Overseas-based landlords are leaving the British private rental sector, according to the latest index from Hamptons International.
The estate agent found that the proportion of let properties in the UK owned by overseas-based landlords is now at its lowest level in almost a decade.
The number of homes let by international landlords has dropped sharply from 14.4% of all properties in the first half of 2010 to 5.8% in the first 11 months of 2018, Hamptons found.
Every region in Great Britain recorded a fall in overseas-based landlords, but London has seen the most significant decline, with the proportion of homes let by international landlords dropping by 15.5% since 2010, to reach one in ten (10.5%) homes. This is down from just over a quarter (26%) of all properties in 2010.
However, the capital still has the highest proportion of homes let by overseas-based landlords than any other region.
Elsewhere, the proportion of international landlords has fallen by 10% in the South East over the same period, and by 6% in both the North East and East Midlands.
Outside of the capital, Yorkshire and the Humber has the highest proportion of homes let by overseas-based landlords (6.7%), and this region has only seen a 4% decrease in international investors since 2010.
Western Europeans account for the largest group of overseas-based landlords (34%), followed by Asians (20%) and North Americans (13%). However, since 2010, the proportion of Western European-based landlords has fallen by 2.1%, compensated by a pick-up in Asian landlords (2.1%). The number of Middle East-based landlords has also risen by 1.4% over the same period, now accounting for 11% of all international investors.
Hamptons International also found in its latest index that the average cost of a new let in Great Britain increased by 1.1% in the year to November, to hit £968 per month.
Every region of the country recorded growth in average rent prices, but the East of England saw the strongest (2.9%), followed by Scotland(2.5%) and Wales (1.9%).
Meanwhile, Greater London saw the slowest rent price growth of the year, at just 0.1%.
Are you an international landlord? If so, we’d love to hear your thoughts on the number of overseas-based landlords declining.
Rent prices across the UK edged up in November, led by gains in the country’s regional hubs, according to the latest report from Landbay.
The buy-to-let lender found that rent prices rose by an average of 0.97% in the 12 months to November, which is virtually unchanged from the level of growth recorded during the same point of 2017.
However, rent prices in the UK’s regional hubs are growing significantly faster than both London and the UK average, particularly in the north of England, as workers continue to relocate from the capital, Landbay reports.
Rent growth in November was led by Leeds, where the average price was up by 2.54% over the year, followed by 2.05% in Birmingham and 1.91% in Manchester.
John Goodall, the CEO and Co-Founder of Landbay, says: “The truth is, there is now a twin speed rental market, as London’s rent growth is dwarfed by cities such as Leeds and Manchester. This is being fuelled by the capital’s millennial exodus, as countless young professionals realise there is more to life than London. This same message carries weight with landlords, who are increasingly seeing the value of investing in these regional hubs.
Rent Prices Edge Up, Led by Gains in Regional Hubs
“In many ways, it could be argued that the northern powerhouse is beginning to take effect amid stretched affordability and a harsher tax regime.”
In November, the average UK rent stood at £1,212 per month, which is up by £10 since the start of the year, owed in part to London’s improved performance, recording growth of 0.58% this year.
Rent prices are rising in 27 out of the 33 London boroughs, which is a very different picture from this time in 2017, when rents were declining in 26 of the capital’s boroughs.
When London is removed from the picture, the average rent in the UK was £769 per month in November, which has increased from £761 since the start of 2018.
The East Midlands (2.25%), Yorkshire and the Humber (1.50%) and the West Midlands (1.48%) have all experienced the most substantial growth over the past year, and are expected to climb further as we head into 2019.
Growth in the North East peaked to its highest point in two years in November 2017, but, since then, rent price inflation has depreciated to 0.05% on an annual basis – its lowest growth rate since August 2013.
Every region of the UK saw rents increase last month, but it is worth noting that the speed of growth has not been consistent, with all areas other than London experiencing a slowdown.
Goodall adds: “London’s green shoots paint a positive picture for landlords ahead of what will likely be testing economic times, with Brexit and further interest rate rises expected.”
Housing market activity continued to slow down in November, according to the latest Housing Report from NAEA Propertymark (the National Association of Estate Agents).
