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Em Morley

House Price Growth in the UK Picked Up in March

Published On: May 23, 2019 at 10:00 am

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Annual house price growth across the UK picked up to an average of 1.4% in March, which is up from 1.0% in the previous month, according to the latest House Price Index from the Office for National Statistics (ONS).

However, over the last three years, there has been a general slowdown in house price growth, driven mainly by declines in the south and east of England.

The lowest annual house price growth in March was recorded in London, where the average property value dropped by 1.9% over the year, which is up from -2.7% in February.

Across the UK, the average house price was £227,000 in March. This was £3,000 higher than in the same month of last year.

In England, the typical property value stood at £243,000 in March, following a 1.1% rise in the year to March, which was up slightly from 1.0% in February. House prices in Scotland increased by an average of 3.3% over the same period – up from just 0.5% in February – to reach £149,000. House price growth in Wales averaged 3.0% in the year to March, which is down from 3.6% in February, taking the typical property value to £159,000.

House prices in Northern Ireland rose by an average of 3.5% in the year to the first quarter (Q1) of 2019. It remains the cheapest UK country to purchase a property, at £135,000.

Across the English regions, Yorkshire and the Humber recorded the highest annual house price growth in March, at an average of 3.6%. The West Midlands followed, at 3.4%.

The lowest annual growth was seen in London, where prices fell by an average of 1.9% in the 12 months to March. The North East followed, with a decline of 0.8% over the same period.

House Price Growth in the UK Picked Up in March

While house prices in the capital fell over the year, the region remains the most expensive area to purchase a property in England, at £463,000, followed by the South East and East of England, at £318,000 and £287,000 respectively. 

The North East continued to record the lowest average house price, at £123,000, and is the only English region yet to surpass its pre-economic downturn peak.

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John Goodall, the CEO and Co-Founder of buy-to-let specialist Landbay, says: “Despite this month’s slight uptick, we’ve not seen the spring bounce we had hoped to see – UK house price growth has remained subdued so far this year. For potential buyers, this, combined with sustained wage growth and record low unemployment, means affordability is starting to improve. 

“However, transaction volumes remain stagnant in the face of Brexit uncertainty, and so the role of the private rental sector remains as important as ever. Until we have some clarity, the market is unlikely to pick up, so all eyes are on October to provide some certainty to buyers and sellers alike.”

Lucy Pendleton, the Founder Director of independent estate agent James Pendleton, also comments: “Continued price declines in the capital are helping to paint England as the sick man of the UK, with house prices in Scotland and Wales still accelerating way ahead of inflation. 

“The silver lining is that this could be a real boost for transactions, as buyers step back into the fray, though it will take a bit more persistent declines for us to see anything resembling a whirlwind of activity. Even though it’s a zero-sum game for most, buyers are still hesitant and have a tendency to wait for markets to level off before pressing on with a move. 

“London is also not the blueprint for the whole country, as a very different story is being told everywhere else.

“A hot property market in the Midlands and North West is propping up the UK’s overall picture, and this, together with declines that have so far not been dramatic in London, show property is still the relatively safe long-term investment it has always proved to be.”

Northern Regions Continue to Offer the Highest Rental Yields

Published On: May 23, 2019 at 9:36 am

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Northern regions continue to offer the highest rental yields for landlords across England and Wales, according to the latest data from Your Move.

The letting agent revealed that rent prices in England and Wales edged slightly higher over the 12 months to April, by an average of 0.5%, to reach £861 per month.

The West Midlands overtook the South West as the fastest growing region for rent prices in April. The average rent increased by 4.0% in the year, to hit £641 a month. The South West recorded rent price growth of 3.7% in the same period, to £701.

Other areas to record strong growth included Yorkshire and the Humber, where rents were up by 2.5%, to £589, the North West, where prices stood at £648, following 2.3% growth, and the East Midlands, where rent price growth stood at 2.2%, to reach £666.

At the other end of the spectrum, rents declined in two regions in April – by 1.1% in London and 2.2% in the East of England, where the average rent was £874 as a result.

London remained the most expensive region to rent a home in the UK in April, at an average of £1,262 per month.

The North East remained the cheapest place to rent, at just £538 a month on average.

