporation tax last year despite collecting £657m of rental payments for property owners.

The commissions the company earns in the UK are booked by its Irish subsidiary, but it also has two UK subsidiaries.

One unit made a pre-tax profit, but the other did not incur UK corporation tax because deductions resulted in a loss.

Airbnb said in a statement: “We follow the rules and pay all the tax we owe.”

One of the British subsidiaries, Airbnb Payments UK, handles payments between landlords and travellers for countries other than the United States, China and India.

That unit made a pre-tax profit of £960,000 and paid £188,000 in UK corporation tax – £8,000 less than in 2015.

The other British subsidiary, Airbnb UK, markets the website and app to British consumers. It reported a £463,000 pre-tax profit last year but because it gave shares to staff, which are tax-deductable, there was no corporation tax bill.

Airbnb said: “Our UK office provides marketing services and pays all applicable taxes, including VAT. The Airbnb model is unique and boosted the UK economy by £3.46bn last year alone.”

The tax arrangements of other technology giants have come under under closer scrutiny in recent years.

One of the most vocal critics has been EU competition commissioner Margrethe Vestager. She has taken aim at the likes of Apple, Amazon and others for where they book the revenues and profits of their European activities.

Bruno Le Maire, the French finance minister, has also asked why Airbnb paid tens of thousand of euros in French corporation tax despite a turnover in the millions.

The company, founded in San Francisco in 2008, has disrupted the hotel industry by linking travellers with landlords who generally want to rent out a spare room or an entire property for short-term stays.

It has become one of the most successful examples of the digital economy, with an estimated value of about $24bn.

However, Airbnb has faced a growing backlash in cities including Barcelona, Berlin and Paris, where politicians have taken steps to stop landlords renting properties to tourists rather than local residents.

While Airbnb has long been linked with a stock market listing, it remains privately owned.

It takes a 3% commission from landlords for each booking, and also charges fees to travellers.

In the UK last year Airbnb catered for 5.9m travellers and had 168,000 listings.

 

UK housebuilders hooked on the help to buy binge

(qlmbusinessnews.com via cityam.com – – Mon, 2 Oct 2017) London, Uk – –

It’s been clear for some time that housebuilders are hooked on the help to buy drug.

Now it seems the government is, too.

In a bid to ensure that the Tory party conference has something to unveil, Theresa May has confirmed that an additional £10bn will be pumped into the scheme, helping (we are assured) another 135,000 people get on the housing ladder with as little as a five per cent mortgage.

The market movements this morning will likely tell you all you need to know about the housebuilders’ reaction to this news, but beneath that there’s an almighty political row rumbling on about the extent to which the government should be helping people buy homes with greater enthusiasm than it has for actually building them.

Help to supply, not help to buy – that’s the reaction of the free-market think-tanks, who are also joined by housing charity Shelter – whose chief executive said the scheme had increased house prices while propping up a system in need of reform.

When the PM is being criticised by the Adam Smith Institute and the charitable sector, alarm bells should ring. Clearly, there is a problem with housing policy in this country.

Twenty years ago, over 40 per cent of under 25s owned a property. Today that figure has fallen to just 20 per cent, and many people (regardless of age, and particularly in London and the south east) can see no route out of renting.

The scheme is bundled up with other government initiatives including the Help to buy Isa, the London Help to buy Isa and the equity loan scheme, all of which tinker with a market whose fundamental problem is a lack of supply – not demand. To compound matters, analysts warned recently that many using help to buy do not actually need it – adding weight to the argument that the whole process simply drives up prices of existing stock.

It’s hard to disagree with the Adam Smith Institute’s assessment over the weekend that the property market is “totally dysfunctional because supply is so tightly constrained by planning rules, and adding more demand without improving the supply of houses is just going to raise house prices and make homes more unaffordable for people who don’t qualify for the help to buy subsidy.”

Rather than injecting more taxpayer cash into this monetary doping of the housing sector, the PM should loosen rules to allow the construction of more homes in high demand areas – including in her own green belt constituency.

By Christian May

Possible fine for homeowners who sell draughty homes, a report has suggested

(qlmbusinessnews.com via bbc.co.uk – – Wed, 27 Sept 2017) London, Uk – –

Homeowners who sell draughty homes could be fined, a report has suggested.

Economic consultancy Frontier Economics says the money raised could underpin government funding for insulating the homes of the least wealthy homeowners.

