Flat glut leaves regional markets facing collapse

The filling of city centres with ‘Identikit’ apartments has left the price of such developments in danger of collapse. Housebuilding analysts are giving warning of price falls next year in some regional cities, saying that declines might be followed by years of stagnation. The Times

Property Week, 14th December 2007

Alastair Stewart, of Dresdner Kleinwort, said: ‘The proportion of new-build properties that are apartments has gone up from 21 per cent in 2000 to 49% in the latest quarter. In various cities in the UK, such as Leeds, Manchester, Ipswich, Norwich, Leicester, Nottingham and Birmingham, there’s a vast oversupply.’ full article

Housing market slowdown deepens

The slowdown in the housing market is deepening, according to the authoritative RICS survey of estate agents that shows price falls spreading across all regions of England and Wales.

Properety Week, 13December 2007

Expectations for property prices are at their lowest since 1998.

New buyer inquiries are falling faster than new instructions to sell property, the RICS reports today, suggesting vendors will come under increasing pressure to accept offers below their asking prices.

The stock of unsold property on surveyors’ books increased by 8.7% in November, after the previous month’s 9.7% rise, and RICS said market conditions were the loosest since October 2005 - full article

Commercial Property values tumble in November

Capital values tumbled 4.1% in November according figures released today.

Mike Phillips, Property Week - 12th December 2007

The CB Richard Ellis UK Monthly Index showed values to have dropped 8.6% since July.

This index is widely seen to foreshadow the Investment Property Databank Monthly Index, released tomorrow, because CBRE values a significant proportion of the property monitored by IPD.

The drop is a sign that Benchmark indices are becoming more aligned with sentiment surrounding UK property. The £3.6bn Norwich Property Trust, the UK’s largest private investor property fund, reduced its values by 7% at the end of November, and on Monday New Star said that it had written down the value of its UK assets by 18% since July - full article

Landlords’ Flexibility Drives Down Leases

Landlords have responded to tighter market conditions over the last year by negotiating shorter leases with retailers and other commercial tenants, in a bid to increase choice and flexibility.

The tenth Annual Lease Review, published by the BPF and IPD, reflects the downturn across property during 2006/07 and a desire more generally across business for greater flexibility, with the average length of a lease falling from 6.2 to just 5.7 years.

The survey draws from detailed evidence of 75,000 tenancies, encompassing a full analysis of lease lengths, break clauses, review cycles, rent free periods and income profiles. It incorporates the 9,580 new leases granted between January 2006 and March 2007.

The continuing trend towards shorter, more flexible leases will boost confidence in the industry’s ability to provide tenants with the terms they need and adapt to changing market conditions - full article

Private Rental Review Could be Housing Lifeline

Housing minister Yvette Cooper will today announce a review of the private rented sector by Julie Rugg, an academic at York University.

British Property Federation, 12 November 2007

The review, likely to be similar to the recent Hills Review of social housing, could see the introduction of a large scale professional rented sector which many business leaders believe could solve the current housing crisis.

The property industry believes that a professional rented sector akin to that of Germany or the USA could solve supply issues and ensure stability in the market, as well as flexibility and choice for those seeking quality, professionally managed accommodation.

The news comes as the Citizens Advice Bureau reveals the scale of home owners saddled with mortgages they cannot afford, while the MoD admits spending £11m renting army homes from private landlords because of a lack of supply - full article

Too much cheap credit can be ruinous

In Roaring Twenties’ America, Joseph Kennedy knew it was time to off-load his shares when the shoe-shine boy started giving him stock tips. In New Millennium Britain, we have been witnessing a similar, equally clear, “sell signal”: mini-cab drivers as property tycoons.

Jeff Randall, The Times - 7th December 2007

During the Blair years, it seemed that taxis, especially those in London, were driven largely by aspiring landlords.

In return for a £10 fare, many cabbies would throw in a free 15-minute lesson on real-estate economics, which often ended with the revelation that they had just bought a place on the Costa Plonker as an “investment”. - full article

Landlords flag slowdown in buy-to-let market

Landlords at the coalface remain unconcerned about reports of a slowdown in the buy-to-let market, according to Mortgage Express research.

Emma Ann Hughes, FT.com - 12th December 2007

Almost nine out of 10 landlords told the intermediary lender they plan to either increase their portfolio or leave it untouched in 2008 - full article

Will the property market cause the next savings disaster?

I asked the Mr Big of commercial property in a city somewhere north of Watford Gap last week. I won’t say which city, because this Mr Big is so big there – his logo is on office block after office block – that he would be instantly identifiable.

Spectator.co.uk, Martin Vander Weyer - Tuesday, 11th December 2007

‘I’m a buyer for the first time in 18 months,’ he replied, rather to my surprise. ‘Prices have been at silly levels, but now they’re anywhere between 10 and 30 per cent off and we can see value. And before all this credit-crunch business the banks gave us a £400 million credit line at 20 basis points [that’s 0.2 per cent over the banks’ base lending rate or interbank borrowing cost] so frankly we might as well use it – if we were asking for it now it’d cost us at least 100 basis points.’

This was, I thought, a fascinating glimpse of the real-world real-estate market. ‘So who was buying at the silly prices?’ I asked. ‘Mostly property funds,’ was the answer. ‘And who’s selling at attractive prices now? ‘That would be property funds again. Their investors have got nervous and want cash out quick, so the funds have no choice but to sell – after all, no bank’s going to lend to them for liquidity at this stage in the game.’ - full article

NALS urges Sir Bryan Carlsberg on Voluntary Accreditation

Following Sir Bryan Carlsberg’s meeting yesterday as part of the Review of Resident Property, Caroline Pickering, Chair of The National Approved Lettings Scheme has responded strongly calling for the industry to look to voluntary accreditation schemes - such as the Government supported NALS scheme - as opposed to statutory regulation:

“It is vitally important to us that the consumer is protected in the private rented sector whether letting or renting, and the key to this is self-regulating the industry. Accreditation is essential and we are pleased that Sir Bryan Carlsberg and his team have pushed it up the political agenda. We believe the industry needs to focus on promoting and raising awareness for the highly regarded and reputable accreditation schemes already in place to encourage more people to aspire to best practice.”

“NALS accreditation is imperative to the many hundreds of firms who use the NALS kite mark to demonstrate to consumers they meet an industry standard for customer service. It has strict criteria and as a result is recognised by the industry as the benchmark for the consumer to look for and enhances the rental experience. It is our opinion that we need to continue to promote voluntary accreditation to ensure the sector delivers exceptional standards.”

NALS is backed by the Government and the professional bodies in the lettings sector. NALS offers a reliable benchmark for landlords and tenants to compare the standards of service they receive from residential letting agents. All accredited firms commit to providing clearly defined levels of customer service, have client money protection cover, maintain professional indemnity insurance and operate a customer complaints procedure. For more information visit www.nalscheme.co.uk

Landlords told to get licences

FIRE chiefs have backed a warning to private landlords to ensure multi-occupancy households are licensed - or face a fine of £20,000.

Mike Blackburn, North East Evening Gazette, 11 December 2007

Stockton Council believes there are still private landlords in the borough who are unaware of Government guidelines for housing safety, introduced in April 2006.

The Mandatory Licensing for Houses in Multiple Occupation rules ensure properties have adequate fire safety and amenity standards.

Under the new laws, rental properties of three or more storeys, housing five or more people, made up of more than one household and with shared amenities are required to be licensed.

Stockton Council has issued 41 licences to date, but is urging any landlords who still do not know their property should be licensed to come forward - full article