Average rental prices in London reach over £1,400 a month

Thursday, 26 November 2015

Rental values in London have risen by 4.67% since June 2015, with the average rental price for a property in the capital standing at £1,467 compared to £1,402 in the summer, the latest figures show. Greenwich saw the largest increase taking the average rent to £1,397 per month, according to the Rentify Property Index. The firm said that this could be due to the time of year when students are starting back at university. Other areas that experienced considerable rental uplifts include Brent, with average rents in the North West London borough growing by £201 to almost £1,500 per month. Next was Newham with an increase of £197 taking the average rent to £1,378 per calendar month, then Lewisham with an increase of £194 taking the average rent to £1,305 and Lambeth with an increase of £182 to an average rent of £1,617. Areas that saw a fall in rent included Wandsworth where the average rent fell by £33, and Kingston-upon-Thames, with the average rent in the area falling by almost £90 to £1,237. Homes in the City of London have also experienced what the firm described as an unprecedented dip in price, with the average monthly rent dropping £185 to £2,149. Although this can’t be considered a long term decline, the figures do highlight seasonality in the market, according to the report, which adds that the dip in costs could be in part attributed to the school calendar, with families moving to ensure they secure the best postcode possible for their child’s education during the summer months. The data also showed how strong rental demand is across the capital. Bexley proved to be the most popular area for property hunters with an average of 10 people viewing each home in the borough each day, whilst other outer London boroughs such as Enfield and Haringey, both seeing an average of 9.6 viewers per day, also generating huge interest. ‘High cost of rent in central London is continuing to drive people away to outer boroughs in search of affordable housing. This however means that these so called cheaper locations are seeing a remarkable rise in rent due to their popularity. They are hot on the heels with central London due to strong demand,’ said Rentify chief executive officer George Spencer. ‘Furthermore, the recent buy to let tax hike introduced by the Chancellor will further constrain supply as less people invest in property to rent, making life increasingly hard for Londoners,’ he added. Source

These are London's most controversial billionaire basements

27 November 2015 | By Shruti Tripathi Chopra, Robyn Vinter

The super-rich and their love for London basements….

The former home of singer Duffy and the address at which the rules of football were first written down has collapsed thanks to a basement excavation gone wrong.
One wall of the £3.8m Barnes townhouse, which is now owned by former Phones4U boss David Kassler, completely disintegrated as builders dug beneath to create a home cinema, gym and wine room.

The company carrying out the work denied the collapse had anything to do with the basement excavation, saying it was “just an old building”.
Here are five more basement excavation controversies:

Bernie Ecclestone’s daughter, Petra

Petra Ecclestone, daughter of F1 chief Bernie Ecclestone, was forced to withdraw a planning application on a 19th Century lodge in the grounds of her Chelsea mansion after planners thought the work would be too invasive. However, the basement excavation on her Grade II listed home still went ahead despite residents objecting to the work.

Nigella Lawson and Charles Saatchi

The next-door neighbour of the TV chef and art collector submitted planning permission for a huge basement complex underneath the garden of the Eaton Square home in 2012. Saatchi had previously clashed with residents over building works and was accused of causing £50,000 worth of damage to some Italian marble bathroom tiles. However, despite these protests the couple were no strangers to causing disruption themselves. In 2010, they bought a former factory in Chelsea and converted it to a mansion, including, you guessed it, a massive basement excavation.

Jon Hunt

Foxtons’ billionaire founder Jon Hunt wants a humongous basement under his home in Kensington Palace Gardens to fit a tennis court, swimming pool and a showroom for his collection of Ferraris.
However, the French government has launched a legal tirade against Hunt claiming that certificates granted by the Royal Borough of Kensington and Chelsea for completion of the property mogul’s project are invalid.
Hunt bought his home for £15.75m in 2007.

Lakshmi Mittal

Indian steel czar Lakshmi Mittal spent millions putting an underground complex of Turkish baths and a pool made of marble from the same quarry as the Taj Mahal. No wonder his Kensington Palace Gardens home is nicknamed “Taj Mittal”.

Hedge Fund boss Edmund Lazarus

Hedge fund boss and major Conservative Party donor Edmund Lazarus submitted plans to build a three-storey basement underneath his Victorian home in West London. If built, the basement would be more than double the size of his Holland Park home.
Lazarus was reportedly willing to fork out £16m for the basement complex. Frills and thrills include a swimming pool, gym, yoga studio, wine cellar and private cinema.

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Autumn Statement 2015 - Paul Emery responds to Chancellor George Osborne

Urgent announcement on stamp duty hikes

26th November 2015 |

Yesterday’s autumn statement from the chancellor delivered more challenges for all of us involved in residential property investment. Whilst not all of the changes are completely clear, it does seem that from April 2016 stamp duty on residential purchases above £40,000 will be increasing by 3%.

