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Estate Agents & Letting Agents in Leeds

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

Gross mortgage lending increases 14% year-on-year

Gross mortgage lending reached £18.2bn in May, the latest figures from the Council of Mortgage Lenders (CML) reveal.

Lending was 4% higher than the £17.6bn recorded in April, and 14% higher than May 2015 when lending hit £16bn, and the highest May figure since 2008 when gross lending reached £23.7bn.

Commenting on market conditions in this month’s market commentary, CML senior economist Mohammad Jamei said: “As expected, lending continued to be somewhat dampened in May, reflecting the earlier rush in the first quarter to beat the stamp duty change on second properties.

“Looking ahead, there is likely to be considerable uncertainty as a result of the EU referendum decision. We expect this to affect sentiment and reduce activity below levels that would otherwise be expected in the near term, as both buyers and sellers adopt a wait-and-see attitude until the dust begins to settle. Market fundamentals underpinning house prices still look sound, and we do not expect significant house price falls, especially given the current supply demand imbalance.”

Gross mortgage lending, not seasonally adjusted  
      Total    
      £m    
Year          
2005     283,452    
2006     340,931    
2007     356,802    
2008     247,805    
2009     140,573    
2010     133,807    
2011     138,257    
2012     144,512    
2013     177,715    
2014     203,384    
2015     219,834    
           
Quarter          
2013 Q1   34,055    
  Q2   42,355    
  Q3   49,815    
  Q4   51,489    
2014 Q1   46,211    
  Q2   51,497    
  Q3   54,982    
  Q4   50,695    
2015 Q1   44,582    
  Q2   52,035    
  Q3   61,217    
  Q4   61,811    
2016 Q1   62,526    
           
Month          
2015 May   16,015    
  Jun   20,067    
  Jul   21,605    
  Aug   19,545    
  Sep   20,067    
  Oct   21,767    
  Nov   20,389    
  Dec   19,655    
2016 Jan   18,424    
  Feb   17,919    
  Mar   26,184    
  Apr   17,562    
  May est 18,200    
est=estimated        

Source: CML


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Emerging markets look more attractive following Brexit

With Britain in turmoil following the vote to leave the EU and uncertainty mounting in the USA ahead of the presidential elections, emerging property markets are increasing looking like the best investment in 2016, according to Kian Moini, managing director of Lamudi. 

The head of the global property platform is urging property investors to consider investing in emerging property markets that trade predominantly with the United States and are less exposed to the EU crisis.

Kian Moini, managing director of Lamudi, said: “With investors scared away from Britain, and the United States still in a downturn, high-growth countries such as Mexico, the Philippines, and Pakistan offer good alternative investment opportunities and going forward will be fundamental in a balanced portfolio.”

Investors will look increasingly to the emerging markets as an alternative with the downturn in Western developed nations. The opportunities are enticing: higher-potential returns, lower entry prices, and favorable long-term growth indicators. 

According to a report by EY, the middle class will expand by 3bn over the next two decades, with the vast majority of that growth in the emerging world. This equates to long-term demand for real estate. As more people rise into the middle class their expectation for modern residential housing will increase. Emerging market real estate investment exists in stocks, REITs, foreign direct investment, and ETFs.

“While you can read nothing but negativity in the media following Brexit we see it quite differently,” Moini added. 

 


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Does Brexit mean the end of the Northern Powerhouse?

Plans for the Northern Powerhouse scheme, designed to rival London and the South East as the main driver of economic growth in the country, could be in jeopardy following last week’s dramatic referendum result and David Cameron’s decision to step down as Prime Minister, while George Osborne, the Chancellor and the man behind the Northern Powerhouse idea, could soon follow suit or be forced out.

But the outcome of the EU vote makes the case for the Northern Powerhouse project more ‘compelling’ than ever, according to Martin Venning, director at UK Northern Powerhouse, organisers of the UK Northern Powerhouse Conference, which took place at Manchester Central earlier this year.

