Thursday, January 12, 2017

South Ockendon Property Values increase by 2.85% ... good or bad news?

 “How's the South Ockendon housing market doing?” asked an upbeat South Ockendon landlord last week.  “Quite strange”, I replied. Our landlord was perplexed! Let me explain...

Even the Brexit vote has not hindered South Ockendon’s steady rise in property value, as South Ockendon property values went up 2.85% last month alone, leaving South Ockendon values 20.62% higher than a year ago. An increase in demand from buyers and an uninspiring level of supply (i.e. the number of properties on the market) has driven up the value of the South Ockendon’s housing.

...And that is where the issue is. With Brexit, the coalition of the 2010-15, a double-dip recession and post credit crunch fallout – I was perplexed that the South Ockendon property market (and values) has remained so strong, still 29.6% higher than 20 months ago. That is until you start to look into the real reasons why we find ourselves in such a great place.

The South Ockendon (and the UK) housing market is built on the foundations of basic economic rules that any GCSE Economics student should understand. However, at a time when, as a country, we seem eager to uncouple ourselves from all manner of proven facts, anything is up for grabs.

Even the wary RICS said throughout the UK, most of its Chartered Surveyors anticipated house prices to increase in the next six months, which seems contradictory given economic cautions from Mr Hammond and HM Treasury. Even though inflation will rise to around 2% to 3% in 2017 and perhaps a little more in 2018 because of Sterling’s devaluation, together with a high probability of a decelerating GDP and a slight rise in unemployment, how can the RICS and most of my landlords be so confident about the value of our homes?

Well, look at from where we are starting. Nationally, a base of low unemployment, low inflation and preposterously low interest rates, while in South Ockendon, the local economy is doing quite well for itself. Confidence also plays a part. Confidence can supersede basic economic facts for a short time at least, which is why actual property market changes tend to be more exaggerated, as confidence can turn both positive and negative very quickly. The fact is, there is a long-term relationship between property values, wages and unemployment. For example, looking at the graph below, you can quite clearly see the ratio of property values to earnings is nowhere near as high as it reached in 2008 and currently is in the middle of the range for the last 30 years. As a country, we are in a good place.

By April 2017, Article 50 will be invoked. This will bring additional political tomfooleries and economic ups and downs. With both purchasers and vendors predisposed by the 24-hour news cycle, which let’s face it, gets more haphazard by the day, it is likely to prove a challenging couple of years … and yes, South Ockendon property values might drop slightly in 2017, but based on what we know of the UK plc now, the UK and South Ockendon property values are not projected to move that much over 2017 or 2018.  Going into the next two years, we are in much better financial shape as a country compared to the last two crashes of 1987 and 2008.


But, on the other side of the coin, what we also know is that we don't know much about the form of our economic future or indeed many other facets of our lives. Confidence will continue to be the key player in the South Ockendon housing market for a while longer - yet this may spur some much needed second-hand market activity? Now, where is my crystal ball?

Regards

Paul

Ps on a three day seminar in London at the moment - didn't realize how packed the trains could be at 6.30 in the morning

Wednesday, January 4, 2017

Average Rent Paid by Tenants in South Ockendon rise to £1,013 per month


Back in the Spring, there was a surge in South Ockendon landlords buying buy to let property in South Ockendon as they tried to beat George Osborne’s new stamp duty changes which kicked in on the 1st April 2016. To give you an idea of the sort of numbers we are talking about, below are the property statistics for sales either side of the deadline in RM15.

Jan 2016 – 23 properties sold
Feb 2016 – 37 properties sold
March 2016 – 69 properties sold
April 2016 – 46 properties sold
May 2016 – 58 properties sold

Normally, the number of sales in the Spring months is very similar, irrespective of the month. However, as one can see, this year was a completely different picture as landlords moved their purchases forward to beat the stamp duty increase. You would think that even with a basic knowledge of supply and demand economics, rents would be affected in a downwards direction?