For example, the purchase of a house for rental at £100,000 will from April 16 attract stamp duty on any amount over £40,000 so in this case: £60,000 @ 3% or £1800, not the end of the world but certainly a consideration. A bigger property (which you might buy for HMO purposes) with a purchase price of £250,000 will attract £8,800 stamp duty rather than £2,500 you pay currently, clearly more of a consideration.

There are a variety of other changes including one that means we now have to pay capital gains tax on the sale of property within 30 days of completion, probably not a massive issue for most people.
There does, however, seem to be (which we are currently assessing) an exemption for companies - The government seem to be consulting groups on how to introduce an exemption for those holding more than 15 properties in a company or other structure. Whilst not completely clear at the moment, it does seem as though they want to encourage larger professional landlords (as they seemed to suggest with the mortgage interest offset changes earlier in the year), so buying in an Ltd company may again prove to be a solution.

For the geeks out there that want the detail, a lot of the fine print is in this document:
HM Treasury: Spending Revue & Autumn Statement 2015

I had a discussion with someone yesterday about boats resetting their sails when the wind changes. When legal or economic changes take place (as they did with the credit crunch a few years ago and lots of other times over the hundreds of years that property investment has been a favored investment tool) we have to change the angle of our sail to continue to prosper. We will go through this cycle many times in our lives and we just need to accept it as being normal. There are and will always be solutions for those who are willing to learn and adapt. Lots won’t adapt and you should see this as your advantage as competition will inevitably decrease, and as with any business this will mean that your margins will increase. Progressive saw this through the credit crunch when 80% of our competition gave up. We persevered and now have much higher margins and sales volumes than before 2008. Playing the long game in business and investing is the single best way I know to achieving extraordinary results. Warren Buffett is a great example of this.

Some Government policy changes which are responding to public sentiment about a wider issue of a lack of housing (which these policies won’t materially change) don’t change the economics. There are not enough properties for the people that live in this country, many of the people in this country can’t afford to buy as they can’t or won’t save for a deposit and pay a mortgage (or want to be more transient/rent for other reasons) so they need to live in rental properties. As quick as negative sentiment can move against us it can move onto something else just as quickly, people are fickle like that. We won’t be the focus of other people’s issues forever, rather than taking personal responsibility some will want to have a new group to point the finger at as landlord bashing becomes boring. How long this will take I don’t think anyone knows.

I will believe that George’s building boom is actually going to happen/make a difference when we see results (as so many of them before him have promised similar and achieved very little in this area) so I predict the shortage will continue and therefore rents will rise even more strongly. You might want to use this extra cash from rents to pay your accountant to run your new Ltd Company :-)
Mark Homer (Progressive Property)
"Invest For Freedom, Choice and Profit"

Source

Autumn Statement: Buy-to-let homes face higher stamp duty

By Brian Milligan Personal Finance reporter

• 2 hours ago
• From the section Business

Buy-to-let landlords and people buying second homes will soon have to pay more in stamp duty, the chancellor has announced.

From April 2016, those in England and Wales will have to pay a 3% surcharge on each stamp duty band.
George Osborne said the new surcharge would raise £1bn extra for the Treasury by 2021.
Landlords reacted angrily to the change, saying it would "choke off" investment in rented properties.
Other changes announced by the chancellor included an extended Help to Buy scheme in London, and more money for the Starter Homes programme.

• Full in-depth coverage of the Spending Review and Autumn Statement
• How the Autumn Statement and Spending Review will affect your finances
• Full Autumn Statement and Spending Review documents via HM Treasury

'Choke off investment'

The stamp duty surcharge will lift each band by 3%. That means that for properties worth between £125,000 and £250,000, where the stamp duty is 2%, buy-to-let landlords will pay 5%.
For the average buy-to-let purchase of £184,000, that means they will pay an extra £5,520 from April 2016.
Commercial property investors, with more than 15 properties, are expected to be exempt from the new charges.

Stamp Duty Rates (on purchases)
Property value	Standard rate	Buy-to-let/second home rate (April 2016)
Up to £125,000	0%	3%
£125 - £250,000	2%	5%
£250 - £925,000	5%	8%
£925 - £1.5m	10%	13%
over £1.5m	12%	15%
Source: HMRC

Buy-to-let landlords will also be hit by a change to Capital Gains Tax (CGT) rules.
From April 2019, they will have to pay any CGT due within 30 days of selling a property, rather than waiting till the end of the tax year, as at present.
Landlords are already due to get a lower rate of tax relief on mortgage payments.
In his summer Budget, the chancellor said that landlords would only receive the basic rate of tax relief - 20% - on mortgage payments, a change being phased in from 2017.
Responding to the latest changes, Richard Lambert, chief executive of the National Landlords Association said: "The chancellor's political intention is crystal clear; he wants to choke off future investment in private properties to rent.
"If it's the chancellor's intention to completely eradicate buy-to-let in the UK then it's a mystery to us why he doesn't just come out and say so".
Up to £60m of the money raised from the stamp duty surcharge will go to help home-buyers in England in places where holiday homes have forced up local prices.

