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Here you will find the latest Hudson Moody Wass and property news.

London property prices at risk of ‘severe correction’ – UBS

House prices in London are at risk of falling sharply because they are grossly overvalued, according to research from UBS Global Real Estate.

The study found that London is second only to Vancouver in Canada in the list of world cities at risk of a “severe correction” in its housing market, suggesting that the market is heading into bubble territory despite the strong economy in the capital.

Only property in Hong Kong is more unaffordable than London, when taking into account rising property prices and average earnings.

In London, residential property prices are 15% higher than the 2007 market peak, but incomes are 10% lower.

UBS highlighted the fact that the slowdown at the high-end of London’s housing market, caused largely by the introduction of higher stamp duty rates, reflects “an end to the global boom for luxury properties”, with a “renewed luxury boom” unlikely to happen due in part to the recent Brexit vote, and yet the slowdown at the top of the market has “failed to cool down the broader housing market” in the capital.

The report added that inflated house prices were likely to continue in London due to the supply-demand imbalance and record-low mortgage rates, describing the UK housing market as a “fragile equilibrium”.

Matthias Holzhey, an economist for UBS wealth management, said: “The situation is fragile for the most overvalued housing markets. A sharp increase in supply, higher interest rates or shifts in the international flow of capital could trigger a major price correction at any time.”

Last year, just London and Hong Kong were classed as being at risk of a bubble; this year there are six global cities in that category:

1 - Vancouver

2 - London

3 - Stockholm

4 - Sydney

5 - Munich

6 - Hong Kong


Article courtesy of Property Investor Today | Sign up for Property Investor Today newsletter | Get this news on YOUR site!



Property investors buoyant ahead of busy autumn period

There may be a high level of uncertainty in the UK economy at the moment, but this is doing little to dampen demand from property investors, according to a leading property auctioneer.

One of Britain’s largest property auctioneers Clive Emson sold land and property worth more than £16.5m at its latest five-day sale this month, thanks to high demand from property investors.

“Demand remains strong, particularly among investors, and the market buoyant due in part to record low interest rates,” said managing director James Emson.

Highlights from Clive Emson’s September sale included more than £1.25m worth of residential properties in the Isle of Wight, including houses, flats, cottages and two HMOs, which were snapped up by buy-to-let investors, along with stand-alone garages in Maidstone and Mitcham, Surrey, which sold for £18,500 and £15,000 respectively, and the Beacon Court Tavern in Gillingham, Kent, a former music venue which was acquired for £370,000.

Also, fire-devastated terraced house in Rye, Sussex, went for £122,000 and in Brighton, a four-storey commercial property in need of complete renovation at the heart of the city's vibrant Lanes area went for £352,000. Both properties offer plenty of room to add value. 

As the housing market heads into the busy autumn period, Clive Emson, which catalogued a total of 138 lots in September and achieved a sale rate of 75%, expects to see demand from property investors remain strong, which is partly why the company is now offering clients even more ways to buy and sell property.

The company launched a new online property auction service last week to complement its live auctions held every six weeks at five venues from Essex to Cornwall.

Lots from the property listings are sold upon the 'fall' of the electronic gavel, with bids placed via smartphones, other handheld electronic devices and desktop/laptop computers.

“We go into the busy autumn period in good heart with our new online auction service complementing our traditional sales,” Emson added. 

Clive Emson’s next auction begins on Monday 31st October in Maidstone, followed on consecutive days in Chelmsford, Brighton, Saltash and Southampton. 


Article courtesy of Property Investor Today | Sign up for Property Investor Today newsletter | Get this news on YOUR site!



Property investors remain buoyant ahead of busy autumn period

There may be a high level of uncertainty in the UK economy at the moment, but this is doing little to staunch demand from property investors, according to a leading property auctioneer.

One of Britain’s largest property auctioneers Clive Emson sold land and property worth more than £16.5m at its latest five-day sale this month, thanks to high demand from property investors.

“Demand remains strong, particularly among investors, and the market buoyant due in part to record low interest rates,” said managing director James Emson.

Highlights from Clive Emson’s September sale included more than £1.25m worth of residential properties in the Isle of Wight, including houses, flats, cottages and two HMOs, which were snapped up by buy-to-let investors, along with stand-alone garages in Maidstone and Mitcham, Surrey, which sold for £18,500 and £15,000 respectively, and the Beacon Court Tavern in Gillingham, Kent, a former music venue which was acquired for £370,000.

Also, fire-devastated terraced house in Rye, Sussex, went for £122,000 and in Brighton, a four-storey commercial property in need of complete renovation at the heart of the city's vibrant Lanes area went for £352,000. Both properties offer plenty of room to add value. 

