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Em Morley

Call for freeze as report shows rents rising at record rates

Published On: May 19, 2022 at 9:31 am

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Categories: Lettings News,Tenant News

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Rising rental yields signal a period of opportunity for property investors

The Index of Private Housing Rental Prices report for April 2022 has been published by the Office for National Statistics (ONS). It shows that rents in the UK have risen by 2.7% in the 12 months to April 2022. This is up from 2.4% in the 12 months to March 2022.

The main points of the report also include:

  • Private rental prices grew by 2.5% in England, 1.7% in Wales, and 2.9% in Scotland in the 12 months to April 2022
  • The East Midlands saw the highest annual growth in private rental prices (4.0%), while London saw the lowest (1.1%)

Generation Rent has commented on the ONS Index of Private Housing Rental Prices, highlighting that it shows UK rents rising at their fastest rate since 2016.

Dan Wilson Craw, Deputy Director of Generation Rent, said: “Rents have been surging since offices and universities opened back up last year, and more people moved back to cities than there were homes available. Now landlords are trying to raise rent on existing tenants knowing that if they can’t afford it, it won’t be hard to find a new tenant.

“This is unsustainable, particularly for the 39% of private renters who rely on Local Housing Allowance which has been frozen. With rising food and energy prices, renters will get ill, go hungry and fall into arrears, risking eviction and homelessness. To avoid this catastrophe, we need a freeze on rents and a pause on evictions for the duration of this emergency, and an increase in Local Housing Allowance.”

Government reports continued UK house price growth

Published On: May 18, 2022 at 3:28 pm

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Categories: Property News

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Treasury loses £1.5 billion since hike in rented housing tax

The House Price Index for March 2022 has been published by the Government, revealing the latest house price changes for England, Scotland, Wales, and Northern Ireland.

The report states that the March data shows:

  • On average, house prices have risen 0.3% since February 2022
  • There has been an annual price rise of 9.8%, which makes the average property in the UK valued at £278,436

James Forrester, Managing Director of Barrows and Forrester, comments: “The economy continues to wobble against a backdrop of rising inflation and the cost of living crisis and so the old adage of ‘what goes up must come down’ may certainly be on the minds of many where the UK property market is concerned. 

“So far, this worry is yet to be realised and the market continues to move forward at speed, seemingly impervious to the influence of the wider economic landscape.”

Marc von Grundherr, Director of Benham and Reeves, comments: “The winds of change are certainly starting to blow and while this building economic headwind is yet to derail the phenomenal rates of house price growth being seen across the UK on an annual basis, it certainly seems as though dark clouds are gathering on the horizon with a reduction in pace already materialising on a monthly basis.”

Chris Hodgkinson, Managing Director of HBB Solutions, comments: “The property market remains awash with homebuyers keen to climb the property ladder and with stock levels remaining insufficient, this heightened demand is continuing to drive house prices upwards on an annual basis. 

“However, with interest rates rising and inflation at a 40 year high, mutterings of a looming recession could soon reverse the market conditions seen in recent years and we’re already starting to see a slowdown on a month to month basis. 

“Should this come to fruition, many sellers may find it a struggle to secure a buyer and for a price they are happy with.” 

Short-term rental market research pinpoints London hotspots

Published On: May 17, 2022 at 12:55 pm

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Categories: Landlord News,Lettings News,Property News

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Rental data reveals London has become unaffordable for graduates

Research into London short-term lets has found that Westminster provides the greatest level of rental stock choice.

London rental platform Rentd analysed current rental availability for short-term rentals across the London market to reveal which boroughs were home to the highest level of short-term rental stock.

The market analysis shows that there are some 66,641 short-term rentals currently listed to let across the London rental market. 

Westminster is the capital’s short-term rental market hotspot, with 11% of all available short-term rental properties found within the borough.

Tower Hamlets ranks next, accounting for 8.3% of London’s short-term rental availability, followed by Hackney (7.7%), Camden (6.8%) and Kensington and Chelsea (6.8%). 

In contrast, Havering, Sutton and Bexley are home to the lowest levels of short-term rental availability, with each borough accounting for just 0.4% of total short-term stock each. 

Ahmed Gamal, Founder and CEO of Rentd, comments: “Short-term rentals form an integral part of the rental market and for many, they are the vital stepping stone between moving to a new town or city and finding that perfect long term rental property. 

“For others, they provide a preferable option to hotel living when working away from home for a prolonged period and providing this flexibility is as important as the need for long term rentals within the sector, perhaps more so in major cities such as London.”

HMO stock declines, as Government rule changes take effect

Published On: May 13, 2022 at 12:52 pm

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HMO stock levels continue to fall, now down -2.4%

The number of HMOs in England has declined in the past year, research from specialist property lending experts Octane Capital shows.

They say this is likely caused by the Government’s regulations for Houses in Multiple Occupation (HMOs) introduced in 2018. A licence is now required for all properties that are occupied by five or more people who are not members of one family.

Octane Capital says the number of HMOs on the market has decreased, with many landlords selling up because of legislative changes. Their market analysis shows that, on an annual basis, the number of HMOs in England fell by -3%, from 511,278 in 2019/2020 to 497,884 in 2020/21.

This overall national decline has been driven by the London market where the level of total HMOs has declined by -13%, the biggest reduction of all regions. In the capital, 11 different boroughs have reported a drop, with the biggest being in Ealing where HMOs have declined by -59%, followed closely by a -58% decline in Lambeth.

Redbridge has seen its numbers halved, and Barnet’s decline sits at -37%. The number of HMOs has also declined considerably in Greenwich (-34%), Enfield (-30%), Wandsworth (-18%), Croydon (-13%), Hillingdon (-10%), Merton (-2%), and Tower Hamlets (-1%).

