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Em Morley

East Midlands Storms Ahead with Highest Rent Price Growth

Published On: November 15, 2017 at 10:49 am

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Categories: Lettings News

The East Midlands has stormed ahead with the highest rent price growth over the past year, according to the October Rental Index Report from Landbay.

Tenants living in properties in London now spend an average of £1,874 on rent per month, while those outside of the capital pay £759 on average.

In London, the average rent for a one-bedroom property is now £1,449 per month, while two-beds and three-beds cost £1,920 and £2,677 on average respectively.

In contrast, tenants in the rest of the UK pay an average of £599 for a one-bed, £715 for a two-bed and £826 for a three-bed property.

Since October last year, the average rent in the UK has risen by 0.68%, to £1,196 a month. In England, rents increased by 0.60% to £1,227, while London actually experienced a drop in average prices, of 0.80%, to £1,874. In Northern Ireland, rents rose by 0.81% over the year to an average of £563 per month, whereas Scotland saw average annual growth of 1.81%, to reach £733. Wales also recorded a healthy increase of 1.49%, to take the average rent to £642 per month.

East Midlands storms ahead

It’s the East Midlands, however, that has taken the market by storm to become the region with the greatest rent price growth in the whole of the UK since October 2016. Out of the top 20 areas for annual growth, the East Midlands scored six places, with Leicester (3.23%) and Northamptonshire (3.19%) making the top ten, in eighth and ninth spots.

Following them, Rutland (2.73%), Leicestershire (2.68%), Nottingham (2.56%) and the East Midlands as a whole (2.42%) snatched spots in close succession, suggesting that the region is becoming a more popular rental hotspot.

In fact, average annual growth in the East Midlands has not only increased by 0.08% since last month, but is currently almost 0.5% higher than the average in the rest of England (outside London), rivalling the surge in rent price growth seen recently in the East of England.

The change comes as the Bank of England (BoE) announced a 0.25% increase in the base rate to 0.5% on Thursday 2nd November – the first rise in over a decade. Since August 2016, when the Monetary Policy Committee (MPC) made the decision to cut the base rate from 0.5% to 0.25%, rent prices rose by less than 1%, while house prices grew by five times as much.

Now, however, this reversion back to 0.5% is expected to affect the rental market across the UK, as mortgage rates are also likely to increase.

The CEO and Co-Founder of Landbay, John Goodall, comments: “A 0.25% uplift might seem small, but the message it would give to the markets, of monetary policy normalisation, could spook landlords, especially those embarking on long-term tenancies. In and of itself, a quarter of a percent is not going to have a huge impact on rental prices overnight, but, symbolically, it has the power to galvanise landlords to price in many of the tax and regulatory changes that have been building up for some time now.”

East Midlands Storms Ahead with Highest Rent Price Growth

East Midlands Storms Ahead with Highest Rent Price Growth

The appeal of Leicester

Buy-to-let properties in Leicester, East Midlands have experienced a significant rise in rent price growth over the past month. So much so that the area leads the region as a hotspot for landlords looking to invest.

Although the city takes eighth spot in this month’s index of the top ten areas with the greatest annual rent price changes, it zoomed past the East of England, which has dominated the spotlight in recent months, to take crowning glory on a monthly basis, with growth of 0.60%.

Rental properties in Leicester cost tenants an average of £639 per month, with one-beds costing £491, two-beds being £630 and three-beds at £715. In comparison to the rest of the region, rents are just £17 per month more than the average, and are almost £90 a month cheaper than prices in Northamptonshire – the most expensive area of the region.

With HS2 looking to complete in 2026, it is possible that tenants are looking to get ahead of the rush to take advantage of the more convenient access and travel connections between London, the West Midlands and East Midlands.

However, the regeneration that is currently taking place in the city is perhaps enough of a draw on its own to welcome new tenants. Over the past five years, the city has secured £25m of funding to kick-start development in the Waterside area. This will see the building of 300 new homes, new office space, shops, green areas and canal paths.

Furthermore, another, larger 130-hectare site, Ashton Green, is looking forward to the development of up to 3,000 new homes, ten hectares of office space, a commercial village centre and 50 hectares of green space, which would be perfect for families looking for the best of country and city life.

