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Welcome to LendInvest’s monthly round-up of property market insight. We’ve read it, you just need to skim it.
So what’s going on? As the government’s Housing Bill makes its way through the House of Lords, concessions are being made to the starter homes scheme and detail added to planning reforms. The Stamp Duty Deadline passed, with varying impacts on the property market and the Panama Papers revealed the extent of homeownership in London by suspected criminals.

New trade body launched for the private rented sector

The UK’s first professional body for the private rented sector (PRS) has launched, with some of the sector’s biggest names already signed up.
The UK Apartments Association (UKAA) aims to drive the professionalisation of the sector and act as a ‘speed dating’ service to link investors and developers with operators and service providers. More.

Concessions made to government’s starter homes plan

Under the starter homes scheme, unveiled by George Osborne in the Autumn Statement last November, developers will sell homes at a minimum 20% discount on the market value to first-time buyers aged under 40.

The value of the homes will be capped at £450,000 in London and £250,000 outside the capital.
A consultation on the plans published last month proposed allowing buyers to sell their starter home after eight years at the full market value. This was rejected by the House of Lords, which voted in favour of a 20-year restriction, with the portion of the discount repayable reducing by a twentieth each year. More.
property planning joy

How planning reforms are set to impact developers

Possible hike in planning application fees:
Most MPs back a hike in planning application fees, a new ComRes survey has revealed.
More than six in ten MPs (61%) “broadly agree that fees should increase”, the results of the poll showed.
The  British Property Federation, which commissioned the survey, welcomed the recognition that local authorities are “struggling to provide the service required by applicants” with the money they currently receive. More.
New housing bill detail to accelerate planning decisions:
The government’s planning reforms, set out in the 2015 Productivity Plan and Budget 2016, already promised to reduce the delays and costs that result from negotiating planning agreements.

A new addition to the Housing and Planning Bill will mean developers can refer disputes about draft planning agreements to the Planning Inspectorate. A ‘dispute resolution mechanism’ will allow developers to ask the Planning Inspectorate to rule on planning agreements before the agreement is entered into. The mechanism could be used before an application even goes to the planning committee. More.

Panama Papers revealed secret London property empires

World leaders, business people and celebrities were among those whose anonymous ownership of London property was exposed by the massive leak of Panama law firm Mossack Fonseca’s data on offshore companies.
The Financial Times noted that this is a phenomenon which has helped to shape London’s housing market, where prices are up 50 per cent since 2007.

According to The Times, the data identifies Alaa Mubarak, son of the former Egyptian president, who was jailed last year; Soulieman Marouf, fixer for President Assad of Syria; and Bukola Saraki, the president of the Nigerian senate, who has been charged with corruption, as owners of London property through offshore vehicles. All deny acting illegally or improperly.


EU fears hit building of homes

A new survey suggests fewer new houses are being built because of planning delays and uncertainty over the result of the EU referendum.

The Royal Institute of Chartered Surveyors (Rics) says private housebuilding “slowed considerably” over the first quarter of this year, putting at risk the government’s pledge to build 200,000 new properties by 2020.

The number of homes being built grew more slowly in the first three months of the year than it has for the last three years, the survey suggests. Compared to any quarter of the last few years, it was the slowest rate of growth since April-June 2013. More.

How the Stamp duty charge affected the property market

Impact on house-building:
Research by JLL showed the number of new housing starts in the second half of 2015 was lower than the first six months of the year. They said the shift was “clearly” a reaction by developers to “recent political uncertainty, higher tax regime and slower sales market”. More.
Impact on property prices:
Asking prices for rental properties in England and Wales fell, hit by the introduction of a new tax, but prices in the housing market as a whole have continued their rise, according to Rightmove’s online property listings:
Asking prices for properties typically sought by buy-to-let investors and first-time buyers – with up to two bedrooms – fell by 1.4 percent in the four weeks to April 9.

By contrast, in the market as a whole, prices rose by an average of 1.3 percent, or £3,843, to hit a new record high of £307,033, Rightmove said. More.
Impact on landlords:
LendInvest detailed the financial impact on landlords with data from the Buy To Let Index:
Landlords in Inner London and Harrow will now need the equivalent of 20 months’ rent or more to repay higher SDLT. Darlington, Halifax and Doncaster were shown to be among the worst affected by first-time SDLT payment.
But, Outer London landlords will be hit hardest by the overall percentage increase in SDLT due. Landlords in Tunbridge Wells, Dartford, Romford will see SDLT rise more than 300%, vs <200% in Inner postcode areas. More.

Now Stamp Duty deadline has passed, it’s the morning after the night before

New figures from the Council of Mortgage Lenders have revealed that gross mortgage lending in March jumped by almost 60% year-on-year to £25.7 billion – the biggest March figure since 2007.

Ian Thomas co-founder and director at LendInvest said: “Landlords across the country fought tooth and nail to get deals completed by 31 March so that they could avoid the higher Stamp Duty charge for second and additional homes.

However, it’s now a case of ‘the morning after the night before’. The Stamp Duty change means building a property portfolio is simply a much tougher financial task for would-be amateur landlords.” More.