Author: Antony Antoniou

Antony Antoniou MAPD, has been involved in property for over two decades, in developing, sales and rental. With an inherent love of property and a comprehensive knowledge of Northampton and the surrounding area, he is well placed to deal with all aspects of the sales process, from sourcing, valuing, marketing and sales progression.
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Housing supply slumps 40% since January as agents woo sellers

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Housing supply slumps 40% since January as agents woo sellers

Propertymark says the supply of homes on the market has dwindled almost continuously since the start of the year, with 40 per cent fewer homes now than in January.The average estate agency branch has 23 properties available for sale – but typically will have no fewer than 19 times that number of prospective buyers on their books.

Nathan Emerson, Propertymark chief executive, says: “Sellers have seen the headlines about the huge demand and are nervous about joining the market and selling quickly with nowhere to go.

“Firstly, if you are serious about buying in the current market it’s all about being in a position to proceed. Very few people can buy without selling, so having a buyer waiting gives you an edge over those you may be competing with.

“If you wait to find a property before putting your house on the market, the likelihood is the property will already have been sold by the time you secure an offer.

“It’s also important to remember that the average time being taken for a sale is around 16 weeks to exchange – that’s four months and the likelihood of not finding an onward property in that time is very small.”

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Capital Gains Tax threat returns – property “disposals” warning

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Capital Gains Tax threat returns - property “disposals” warning

A leading tax expert is advising investors to “plan your disposals” after new Capital Gains Tax figures have raised speculation of an increase in the near future.Figures from HM Treasury released yesterday show that its CGT receipts hit £9.8 billion in the 2019/20 tax year, up four-fold from the £2.5 billion achieved a decade ago.

Now a tax specialist – Shaun Moore, tax and financial planning expert at Quilter – warns: “This is likely to just be the start of record years for the amount brought in by CGT and preliminary data from the Office for National Statistics is already showing this will be the case.”

At the most recent budget the Chancellor froze the annual CGT allowance at £12,300 until 2026 at the earliest and Moore says there is no guarantee the tax rate will stay at its current level as the government scrambles to find revenues where it can.

“Clearly with asset prices rising and frozen or decreasing allowances, more people will ultimately be brought into scope to pay CGT, and as such it is a good idea to plan your disposals thoroughly and ensure they are done in the most tax-effective way” he adds.

And he cautions: “The amount paid in CGT dwarfs what is brought in by inheritance tax and as such will be considered a more attractive tax to raise for the Treasury. The fact that 41 per cent of CGT came from those who made gains of £5m or more suggests an increase in rates is far more likely than any other policy tweak, particularly given the government’s triple tax promise not to raise VAT, income tax and national insurance puts the Treasury in somewhat of a bind.”

Moore says that aigning CGT to income tax rates – which was proposed last year by a review into the issue, commissioned by Chancellor Rishi Sunak himself – could bring in 40 or 45 per cent tax on larger capital gains.

“Aligning to income tax rates will mean everyone is likely to face at least a 100 per cent increase in the rate payable, but this is higher for the wealthiest with a 125 per cent increase in rates paid for 45 per cent taxpayers” Moore continues.

“Planning now to beat any kind of reform that is mooted for the forthcoming budget in the Autumn will be the most effective strategy for people given the relatively generous rates applicable to gains in 21/22.”

There is expected to be an Autumn Statement outlining some short term fiscal changes towards the end of this year, with a full annual Budget in the early spring of 2022.

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House prices see first fall since January as stamp duty holiday ends

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The average house price dipped for the first time since January, falling by 0.5% in June, according to the latest Halifax house price index.

As a result, annual house price inflation eased to 8.8%, compared to 9.6% in May.

Despite this, average prices are still more than £21,000 higher than this time last year, following a “broadly unprecedented period of gains”, according to the research.

Additionally, whilst the two Midlands regions and Greater London saw slightly slower annual price gains compared to May, all the other regions and nations continued to see a strengthening of inflation.

Wales (12.0%) continues to lead the way on annual house price growth, registering its strongest performance since April 2005, whilst Northern Ireland (11.5%), the North West (11.5%), Yorkshire and Humberside (10.9%) and Scotland (10.4%) all registered double-digit gains.

