Retired home owners in Britain see property wealth increase by £1,000 a month

Home owners in Britain aged 65 and over have effectively earned almost £1,000 a month over the last six months from their properties, new research shows.

It means that retired home owners’ property wealth increased by £28 billion over the period to a new record high of £1.118 trillion, according to the pensioner property index from equity release advisor Key.

Owners in Yorkshire and Humberside recorded the biggest increase at £8,607, followed by those in Wales at £7,875, the North West at £7,546, all better than the national average of £5,889.

In Scotland the average growth was £5,499, in the North East of England it was £4,103 and in East Anglia it was £3,133 while in London the growth was just £1,655 over the whole of the six month period.

Since Key started analysing the un-mortgaged property wealth of the over 65s in 2010, retired home owners have seen growth of nearly £340 billion in property wealth, equivalent to an increase of 43%.

‘The numbers are fascinating but the basic fact is that no matter what happens year to year to house prices many over-65s will have considerable property wealth which can transform their standard of living in retirement and help family members,’ said Will Hale, Key’s chief executive officer.

‘Increasingly equity release customers are able to make substantial gifts to family members including their adult children or even grandchildren with money being used to clear debts, fund university fees and pay for house deposits and weddings. Customers can also use the money to age proof their own homes and preserve wealth for the family,’ he explained.

‘While equity release is not right for everyone, it is clear that if your home is your largest asset in retirement, you should take some time to think through when and if you might need to access this wealth,’ he added.

The average increase in property wealth over the six months was also strong in the East Midlands at £7,527, and the West Midlands at £7,376 as well as £6,328 in the South West and £6,103 in the South East.

Original Source:Property Wire https://www.propertywire.com/news/uk/retired-home-owners-in-britain-see-property-wealth-increase-by-1000-a-month/

First time buyers can find cheaper mortgages than a year ago

In the UK first time buyers have a rare opportunity to take advantage of cheap mortgage rates at a time when property price growth has slowed, according to new research.

This is because there are 46% more high Loan to Value (LTV) mortgages available now than there were a year ago, the study from financial information business Defaqto says.

It also shows that while interest rates are increasing overall, mortgages for first time buyers have just got cheaper.

High LTV mortgages, where a borrower can buy a house with a small deposit such as 5% of the value and borrow the remaining 95%, are typically used by first time buyers to get on the housing ladder.

While mortgage interest rates have been increasing overall, making mortgages more expensive, Defaqto has found that interest rates have been falling for 95% LTV mortgages. A year ago, the average interest rate on a two year fixed rate mortgage was 3.98% and today it is 3.46%.

The study also shows that effective rates, that is the cost of borrowing including any product fees, for first time buyers has been dropping, for two, three and five year fixed rate mortgages.

The best buy two year fixed rate available today is 2.86% from Barclays. However, a year ago the equivalent best buy was 3.49% from Hanley Economic Building Society. This 0.63% difference means a potential saving of £68 per month, based on a £200,000 mortgage over 30 years, compared with a year ago.

More lenders are serving this market too with 58 providers today compared to just 52 a year ago, an increase of 10%.

‘Buying a home is a huge investment and high prices have kept it out of the reach of many for years. It looks like the cost of buying a home has just got a bit easier for first time buyers as prices have finally stopped rising and mortgages are cheap,’ said Brian Brown, head of insight at Defaqto.

‘For those looking to get a mortgage, it is important to do your sums and check exactly what you can afford to borrow. While interest rates are low, an increase of just 1% can add hundreds of pounds to a monthly repayment and thousands to the overall cost of a home,’ he pointed out.

‘It’s important to factor in what an increase could mean for your mortgage and whether you can afford it. If you need advice, talk to a qualified mortgage adviser who can recommend the best product for your needs,’ he added.

Original source:Property Wire https://www.propertywire.com/news/uk/first-time-buyers-can-find-cheaper-mortgages-than-a-year-ago/

Tens of thousands of landlords could be unaware of inaccurate EPC certificates

Up to 2.5 million Energy Performance Certificates in the UK are wrong due to inaccurate measurement standards and practices and it means landlords could be unwittingly breaking the law.

