Growth in valuations activity reported
There was an acceleration in the year on year growth of property valuations during April 2013 according to chartered surveyors Connells.

Landlords reaching retirement age may leave BTL sector
Landlords who are reaching retirement age may be forced to leave the buy-to-let sector rather than continue to rent out their properties due to rising costs and increased exposure to rent arrears, according to research from Landlord Assist.

Steady rise in first time landlords
There has been a steady increase in the number of first-time landlords entering the buy-to-let market according to intermediary partners (IFA’s and mortgage brokers) of Paragon Mortgages.

Number of house hunters falls
Despite a fall in the number of house hunters (per agency) registering during March 2013, from an average of 289 in February to 286, sales of homes remained strong, according to the National Association of Estate Agents’ (NAEA).

Government announces changes to permitted development rules
The Government has published the long awaited changes to permitted development rules which aim to stimulate development activity for buildings that are vacant or underused.

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Growth in valuations activity reported

There was an acceleration in the year on year growth of property valuations during April 2013 according to chartered surveyors Connells.

John Bagshaw, Corporate Services Director of Connells, said: “Increased activity in April may demonstrate a crystallising sense of optimism in the housing market. This is the seventh month in a row of annual growth, the latest link in a lengthening chain of good news. It can in some part be attributed to Funding for Lending which started to work through the system in October. March was the strongest month for valuations since 2007, so even faster annual growth in April is only encouraging. It would seem that things are finally starting to look sunnier, as lenders’ balance sheets are more buoyant and government incentives help a wider range of borrowers gain access to finance. Certainly, the strongest April in six years is a good foothold for the rest of the year.”

April also saw the highest number of valuations for first time buyers since 2007 with 40% more valuations on behalf of first time buyers than a year ago. This compares to 33% year-on-year growth in March.

Remortgaging activity also grew with valuations now 55% higher than a year ago (despite a seasonal fall of 27% compared to March). In a similar vein, buy-to-let valuations remain 27% above the level of April 2012.

Bagshaw said: “New buyers are of growing importance to the valuations market, as lenders report a record proportion of first time buyers taking out mortgages.

“Meanwhile, cheaper buy-to-let deals help landlords to increase the supply of rental property, and compared to previous years when repayments were rising, these deals put less upwards pressure on rents. For all those reasons, this activity is as important economically as any other type of valuation, and underpins current progress.”

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Landlords reaching retirement age may leave BTL sector

Landlords who are reaching retirement age may be forced to leave the buy-to-let sector rather than continue to rent out their properties due to rising costs and increased exposure to rent arrears, according to research from Landlord Assist.

In recent years a greater proportion of landlords have remained in the buy-to- let sector well into their retirement as they have seen it as an excellent and ongoing way to finance their retirement.

Graham Kinnear, managing director at Landlord Assist, said: “Many landlords rely on their buy-to-let properties as a way to safeguard their income in retirement. In recent times this has been a safe bet as increased demand for rented properties has forced prices to reach record levels. However, with landlords being faced with increased legal obligations and costs, we are worried that the trend for landlords to continue renting out their properties well into their retirement will change in the coming years and they may consider leaving the sector at a time when the UK is already experiencing a housing shortage.

“Landlords already face having to pay council tax on empty properties and costs for referencing checks, letting agents’ fees and selective licensing agreements in some areas. Combine this with the possibility of being exposed to increased tenant arrears under the forthcoming Universal Credit scheme - which will see tenants responsible for passing on the rent rather than landlords receiving direct payments - it is a concern that many landlords reaching retirement age may opt to leave the sector rather than remaining active.”

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Steady rise in first time landlords

There has been a steady increase in the number of first-time landlords entering the buy-to-let market according to intermediary partners (IFA’s and mortgage brokers) of Paragon Mortgages.

Paragon’s quarterly trends survey shows that intermediary buy-to-let business has been growing from first-time landlords since mid-2009.

During Q1 2013 22% of intermediaries’ buy-to-let business was from first-time landlords. Although less than the peak of 24% recorded in Q3 2012 it is above the average 20% recorded since Q4 2010.