As the housing market heads into the busy autumn period, Clive Emson, which catalogued a total of 138 lots in September and achieved a sale rate of 75%, expects to see demand from property investors remain strong, which is partly why the company is now offering clients even more ways to buy and sell property.

The company launched a new online property auction service last week to complement its live auctions held every six weeks at five venues from Essex to Cornwall.

Lots from the property listings are sold upon the 'fall' of the electronic gavel, with bids placed via smartphones, other handheld electronic devices and desktop/laptop computers.

“We go into the busy autumn period in good heart with our new online auction service complementing our traditional sales,” Emson added. 

Clive Emson’s next auction begins on Monday 31st October in Maidstone, followed on consecutive days in Chelmsford, Brighton, Saltash and Southampton. 


Article courtesy of Property Investor Today | Sign up for Property Investor Today newsletter | Get this news on YOUR site!



Landlords warned about ‘risk’ of using limited companies for buy-to-let

Buy-to-let landlords face the risk of double taxation if they choose to put their property investments into a limited company to avoid paying higher rates of income tax, a leading tax advisor has warned.

Addressing an audience at last week’s Association of Short Term Lenders’ annual conference, Nick Cartwright, a tax partner at Smith & Williamson, said that there is a chance that buy-to-let landlords could be hit with a potential double layer of tax on part or all of their rental income, as they may be taxed both in the company and on the extraction of their money. 

He said that the “overall tax rate, if rental income is distributed, could be as much as 50% with current rates”, adding that incorporation works better with what he called a “roll-up” strategy.

He continued: “Incorporation is good if you want to build up money within the company, but not if you want to live off the income as it is earned.”

The issue appears to be that the landlord could be taxed on taking money out of the company and, where taken as a salary, could also be liable for National Insurance contributions, which would be payable both by the employer company and the director/employee.

Susan Emmett of Savills also warned of the consequences of taxation changes in the buy-to-let market saying that the government should be “careful of what they wish for”. 

 

She commented: “Fewer buy-to-lets means more competition for rental properties, resulting in rising rents making it yet harder for potential first-time buyers to save for a deposit.” 

 

She went on to say that there has “definitely been a slow-down in enquiries from investor buyers” but that some of these may now be looking in areas of lower cost housing, however she warned “this goes against what the government wants, as landlords will be competing more strongly with the first time buyers in these areas”.

 

“The problem is that if you are an investor there aren’t that many options out there and the property market is still the best option,” she added. 


Article courtesy of Landlord Today | Sign up for Landlord Today newsletter | Get this news on YOUR site!



Society of Mortgage Professionals launches buy-to-let CPD events

The Society of Mortgage Professionals (SMP) has announced that it will deliver a CPD event programme dedicated to buy-to-let following the sector’s recent changes.

Former chancellor George Osborne introduced a number of measures which will impact buy-to-let mortgages, including a 3% surcharge for those acquiring buy-to-let property, while the amount landlords can claim in mortgage interest relief will be limited to the basic rate from 2017, which will eat into many landlords’ rental returns, especially higher and additional rate taxpayers.

Additionally, the 10% Wear and Tear tax relief for landlords who rent out furnished homes was scrapped earlier this year, leaving landlords free to only claim for the amount that they have spent. 

The SMP’s campaign will get begin in October with a series of five regional roadshows at Haydock Racecourse on Tuesday 4 October, followed by East Midlands on Wednesday 5 October, Southampton on Thursday 6 October, London on Monday 10 October and Belfast on Tuesday 11 October. 

They will include a session on complex buy-to-let and how to cater for the needs of portfolio landlords, delivered by Connect for Intermediaries chief executive Liz Syms.

There will also be a webinar on 26 October featuring Legal and General Mortgage Club director Jeremy Duncombe, who will provide an overview of the current state of the buy-to-let market, followed by a briefing by David Kilshaw, tax partner at Ernst & Young’s private client group.

To complete its buy-to-let focus the society has confirmed that three specialist workshops will take place in London on 25 October, Leeds on 27 October and Birmingham on 28 October.

The all-day sessions will cover a range of topics, including the buy-to-let landscape, taxation rules and the calculations involved and the likely impact of all the buy-to-let changes on first-time buyers as well as other areas that are of interest to advisers.

Lee Travis, head of professional development at the SMP, said: “Buy-to-let has gone through some very significant changes this year and we do not think we have seen the last of them.

“From 2017, higher and additional rate tax-paying landlords will no longer be able to claim full tax relief on the interest payments made on their BTL mortgage.

“Although this will be a phased adjustment and not fully implemented until 2020, it is vital that advisers are aware of what’s on the horizon, as advice given now could have huge ramifications on a client’s future tax position.”