Housing demand
The number of home hunters registered per NAEA Propertymark member estate agent branch fell in November, from an average of 294 in October, to 282.
This is the lowest number of prospective buyers to be recorded for the month of November since 2012, when agents registered an average of 263.
Property supply
In November, the supply of available homes to buy on member estate agents’ books dropped by 13% for the second consecutive month, falling from an average of 40 in October to 35.
This is the lowest number recorded since earlier this year, when an average of 33 properties were available to buy per branch in April.
Agreed sales
The number of properties sold to first time buyers remained at 23% in November for the second month running, which was higher than the 20% recorded in August and 22% in September.
Year-on-year, the amount of sales made to this group is down, from 27% in November 2017.
The number of sales agreed per NAEA Propertymark member branch fell for the second consecutive month in November, from an average of nine in September, to eight in October, to seven last month.
Mark Hayward, the Chief Executive of NAEA Propertymark, assesses the figures: “Last month, it was clear that uncertainty surrounding Brexit was having an impact on the sector, and this month is no different. We usually see a seasonal slowdown, but it’s unlikely that the time of year is the sole cause of today’s market conditions.
“As we near the end of the year, we’d usually expect potential buyers and sellers to put their plans on hold until early next year, but it’s likely that this year we’ll just see people holding off until there’s some clarity around what the Brexit deal might look like and what it will mean for the economy.”
The UK property market is biding its time, according to the November House Price Index from Your Move.
House prices across the country largely continue to flatline, with the rate of annual growth falling consistently since August. It now stands at an average of 0.9%, which is well below the rate of inflation and the lowest since April 2012.
This leaves the average property value in England and Wales at £305,522, following a £2,724 increase on November 2017.
Despite weak price growth, property transaction levels rose slightly in November, by 2.5% on a seasonally adjusted basis. With an estimated 82,500 sales, they are at their highest for the month in three years.
Key insights
In the year to September, while the number of loans for first time buyers was up marginally (0.4%) on the same period last year, the amount for home movers was down by 3.6%.
Perhaps most tellingly, the number of buy-to-let mortgages fell by 13.0%. This could be an indication that a wait-and-see approach is now being adopted, particularly as the end of the year approaches and the nation waits with bated breath on the outcome of Brexit.
Longer-term issues also play a role, however, and affordability remains a key concern. The greatest growth in transactions has been in the cheapest region in England – the North East – with sales in the three months to October up by 7% on the same period of 2017.
By contrast, the South East (the most expensive region outside of London) saw transactions fall by 4%. The capital bucks the trend, with sales up by 2%, but it also saw price falls earlier than other regions.
More widely, the Resolution Foundation’s report on the bank of mum and dad earlier this month shows the continuing difficulty that the young have funding their own home purchases. It showed that those without parental property wealth are, at the age of 30, roughly 60% less likely to be homeowners than those whose parents are homeowners.
Region-by-region
The top three regions for house price growth remained unchanged in November. The West Midlands still lead the way, with annual growth of an average of 3.7%, supported by a strong performance in the West Midlands combined authority, which includes Birmingham. With prices up by an average of 5.3% over the year, it’s among 13 areas to set a new peak in the month.
The Property Market is Biding its Time, According to Your Move
Neighbouring East Midlands, meanwhile, is also growing strongly, with prices up by an average of 3.5% annually. Rutland saw growth of 10.8% over the 12 months to November, while Derby (6.1%), Leicester (5.7%), Nottinghamshire (3.9%) and Nottingham (2.0%) all set new peak average property values.
Despite the performance of Rutland and others in the Midlands, it is Torfaen in Wales that has recorded the highest growth over the last year, at an average of 15.6%. This was helped by the recent sale of the highest priced property in the area, for £620,000, where the average home costs just £171,708. It is also supported by demand for properties from those working in the Bristol and Gloucestershire areas.
More generally, Wales also continues to be the only area outside the Midlands that is outpacing inflation (2.2% in October), with the average price up by 2.7% annually.
As well as Torfaen, it has seen strong growth in Caerphilly (8.8%), Carmarthenshire (7.2%) and Powys (6.4%), all of which set new peak average prices in November. The big cities of Newport (6.2%) and Swansea (3.7%) also show above average growth for the region, although prices in Cardiff were only up by 2.2% annually.
