29
May 19

New data released by Zoopla has revealed that cautious buyers are negotiating harder on price resulting in a 3.9% widening in the difference between asking and selling prices.

According to the report from Zoopla, the gap between average asking prices to average achieved prices has increased in Q1 2019 across nearly all (16) cities, compared to 2018.

With the exclusion of Leicester, these discounts are increasing off a relatively low base and indicate that buyers are not prepared to keep pace with asking price growth. Different market dynamics in Edinburgh and Glasgow mean property sells for more than the asking price but the scale of the premium has declined in 2019Q1 compared to 2018.

Regional breakdown

The current UK average for the gap between asking price to selling price is 3.9%, up from 3.3% in 2018. Six cities registered average discounts above the current national average, with Aberdeen registering the highest discounts at over 8%. This is consistent with the decrease in demand for housing in the city due to the collapse in the oil price since 2015. Newcastle and Liverpool also registered higher gaps than the national average although the level of discounts has narrowed over the last 3 years as underlying market conditions improve.

Only two cities, Glasgow and Edinburgh, registered average sale prices as higher than average asking prices. Typically, properties in Edinburgh sell for 6.3% more than their listing price, while stock in Glasgow shifts for 5.2% above asking price.

Discounts increase in London

In London, which has led the slowdown in house prices, the average differential between asking price and selling price has increased from 4.8% in 2018 to 5.7% today. Price falls have been concentrated in inner London areas where average discounts are highest at 7.6%. In some central areas, such as Kensington & Chelsea, buyers continue to achieve double digit discounts. In outer London and the commuter locations, the gap is lower, averaging 5.1%.

House price growth softens

The level of house price growth across UK cities continues to slow, following the national trend. UK Cities registered the smallest spread in annual growth since 1996 according to the latest Zoopla UK Cities House Price Index. Price growth ranged from +5.1% in Glasgow, which is the lowest growth rate of the best performing city since 2012, to -0.5% in London. Overall, house prices increased by 1.7% over the 12 months to April 2019.

The latest index results reveal a softening in the annual rate of growth across most cities, with this slowdown now extending beyond southern England. Manchester, Nottingham and Leicester are among the regional cities registering a slowdown in price growth. The deceleration in house prices is still most marked in southern England with Bristol, Portsmouth, Bournemouth and Southampton all registering price inflation at or below 2.5%.

Richard Donnell, Research and Insight Director at Zoopla, comments: “This latest index report reveals a continued moderation in the rate of UK city house price growth as the slowdown extends beyond south eastern England. It has been twelve years since the fastest growing city was recording price inflation of 5.1%.

Sellers are having to accept slightly higher discounts to the asking price in order to achieve a sale. This is a natural response to weaker market conditions and buyers are starting to negotiate harder on price. The increase between asking and selling price is off a low base. Correctly priced homes continue to sell within a reasonable period and setting the asking price at the right level remains a key decision to agree with your agent.

Market conditions remain weak in London and the level of discounting continues to increase. We expect the price adjustment in London to continue although we do expect sales volumes to start to tick upwards. The slowdown in the rate of price growth is set to extend further across the south of England while we expect continued above average house price growth in regional cities where employment levels continues to grow, and affordability is attractive.”

12
Apr 19

On Monday 12th November, BBCs latest Panorama investigation focused on the impact of the controversial Universal Credit, and most crucially the housing element.

The programme revealed the extent of the rent arrears problem as a result of changes to the benefits system. Paul Shamplina, founder of Landlord Action, together with Mick Roberts, one of the UK’s largest Housing Benefit landlords, join other industry experts in calling on the government to act now and scrap direct payments to tenants of the housing element of Universal Credit, before the situation worsens.

Under the old system, housing allowance was paid direct to councils or private landlords. Now, in order to mirror the world of work and encourage people to be more independent, Universal Credit (UC) payments are made direct to claimants. However, when combined with the cuts in benefits, tenants are under increasing financial pressure, evidenced by the 55% rise in evictions of council tenants compared to the same time last year. Panorama revealed the average rent arrears for UC claimants across the UK stands at £663 versus £263 on the old system, nearly two and half times more.

According to Paul Shamplina, founder of Landlord Action, the changes are exacerbating the housing shortage by forcing private landlords to move away from letting to tenants in receipt of Universal Credit. In the last year, 61% of private landlords with tenants on UC have seen them go into arrears.

Paul says: “It’s a deal breaker for landlords and yet the councils don’t have enough houses to house homeless people. We saw on Panorama that, in the last year, Flintshire Council alone has seen an 85% reduction in the number of private landlords on their books willing to rent to UC tenants. When you roll that out across the rest of the country you can see why we have such a desperate housing shortage. The system used to benefit tenants, by providing more accommodation, as well as landlords, who were guaranteed timely rent with no void periods. Now it benefits no-one. The most vulnerable tenants are being left behind, forced to use an online system which many can’t access, and landlords are having to start eviction proceedings as a last resort.”

Mick Roberts, 40, has been a private landlord for more than 20 years. He has always let his properties to Housing Benefit tenants but is now having to consider only letting to private tenants.

He comments: “I have loved letting to housing benefit tenants over the years and formed great relationships with many of my tenants, but I’m sad to say I can no longer do it as a direct result of Universal Credit. As an example, I have four tenants in Nottingham in receipt of housing benefit who have rented from me for over 16 years. They have NEVER had arrears. They have all been moved to Universal Credit, and now they are all in arrears! That’s 100% failure rate. I believe sorting the housing element would solve a large proportion of problems.”

Panorama’s investigation appeared to echo what many industry experts has been saying for some time - the majority of tenants do not want direct payments because they openly admit they struggle to budget.

Alok Sharma MP, Minister of State for Employment, argued that UC is working well, that there have been lessons learnt in the process but that “we have is a simpler system which people understand and ultimately makes sure they get into work fast, stay in work longer and earn more.”

Mick Roberts vehemently disagrees with this: “UC has to be applied for online. I have a tenant who doesn’t even know how to go online or have access. They are not coming out to see the people at ground level. If they spoke to the tenants that are affected by this, as I have, they would realise.”

Paul Shamplina adds: “I’ve raised my concerns over the increasing complexity of the scheme which, in many cases, means even staff assessing Universal Credit claims are making mistakes on an all too regular basis to the detriment of tenants and landlords. Over the next few years, thousands more families will move across to UC as the Full Service rollout expands, bringing with it even more complicated cases and further challenges for DWP staff.

Unless changes are made now, housing stock will decrease further, and homelessness will increase. At present, direct payments to landlords are only considered in certain crisis situations. This needs to change and tenants and landlords need the option to have the housing element paid direct to the landlord.”

Full story below

https://www.propertyreporter.co.uk/features/rent-arrears-double-for-universal-credit-claimants.html

31
Mar 19

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28
Mar 19

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27
Mar 19

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27
Mar 19

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12
Mar 19

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