He said: “The result [of the EU referendum] makes the case for the UK Northern Powerhouse more compelling.

“Our stakeholders will continue to contribute to the process of building a stronger, more productive and stable Northern economy.

“The challenges of growth post Brexit will require innovation and new forms of collaboration which can create new opportunities for all. We expect to play our part in shaping that agenda.”

The Northern Powerhouse concept has already attracted a lot of investment, particularly from China, helping to push up property prices and rental values across many other parts of Manchester and surrounding areas.

“While the initial shock might be hard to swallow for some, the reality is that Manchester’s economy has never been stronger – and will only continue to grow,” said Ged McPartlin, sales director at Manchester-based sales and lettings agency Ascend Properties.

“The level of internal investment pouring into the city has reached many millions of pounds, spanning new homes, commercial ventures, offices and infrastructure. Manchester will also be seeing investment from China which will be going into Airport City, testament to the strength of the Northern Powerhouse. We are confident for the future,” he added.

Graham Davidson, managing director of Manchester-based Sequre Property Investment, is among those feeling more optimistic now that the EU referendum is over.

He commented: “The decision to leave is truly a once-in-a-lifetime decision and should now be embraced. The UK economy is going from strength to strength and the people of the UK have decided that now is the time for us to break away from the rest of Europe and gain back more control on our own future. Our economy continues to develop, particularly outside of London in light of the Northern Powerhouse agenda which is key to growth.

“Investment in Manchester over the past 12 months for example has been unprecedented and this month it was announced that MediaCityUK is set to double in size, with investment from UK companies creating thousands of new homes and job opportunities - a show of confidence in what we can achieve on our own. It’s safe to say The Northern Powerhouse agenda is well underway, and the referendum results being announced in Manchester’s town hall was testament to this.”

“The reasons for investing in UK property won’t change, with returns still outperforming all other forms of investment. Our own business is testament to this – enquiry levels have not declined despite what much of the media has portrayed; people understand that property investment can be highly rewarding, whether you are topping up your pension, saving for your children’s future or looking for additional regular income.”


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Turning a house into flats

Converting houses into flats is becoming increasingly popular. There’s a high demand for flats in London, and splitting a property into units can maximise both rental income in the short-term, and profit on sale in the long-term.

But where do you start? Here’s my quick guide on everything you need to know about converting a house into flats…

Research the market

Before you even start thinking about conversion, you must make sure the flats you’re planning on building will be wanted in the area.

Do some research, and ask us about the current market; an agent will be able to give you expert advice about what’s selling quickly, what’s not, and the new hotspot areas. If four bedroom properties aren’t shifting but studios or one bedroom flats are, conversion seems sensible.

Planning implications

The next thing to do is contact the planning department of your local council, as you’re likely to need planning permission. If you’re given the go ahead, you’ll then need to apply for Building Regulations before you start building.

Cost

Costs will vary hugely from property to property, depending on the size, condition and the number of flats you’re converting. We’d say you will expect to pay around £25,000 for a basic conversion, which would include putting up walls, installing bathrooms and central heating units. (You’ll need to talk to the utility companies so that each address has its own gas, electricity and water meters.)

There are lots of things you’ll need to consider when budgeting for the project, including: 

  • Planning approval from the local planning department
  • Building regulation approval
  • Installing new utility meters
  • Fitting a new kitchen and bathroom
  • Finance for development
  • Sound deadening & tests
  • Separate boilers
  • Separate heating systems
  • Creating a second entrance
  • Decorating costs

Finance

It’s imperative you shop around for the best mortgage rates and loans, as this will be where your profit margin is made.

The legal stuff

Make sure you tell the solicitor dealing with the legal transaction of your plans to convert, and ask them to identify any legal barriers to you doing so once the sale is complete - e.g. caveats in the deeds. Your solicitor will also be able to draw up leases for separate dwellings, which you’ll need if you plan on selling the properties.