At the other end of the scale, prices in the East of England are now down on an annual basis for the first time since March 2012. While Southend-on-Sea and Thurrock still show good growth (4.1% annually for both, with the latter recording a new peak), that’s more than offset by falls in Suffolk (-0.8%), Luton (-1.0%), Bedfordshire (-1.3%) and, most significantly, Cambridgeshire (-4.6%).
It is, however, the only region to see prices falling on an annual basis, and the majority of unitary authorities continue to see growth, with prices up in 74 of the 108 areas in England and Wales outside of London.
London
The average house price in London increased by 1.3% in October – nominal growth, but a real fall compared to inflation. The average property in the capital was priced at £622,508.
On an annual basis, prices fell in 21 of the 33 London boroughs, with the City of London (7.8%) leading those that bucked the trend. Three of the top five priced boroughs recorded double-digit declines: in Kensington and Chelsea – the most expensive borough – prices fell by 16.5%; in the City of Westminster, they were down by 8.0%; while Hammersmith & Fulham saw declines of 10.5%.
On the other hand, prices continue to grow strongly in both Merton and Lambeth (7.5% and 7.6% respectively).
Overall, there are pockets of strength and weakness across London. Prices in Tower Hamlets fell by an average of 13.7%, while, in Hackney, they’re up by 5.6%, with both areas roughly mid-table in terms of property values.
At the lower end of the market, Bexley, and Barking and Dagenham still show nominal growth (1.7% and 0.7% respectively), while Newham has seen prices drop by 6.7%. Largely, however, areas to the east of the capital, where properties tend to be more affordable, are most likely to be seeing modest growth.
Oliver Blake, the Managing Director of Your Move and Reeds Rains, comments: “Despite the current economic uncertainty, it’s encouraging to see that there is still some increase in transaction levels and that, whilst house price growth is relatively flat, it means for first time buyers, for example, the news remains positive.”
If you’re thinking of becoming an independent inventory clerk, then you must be aware of what it takes. The Association of Independent Inventory Clerks (AIIC) has spoken to its members to find out…
Being an inventory clerk goes beyond writing an impartial and detailed report; it’s about customer service, ingenuity, safety and good dose of tactfulness, according to the AIIC’s Chairman and the Managing Director of My Property Inventories, Danny Zane.
Landlords, letting agents and tenants all know that the role of an inventory clerk is to note meter readings, the condition of a property (including its walls, fixtures, fittings and furniture), whether fire safety labels on soft furnishings are present, and whether smoke and carbon monoxide alarms are in working order.
So, if you were an inventory clerk, what would you be keeping in your bag?
“I just thought about the stuff I keep in the car: replacement batteries, charging cable for my phone, a change of top and leggings, a small towel, dry shampoo and a hair brush, amongst other things,” says one AIIC member. “I could tell you the story of the fridge that meant I was very glad to have a change of clothes. And what to say of the house where the tenant left the heating on so high that, in the end, I had to reach for the towel and dry shampoo!”
Another adds: “One of our clients asked us to carry a ladder to every job in order to twist non-working light bulbs to see if they are just loose or actually blown. They also asked us if we were prepared to change the batteries of the smoke alarms whilst on the job, so we now carry spare batteries, too!”
What it Takes to be an Inventory Clerk
Properties vary in size and style, depending on the area. In some locations, buildings are more traditional, with very high ceilings and double-height stairwells. This may complicate the job of inventory clerks, who are instructed to read and note the expiry dates on smoke alarms from a sticker, which is usually on the side of the device.
Where using a ladder may not be possible, or may be deemed too risky for health and safety reasons, and insurance cover purposes, the selfie stick is invaluable – especially in unfurnished properties, where there is nothing to stand on to gain height.
“On a few occasions, alarms are situated more than four metres high, making it impossible to reach them, even with an extended pointer,” explains one member. “I say as much in my report, and add a photograph for the landlord and agent to see.”
Photographs may, however, not always show the issues that inventory clerks are reporting on, as it is difficult to show damage unless it is a major problem. When photos are used in a dispute, they must be high resolution and of a reasonable size.
Short days during the winter make the task especially troublesome, so landlords and agents should book inventory reports to be completed in daylight, for the best results.