However, there appears to be no apparent effect on the levels of rent being asked in South Ockendon - and more importantly achieved - and this direction of rents is not likely to inverse any time soon, particularly as legislation planned for 2017 might reduce rental stock and push property values ever upward. The decline of buy to let mortgage interest tax relief will make some properties lossmaking, forcing landlords to pass on costs to tenants in the form of higher rents just to stay afloat. Even those who can still operate may be deterred from making further investments, reducing rental stock at a time of severe property shortage.

.. but it’s not all bad news for tenants. Whilst average rents in South Ockendon since 2005 have increased by 18.6%, inflation has been 38.5% over the same time frame, meaning South Ockendon tenants are 19.9% better off in real terms when it comes to their rent (which is a sizeable chunk of most people’s monthly household budgets)

Year
Average Rent in South Ockendon per month
2005
854
2006
878
2007
897
2008
922
2009
927
2010
914
2011
930
2012
946
2013
953
2014
962
2015
985
2016
1013


I found it particularly interesting looking at the rent rises over the last five years in South Ockendon, as it was five years ago we started to see the very early green shoots of growth of the South Ockendon economy.  As a whole, following the Credit crunch (2011), rents in South Ockendon have risen by an average of 1.9% a year – fascinating don’t you think?

The view I am trying to portray is that while renting is often portrayed as the unfavorable alternative to home ownership, many young South Ockendon professionals like renting as it gives them adaptability with their life. Rents will continue to rise which is good news for landlords as buy to let is an investment but, as can be seen from the statistics, tenants have also had a good deal with below inflation increases in rents in the past. It’s a win-win situation for everyone although on a very personal note, it’s imperative in the future that tenants are not thwarted from saving for a deposit by excessive rental hikes – there has to be a balance.


Regards

Paul

PS. If you are looking for advice or a second opinion on a buy to let property why not sent me the URL link and I will give you my impartial opinion to buy or not to buy!

Thursday, December 29, 2016

“PROPERTY INFLATION”

We recently came across this poem about investing in property, and thought you might find it interesting. Once you have read it, and only then, take a look at the date of first publication. Makes you think!  




I hesitate to make a list
Of all the countless deals I’ve missed.
Bonanzas that were in my grip
I watched through my fingers slip.
The windfalls that I should have caught
Were lost, because I over-thought.
I thought of this, I thought of that
I could have sworn I smelled a rat;
And whilst I thought things over twice
Another grabbed them at the price.

It always seems I hesitate
Then make my mind up much too late
A very cautious man am I
And that is why I never buy.

How Nassau and how Suffolk grew
New Jersey, Statten Island too
When others culled those sprawling farms
And welcomed deals with open arms
A corner here, ten acres there
Compounding values year by year
I chose to think,
And as I thought
They bought the deals I should have bought

The golden chances I had then, are lost
And will not come again
Today I cannot be enticed
For everything’s so overpriced
The deals of yesteryear are dead
The market’s soft
And so’s my head

At times a teardrop drowns my eye
For deals I had, but did not buy
And now life’s saddest words I pen
“If only I’d invested then!”

Farm and Land Realtor Magazine
October 1917 – nearly one hundred years ago!   



Regards

Paul

Wednesday, December 28, 2016

Private Renting set to grow by 300 South Ockendon households by 2025


I was having a most interesting chat the other day with a South Ockendon landlord when we were looking at a property. As I am sure you are aware, I am always happy to cast my eye over any potential buy to let purchase in South Ockendon, be that you emailing me a Rightmove link, a brochure in the post or even treading the carpet and seeing it together. I don't charge for that, and you don't even need to be a client of mine. We got talking about the South Ockendon Property Market and this landlord brought up the subject of a report he had read from the Royal Institution of Chartered Surveyors (RICS) and PricewaterhouseCoopers (PwC) that stated almost 1.8m new rental homes are needed by 2025 to keep up with current demand from tenants. He wanted to know what this meant for South Ockendon.

