Sales
Carry on regardless
In spite of a new coalition Government, the threat of increased Capital Gains tax and the plummeting value of the euro, the central London property market has, to date, remained resilient! Whilst applicant registration has decreased, there are active purchasers in the market and sales at high capital values are taking place regularly.
We have had several enquiries from vendors wishing to sell second homes (mainly smaller flats and pied-a-terres) although most of these seem rather tentative and resigned to a potential increase in their CGT exposure. It is, of course, only in the last three years that we have enjoyed CGT at the reduced rate of 18% - previously it was 40% (with taper relief) so it is most likely that we will return to the former state of play.
The disastrous HIP legislation has finally "bitten the dust" and most agents heaved a sigh of relief at the removal of this clumsy and poorly implemented bureaucracy. The EPC has remained and will continue to pay lip service to the previous government's commitment to the Kyoto summit, however, I am yet to experience a purchaser taking the slightest bit of notice of it! More importantly, the delays at both Kensington & Chelsea and the City of Westminster in the undertaking of searches is slowing up the conveyancing process and we have returned to the days of a simple freehold conveyance taking 4-5 weeks. Back to square one then, Mr Blair! Perhaps the money and effort should have been spent on efficiencies at town halls and the computerisation of planning, highways and building control departments.
Whilst there seems to be a mood of cautious optimism towards the new government, there is also widespread concern with regard to the massive national debt and the taxes and savings that will need to be implemented in order to repay it. However, with no dramatic increase in stock availability and continuing interest from abroad, I predict a steady market through the summer but with a plateauing in the price increases which we have seen over the previous nine months.
_______________________________________________
Lettings
All change with a new Government.
We all breathed a sigh of relief when we came out of political limbo and Cameron and Clegg formed their coalition and became best buddies in No 10’s garden! For the time being, it seems to have given us some political stability although, as we all know, their honeymoon period will not last too long. There definitely appears to be a more confident air in the property world. Relocation agents have never been busier as they scour the market and snatch up any suitable properties quickly.
The Queen delivered her speech on 25th May - the agenda being described as both bold and radical with proposals very much reflecting the power sharing agreement with a number of compromises. We all knew that the new Government’s main priority had to be to reduce the deficit and try to give us some economic stability.
We are pleased that Grant Shapps has been made Minister in charge of Housing. Hopefully, he will really get to grips with some much needed change and also that he will remain in office for longer than the 13 Housing Ministers under the last Government so that we can have some continuity.
As has been widely reported, along with the abolition of HIPS the Decentralisation & Localism Bill also gives greater powers to Councils and neighbourhoods, and gives local communities control over Housing and Planning decisions. The Energy Bill will deliver a national programme of energy efficiency measures to home and businesses through a new Green deal.
I will personally be lobbying for the regulation of Lettings agents. Unregulated agents up and down the country hold millions of pounds on behalf of landlords and tenants, much of which is unbonded. I will also be lobbying for the Government to encourage investors into the property market as there is still a huge lack of good quality stock and also to treat landlords as exempt businesses. Perhaps they could propose taper relief or rollover relief into the Capital Gains Tax changes. We urgently need clarity before they risk damaging the confidence of the recovering property market. The Private Rental Sector currently represents more than 3 million homes and is a crucial component in offsetting the shortage of homes being built to house the growing UK population. The CGT presents a further threat to the PRS as worryingly some investors may look to sell off their portfolios in order to avoid paying CGT and it may also deter future investors from buying.
The upside to the shortage is that rents are still on the increase and new figures revealed by the RICS indicate that landlords are likely to see rental expectations increase as the supply of new properties falls for the second quarter. The survey also found a fall rather than a rise of new instructions, indicating that tenant demand could increase to unprecedented levels. Our average renewal increase is circa 10% and it is at this time that landlords need experienced agents more than ever to not only negotiate their renewals but also to advise on rental levels from the outset. We were recently one of five agents called in to value a 3 bedroom maisonette in a prime location. The landlord was bemused as he had had values ranging from £3500 per week to £8000 per week. We advised him to market it at £6750 per week and we obtained close to that price within a month of marketing. Imagine if he had stayed only with the advice of the lowest valuation – he could have been over £160,000 out of pocket over the first year only, added to which it could have set a low benchmark for any renewals. There is a moral to this tale – I have been in the business for some 27 years and have seen the peaks and troughs but there are some agents out there valuing millions of pounds worth of property with little more than a few years experience.
We anticipate that the coming months will be very busy with a steady stream of new families coming in to London and we will do our very best to house them all.