On a positive note, photos are normally only used to back up what has been reported.
A member of the AIIC jokes: “My very best was a retro-fitted water meter under a sink. Fitted upside down, facing the back of the cupboard! I took a picture of the back of it and recommended the landlord use his spidey senses to read it.”
The good news is that there is no legal requirement to include photos in an inventory report, but AIIC members like to include them as supportive evidence. To be able to cover everything, one clerk took 346 photos of a two-bedroom furnished property, with five rooms, plus a hallway.
Meter readings are an important part of the inventory. They help new tenants and landlords of empty properties to confidently deal with discrepancies reported by utility suppliers.
However, they can be troublesome for some clerks: “I have my arachnophobia (the real thing, diagnosed and everything) under control-ish! But OMG, I hate openingwater meter covers. Gas and electricity boxes are bad enough! There is always at least one web-with-resident at the top, more below! The landlords I work for think it is funny. Landlords just look at me as though I have lost my mind (to be fair, they are probably right) and I do find it a bit daft myself.”
Another continues: “I find the only way to take a picture of a water meter is to lean completely over it, blocking the sun, then drop my arm into the recess and let the auto focus do the rest. This provided that the water meter is not covered by a HUGE ants’ nest, water, rubbish or, typically, by a car parked over it.”
The relevant water company maintains water meters on public areas, such as footpaths and highways. Inventory clerks attempting to read meters located in the pavements are responsible for any damage that they may cause to the meter itself, or injury that they may cause to other people in the process of reading the meters.
Zane observes that, when AIIC members cannot read a water meter, but can locate it, they are always advised to take a photo, so that their landlord or agent can clearly see why. Clerks should also ask their instructing principle for the exact location and the meter reference number at the time of booking. This will enable them to identify the right meter where no flat labels are applied, especially in blocks of flats.
It is surprising how many tenants go ahead with changes to their property without their landlord’s consent, even when a tenancy agreement carries a clause that the landlord’s consent must not be withheld unnecessarily.
Zane says: “The fact is, whether rented or owned, a property is a home. It is therefore understandable that tenants have a sense of ownership towards the property they live in. In reality, it is a false sense of ownership, which may cost them, and the landlord, dearly.”
However, there are times when inventory clerks must find a neutral ground that is both tactful and respectful.
An AIIC member recalls: “I have just completed a check-out where the tenants had been living for six years. They had a pet dog, which died during the tenancy, and they buried in the back garden with a small concrete marker stone with the pet’s name anddates etc. I left it as was and just commented at the end of the report that the grave was present.”
After hearing the accounts of these inventory clerks, do you believe that you have what it takes to enter the industry? Let us know!
Annual declines have been seen in the UK lettings market over November, despite a buoyant month in October, according to the latest Property Activity Index from Agency Express.
The report reveals a slowdown in lettings market activity as we draw closer to the festive period.
Nationally, the number of new property listings to let across the UK dropped by 1.6% over the month to November, while the amount of properties let was down by 7.2%.
Looking back at Agency Express’ historical records, annual comparisons show this November’s declines to be greater than those recorded in both 2017 and 2016.
Across the UK, five of the 12 regions included in the index saw growth in the number of properties to let, while four recorded increases in the amount of properties let.
The greatest rise in November’s index was recorded in the North East, where the number of properties let was up by a robust 33.3% on October. However, the region also experienced the largest decrease of the month, with new listings down by 31.3%.
The South East followed suit, with the number of new listings up by 19.1% and properties let down by 16.5%.
Again, looking back at Agency Express’ historical records, we can see that year-on-year data for the North East is positive, but the number of properties let in the South East has dropped.
Of the remaining regions, prominent performers in November included:
Property listings
South West: +14.3%
East Anglia: +8.7%
East Midlands: +7.8%
London: +2.0%
Properties let
Yorkshire and the Humber: +5.9%
North West: +1.7%
Scotland: +0.4%
Stephen Watson, the Managing Director of Agency Express, comments: “This month, we have seen a much steeper decline than usual across the UK lettings market. As now we move into the December seasonal slowdown, we don’t anticipate any increases in activity, so will be interesting to see how the end of year figures stand.”