Well my blog reading friends, some commentators said last Winter that buy to let was about to die, what with the new stamp duty changes and how mortgage tax relief will be calculated. Others even said 500,000 rental properties would flood the market nationally in the 12 months after the new Stamp Duty rules came into force on the 1st April 2016 as landlords left the rental market. Well, all I can say is, I wish all the landlords of those half a million properties would hurry up and put them on the market – because I have plenty of other potential landlords wanting to buy them!

Back to the matter in hand.. if the RICS and PwC are indeed correct, what does this mean for South Ockendon? The fact is, as a country, we are facing a precarious rental shortage and need to get South Ockendon building in a way that benefits a cross-section of South Ockendon society, not just the fortunate few. I call on the Prime Minister to drop the higher stamp duty tax on buy to let purchases to ease the pressure on the rental market.

Of the 7,900 households in South Ockendon, currently 1,700 tenants live in 600 private rented properties. If we apportion those 1.8m households equally around the Country, that means in nine years’ time, the number of rental properties in South Ockendon needs to rise by 300 (i.e. 42.8%) .. taking the total number of rented properties in the city to 900.

That means South Ockendon landlords need to buy around 30 properties a year between now and 2025 to meet that demand – because according to my calculations, an additional 700 people will want to live in all those 'additional' South Ockendon rental properties – so why is the government penalising landlords?


Thankfully the new housing minister Gavin Barwell detached Teresa May's new administration from the Cameron/Osborne laser-like focus of just home ownership to solve our housing issues, saying "we need to build more homes for every single type of person needing a home and not focus on one single tenure". The private rented sector became a stooge under David Cameron's watch and still, with increasingly unaffordable South Ockendon house prices, the majority of new South Ockendon households will be relying on the rental sector in the future to house them. I can only say Westminster must put in place the measures that will allow the rental sector to flourish. Any restrictions on the supply of rental property will push up rents (bad news for tenants), thus side-lining those members of South Ockendon society who are already struggling. Let's hope this new Government continues to see the contribution landlords give to the country as a whole.

Thursday, December 22, 2016

Market report – December 2016


What a year it’s been! The words Brexit and Trump have caused division and confusion on a global scale and the political landscape as we enter 2017 is very different to the one we are used to.

Despite these surprises, the UK property market has remained remarkably robust, although it may be too early to tell. It’s true that rumours and uncertainty play a huge part in the confidence levels that drive the market. But maybe we have moved away from it actually being regarded as a “market”. Unlike a stock market share, a property is primarily a home and, as the population on our small island explodes, demand for homes is higher than it has ever been. However, supply is still way too low following years of new-build stagnation. Hence prices continue to rise, albeit more modestly than in previous years.

Certainly the heat is off the London market more than any other area (Prime Central London is down by 24% on last year in terms of transaction volumes) , pointing to a long overdue balancing of the regions. Or could it point to a more general slowdown in house prices? 2017 may well see higher inflation and a probable rise in interest rates. If, additionally, employment figures were to take a dip, or industrial action takes a hold, then you have a cocktail for falling demand, which would certainly put a dampener on house prices, which have overall ended the year 6.9% up on last year’s figures with the average UK house price now standing at £216,674 (2015 was 4.5% up) (Source Land Registry). Rightmove reports that although demand is 9% up on last year, and sales agreed in all areas except London are up by an average of 5.2% on last year, it is still forecasting a rise of just 2% during 2017.


Any potential difficulties could come at a time of year traditionally associated with an increase, not a decrease in activity – the spring. Our advice, this year more than ever before, would be to hit the market before the traditional rush.  There are plenty of buyers for the time being, but a dearth of stock, meaning you could not only get top dollar, but in selling during the winter, you’ll then be in pole position as a buyer yourself, with plenty of choice by the time spring comes along. It’s called strategic home-moving! In the meantime, may we wish all our customers a very happy Christmas and a prosperous New Year.

Regards

Paul

Thursday, December 15, 2016

“Plans for a Successful Sale”



Our research has shown that buyers overwhelmingly prefer floorplans on property details in addition to the usual description and written dimensions. There are several good reasons behind this preference, which is why we always feature floorplans on our particulars: 

Firstly, where several properties are competing for a buyer’s attention, the particulars that include a floorplan always make an immediate impression. The layout of a property is a major consideration when choosing a new home, and cannot adequately be described by words and room sizes alone. It is the relationship between the rooms in a property that can make the difference between a comfortable and attractive home and a purely functional one. This relationship is enhanced by our use of 3D floorplans in many instances.   

