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Em Morley

Overseas-based landlords increase interest in UK property

Published On: November 12, 2019 at 10:19 am

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Categories: Landlord News

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Overseas property investors are increasing in the UK, according to new figures from Hamptons.

This latest data reveals that the proportion of homes in Great Britain let by overseas-based landlords has increased to 11% over the first 10 months of 2019. This is up from % during the corresponding period last year.

The proportion of homes let by overseas-based landlords: 

Source: Hamptons International

Aneisha Beveridge, head of research at Hamptons International, said: “The proportion of homes let by overseas-based landlords rose for the first time in more than nine years. The East and London recorded the biggest increases.”

The depreciation of sterling is thought to be the main reason for this increase in interest from those overseas, as it is not cheaper for international buyers to acquire property IN Great Britain than it was a few years ago.

The average home in Great Britain cost £53,065 or 23% less than it did in 2014 for a US dollar buyer – solely due to a fall in the value of the pound. 

Beveridge added: “Sterling’s depreciation has made investment property in Great Britain more attractive to international investors. The average home cost 23% or £53,065 less than in 2014 for a US dollar buyer, solely due to the currency changes.

“Rental growth in the South outstripped rental growth in the North.  Rents in Great Britain rose 2.2% in October, but rents in the South East rose 3.9% compared with a -0.6% fall in the North.  This was the first annual rental fall in the North for 17 months.”

 The proportion of homes let by overseas landlords by region & currency depreciation discount: 

Source: Hamptons International

Hamptons’ data also reveals where these overseas landlords are based:

Source: Hamptons International

On top of this, it shows that the average rent of a newly let property in Great Britain has increased to £999 per calendar month (PCM) in October. This is up 2.2% on the same period last year.

Rental growth is looking particularly good for the South, with average rent prices increasing by 3.9% in the South East, 3.8% in the East and 3%in the South West.

In comparison, the north of England was the only region to show a drop, with rents at -0.6%.

Average Rents of new lets (PCM): 

Source: Hamptons International

Rent controls will not fix London’s housing crisis

Published On: November 12, 2019 at 9:35 am

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The proposal for rent controls in London continues to be a controversial one, with mayor Sadiq Khan being urged to focus more on increasing the supply of rented housing across the capital.

The Mayor of London has called on the government to provide him with the power to put a cap on rents so that he can “fundamentally rebalance London’s private rented sector”.

Average monthly rent prices in London have increased by 35% from 2011 to 2018, rising from £1,095 to £1,473, according to the Valuation Office Agency’s analysis.

The latest English Housing Survey has also highlighted that private renters in the city spent 42% of their household income on rent, compared with 30% by those living outside of the capital in England.

However, there is a fear that Khan’s proposal could have a negative long-term impact on the quality of housing.

Paul Sloan, development director for haart, comments: “Rent controls sound great in theory, but unfortunately the reality is that they simply do not work. Around the world, we have countless examples of cities which have introduced rent controls, but that has done nothing to address affordability issues.

“The risk is that landlords are dissuaded from entering or staying in the market, which reduces the supply of available homes and can, in turn, inflate prices – the very thing the controls are brought in to avoid.

“Rent controls discourage landlords from investing in their properties which can mean that the supply of rental housing is of a lower quality than it would otherwise be, and tenants can find that repairs and maintenance are no longer a priority for landlords.

“Not only that, but the research from RLA has shown that rent controls can even serve to accelerate rises. An example from Berlin has shown that rental controls actually made rents rise by about ten% over two years, whereas before the controls were introduced, they rose by about one to two% per year.

“We believe that rental controls are no substitute for a functional market where homes are fairly priced and well-maintained. Rather than plumping for a system which has been proven not to work, we call upon the Mayor and the government to work alongside private landlords to discover measures that will keep them in the market and find ways to entice new people into becoming landlords.

“After all, increasing the supply of good quality homes into the rental market is by far the best method of keeping rental prices at a reasonable level.”

