6,618 new homes to be built as a result of the Kickstart programme

Coffee Shops on the rise

Commercial Property continues to recover, but may slow in 2010

Landlords benefit as rents rise and properties let quicker

NLA hails decision on Local Housing Allowance

The Homes and Communities Agency (HCA), as part of the Government’s Kickstart programme, has announced that funding to the tune of £207m has been approved for 91 housing developments, with a further 63 schemes conditionally approved awaiting final sign-off.

The 91 schemes approved will help provide 6,618 new and affordable homes, with the 63 schemes conditionally approved set to build 5,144 homes with funding of £241m.

The Kickstart programme, which was started in July 2009 by the Government with funding of £925m, aims to get stalled residential developments off the ground presuming they meet strict criteria or are worthy of further consideration.

In order to qualify for the programme, developments have to be non-viable under the current economic climate and must be completed by March 2011. So far developers have withdrawn 81 schemes due to the timescale required to build them or the fact public sector support is no longer needed.

Coffee Shops on the rise

Coffee shop chains have increased by +47%, with 164 stores opening in the top ten urban areas throughout the UK in the year since October 2008, according to a report by the Local Data Company.

Independents’ have the greater market share at 70% having grown annually by 12.5%, establishing a clear lead over the chains in a rare retail area where independents rule.

The nation’s coffee capitals based on town centre size are Camden Town in London with 66 outlets, Brighton with 121 and Edinburgh with 182. Those with the lowest are Cockfosters, Hyde and Wolverton with each only having a solitary shop. London has the highest coffee shop per shopper at 1.105 compared to Cardiff at only 14,452 shoppers per outlet.

Despite public outcry against certain coffee chains, coffee is one of the few areas of retail where independents rule the market. The Local Data Company statistics show that independents’ market share increase to 70%, taking 1% from the multiples.

The overall total of independent coffee shops stands at an impressive 9,441 in the 705 researched centres, in comparison to just over 2,000 chain outlets.

Commercial Property continues to recover, but may slow in 2010

A report on the current commercial property market by Capital Economics has indicated that despite an increase in investor sentiment in Q3 (July-September), investors will remain cautious about the speed of the recovery over the next year.

Rental value decreases slowed down in September, however the annual rate of rental value decline fell to -8.7%, the lowest figure since November 1993. Office rental values fell by -1% in September, down a further -0.3% on the previous month, whilst City values recorded the highest drop of -1.4%.

UK office market rental values are now down over -6% from their peak, which is significantly less than the West End market which has seen a -27% fall, with the report stating that this is highly unlikely to be the bottom of the market. However these drops in yields were enough to help capital values increase by +1.1%.

Landlords benefit as rents rise and properties let quicker

The number of rental properties on the market has dipped by -10% during September and October after a -6% drop in August according to Findaproperty’s October Rental Index.

The report stated that the oversupply of flats by ‘accidental landlords’ has caused a distortion in the rental market, however in October there was a -12% decrease in flat rental stock, which has been partly attributed to the demand from students and graduates requiring low-cost rental accommodation.

Rents increased slightly by +0.1% in October, which continues the upward trend since April 2009, with competition amongst tenants seeking property rent. This has also been reflected by the decrease from 71 days at the start of 2009 to 58 days it takes for properties to let.

Michael O'Flynn, director at FindaProperty.com, said: "Buy-to-let landlords have had a tough time over the last 18 months, but those who have managed to hang on in the rental market, despite a dramatic oversupply of properties, falling rents and rising unemployment among tenants, are now breathing a sigh of relief.

"Despite the fact that the economy remains uncertain and unemployment is still rising, the oversupply of rental properties is correcting itself almost as quickly as it occurred, and as long as the sales market continues to strengthen this clear out of stock is likely to continue. Rents are on a clear road to recovery with six consecutive months of stable or rising prices. Provided the 'double dip' theory of a second fall in sale prices doesn't come to fruition, landlords could be set to enjoy a further recovery in rents over the coming months."

NLA hails decision on Local Housing Allowance

A landmark case on Local Housing Allowance has been hailed as “good news for landlords” by the National Landlords Association (NLA), after the Housing Benefit Tribunal upheld a decision on appeal that a tenant’s rental arrears begin immediately once the due date has been missed.

In his judgment (I Doncaster v Coventry City Council), Mr. C Jones, Chairman, Coventry Appeal Tribunal, categorically disagreed with the Department for Work and Pensions (DWP) view, and said, 'rent is in arrears once the contractual date for payment has passed irrespective of whether rent is due in advance or in arrears’.

Housing benefit regulations currently state that a landlord may only apply to their local authority for direct payment of rent once eight weeks or more of arrears have accrued. Certain local authorities refuse direct payment within this period citing DWP guidance which states that 'a person cannot be in rent arrears in respect of a period that has not yet been served’.

Richard Price, the NLA’s director of operations, said: “It is quite clear that the normal rules of renting should apply to Local Housing Allowance. According to most tenancy agreements, rent is payable in advance. Yet local authorities pay their Housing Benefit claimants in arrears. Therefore, when it comes to assessing the length of rent areas, there is a significant difference in approach between councils and landlords. The aim of the LHA was to put those tenants in receipt of Housing Benefit on a level-playing field to those in the open market. The fact that rent is paid in arrears puts them at a major disadvantage.

“This decision is good news for landlords and, although not binding, those who are experiencing similar problems should consider highlighting this decision to their local authority.”

The decision, which neither sets a legal precedent nor is binding on future decisions, in the meantime, may help landlords who find themselves in a similar position to Mr Doncaster when negotiating with local authorities over LHA rent arrears.

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