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US home owners think it is a good time to sell

Thu, 01 Sep 2016 15:59:27 +0100

Home owners in the United States are feeling increasingly confident that now is a good time to sell a home, but renters are feeling uncertain they'll be able to afford to buy, according to the latest research.

Existing home owners have a more positive attitude toward selling than buying, an imbalance that is causing a slowdown in many markets, especially in the more expensive, urban cores, says the latest housing confidence index report from real estate firm Zillow.

However, less than 65% of home owners surveyed said now is a good time to buy, a number that's been declining for the past two years and just 38% of renters surveyed said now is a good time to buy a home.

The research also shows that about 50% of renters in San Francisco and New York expressed a lack of confidence in their ability to afford a home in the future. Almost half of the renters surveyed in Seattle, San Jose and Boston had similar feelings.

Meanwhile, confidence among home owners is on the rise, with the most confident home owners concentrated in Western and Southwestern cities. Out of every 10 home owners surveyed, seven said now is a good time to sell a home.

Home values are at or past peak levels in roughly a quarter of US markets, signalling a recovery since the housing bubble bust, but a growing divide between renter and home owner sentiments persists, highlighting two very different trends in the housing market right now.

‘The overall health of the housing market looks great at first glance, but dig a bit deeper you'll find inequality between renters and home owners. Even though the majority of homeowners are confident and believe now is a good time to sell, they're holding off because they expect home values to continue to appreciate and want to ride the wave,’ said Zillow chief economist Svenja Gudell.

‘They also don't want to turn around and become buyers in a competitive market. On the flip side, renters aren't nearly as confident as home owners and they're discouraged by the shrinking number of homes for sale and rapidly rising prices. As housing gets more and more expensive, these trends are not sustainable in the long run, especially once mortgage rates start to rise,’ she added.

Housing confidence among home owners continues to exceed that of renters in each of the metro areas surveyed. This gap is smallest in Miami and the largest in Seattle, which has the highest year on year rent appreciation of the 35 largest US metros and rapidly rising home values, up 11% over the past year.

Terry Loebs, the founder of Pulsenomics LLC, pointed out that during the past two years, housing confidence has increased in all but two of the metro areas that the firm studies.

‘Rising home equity levels, healthy housing market expectations among millennials, and resilient homeownership aspirations among minority groups have all been factors in the robust readings of overall US...

Leasehold sales process needs reform in UK, say conveyancers

Thu, 01 Sep 2016 14:56:15 +0100

The main trade body for the conveyancing industry in the UK has announced that it will continue unabated with its campaign to reform and amend the leasehold transaction process, despite recent developments.

The Conveyancing Association announced a number of recommendations it wished to see applied in order to cut back on what it sees as significant delays and overcharging taking place in the leasehold process.

However, also last month, Baroness Hayter raised a written question in the House of Lords regarding these issues in the leasehold process and the response from the Department of Communities and Local Government (DCLG) suggested that the Government department do not think there’s a problem.

However, according to Beth Rudolf, director of delivery at the CA, Lord Bourne’s response to the question as to whether the Government plan to require landlords of leasehold properties to belong to a redress scheme indicated the lack of appreciation by the DCLG as to the loophole within the Commonhold and Leasehold Reform Act 2002.

The response from Lord Bourne said that the Government is not persuaded more burdensome approaches to regulate landlords would be effective. Leaseholders in dispute with their landlord can apply to the First Tier Tribunal (Property Chamber) in England and the Leasehold Valuation Tribunal in Wales to seek redress.

However, Rudolf pointed out that the First Tier Tribunal is only granted jurisdiction in the Commonhold and Leasehold Reform Act 2002 over administration fees in respect of approvals or consents and therefore there is no form of redress for items such as Notice of Assignment, Deed of Covenants (unrelated to an application for consent), Certificate of Compliance or Transfer of Shares.

This has resulted in up to 75% of leasehold home movers being charged unreasonable fees, according to a recent survey by the CA.

‘Recent cases in the Upper Tribunal which sets precedent confirms that the Commonhold & Leasehold Reform Act wording is very restrictive. There are no provisions for redress in respect of delay in the Leasehold sales process,’ said Rudolf.

‘Over 30% of home movers according to our data have to wait over 30 days to obtain the information they need to sell their home and that is after they have paid the Lease Administrator’s, often exorbitant, fees. It’s no wonder leasehold transactions take on average four weeks longer to exchange and that has a big impact on the economy with 260,000 leasehold transactions annually,’ she added.

According to Paula Higgins, chief executive officer of the Home Owners Alliance, said it has seen first hand the difficulties of leasehold conveyancing from the consumer's perspective.