Void period lengths and average rent prices revealed in October Rental Index

Published On: November 11, 2019 at 10:36 am

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Goodlord’s Rental Index for October 2019 has been released, showing mixed results for void periods in the UK.

The report highlights that the UK average for void periods remained at 18 days during October. This showed no change to the previous month’s data.

The following regions have seen an increase in void period lengths since August:

  • North West

August: 14 days

September: 19 days

October: 19 days

  • North East

August: 7 days

September: 10 days

October: 25 days

  • South West

August: 5 days

September: 18 days

October: 18 days

  • South East

August: 10 days

September: 14 days

October: 25 days

In the West Midlands. void periods increased from 15 days to 34 days in August to September. In October it dropped to 20 days. The East Midlands has seen a similar movement, with August at 13 days, September at 20 days and October at 17 days.

October figures for Wales show an average 10 day void period, down from 23 days in September. The length was at 14 days in August.

London has seen little change, going from 14 days in August to 11 in September and then back up to 14 days in October.

The index also looks at average rent costs, showing a slight dip. The average sat at a 2019 high of £1,034 in September and fell to £925 in October.

Tom Mundy, COO at Goodlord, said: “After a fantastic summer for lettings followed by a more tempered start to the Autumn, the rental market is starting to stabilise in key regions across the UK.

“The numbers indicate a return to consistency across void periods and rental prices, although this is being felt at different rates depending on the region. 

“Overall, void periods are generally below or on par with annual averages, and average rents across most areas of the UK are returning to expected levels.”

National landlord register rejected by government

Published On: November 11, 2019 at 9:26 am

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A national landlord register for the private rental sector in England was potentially on the cards at the beginning of the year, but the Government has now rejected the proposal.

The Chartered Institute of Housing and the Chartered Institute of Environmental Health released a report in January calling for the creation of a national landlord register. 

The report stated: “Central Government should consider introducing a national landlord registration scheme, which would support and complement selective licensing schemes by making it easier for local authorities to identify the majority of landlords in their area. 

“Whilst this would not completely remove the need for data matching and other exercises to find unregistered landlords, it would help local authorities to build a much better picture of the private rented sector in their areas and reduce the resources needed to start a new scheme.”

Baroness Thornhill submitted a Written Question to Her Majesty’s Government to ask what assessment has been made of the report.

Viscount Younger Leckie, on behalf of the Government, responded: “A detailed assessment of this report has not been made. This Government commissioned an independent review into selective licensing which was published on 25th June 2019 and the recommendations are currently being reviewed.

“This Government has no current plans to introduce a national landlord register, which could place an additional regulatory burden on landlords. This Government is committed to improving the private rented sector by driving out criminal landlords and landlords who consistently neglect their responsibilities to provide safe and decent accommodation.

“Local authorities currently have a wide range of powers available to them including banning orders for the worst offenders, civil penalties of up to £30,000 and a database of rogue landlords and property agents targeted at the worst persistent and criminal offenders.”

David Cox, Chief Executive ARLA Propertymark has shared his comments: Licensing does not work. Licensing has never worked and never will work. Newham have done 1,200 prosecutions, or 240 a year, out of 47,000 properties. 

“That is 0.5% of properties in their area that they have done anything about and have done prosecutions. I would note that that is with 140 officers. They have 40 police officers; 100 enforcement officers and they have done 240 prosecutions a year. That is less than two prosecutions an officer.

“If that is what is classed as success—and it is classed across the industry as the most successful licensing scheme in the country—really what does that say? It is pitiful.

“What we need is education. Landlords need to be trained in what they need to do. Agents need to be trained in what they need to do. Filling in a piece of paper and giving it to the council and paying £500 is not going to teach them the 150 laws that they need to understand.”

Scotland sees tough month for property activity, latest Agency Express index shows

Published On: November 8, 2019 at 10:05 am

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The data from Agency Express has revealed that not much has changed in the UK property market since the mixed month we had in September.

The national month on month figures in the October Property Activity Index show that properties ‘Sold’ sat at 8.1%.