For Northern Ireland and Scotland, the annual price rises were the highest recorded since late 2007, while for the North West and Yorkshire, inflation was the strongest since early 2005.

At the other end of the scale, the South of England continues to lag somewhat behind the rest of the country, with Eastern England and the South East recording inflation rates of around 7%.

Greater London saw house price inflation of just 2.9% year-on-year, though Halifax says “there are several unique factors likely to be weighing on the capital’s property market”.

Halifax’s managing director, Russell Galley, said: “With the stamp duty holiday now being phased out, it was predicted the market might start to lose some steam entering the latter half of the year, and it’s unlikely that those with mortgages approved in the early months of summer expected to benefit from the maximum tax break, given the time needed to complete transactions.

“That said, with the tapered approach, those purchasing at the current average price of £260,358 would still only pay about £500 in stamp duty at today’s rates, increasing to around £3,000 when things return to normal from the start of October.

“Government support measures over the last year have helped to boost demand, particularly amongst buyers searching for larger family homes at the upper end of the market. Indeed, the average price of a detached home has risen faster than any other property type over the past 12 months, up by more than 10% or almost £47,000 in cash terms. At a cost of over half a million pounds, they are now £200,000 more expensive than the typical semi-detached house.

“That power of homemovers to drive the market, as people look to find properties with more space, spurred on by increased time spent at home during the pandemic, won’t fade entirely as the economy recovers. Coupled with buyers chasing the relatively small number of available properties, and continued low borrowing rates, it’s a trend which can sustain high average prices for some time to come.

“However, we would still expect annual growth to have slowed somewhat more by the end of the year, with unemployment expected to edge higher as job support measures unwind, and the peak of buyer demand now likely to have passed.”

Tom Bill, head of UK residential research at Knight Frank, commented: “The figures indicate how the second half of the year is unlikely to bear much resemblance to the first half for the UK housing market. We expect house price growth to narrow to mid-single digits as tax breaks wind down and supply picks up. Comparisons with the global financial crisis are misleading given how low interest rates remain and the fact the mortgage market acts as more of a brake and less of a lubricant for housing market activity than it did in 2007.

“House prices were driven higher by a supply squeeze as the UK came out of the pandemic, an effect seen in other sectors of the economy. If you add in a stamp duty holiday and the fact pent-up demand had been building for five years against the uncertain backdrop of Brexit, the result was a burst of house price inflation. In what may be a sign of things to come in the UK, housing market activity is now beginning to moderate in North American markets as the distortive effects of the pandemic recede.”

Sundeep Patel, director of sales at specialist lender Together, added: “Today’s figures reflect the first signs of stamp duty winding up, with house prices falling by -0.5% in June, the first monthly dip since January. Annual growth also softened at +8.8% compared to May’s +9.6%.

“While the average house in the UK costs £260,358 – and prices are still over £21,000 more than they were this time last year – this dip has largely been anticipated given activity is expected to slow further after the summer. Indeed, it’s likely we’ll see figures dropping from the top end down to lower single digits by the end of the year. With the hotly anticipated Freedom Day back in our sights, a slight return to normality could see more sellers list their homes, offering broader supply in what’s been an overpopulated market.”

“Specialist lenders will be paying close attention to the shape of the market over the next few months. There are likely to be opportunities created from the backlog in demand from keen buyers needing better flexibility from the highstreet in order to quickly snap up properties.”

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Brexit to increase anti-money laundering red tape, agents expect

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Brexit to increase anti-money laundering red tape, agents expect

The industry is braced for more anti-money laundering compliance processes according to a risk consultancy.LexisNexis Risk Solutions claims its survey shows that nearly four fifths of compliance professionals across the UK’s regulated industries – including estate agency – predict more anti-money laundering regulation is on the way as a result of Brexit.

Its study of over 875 compliance professionals show overwhelming support (81 per cent) for the UK’s recent opt out of the forthcoming EU 6th Anti-Money Laundering Directive – a decision taken because many of its requirements are already covered by existing UK law.