People make buying decisions on how a property “feels” as much as they consider its size. Several smaller rooms are often more practical than one impressively large one, particularly when there is a family to consider. Only floorplans can accurately relay how the accommodation actually “works” in practice, illustrating how it could complement the needs of a buyer.

Conversely, in instances where a floorplan alerts a purchaser to a blatantly unsuitable property, fruitless viewings can be avoided. This helps to improve the ratio of viewings that actually become sales, saving a great deal of time and frustration.

We also have examples of buyers having bought a property that might have otherwise appeared unsuitable, but the floorplan helped them to visualise adaptability in the accommodation that encouraged them to view. Indeed, Rightmove reports that property listings with a floorplan recive 60% more interest than those without a floorplan.


Floorplans suggest an open approach to property marketing. No longer do buyers have to translate euphemistic “agent-speak”. After all, part of your agent’s job is to match the right buyer to the right property without recourse to flowery misdescription, saving everyone time, and reducing the stress of moving home.

Regards

Paul

Monday, December 12, 2016

“Unexpected Buyers over Christmas”


Christmas is already in sight and it might be tempting to assume the market will slow down and that it might be best to wait until the New Year before selling.

However, whilst many agents do indeed shut up shop so they can roast chestnuts over an open fire, we like nothing more than to sneak into the office in our Santa outfits and huddle round the computer rubbing our hands in glee as we see our web traffic stats rocket (by 195% over the festive period according to Rightmove)!

Having been among the first agents to embrace technology and social media in the area, we are fortunate that our website ranks highly in the search engines. So over Christmas we always see a huge spike of buyer activity, as people who are anticipating a move in the New Year start to spend their “time out” browsing for properties. They inevitably fall in love with one of our beautifully presented instructions sooner than expected, so our physical accompanied viewing figures over Christmas aren’t bad either!

We certainly recommend that you avoid falling into the trap of waiting until the Spring to sell. The sheer volume of properties flooding onto the market at the same time in March and April can create an imbalance of supply over demand and prices can actually weaken. Serious buyers are still very active over Christmas, when their time off work allows them to view more properties. So we say, “make hay while the snow falls”.

Also, Christmas is a time when a house really does look like a home and this could just tip the balance in your favour when buyers come to view.  

So if you are thinking of selling in the New Year or even the Spring, why not bring it forward by a few weeks and let us help you take advantage of this surprisingly buoyant time of year. You’ll then be in a strong position yourself as a buyer to take advantage of any increase in supply early next year. Why not call 01708 851999 today to arrange a no-obligation marketing consultation with one of our local experts.  

Regards

Paul

Ps Only 13 days to Christmas!!






Wednesday, December 7, 2016

"Fear over social cleansing in Borough"


One of our tenants today contacted us to say that she had seen a string of comments made on a Facebook Forum, the person making the comments was a local MP who felt the necessity to post images of properties from Rightmove to substantiate and support his headline "Fear over social cleansing in Borough"  which I found really unpalatable as did a number of other people who had made responses to his comments.  One of who was a tenant who we had recently let a property to; she was not pleased by the comments he had made.
Click the link to see the full story

One of the properties he had posted in his FB article was a property we currently have on the market, I always thought that MP’s would do their research first but yet again this seems not to be the case.  Having worked in the area for 20 years and having written many BLOG articles which have also been published in the Thurrock Gazette I would have been quite happy to inform him why the rental market has boomed out of control.  This is not because of greedy landlords or letting agents, it is simply on the basis of simple economics.  The supply of housing is outweighed dramatically by the demand for it, and the property he mentioned was owned by a local person and bought by them on the Right to Buy scheme that funny enough was introduced by politicians. In addition this landlord still lives in the Thurrock area and the person that has taken the property to live in also lives locally, so much for his social cleansing argument!