Image caption An extra £2.3bn will be lent by the government for building starter homes

Help to Buy

The Help to Buy (equity loan) scheme in England will also be extended to 2021, one year longer than planned.
An extension to the scheme in London will see buyers who can find a 5% deposit given a loan worth up to 40% of the property.
The loan will be interest free for five years.
Elsewhere the existing maximum loan is for 20% of the property's value.
In total, the government will put an extra £6.9bn into housing.
This includes an extra £2.3bn in loans for the government's starter homes programme, and £4bn lent to housing associations and local authorities to build more homes for shared ownership.
Another £200m will be used to build homes for rent, which will allow tenants to save for a deposit.
There will also be a pilot scheme to trial the government's Right to Buy programme for housing association tenants.
Five housing associations will take part, to help design the final scheme.

Source

 

Onliner takes a swipe at estate agents who 'lose interest' in vendors' homes 

An online estate agency claims it has evidence traditional agents have attention spans “not that much longer” than goldfish when it comes to the properties that they market.

House Simple claims that traditional agents lose interest in homes they are marketing if no offers have been received within two week.

The online agency, in a poll of more than 2,000 people who have sold a property in the past 12 months, says 50 per cent felt their agent’s commitment to sell dropped off considerably after the initial marketing period, and by the second week they felt they were already having to chase the estate agent for updates.

House Simple also claims “it is not uncommon for high street agents to promise an unrealistic sale price to get sellers signed up only ... to quickly recommend a price drop once the property is marketed.” It claims 51 per cent of those polled revealed their agent suggested they drop the asking price soon after marketing began.

The poll also suggests 21 per cent of those surveyed regarded half or more of those would-be buyers who came to viewings were actually time-wasters - in London and Wales that figure rose to 40 per cent.

“Agents only receive their commission once a property is sold, so they need to secure an offer quickly. Once they have you signed up, their interest in your property can wane rapidly if an offer doesn’t materialize” claims Alex Gosling, House Simple’s chief executive.
“Sellers shouldn’t feel under pressure, but often do, to lower the price to attract a buyer, especially when viewings dry up. And the agent is in a much stronger position to suggest dropping the price, when the seller is tied into a contract.”

Source

 

Dog-friendly flats to rent in London command £25,000 premiums

The craze for 'handbag dogs' has led to a rise in letting enquiries from pet-owning tenants, according to EJ Harris.

By Annabel Dixon
October 12, 2015

Dog-friendly flats to rent in London command £25,000 premiums as supply fails to keep up with demand from tenants with pets, research showed today.
The craze for ‘handbag dogs’, driven by celebrities such as Paris Hilton and Simon Cowell, has led to a huge rise in letting enquiries from dog-owning tenants, according to EJ Harris.
The most sought-after addresses for tenants with pets in the prime areas of central London are around Hyde Park, Regent’s Park, Green Park and Holland Park.

There were virtually no dog-owning London tenants 10 years ago. However, up to 30 per cent of all tenants searching for a flat in London now own a pet.
In the heart of the capital alone, 8 per cent of all households now own one or more dogs – up from 7 per cent in 2010 and 4.8 per cent in 2002, according to the UK Pet Food Manufacturer's Association.
However, some 40 per cent of all flats in the prime areas of central London have head leases which ban pets.
The typical six week deposit for a one bedroom pet-friendly flat in central London, available to rent for £500 per week, is £3,000 for a pet-free tenant. However, this would rise to £5,000 for a dog-owning tenant.
And for a three bedroom flat for rent at £2,500 per week, the deposit for a tenant with a dog increases to £25,000 or more. This compares to a £15,000 deposit for a pet-free tenant, claimed EJ Harris.
The bulk of landlords of dog-friendly flats to rent in London also include a professional cleaning clause in the tenancy agreement. It requires pet-owning tenants to make an extra, non-refundable payment at the start of the tenant to cover the cost of sanitation and professional cleaning when they move out. The bill can sometimes rack up to several hundred pounds, the estate agent warned.
More than 80 per cent of the enquiries for dog-friendly flats to rent in London are from affluent English, continental European and American tenants, EJ Harris said.
Tenants are typically professional couples in their 30s and 40s as well as single socialites, 70 per cent of which are women. They tend to look for spacious one or two bedroom flats in Mayfair, Belgravia, Chelsea, Marylebone, Hyde Park, Regent’s Park, Westminster or St John’s Wood.
However, landlords’ concern that pets will cause damage to property and furnishings means that lettings to dog owners can take up to seven times longer than tenants without one.
Elizabeth Harris, managing director of EJ Harris, said: “Despite the stigma surrounding tenancies with pets, in our experience tenants who own dogs make for reliable and responsible tenants. They take good care of the property and keep their pets pampered and well trained.
“We always advise dog owning tenants to create a ‘pet CV’ that provides a detailed description of the pet. It outlines key facts regarding behavior, health and grooming, which can help alleviate the landlord’s concerns.”

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