New listings ‘For Sale’, however, feel at -3.2%. Agency Express expected to see a seasonal fluctuation in activity, but according to the index’s historical records, figures were far greater in 2018. New listings were at 10.6% and properties ‘Sold’ hit a record best of 20.7%.

Of the twelve regions recorded by the Property Activity Index, four reported increases in new listings ‘For Sale’. Meanwhile, another ten reported increases in properties ‘Sold’.

This month’s top performers included:

New listings ‘For Sale’

  • London 6.1% 
  • East Anglia 5.5% 
  • North West 2% 
  • South East 0.6% 

Properties ‘Sold’

  • East Anglia 13.9% 
  • Central England 12.7% 
  • Yorkshire & Humberside 9.8% 
  • London 8.5% 
  • North West 7.9% 

Top of the leader board for October was the East Midlands, with figures for properties ‘Sold’ at 26.1%. Following two months of consecutive decline, the increase in figures brought the region back on track for the month.

Scotland saw the greatest declines, with new listings ‘For Sale’ at -12.2% and properties ‘Sold’ falling for the fifth consecutive month at -6.3%. Again, looking back at the index’s historical record, Agency Express points out that activity was far greater 12 months previous.

Commenting on the latest index, Stephen Watson, Managing Director of Agency Express said: “October’s Property Activity Index data has reported a slowdown in properties coming on to market across the UK.

“Traditionally the decline is expected but in 2018 we saw a significant change in this trend. This month’s regress in figures could have been a reflection of the impending Brexit decision. As we now head into the last few months of the year, we would expect to see a further slowdown in activity.

“However, with our current level of activity and uncertainty looming across the nation it will be interesting to see how the seasonal slowdown compares to years previous.”

Halifax House Price Index reaction: ‘Market’s biggest problem is lack of confidence’

Published On: November 8, 2019 at 9:42 am

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Halifax’s October House Price Index is now out, showing that annual house price growth has slowed to 0.9%.

The highlights of the latest index include:

  • House prices in October were 0.9% higher than in the same month a year earlier
  • House prices have fallen by 0.1% on a monthly basis
  • From August to October, house prices were 0.2% higher than in May to July

Russell Galley, Managing Director of Halifax, said: “Average house prices continued to slow in October, with a modest rise of 0.9% over the past year. While this is the lowest growth seen in 2019, it again extends the largely flat trend which has taken hold over recent months. 

“A number of underlying factors such as mortgage affordability and wage growth continue to support prices. However, there is evidence of consumers erring on the side of caution. 

“We remain unchanged from our view that activity levels and price growth will remain subdued while the UK navigates political and economic uncertainty.” 

Milton Rodosthenous, director of online auction service LetsBid Property, comments: “It’s no surprise to see that annual house price growth slowed again in October, adding to the overall flat trend recorded over the last few months.

“That said, the market has remained stable and resilient in the face of an unprecedented political situation and a period of uncertainty that has stretched to over three years now.

“It’s likely that activity in the market will stay at the same subdued pace over the next couple of months. However, the outcome of the General Election in December combined with the traditional market boost in January should provide the property industry with renewed optimism for the New Year.”

“The market’s biggest problem in recent times has been a lack of confidence, but certainty surrounding the outcome of Brexit and the government alongside the positivity a fresh year brings, will encourage buyers and sellers to return to the market in volume.”

“With consumer confidence in the property market restored, there’s no reason why 2020 can’t be a great year for house price growth and transactions.”

Lucy Pendleton, founder director of independent estate agents James Pendleton, says: “The market is hovering around six-year lows and is unlikely to move off the rocks until there is some certainty for buyers but London is already roaring back to life. 

“October produced a general election date so hopes are growing that certainty could be just around the corner but the situation isn’t without its risks for house hunters. 

“Buyers will have that date of December 12 firmly in mind as they enter negotiations and this will undoubtedly lead some to put off exchanging contracts until the outcome is known.”