Have you just found your next place to invest?

Top Tips for Having a Stress-Free Move

Published On: November 15, 2017 at 9:47 am

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Categories: Property News

We all know moving house is stressful. Some studies rank it as being almost as stressful as a bereavement. But stress can just be the start.

According to research conducted by west London removals firm Kiwi Movers, almost a third of people who’ve moved house in the last five years have injured or hurt themselves doing so. The most common complaints were back injuries, bumped heads, scraped knuckles and pulled muscles.

As well as injuries, house movers regularly have to deal with loss and damage to their belongings, not to mention stress-induced conflict with loved ones and unnecessary moving expenses.

To help house movers eliminate some of these more common challenges, Kiwi Movers has assembled a team of highly qualified experts to pool their knowledge on relocating the easy way. 

Plan your move like a military operation

“Planning is everything” says Matt Lowe, civil engineer, British Territorial Army officer and Director at Kiwi Movers. “With the right plan, you can identify hurdles, save time and shave hours off of the time it takes you to move. This of course will save you money, as well as hassle.”

Begin the planning phase no less than one month ahead of your move date. Start by throwing out clothes you haven’t worn within the last six months and get rid of as much paper as possible.

Document important stuff like bills and official letters by snapping them with your phone, but get rid of as much unnecessary paper as possible. This will save you at least one box’s worth of packing.

You should also stop buying frozen food at this stage. About a week before your move, you will hopefully have used up the remaining contents of your freezer. If not, invite some friends round to use up the leftovers. Who doesn’t love a good feast of potato waffles and IKEA meatballs once in a while?

Other tasks to complete before moving day

  • Tell the council, TV licensing, utility and broadband suppliers, employer, bank and anyone else who sends you important letters that you’re moving, when you’re moving and, of course, your new address.
  • Book your removal firm as soon as you have a removal date. Removal firms get booked up weeks, sometimes months, in advance.
    • Ask about rate structures. Some firms, including Kiwi Movers, offer by-the-hour removals, which can work out cheaper than booking a crew for the whole day.
  • De-clutter. Get rid of as much unnecessary stuff as possible. Don’t be sentimental about it either. Start with duplicate items. Most households have more hand-whisks than they actually need.
    • Then get rid of anything that’s going to need replacing within a year, such as tatty furniture or appliances on their last legs. Better to get rid now and have a new one delivered to your new home, rather than lugging the old one on the day and replacing it shortly after.

The physics of moving heavy stuff

Now that you’ve decluttered your stuff, it’s time to shift what’s left of it. Before moving house, everyone should be aware of their physical capabilities. A lot of injuries come about from people lifting too much, or lifting heavy items when tired.

According to the Niosh Lifting Equation, a healthy adult should be able to carry 51 lbs (23 kg) of weight. But this doesn’t account for tiredness, stairs, or the extra stress to the body of carrying awkwardly shaped boxes along narrow hallways.

Texas-based scientist Dr. Greg Moakes has more than ten years’ hands-on experience in the field of materials science. He thinks many house movers encounter problems when they fail to respect the unique physical properties of each item.

“It’s easier to move 20kg of books than it is to move a 20kg mattress. You can split the books into smaller batches, stack them, carry them on a dolly or lift from an elevated surface to give yourself a host of advantages.

“But a mattress is just one big floppy slab of weight that drags, snags and scuffs at will. People are more likely to get injured moving a mattress up a flight of stairs than carrying a heavy box.”

While it may take a little more time to team up on seemingly easy-to-carry loads, it will save time and stress in the long run. It’s far better for two people to lift something together with ease, than for one person to injure themselves trying to whizz a box up the stairs and then be out of action for the rest of the move.

Avoiding injury

Speaking of avoiding injuries, it’s easy to complete a house move unscathed with just a few simple precautions.

Scott Roberts has worked in the fitness industry for five years. He recommends a pre-move stroll for getting the job done without any drama.

Top Tips for Having a Stress-Free Move

Top Tips for Having a Stress-Free Move

“To avoid injury, people need to concentrate on lifting with correct technique and not rushing things. Keep the back straight and lift with the legs rather than the back when picking items up from the floor, and do a sufficient warm up beforehand.”

