The great council house sale – news now in

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Council Houses are sold off by the Government

The government has announced that the “Right to Buy” sales of council houses to tenants are at their highest level since 2007.

In April it will be 12 months since the government set out measures to encourage tenants to buy their council homes. The scheme introduced by the coalition raised the potential discount for tenants from £16,000to £75,000 in some areas. This has led to sales of nearly 3,500 homes, an increase of 30% on the previous financial year.

The ‘Right to Buy’ scheme offers tenants discounts of up to 60% of the value for a house and 70% for a flat, with a maximum discount of £75,000.

The final quarter of last year saw the biggest rise in the rate of sales – with tenants buying 2,010 properties between October and December 2012, double what was sold in the previous quarter.

Thatcherite legacy

This mass sell-off of council properties was last seen in the Thatcher era, and many people are worried that the policy will lead to a shortage of council and other affordable housing, however the government deny this.

According to the Government the resulting income of £210 million will be ploughed back into providing affordable rental housing.

The Market is picking up

The housing market has started to see some general improvements recently as lenders have been offering some of their lowest ever mortgage rates.

The New Buy scheme, launched last Spring, has helped to boost the housing market. In fact more than 3,000 homes also been reserved under the scheme which allows first-time-buyers to buy with just a 5% deposit.

The availability of mortgages has also increased since the ‘Funding for Lending’ scheme was initiated by the Government in August 2012. This basically gives lenders access to cheap finance in order to help borrowers to gain a mortgage.

This Government do seem committed to using the Housing Market to drive the economy forward and out of recession.

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Finally some good news for first time buyers!

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Light at the end of the tunnel for First Time Buyers as lending increases

The Council of Mortgage Lenders (CML) announced a significant rise in the number of first time buyers in the UK for the first time in the last six years

They reported that the number of first time buyers rose by 12% last year – the highest number since 2007. While the Office for National Statistics (ONS) also reported a rise in average house proses in the UK of 3.3% last year.

“the number of first-time buyers rose by 12% to 216,000” (CML)

“UK house prices rose by 3.3% last year.” (ONS)

“property sales rise by 4th month in a row” (RiCS)

This picture of a confident property market emerging from a previously stagnant market is backed up by the Royal Institution of Chartered Surveyors (Rics), whose latest survey showed property sales rising for the fourth month in a row since October 2012.

Cause for celebration?

Maybe not yet, but is is good news that lenders are extending more mortgages to first time buyers as this has a positive effect on the housing market as a whole

Why this upturn now?

Mortgage Lending has been boosted by the Funding for Lending Scheme, which was launched by the Bank of England in August 2012. The aim of the scheme is to boost overall lending in the UK by some £60bn stirling. Under the scheme Banks and Building Societies are offered access to cheap funds, on condition they then lend it down to customers.

The effect has been to gradually improve the flow of funds to home buyers, including those who had been unable to borrow because they did not have a large enough deposit to put down.

According to the CML some first-time buyers have found it easier to get mortgages, even if they only had a deposit of 5- 10%. They commented “one in 40 first-time buyers took out a 95% mortgage compared with less than one in 100 a year earlier. And around one in five first-time buyers borrowed 90% or more”

Other positive signs

HM Revenue and Customs (HMRC) reported that completed sales rose by 5% last year to 932,000, the highest level of sales since 2007.

The  Bank of England reported that the number of mortgages agreed but not yet lent by lenders for home buyers but not yet lent rose in December for the fifth month in a row. This is a good indicator of upcoming house sales.

55,785 mortgages were approved in December – the most since January 2012 and, before that, the highest since December 2009.

If you are looking for property, whether you are a first time buyer or not, please visit our property search section on our home page.

If you would like to talk to us about putting you property on the market please call and speak to our sales team on 020 7394 1160

New licencing requirements for landlords in Newham

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Licencing of rental properties Newham could start a trend in the rental sector

Newham Landlords who rent out properties privately are the first in the country to face mandatory licensing which came into effect on the 1 January 2013.

Following a 10-week consultation on proposals to introduce a licensing scheme for all private landlords in the East London Borough, the scheme was approved by Councillors  making it a requirement for private landlords in Newham to show that they are “fit and proper persons”.

Landlords are now required to fill in an application form which allows the council to check the credit background of landlords as well as requiring them to provide proof of safety checks. Follow this link for more information from Newham Council, including a link to the form for licencing.

Newham Council ran a pilot scheme for 18 months prior to the Olympics charging £500 for a licence, or £300 for early applications.
The aim of the council is to improve the quality of private rented housing in the borough and eradicate so called ‘rogue landlords’ who do not take their obligations seriously. The discounted fee has been extended from the 1st January to the 31st January 2013 but it is unlikely to be further extended.

Newham mayor, Sir Robin Wales (above), said: “We want to ensure that private sector rented properties are well managed and meet a good standard.” He added “We also want to deal with the crime and anti-social behaviour that is sometimes associated with bad private sector rented housing,”

A national regulatory scheme to protect tenants was proposed by the previous Labour government after the Rugg Review, a reported on the private rented sector. The then government proposed plans to establish a national register of landlords, make written tenancy agreements compulsory and regulate letting and managing agents.

However, Coalition government housing minister Grant Shapps rejected the regulations as he believes the majority of England’s three million private tenants are happy with the conditions of their housing.

In 2010 he announced to landlord: “I am satisfied that the current system strikes the right balance between the rights and responsibilities of tenants and landlords.” Going on to promise “the government has no plans to create any burdensome red tape and bureaucracy.”

We would advise landlords who run their rental property as a business with the rights and responsibilities that incurs are unlikely to have any problems getting licenced by Newham or any other borough. Riley Marshall have noticed a marked increase in demand for new property in the rental sector over the last twelve months which is obviously good news for property developers, and investors. New properties are not likely to have any problems with licencing if it does come into effect more widely, but as long as your property is well maintained there is no reason you should have a problem even if it is an older building.

The Riley Marshall Blog intends to keep you up to date with property matters – why not check out our series on what you agent does for you click here to go to part 1 – Marketing.