Buy-to-let landlords could trigger a house price crash as increasing numbers are selling their properties according to a report in the Observer. Fearful of higher interest rates and a fall in prices, landlords are starting to panic sell. For many landlords the rental yield is very low – 4 per cent and lower is now typical in London and the south east – while the top buy-to-let mortgages are charging between 5 and 5.8 per cent. A spokesperson from the Royal Institution of Chartered Surveyors (RICS) said that smaller landlords, those with two or three properties, are most vulnerable. These smaller landlords make up 55 per cent of landlords, while the ‘professionals’ with more than 10 properties own 90 per cent of the buy-to-let stock in England and Wales.
Thousands of homebuyers have already abandoned plans to move house after the Northern Rock crisis last week. Estate agents are reporting that internet traffic to house buying sites is down a quarter over the past 10 days, as is the number of people entering their shops.
However it’s not so tough at the top. Sales of million pound properties have trebled in the past five years to 88,000 homes, according to figures by Halifax. Most top end properties were concentrated in London, but two of the biggest hotspots outside the capital were Cobham, Surrey, near to where Chelsea Football Club is building its new training grounds, and in the Cheshire districts. However Savills, the property agent, expects minimal price increases at best, and more likely falls in prices, in central London as weaker financial markets and fears over City bonuses and job security take their toll.
Cabinet husband-and-wife team, Ed Balls and Yvette Cooper have been accused of exploiting Commons expenses by registering their four-bedroom property in North London as their ‘second’ home which entitles them to claim allowances of up to £44,000 a year to subsidise their mortgage. Their other property, in Yorkshire, which they used to call their second home is now their main residence. A Liberal-Democrat spokesperson said ‘It is clearly advantageous for them to maintain that their more expensive home is their second home… They may not have broken the rules absolutely, but they have clearly broken their spirit’.
And finally, salaries of housing association executives have soared by an average of 10 per cent last year, according to an Inside Housing report, ignoring the Housing Corporation’s caution that huge increases could ‘detach them from the communities they serve’. In top place is the chief executive from Places for People whose salary was £257,928. In comparison, Unison, the union representing many of the front line staff, say that staff received salary increases of around 3 or 4 per cent.