Lunchtime news Tuesday 19 August 2023

Record numbers of homeowners are letting out properties after failing to sell them, according to the Royal Institution of Chartered Surveyors. New instructions to let houses and flats increased at the fastest ever pace – and the flood of properties is expected to depress rental levels in the coming year. However, demand is rising, with the biggest increase coming from families looking for houses.

Renting in London is five times more expensive than the country’s cheapest locations, with Westminster the most expensive borough in the country, research from the Deposit Protection Service found. The research measured the average deposit demanded by landlords and found the 10 most expensive boroughs are all in the South, while all but the one of the cheapest areas to rent is in the North. The Tenancy Protection Service recently said that 62 per cent of landlords are failing to use the deposit schemes properly.

Further research from financial services experts Skandia forecasts that £18 billion will be pulled out of the buy-to-let market during the next few years as investors sell around two-thirds of their properties in the face of falling housing prices, higher mortgages rates and sluggish rents. Skandia thinks that the stock of buy-to-let mortgages will collapse in value from its height at the end of 2007 of £120 billion to £44 billion.

There has also been a drop in the number of shared ownership sales during the past three months according to the Housing Corporation, with flats proving particularly difficult to move. London associations were facing the fewest problems – with demand for shared ownership homes ‘holding up well’. The corporation also reported that some lenders were making associations renegotiate the price of existing loans as a condition for getting new borrowing facilities.

The Liberal Deomocrat party is to debate the future of the development of eco-towns at its autumn annual conference. A South Cambridgeshire councillor is calling for homes to be built on brownfield land where possible and linked to existing settlements. The councillor has also called for reforms to ensure central government does not interfere in local planning decisions, but uses a process adopted by other European countries to encourage greater local involvement.