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Em Morley

HomeLet Reveal Rent Rises and Falls Around UK

Published On: January 19, 2015 at 3:40 pm

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HomeLet’s Rental Index revealed that the highest rental price rises in 2014 were seen in Leicester, Southall, and Cambridge.

Respectively, rents were 45%, 38%, and 24% higher in these places in 2014 than 2013.1

However, Colchester, Croydon, and Brighton experienced the largest drops in rents in 2014, with prices on new agreements 24%, 23%, and 18% less, correspondingly.1

HomeLet also found that average rents around the UK were 6.6% higher than in 2013, as the average rent is now £867 per month.1

HomeLet Reveal Rent Rises and Falls Around UK

HomeLet Reveal Rent Rises and Falls Around UK

Chief Executive Officer of Barbon Insurance Group, Martin Totty, says: “2014 was predominantly a year for growth in the rental market with rental prices on average 6.6% higher than in the previous year.

“With property prices continuing to grow, and mortgage criteria tightening, the rental market represents a much more accessible option for house hunters than the property ladder. The demand for rental property is increasing, and we expect it to continue doing so in 2015 as large numbers of people are priced out of buying. As a result, we expect to see continued growth in rental prices across the UK as the New Year progresses, particularly as real incomes are starting to rise.

“However, the data also points to some big differences in rental market performance in 2015 from town to town, and city to city. The causative factor behind these differences is as simple as supply and demand.

Totty explains: “In locations such as Leicester, and Cambridge, demand for rental property is outstripping supply. By contrast, Croydon and some parts of Essex are benefitting from a relative boom in new property building, easing the pressure on the local rental market, and this is reflected by a drop in rental prices.”

HomeLet’s figures for December reveal a largely positive rental market, despite end-of-year seasonal steadying. Rents dropped in many parts of the UK, although annual figures for December depict positive growth in ten out of 12 regions.

Totty concludes: “The moderation in rental prices across the UK in December 2014 is broadly in line with the typical seasonal effect that often sees rental prices slow or move into negative growth towards the end of the calendar year.

“However, the annual comparison figures show that in all but two regions of the UK, rental prices are higher now than they were this time last year and this is a trend we expect to continue in 2015.”1

1 http://www.landlordtoday.co.uk/news_features/HomeLet-reveals-rental-market-hotspots

Litter Outside Houses can Cut 12% off Value

Published On: January 19, 2015 at 10:34 am

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Categories: Property News

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No one likes to see litter disguising their street, but it has now been revealed that if your road is full of rubbish, the value of your home could be knocked by tens of thousands of pounds.

Neighbourhoods covered in litter can see property prices drop by around 12%, a report has found.

Cleaning up an area can have as big an impact on a house’s selling price as building an extension.

The research also revealed that reducing litter can help to cut crime, which is another factor in determining property prices.

This is the first study conducted on how litter affects house prices. The Keep Britain Tidy campaign found that the value of suburban homes with litter problems can be calculated at between 2.7-11.8% less than they should be.1

Litter Outside Houses can Cut 12% off Value

Litter Outside Houses can Cut 12% off Value

The average property value in England and Wales is £176,581, meaning that a serious litter issue could take £20,837 off the price. For a £500,000 home, the loss in value could be £58,823.

The report stated that if litter affected just 1% of the nation’s 22m properties, the total loss in value would surpass £1 billion.

The report cautions: “Even taking the lower end of the scale, a 2.7% reduction in value would represent a considerable loss in value for many homeowners.”1

These numbers are based on a National Association of House Builders pricing model in the USA. Furthermore, a survey in the USA in 2009 found that litter would influence 93% of house buyers, and 55% of estate agents say litter would reduce their valuation by up to 9%.1

Keep Britain Tidy’s Tim Burns says: “When people are looking to buy a new home they want to feel they are buying in a nice place, where the community is cared for.

“There’s a lot of evidence to show in a more littered environment, people are less helpful to each other. Crime breeds litter and it might be that litter breeds crime. The knock-on effect is that people don’t want to move there and prices are reduced. If you clean up the neighbourhood, it can improve your bank balance.”1

The report included data from a study in Massachusetts, USA. 34 crime hotspots were identified in the state, where they accounted for 23% of all crime in Massachusetts, but make up less than 3% of its geographical area.

During a one-year period, half of the hotspots were cleaned up and half weren’t touched. The tidied parts experienced a 20% fall in calls to police and a 27% reduction in litter after the test period.1

The National Association of Estate Agents’ Mark Hayward states: “You buy with your heart, not your head, so first impressions are important. Impressions of a property are made in the first two minutes, so the street leading up to it can make the buyer say, ‘No thank you’.”1

1 http://www.dailymail.co.uk/news/article-2915296/Litter-outside-home-knocks-12-house-prices-meaning-cuts-street-cleaning-costs-owners-thousands.html

Nationwide Introduces 10-Year Mortgage at 2.94%

Published On: January 18, 2015 at 8:34 am

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Nationwide is the latest mortgage provider to drop their rates, as they launch a ten-year fixed rate mortgage at 2.94% with a £999 charge, or a fee-free deal at 3.09%.

