Wriglesworth Vlog: Paper Summary for 20th May 2013

The key macro-economic, personal finance, property and recruitment stories from today’s papers, read by Wriglesworth Account Executive Jamie Till.

News Headlines – Monday 20th May 2013

Economics / Business

Some of Britain’s most successful business leaders today accuse Eurosceptic MPs of putting “politics before economics” and abandoning the national interest in their calls for Britain to leave the EU. Oliver Wright, The Independent, P1.

Sir Mervyn King has sounded the alarm over the Chancellor’s Help-To-Buy scheme , suggesting that it could trigger a US-style economic crash. Mervyn King, the outgoing Governor of the Bank of England warned yesterday that government guarantees for mortgages pose a danger to the economy. Tim Wallace, City AM, P1. Tamara Cohen, The Daily Mail, P4.

Higher inflation is here to stay according to a leading think-tank, which argues that soon the problem could dent the credibility of the Bank of England under its incoming Governor Mark Carney. Patrick Hosking, The Times, P36.

Property

House prices at a record high as confidence floods back to the market. The average new home now goes on sale for nearly £250,000 following a 2.1 per cent rise of around £5,000 in the last month alone. Average asking price for a home in London has broken through half a million pounds for the first time. The property website Rightmove said that the average of £509,870 in the capital is more than 16,000 higher than a month earlier and beats the previous record from March by 2.7 per cent. Gary Parkinson, The Times, P3. Rupert Jones, The Guardian, P20. Sarah O’Grady and Jimmy McCloskey, Daily Express, P1.

Personal Finance

The UK has spent almost £2billion housing vulnerable homeless families in short-term temporary accommodation, according to figures that demonstrate the scale of Britain’s housing crisis. Rising private rents, a shortage of affordable housing and benefit cuts have forced local authorities to place increasing numbers of families in B&Bs. Nick Mathiason et al, The Guardian, P1.

Recruitment

Meagre pensions pots will force thousands of Britons to work well into their 70s employers warn today, Almost three quarters of bosses believe that within ten years half their staff will have to work beyond 65. Jimmy Mcloskey, Daily Express, P2.

Britain is likely to increase its opposition to the EU’s planned bank bonus cap, as detailed plans of the scheme are published this week, extending the scope of the cap dramatically. The European Parliament is expected to call for performance fees for fund managers to also be capped. Time Wallace, City AM, P4.

First Group is to announce the departure of Martin Gilbert, Chairman of First Group this morning, after 27 years at the transport group, as it presses ahead with a £600million right issue. Gilbert is one of the firm’s founders. James Titcomb, City AM, P6. Mark Odell and David Oakley, The FT, P22.

SME

A £150million fund will be launched by Royal Bank of Scotland this week, aimed at the leisure sector, as it seeks to counter accusations that big banks are still slow to lend money to small businesses. Andrew Taylor, Head of Leisure within the commercial bank unit, said that a survey by the bank found that one in four leisure businesses in Britain felt they were losing out to competitors because of lack of investment. Dominic Walsh, The Times, P33.

Wriglesworth Vlog: Paper Summary for 17th May 2013

The key macro-economic, personal finance, property and recruitment stories from today’s papers, read by Wriglesworth junior account executive Rachel Morrod.

ONS Regional Labour Market Statistics – Yorkshire & The Humber

Reacting to statistics released by the ONS this week showing employment levels for Yorkshire & The Humber are at record highs and that over the year the regions with the largest change in the employment rate were in Yorkshire & The Humber and London, Tara Ricks, managing director of Randstad Financial & Professional, said:

“Even though the economy has failed to take off, there has been a 4.2% rise in financial services jobs since the start of 2011, which is testament to the underlying strength of the sector. But not enough is being done to make sure those jobs are distributed evenly across the country. Although Yorkshire and the Humber was one of only five regions to see employment levels rise in the first quarter, it still has the third highest unemployment rate of any region in the UK. More needs to be done to encourage private sector investment in Yorkshire, and northern regions in general. The government needs to make it easier for financial services firms to hire people, particularly in areas like Yorkshire. It needs to continue to cut red-tape, which will make the private sector labour market more fluid. But the zen-like obsession with fiscal austerity is strangling the recovery of the labour market. More needs to be done to encourage firms to invest in human capital.”