It is the most radical idea in the report, which also urges interest-free loans and tax and stamp duty rebates for people to insulate their homes.

Frontier warns the government will miss its targets on cutting carbon emissions unless it stops energy waste in homes.

  • Households ‘need help to get warmer home’
  • ‘Abysmal’ take-up for Green Deal loans

The government said it is considering many options as part of its long-delayed Clean Growth Plan, which is expected soon.

Frontier’s report notes that government advisers say ageing housing stock is the biggest obstacle to meeting the UK’s climate change targets.

Improving homes also gives a boost to health and comfort and keeps bills down. But renovating homes is often an expensive hassle.

The report says that, following the collapse of the ill-fated Green Deal home loan scheme, ministers must find new ways of incentivising people to take on improvement work.

The Green Deal was criticised for offering loans at 7% interest.

The report suggests instead offering equity loans at lower than the standard mortgage rate, to be paid back when owners die or move house.

Another idea is to charge differential stamp duty depending on the level of insulation in the property.

Traditionally the Treasury has been unwilling to fund improvements that will increase the value of people’s homes, but it’s under pressure to be creative to solve the problem.

Infrastructure priority

The report also suggests that people should be tempted to invest in home improvements through a “salary sacrifice” scheme – where part of a person’s salary goes towards energy efficient renovation, and they then save on the associated income tax.

Frontier Economics’ report was funded by a coalition of groups concerned about housing stock – including the architects’ body Riba; the green thinktank e3g; the Institution of Civil Engineers and the electricity group Energy UK.

They all want housing treated as an infrastructure priority.

“It’s the package of measures that matters,” a spokesman, Ed Matthew, told BBC News.

“We want to stop the government’s incremental, short-termist, approach – and treat this like the major infrastructure programme it is… after all every home must be zero carbon within 30 years.”

By Roger Harrabin

Bovis new chief exec sets out strategy to fix the beleaguered company

(qlmbusinessnews.com via telegraph.co.uk – – Thu, 7 Sept 2017) London, Uk – –

Bovis Homes’ share price has soared more than 8pc as its new chief executive updated investors on his strategic review, which will include building fewer homes and paying out more cash to shareholders, in an attempt to get the beleaguered housebuilder back on track.

Greg Fitzgerald, who joined the company in May, described Bovis’s problems as “very fixable”.

In his plans for the overhaul, he said that he would streamline the business and its balance sheet, reducing the number of employees, disposing of developments outside its core areas, and lowering infrastructure spending.

He also added that the company would merge operating regions to create seven key areas, and that the business would aim to build just 4,000 homes a year, a step down from the high-volume model in which the company aimed to build up to 6,000 per annum.

To please investors, the company will hike its dividend and plans to pay out special dividends totalling £180m by 2020, as well as promising to raise the margins from 11.4pc in the first half of this year to 23.5pc.

George Salmon, an analyst at Hargreaves Lansdown said: “[The plan] even includes pledges to return the cash generated from slimming down non-core operations to shareholders. In a big way too: the plans suggest around a third of Bovis’ current market cap will be in shareholders’ pockets by 2020.

“However, it seems fairly apt that the new CEO’s plans include instilling a culture of ‘getting it right first time’. The tailwinds in the sector, namely the combination of low interest rates and supportive government policy won’t last forever.”

 It came as it reported its pre-tax profits have fallen by a third in the six months to June as it reduced volumes in an attempt to repair damage to the company’s brand and the homes it built.

Bovis said there was a 6pc fall in the number of homes it built, as it had warned in a previous update, with pre-tax profit down 31pc to £42.7m from £61.7m in the same period last year. Revenues were up 4pc to £427.8m.

The company said that this profitability was impacted by “by legacy customer service costs, overweight operating structure, investment to change the business, and defence costs,” and it had warned that it set aside more than £10m to attempt to fix the problems that emerged earlier this year.

Bovis’s problems started when it ­issued a profit warning last December due to production delays, before it was revealed that the company was offering incentives to persuade home buyers to move into unfinished properties.

The company faced further reports of low-quality homes and service, while in March housebuilders Redrow and Galliford Try tabled takeover bids, although these were ultimately rejected.

Its average selling price increased by 9pc to £277,000, driven by an increase in building more upmarket homes in the south of England. Other measures to change the direction of the company include an increased focus on affordable housing, teaming up with housing associations.