Once again, northern regions offered the highest rental yields in April, led by properties in the North East, which typically returned 5.0% to landlords, while those in the North West made an average of 4.8%.

This contrasts with an average yield of 3.2% in London, and 3.3% in both the South East and South West.

The average yield in England and Wales was 4.3% in April – the same as March’s figure, but slightly down on the 4.4% recorded in April 2018.

Your Move also reports that tenant finances remained relatively healthy in April, with the proportion of renters struggling with their rent payments standing at 9.1% in the month, which is down from 9.4% in March and February.

Martyn Alderton, the National Lettings Director of Your Move, says: “Across England and Wales, there are those areas which are seeing rents rise, and those where they are flat or falling.

“It is the areas which have seen periods of strong growth in recent years, such as London and the East of England, which have dropped back slightly.”

He continues: “Other areas of the country, including the West Midlands, are starting to catch up and are growing at an attractive rate.

“Regardless of the short-term rent fluctuations, the property market remains a great place to invest, with landlords also enjoying stable returns compared to last month.”

Lettings Market Lull Recorded in April

Published On: May 23, 2019 at 9:00 am

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A lettings market lull was recorded in April, following an increase in activity across the private rental sector in March, according to the latest Property Activity Index from Agency Express.

Following March’s growth, a decline in activity was expected last month.

Nationally, the number of new listings to let dropped by 14.1% month-on-month, while the amount of properties let was down by 9.9%.

New listings and the number of properties let also decreased on an annual basis in April.

All bar one region included in the index recorded a lettings market lull in April, with both new listings and the amount of properties let on the decline.

The only region to buck the seasonal trend was Yorkshire and the Humber. The number of properties let rose by a robust 7.1% on the previous month – the region’s greatest increase for the month of April since the index’s first records in 2012.

The regions to record the smallest decreases in April’s index included:

Property listings

  • Yorkshire and the Humber: -7.5%
  • Scotland: -8.4%
  • East Midlands: -9.9%
  • West Midlands: -10.7%
  • North East: -11.3%
  • Central England: -11.5%

Properties let

  • Scotland: -3.3%
  • South East: -5.2%
  • West Midlands: -6.8%
  • Wales: -9.3%
  • East Anglia: -9.4%
  • Central England: -11.4%

The most significant lettings market lull in April’s index was recorded in London, with new listings to let falling by 25.6%. While 2018’s figures did see an unseasonal spike in activity, of 10.7%, looking further back, we can see that this year’s activity has remained by and large on trend.

Stephen Watson, the Managing Director of Agency Express, comments: “We traditionally see a slowdown in activity throughout April, so this month has come as no surprise. While our figures will be affected by the bank holiday weekends and reduced number of working days, the fall in activity seems greater than what we would anticipate. As we now move into what is usually a robust period for the market, it will be interesting to see what advances are made.”

Half of Landlords and Agents More Likely to Leave Sector under Government Plans

Published On: May 23, 2019 at 8:00 am

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Almost half (46%) of landlords and letting agents are more likely to remove some or all of their investments in the private rental sector as a result of the Government’s plans to abolish Section 21 notices.

The findings come from a new survey by the Residential Landlords Association (RLA) of around 6,500 landlords and letting agents – its greatest ever response. 

The study also found that more than 40% of landlords are waiting for other planned changes by the Government to become clearer, before they make decisions on their ability to provide homes to rent.

These figures arrive just weeks after the Royal Institution of Chartered Surveyors (RICS) warned of private rent prices increasing by an average of 3% per year over the next five years, as a result of landlords being less prepared to let properties, while demand from prospective tenants rises.

In April, the Government announced plans to end Section 21 evictions, alongside proposals on improving the Section 8 process, under which landlords can repossess their properties on grounds such as rent arrears or anti-social behaviour. This procedure requires landlords to apply and be granted permission to repossess via the courts, yet official data shows that it takes over five months on average from application to repossession.

Half of Landlords and Agents More Likely to Leave Sector under Government Plans

According to the RLA’s survey, of those landlords with experience of such repossessions, 79% did not consider the courts to be reliable. Almost 91% of landlords supported the establishment of a specific housing court, bringing together all housing disputes under a single body.

