June 29, 2018
In this week’s post, we’ll be looking at whether it’s becoming more plausible to live by the seaside, a petition to scrap ‘no-fault evictions’, a landlord who’s been fined for renting out his shed, and how single first-time buyers could be saving for up to 17 years just for a deposit.
Significant fall in house prices by the seaside
For the first time in a long time, house prices by the coast are dropping, according to recent figures provided by the Halifax. It’s said that even the moderately rich would have struggled to afford a home in a British seaside town, but prices have tumbled quite significantly in the past year.
Salcombe, a popular boating resort located in South Devon, has seen a dramatic fall of 8.2% in house prices, which is equivalent to roughly £52,000. In Sandbanks, Dorset – famed for being the UK’s most expensive seaside town – prices are down by 5.6%, making houses around £37,000 cheaper on average.
The same can’t be said in other coastal towns, however, as house prices are still on the rise in Aldeburgh, Lymington, Padstow and Lyme Regis. The Halifax suggests that the reason seaside homes are so expensive is because of the high cost of Stamp Duty. If you were to buy a house in Sandbanks last year, you’d be looking at paying over £23,000 in tax.
Single first-time buyers will need to save for more than 10 years before they can afford a deposit
New figures released by Hamptons International have found that single first-time buyers across England and Wales would need to save for just over 10 years on average in order to put down a 15% deposit. This has dropped from 11 years last year, possibly because of slower house price growth and a rise in income.
In London, the average amount of time needed to save for the same amount is 17 years. This amount has risen from 15 years recorded in both 2008 and 2013, despite steep house price falls witnessed after the Brexit vote in 2016.
These results suggest that raising a deposit is the biggest barrier when buying property. However, experts suggest that there may be a quicker, more realistic way around it: if potential buyers could save enough for a 5% deposit they would qualify for the government’s ‘Help to Buy’ scheme where they’ll lend the buyer 20% of the cost of their new home.
This would mean they’d be left with just a 75% mortgage to pay off. On average, this method would require 3 years 9 months of saving in England and Wales and 5 years 9 months in London.
June marks the slowest growth in UK house prices for 5 years
Recent data from Nationwide reveals that this month, annual house price growth in the UK has dropped to 2%, 0.4% lower than it was in May. This is the slowest it’s been since June 2013, where growth was 1.9%.
Most regions saw the annual rate of house price growth slow in the second quarter of the year, except Scotland where there was a significant rise of 3.1%. Northern Ireland experienced a strong growth of 7.9% throughout January – March but this has since dropped to 2.1% in the second quarter.
Wales had similar results, as price growth dipped from 6.1% to 4% in the second quarter. The strongest pace of house price growth was recorded in the East Midlands and West Midlands, where there was a 4.4% and 4.3% rise respectively.
Richard Gardner, Nationwide’s Chief Economist said: “Overall, we continue to expect house prices to rise by around 1% over the course of 2018.”
Lobbying organisation calls on the government to scrap ‘no-fault evictions’, leaving landlords in the lurch
Generation Rent, a lobbying organisation based in London, have called on the government to scrap section 21 orders, otherwise known as ‘no-fault evictions’.
A section 21 order is a 2-month eviction notice that landlords can serve without giving a reason. However, Generation Rent argue that they’re being misused to throw renters out unfairly. They’ve started an online petition which, if successful, would end no-fault evictions, compensate tenants that have been evicted and aren’t at fault, as well as enforcing inflation-linked rent caps.
“Landlords don’t just use section 21 willy-nilly because they’re evil people. There has never been any substantial evidence that retaliatory evictions are a large problem,” argues David Smith, a member of the Residential Landlords Association. He believes that the evictions are issued fairly and are usually used in cases of tenants not paying rent, anti-social behaviour, or if the landlord needs to sell the property.
Smith says that the alternative would be a section 8 notice which requires landlords to state their reason for wanting to evict a tenant before taking them to court if it’s approved. This whole process can take twice as long at up to 4 months.
£5,000 fine issued to Enfield landlord after renting out his garden shed
Sanjiv Shah, a landlord living in Enfield, North London, has been fined £5,000 after pleading guilty to renting out his garden shed to tenants, despite having received a Prohibition Order in September last year.
Shah chose to ignore this warning, which was issued after inspections found his shed being used as accommodation, despite not having appropriate insulation or an independent power supply.
The fine was made up of two payments amounting to £2,600 and £2,441.35, plus a victim surcharge of £170 after Shah pleaded guilty at Highbury Corner Magistrates Court.
A statement was released whereby a council spokesperson said: “Inspections by Enfield Council officers highlighted hazards that left the building cold and uninhabitable.
“Some hazards were assessed as posing a serious threat to the health or safety of people living or visiting the accommodation.”
Councillor Nesil Caliskan, Enfield Council’s leader, agrees: “There is no excuse for renting out property that does not meet the basic housing requirements.”