10,000 privately rented home tenants face eviction

Nearly 10,000 tenants staying in privately rented homes would be asked to vacate premises since their landlords would be in arrears over mortgage payments, warned Conservatives.

The Housing spokesman, Grant Shapps urged the Government to introduce new measures to protect tenants from sudden eviction. He suggested that tenants who have been regular in their payments to landlords should be allowed minimum one fortnight’s time to enable them find another accommodation.

The Council of Mortgage Lenders has predicted 75,000 repossessions in 2009 due to economic downturn. Majority of those likely to lose their property will be small landlords who have defaulted on their buy-to-let deals.

Under existing regulations, authorized tenants get just 14 days from the date of repossession order by the court to vacate property. If the landlord had not taken permission for letting, tenant could be evicted within days. Many times tenants do not get notice in time regarding repossession and are taken by surprise when asked to leave.

Shapps has urged the Government to protect tenants from inconvenience by introducing 5 to 7 weeks’ notice period and allowing tenants to be heard by courts and lenders during repossession hearings.

Shapps informed that the Government was being called to take actions to protect families from suddenly finding “roof being taken away from above their heads.”

London’s richest boroughs hit by housing slowdown

The UK housing market’s traditional barometer, London property, is shrinking in key commercial and residential areas, according to reports from leading estate agents. An average 1.5% slump in housing prices has been reported by estate agent Savills in prime locations like Chelsea, Holland Park, Knightsbridge, and Belgravia, during first 3 months of the year, following 2% fall in the 4th quarter of last year.

Regarding commercial property, Savills informed about sharp decline in demand in the City of London’s office market, while demand for retailer has subdued across the UK. High-end estate agent Knight Frank also confirmed downslide for the Capital, where only ‘super prime’ residential properties above £10 million could fetch more value last month.

According to Liam Bailey, residential research head at Knight Frank, month of April results in further weakening of property market with poor growth across the board. He adds that super prime market has remained the lone bright spot in the UK over last six months.

London homes which could fetch 102% of average asking price are now being sold at 96% of asking price, the lowest since 2004. Liam Bailey believes that even after making further cut in base rate, real impact housing market will come only when the Bank of England’s special equity scheme supports money market and makes lenders feel confident lending each other.

House sales at 31-year low despite increase in buyer enquiries

Despite increase in the buyer enquiries for the fourth consecutive month, house sales in the UK are down to 31-year low, reports the Royal Institution of Chartered Surveyors (Rics). The rise in enquiries is attributed to continuous fall in housing prices.

As per Rics’ data, property sales in 3 months to February touched the lowest level since it started data recording in 1978. Rics reveals that estate agents could make only average 9.5 sales in last 3 months, down from 9.8 in November 2008. This again is the record low average since 1978.

According to Jeremy Leaf at Rics, though potential buyers are flocking in large numbers to agents’ offices, lack of mortgage finance is causing transaction levels to remain at all time lows.
Rics is urging the Government to expedite implementation of its guarantee scheme  for new residential mortgage-backed securities to revive property market.

National Housing Federation (NHF) has also painted grim forecast about number of new homes being built in England during next financial year. According to NHF, this figure could fall by 50% to 70,000, lowest in last 88 years.

Meantime, Grant Shapps, spokesman for Conservative Housing, claimed that temporary suspension of Stamp Duty did not help in revival of housing market. Back in September 2008, the Government had had announced exemption of stamp duty for properties costing less than £175,000, for twelve months.

Foreign investors keenly interested in London property

Foreign investors are getting increasingly attracted to the UK commercial property market, courtesy sterling devaluation and tumbling prices of assets, say industry experts. As per the leading property index IPD, fall in capital values from the UK peak in June 2007, is 39.5%. This figure goes up to 60% in the US and Eurozone due to fall in pound’s value.

The investors are also attracted by lease period of 15 years in the UK as compared to just 6 to 9 years prevailing in the continental Europe. It provides them enhanced income security.
Fund managers, leading developers, bankers, agents and politicians who attended global property conference Mipim in Cannes, remained focussed in their discussion on foreign investment in the UK.
Experts believe that overseas buyers’ increased buying activity could help in revival of Europe’s worst affected UK property market.

Major part of foreign investment is expected to come from German, Middle Eastern and Far Eastern Groups as well as Spanish funds, which had previously taken advantage of falling values in 1990s recession.
Investors will be primarily eyeing prime property in London, considered to provide guaranteed income even during financial crises.

London had major representation at Mipim conference. Norway’s sovereign wealth fund has already shown keen interest in investing $20bn into the UK property market.

RBS to pass on only half of base cut to borrowers

Mortgage borrowers are being denied full base rate cut by RBS and its subsidiary NatWest. They will pass on only 50% of it to the customers.

The Bank of England had announced 0.5% base rate cut on SVRs (Standard Variable Rates) yesterday. Read the rest of this entry »

Increasing number of UK property owners preferring overpayments on mortgages

More number of property owners seems keener on clearing their mortgages as early as possible by making overpayments. The number of these owners has increased by 50% in the last year.

Research figures from The Co-operative Bank reveal that 80% of people are doing this believing that it made financial sense because of low return on saving rates. Read the rest of this entry »

Current distress in property market most favourable for investors

While many investors are extremely worried over their investment in property market, Ducalian, a property investment consultancy believes that distressed residential property market in the UK is most ideal for professional investors. Read the rest of this entry »

Landlords alerted over excess payment of building insurance

A customer friendly insurance broker has a word of advice for landlords possessing portfolios that contain blocks of flats and they may be overpaying for insurance without being aware of it.

Neil Cook, a broker employed at Ember JD Insurance, has cautioned about activities of certain brokers and managing agents. According to him some hidden commission charges are being collected by both at the expense of landlords. Read the rest of this entry »

Developer Persimmon suffers loss of £780 million

A prominent UK house developer Persimmon has registered whopping loss of £780 million for the year 2008 amid serious housing downturn, after being forced to write down its land bank value. Read the rest of this entry »

Rents drop further but yields remain unchanged

The latest rental index indicates market is flooded with excess stock. Number of advertisements of rental properties on websites has increased 43% in last 6 months with rise of 8% in January alone.

Rental prices have fallen by 4.8% over last year and 1.2% over January 2009. Read the rest of this entry »