The problem for those on low incomes who, as I have previously stated in other articles, have a very important role in our economy, has been created by the very politicians that purport that is everybody else’s fault other than those who make the laws, rules and regulations that we are all bound by. History shows us that the problem of the UK housing market has been an ongoing problem created by short termism politicians who are only looking at their own invested interests and not for the people who have elected them.


If anybody would like facts and figures about the South Ockendon and Aveley property market in relation to house or rental values and the reason they have increased, then please contact me and I will be happy to share my knowledge and insight in a constructive way.

Regards


Paul

Ps People with social influence should act more responsibly.

Tuesday, December 6, 2016

November 2016 Property Market Comment




Christmas is already in sight and it might be tempting to assume the market will slow down and that it might be best to wait until the New Year before selling.

However, whilst many agents do indeed shut up shop so they can roast chestnuts over an open fire, we like nothing more than to sneak into the office in our Santa outfits and huddle round the computer rubbing our hands in glee as we see our web traffic stats rocket (by 195% over the festive period according to Rightmove)!

Having been among the first agents to embrace technology and social media in the area, we are fortunate that our website ranks highly in the search engines. So over Christmas we always see a huge spike of buyer activity, as people who are anticipating a move in the New Year start to spend their “time out” browsing for properties. They inevitably fall in love with one of our beautifully presented instructions sooner than expected, so our physical accompanied viewing figures over Christmas aren’t bad either!

We certainly recommend that you avoid falling into the trap of waiting until the Spring to sell. The sheer volume of properties flooding onto the market at the same time in March and April can create an imbalance of supply over demand and prices can actually weaken. Serious buyers are still very active over Christmas, when their time off work allows them to view more properties. So we say, “make hay while the snow falls”.

Also, Christmas is a time when a house really does look like a home and this could just tip the balance in your favour when buyers come to view.  


So if you are thinking of selling in the New Year or even the Spring, why not bring it forward by a few weeks and let us help you take advantage of this surprisingly buoyant time of year. You’ll then be in a strong position yourself as a buyer to take advantage of any increase in supply early next year. Why not call 01708 851999 today to arrange a no-obligation marketing consultation with one of our local experts.  


Regards

Paul

Sunday, December 4, 2016

£4m paid in Stamp Duty by South Ockendon Residents

“A pound saved is worth two pounds earned . . . after taxes” is what my Grandfather used to say. He loved his irony, yet was always a wise man, and it is tax I want to talk about today, in particular, property taxation .. Stamp Duty in fact.

Apart from some minor exemptions, Stamp Duty is paid by anyone buying a property over £125,000 in the UK. It presently raises £10.68bn a year for the HM Treasury (interesting when compared with £27.6bn in fuel duty, £10.69bn in alcohol duty and £9.48bn in tobacco duty).

In the latest set of data from HMRC, in the MP constituency that covers South Ockendon, property buyers paid £4m stamp duty in one year alone – a lot of money in anyone’s eyes (although not as much as the £220m in income tax that all of us in the same area paid last year).

However, as you may know, George Osborne introduced an additional tax for landlords and from 1st April 2016 they had to pay an additional 3% stamp duty surcharge on top of the normal stamp duty rate when purchasing a buy to let property. There were tales of woe and Armageddon with a report by Deutsche Bank suggesting that the new surcharge could see house prices fall by as much as 20%.

HMRC data released in the Summer for Quarter 2 (Q2) of 2016 did seem to back up those fears as they published some worrying figures; only one in seven properties purchased was a second home or buy-to-let (in real numbers, only 30,300 of the 207,900 properties in Q2 were bought by landlords).

In previous articles, I spoke about the slump of property transactions after the 1st of April (as landlords rushed through their property purchases in March to beat the April deadline). In Q2 of 2016, £1.976bn was raised in Stamp Duty from Residential Property. Of that £1.976bn, £652m was paid by buy to let landlords (£424m in normal stamp duty and £228m in the additional 3% surcharge).

