A new report from Savills says that the shift away from mortgages to equity has been a key change in the market.

It says that in 2001, mortgage debt funded 62 per cent of all housing transactions. By 2006, it had fallen to 55 per cent and last year it stood at 46 per cent
The report says that constraints on mortgage debt have been the main catalyst – citing bigger mortgages and more rigorous vetting of mortgage applications.

It estimates that in the year to the end of September 2011, based on Land Registry figures, £150bn was spent on house purchase. That was 47 per cent less than the £284bn spent at the peak of the market.

Lucian Cook, of Savills research, said: “Equity has replaced debt as the dominant source of funding of house purchase. It favours high-value markets, particularly those in the South of England.”

The new research also says that equity will reign for some time to come, because of new proposed reforms.

The Financial Services Authority wants mortgages only to be lent where they can be repaid without borrowers having to rely on house prices going up. The FSA also wants lenders to account for future interest rises and, whilst not banning interest-only mortgages, wants these to be assessed on the basis of repayment.

The report says that the biggest consequence of the shift from debt to equity has been the growth of the private rented sector. It estimates that the value of private rented housing stock in the UK has risen by 42 per cent in the last five years to just over £900bn.

It says further growth is inevitable, with ‘many potential large-scale landlords and housing providers’ still waiting in the wings. Savills expects the private rented sector to expand to 20 per cent -23 per cent of housing stock in England by the end of 2016.

The report also warns that the UK property industry needs to adjust to the new reality. It says: “The valuation of residential property is still predicated on the old mortgage-funded, owner-occupied world.”

However, the report adds, if UK housing is “to attract new forms of funding, as it must in the new age of debt drought, we have to understand equity and the cash it can generate”.

Baroness Gardner asked whether the Government would be introducing regulations or a code.

Lord Best, who chairs the council of the Property Ombudsman scheme, which listens to complaints against managing agents, asked whether the baroness agreed it would be a good idea if it were made compulsory for all block managing agents to belong to an ombudsman scheme.

The baroness replied that she would not want to compel managing agents to do that, while Lord Lea of Crondall complained – having lived in a block of flats for some years – of the difficulties of getting work done.

The baroness also raised the issue of ‘rip off’ charges by some block managing agents. 

 The full exchange can be viewed here: http://www.publications.parliament.uk/pa/ld201212/ldhansrd/text/120117-0001.htm#12011740000432

Instead of registering with agents when they want to start looking in a particular area, house buyers now wait to see a particular property pop up online, and only then contact the agent.

Yet apparently very few first spot their next home on Rightmove.

The extraordinary claims appear factual and are based on statistics gathered by software supplier Expert Agent from its 1,200 member branches.

The website has analysed the 209,000 applicant registrations made to its members since August 1.

Of these, just half (105,000) made one or more viewing appointments – but of that number, over 90% booked a viewing at the same time they registered.

Mike Griffiths, founder of Expert Agent, says: “That means that almost all of the viewings were made with applicants who didn’t bother to register until they saw something that interested them enough to book an appointment.”

Intrigued, Expert Agent looked at where applicants are finding the properties they decide to view, but admits that statistics are not particularly accurate nor that easy to analyse, as each member branch can change their inquiry and status prompts.

Nevertheless, the statistics it has come up with are startling: it found that just four per cent of the total 209,000 applicants are recorded with Rightmove as the source.

A further nine per cent show the source as agents ‘own website’.

“Our members’ stats suggest that old-fashioned applicants have disappeared and that house buyers now sit on the virtual fence till they see something they like and then reveal themselves to the agent in question

Referencing company HomeLet said that it was because more students had checked in to rental properties.

The average cost of renting a home in the UK also reduced from September to October by 2.5% to £763 per month, which is still over 4% higher than the same time last year.
 
There were only two out of 11 regions where there was an increase in average rental amounts between October and September – Wales and East Anglia.

The youngest first-time buyers are in Selby in North Yorkshire where the average age is 25: nine years younger than one of the areas with the oldest first-time buyers, Harrow in London (34).

Other areas where the average age of a first-time buyer is significantly below the national average are Redcar and Cleveland in the North East, Barrow-in-Furness in Cumbria, Bolsover in Derbyshire and South Ribble in Lancashire. The average age in each of these areas is only 26.

At a regional level, rather than at local district level, the differences are less stark. The youngest first-time buyers are in the North East, North West, Yorkshire and the Humber, Wales and Scotland all with an average age of 28; the oldest are in London (32) and the South East (31).

The youngest first-time buyers in southern England are in Swale in Kent and South Gloucestershire with an average age of 27 in both areas. Several areas in Wales also have an average age of 27; Bridgend, Rhonda, Caerphilly and Port Talbot. The lowest average age of first-time buyers for any area in Scotland – Midlothian – is also 27.

