Boot out the rogue landlords

Unscrupulous landlords are to be driven out of Oxford by the creation of a public register displaying details of approved homes for rent.

Chris Kearney, Oxford Mail - 17 July 2008

An increase in the number of landlords prosecuted by the city council in the past year for renting out unfit properties has led to the urgent creation of the list.

Details of the scheme - which should be operating within months - are released for the first time today and landlords are being urged to sign up.

The idea is prevent tenants living in shabby conditions and to provide people with an at-a-glance guide to renting safe properties and the safeguards landlords have put in place.

Oxford City Council’s chief environmental health officer Ian Wright said: “There are approximately 11,000 rented properties and 5,000 homes in multiple occupation and about 1,000 landlords in the city.

“We’re making more prosecutions now than we have ever made before and I think the scheme would work very well in Oxford - full article

‘The Modern UK Housing Market – Origins and Prospects: Private Rented Housing’

Part 1: Private Rented Housing’

At over GBP500 billion, the value of the Private Rented Sector now outstrips the total of all privately-owned commercial property, including offices, shops, hotels, factories, warehouses and leisure facilities.

In a report for the Association of Residential Letting Agents, ARLA, published today, Monday 14 July, the Private Rented Sector is forecast to continue outstripping other types of investment property and rents will rise significantly in the short term. House prices will almost certainly increase faster than commercial real estate over the longer term, as housing supply is less responsive to demand than commercial property but consumers demand more housing as living standards rise.

The report, Part I of “The Modern UK Housing Market - Origins and Prospects” by Professor Michael Ball, Professor of Urban and Property Economics at Reading University, forms part of a wider study into residential housing commissioned by the National Federation of Property Professionals, to be published in the Autumn. This will cover the market sectors of both its residential housing divisions, ARLA and the NAEA.

Continue reading ‘The Modern UK Housing Market – Origins and Prospects: Private Rented Housing’…

Government acts to help housing market

Rent-to-buy scheme to help first-time buyers and new local housing companies among a raft of measures announced today.

Kate Ahira and Chloë Stothart, Building Magazine - 16 July 2008

Housing minister Caroline Flint will today announce a series of measures to support the ailing housing market in an attempt to keep government housebuilding targets on track.

Detailed in “Facing the Housing Challenge - Action Today, Innovation for Tomorrow”, the measures include a scheme to help first-time buyers into homeownership and the creation of the first four PPP local housing companies.

Flint said: “The package being announced today will both help people facing difficulties right now, and lay the foundations to help meet the long-term housing needs of the country.

“We are determined to continue to do everything possible to promote long-term stability and fairness in the housing market… the long-term need to provide more homes has not gone away. We have a growing and ageing population and will only see worsening affordability unless we increase housing supply.” full article

Energy Efficiency is a Major Factor when Renting Property

Nearly nine out of ten (85%) private tenants are concerned over increases in domestic energy costs, while 42% claim to be very concerned, according to new research on current attitudes to energy efficiency, conducted by the Energy Efficiency Partnership for Homes (EEPH).

Clearly feeling the squeeze, caused by rising energy costs, 9% of respondents have already taken action into their own hands and decided to go as far as to change properties to find somewhere more energy efficient to rent.

When tenants were asked about the perceived value of Energy Performance Certificates (EPC), nearly nine out of ten (88%) said that the EPC would be useful when looking for somewhere to rent and nearly a third (32%) said it would be very useful. Nine out of every ten private tenants said the EPC could have an impact on their choice of property. A quarter would actually use it in the first instance to narrow down properties whilst a further quarter would narrow down properties on other factors but then use the EPC to help make their final decision, (the remaining 40% would use it to decide between two properties that had equal appeal to them based on other attributes).

Continue reading Energy Efficiency is a Major Factor when Renting Property…

CML urges Treasury to adopt innovative funding solution

The Council of Mortgage Lenders has drawn up a blueprint to address the funding problems in the mortgage market. The idea, which has already been submitted to the Crosby review team and to the Treasury, is an innovative approach which helps the financial system to help itself. It could help to significantly reduce the severity of the downturn in the housing market.

CML Press Release - 15 July 2008

But speed is of the essence. The CML was disappointed by speculation this week that the Crosby review of housing finance was unlikely to offer policy recommendations in its interim report. The CML firmly believes that with quick and decisive implementation of the mortgage market funding proposal, the Government could mitigate the difficulties that households and the housing market will otherwise face, as well as helping to restore greater confidence to the financial system as a whole.

The suggested action plan is outlined in detail in section 5 of the attached document and is represented visually in the attached diagram. It is essentially a way of kick-starting the markets for UK residential mortgage-backed securities (RMBS) and covered bonds (CBs) back into life. These are parts of the market that have been dysfunctional since investor appetite disappeared in the wake of the credit crunch.