CEO of Octane Capital, Jonathan Samuels, comments: “It’s only right that all efforts should be made to ensure the safety and wellbeing of the nation’s tenants and that everyone is afforded the right to a basic standard of living. The changes to HMO licensing have certainly looked to ensure this, but as a result, we have seen a decline in the level of operational HMOs across the rental market, particularly within London.

“This essentially means that those reliant on the rental sector now have even less choice when it comes to finding suitable, safe accommodation, but that’s not to say it can’t be found.

“We’ve continued to fund a high number of quality HMO deals throughout the pandemic and this sustained level of interest from professional investors is yet to show any signs of decline. This includes a large number of refurbishment transactions whereby investors are looking to drastically improve the quality of existing HMOs, so while volume has certainly fallen, we don’t believe this will be a long-term trend and should benefit the nation’s tenants in the long run.”

Queen’s Speech announces Government housing and homelessness legislative plans

Published On: May 11, 2022 at 9:20 am

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Categories: Law News,Tenant News

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Landlord repossession rates have risen across all regions, government data shows

As part of the Queen’s speech, the Government has unveiled the legislative measures planned for the next parliamentary year.

The plans include:

  • Legislation to make the streets safer, which a Government consultation suggests will replace the Vagrancy Act and could be used to criminalise people sleeping rough
  • Reintroducing the Renters’ Reform Bill, which will scrap Section 21 ‘no fault’ evictions.
  • Regulating social housing to strengthen rights of tenants and ensure better quality social homes.

Matt Downie, Crisis Chief Executive, comments: “This Queen’s speech provides some hope for renters anxious about being turfed out of their home in the midst of the cost-of-living crisis and recognises the urgent need to address poor quality social housing with tenants’ voices at the heart of this reform.

“But let’s be clear, this speech gives with one hand while taking with the other. The plan to introduce legislation that has the potential to criminalise anyone forced to sleep rough is nothing short of shameful and flies in the face of any effort to tackle rough sleeping for good. What’s more, we need urgent action to pull struggling families back from the brink.

“We cannot end homelessness with this mismatched plan. The Government must take action to provide direct support to families hit by the cost-of-living crisis and plans to introduce punitive legislation must be scrapped, if the Government wants to truly end rough sleeping for good.”

The National Residential Landlords Association (NRLA) has also responded to the confirmation in the Queen’s Speech that the Government will bring forward its planned Renters’ Reform Bill to abolish Section 21 repossessions.

Ben Beadle, Chief Executive of the NRLA, comments: “We welcome the Government’s acceptance that reforms to the rented sector need to strengthen the ability of landlords to tackle anti-social tenants and those with repeated rent arrears. We will continue to work to ensure that these and other grounds for possession are fair and workable.

“Whilst we support proposals for an Ombudsman to cut the number of possession cases needing to go the court, this cannot be a substitute for proper court reform as well. At present it can take almost a year for a private landlord to repossess a property through the courts where they have a legitimate reason to do so. This is simply not good enough.”

Alicia Kennedy, Director of Generation Rent, comments: “We can’t level up without dramatic improvements to the quality of rented homes. Reforming tenancies and raising standards in the private rented sector are essential first steps towards this so the Government’s recommitment to a Renters’ Reform Bill is hugely important.

“Renters have been waiting three years for the Government to abolish these insidious Section 21 evictions. Finally, legislation looks to be on its way. But we can’t rest until the changes are passed into law. Now it’s the details that matter.

“It is essential that any new tenancy regime reduces the number of unwanted moves and gives renters the confidence to challenge poor practice by landlords.

“The plans also appear to address the desperate lack of regulation of private landlords, with a new ombudsman, a property portal and a requirement to meet the Decent Homes Standard. We need more detail on each, but they are essential measures if private renters are to exercise their rights effectively.”

London rental yields are recovering from the pandemic

Published On: May 9, 2022 at 8:36 am

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Rental data reveals London has become unaffordable for graduates

London rental yields are on the rise after a temporary pandemic slump, according to research by rental platform Rentd.

It says southern areas of the capital are providing particularly strong opportunities for buy-to-let landlords.

London’s property market was hit by a dip in demand during the pandemic, as people prioritised green, open space over urban living. This, alongside a reduced need to commute to the office, created a drop in demand for rental homes in England’s biggest city. 

This fall in demand caused rental values to dip and led to a fall in yields. However, with the London rental market improving, Rentd has seen yields increase again.

In the past year alone, average yields have climbed by 0.3%, from 3.3% to 3.6%. However, there are a good number of areas where yields have climbed more dramatically. 

In the SE17 outcode area around Walworth, yields have increased by 1.4%, from 4% to 5.4%; and up in Hampstead Heath’s NW3 area, they’re up 1.1% from 2.9% to 4%. 

In the Forest Gate area of E7, yields have increased by 1%, from 3.7%-4.7%, and the same increase applies to both SE16 and SE8. 

In E9, SE4, SE5, CR4, and EN4 respectively, yields have increased by 0.9% on the year.

Ahmed Gamal, Founder and CEO of Rentd, comments: “The capital’s rental market is showing a solid return to form after a slightly concerning dip in the early days of the pandemic. It was probably a little naive to think that renters would reject London in the long-term. It is, after all, one the greatest cities on earth and the opportunities it presents are unmatched in the UK. 

“It’s interesting to see the south of the city enjoying much of the strongest yield growth, suggesting that, while people are still happy to live in a major city, they also want to maintain easy access to the green and coastal locations easily accessible from the south.”