Prime Market Review

The latest property report from Savills suggests that prime London saw 2.5 per cent growth in Q2 2013. The best for this quarter? Yes, but the prime regional markets are looking promising. Elmbridge – Esher to Weybridge way where I come from – leads the way with prices now back at 6.6 per cent above the 2007 peak.

In what we might loosely call the commuter zone for London – rather beyond the M25 – the market is doing well, at least in places. ‘Town markets’ are looking the strongest with Cambridge, Oxford, Winchester and Bishop’s Stortford all above 2007 peaks. Rule of thumb? Well-established locations within an hour of London by rail have seen 1.9 per cent growth so far this year.

‘At the beginning of the year we anticipated that 2013 would mark a turning point in the prime regional markets, with the gap between prices in the prime markets in the capital drawing demand out of London. This has been slow to materialise meaning the gap has widened further. With confidence in the economy and the wider housing market improving  against the backdrop of continued low interest rates, we believe that the next 12 months will see a return to more consistent house price growth in the prime markets beyond the capital, though the market is likely to remain highly seasonal.’

Section 21 Tip

It’s being reported by The Simple Team at simplelandlordsinsurance.co.uk, that seven out of 10 notices served under Section 21 are rejected by courts. Think mistakes! The team offers advice, ‘If you want to regain possession of your property, and your property is being rented under an assured shorthold tenancy (AST), you need to use Section 21. This allows landlords to evict tenants after the fixed term of the AST has expired without having to give a reason.’

‘The law states that a minimum two months’ notice must be given to tenants before possession of the property is retaken. This is dated from when the tenant receives the notice not when the notice is written or posted. A Section 21 notice can be given at any time provided any deposits paid have been placed, within 30 days of receipt, in a tenancy deposit scheme. While you can serve the Section 21 notice at any point during the tenancy, you cannot force your tenant to move out before the fixed term has expired. Make sure the date at which possession is required is at least one day after the fixed term‘s expiry. If you serve notice during the fixed period, you will want to use a Fixed Term Notice, which comes under section 21(1)b.’

‘After the expiration of the AST fixed term, the tenancy automatically becomes a periodic tenancy, unless a further fixed term is agreed. During the periodic term you can use Section 21, though instead of serving a fixed term notice (section 21(1)b) you should serve a periodic term notice, under section 21(4)a. This must give two months’ advance notice; this notice must end on the last day of a tenancy period, with the date of required possession being the day after this. Tenancy periods are defined by how frequently rent is paid. If tenants pay rent monthly, the tenancy period is one month; if they pay rent weekly, a tenancy period would last one week.’ The Simple Team provides landlord insurance, see simplelandlordsinsurance.co.uk.

BTL Product News

The Mortgage Works has extended the maximum length of tenancy it allows landlord borrowers to offer from one year to three years.

Previously, TMW was aligned with virtually every other lender in allowing assured shorthold tenancies of no more than 12 months. It will now allow ASTs of 36 months.

TMW’s Henry Jordan says, ‘One in five families now rents rather than owns. Families are more likely to want longer-term tenancies to, for example, ensure continuity of schools, so giving our customers this option will bring greater stability to this growing market segment.’ As always, talk to a broker. You need, of course, to assess the whole package – rates, charges, criteria such as this – before making a decision.

All for now, other than to say that we have Bristol student accommodation material coming out shortly. We have another hush-hush student deal coming from Yorkshire; they won’t let me release details yet. And we have, as some of you know, a JV deal – profit as a developer! – now being introduced. Well worth a look.

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