Even if you’re pressed for time, Scott warns against rushing into it: “Do not go straight into lifting heavy objects as soon as you get out of bed. Spend ten to 15 minutes waking your body up and getting active. A simple walk around the block can get the heart rate up, before moving on to some more specific drills.

“Bodyweight squats and hip rotations will mimic picking objects up from the floor and any rotational movements you may do. This is where most back issues occur.”

One final scientific note of consideration comes from Professor Sir Cooper, an expert in organisational psychology at the University of Manchester. Professor Cooper stresses the need to consider privacy, mood and anxiety when planning where to put your furniture: “Position seats and chairs so people don’t have their backs immediately facing room entrances or areas of high foot traffic.”

TPO Launches Phase Three of Crackdown on Letting Agent Fees

Published On: November 15, 2017 at 9:04 am

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Categories: Lettings News

The Property Ombudsman (TPO) scheme has launched phase three of its national campaign with the Chartered Trading Standards Institute (CTSI) to crack down on the letting agents that are breaking the law by not displaying their fees.

This phase will see TPO contacting 117 letting agents in Plymouth and the surrounding region.

Phases one and two of the campaign targeted agents in Swansea and Dorset, followed by Reading, Basingstoke and the surrounding areas. The purpose of the campaign is to improve awareness of the current legislation that requires agents to display fee information and ensure that more firms are fully compliant, to avoid fines being imposed by Trading Standards.

The campaign requires agents to submit evidence, and any firm that is found to be displaying the information incorrectly is given additional guidance and the opportunity to amend and resubmit to ensure that they are compliant.

The first two phases of the campaign saw 445 agents asked to submit photographic evidence, with 95% of agents now displaying fees correctly as a result. Agents that fail to comply and submit evidence will be referred directly to Trading Standards, which can impose fines of up to £5,000.

TPO, Katrine Sporle, says: “We’ve had an excellent response in the regions the campaign has focused on so far, with the vast majority of agents demonstrating they are compliant. This campaign is about educating agents that are either failing to display the required information or are unwittingly breaching the law by not displaying it correctly, which is why our campaign is phased, so we can offer agents additional guidance and support, so they can put things right and avoid risking a fine from Trading Standards.”

In the last three months, it has been reported that agents in London alone have been issued with fines from Trading Standards totaling as much as £370,000 for not displaying their fees correctly.

To date, seven agents are due to be referred to Trading Standards for falling short of the expectations outlined in TPO’s Lettings Code of Practice and failing to display their fees in accordance with the law.

While the Government has confirmed its intention to ban agents from charging fees to tenants in the future, as laid out in its draft Tenants’ Fees Bill this month, there is no confirmation on when this new legislation will come into force.

This means that the current law still applies, and agents in England and Wales must display any tenant and landlord fees prominently, along with their redress scheme membership and any Client Money Protection (CMP) scheme membership details. This information must be displayed at all premises where agents deal face-to-face with tenants and landlords, and on the agent’s website.

Furthermore, regardless of the future ban on tenant fees, letting agents will still be required to display the fees they charge to landlords. Therefore, TPO and CTSI’s joint campaign to ensure agents display their fees in accordance with the law will continue.

As before, agents in Plymouth will be asked to provide photographic evidence to demonstrate that they are correctly displaying their fees in both the branch and on their company websites, as required by law.

Sporle adds: “TPO has also been in contact with a Trading Standards officer from Plymouth, who is focusing on display of lettings fees, and TPO and Trading Standards Plymouth hope to work collaboratively on this project to ensure we continue to see positive results or encourage agents to make changes where necessary.”

Prospect of Interest Rate Rise Boosted Remortgaging in September, UK Finance Finds

Published On: November 14, 2017 at 11:03 am

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Categories: Finance News

The prospect of an interest rate rise, which was implemented last week, caused a boost to remortgaging activity in September, the latest data from UK Finance shows.

On a non-seasonally adjusted basis, the figures show that total mortgage lending dropped in September, but remained higher than in the same period last year.

First time buyers borrowed £5.1 billion – down by 11% on August, but 4% higher than in September 2016. This equated to 31,100 loans – down by 10% on a monthly basis and 1% on last year.