John Heron, Director of Mortgages, said: “The dynamics of the landlord market are changing. Professional landlords were typically the back bone and driving force behind growth in the market. However, in recent times, we are seeing them becoming more constrained in terms of being able to release equity and to secure new finance.

“Private investor landlords –those with between one and five properties – will be the ones to pick up the slack. These landlords have access to more flexible finance and are able to agree deals much more quickly.

“These landlords are financially astute individuals who typically have other investments such as equities and gilts or bonds, and are well-placed to cope with fluctuations in the economy and the general demands of being a landlord.”

Unsurprisingly the number of buy-to-let cases from first-time landlords was at its peak in Q2 2002 when the buy-to-let market was experiencing its ‘boom’ period. During 2008 demand from new landlords fell to its lowest level, largely attributed to the general financial crisis.

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Number of house hunters falls

Despite a fall in the number of house hunters (per agency) registering during March 2013, from an average of 289 in February to 286, sales of homes remained strong, according to the National Association of Estate Agents’ (NAEA).

This puts the ratio of house hunters purchasing homes at levels not seen since the summer of 2011, with one home being sold for every 39 house hunters in Q1 2013, improving from one every 43 in Q1 2012.

Mark Hayward, President of the NAEA, said: “House hunters who are set on completing their purchases have not been deterred by the cold start to spring and sales have remained resilient, despite the conditions. With the cold weather finally withdrawing we now expect that the overall number of house hunters may rebound over the next couple of months.

“First time buyers (FTB) are still in need of further help however. The declining FTB numbers this year prove that existing Government schemes outside the new home sector are still failing to give this portion of the market acceptable access to mortgage finance, and more must be done in the short term.” 

The average number of FTBs entering the market decreased by 24% in February to 19% in March, this is the second month in a row that FTB figures have decreased. However also for the second consecutive month the supply of homes increased, with the average number of properties available per branch increasing from 58 in February to 60 in March. This rise follows a similar increase between January and February.

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Government announces changes to permitted development rules

The Government has published the long awaited changes to permitted development rules which aim to stimulate development activity for buildings that are vacant or underused.

The Planning Minister, Nick Boles said: ”These changes will bring empty and underused buildings back into productive use; make it easier to bring forward suitable buildings for state-funded schools; allow business and families to extend and improve their premises and homes without the expense of moving; and facilitate delivery of superfast broadband.”

Among the key measures, to come into force on May 30, are controversial plans which will allow offices to be converted into homes without the need for planning permission, allowing larger household extensions under permitted development rights and making it easier for shops and schools to open in certain buildings.

Eric Pickles, Communities Secretary, added: “There is huge untapped potential in the many disused existing buildings we have and we’re determined that every one of them is put to good use.

“By simplifying the process and relaxing some stringent rules we can provide a helping hand to those eager to boost their high streets or rural communities by cutting the time and costs needed to start up new businesses.

“We’re also providing a great opportunity for outdated, redundant or underused offices to be brought back to life by converting them into homes, protecting the green belt and countryside at the same time. This will also increase footfall and provide knock-on benefits to the wider community.”

The move has been seen as a positive step for property across the UK but prior approval may still be challenging to navigate according to planning and urban design consultancy Turley Associates.

Stuart Irvine, Director at Turley Associates, commented: “These changes are positive and whilst there are still some questions to be answered about the specific detail, the clear message is that investment is good. The planning system is prepared to take a step back to allow it to take effect but the issue of ‘prior approval’ and how this is interpreted by each Local Planning Authority (LPA) needs to be watched carefully.

“Given the requirements for prior approval, the measures fall somewhere between traditional permitted development rights and a planning permission. There is some question as to whether LPA’s will simply use the prior notification process as a means of requiring planning applications. However the measures are clear on what can be considered. It is notable that reference is made to the National Planning Policy Framework (NPPF) but there is no requirement to consider the local plan.”

The written ministerial statement can be found on the DCLG website.

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