Dropping inflation levels and steadying in economic growth have cut interest rate increases, but now homeowners can lock into their repayments for a whole decade, at record low rates. Nationwide is moving forward in the ever-competitive market.

Nationwide Introduces 10-Year Mortgage at 2.94%

Nationwide Introduces 10-Year Mortgage at 2.94%

However, these appealing deals are only available to existing Nationwide customers.

Borrowers have been profiting recently from a price war between lenders, as they cut their rates in a host of deals.

Nationwide’s present customer base has been benefitting from the building society’s vow to compare its rates with high street rivals weekly, and to make cuts if necessary, in a bid to stay competitive.

These new deals have arrived only a week after Barclays launched a record low ten-year fixed deal at 2.99%. This is still the best rate possible for non-Nationwide customers.

Existing Nationwide borrowers with 40% equity in their property can now move to the ten-year fix. With this deal, a 25-year £150,000 mortgage would cost £706 a month and £85,795 over the decade. This is £468 cheaper than Barclays’ deal.

Under Nationwide’s fee-free rate, of 3.09%, the same mortgage would be cheaper in the long run, at £718 a month and £85,680 over ten years.

Both of these offers are appealing to those looking to stay in the deal for a decade. However, with any long-term fixed rate, borrowers should look out for any early repayment charges.

If a borrower leaves in the first four years, the charge would be 7%. This drops to 6% in the fifth year, 5% in the sixth, 4% in the seventh, 3% in the eighth, 2% in the ninth, and 1% in the last year of the mortgage.

 

 

Students Call for Cheaper Rents

Published On: January 16, 2015 at 4:01 pm

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Students could be pushed out of higher education due to spiralling accommodation prices.

Students are campaigning against rising living costs, while other groups fight for tenants’ rights, and affordable housing.

Students, on and off campus, are fighting for better deals on accommodation costs. They believe that future generations will be forced out of higher education if something is not done.

Unlike typical low-income tenants, students cannot claim welfare payments, such as housing benefit, as they are in full time education. However, student maintenance loans do not come close to full time wages.

On average, the average student home will cost 95% of the maintenance loan available, leaving only 5% for all other expenses.

Students Call for Cheaper Rents

Students Call for Cheaper Rents

In Sheffield, students are focusing on the general election to influence policy makers. Welfare Officer at the University of Sheffield’s student union, Tom Harrison, says: “While the Government refuses to invest in social housing and continues to slash housing benefits, we need to improve tenants’ rights and reintroduce rent controls.”

Even accommodation provided by the University is increasing faster than inflation. The cheapest rooms have grown in price by 11% in three years.

Harrison continues: “It is crucial to have student representation when rent setting as it allows us to help end the influence of large private providers.”1

At University College London (UCL), students are requesting a cut in rents.

Prices have risen by an average of 5% per year in accommodation primarily owned by UCL.

Elected halls rep David Dahlborn, says that the University is acting like a business, and does not have the interest of tenants at heart.

Dahlborn explains: “UCL doesn’t seem to take our cost of living into account when they set their rent. It is more concerned about competing within the market.”

UCL do believe that their rents reflect the London rental market. A spokesperson says: “We are aware of the [students’ campaign] and are in dialogue with the student union about this. While there will be some increase in rents, this is not expected to be as high as in recent years and remains competitive for central London living.”1

Tenants in halls have taken the issue to management. Dahlborn says: “When the Head of Accommodation refused to meet with us, we sat on the floor and waited for him. At first it seemed as if he would just ignore us, but in the end he stayed to debate.”1

Most universities do not include student reps in the rent setting process. However, as prices continue to rise, students are getting involved. Lancaster has seen a similar campaign, as students protest a 2.5% rent rise.

Student groups will protest in London under the banner, No Free Education without Affordable Accommodation. The march will come to City Hall at the end of the month, with a Rent Freedom Day following in February.

Students are at the forefront of tenants’ rights; whether it is more affordable halls, better standards in the sector, or a rent control scheme.

1 http://www.theguardian.com/education/2015/jan/15/students-demand-end-to-rents-that-swallow-up-95-of-their-loans

One Girl’s Experience of Homelessness

Published On: January 16, 2015 at 3:11 pm

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Daisy May Hudson received a phone call from her mother in 2013 to say that their family home was being sold, and they would thus be evicted, after living there for 13 years.

Since then, Daisy has been making a documentary of her experiences with homelessness, called Half Way. Details of the film can be found at www.halfwayfilm.co.uk.