Robert Nichols is managing director of Portico London estate agents


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Rents rise 2.5% in a year

Rents in Britain rose by an average of 2.5% in the 12 months to May, which was a marginal fall from the 2.6% annual increase recorded in the previous month, according o the latest data.

Index figures from the Office of National Statistics reveal that rental price increases were led by England, at an average of 2.6% year-on-year, followed by a 0.4% rise in Scotland, while the data remained flat in Wales.

The average rental price across Great Britain in May was £512.50, up from £500 a month in May last year.

Rental prices across Great Britain, excluding London, rose by 2% in the corresponding period and rental prices increased in all the English regions over the year to May 2016, with rental prices rising the most in the South East at 3.4%, up from 3.1% in April 2016.

In London, rents increased by 3.3% year-on-year, but the annual rate of growth was down from 3.7% in April 2016 and the East of England at 3.2%, up from 3%.

The lowest annual rental price rises were recorded in the North East at 0.8%, unchanged when compared to April 2016, the North West at 1.2%, up from 1.1% and Yorkshire and the Humber at 1.2%, down from 1.3% over the same period.

Since January 2011, rental prices in England have increased more than those of Wales and Scotland and since the beginning of 2012, English rental prices have shown annual increases ranging between 1.4% and 3% year-on-year, thanks in part to the supply-demand imbalance in the market. 


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Have you considered buying property at auction?

My office has been like a doctor’s waiting room at times this year but it is amazing what a bit of sunshine can do to lift your spirits, and it’s not just the weather that’s been changing around here. The property auction world is transitioning – and for the better. Auction days are growing and becoming a much more popular platform to both buy and sell property and, even more excitingly, the traditional auction audience is evolving.

Seven years ago as a fresh faced 22 year old, I bought my first property from an auction in London; something that was seen as quite a brave move at the time. Granted, I had the benefit of auction experience under my belt, but I never understood what all the worry and fuss was about really, and I still don’t.

Back then the phone would ring regularly with excited callers desperate to view the latest instruction. They would enquire eagerly about a particular property whilst stressing that it was just what they want and that they’d got everything in place to buy it immediately… and then they’d discover it was being sold ‘by auction’. The mood would instantly change and, as quick as you can say: “I can’t buy from auction” / “I’m not interested in auctions”/ “I don’t like auctions”, they’d gone. I can’t tell you how many times I’ve had that response.

Back then, it was a really hard nut to crack to try and convince somebody that actually, auction probably was for them and in fact, in a lot of cases, could be more beneficial than buying off an estate agent. So let’s just break it down:

A potential buyer calls up. They have nothing to sell and their mortgage is in place (in principle). Then they discover it’s an auction property and they’re not interested. Why? From experience and in general the real answer to this is because of their perception of how the auction works, or a fear of the unknown.

Picture your dream home, that property which ticks all your boxes and is exactly what you’re looking for at the moment. If you saw it for sale on Rightmove as: ‘1 Smith Street’ being sold by ‘Joe Blogs estate agents’ you’d be interested, right? Obviously – it’s your dream home. Now imagine if that exact same property was on Rightmove as ‘1 Smith Street’ being sold by ‘Joe Blogs Auctions’ instead.

Would you still be interested?

It is the same property. What you’re buying hasn’t changed; the end vision is still the same; it’s still around the corner from your Mum & Dad’s; it’s still in the catchment area for the school that you want your kids to go, and you can still stagger back from that boozer you like…etc.

You would still view the property like you would if it was being sold by an estate agent. You’d still go back again with your Dad, Wife, Best Friend or Builder for a second opinion – like you would with an Estate Agent. You’d still apply for a mortgage and instruct a solicitor and do everything else that you would with an estate agent. The bricks and mortar is the same and therefore the due-diligence on it is too. It’s just done in a different order.

