March 27, 2017
What’s next for short-term lets, Budget update and listing on a Monday
The property industry slows down for no-one, so there has been plenty of new and interesting stories since our last blog piece in February focusing on the government’s long-awaited Housing White Paper.
Here’s a round-up of what’s been going on in the London property market in recent weeks.
Mayor calls on short-term lets sites to copy Airbnb
In early March it was revealed that Sadiq Khan, London’s Mayor, had written to six short-term lets websites – Veeve, One Fine Stay, Wimdu, Booking.com, HomeAway and Airsorted – urging them to introduce a 90-day limit on rentals in the capital, replicating a move that Airbnb made at the end of last year.
After pressure from politicians and industry bodies, Airbnb announced in December 2016 that it would prevent London landlords – or ‘hosts’ – from renting out their properties for more than 90 days a year without planning permission, a move that was widely praised by City Hall and the private rented sector.
The concern is that allowing properties to be let on a short-term basis for the whole year is to the detriment of the capital’s housing market, as valuable stock is too often tied up elsewhere. At a time when demand is already comfortably outstripping supply, any loss of potential stock is pretty unwelcome.
While London benefits from sites such as Airbnb – providing somewhere for tourists, businesspeople and temporary residents to stay – Khan has called on the short-lets market to start self-regulating itself to negate the need for government intervention.
Recent analysis suggests that, as a result of December’s move, Airbnb could end up losing more than £325m a year, but tenants are likely to be pleased that their choice of rental stock won’t be diminished by the rise of longer-term short-term lets.
A budget with few surprises
Before Philip Hammond’s first Budget, there was understandable nervousness among the landlord and buy-to-let community about further attacks on the private rented sector, but no new property taxes – to go with the additional stamp duty surcharge on second homes and the changes to mortgage interest tax relief announced in previous Budgets – were introduced.
In fact, property was largely off the agenda, with no explicit references to the phasing out of mortgage interest tax relief, which is being introduced from next month. The proposed changes have drawn opprobrium from landlords and industry groups since first being announced by George Osborne in the summer of 2015, with the many calls for it to be scrapped falling on deaf ears and attempted legal challenges failing to get off the ground.
Of course, Hammond’s first Budget will now be remembered for other things – with the government performing a dramatic, spectacular U-turn on plans to increase National Insurance rates for self-employed people. After a backbench rebellion, widespread criticism about breaking a manifesto pledge and condemnation from the Conservative-leaning media, Hammond decided to row back on his controversial proposals.
The increases to National Insurance could have affected landlords looking to incorporate to reduce the effects of the mortgage interest tax changes, with the Residential Landlords Association suggesting that around a fifth of landlords would have been impacted by the NICs changes. So, along with other self-employed people around the country, landlords will be pleased to see that Hammond and the government have backtracked.
Why sellers should like Mondays
We all know The Boomtown Rats weren’t great fans of Mondays – however, recent research from Which? Money has revealed that sellers should feel much more positively about the day that sees most of us heading back to work after the weekend.
Which? Money, which conducted detailed analysis of Land Registry data for thousands of properties sold in the 12 months to September 2016, revealed that homes listed on Mondays tend to sell quicker than those listed on other days. What’s more, they sell a month faster than homes brought to the market on the weekend.
The research found that an average home took 190 days to sell from listing to completion. By contrast, homes listed on Monday took just 176 days. The difference is even starker when you compare Mondays and the weekend, with homes listed on a Saturday taking 203 days on average to be sold, while properties listed on a Sunday take 213 days (or roughly seven months) to sell.
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