Whilst living in the house, the rent had stayed fairly stable. However, when Daisy’s mother began looking at other rents in the area, it became clear that properties were now out of her price range.

Daisy describes the realisation: “Our whole world collapsed. When you lose your home, you lose the way you relate to everything around you, and the way you define yourself.

“It’s the place where you create relationships, and discuss the weight of the world. When that’s taken away from you, you feel paralyzed, empty, and completely violated.”

The housing crisis has been in the news for a long time now. However, Daisy believes that it has gone on for such a long time that we have become “desensitised” to the issue.

However, it is still near impossible for people to get onto the property ladder. With stagnant wages, high living costs, a lack of housing supply, and a competitive rental sector, the housing market is a struggle for many. Council housing used to apply to a few, but now, it is the only option for lots of people, especially in London.

There are many more people depending on council houses who would probably have rented privately, or bought a home previously. It seems that more council homes need to be built, or the private rental sector requires rent caps.

Daisy believes that the Government have not reacted correctly or efficiently in this situation. She cites this as the reason for people protesting, marching, and petitioning in a bid to save themselves from homelessness.

Daisy feels that politicians now have a “no-can-do attitude” regarding the housing crisis. They can explain why things have happened, but not what they can do to help, Daisy says.

She comments: “In most places of employment, that kind of attitude would get you fired.”

Daisy describes buy-to-let investors as greedy, and says that as they are driving up house prices, and pushing people out of their homes, a rent cap should be introduced.

She also refers to the green belt, saying that this a great opportunity for new houses: “I love Mother Nature, but making sure everyone has a place to live is important.”1

1 http://www.independent.co.uk/voices/comment/think-the-housing-crisis-is-boring-and-too-complex-then-try-being-homeless–youll-realise-how-simply-it-can-all-be-solved-9980877.html

The Difference Between Help to Buy Mortgage Rates

Published On: January 16, 2015 at 9:51 am

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The Government’s Help to Buy scheme has helped aspiring buyers onto the property ladder. However, homebuyers should be careful about who they sign up with.

There is as much as a £3,000 difference between the cheapest and most expensive Help to Buy rates on an average home loan.

The system aids buyers access 5% deposit mortgages from participating lenders.

The Government launched the mortgage guarantee scheme in October 2013. The Government then pledges a portion of a low deposit loan in return for a fee from the lender. This means that borrowers can receive mortgages of up to 95% loan-to-value (LTV).

Official figures since the introduction reveal 30,269 households have been brought into the housing market under the scheme.1

Rates

The Difference Between Help to Buy Mortgage Rates

The Difference Between Help to Buy Mortgage Rates

Most high street lenders provide Help to Buy rates and some new banking entrants also offer these loans.

However, rates can vary from as low as 4.49% to over 6%, so it is vital that buyers find the best deal.

The first lenders to launch rates under the system were RBS, NatWest, Lloyds, and Halifax. However, all of their offers are now over 5%.

At present, Barclays are offering the lowest Help to Buy mortgage rate, with a two-year fixed deal at 4.49% with a £499 fee for a 5% deposit. A 25-year £150,000 mortgage would cost £832 a month and £20,488 over the two years.

Contrastingly, Aldermore provides a two-year fixed rate at 6.09%. The same mortgage here would cost £974 a month and £23,393 over the two years. This is a huge difference of around £2,905.

A spokesperson at Aldermore said that their pricing reflects the risks associated with high LTV lending.1

Other offers

HSBC also has a competitive two-year fixed rate of 4.59% with a £99 fee. A 25-year £150,000 mortgage would cost £841 a month and £20,293 over the two years.

The Post Office offers a two-year fixed rate at 4.75%. The same mortgage would cost £855 a month and £20,524 for the two years.

Five-year fixed rates

Barclays also offers a five-year fixed rate of 4.99% with a £499 fee. A £150,000 mortgage would cost £876 a month and £53,059 over five years.

However, Virgin Money, a new banking entrant, beats this. Their fee-free rate at 4.99% also offers £300 cash back. The £150,000 mortgage would cost £52,560 over five years. This is £499 cheaper than Barclays, before the cash back.

Outside Help to Buy

Without using the Help to Buy scheme, buyers can get a two-year fee-free fixed rate of 4.99% at Norwich & Peterborough. However, this is more expensive than the lowest Help to Buy deals. A 25-year £150,000 mortgage would be £876 a month and £21,024 over two years.

A longer-term five-year fixed rate at Monmouthshire Building Society is 4.59%. The same mortgage would be £841 a month and £50,485 over five years. This is cheaper than the Help to Buy rates.

1 http://www.thisismoney.co.uk/money/mortgageshome/article-2908395/Beware-Help-Buy-trap-3k-difference-mortgage-rates.html