 


Article courtesy of Landlord Today | Sign up for Landlord Today newsletter | Get this news on YOUR site!



New landlord licensing scheme announced

Ashfield District Council has given the go-ahead for new selective landlord licensing to be introduced in two areas of the western Nottinghamshire district.  

Landlords operating in Stanton Hill and Sutton Central will now have to pass a ‘fit and proper’ test before being granted a licence.

A five-year license will cost a landlord £350, while those who belong to the East Midlands Landlords Accreditation Scheme will be charged the reduced rate of £250.

Landlords will also have to take responsibility for the safety of their tenants by keeping their rental homes up to the appropriate standard and reacting to anti-social behaviour.

Councillor Keir Morrison, portfolio holder for housing at Ashfield District Council, said: “The vast majority of private landlords who rent out properties in the district operate within the law and look after their tenants, but there are some who fail to provide housing to a decent standard and don’t act on bad tenant behaviour to those they lease their properties to.

“Any scheme would mean landlords and tenants have to act responsibly or face possible action from the council – ensuring landlords properly fulfil their responsibilities to provide housing at the correct standard and to deal with tenants who may be causing anti-social problems.”

The new selective landlord licensing scheme has been backed by Nottinghamshire Fire and Rescue. 

John Buckley, chief fire officer at Nottinghamshire Fire and Rescue, commented: “Significant and persistent anti-social behaviour has long been associated with areas that have properties in a state of chronic disrepair.

“It is my view that the Selective Licensing scheme could improve the safety of homes and properties by addressing unsafe and irresponsible management practises conducted by a minority of landlords.”


Article courtesy of Landlord Today | Sign up for Landlord Today newsletter | Get this news on YOUR site!



London’s £2bn rental deposits are simply ‘gathering dust’

Dlighted is trying to persuade more landlords and tenants to use its deposit-free renting service by claiming that at least £2bn is being lost to the British economy in ‘useless’ tenancy deposits in London alone.

Research by the company indicates that the capital’s 960,000 privately rented households have handed over £1.9bn to their landlords and letting agents – 97% of which will be handed back to them at the end of their tenancy.

The figures are obtained by taking the number of privately rented households in each of the capital’s 33 boroughs and multiplying them by the average monthly cost of renting a property there – the typical cost of a deposit.

With many landlords and agents demanding deposits now asking for deposits equivalent to six weeks, Dlighted says that the total cost to the capital of rental deposits could be as much as £3bn.

Areas where private rents costs the most in the capital are worst hit.

The ten London boroughs with the largest overall estimated value of tenancy deposits are:

1.   Westminster - £250m (43% of households privately rented)

2.   Kensington and Chelsea  - £136m (33%)

3.   Camden - £124m (31%)

4.   Lambeth - £111m (34%)

5.   Wandsworth - £100m (31%)

6.    Barnet - £95m (31%)

7.    Ealing - £90m (35%)

8.    Brent - £82m (35%)

9.   Tower Hamlets - £74m (32%)

10.  Newham - £73m (43%)

Ajay Jagota of Dlighted said: “The £11m we’re wasting in Bexley alone should be a national scandal – and that’s one borough in one city, and the borough with the lowest tenancy deposit bill at that. Just think what problems £74m could solve in Tower Hamlets, what good £100m could do in Wandsworth and what better ways there are to spend £44m in Lewisham.

“The irony is, it’s unlikely these deposits will even solve the problems they’re supposed to. Statistics show that 97% of deposits are handed back untouched at the end of their tenancies. And whether you’re renting out a property in Kensington or one Brent, it’s either unlikely you’ll go through the process of using a deposit to pay for minor damage, or that the deposit will cover the costs of major damage.

“In the meantime that money isn’t just gathering dust, its gaining interest in the bank accounts of people it doesn’t legally belong to. The industry needs to take a good hard look at itself and consider moving to a insurance-based system like every other industry on Earth. It would mean a better deal for landlords, a better deal for renters and more money in our economy.” 


Article courtesy of Landlord Today | Sign up for Landlord Today newsletter | Get this news on YOUR site!



Join us at the Property Investor Show

The Property Investor & Homebuyer Show, the UK’s most comprehensive property exhibition, takes place at London ExCeL next week – 7 & 8 October – and we are delighted to announce that Angel Media, publisher of Property Investor Today, will be exhibiting at the show for the first time.

If you are attending the show, stop by at the Angels Media stand (number 4 – near the main entrance) and say hello to our team. We’ll be delighted to see you.