However, looking at Q3, the numbers have improved significantly. Of the 235,000 property sales, nearly one in four of them (56,100 to be precise) were bought by buy to let landlords and of the £2.208bn in stamp duty, £864m was paid in ‘normal’ stamp duty by BTL landlords and an impressive £442m paid by those same landlords in the additional stamp duty surcharge.

The statistics suggest buy to let investors have thankfully not been deterred by the stamp duty surcharge introduced in April this year. The figures also show that 65.4% of "buy to let" purchases cost less than £250,000, 23.7% of properties were in the £250k to £500k range and 10.9% (or 6,100 additional properties) of buy to let properties bought cost over £500k – interestingly nearly one in four (22.2%) of £500k properties purchased in Q3 were buy to let properties.


It just goes to back up what I stated a few weeks ago when I suggested that many investors had rushed to make purchases before 31st March, making figures in the following months (Q2) artificially low when the 3% supplement was introduced, but in Q3 the number of buy to let properties purchased increased by 85%.


It just goes to show you shouldn’t believe everything you read in the newspapers! I can assure you the South Ockendon property market is doing just fine. For more thoughts on the South Ockendon Property Market like this .. visit the South Ockendon Property Market Blog


Regards

Paul

Ps Have a restful Sunday! I'm off for a couple of hours fishing!



Thursday, December 1, 2016

Immigration Act 2016 - What does it mean for Letting Agents & Landlords



“Saw this article today in Letting Agent Today and thought that my readers would be interested to know what the responsibilities of Letting Agent and Landlords are in relation to the Immigration Act 2016”

New parts of the Immigration Act 2016 come into effect today, consolidating the Right To Rent regulations that came into effect back in February.

From today agents acting on behalf of landlords, or landlords themselves if they manage tenancies, will be committing a criminal offence if they have "reasonable cause to believe" that the apartment or house they are letting is being rented by a tenant disqualified under Right To Rent regulations.

From today, if a landlord or managing agent serves a Section 8 notice which does not specifically refer to the Immigration Act 2016, it is regarded as invalid and tenants will have a technical defence to possession proceedings.

It is now also an offence for agents who have "reasonable cause to believe" that their landlord client is letting to a tenant disqualified because of their immigration status, and who go ahead with the management of the property.

The penalties for both offences on indictment are imprisonment for up to five years and/or an unlimited fine; penalties on summary conviction are imprisonment for up to 12 months and/or, again, an unlimited fine.


Source Letting Agents Today Written By Graham Norwood

Wednesday, November 30, 2016

Great investment opportunity I Bedroom Flat Purfleet


This one bedroom top floor flat has just come on the market with M&P Estates Ltd South Ockendon branch (01708 851999) and is priced at £155.000. These properties make ideal investment or first time buyer properties. 





I have had the opportunity of viewing this property internally myself and for investment purposes the property would need to be redecorated, but is fitted with a modern kitchen and bathroom. The real bonuses of this flat is that it has loft storage and Purfleet Train Station C2C line is only 0.4 miles away.

So if we have a quick look at the figures you will see that purchasing the property at £155.000 and achieving a rental of £725 pcm will give you a very healthy yield of 5.61%, so I would not delay too long as properties of this size, calibre and location sell very quickly.

If you would like any further information regarding the South Ockendon, Aveley or Purfleet property market why not give me a call on 01708 851999 or drop me an e-mail paul@mpestates.co.uk, I have recently had a number of landlords drop into my office and take me up on my offer of a coffee and a chat about the South Ockendon and Aveley property market, some have actually gone on to buy properties, so why not get in contact.


Regards

Paul

Tuesday, November 29, 2016

“What About The Children?”


Showing your home to prospective purchasers can be stressful enough, but children add an extra dimension and their needs should be considered.    

Moving house might be logical and exciting for an adult, but the fear of the unknown can be upsetting for children. That room or corner of the garden that has been their special place for most of the child’s life is about to be taken away from them, as they are rocketed out of their comfort zone into unknown territory.

After you have made the decision to move, child psychologists usually advise telling the children as soon as you can. They are certain to find out one way or another and being up front with them will enable you to manage the process better and stay in control.