Average house prices tend to be relatively low in areas with the youngest first-time buyers. For example, over half of the ten areas with the youngest first time buyers have an average house price 25 per cent to 40 per cent below the national average. South Gloucestershire is the only area in the top ten where the average house price paid by first-time buyers is above the national average of £135,100.

Typically, the areas with the youngest first-time buyers are also areas where housing affordability conditions are the most favourable. Seven of the ten local areas with the youngest buyers have an average house price to average earnings ratio for first time buyers below 4.0. With an average house price of £114,113, Selby has a price to average earnings1 ratio of 2.9. In Barrow-in-Furness and Bolsover the ratio is 3.0.

Unsurprisingly, the areas with the oldest first time buyers are in the south east of England and are mostly in London. Harrow, Barnet, Ealing, Kingston upon Thames, and Three Rivers in Essex all have an average age of 34, the highest in the country. All these areas have an average house price paid by first-time buyers that is in excess of £224,000 (i.e. at least 66% higher than the national average) and an average price to average earnings ratio above 4.0. The youngest buyers in the capital are in Hackney with an average age of 30.

The average age of a first time buyer has remained remarkably stable over time. In 1983, when Halifax records began, it was 28, just a year younger than today. An increasing number of FTBs, however, now require financial assistance to raise funds for a deposit. The Council of Mortgage Lenders estimate that 84 per cent of FTBs under 30 had help with their deposit in 2010 compared with only 38per cent in 2005. The typical age of those FTBs who did not receive assistance has increased significantly from 28 to 31 over the same period.

It shows that the number of unique visitors to Zoopla grew faster than other UK property portal in August – by 10.6% – placing Zoopla as the second most-visited property website in the UK.
 
However, it looks as though Zoopla and the Digital portals will continue to slug it out for second place. Nielsen puts Zoopla in second place, recognising it as a single portal, but places FindaProperty and Primelocation in third and fourth place respectively, recognising them as two separate portals.

In fact, if you were to add FindaProperty and Primelocation unique visitor traffic together as one, as some other traffic measures do, Digital would be in second place.

The Nielsen figures for August report Rightmove effortlessly ahead of the competition in any case, with 3.37m visitors – a 1.2% drop on July. It places Zoopla in second place with 1.95m visitors, a rise of 10.6% on July. FindaProperty, with 1.75m visitors is third, with a 6.6% rise on July traffic, and Primelocation comes in fourth with 881,000 unique visitors, an 8.8% drop on July.

It is always important to check out what competition is out there. See how other landlords are marketing their properties and compare how much they are marketing them for.

Marketing your property

Next you need to market your property. The more methods you use, the more tenants you will attract. There is currently a big demand for rental properties so advertising your property will help you achieve a wider selection of tenants.

Use a reputable agent – they will take the headache out of sifting through the prospective tenants  

Use Gumtree – they are a free internet site that will allow you to market your property

Take advantage of social networking sites – eg. Facebook, Twitter

Advertise in the local paper, local shops and even the post office – make sure you give a clear description, provide photos and supply your contact details. Keep all information up to date.

Viewings

The day of the viewing is the most important. Make yourself available if necessary and ensure you have the answers to tenants frequently asked questions:

When is bin collection day?

What council tax band is the property in and how much is it?

Where’s the nearest…shop, school, sports centre, doctors’ surgery, bus stop, etc?

Make sure your property is clean and odour free, if there is a garden – keep this maintained

Getting a tenant is the easy part – getting a GOOD tenant is harder.

Before you accept any prospective tenant, check their past and current employment status, take up references from previous landlords, arrange a credit check. If the tenant is on housing benefit or a student, make sure you get a UK based guarantor. That way if there are any problems, you will have someone who is worth chasing.

Once you have chosen your tenant, request a deposit and payment – be clear about the payment required, the method of payment and due dates. MAKE SURE YOU PLACE YOUR DEPOSIT IN A  GOVERNMENT APPROVED SCHEME!

Ensure the requisite paperwork is in order before the tenancy starts. For example, tenancy agreements, inventory, guarantor forms, gas and electricity safety certificates.

Arrange moving in dates and contact your tenants a few days beforehand to check everything is still going to plan.

Don’t hand keys over until you’ve received payment, signed the relevant agreements and been through the inventory. Always keep one set yourself.

Ensure that you have adequate Landlord Insurance in place and that your tenants have contents cover.

Ask your tenants to inform relevant authorities and utility suppliers of their tenancy. Follow this up a few weeks later to ensure it’s been done.