             Tara Ricks

Rents rise once again in April, but pace of increase slows

Rents in April increased to the highest level since November 2012, according to the latest Buy-to-Let Index from LSL Property Services plc, which owns the UK’s largest lettings agent network, including national chains Your Move and Reeds Rains.

The average rent in England and Wales has risen by 0.2% since March, to £736 per month. Continued growth leaves rents in April 3.9% higher than a year ago, almost as fast in March when rents were 4.2% higher year-on-year.

For the first time since November 2011, every region of England and Wales has seen rents rise on an annual basis. The strongest increases were in London, where rents are 7.6% higher than a year ago, followed by annual rises of 5.0% in Wales and 4.1% in the East Midlands. While the South West was the only region to see annual falls in March, this reversed in April, with annual rent rises of 0.5%.

On a monthly basis, eight out of ten regions saw rents rise. The strongest of these increases was in the East Midlands where rents rose 0.6% from the month before. This was followed by the North East and the South West where rents posted a 0.5% gain in both regions. Meanwhile, rents dropped the fastest in Wales, falling 0.3%. The second region to see a monthly fall was the North West, with rents in April 0.2% lower than a month before.

David Newnes, director of LSL Property Services, owners of estate agents Reeds Rains and Your Move, comments: “Rents everywhere are higher than a year ago – at a time when pay has crept up at the slowest rate in years. But some regions are suffering even more than others. Despite a year-on-year increase across the board, the divergence between London and the rest of the country is continuing, even if a little slower than last month. Meanwhile, other regions with traditionally weaker labour markets are suffering the same rent rises. For example, rental rises of 5% in Wales will be keenly felt. Landlords across the UK have increased the stock of rental properties by around 10% since 2008 – but the more fundamental squeeze is still coming from a lack of new building.”

The total annual return on a rental property rose to 5.9% in April. This represents an average return of £9,679 with rental income of £7,807 and a capital gain of £1,872. The average yield on a rental property was 5.3% in April, compared to 5.2% in the same month last year.

If rental property prices maintain the same trend as the last three months, the average investor in England and Wales could expect to make a total annual return of 5.7% per property over the next 12 months – equivalent to £9,496 per property.

David Newnes comments: “Further increases in the rental stock will be dependent on sustained improvements in the availability of finance for landlords. However, new buy-to-let lending dropped in the first quarter, just as purchase prices are starting to move up more steadily. Price rises can be a double-edged sword for renters and landlords, not just owner-occupiers. On the one hand, landlords have already responded to mounting demand, and capital accumulation has made up more of many landlords’ total return than rental income in some areas. However, if property is more expensive to buy then in the long run it will always be more expensive to live in. And that affects everyone. Schemes like Help-to-Buy could be very good in helping first-time buyers but renting continues to prove more flexible than any other part of the housing market.”

The total amount of rent late or unpaid has improved marginally, despite higher rents. Total arrears in April were £282m, compared to £284m in March. This equates to 8.4% of all rent across England and Wales, compared to 8.5% of all rent in March.

David Newnes concludes: “Optimism is seeping in to the housing market – but from the top. For many tenants the monthly ebb and flow is still draining. Compared to inflation and expectations before the crisis, wages are still seriously under water. Hence slower rent rises in April were a life raft for some. But for the tenants still struggling the most, it could be some time before their ship comes in. Landlords are lending a hand, and will need to keep taking up slack until the economy is on a more solid footing and improvements filter through to everyday wage levels.”

Test match special – howzat for property prices?

As the test match season comes into play in May, cricket fans may be surprised to learn what it would cost to live with a view of their favourite wicket. Sequence, owners of leading London estate agent Barnard Marcus, surveyed five test match grounds including London’s famous Lords to see if fans will be bowled over by the price of a view into the ground.

