“The recent budget cuts will undoubtedly have an effect on the amount of people made homeless. By capping the benefit people can receive, some landlords will only take professional people thus making the homeless situation worse. At the end of the day, landlords are in this game to make money, it’s a business and not a charity, so by capping benefits, the government is forcing the hand of many investors.

Another change in the HB system that hasn’t been thought through is to reduce people’s HB if they are on job seekers for more than 12 months. It currently stands that if you are on job seekers for 12 months, your housing benefit will be cut by 10% in month 13. This will only give rise to landlords asking for high top ups from tenants or simply evicting tenants adding further to the homeless problems. I’m all for getting people back into work but feel that the carrot should be better than the stick”.

More than 750,000 people face homelessness under the government’s decision to cap housing benefits.
This is according to the National Housing Federation, which has estimated in London alone, around 425,000 people could lose their home.

Housing minister Grant Shapps announced last month that households can only now only claim a third of the average market rent of an area.

Rental rates in London are so high that many families could be forced to leave the area in search of work or struggle and fall into arrears.

The organisation has claimed that the rates of homelessness could be the highest in over 30 years.

It has called on the government to create a poverty commission to assess the impact of the cuts on the poorest in the country.

David Orr, chief executive of the Federation, said: “For many people, particularly those with disabilities, moving could be an enormous upheaval. It will also disrupt the education of thousands of children.

“The resulting impact on people’s lives would be huge  as would the cost to the taxpayer.”

He added that councils could face huge costs from temporarily re-housing families while others would be unable to support homeless families.

Posted by Luella Ravelin

The Council of Mortgage Lenders (CML) has reported that new homeowners in May only spent 9.5 per cent of their income on interest payments.

In May 2009, mortgages accounted for around 11.4 per cent of income for the average homeowner.

In addition, lending has risen for the 11th month in a row, with total lending at around £4.2 billion in May.

This is an increase from £4.1 billion in April.

Despite the increased activity, the CML forecasts that lending will come down in next six months because of the impact of tax rises and budget cuts.

Commenting on the new figures, the organisation’s general director Michael Coogan said: “Activity picked up in the second half of 2009 due to the stamp duty holiday but with the government’s austerity drive picking up momentum we are unlikely to see a repeat of those buoyant numbers this year.

“Our forecast for gross lending in 2010 may now be looking a little optimistic.”

Posted by Luella Ravelin

The Bank of England’s decision to keep interest rates at 0.5 per cent will mean that repayments on buy-to-let will remain low.

Landlords are reportedly more positive about the economic climate, despite the slowing market.

A recent survey from Upad.com found that six in ten landlords polled planned to expand their portfolios in the coming year, because of optimism about the future.

Commenting on prospects for landlords, Property Hawk’s editor Chris Horne said: “The finance market and the mortgage markets have recovered from the lows of last year, so there are more mortgage products.

“It looks like low interest rates are here to stay this year and probably early next year, so from that point of view finance is stable and relatively affordable.”

He added that rental yields were expected to get higher over the coming year, signalling further good news for landlords who saw values go down during the recession.

Posted by Luella Ravelin

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The CML press release out today reports gross mortgage lending in June was up 15% from May, now at £13.1 billion.

CML economist Paul Samter commented:

“Our gross lending estimate of £13.1 billion in June represents a seasonal pick-up and is higher than June last year, but is still indicative of low levels of activity.

“There are signs of house prices stabilising and more properties coming onto the market following the abolition of home information packs. This may improve liquidity in the market, but transaction levels are subdued and likely to remain so while access to credit remains constrained.

There is further a view that a recent FSA consultant paper on responsible lending could increase burden and have a knock on effect of making it harder for borrowers to access credit.

For more information visit:
http://www.cml.org.uk/cml/media/press/2674

Although the headline figure indicates an increase in lending it would be great to hear from you as to whether you are finding easy access to lenders or finding it hard still. We have found there is lots of activity amongst the lenders, but that surveyors are being tougher and much more picky.

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Santander Mortgages found in its study that there are now over 100,000 homes worth more than £1 million in the country.

In 2000, there were only 26,776 properties valued above this threshold.