Don’t get me wrong, I’m not saying that everyone should only buy from auction. If you see that dream house of yours on the market with an estate agent, then go and buy it, obviously. But equally, if you see that property and is being sold By auction, don’t rule it out.

I’m pleased to say that more and more people are considering auctions for both buying and selling property these days and whilst the weather might still be subject to frequent change, this auction trend is one that I can only see going from strength to strength.  


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Buying property at auction

Finally, after what has felt like a very long winter and a somewhat stop-start spring we are officially into summer! Feels good doesn’t it?

My office has been like a doctor’s waiting room at times this year but it is amazing what a bit of sunshine can do to lift your spirits, and it’s not just the weather that’s been changing around here. The property auction world is transitioning – and for the better. Auction days are growing and becoming a much more popular platform to both buy and sell property and, even more excitingly, the traditional auction audience is evolving.

Seven years ago as a fresh faced 22 year old, I bought my first property from an auction in London; something that was seen as quite a brave move at the time. Granted, I had the benefit of auction experience under my belt, but I never understood what all the worry and fuss was about really, and I still don’t.

Back then the phone would ring regularly with excited callers desperate to view the latest instruction. They would enquire eagerly about a particular property whilst stressing that it was just what they want and that they’d got everything in place to buy it immediately… and then they’d discover it was being sold ‘by auction’. The mood would instantly change and, as quick as you can say: “I can’t buy from auction” / “I’m not interested in auctions”/ “I don’t like auctions”, they’d gone. I can’t tell you how many times I’ve had that response.

Back then, it was a really hard nut to crack to try and convince somebody that actually, auction probably was for them and in fact, in a lot of cases, could be more beneficial than buying off an estate agent. So let’s just break it down:

A potential buyer calls up. They have nothing to sell and their mortgage is in place (in principle). Then they discover it’s an auction property and they’re not interested. Why? From experience and in general the real answer to this is because of their perception of how the auction works, or a fear of the unknown.

Picture your dream home, that property which ticks all your boxes and is exactly what you’re looking for at the moment. If you saw it for sale on Rightmove as: ‘1 Smith Street’ being sold by ‘Joe Blogs estate agents’ you’d be interested, right? Obviously – it’s your dream home. Now imagine if that exact same property was on Rightmove as ‘1 Smith Street’ being sold by ‘Joe Blogs Auctions’ instead.

Would you still be interested?

It is the same property. What you’re buying hasn’t changed; the end vision is still the same; it’s still around the corner from your Mum & Dad’s; it’s still in the catchment area for the school that you want your kids to go, and you can still stagger back from that boozer you like…etc.

You would still view the property like you would if it was being sold by an estate agent. You’d still go back again with your Dad, Wife, Best Friend or Builder for a second opinion – like you would with an Estate Agent. You’d still apply for a mortgage and instruct a solicitor and do everything else that you would with an estate agent. The bricks and mortar is the same and therefore the due-diligence on it is too. It’s just done in a different order.

Don’t get me wrong, I’m not saying that everyone should only buy from auction. If you see that dream house of yours on the market with an estate agent, then go and buy it, obviously. But equally, if you see that property and is being sold By auction, don’t rule it out.

I’m pleased to say that more and more people are considering auctions for both buying and selling property these days and whilst the weather might still be subject to frequent change, this auction trend is one that I can only see going from strength to strength.  


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Landlords urged to remain calm after Brexit vote

There is no need for landlords to panic following Britain’s decision to exit the European Union, according to the National Landlords Association (NLA).

Landlords have already been hit in the pocket by various tax measures announced by the Chancellor George Osborne, including higher stamp duty rates, while mortgage tax relief will be cut from next year. Tougher buy-to-let mortgage lending criteria has also been announced. But the NLA does not necessarily believe that a Brexit should add to landlords’ woes.

The NLA does not necessarily believe that an exit from the EU will have an adverse in impact on the private rented sector, especially now that the Bank of England and the Treasury have confirmed that they have extensive contingency plans in place to ensure the country’s financial stability.