‘Buying and selling your home is very stressful for consumers and this stress is magnified when it is a leasehold property. Perspective buyers and sellers are held to ransom by some freeholders and their managing agents having to pay extortionate fees in order not to lose...

Rental deposits worth over £500,000 not claimed in Scotland

Thu, 01 Sep 2016 10:21:27 +0100

Thousands of private sector tenants in Scotland have failed to collect their deposit when they moved out of their home, it has been discovered.

Staff at tenancy deposit scheme SafeDeposits Scotland have calculated that money due to tenants amounts to more than £500,000.

Tenancy deposit schemes were introduced in July 2012 and since then more than 156,000 deposits have been repaid by SafeDeposits Scotland. While millions of pounds have been returned to tenants at the end of their leases, a small proportion of people don’t claim back the money that is due to them. It is those people who SafeDeposits Scotland are trying to track down.

A large proportion of missing tenants are students, according to the firm. With the start of the academic year, September is the busiest time for deposits being paid both in and out. The busiest day sees almost 90% more deposits being paid in than the average day through the year.

Just over 2,000 tenants have ended their leases without claiming back the money due them, totalling more than £500,000. The clock is ticking and if deposits aren’t claimed back within six years, unclaimed funds go to the Crown, a process which will start in 2018.

SafeDeposits Scotland’s finance team do everything they can to reunite former tenants with their money including sending letters to forwarding addresses, emailing, calling and texting. While successful in the majority of cases, some people are more elusive. Money cannot be paid directly back into accounts as this isn’t information that tenancy deposit schemes have been given.

The Scottish Government introduced the tenancy deposit scheme in 2012 to make deposits safe for tenants. When landlords and agents take a deposit from a tenant they’re required by law to lodge the money with one of three approved schemes who ring fence the money until the end of the lease.

SafeDeposits Scotland is the largest of these three approved schemes in the UK, holds an estimated 60% of all private rental deposits and the only scheme to be based in Scotland.

‘It’s extremely surprising that people can leave their rented property and forget to ask for their deposit back. The vast majority of tenants remember to claim their money but there’s a small minority who don’t,’ said Jennifer Paice, chief executive of SafeDeposits Scotland.

‘Our finance team do a great job in tracking most of them down but there are a significant number they can’t get hold of. We don’t think it’s right that people lose out on what’s due to them so we do everything we can to try and get people the money they are owed,’ she added.

Research suggests more people in Europe are finding home prices too high

Thu, 01 Sep 2016 09:51:45 +0100

Confidence in European housing market has hit a plateau at a time when unaffordable prices are forcing people to live with parents or put off having children, according to new research.

Overall some 56% of people in Europe expect house prices to rise in the next 12 months and as a result 33% are delaying important life decisions, the homes and mortgages 2016 report from ING suggests.

But a breakdown of the survey data covering 15 countries shows that there are vast shifts in outlook across Europe and the most dramatic shift has been in the UK, where expectations of rising house prices fell by 13% prior to the referendum on its future in the European Union.

Following the Brexit vote the question was repeated and the number who expect house prices to fall grew 16%. It means that 46% of people in the UK now believe house prices will rise in the next year, the lowest proportion since the first survey was conducted in 2012.

Falling interest rates are one factor that can typically influence house prices. Across Europe, Luxembourg at 28% and the UK at 26% have the largest share of people who report that low interest rates have pushed up house prices where they live.

However, in all but two of the countries included in the study, when asked how the fall in rates has affected house prices where they live, some 39% of respondents say they ‘do not know’, indicating that few actually understand the effect on house prices.

Unaffordable housing is having an impact across Europe. Some 60% of people find that house prices where they live are expensive and 33% are putting their lives on hold as a result. Those affected admit to putting the brakes on their futures, with 29% being forced to live with others, 22% saying they feel trapped in their current jobs and 16% delaying having children.

High house prices are resulting in 24% of people finding it difficult to pay their mortgage each month, reaching highs of 41% in Poland and 40% in Romania.

As a coping mechanism, some 46% are compromising on their housing choices whether they rent or own their home. Of those who have compromised and are unhappy with their situation 39% moved to areas they do not like as much and 39% settled for a smaller home while 37% of those who are unhappy with their housing today say they opted for houses in poor condition.

Despite these challenges, 46% want to buy a house in the near future and are willing to make the necessary sacrifices in order to call their place their own. Some 41% of people in Europe admit to curtailing spending a lot in order to buy, although this proportion rises to a survey high of 60% in Turkey.

The difficulties facing buyers have also led to a reliance on the...