The data indicates that the housing market has bounced back quickly, with prices this year alone going up 28 per cent, making up for a 29 per cent decline last year.

London and the Home Counties headed the table of the 25 most property-rich areas, with south-west London leading with a staggering 38,026 homes worth over a million.

However, it is Edinburgh, as the only northern place in the top 20, which has seen the biggest increase over the past ten years.

Property millionaires in the Scottish capital have increased by 10,306 per cent.

This is more than double the national average increase, which is 393 per cent.

Posted by Luella Ravelin

This has left the index down -0.6%, which in reality represents a flattening of prices, however Rightmove.co.uk predict that the 7% gains achieved in asking prices so far this year will be wiped out by the year end.

Miles Shipside, commercial director of Rightmove, comments:

“The number of new mortgages being approved each month is less than half the number of new sellers, with the imbalance being exacerbated by the increase of nearly 50% in the number of properties coming to market compared to a year ago. More aggressive pricing is now the order of the day, which means that conditions are ripe for a strong buyers’ market in the second half of 2010.

The end of spring is typically a touch time as the market takes a summer break and so it is not surprising that prices sellers can ask has fallen.

Of course this is a national figure and regionally the decrease in asking prices has only been reported in the North West, North East, London and the South East. The Midlands, South West and Wales have still seen some increases, albit small.

For more information download the full report: http://www.rightmove.co.uk/news/files/2010/07/july-2010.pdf

The Association of Residential Lettings Agents (ARLA) has found that more than two-thirds (70 per cent) of their members report having more tenants than properties.

Commenting on the new figures, ARLA’s operations manager Ian Potter said: “This situation has been deteriorating rapidly in recent months, as the supply and demand of homes to buy is also swinging out of kilter – making the prospect of a severe rental housing shortage ever more likely.”

Since the last quarter, there has been a ten per cent rise in demand for rental properties.

The situation has become more acute since September, when less than a quarter (24 per cent) of agents reported a shortage.

Mr Potter blamed the government’s failure to “incentivise” investment in the private rented sector, arguing that the current shortage and the poor state of the housing market would mean “people going without homes they can afford”.

Posted by Luella Ravelin

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The governments own House Price Index figures from the Department of Communities and Local Government (DCLG) has reported an increase of 11% from May 09 to May 10.

This is inline with both Nationwide and Halifax, although Halifax was already showing a plateaux in prices in May that has been re-confirmed in June figures.

Indeed the monthly increase indicates this at only 0.7% between April and May 2010.

Although the annual increase was an average of 11%, regionally this was only really seen in England and Wales. Scotland (3.7%) and Northern Ireland (-1.1%) were not in line with the average.

The top performing England regions were London, East and South East, with the bottom performing regions being Yorkshire & Humber, West Midlands and East Midlands.

For more information visit:
http://www.communities.gov.uk/publications/corporate/statistics/hpi052010

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This means that out of the 246 members surveyed there was only a 9% balance reporting a rise (23% reporting a rise versus 14% reporting a fall). The number of surveyors reporting prices staying the same was pretty static at 64%.

Although the respondents reported a rise in new instructions, new buyer enquiries decline – reflecting what other industry experts have already highlighted.

As normal there are regional differences with London and Scotland clear outperformers and West Midland, Wales and Yorkshire with reported negative change.

For more information visit:
http://www.rics.org/housingmarketsurvey

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Marketiers found that just over four in ten people felt that energy suppliers offered little or no assistance in helping customers cut their carbon emissions.

Eight out ten people thought that all advice given was useless.

The chief executive of the energy management company AlertMe believes that what is lacking is very practical straightforward advice that tenants and owner-occupiers can act on.

Mary Turner commented: “There are stats saying 900 million worth of energy is being wasted by just leaving appliances on standby and we are paying for that.

“People have very busy lives. We need very simple information you can actually action on � because with energy use, you cannot actually see the waste.”

The government’s plans for a nationwide energy efficiency programme called the Green Deal intends to help up to 14 million homes through loaning them money for insulation and other cost-cutting measures.

However, Labour’s shadow minister for the environment Joan Ruddock recently pointed out that tenants could miss out on the benefits without regulation of the private rented sector.

Posted by Luella Ravelin

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