Richard Lambert, chief executive officer at the National Landlords Association (NLA), said: “Let’s just everyone, take a long, deep, calm breath.  Leaving the EU is completely unknown territory, and jumping to conclusions isn’t going to help anyone.

“We welcome the Mark Carney’s steadying words and his reassurance that the Bank of England and the Treasury have extensive contingency plans in place.

“Any knee-jerk reaction will have a real impact on our members’ mortgages, tenants’ rents and overall confidence in the market.  So we would urge the policy as regards to interest rates should be, to continue the Prime Minister’s analogy, one of steady as she goes.”  


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Euro bargains for eurozone buyers

A sharp fall in the value of the British pound against the euro, after Britons voted to leave the EU, will be seen by international property investors as great opportunity to acquire bricks and mortar in Britain, according to various experts.

Eurozone buyers, for instance, have gained a €50,900 (£41,380) discount on the average London house price in the wake of the EU Referendum result, according to new analysis from London estate agents Stirling Ackroyd.

The depreciation in Sterling, down by around 6.6% against the euro since Leave won a narrow victory last week, means that the average price of a home in London now equates to €579,200 – compared to a record high of €630,100 in November 2015. This change amounts to an 8% discount within London’s residential market.

Andrew Bridges, managing director of Stirling Ackroyd, commented: “European buyers can now snap up real bargains across London. Overnight London has become a more affordable global property hotspot – particularly for those paying in Euros.”

The decline in the value of the UK pound and a potential slowdown in house price growth could boost activity in the housing market, according to Simon Barry, head of new developments at Harrods Estates.

He commented: “Any sharp fall in sterling will be seen by investors from around the world as a buying opportunity, which if followed by a much-needed moderation in prices will kick-start a recovery fuelled by domestic demand - assuming interest rates stabilize quickly.

“The big unknown is whether London will ultimately retain its status as a world financial and business capital outside the EU – we hope so and assume prices and confidence will recover from any set-back.”


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Stamp duty could be ‘tempered’ to boost activity

As predicted, the pound is in freefall and the world stock markets are gyrating but this will be short lived once the speculators have calmed down and new investors seize the opportunities that will arise, according to Trevor Abrahmsohn, a veteran luxury estate agent.

The director of north London based Glentree Estates believes that property prices in most price ranges will be stable and there is a chance that when the new Prime Minister takes charge, following the Conservative Conference, and appoints a new Chancellor who could make addressing the rate of stamp duty charged a priority to help boost activity levels in the market.

He said: “The present ‘draconian’ Stamp Duty rates could be tempered somewhat to induce more activity in the market place that has come under serious pressure at the moment, reducing transaction levels by more than 50%.”

Abrahmsohn, who famously had Mikhail Gorbachev attend the agency’s 35th anniversary held at the Royal Mansion on The Bishop’s Avenue, has had a busy few days following the EU referendum, with lots of new buyer enquiries from international investors.

He commented: “Dollar denominated International purchasers buying property in the UK can now enjoy a 50% total discount from both the currency gains and the lower property values that, in aggregate, should induce them to buy in the UK. Some of these individuals have held back decisions during the four-month hiatus prior to the Referendum and their patience will be handsomely rewarded since bargains abound.

“I don’t believe Mark Carney will take a risk with the Economy by raising Interest Rates to support the Pound and offer a higher yield on Gilts to help finance our trade imbalance and, therefore, mortgage rates will continue to be at an all time low which will be comforting to homeowners.”

Abrahmsohn believes that properties in the lower price ranges up to £700,000 will continue to grow up to 4% this year but there will be no growth in values of properties in the middle to upper ranges since there is an over-supply and lack of demand.

“Although these sudden events are initially unsettling, as in 1992, when the UK fell ignominiously out of the ERM the Economy never looked back.  It was traumatic at first but the gain in the medium to long term was all too real,” he added. 


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