Carry on regardless
In spite of a new coalition Government, the threat of increased Capital Gains tax and the plummeting value of the euro, the central London property market has, to date, remained resilient! Whilst applicant registration has decreased, there are active purchasers in the market and sales at high capital values are taking place regularly.
We have had several enquiries from vendors wishing to sell second homes (mainly smaller flats and pied-a-terres) although most of these seem rather tentative and resigned to a potential increase in their CGT exposure. It is, of course, only in the last three years that we have enjoyed CGT at the reduced rate of 18% - previously it was 40% (with taper relief) so it is most likely that we will return to the former state of play.
The disastrous HIP legislation has finally "bitten the dust" and most agents heaved a sigh of relief at the removal of this clumsy and poorly implemented bureaucracy. The EPC has remained and will continue to pay lip service to the previous government's commitment to the Kyoto summit, however, I am yet to experience a purchaser taking the slightest bit of notice of it! More importantly, the delays at both Kensington & Chelsea and the City of Westminster in the undertaking of searches is slowing up the conveyancing process and we have returned to the days of a simple freehold conveyance taking 4-5 weeks. Back to square one then, Mr Blair! Perhaps the money and effort should have been spent on efficiencies at town halls and the computerisation of planning, highways and building control departments.
Whilst there seems to be a mood of cautious optimism towards the new government, there is also widespread concern with regard to the massive national debt and the taxes and savings that will need to be implemented in order to repay it. However, with no dramatic increase in stock availability and continuing interest from abroad, I predict a steady market through the summer but with a plateauing in the price increases which we have seen over the previous nine months.
_______________________________________________
Lettings
All change with a new Government.
We all breathed a sigh of relief when we came out of political limbo and Cameron and Clegg formed their coalition and became best buddies in No 10’s garden! For the time being, it seems to have given us some political stability although, as we all know, their honeymoon period will not last too long. There definitely appears to be a more confident air in the property world. Relocation agents have never been busier as they scour the market and snatch up any suitable properties quickly.
The Queen delivered her speech on 25th May - the agenda being described as both bold and radical with proposals very much reflecting the power sharing agreement with a number of compromises. We all knew that the new Government’s main priority had to be to reduce the deficit and try to give us some economic stability.
We are pleased that Grant Shapps has been made Minister in charge of Housing. Hopefully, he will really get to grips with some much needed change and also that he will remain in office for longer than the 13 Housing Ministers under the last Government so that we can have some continuity.
As has been widely reported, along with the abolition of HIPS the Decentralisation & Localism Bill also gives greater powers to Councils and neighbourhoods, and gives local communities control over Housing and Planning decisions. The Energy Bill will deliver a national programme of energy efficiency measures to home and businesses through a new Green deal.
I will personally be lobbying for the regulation of Lettings agents. Unregulated agents up and down the country hold millions of pounds on behalf of landlords and tenants, much of which is unbonded. I will also be lobbying for the Government to encourage investors into the property market as there is still a huge lack of good quality stock and also to treat landlords as exempt businesses. Perhaps they could propose taper relief or rollover relief into the Capital Gains Tax changes. We urgently need clarity before they risk damaging the confidence of the recovering property market. The Private Rental Sector currently represents more than 3 million homes and is a crucial component in offsetting the shortage of homes being built to house the growing UK population. The CGT presents a further threat to the PRS as worryingly some investors may look to sell off their portfolios in order to avoid paying CGT and it may also deter future investors from buying.
The upside to the shortage is that rents are still on the increase and new figures revealed by the RICS indicate that landlords are likely to see rental expectations increase as the supply of new properties falls for the second quarter. The survey also found a fall rather than a rise of new instructions, indicating that tenant demand could increase to unprecedented levels. Our average renewal increase is circa 10% and it is at this time that landlords need experienced agents more than ever to not only negotiate their renewals but also to advise on rental levels from the outset. We were recently one of five agents called in to value a 3 bedroom maisonette in a prime location. The landlord was bemused as he had had values ranging from £3500 per week to £8000 per week. We advised him to market it at £6750 per week and we obtained close to that price within a month of marketing. Imagine if he had stayed only with the advice of the lowest valuation – he could have been over £160,000 out of pocket over the first year only, added to which it could have set a low benchmark for any renewals. There is a moral to this tale – I have been in the business for some 27 years and have seen the peaks and troughs but there are some agents out there valuing millions of pounds worth of property with little more than a few years experience.
We anticipate that the coming months will be very busy with a steady stream of new families coming in to London and we will do our very best to house them all.