Their loss has been the main cause of the contraction in the size of the mortgage market, and hence the lack of mortgage availability for many borrowers and higher mortgage costs. Mortgage lending is set to halve this year, with many borrowers who could afford new mortgages nevertheless being unable to access funds.

Continue reading CML urges Treasury to adopt innovative funding solution…

The importance of Freddie Mac and Fannie Mae

Fannie Mae and Freddie Mac are central to the US housing market

Simon Atkinson, Business reporter, BBC News - 14 July 2008

When UK lender Northern Rock hit difficulties last year, the queues forming outside its branches across the UK provided a very visual image of the problems that it faced.

A few months later the beleaguered bank was taken into government hands after it was nationalised, with loans worth £100bn on its balance sheet.

It was doubtless a disaster for shareholders, the Rock and the government - but is perhaps put into perspective by the troubles faced by Freddie Mac and Fannie Mae.

Together, the two firms own or guarantee about $5.3 trillion (£2.7 trillion) worth of home loans - about half the outstanding mortgages in the US.

That is about 25 times as big as the Rock’s obligations, and twice the size of the UK economy - full article

The Bank of England must avoid rate overkill, says Kate Barker

Kate Barker believes that Britain should escape a recession such as those suffered in the early 1980s and early 1990s

Gary Duncan, Economics Editor, The Times OnLine - 14 July 2008

The Bank of England must guard against keeping interest rates too high for too long and from tipping Britain’s economy into a slump as it fights to curb inflation, one of its most influential officials says today.

The warning that the Bank must strive to avoid interest-rate overkill, from Kate Barker, the longest-serving external member of its Monetary Policy Committee (MPC), will dampen City speculation that rates will be raised soon to combat rising inflation.

Britain should escape a severe recession, such as those suffered in the early 1980s and early 1990s, Ms Barker told The Times, after a barrage of grim economic news in the past two weeks. However, she emphasised that the stakes were quite high over risks that the Bank could make a grave error as it tried to steer a course between the conflicting pressures of rapidly weakening growth and fierce inflationary pressures - full article

House prices could fall back a long way after their excessive rises

Last week the penny finally dropped about the housing market. The Halifax numbers were awful. A 2pc fall on the month was bad enough, but this came after earlier large falls.

Roger Bootle, The Times OnLine - 14 July 2008

Over the past three months prices have fallen by almost 6pc - which translates into an annualised rate of decline of over 20pc. That is the fastest on record. But how large will the total drop in prices be?

The place to start is with an analysis of why this is happening. The essential reason is that houses had become ludicrously over-priced, to the point where, in order to be able to afford one, you either had to own one already, to mortgage yourself up to the eyeballs or to win the lottery.

Many British people seem to believe that it is somehow inevitable that house prices rise by 10pc, 15pc or 20pc every year, thereby squirting money around for all who have been lucky or canny enough to position themselves under the shower - full article

US Treasury to spend billions in bailout of Freddie Mac and Fannie Mae

The US Government took dramatic steps to prop up America’s financial system last night, announcing that it was prepared to pump billions of dollars into the country’s mortgage market in a desperate measure to prevent the economy going into a tailspin.

Tom Bawden in New York and Gerard Baker in Washington, TimesOnLine - 14 July 2008

In a late-night announcement designed to calm increasing panic on Wall Street before today’s market opening, the US Treasury Department and the Federal Reserve issued a joint statement in which they pledged to spend billions of dollars of taxpayers’ money to bail out the two American mortgage giants that collectively underpin the entire housing market “if needed”.

The Fed said it would offer cheap financing to the giants, Freddie Mac and Fannie Mae, through its so-called discount window. The Treasury separately said that it would propose to Congress that lines of credit to the two should be extended temporarily. Furthermore, Henry Paulson, the US Treasury Secretary, said that the Treasury would purchase equity in both organisations if needed - full article

Housbuilders forced into desperate measures

Free car with your new home: slump in housing market brings desperate offers

Gráinne Gilmore and Judith Heywood, Times Online - 11 July 2008

Forget slashing the asking price, offer a free car instead. This is the approach that a developer in Newquay is hoping will help him to beat the sales slump as he tries to sell 65 flats.

Another developer is simply threatening to sue buyers who pull out of purchasing luxury flats in a £25 million development in Plymouth.

The increasingly desperate measures being employed by housebuilders to sell their properties reflect the dire state of the housing market.

Barratt Developments became the latest to announce job losses, saying yesterday that it was cutting 1,200 posts, a fifth of its workforce. Other leading homebuilders, including Taylor Wimpey and Redrow, have already said that they are slashing thousands of positions. Mark Clare, chief executive of Barratt, gave warning that job cuts across the industry could reach 60,000 out of 300,000 - full article