 Mr Fitzgerald, who was previously chief executive at Galliford Try, said: “The new strategy of disciplined volume growth, allied with a renewed focus on customer satisfaction and build quality, will deliver the homes that are required in the locations where people want to live. The group’s strong balance sheet and valuable land bank mean we are well set to provide the stable returns to shareholders that their patience and support have deserved.”

By 

Uk Housing Market Shows Decline Amid Concerns over Cooling Economy

(qlmbusinessnews.com via theguardian.com – – Tue, 29 Aug 2017) London, Uk – –

UK house prices dipped this month, dragging down the annual growth rate, in further evidence of a cooling market.

The average price of a home fell 0.1% between July and August to £210,495, according to Nationwide, Britain’s biggest building society. Prices rose in July and June but fell between March and May, the first time this had happened since the financial crisis.

The latest monthly price drop took the annual growth rate back down to 2.1%, a level last seen in May, which was the lowest rate in four years, from 2.9% in July.

Robert Gardner, Nationwide’s chief economist, said: “The slowdown in house price growth to the 2-3% range in recent months from the 4-5% prevailing in 2016 is consistent with signs of cooling in the housing market and the wider economy.”

He noted that economic growth had halved from last year to about 0.3% per quarter in the first half of this year and that the number of mortgages approved for house purchase hit a nine-month low in June, while surveyors had reported softening in the number of new buyer inquiries.

He said in some respects the slowdown in the housing market was surprising, given the strength of the labour market, while mortgage rates have remained close to all-time lows.

Household finances are under mounting pressure, with the cost of living rising steadily as the weak pound bites, and wage growth stagnating.

Samuel Tombs, chief UK economist at the consultancy Pantheon Macroeconomics, said the slowdown in house price growth reflected the squeeze on real wages (adjusted for inflation) and the slowdown in the pace that mortgage rates are falling.

“Prices likely will continue to struggle to rise much, given that inflation still has further to rise, consumer confidence has deteriorated sharply since June and lenders intend to reduce the supply of unsecured credit.

“From February, new lending also will not generate borrowing allowances from the Bank’s term funding scheme, raising the costs of credit significantly. Accordingly, we still think that prices will be up just 1.5% year-over-year in December.”

A shortage in the number of homes on the market is underpinning house price growth, with the number of properties on estate agents’ books close to 30-year lows. Nationwide expects prices to rise by 2% over 2017 as a whole. It says house prices across the country are still 12% above their 2007 peak.

After increases in stamp duty in spring 2016, revenues from the tax have reached all-time high highs, rising to £12.8bn in the 12 months to June, well above the £10.6bn peak recorded in late 2007.

By Julia Kollewe

Foxton estate agents profits plunge by 64% as housing market slows

(qlmbusinessnews.com via bbc.co.uk – – Thur, 27 July 2017) London, Uk – –

Two of the country’s estate agent chains have posted slumping profits in the face of a slowing housing market.

London-focused estate agent Foxtons saw profits plunge 64% in the first six months of this year.

Another estate agent, Countrywide, also saw profits tumble, by 98% in its case. The firm said it would not pay a dividend.

Foxtons’ head said demand had slowed in the face of “unprecedented economic and political uncertainty”.

Countrywide said house sales exchanges were down 20%, 24% in London.

Countrywide said the first six months of this year were also tough in comparison with last year, which saw high levels of housing transactions brought forward to beat an increase in stamp duty changes and ahead of the EU referendum.

Its profits were £447,000, down from £24.3m.

Both agents are making deep cost cuts.

Foxtons pre-tax profits fell to £3.8m, down from £10.5m for the same period last year. Revenues fell 15% to £58.5m.

Foxtons said in its statement that there had been further cooling of the market in the second quarter of 2017, with the unexpected general election a factor in slowing activity.

It added that London was more greatly affected than the rest of the country.

Foxtons has been warning since 2014 that rapid price growth and strong demand in London had started to cool.

However, it said that in the longer term, it expected London to remain an attractive property market for sales and lettings.

 

Government to ban leaseholds on new-build houses in England

(qlmbusinessnews.com via independent.co.uk – – Tue, 25 July 2017) London, Uk – –

Ground rents on flats could also be cut to zero under proposals tobe outlined by communities secretary Sajid Javid

Builders are to be banned by the government from selling houses as leasehold in England and ground rents on flats could be cut to zero following widespread outrage over exploitative contracts.

In a blow for major housebuilders such as Taylor Wimpey and Persimmon, the communities secretary, Sajid Javid, will on Tuesday set out plans to “ban new-build houses being sold as leasehold as well as restricting ground rents to as low as zero”.

Flats can be continued to be sold as leasehold, but ground rents will be restricted to a “peppercorn” level and therefore be of little financial value to speculative buyers. The ban is expected to come into force after an eight-week consultation period.

The ban, while welcomed by campaigners, leaves the position of existing leasehold homeowners unclear. The DCLG is expected to consult on what it can do to support existing leaseholders with onerous charges, which could include tackling unreasonable rises – such as rents doubling every 10 years – and giving more powers to householders to fight unfair charges.

“Under government plans, [ground rents] could be reduced so that they relate to real costs incurred, and are fair and transparent to the consumer,” said the DCLG.

Tens of thousands of homebuyers have been caught in spiralling ground rents, which have in some cases left homes virtually unsaleable. Javid cited one family home that is now unsaleable because the ground rent is expected to hit £10,000 a year by 2060.

A Guardian Money campaign has over the past nine months highlighted reports of buyers trapped in properties valued at zero just six years after being built, £2,500 fees demanded by freeholders for permission to build an extension, and quotes of £35,000 to buy freeholds on detached houses only just a few years old.

Javid said: “It’s clear that far too many new houses are being built and sold as leaseholds, exploiting home buyers with unfair agreements and spiralling ground rents.

“Enough is enough. These practices are unjust, unnecessary and need to stop. Our proposed changes will help make sure leasehold works in the best interests of homebuyers now and in the future.”

Javid told BBC Radio 4’s Today programme that ground rent had been used by some housebuilders “as an unjustifiable way to print money”.

He said building firms should do more to compensate those affected by such problems: “If they are responsible, if they want to keep their business in the future, if they want to show that they really care about their customers, they should be seeing what they should do to right some of the wrongs of the past.”

However, Javid said there were not as yet any definite government plans to compel builders to take action to assist those already affected.

“It’s an eight-week period of consultation to look at what action can be taken,” he said.

“I don’t profess that I’ve got all the answers on this. I’ve identified a problem, we’ve come up with some potential solutions. We don’t pretend they’re easy, there are are complex matters here.”

New legislation will close legal loopholes to protect buyers, some of whom have faced repossession orders after failing to keep up with the ground rent. The government will also change the rules on help-to-buy equity loans so that the scheme “can only be used to support new build houses on acceptable terms”.

Sebastian O’Kelly, whose Leasehold Knowledge Partnership has been the sharpest critic of abusive practices, welcomed the ban. He said: “Leasehold houses are an absolute racket: a means by which developers have managed to turn ordinary people’s homes into long-term investment vehicles for shadowy investors, often based offshore. In short, plc housebuilders have been systematically cheating their own customers.”

The practice of selling houses as leasehold has been particularly prominent in the north-west of England.

DCLG statistics estimate there were 4m residential leasehold dwellings in England in the private sector in 2014-15 and of these 1.2m were leasehold houses.

Justin Madders, Labour MP for Ellesmere Port and Neston, who has many constituents suffering from leasehold problems, said: “What has occurred in this sector should be regarded as a national scandal. Therefore, once we have taken action to drive out these rotten practices, the ultimate aim must be to hold to account the men and women who must have known that creating this second lucrative income stream for developers would ultimately be at the cost of their customers.”

Jo Darbyshire, whose Taylor Wimpey-built house has a clause where the ground rent doubles every 10 years and is part of the National Leasehold Campaign group on Facebook, said the ban was “fabulous news”.
“It’s great that others won’t be stuck in the nightmare we have been in,” she said. “But what are they really going to do for people in our position? There now needs to be a national review, like the review of endowment misselling, to review every case and put people back into the position they would have been without these onerous clauses.”

Earlier this year, Taylor Wimpey agreed a £130m deal to help distressed leasehold buyers. At the time, it said that the contracts where ground rents double every 10 years were legal but “not consistent with our high standards of customer service and we are sorry for the unintended financial consequence and concern that they are causing”.

By Patrick Collinson and Peter Walker

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