London's new commuter suburbs

The London Evening Standard introduces the new proposed suburban developments in Old Oak Common, Cricklewood, Croydon and the Upper Lea Valley.

Part of the Outer London Commission aim to revitalise suburbs with new transport and business initiatives.

The commission will focus on large tracts of industrial land, so-called “brownfield sites” where designated housing zones, will benefit from tax breaks and relaxed planning rules. 

RICS sees increase in property sales

According to RICS, house sales are on a high.

The Royal Institute of Chartered Surveyors report homes sold per surveyor has hit a six year high, the higher volume driven by an easing of credit conditions, the Help to Buy Scheme and improved consumer confidence.

The RICS Residential Market Survey reported the average number of transactions seen by its surveyors reached 21.3.

“Growing availability of affordable mortgages has released some pent-up demand from a market that, in recent years, has seen many viable buyers unable to enter the market,” said Peter Bolton-King director at RICS. “On the face of it, this seems like good news but unless we see a marked increase in the number of homes coming up for sale we could well be looking at a price rises becoming unsustainable in some areas.”

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Council to compete with letting agents

Hackney Council are taking a radical approach to housing tenants by setting up as a letting agent.

The council’s is setting up a not-for-profit model of a letting agency, with the aim to rent out properties on behalf of landlords without charging administration fees to prospective private sector tenants. 

The council's 'letting agency service' will only accept those landlords and properties approved under the  London Landlord Accreditation Scheme.

As part of the service the council will guarantee a landlord there rent even if a property falls empty. 

A pilot for the scheme is hoped to start in April, with the scheme fully up and running by the summer.

Cllr Karen Alcock, cabinet member for property and housing policy, said: “Hackney is a place where some rents are going up considerably and what the council is trying to do is to find different levels of affordability for people. Rather than going to agencies and the property going to the highest bidder, we’re working on longer tenancies – we’re trying to create a more stable rental market for those who can’t afford to rent but earn too much to get a council house. We’re trying to help people stay in the borough in properties of a good standard.”

The council has not said how it would fund the rents on empty properties.

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The only way is up - maybe

Talk abounds of the inevitable trajectory of property prices in 2014.

As Yazz once sang, 'the only way is up, baby!"

However, let's just stop a moment and take a deep breath before we get carried away by this euphoric late eighties music track. ( remember that's the trick new Labour pulled on us before and look where that got us)

Maybe we should all take time to re-consider Yazz's bullish lyrics. Should they be hedged with  caution? Let's bring in some reality that might have been discarded along the way.

I mean despite her declaration, Yazz has hardly remained a gleaming star, the only way was clearly not up for her despite her own predictions.

So with property prices, despite the talk of a price boom, in many parts of the country, property is already clearly over-priced, as this article in the Daily Mail underlines the gap between wages and values are unrealistically stretched. The current property market is an inflated bubble fuelled on debt that might simply be unsustainable.

With average property prices rising 5.4 % a year, set against wage increases of just 0.9%, a typical home buyer needs to raise this extra £16,000 from an earnings rise of a meagre £261. This clearly isn't adding up.

"The only way is up, maybe!" sounds a far more realistic lyric to sing along to.

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Gambling the rent is paid

Judging by the television advert breaks, a lot of money is being lost to online gambling sites and a fortune in interest is being paid out to payday loan sharks. What other explanation can there be for the sequence from one to the other during endless TV advert breaks. 

The frequency of these TV adverts points to a lot of folk in financial trouble. 

Shelter has recently said they believe 70 per cent of families are struggling with rent.

So ask yourself the question, if you were someone in debt, who would you pay first?

Not paying off a payday loan would be prohibitively expensive. We've all read the 4000 percent interest footnotes in the small print at the bottom of the TV screen. You'd clearly want to pay them first.

A bank overdraft or credit card debt are  hefty on their interest and charges, plus not paying them would annihilate your future credit rating. So it would be shrewd to pay them off next.

Food - well you've got to eat.

So when would you pay the rent? Would you rob Peter to pay Paul? Or would you let Paul the landlord go without his rent? I mean, he seems a nice chap, what he going to do? - pull a face and threaten to evict you - he's too nice a guy.

Maybe you could offer him fifty quid as a part payment on the rent, to see if that will keep him happy for a week or two, or maybe you could try and win the full rent by a few spins of a virtual roulette wheel over on slippyslots.com.

Stay lucky!

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Debate on the shift from letting to benefit

The trend for landlords to shift away from renting to tenants on benefit has featured in various articles over the weekend, sparked by news that famed Kent landlord, Fergus Wilson has sent out two hundred notices to all of his existing tenants claiming benefit.

The Guardian warn that the situation might worsen with the introduction of Universal Credit, whilst the Telegraph makes a case that benefit tenants are still the most profitable sector of tenants.

The situation is not a straight forward one - profit and risk are intertwined.

Although yields remain relatively high for the benefit market, the risks still seem higher than other sector. With direct payments being ended to landlords, many of us are seeing an increase in rent defaults by those tenants on benefit. In another piece in the Telegraph, Fergus Wilson relayed how his benefit tenants now owed him £800,000 in rent.

Landlords will have their own opinion, based on their own experiences, but with the insecurity of an AST the rental market will be left to choose it's own balance.

It will be down to landlords to decide who they want to let to.

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