Asking prices dip at end of 2014

Asking prices for residential properties in the UK suffered the largest monthly drop on record in December, as the market continued to cool, according to Rightmove.

The property website reported that 2014 has ended with the average asking price for a home in Britain falling by almost £9,000, leaving prices up 7 per cent during 2014.

But whilst a near £9,000 drop is the biggest ever reduction in the price of newly marketed property compared to the month before and a sign of a market continuing to cool, Miles Shipside (left), Rightmove Director and housing market analyst, pointed out that “a fall is not unexpected in December”.

He commented: “Though sellers are fewer in number at this time of year, those that do come to market are often keener to sell so price lower in a bid to stand out. The overall picture for the year is still one of a much recovered property market, with sellers and their estate agents confident enough to be putting property on the market at a higher price on average than a year ago.”

Despite the sharp fall in December, Rightmove project that asking prices for homes on sale in Britain are likely to rise by between 4 and 5 per cent next year, led by gains in the South East as the London ripple effect continues and stock shortages remain acute.

“In spite of generally positive market conditions, some of the measures designed to restrain and control buyer demand have also curtailed the supply side by damaging the desire and ability of homeowners to place their property up for sale,” added Shipside. “Elections also add a further element of uncertainty that may deter some from making a major financial decision to trade up or down, so the likelihood is that good quality property will be in short supply in higher-demand locations, leading to higher prices where buyers still remain ready, willing and able to proceed.”

With the average number of properties for sale per estate agency branch at an historical low for this time of year, “there is still some scope for price growth” according to Shipside, but he insists that “sellers and agents will have to work harder to achieve a sale next year”.

Rightmove’s findings are supported by the latest Home.co.uk Asking Price Index which also shows that asking prices fell in December in line with seasonal expectations.

The mix-adjusted average asking price for England and Wales rose 7.6% during 2014, according to the Home.co.uk Asking Price Index led by gains in London and the south of England.

Looking ahead, Home.co.uk forecast that 2015 will be a more consistent year for UK property prices than 2014.

Source: Property Market

Evictions reach record high

The number of tenants being evicted from their home has reached a record high. 

Figures released by the Ministry of Justice this month show 11,100 properties were repossessed between July and September this year. 

This is the highest figure reported in a quarter since records began. In the same period, 2,805 mortgage borrowers lost their home.

By the end of September, 30,000 tenant evictions had taken place in 2014, which suggests the total of 37,972 that was recorded last year will be surpassed. 

However, of the 40,859 possession claims made in the third quarter, only 5,694 were by private landlords, with the vast majority coming from the social housing sector. The Ministry of Justice said around one in five claims are expected to lead to an eviction. 

The subject of evictions remains a controversial topic and is often used as a means of criticising the rental market. However, the statistics do seem to suggest the problem is more severe in the social sector than the private rental sector.

Particularly controversial is the issue of so-called revenge evictions, in which homes are repossessed using a Section 21 notice in retaliation for a tenant requesting improvements or making a complaint. A private members will shortly be heard in Parliament that seeks to restrict the notice a landlord serves on a tenant when a complaint has been made by that tenant. 

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Retaliatory evictions - Update

In Parliament today (28 Nov 2014), there was a second reading of a private members bill to reform Section 21 notices (we serve these to give a tenant two month's notice of the ending of a tenancy) with the effect of restricting their use when a complaint has been made by a tenant. 

In addition, there were some other proposals such as recognising the recent decision in the Spencer V Taylor case for the length of notice required for a periodic tenancy. 

So what happened?

There were not enough MP's who voted for the Bill, so it will not progress any further.  Therefore for the time being, changes to a section 21 and proposals to restrict retaliatory evictions have been placed on the back burner.

Our opinion

There is some merit in preventing an inconsiderate landlord who fails to in his/her obligation to maintain or repair a property and then makes a tenant homeless when they make a fuss about the deteriation in the standard of their home. All too often, when someone has a good idea that would be welcomed by most people in the industry, others hijack the initial proposal with their own agendas resulting in a bill that is unpalatable and far too complex.

Letting red tape

Landlords often ask us: "What regulations do I have to comply with?"  So here is a summary of the most important.

As a landlord it is your responsibility to ensure your rental properties are safe and that your tenants are properly protected. Regulations surrounding private rentals can change at any time and failure to observe these rules can lead to a criminal conviction. Below is an outline of current regulations (as of June 2009):

Gas Safety
You must ensure that all gas appliances and flues are safe so as to avoid the possibility of carbon monoxide poisoning. All rental properties must have:

• A valid Gas Safety Record.
• Approved appliances and pipework - Gas Safe Register are responsible for the registration of gas engineers.
• An annual Gas Safety check - tenants must be provided with an appropriate Gas Safety record & you must keep Gas Safety records for a minimum of 2 years.

Furniture and Furnishings

• All furniture provided in a rental property must meet safety standards.
• All furniture must have a permanent label clearly showing that they are fire resistant.

Furniture manufactured from March 1989 should comply with these regulations and will generally have a label showing compliance.

Electrical Equipment Safety
All electrical equipment supplied in a rental property must be safe to use.

• Unlike gas appliances there is no legal requirement to have an annual safety check, however it is advisable to get appliances checked by a qualified electrician.
• Operating and safety instructions for all electrical equipment should be given to tenants.

Smoke Detectors

• Building Regulations stipulate that properties built after June 1992 must have mains operated smoke detectors fitted on each floor.
• Although there is no legislation requiring smoke detectors to be fitted in ordinary tenanted properties, it is generally considered the common law "duty of care" meaning that the landlord could be held liable should a fire cause injury where no smoke detectors are fitted. We therefore strongly recommend that you fit one smoke alarm on each floor.

More detailed information on these regulations can be found in the Information pages of our website.