Proposal for new tax on empty residential properties

Asking prices drop -1.6% in November

A brighter future in 2010

Fast food outlets on the rise

Platform reduces rates

According to the Guardian, a controversial tax has been proposed where all home owners and landlords in the UK whose property is kept empty would have to pay an ‘empty property tax’, like those in the commercial sector.

The tax has been proposed by British union leader Brendan Barber to Chancellor Alistair Darling and if approved would bring in an anticipated £5bn with approximately one million properties likely to fall under its remit. It is likely to cost individual landlords, on average, over £5,875 for each empty property.

The proposal would also overseas affect those landlords that live overseas as they would become liable for British income tax on any rental revenue their properties accrue.

Asking prices drop -1.6% in November

According to Rightmove, UK home sellers reduced their asking prices by an average of -1.6% in November 2009 for the first time in three months, as demand for property decreased prior to the Christmas period.

Prices have now fallen -6.6% below the peak in May 2008 despite having risen by +2.8% in October 2009. The highest decrease in prices was in the Yorkshire and Humberside area, where they dropped -4.4% from October, and prices in the North West also fell by -3.8%.

Miles Shipside, Rightmove’s commercial director, said: “In all but the most buoyant of markets home moving comes second to Christmas festivities,

“While the market has recovered from some dreadful lows, this month’s price fall proves that it does not yet have the strength to buck seasonal trends.”

Prices in London also decreased in November by -3.1%, with the highest drop in Barking and Dagenham (-5.3%). Kensington and Chelsea was the only area where prices increased, with a +3.9%gain, putting the average price of a home at £1.97m.

Looking at 2008, the report stated that asking prices in England and Wales went down by -2.9% in November and decreased further in December and January. However, prices have risen in seven of the ten months since then.

A brighter future in 2010

A quarterly report by the Business Development Research Consultants (BDRC)
revealed that a quarter of residential landlords' profits dropped in Q3
2009, causing them to either break even or make a loss.

Of those, around 7% made a small loss and a further 1% made a large loss.
Respondents also said that prospects for letting are declining, having
experienced an increase in Q1 and Q2 this year.

In addition, some 19% of landlords said they had decreased their rent
whilst 27% had put it up, with 49% not changing it at all. Despite less
profits, 63% of landlords don't have any plans to increase the rates they
charge their tenants between now and the end of 2009.

The report also contained data on how landlords set rental rates and found
that 21% were looking to cover costs, 15% were undercutting the market, 8%
were leaving it to the letting agent and 6% were charging what the housing
benefit/LHA will pay.

According to BDRC, private landlords continue to enter the market with 20%
of current landlords saying they have entered the market in the last 24
months - the most challenging times since the survey began in 2006.
According to the research, newer landlords are more likely to have entered
the market as a business decision to secure a better financial future or as
a source of income - compared to an average of 55% of established landlords.

Mark Long, BDRC director, said it saw signs of a brighter future for
landlords in 2010.

He explained: "With 2009 characterised as a year of survival for many
landlords, we are starting to see signs of a brighter future into 2010.
Despite the current profitability situation, as shown by the findings in
the latest survey, prospects for rental yields do appear to be improving in
line with our landlords' optimism index. The UK's private landlords are a
resilient bunch and will opt for a strategy that allows them to
protect their income and portfolio."

The 12th survey of the BDRC Landlords Panel was carried out in September
2009 and consisted of online surveys with residential property landlords
who owned at least one residential or holiday property in the UK.

Fast food outlets on the rise

Research by the Local Data Company (LDC) has indicated that fast food outlets have increased by +8.2% to 1,456 outlets in the UK’s top ten cities in the 12 months since November 2008, with Subway and Domino’s the major movers.

With one in ten outlets closing, the retail and leisure companies have borne the brunt of the recession. Burger King has closed 11.8% of its outlets whilst Domino’s has increase it outlets by +50% with Eat (+36.4%) and Pret-A-Manger (+29.7%) all growing substantially as well.

James Moss of Curzon Investment Property said: “The Domino's and Subway franchise model has allowed them to be pretty recession proof, and many individual businessmen have found them to be sturdy investments, as these figures show. Clearly, Britons are also shunning posh business lunches and choosing instead to head to Eat or Pret for a sandwich.”

There has also been an increase in independents (with less than five outlets) as their market share has moved up by +2.2%.

The three cities with the most fast food outlets are London, unsurprisingly, on top with 847, Edinburgh at 129 and Glasgow having 94.

Across the UK’s 705 monitored town centres there are 13,303 fast food outlets of which 71.6% are independents. With fast food takeaways (KFC, McDonalds etc) being the most prolific category with over 62% of the outlets.

Platform reduces rates

Platform has two new buy-to-let mortgage products and has also made changes to the rates of a number of its other products.

The two new products are both fixed-rate with a three-year rate of 5.79% and the two- year at 5.19%. The three products that have reduced rates include a three and a two-year tracker as well as a three-year fixed-rate, making it the second rate cut by the lender in two months.

Lee Gladwell, sales and propositions director at Platform, said: “This reduction in rates across our mainstream range is good news for intermediaries with the introduction of more competitive products.

“Platform is striving to develop a dedicated intermediary mortgage business that puts IFAs at the heart of our product and service proposition, enabling them to deliver an enhanced service to their clients.”

Both of the new mortgage products are available through its panel of intermediaries and come with valuations and free legal fees for remortgages with a reduced application fee of £855.

PIN’s latest mortgage recap