One in four EPCs record the size of a property so inaccurately that it varies by more than 10% from the actual measurement, according to a new report by property technology firm Spec.

It believes that this means that landlords are letting properties illegally as an estimated 35,000 E rated properties are below the legal standard for the residential lettings market

The report explains that outdated techniques to measure floor space can have a significant impact on the accuracy of EPCs and the problem is so acute and so widespread, that it means that tens of thousands of landlords may be unwittingly breaking the law.

Spec’s research highlights the limitations of most Domestic Energy Assessors’ (DEA) old-fashioned property measurement techniques, with the average discrepancy in property area coming in at 8.6% or 87 square feet.

The firm says that floor space is a key component of the calculation carried out by DEAs to give a property its energy rating. Accurate floor space measurements are essential for producing an accurate final EPC rating because as little as a 1% change in property area can result in a one point change in EPC score, which in turn can alter the overall EPC rating.

This is particularly important for residential landlords who must ensure that their property achieves an A to E rating to be legally let or they can be fined thousands of pounds if their property does not. EPC’s are required by law for all residential properties being sold or let.

Spec’s researchers found that an estimated 35,000 E-rated properties are being let illegally, due to EPC scores that would likely be downgraded if the floor space was accurately measured.

Further research has uncovered the shortcomings of using outdated methods of property area measurement in the EPC calculation process. The majority of EPCs lodged, some 90%, use the Reduced Data Standard Assessment Procedure which employs simple averages or standardised values rather than actual measurement of many features that are relied on to calculate the EPC score and rating, such as volume of a property.

However, Spec says given that there is little requirement to reflect the accurate structure of a building and measurement standards vary widely in practice, the raw data used to calculate most EPC ratings is very likely to inaccurately reflect the true energy performance of a property.

The availability of new technologies like Spec, that can accurately laser scan a property in 3D, mean the EPC assessment procedures need to be reviewed to ensure consumers are properly informed and have confidence and trust in the data they are provided.

‘Our study reveals that it’s not really a case of if your EPC is measured inaccurately, but how much it is measured inaccurately. Inaccurate EPCs present serious challenges and risks not only to property professionals, consumers and estate agents but also the environment,’ said Anthony Browne, senior advisor to Spec.

‘It means tens of thousands of landlords are unwittingly renting out their properties, opening them up to the risk of fines of thousands of pounds through no fault of their own. Measuring the energy efficiency of buildings accurately is essential in limiting their environmental impact and tackling the bigger global issue of climate change. If you are not measuring the problem properly, you won’t tackle it effectively,’ he pointed out.

‘Until now there has not been a viable option available to overcome these issues. But now there is no longer any excuse for having inaccurate EPCs,’ he added.

House planning process to be speeded up, particularly appeals

The average time it takes for a planning appeal looks set to be cut by five months after the Government accepted an independent review saying builders and communities need more certainty.

Secretary of State for Housing James Brokenshire said that it will work with the Planning Inspectorate to drive down the time it takes to process appeals after the review by Bridget Rosewell called for it to be speeded up.

It means that the average time to decide a planning appeal inquiry could be slashed from 47 to 26 weeks. The most contentious planning cases could be decided up to five months faster, and some in half the time, giving certainty to communities about future developments.

The wide ranging review concluded that outdated administrative processes and poor IT infrastructure were unnecessarily holding up cases. It also suggested that a lack of suitably qualified inspectors was also hampering efforts to set up inquiry hearings on time.

Brokenshire believes that speeding up planning decisions can help the Government deliver on its target to build 300,000 homes each year by the mid-2020s.

He also pointed out that faster inquiries into contested development will give house builders and local communities more certainty on when decisions will be made, while also maintaining the integrity of the appeals system which works to prevent inappropriate development.

‘Planning appeal inquiries have held up development and kept communities waiting in limbo and 47 weeks on average is far too long to wait for a decision on something so important as a proposal for new development,’ said Brokenshire.