Maxine Footitt, manager of Barnard Marcus in St John’s Wood says: “There are two blocks overlooking the ground – The Pavilions and Lord’s View – the first property sells for £1,500 per sq ft the second for about £800 per sq ft. A view of the ground certainly adds interest but the general vista is so good as it extends across London too and will sell at a premium – perhaps between £100-£500 more per sq ft for a good view of the cricket

“The ground is in one of London’s prime residential areas so there are no downsides to living close to the ground. International cricket matches bring in the crowds and you can see the floodlights but it is London so it’s expected.

“These properties in the heart of St. John’s Wood probably sell for 10-15% more near the ground primarily because of the transport links and amenities.”

David Plumtree, CEO of Sequence, comments: “An apartment that actually enjoys a view into a cricket ground – which not all the test venues enjoy – appears to command a premium on the price and will certainly add marketing value too. In London, if you overlook Lords you may have to pay even more. The higher floors of two particular blocks certainly sell for a premium largely because of the great views over the capital – being able to watch the cricket is a bonus for someone who understands the LBW rule!”

 

 

	Oval London SE11 35,000 capacity	Lords London NW8 30,000 capacity	Trent Bridge NG2 6AG (17,500)	Headingley LS6 3DP (20,000)	Edgbatson B5 7QU (25,000)
Fixtures	Eng v Aus, August 5th	Eng v NZ 16th-20th May Eng v Aus 18th-22nd May	ICC Champions Trophy final 23rd June	Eng v NZ 24th-28th May	One Day International Eng v Aus September 11th/ Final of Champions Trophy, 23rd June
Property Prices
Overlooking the Ground	£360,000	£959,000	£140,000	None overlook the ground	Very rare
Next to the ground	£315,000	£850,000	£135,000	£130,000	£164,950
Further from the ground	£375,000	£900,000	£140,000	£180,000	£200,000

Property price reductions at lowest level for almost three years

In a further sign of strength in the housing market, research out today from property website Zoopla.co.uk reveals that the number of properties currently for sale that have been reduced in price since first coming onto the market has fallen to its lowest level in almost three years.

In a further sign of strength in the housing market, research out today from property website Zoopla.co.uk reveals that the number of properties currently for sale that have been reduced in price since first coming onto the market has fallen to its lowest level in almost three years.

In a further sign of strength in the housing market, research out today from property website Zoopla.co.uk reveals that the number of properties currently for sale that have been reduced in price since first coming onto the market has fallen to its lowest level in almost three years.

In a further sign of strength in the housing market, research out today from property website Zoopla.co.uk reveals that the number of properties currently for sale that have been reduced in price since first coming onto the market has fallen to its lowest level in almost three years.

The proportion of properties for sale that have had their asking price dropped at least once now stands at 30.7%, down from 34.3% twelve months ago. This marks the third successive quarter where the proportion of reduced price properties has fallen and is the latest sign that confidence is returning to the housing market.

The amount by which asking prices are being discounted on average has also fallen to 6.1%, the lowest proportion since November 2010. But the north-south property divide remains with the top ten areas with both the highest proportion of discounted properties and the biggest asking price reductions all in the north.

Yorkshire has been particularly hit by property price reductions. Six of the ten areas with the biggest proportion of discounted properties are in Yorkshire, including the top three with 42% of properties in Rotherham, 41% in Doncaster and 40% in Wakefield having been reduced in price coming to the market. And Barnsley has the highest average discount in the country to the original asking price at 8.6% followed by Liverpool (8.5%) and Blackpool (8.3%),

London has the lowest proportion of price reductions in the UK with only 24% of properties currently for sale in the capital having had their asking price adjusted downwards. Edinburgh (25%) and Bournemouth (26%) complete the top three. And Edinburgh has the lowest average asking price discount in the UK currently standing at just 4.9% off the original asking price with Swindon (5.3%) and Bedford (5.4%) coming in second and third respectively.

Lawrence Hall of Zoopla.co.uk comments: “There is a generally positive sentiment in the property market at the moment that reflects a genuine belief that the worst of the economic crisis is behind us and that the housing market is at the early stages of a recovery. These figures show that fewer and fewer sellers are feeling the same level of pressure to reduce prices as over the past couple of years which bodes well for a recovery in house pricing.”