Being a successful landlord is not easy but with the right planning, it is very much possible. Ensure your tenants are happy then you’re more likely to have a stress-free time and reap the rewards.

The figures show that 17.4 per cent of homes are now within the private rented sector, an increase from 16.4 per cent in 2009 and up 229,000 by number.

Since 2000, the number of properties in the sector, which currently stands at 3.9 million, has risen by 1.8 million, reflecting the shift in housing tenures England is currently experiencing.

Conversely, the number of properties in the owner-occupied sector fell from 14.9 million in 2009 to 14.8 million last year – the lowest since 2000.

The CLG’s figures (look for Table 104)  can be viewed at

http://www.communities.gov.uk/housing/housingresearch/housingstatistics/housingstatisticsby/stockincludingvacants

Although Parliament is now in recess, it is likely that the regulations will now be laid within the next few weeks, with the aim of bringing them into force on October 1.

The full proposed changes are below.

1. Summary of the changes to the EPB Regulations

The changes to the EPB Regulations can be summarised as follows:

• The changes will extend the current requirements to commission an EPC that apply to residential buildings to all residential and non residential buildings when sold or rented out;
• The requirements for the provision of an EPC with written particulars will be extended to all buildings sold or rented out and the option to attach the asset rating will be removed. The requirement will only extend to the first page of the EPC (the EPC consists of two pages, accompanied by four pages of recommendations); and
• The requirement for the statutory lodgement of air conditioning inspection reports onto the central EPC Register.

The following summary details the main changes that will be made in relation to EPCs.2. Commissioning an EPC before marketing

A number of changes will be made to regulation 5A of the EPB Regulations. In general, the onus remains on the ‘relevant person’ (i.e. the seller or landlord) to commission an EPC before marketing. The main changes are as follows:

• The duty to commission an EPC before marketing will be extended to the sale and rent of residential and non-residential buildings;
• The current 28 day period within which an EPC is to be secured using ‘reasonable efforts’ will be reduced to 7 days;
• If after that 7 day period the EPC has not been secured the relevant person will have a further 21 days in which to do so.

3. Power to Require the Production of Documents

Trading Standards Officers (TSOs) currently have the power to require the ‘relevant person’ (i.e. the seller or landlord) to produce copies of the EPC for inspection and to take copies if necessary. The power to require the production of documents will be extended to include persons acting on behalf of the seller or landlord – e.g. estate agents and letting agents. This means, for example, that TSOs will be authorised to require estate agents to produce evidence showing that an EPC has been commissioned where they are marketing a building without one.

4. Clarifying when an EPC is required

This technical amendment to Regulation 5 is intended to remove the erroneous belief that the provision of the EPC can be delayed until shortly before the parties enter into a contract for sale or rent. This will be achieved by deleting the words “before entering into a contract to sell or rent the building or, if sooner” in Regulation 5(2)(b) of the EPB Regulations. 

5. Consequential changes

A number of consequential changes will be made to enable TSOs to enforce the new duties.

6. EPC Information in Written Particulars

Currently, for residential sales only, the relevant person or his agent is under a duty to either attach the EPC to written particulars or include the asset rating on those particulars.  The amendments will require the EPC to be attached to written particulars in relation to buildings sold or rented out. The option to include the asset rating will no longer apply.

The existing definition of ‘written particulars’ will be expanded to ensure that particulars produced for rented out buildings and commercial properties are captured by the new requirements. 

As an exception to this requirement, provision is made to allow the person subject to the duty to provide the written particulars to omit the address of the building from a copy of the EPC where the address has been omitted from those particulars.

7. Commencement

We had aimed to bring most of these proposed changes into force on 1 July, with the exception of the change described in paragraph 6 which would have taken effect in relation to properties marketed after 1st October 2011.
It has not been possible to introduce changes on 1 July, however, and it is now our intention to bring the changes into force as soon as possible.

It takes data each month from over 3,000 lettings agents across the UK and provides tenant demographics plus commentary – including, for example, that tenants are getting older and are 10 per cent more likely to be male than female.

The new index shows that in May, rents in the UK decreased slightly, by just £1, when compared with April, to stand at an average of £747. Large regional valuations included a rise in the West Midlands and a drop in the North-West. While rents continued to rise in London, their rate of growth slowed to just 0.42%.

The index also found that there was a month-on-month growth in the percentage of tenants who were previously owner occupiers. According to Homelet, 16% of private tenants were previously owners, compared with 39% who were living with family and 49% who are moving from previous rental accommodation.

The index has been months in the preparation, so that it is able to present both monthly and annual comparisons.

Homelet plans to expand the index on feedback from customers. Additions could include data about tenants with county court judgments, the length of tenancies, and tenant income.