Parents nevertheless need to be sensitive when discussing the move, and make a point of highlighting the exciting aspects of a new home. Ask your child what they would like to find in their ideal home. They don’t have to have a major influence on your decision, but their apparent involvement in the process will pay dividends.

Likewise, if your children regard the move as a positive thing they are more likely to be co-operative when buyers come to view your property. A stress-related temper-tantrum as the buyer walks through your door is to be avoided at all costs! Indeed, no matter how sweet your children may be, they are more likely to be a distraction to a prospective buyer than an advantage. This is one of the many reasons why we always aim to accompany purchasers around our clients’ property. So our respectful advice is this: ideally, leave the viewing to the trained agent and take the children (and the dog) for a walk! Happy Selling!   


For more advice on any aspect of your move, please feel free to call us on 01708 851999

Regards


Paul

Friday, November 25, 2016

How will the Chancellors Autumn statement affect the South Ockendon rental market??


The Chancellor in his autumn statement announced the banning of lettings agents charging tenants administration fees, which is an important part of the rental process.  Fees from £200 - £300 cover the tenants' costs for referencing, preparation of their tenancy agreement (the cost of which is shared 50/50 with the landlord) and an inventory which not only does the landlord rely on, but also the tenant, again the cost of this document is split 50/50 between the two parties.

The Government has listened to the pressure groups advocating the banning of letting fees and Shelter the charity for the homeless have been prominent in this campaign.  From an agent's point of view, it is not about the loss of revenue, although this is an important factor as this will have far reaching consequences for staffing levels, on an already over-burdened lettings industry that is dealing on a constant basis of new rules, regulations and intervention.  For an example:-

1)    We have to carry out immigration checks, so we are policing the right to remain of tenants.
2)    Every year under the Finance Act, we have to comply with preparing a list of all of our landlords, how much they have received in rent, and we have to give this list on to HMRC an annual basis.
3)    We are required to implement all the new government legislation that is imposed without real consultation or thought.

All of the above is provided to the government free of charge.  Now, as letting agents, we are told we cannot charge tenants a fee to carry out the administrative work.

These are some of the examples where you are charged an administration fee:-

a)    Buying or leasing a car
b)    Taking out a bank loan
c)     Taking out a mortgage
d)    Remortgaging
e)    Booking a holiday
f)      Booking a hotel
g)    Booking tickets

I think the list would go on and on if you really put your mind to it! However, there is a downside to this and that is the very people Shelter and other pressure groups and the government are claiming to assist are the very people who are going to be affected by it. Indeed, with the new tax changes regarding mortgage tax relief, 3% tax duty levied against anyone buying a second home, have and will, create a real shortage in the private rental sector.  I am sorry to say again that the groups above obviously must have been sick or truant in the GCSE lesson of economics when they talked about supply and demand.

We are already seeing rents rise due to the lack of supply caused by the stamp duty rises and potential tax changes coming into effect from next year.  People in the industry have been arguing this point for some time, but again this falls on deaf ears! 

Having studied social policy more than three decades ago the issue and problems of the UK housing market has been a long term failure of politicians to find a long term solution, as normal they look for short term solutions for their own political gain.  You have to also remember that 20% of everything a letting agent earns is paid in VAT and a further 20% of their profit is then paid to the Inland Revenue in Corporation Tax.  I would argue that if you are going to take this much money out of the system what are you going to replace it with?

There are two issues here and I think that the most important is that the low income families who do important work within the economy are going to be priced out of the private rental market. The measures that have been put in place have been ill thought out and the financial implications of using theoretical models on the cost benefit of implementing the new tax criteria on landlords and the 3% stamp duty on second homes will deepen the housing crisis that we currently face.

I may be wrong in my understanding of the whole situation, a very thought provoking subject at the moment, and the implications are far reaching.  I have written many blog articles over the last couple of years and published many articles in the local paper, I would really like to know what the views of the South Ockendon and Aveley people are on this subject, so please drop me an email to paul@mpestates.co.uk.