‘The review has produced a fantastic report and provided us with a clear direction of travel on how we can ensure the appeals inquiry process is fit for purpose. Reducing the time it takes to secure crucial decisions ensures the delivery of more homes, in the right places, and help us reach our ambition of 300,000 new homes a year by the mid-2020s,’ he added.

Rosewell said that she looks forward to seeing the proposals implemented. ‘It’s critical that all parts of the planning system contribute towards the efficient delivery of the homes we need as well as the refusal of those which don’t meet our high standards,’ she explained.

‘My review found, with commitment for all involved, that speeding up inquiries can be achieved through straightforward reforms, shaving months off the current time it takes for inspectors to make a decision,’ she added.

Overall, the report made 22 recommendations, ranging from committing the Planning Inspectorate to introducing a new online portal for the submission of inquiry appeals to setting out a strategy for recruiting additional inspectors so inquiries can be scheduled sooner, reducing the length of time they take to conclude

The Planning Inspectorate will now prepare an implementation plan which will set out precisely how it will deliver these recommendations.

Original source:Property Wire https://www.propertywire.com/news/uk/house-planning-process-to-be-speeded-up-particularly-appeals/

Rents in the UK increased by 2.5% in the last year

Rents in the UK increased by 2.5% in the 12 months to January 2019, taking the average to £932, with only the North East seeing a fall, the latest rental index shows.

Growth was led by the South West and Greater London. Rents increased by 5.1% year on year in the South West to an average of £859 and also increased by 3.1% month on month.

London recorded annual growth of 3.7% to £1,588 but rents fell by 0.5% month on month and when London is excluded then annual growth was 2% to an average of £755, the data from tenant referencing firm HomeLet also shows.

The slowest growth has been in Scotland and the East of England, both up 0.3% year on year. This took the average in Scotland to £627 and rents also increased 0.6% on a monthly basis. In the East of England at £909, rents also increased month on month, up by 1.6%.

In Wales the market was also subdued, with rents up year on year by 0.5% to an average of £606 and they increased month on month by 1.8%.

There was reasonably strong growth in rents in Northern Ireland, up by 3.2% year on year to an average of £644 and month on month they increased by 1.9% while in the North West rents increased by 2.9% year on year and 0.7% month on month to £703.

In the West Midlands rents increased by 2.8% year on year and 0.6% month on month to £693 while in the South East they were up by 2.7% on an annual basis and 2.4% month on month to £1,022.

Yorkshire and Humberside saw an annual rise of 2.1% and rents increased 1.9% month on month to £636, in the East Midlands they were up 1.1% year on year but fell month on month by 0.8% to £624. The North East saw rents fall 0.6% month on month to £534 but rebounded month on month by 2.7%.

Some parts of London saw rents rise significantly, led by Westminster with an annual rise of 9.7% to £2,356, followed by a rise of 9.5% in Haringey and Islington, an 8.5% rise in Chelsea, Fulham, Hammersmith and Kensington, and an 8.2% rise in Wandsworth, Hackney and Newham.

However, in Camden and the City of London rents fell year on year by 12.3% while in Croydon they were down by 5.6%, in Hounslow and Richmond upon Thames they fell by 2.1% and in Tower Hamlets they fell by 1.3%.

Original Source:Property Wire https://www.propertywire.com/news/uk/house-planning-process-to-be-speeded-up-particularly-appeals/

THE LATEST INTERIOR DESIGN TRENDS FOR 2019

A new year often means a new start, a time for fresh beginnings and new opportunities. If 2019 comes with aspirations to make a positive change, there’s nothing quite like making stylish alterations to the home to get the new year off to a flying start.

Ensure your home adheres to the latest styles and trends by following these must have interior design trends for 2019.

Concealed storage in the kitchen

Kitchens this year are all about clean lines and seamless integration. Maximise the space in your kitchen, alleviate the clutter and make sure one of the most well-used rooms in the house is fabulously on-trend by integrating clever, concealed storage into your kitchen.