The exhibitor ranks include a broad mix of investment types – with a particular spotlight being thrown on both high-yielding HMO Property and the burgeoning property technology (PropTech) sector. Other exhibitors in the hall include specialist lenders, furnishings firms, insurers, auction houses, tax specialists, lawyers, tenancy deposit schemes, landlord/tenant services and crowd funders – a mix indicative of a diverse and healthy sector.

 A diary fixture since the late 1980’s, this is the benchmark event for the residential sector – and the largest gathering / networking hub that the industry has to offer.

The event and all seminars are free to enter, however all visitors are required to register before entering the hall. To avoid the queues on visit day, you register online now by clicking here


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New landlord licensing scheme announced

Ashfield District Council has given the go-ahead for new selective landlord licensing to be introduced in two areas of the western Nottinghamshire district.  

Landlords operating in Stanton Hill and Sutton Central will now have to pass a ‘fit and proper’ test before being granted a licence.

A five-year license will cost a landlord £350, while those who belong to the East Midlands Landlords Accreditation Scheme will be charged the reduced rate of £250.

Landlords will also have to take responsibility for the safety of their tenants by keeping their rental homes up to the appropriate standard and reacting to anti-social behaviour.

Councillor Keir Morrison, portfolio holder for housing at Ashfield District Council, said: “The vast majority of private landlords who rent out properties in the district operate within the law and look after their tenants, but there are some who fail to provide housing to a decent standard and don’t act on bad tenant behaviour to those they lease their properties to.

“Any scheme would mean landlords and tenants have to act responsibly or face possible action from the council – ensuring landlords properly fulfil their responsibilities to provide housing at the correct standard and to deal with tenants who may be causing anti-social problems.”

The new selective landlord licensing scheme has been backed by Nottinghamshire Fire and Rescue. 

John Buckley, chief fire officer at Nottinghamshire Fire and Rescue, commented: “Significant and persistent anti-social behaviour has long been associated with areas that have properties in a state of chronic disrepair.

“It is my view that the Selective Licensing scheme could improve the safety of homes and properties by addressing unsafe and irresponsible management practises conducted by a minority of landlords.”


Article courtesy of Landlord Today | Sign up for Landlord Today newsletter | Get this news on YOUR site!



U.S. housing market remains strong

The U.S. housing market remains strong, despite a slowdown in the economic recovery. The S&P/Case-Shiller seasonally-adjusted national home price index rose by 4% during the year to Q2 2016 (inflation-adjusted).

Global Property Guide’s detailed analysis of the U.S. housing market shows that House prices increased by 1.89% during the latest quarter. The Federal Housing Finance Agency's seasonally-adjusted purchase-only U.S. house price index, rose by 4.34% during the year to Q2 2016 (inflation-adjusted), and was almost unchanged in Q1 2016 from the previous quarter.

House prices continue to rise in all 20 major U.S. cities, according to the Case-Shiller index, with Portland registering the biggest inflation-adjusted increase of 11.4% year-on-year in Q2 2016, followed by Seattle (9.9%), Denver (8.1%), Dallas (7.9%), Tampa (6.9%), Miami (5.8%), San Diego (5.4%), San Francisco (5.4%), Atlanta (4.8%), and Las Vegas (4.6%).

Washington and New York saw the lowest growth in house prices, at 1%.

Residential construction continues to rise modestly. New privately-owned housing units authorized rose by 0.9% y-o-y in July 2016, according to the U.S. Census Bureau, and housing starts rose by 5.6%, while completions rose by 3.2% to 1,026,000 units.

Demand is surging. New house sales were up by 31.3% to a seasonally adjusted annual rate of 654,000 units in July 2016 from the same period last year, according to the U.S. Census Bureau. There were about 233,000 units for sale by July 2016, about 8.4% up from a year earlier.

Homebuilders remain bullish, amidst a shortage of existing homes for sale. U.S. home builder sentiment stood at 60 in August 2016, up from 58 in July, 60 in June, and 58 in May 2016, according to the National Association of Home Builders. A reading of 50 is the midpoint between positive and negative sentiments.

In the second quarter of 2016, the U.S. economy grew by a lower-than-expected annualized rate of 1.2%, after growth of 0.8% in Q1 2016, 1.4% in Q4 2015, 2% in Q3 2015, 3.9% in Q2 2015 and 0.6% in Q1 2015, with exports and investment weaker because of the strong dollar and lower oil prices, according to the U.S. Bureau of Economic Analysis. Despite this, the U.S. economy grew by 2.4% last year, matching its pace in 2014. The world's largest economy is expected to grow by just 2% this year.

For the latest detailed housing market analysis of individual regions and countries, check out the Global Property Guide's global survey for Q2 2016. 


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