Repossessions are selling faster

Rents rising - demand outstrips supply

Ignore Selected Licensing at your peril

PRS faces a ‘grave threat’

According to recent data from Spicerhaart Corporate Sales it seems that property investors and first-time buyers are taking advantage of the chain-free nature of repossessed properties to snap up property deals.

In April 2010, the average time taken for a repossessed property transaction to complete from the day of its repossession by the lender was 106 days, some 18% (23 days) quicker than one year previously.

 The time from repossession onto the property sales market was just 9 days in April this year and from repossession to sales exchange is now just 100 days, compared to 122 days in May 2009. The latest figures come as the CML announced that the rate of new repossessions have fallen in Q1 2010.

Mark Pilling, managing director, Spicerhaart Corporate Sales says: ”Repossessed properties remain attractive for both investors and first-time buyers as their chain-free nature allows a fast and efficient property transaction, with no delays due to other third party involvement.

“The key driver for asset managers is to ensure that they sell repossessed properties in the quickest timeframe and for the best possible price, as this is in the best interests of both the lender and the borrower. By getting the marketing strategy for the property right we can ensure that we are meeting both of these objectives.

“While the number of new repossessions may now be falling, there remain many factors that could lead to a reversal of this trend. Potential rises in interest rates, increasing unemployment and diminishing support for forbearance measures could mean that some borrowers could struggle to meet repayments in future, possibly resulting in a future increase in repossessions.”

Rents rising - demand outstrips supply

A lack of new supply is pushing rents higher said the latest quarterly Royal Institute of Chartered Surveyors’ (RICS) Lettings Survey to April 2010.

The net balance of chartered surveyors reporting rises rather than falls in achieved rents rose from zero to 30% - a marked contrast to April 2009 when 58% more chartered surveyors were reporting falling rents, an all-time low for the survey.

Surveyors are optimistic that rents will continue to rise with the future rent expectations net balance climbing to 36% - the highest figure recorded in the
survey's history.

RICS said that the more positive picture for rents can be attributed, in part, to the
continued decline in rental supply for both flats and houses in the marketplace. The number of new landlord instructions to let for this period is declining as the upturn in the housing sales market has tempted many of the accidental landlords to sell up with new instructions for sale on estate agents books now rising. One consequence of the turnaround in the rental trend analysis is that the net balance of surveyors reporting an increase in gross yields has turned positive for the first time in a year.

Significantly, demand for property to let remains strong with 30% more respondents reporting rises in demand from prospective tenants, the strongest reading since January 2009. Houses remain marginally more popular than flats but flats are starting re-establish their appeal.

Jeremy Leaf, RICS’ spokesperson, said: "With sellers back in the housing market, supply has fallen back in the lettings sector. This is good news for landlords as rents are set to move higher in the coming months and yield returns are likely to improve. Moreover, the news that buy to let specialists are beginning to lend again may also encourage investors to return to the market. However, the prospect of higher capital gains tax on the sale of property may in the near term encourage some existing landlords to take advantage of the current more benign tax regime."

Ignore Selected Licensing at your peril

Four landlords have been fined a total of almost £20,000 thanks to new rules to curb rogue landlords. The four were prosecuted by council bosses for not complying with new licensing regulations which were introduced within parts of Blackburn and Darwen.

David Ashcroft was fined £10,000 for breaches of the regulations including not connecting a house's boiler to the electricity supply, which meant the property had no hot water.

Ashcroft was also found guilty at the Blackburn Magistrates' Court for failing to apply for a licence to let his properties and for not complying with environmental regulations.

Three landlords in the Infirmary area of Blackburn were also fined by magistrates.

Shraz Ashraf, and Khalid Ali, were both fined £2,000 for not having property licenses and Shahid Ullah, was handed a £4,000 fine for not having licenses for his properties, with costs also being awarded against all three defendents.

Lee Wright, the housing standards manager for Blackburn & Darwen Council said: "We want to work with landlords and local communities to improve the quality of life for residents. However we want all our landlords to take their responsibilities seriously and to take a more responsible role towards the management of their properties."

The cases were brought under the selective licensing scheme, which was piloted in central Darwen and Infirmary.

The controversial scheme requires all private landlords in specifically designated local areas in England & Wales to apply for a license to let their property and to prove that they are 'fit and proper persons' to have tenants living in their properties.

PRS faces a ‘grave threat’

A lack of available properties and the proposed increase to the rate of Capital Gains Tax presents a grave threat to the Private Rental Sector (PRS), according to the Association of Residential Lettings Agents (ARLA)

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