Utilise space in the kitchen to the maximum with built-in drawers and cupboards in the kitchen island, turning an unused pantry or broom cupboard into hidden shelving behind sliding doors and other innovative solutions to integrating seamless storage into your kitchen in 2019.

Going bold

Interiors in 2019 are all about being bold and daring to stand out and be different. From industrial-style lights swinging above the dining table, to bright and bold patterned wallpaper contrasting vividly to ceilings and flooring, ensure your home’s interior makes a daring statement this year.

Oxidise wooden furniture

Get on-trend this year by upsizing existing furniture into desirable pieces fit for the 21st century by oxidising wooden furniture. Oxidising wood makes it look old and weathered, transforming lacklustre coffee tables, wardrobes, cabinets and dining tables into shabby chic alternatives that are perfect for giving traditional, cosy homes a more rustic edge.

Opt for oversized rugs

2019 is all about going large with rugs and filling floors with luxury, oversized rugs, which, again, makes a statement in any room. Rugs that have been tailor-made to a specific space are being seen as an invaluable investment for the savviest of interior designers looking for the wow factor in 2019.

Digitally-inspired homes

Smart technology is becoming an increasingly prevalent feature in modern homes. Asides state-of-the-art tech playing a key feature in the home, give your décor a digital makeover by opting for tech-inspired features and fittings, such as binary doormats, numeric keypad chairs, keyboard benches and other quirky additions that mimic our love for technology.

Original Source:New i.d Interiors https://new-id.co.uk/interior-design-trends-for-2019/

Developers confidence is high in key British cities, crane index shows

Confidence among developers is strong across regional cities in the UK with a sustained levels of homes, offices, hotels, retail, education and student housing delivered in 2018, a new survey shows.

Overall construction activity hit record levels last year, led by activity in Belfast, Birmingham, Leeds and Manchester, according to the latest crane survey from Deloitte.

In Belfast there were 34 schemes under construction in the city centre with 21 schemes completed in 2018 and nine set for completion this year. The report says it was a healthy year for office development as work began on over 400,000 square feet of new Grade A space, which the survey said is making good progress against the Belfast Agenda target of 1.5 million square feet of new space by 2021.

Birmingham saw 23 new starts, with residential leading the way as 13 new schemes were started, bringing the development pipeline to over 5,000 units under construction. Last year also saw the delivery of the most residential units to the city centre, the highest since the Birmingham crane surveys started in 2002.

However, new office development in the city is down from a peak of seven new starts in 2016, to just two new schemes but the report points out that total office volume under construction remains high at 1.4 million square feet and 2019 is set to be a record breaking year for office completions.

Leeds has recorded the highest level of construction in the city centre since the Leeds crane survey began in 2002, with 21 new construction starts in 2018. This includes seven new office schemes adding to the record 844,986 square feet of office development pipeline.

Residential development continued an upward trajectory with three new starts, set to deliver a further 533 units to the city, bringing the total to 2,119 units currently under construction. The report pointed out that five of the developments under construction are Build to Rent, which will be the city’s first purpose built units in this sector.

Manchester’s office sector has over two million square feet of office space under construction across 13 schemes which Deloitte describes as ‘a remarkable increase’ on the consistent levels of 1.5 million square feet between 2015 and 2017.

‘To have construction figures this healthy is somewhat of a surprise given a myriad of market uncertainties. Developer confidence is a key indicator for economic health and to have this many significant construction starts over the last 12 months, especially in speculative office schemes, is testament to the resilience of the regions and appetite for growth,’ said Simon Bedford, partner and regional head at Deloitte Real Estate.

He explained that if Manchester had featured in the recently published North American crane index, it would have ranked number two behind Toronto but in front of Seattle, Los Angeles and Chicago. ‘That might have seemed like a remarkable statistic a few years ago given Manchester only had one crane in the sky in 2011, but today the figure is a massive 78 sites under construction,’ he said.

Overall he said that investor confidence is thriving, as the rise in office pre-let deals clearly demonstrates. With creative, media and tech occupiers leading some of the major office deals in 2018, twinned with growing diversity in talent, these are good foundations for regional growth in the years to come.