However, firms are taking it as a signal that the UK is seeking to diverge further from EU AML regulations, and create its own possibly more extensive approach.

Nina Kerkez, director of UK&I consulting at LexisNexis Risk Solutions, says: “As a result of Brexit, we have seen the regulator increase powers to implement more effective regulation which is well suited to the changing needs of the UK, and it’s encouraging to see support from the regulated industries as we diverge from the EU’s approach to AML regulations.

“We are likely to see increased regulation on the horizon as the regulator flexes its new-found muscles and this autonomy will allow the regulator to tailor controls to the UK’s specific needs when it comes to tackling money laundering.

“However, they cannot ignore recent revelations that professionals are already struggling to keep up with what is expected of them when it comes to AML regulatory compliance.”

That was the final EU directive on this subject that the UK signed up to.

Kerkez adds: “This combination of the increasing regulatory burden, a heightened threat of regulator action, and a majority of firms struggling with implementing effective AML controls is a perfect storm of issues that could threaten to further hamper efforts to prevent money laundering to pervade through the UK financial system.”

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Grand Designs water tower sold: Grade II-listed London home that cost £2 million to renovate sells after price reduction

Grand Design fans may recognise the water tower home which cost its former owners nearly £2 million to transform.

The Grand Designs water tower in Kennington, that once supplied the workhouse that Charlie Chaplin lived in as a child, has finally been sold after the price was slashed from £3.6 million to £2.75 million — Homes and Property can exclusively reveal.

The unique 10-storey property, which was rescued from dereliction just over a decade ago and underwent a £2 million transformation into 4,500sq ft home, has sold this time around in less than two months and has just made the stamp duty holiday deadline.

The Chancellor’s Covid tax break saves buyers £15,000 and ends on 30 June.

Dating back 150 years, the abandoned structure was bought in 2010 by a savvy real estate developer and his partner and converted on a nail-biting episode on Grand Designs.

The new owner is considering adding a hot tub to the unusual property’s glamorous roof terrace / Foxtons
Leigh Osborne and his partner Graham Voce spotted the tower from their rented apartment on the 36th floor of the Strata building, just a few hundred yards away.

They bought it for just £380,000 and spent close to £2 million in transforming the abandoned Grade II-listed building into a five-bedroom, four-bathroom home. They risked everything to complete the project, which cost far more than they had budgeted for, and even put some costs on Osborne’s grandmother’s credit card.

The home was first put on the market by Osborne and Voce in 2018 where it sat for six months before the price was lowered once and withdrawn. It was then launched again in April at the lower price as lockdown restrictions began to ease. Contracts were exchanged this week.

The tower was built in 1867 to provide a 30,000-gallon water supply for the nearby Lambeth Workhouse where more than 800 destitute families were once housed and where seven-year-old Charlie Chaplin lived with his impoverished mother.

The renovated tower’s top room is used as a reception area and covers 24 sq ft with panoramic views / Foxtons
The refurbishment included the restoration of the tower and the addition of a two-level glass cube on top giving views across central and south London with the largest sliding doors in Europe installed. The breath-taking top room is used as a reception area and covers 24 sq ft with panoramic views.

“I have always been fascinated by castles and this is the closest I’ll get to owning one in central London. I plan to put a dining table in the top observation room and may look into a hot tub if the roof terrace allows,” says Hamer.

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Property solicitor warns of Knotweed derailing house sales

Property solicitor warns of Knotweed derailing house sales

A company supplying data to conveyancers and other property professionals warns that Japanese Knotweed is a bigger headache than usual this summer.

A wet and frosty spring, followed by dry weather and sunshine, has provided it with the perfect growing conditions, according to solicitor Kate Bould, managing director of Index West Midlands.

“Japanese Knotweed is estimated to affect up to 1.45m homes across the UK, which equates to approximately five per cent of residential properties. It can devalue a house by between five and 15 percent, and in some extreme  cases, it has even almost completely devalued properties” she claims.

“Sellers and buyers must realise there is a distinct possibility they will face either a current infestation of the plant, or evidence of it at a property in the past, and that this could halt or totally derail a property sale.