With concerns that landlords selling property will usually require tenants to be evicted, the RLA’s research revealed that 48% of respondents would be encouraged to purchase a rental property with a tenant in situ, if they could reclaim the 3% Stamp Duty surcharge on additional homes, on the condition that the tenants can remain in the property for a year or more.

The survey also found widespread support for new grounds to be established upon which landlords could regain possession of a property. This included, to sell a property and to ensure that tenancies can best meet the needs of certain groups, such as students, who do not require the indefinite style tenancies being proposed by the Government.

David Smith, the Policy Director of the RLA, says: “Security of tenure means nothing unless the homes to rent are there in the first place. With the demand for private rented housing showing no signs of slowing down, it is vital that landlords are confident that they can quickly and easily get back their property in legitimate circumstances.  

“Whilst the system should clearly be fair to tenants, it needs also to support and encourage good landlords. Our survey shows how complex it will be to ensure that the grounds on which landlords can repossess properties are both clear and comprehensive. This needs to be underpinned by a court system that is fit for purpose and properly resourced. At present it is neither.”

He adds: “It is vital that the Government’s planned reforms are carefully considered, to avoid finding ourselves needing to reopen this whole issue later down the line.”

Have Buyers and Sellers Become Bored of Waiting for Brexit Outcome?

Published On: May 22, 2019 at 10:02 am

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Property buyers and sellers may have become bored of waiting for the Brexit outcome, speeding up activity in the housing market over the coming months.

Uncertainty surrounding Brexit has caused a slowdown in the UK property market over the past few months.

The latest UK Property Transactions Statistics from HM Revenue & Customs (HMRC), covering April 2019, show that the provisional seasonally adjusted property transaction count was 99,420 residential and 11,300 non-residential sales last month.

The provisional seasonally adjusted number of residential property transactions dropped by 0.3% between March and April, but is up by 0.8% on an annual basis.

Shaun Church, the Director of mortgage broker Private Finance, examines the statistics: “While spring fever is yet to hit the UK’s property market, the postponement of Brexit could be set to spark a flurry of summertime completions. Many potential buyers and sellers have adopted a wait-and-see approach, with first time buyers largely propping up the market over the past year, as they take advantage of the affordable mortgage deals and easing house prices that have arisen during these quieter market conditions.

“With the extension to Brexit meaning this uncertainty is unlikely to conclude for a number of months, the patience of prospective buyers and sellers is now being tested and, for many, has reached its limit. Home movers that have maintained a wait-and-see approach for months, if not years, now face the prospect of waiting till the autumn for a clearer picture on the UK’s future outside of the EU. We’re seeing these buyers and sellers now looking to move, regardless of the outcome of Brexit, which is set to bringing an uplift to market activity in the months to come.”

Are you expecting to see greater levels of activity in the property market over the coming months, despite the Brexit outcome? 

Growing Number of English Landlords Investing in Scotland

Published On: May 22, 2019 at 9:34 am

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A notable rise in the number of English landlords investing in property in Scotland has been recorded, thanks to cheaper house prices north of the border, along with tax reliefs and higher rental yields, according to Touchstone.

Research by the property training firm found that 78% of its clients believe that the best buy-to-let investment opportunities can be found in Scotland.

However, half of respondents said that they intend to target London’s buy-to-let market, while 53% prefer the South East and 49% the South West.

Touchstone identified increasing rental yields north of the border as a leading cause of English landlords’ investment in Scotland.

The average rental yield in Scotland has risen for the first time since March 2017, according to Your Move Scotland.

New data from the letting agent shows that the average rental property north of the border generated a return of 4.7% for landlords in March this year, which is higher than the 4.6% recorded in the previous month.

Consequently, rental returns in Scotland are now at a six-month high. This contrasts to England and Wales, where yields have held steady, at an average of 4.3%.

The Chief Executive of Touchstone, Paul Smith, says: “Central Scotland is now the focus of a great deal of activity. Edinburgh has always provided consistent returns, but Glasgow is now the city that’s setting the pace.

“There’s a great deal of excitement about its growing tech, creative and financial services sectors, which are attracting young, affluent workers from elsewhere in the country.

He adds: “The main exception in Scotland is, of course, Aberdeen, whose property market continues to be negatively affected by the downturn in the oil and gas industries.”

English landlords, do you own properties north of the border? If not, do you plan on taking your investment portfolio to Scotland?