However, looking ahead there may be challenges. ‘Each of these featured cities have ambitious plans which, if they are to emerge, will need to be supported by investment in essential infrastructure which is currently struggling to keep up with the pace of real estate development. The next decade may well be all about transport and smarter city solutions,’ he added.

Original Source:Property Wire https://www.propertywire.com/news/uk/developers-confidence-is-high-in-key-british-cities-crane-index-shows/

Majority of UK property professionals set to expand their portfolios in 2019

Landlords looking to expand

According to the results of a recent poll by MT Finance, Brexit, political uncertainty and affordability issues have failed to dampen the spirits of the majority of UK property professionals with many saying they remain positive and plan to increase the size of their portfolio.

MT Finance polled property professionals as part of its research into the future performance of the UK property sector. 80% of investors said they plan to increase their portfolios in 2019, while 20% said they are not making any changes to their portfolio in 2019.

Nobody questioned planned to reduce their exposure to the UK property market this year.

Of the 80% looking to expand their portfolios, 39% are looking to buy in the South East of England. 25% said Wales, followed by 13% who said the Midlands. Whilst 16% revealed that would not be buying property in the UK.

No respondents said they were looking to buy in London, as investors look to broaden their portfolios outside of the more expensive Capital.

The latest forward-looking results are encouraging especially as 51% of respondents revealed they are uncertain of the conditions for property investors in 2019. 28% believe conditions will not improve in the coming year.

2018 was another challenging year for property investors in the UK, as Brexit negations continued and finances were squeezed by tax changes. When asked what the biggest challenge for property investors had been last year, the majority (40%) of respondents cited affordability.

Ongoing Brexit uncertainty was the second biggest challenge at 32%, followed by accessing funding at 17%. Some 11% said government legislation was the biggest challenge in 2018.

During 2018, 48 of the 101 respondents revealed they had purchased residential properties as investments and 43 respondents had bought commercial properties. 21 said they bought foreign properties as investments. Whilst the majority (50 respondents) said they didn’t purchase any property in 2018.

Gareth Lewis, commercial director, MT Finance, comments: “The UK property market has seen a reduction in high value purchase transactions. This is reflected in the latest data from HMRC, who revealed stamp duty receipts fell by £1 billion last year.

The results from our Q4 Property Investor Survey highlight how higher stamp duty and a lack of affordability has pushed property investors out of London, where more rental properties are vital. While there is continuing uncertainty, particularly over how the Brexit negotiations will unfold, UK property investors remain resilient. The fact that property professionals have revealed they will continue to invest in the UK, despite the uncertainty and numerous challenges, bodes well for the future of the market.”

Original Source:Property Reporter https://www.propertyreporter.co.uk/finance/majority-of-uk-property-professionals-set-to-expand-their-portfolios-in-2019.html

Student housing is a compelling asset class for investors

We expect continued demand for purpose-built student accommodation to be driven by a big population bulge in the 16 to 20 age bracket of school leavers set to start university in the next two to three years, and from overseas students attracted by the perceived strength and reputation of the UK’s education system.

On the supply side, while there has been a high level of student accommodation development in recent years with some markets and cities experiencing a surplus, some locations, particularly in the regions, have considerable levels of undersupply.

Key to identifying where these opportunities lie is knowledge of the overall market and the ability to identify areas where new-build activity has been low and supply cannot meet anticipated demand.

An understanding of where and how students want to live, how they use their accommodation and being able to deliver this at an affordable price is also imperative.

From the perspective of investors, purpose-built student accommodation schemes, once completed and occupied, can generate high single-digit or double-digit geared cash-on-cash equity yields, which for assets typically in or around city centres is compelling compared to other sectors. As a result, we continue to see strong investor demand to support development of purpose-built student accommodation.

Colin Anderson, partner, Maven Capital Partners

Original source: Property Week https://www.propertyweek.com/feedback/student-housing-is-a-compelling-asset-class-for-investors/5101167.article