“Home sellers have a legal obligation to declare Japanese Knotweed to buyers. The TA6 Property Information Form used to inform buyers of any negative issues affecting the home, includes a specific question pertaining to Japanese Knotweed.

“Getting a mortgage on a property with or which has had Japanese Knotweed is not straight forward, and in some cases impossible. Most home insurance policies will exclude Japanese Knotweed, and won’t cover owners for damage to their or neighbouring properties, nor the cost of damage to remove or eradicate the plant” she says.

Classified as a ‘controlled waste’ under the Environmental Protection Act 1990, Japanese Knotweed grows up to 20cm a day.

If left unchecked, its deep, wide-ranging roots can tunnel through and destroy foundations, drainage systems, and walls, putting properties at risk of damage as it can grow through cracks in concrete, brickwork, patios, asphalt, cavity walls, gutters, and drains, eventually forcing walls to break apart.

Removal and disposal of it has to be handled by a qualified expert, which depending on the size of the infestation, will cost anywhere between £3,000 and £10,000.

Last week RICS issued advice for the assessment of Japanese Knotweed in UK properties, to help affected homeowners and lenders.

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Stamp Duty frenzy proves need to automate sales process – claim

Stamp Duty frenzy proves need to automate sales process - claim

The frenzy of activity in the housing market thanks to the stamp duty holiday shows the need for automated processes to speed sales.

That’s the view of property software company Openview – Powered by VTUK.

It says the holiday, coming alongside the pandemic and the government’s 95 per cent mortgage scheme, have all contributed to the increased housing demand across the UK.

Automating transactions, sales progression and tenant maintenance reporting could allow more time to speak to prospects, network with landlords or carry out viewings, Openview says.

By automating these processes in a way that tailors directly to the agency, automation could act as an assistant which supports everyone in the property industry.

“In house sales, quick speed and accuracy are fundamental, and if these are not achieved, they can cause backlogs” according to Peter Grant, chairman and chief executive at Openview.

“Transactions fall through if deadlines are not met and when errors are made. The current housing market continues to demonstrate that automated processes must be invested in to ensure efficiency all the time.”

Grant adds: “Automation has the potential to make these processes simpler, reduce paperwork, decrease the chances of error and avoid potential delays. Making the process quicker can help agents manage industry demands better on a single online platform. “

He says automation helps effectiveness across four key areas: business continuity, retaining clients, winning clients, and increasing profit with each transaction.

“By analysing the areas where speed and accuracy need improvement, you can streamline these tasks using a customisable automation system” Grant explains.

“Knowing the areas of improvement in your organisation will help select the right features that will benefit your agency and clients.”

He says there is peace of mind in knowing that the documentation and data that has been inputted is on one single, secure system.

“Also, there is an opportunity to focus on other important areas of the business that require attention,” he continues. “Time can be maximised when automation is at the forefront of the company’s structure. Maximising time means enabling growth, reliability, and stability at any chosen hour of the day.”

And he concludes: “Fastrt property transactions for estate agents can be facilitated with e-signatures and automated communication, as opposed to being completed manually.”

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Interest rate worries played down by Bank of England

Interest rate worries played down by Bank of England

The Bank of England has played down worries that interest rates may have to rise as a result of growing levels of inflation.

The BoE’s monetary policy committee yesterday voted 9-0 to keep interest rates steady at their current historic low of 0.1 per cent – the rate they have been at since the start of the pandemic in March 2020.

There had been fears the Bank may be nervous about consumer price inflation hitting a two year high of 2.1 per cent in the year to May – slightly above the Bank’s own 2.0 per cent target.

But the monetary policy committee believes the high inflation will be short lived.

“Financial market measures of inflation expectations suggest that the near-term strength in inflation is expected to be transitory,” the Bank said in a statement.

“Output in a number of sectors is now around pre-Covid levels, although it remains materially below in others. The housing market remains strong, and indicators of consumer confidence have increased” it continued.

“The Committee’s central expectation is that the economy will experience a temporary period of strong GDP growth and above-target CPI inflation, after which growth and inflation will fall back” it added.