Home movers borrowed £6.9 billion – down by 18% on the previous month, but 6% higher year-on-year. The number of loans (32,200) was down by 17% on a monthly basis, but 3% higher than September 2016.

Homeowner remortgage activity totalled £6.4 billion – the same amount as in August, but 16% higher than a year ago. This equated to 35,900 loans – 3% lower month-on-month, but 13% higher than 12 months ago.

Prospect of Interest Rate Rise Boosted Remortgaging in September, UK Finance Finds

Prospect of Interest Rate Rise Boosted Remortgaging in September, UK Finance Finds

Gross buy-to-let lending totalled £2.9 billion – down by 9% on August, but 4% higher than in September 2016. This was made up by 18,900 loans – down by 8% on a monthly basis, but up by 4% on last year.

Buy-to-let activity continues to be driven by remortgaging, which accounted for more than two-thirds of total lending. Buy-to-let house purchase and remortgaging activity in September remained at a similar level seen since the change to Stamp Duty on additional properties, introduced in April last year.

UK Finance has also released its data for the third quarter (Q3) of the year, which shows that mortgage lending increased on a quarterly basis.

Homebuyers borrowed £38.2 billion in Q3 – up by 11% on Q2 and 12% on Q3 2016. This equated to 199,600 loans – up by 9% on the previous quarter and 7% on the same period last year.

Within this, first time buyers borrowed £15.7 billion – up by 5% on the last quarter and 9% on Q3 last year. They took out 95,800 mortgages – up by 4% quarter-on-quarter and 5% on an annual basis.

Home movers borrowed £22.4 billion – up by 14% on Q2 and Q3 2016. This equated to 103,800 loans – up by 13% on the previous quarter and 9% on last year.

Homeowner remortgage activity totalled £19.5 billion – up by 14% on Q2 and 11% on a year ago. The number of remortgage loans totalled 110,000 – up by 12% quarter-on-quarter and 10% on Q3 2016.

Gross buy-to-let lending totalled £9.3 billion – up by 11% on the previous quarter and 4% on Q3 2016. This equated to 60,000 mortgages – up by 8% on Q2 and 6% year-on-year.

June Deasy, the Head of Mortgage Policy at UK Finance, says: “Although lending slackened in September, it remained higher than a year ago. Remortgaging was particularly strong, with borrowers seeking to lock into historically low interest rates in advance of the widely anticipated rise in Bank [of England] base rate at the beginning of November.

“Over the last year, the number of loans for remortgaging has been higher than in any period since 2009. Low borrowing rates mean that mortgage repayments as a proportion of income remain at or close to their historic low point. While this ratio may edge upward in the coming months, monthly mortgage payments will remain affordable for the vast majority of borrowers.”

The Managing Director of Enterprise Finance, Harry Landy, also comments: “With recent widespread economic and political uncertainty, it was to be expected that buy-to-let and remortgage activity would feel the effects. We are yet to see how the industry will adapt to the PRA [Prudential Regulation Authority]-enforced changes in underwriting of buy-to-let mortgage applications, and how this will affect lending activity.

“As the impact of new regulation becomes clear, it is as important as ever for brokers to be aware of all the different financing options available to them, including alternative, specialist buy-to-let lenders who can operate on a more flexible basis. Improving education and awareness in this area will be crucial if people are to be able to capitalise on the market opportunities.”

Lea Karasavvas, the Managing Director of Prolific Mortgage Finance, adds: “Both homeowners and landlords took the early hints from Mark Carney, so September represents the tail end of the rush to remortgage on low rates while they lasted. However, owner-occupiers and landlords are not on the same page. Homeowners have been grabbing low rates while they can, while the response from landlords has been far more muted.

“This demonstrates a sustained shift, as many turn their backs on the market. Landlords are waving the white flag after a severe tax bashing from the Treasury over the last two years. This is a statement of intent. Being a landlord is not a hobby, it’s an investment that must pay or it’s simply not worth it.”

He continues: “The number of remortgages by homeowners has risen faster than for landlords in the last year and, more recently, is falling slower. Many landlords are effectively signalling that the good times are over and they don’t intend to stick around long enough to justify committing to a new deal.”

House Prices Up by 5.4% in the Year to September, