Letting agents will have to publish fees on their websites, says Nick Clegg

Letting agents will have to publish their fees in full in a bid to promote greater transparency, the Deputy Prime Minister said today.

Nick Clegg

Nick Clegg said agents would have to set out their fees both on their websites and in their offices as greater disclosure should keep costs down for tenants.

But he warned that banning agents from charging fees to tenants could lead to higher rents.

His comments come as MPs are set to vote on a Labour amendment to the Consumer Rights Bill, calling for letting agents to be banned from charging fees for renting out properties, in addition to requiring a deposit and the first month’s rent upfront from tenants.

Speaking ahead of the vote, Emma Reynolds, Labour’s Shadow Housing Minister, said: “Homebuyers rightly don’t have to pay the estate agent who is working on behalf of the seller of the property.

“However, in contrast, renters have to pay to get the keys to their rental property.

“The average upfront fees are £350 but in high demand areas, these fees can be much more expensive.”

She added that around nine million people in the UK currently rent a property through a private sector landlord, a third of whom are families with children.

But letting agents have responded angrily to the proposal.

Paul SmithPaul Smith, chief executive at estate agent haart, branded the amendment an “empty political PR stunt”.

He said: “Tenants receive a very good service, mostly to protect them and their interests, both physical and financial, and to ensure they have security of tenancy.

“That service comes at a real cost to agents and if we are unable to charge as an industry, there is a real danger agents will cut corners and reduce the quality of administration.”

He added that the fees covered the cost of obtaining references for tenants to ensure they were who they said they were and that they could afford to rent the property, as well as drafting the tenancy agreement.

David NewnesDavid Newnes, director of the largest network of letting agents in the UK including Your Move and Reeds Rains, owned by LSL Property Services, said:“It may seem that tenants would be better off if there were no up-front fees attached to arranging a proper legal tenancy.

“But unfortunately no Act of Parliament can magic this cost away – and in reality tenants could be far worse off.”

He pointed out that following a ban on tenancy fees in Scotland in November 2012, rents rose by 4 per cent in the space of just six months – 10 times the rate of rent rises in England and Wales over the same period.

The Consumer Rights Bill will have a third reading and be considered by the House of Lords before it becomes law.

May 13, 2014 at 4:41 PM 3 comments

House price rate to ‘double this year’ amid forecasts of interest rates rising in early 2015

The annual rate at which house prices are rising will more than double this year, an influential business lobby group predicted today.

House prices

The average cost of a UK home is set to increase by 8.2 per cent during 2014, more than twice the rise of 3.6 per cent recorded last year, the CBI said.

Despite concerns that a bubble may be building up in the property market, the group expects annual house price growth to ease back to 5.1 per cent in 2015.

But it added that it remained “alert” to the risks posed to the economy by unsustainable house price growth.

It also called on the Government to make a “renewed push” to build more properties to meet the urgent need for new homes.

John Cridland 1

John Cridland, CBI director-general, said: “We have to remain alert to the risks posed by unsustainable house price inflation, and the Financial Policy Committee [an official committee of the Bank of England responsible for monitoring the economy] is poised to act when necessary.

“Housing has come back under the spotlight as annual house price inflation figures have reached double digits on some measures.

“While housing transactions are still running almost 30 per cent below their last peak in 2006, they are picking up steadily.”

But he pointed out that the strong growth was unevenly distributed across the UK.

He said: “Although London house prices have risen 25 per cent above the 2008 peak, this has in part been fuelled by foreign cash buyers.

“Outside London, prices remain around 2 per cent below peak figures with an even greater difference when you move outside the South East.”

The CBI has upgraded its forecasts for Britain’s economic growth, as the recovery continues to take hold.

It now expects GDP growth of 3 per cent this year, up from 2.6 per cent previously.

It has pencilled in growth of 2.7 per cent for 2015, compared with its previous forecast of 2.5 per cent.

But it warned that its expectations of strong economic growth meant it had also brought forward its prediction of when interest rates will start to rise again.

It now expects the Bank of England’s Monetary Policy Committee to increase the official cost of borrowing from 0.5 per cent during the first quarter of 2015.

Today’s predictions by the CBI come after the National Institute of Economic and Social Research said the house price boom was likely to last for two years before higher interest rates slowed the market.

It expects the average cost of a home to rise by 7.8 per cent this year and 4.2 per cent next year, before price gains ease to just 0.9 per cent in 2016, with property values remaining largely unchanged in 2017 and 2018.

While some house price indices suggest property price growth is continuing to accelerate, other data suggests the market has already begun to moderate as pent up demand works its way through.

Halifax reported a second consecutive dip in monthly house price growth in April, with the average cost of a home slipping by 0.2 per cent.

Figures from the Bank of England also showed that the number of mortgages approved for house purchase had fallen during both February and March.

Recent gains have left the typical cost of a home in England standing at £262,770, according to Zoopla.

 

May 12, 2014 at 12:49 PM Leave a comment

This little patch of grass earns more than an average UK salary for owner

A small patch of grass in central London has made its owner more money than most people in Britain earn in a year after being snapped up at auction.

09.05.14 Chelsea

The lawn – measuring just 55ft by 40ft – in Chelsea was reportedly bought by a foreign owner this week for £84,000.

It last changed hands in the autumn of last year for £53,000, an increase of £31,000 in just nine months.

And this is despite the area having no planning permission for development.

Christopher Coleman-Smith, director of national auctions at estate agents Savills, which is handling the sale, said: “The new owner can do what he likes with it. I suppose he could put up a marquee when the flower show comes around.

He went to tell Zoopla: “Little bits of London, such as this, are in scarce supply and people want to get their hands on their own little piece of Chelsea.

“City environments can easily change and so this could be a very long term investment bought with grandchildren and inheritance in mind – who knows what it might be possible to do with it in 20 years time.”

Properties for sale in Chelsea for less than £250,000:

1. Leasehold garage for £8,500

09.05.14 Chelsea 2

2. Commercial property, suitable for redevelopment for £225,000

09.05.14 Chelsea 3

3. Two bedroom motor yacht, currently lying at Chelsea Harbour marina with moorings available to the buyer for £165,000

09.05.14 Chelsea 4

 

May 9, 2014 at 2:44 PM 2 comments

Think tank predicts the house price boom has years left

The house price boom will last for two years before higher interest rates slow the market, an influential think tank predicted today.

House prices 2

 

The average cost of a home will jump by 7.8 per cent this year and rise by a further 4.2 per cent next year, according to the National Institute of Economic and Social Research (NIESR).

But price gains will ease to just 0.9 per cent in 2016, while house prices will remain largely unchanged in 2017 and 2018 as higher borrowing costs and the end of the mortgage guarantee part of the Help to Buy scheme impacts on the market.

The Bank of England Bank Rate was slashed to just 0.5 per cent in March 2009 in response to the global financial crisis and it has remained unchanged ever since.

But the official cost of borrowing is widely expected to start rising again during the first half of 2015, and lenders have already started to price in a potential increase into the cost of their fixed rate mortgages.

NIESR expects the Bank Rate to rise to 2 per cent by the end of 2017, before reaching 4.25 per cent at the end of 2024.

It predicted that even a small rise in the mortgage rates would have an impact on consumers and the housing market, as it marked the turn in the cycle.

But it added that it expected interest rates to remain below their pre-crisis level, when they peaked at 5.75 per cent, for at least another decade.

The group said it was also not known how big an impact new tools available to the Bank of England’s Financial Policy Committee would have on the housing market.

The Treasury Select Committee also referred to the FPC in a report published today.

It said: “Housing bubbles are easy to spot in retrospect. The FPC has been given the challenging role of identifying them in advance.”

It added that the FPC had been granted a “large and varied range of tools” to address the risk, and it would be meeting in June to decide whether any of them should be used.

It said: “The Committee will take an early opportunity to secure an explanation, both to us and to the wider public, for any decisions taken.”

NIESR’s predictions come as concerns continue to mount that a bubble may be building up in the UK’s property market.

LSL Property Services and Acadata reported that house prices in England and Wales hit a new record high of £263,113 in April, after soaring by £1,200 during the month.

Typical property values are now above their pre-crisis peak in London, the South East and East Anglia.

Meanwhile, the Royal Institution of Chartered Surveyors warned that prices were being pushed higher by a mismatch between supply and demand, and this imbalance was showing signs of intensifying.

But other data has suggested that the market has already begun to moderate as pent up demand works its way through.

Halifax reported a second monthly house price decline during April, with the average cost of a home dipping by 0.2 per cent.

However, the group warned that monthly price changes could be volatile, and property values were still 8.5 per cent higher than they had been a year earlier.

Figures from the Bank of England also showed that the number of mortgages approved for house purchase had fallen for two consecutive months in February and March.

Recent gains have left the typical cost of a home in England standing at £262,770, according to Zoopla.

May 9, 2014 at 12:14 PM 1 comment

Soaring house prices rise almost £20,000 in a year

House prices soared by £1,200 during April to stand at a new record high, figures showed today.

House prices 3

The average cost of a home in England and Wales rose by 0.5 per cent during the month to reach £263,113 – £54,000 above the low point reached in April 2009 during the housing market correction.

It was the tenth month in a row that property values have set a new record, according to LSL Property Services and Acadata.

The typical home is now worth 7.3 per cent or £17,877 more than it was a year earlier.

Sales activity was also buoyant during April, with an estimated 72,000 transactions carried out, 40 per cent more than during the same month of 2013.

David NewnesDavid Newnes, director of Reeds Rains and Your Move estate agents, owned by LSL Property Services, said: “As the floods and bad weather at the start of the year become a distant memory, sales in April have returned to more normal levels.

“Activity is largely being fuelled by increasing numbers of purchases by first-time buyers and buy-to-let landlords, as consumer confidence sweeps the country. “Low inflation and healthy wage growth are energising household finances, and infusing aspiring buyers with greater optimism.”

London continued to outperform other regional housing markets, with house prices in the capital rising by 13.2 per cent during the past year.

But growth is rippling out across the rest of the country, with South East posting gains of 6.1 per cent in the past 12 months, while in the East Midlands house prices are 5.3 per cent higher than they were a year ago.

Meanwhile, East Anglia followed London and the South East to become the third region in which property values have surpassed their pre-crisis peak.

Overall, house prices have risen in 89 per cent of unitary authorities during the past 12 months.

But LSL warned that it was important that the supply of properties being put up for sale kept pace with demand.

Newnes said: “Constrained supply in the capital has already moderated total London sales over the past 12 months.

“Demand shows no sign of slowing. More house building is imperative to keep the momentum going, and to ensure that price rises are sustainable, in particular for first-time buyers – who remain the key ingredient at the lower end of the market, oiling the cogs of growth.”

Today’s figures come the day after Halifax said annual house price growth eased slightly to 8.5 per cent during April.

But the Royal Institution of Chartered Surveyors said it expected house prices to continue their upward march, as the mismatch between supply and demand intensified.

The group said estate agents sold the highest number of properties during the three months to the end of April since February 2008.

But the number of new homes being put up for sale fell for the fourth consecutive month, putting further upward pressure on prices.

May 9, 2014 at 10:25 AM Leave a comment

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