“There are two-sided risks around this central path, and it is possible that near-term upward pressure on prices could prove somewhat larger than expected.

“Taking together the evidence from financial market measures and surveys of households, businesses and professional forecasters, the Committee judges that UK inflation expectations remain well anchored.”

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Stamp Duty Removals Crisis as buyers try to beat deadline

Stamp Duty Removals Crisis as buyers try to beat deadline

A rush to beat next week’s stamp duty holiday deadline has caused a 200 per cent increase in demand for removal firms, it has been claimed.

A survey by an online comparison website for removal companies says that more than 500,000 people have moved in 2021 so far, across rental and sales sectors, with the average distance travelled between the old home and the new home 54 per cent from an average of 32 miles to 50 miles a home move.

The survey also appears to suggest a significant number of people moving out from the cities to towns or rural areas.

Of some 67,000 people have moved out of cities to towns or rural areas and just 30,000 ‘outsiders’ have moved in. This is despite companies and employees preparing for a return to office in July.

Between 2019 and this month, there has been a 20 per cent decrease in people moving from rural areas to cities.

“In the past year as offices closed and more people worked from home or were placed on furlough we witnessed a strong current of people moving out from cities into rural areas or towns, whether permanently or temporarily” says Angus Elphinstone, chief executive of AnyVan, the firm behind the survey.

“Now that offices are back open employers and employees face a conundrum as to whether they help the working from home trend continue. At the moment our data shows us that we haven’t seen the trend invert. In fact, our data shows there has been a significant decrease in people moving from rural to cities at the start of 2021 than in 2019.

“Many companies are phasing a return to office and there are many employees that either want to go back in full-time or with some working from home involved.

“This means that we may well see more people returning to the cities, but it will be a gradual move and one we may not see start to gather pace until the summer when high streets are fully open and the vaccine programme has given more confidence to people living their lives in more crowded cities.”

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Dramatic slump in instructions for Purplebricks, according to data

Dramatic slump in instructions for Purplebricks, according to data

There’s been a dramatic slump in instructions for online agencies, particularly Purplebricks, according to data produced by one online firm itself.

99Home has drawn up as list of online agencies and their number of listings on the major portals on February 1 and June 1 this year.

99Home claims the slump in online agency stock is typical of the slump across the housing market; it suggests that there are 25 per cent fewer homes on the market now than six months ago, and that this has hit the inventory of all agencies of all types.

Even so, the drop in instructions for online agencies appears particularly dramatic for Purplebricks.

The headline figures produced by 99Home appear to show Purplebricks as the biggest loser, with 12,008 instructions on February 1 falling to just 7,984 on June 1 –  that’s a collapse in instructions of just over one third.

Falls for Yopa, EweMove, Express Estate Agency, Doorsteps, Signature, Sellmyhome and 99Home itself are smaller but nonetheless significant – typically around 20 per cent. You can see the full table produced by 99Homes at the bottom of this story.

The one exception appears to be Strike, formerly HouseSimple, which has seen its instructions rise around 10 per cent over the same period, from 5,226 on February 1 to 5,756 on June 1.

99Home’s data also shows that across listings from  some 80 agencies, traditional and online, the market share of online firms has dropped from 13 per cent on February 1 to 12 per cent on June 1.

Purplebricks has been asked for its response to these figures, but says it cannot comment this close to the release of its next trading statement.

Last week the Swiss investment bank UBS advised investors to sell their Purplebricks shares as the market share for the controversial agency appears to have fallen sharply.

UBS cut its price target for Purplebricks shares to 78p from 85p, with the bank suggesting possible reasons for the falling market share of the controversial online agency.

The bank’s note to investors said: “We are currently seeing strong house price growth in the UK, which may have led to more consumers choosing to use a traditional agency to help them maximise the selling price.

“Further, Strike may be winning some customers from Purplebricks. It is also possible Purplebricks may be holding back marketing spend ahead of the launch of its new pricing model.”

Purplebricks delivers its full year results to shareholders, and its next trading statement, on July 6.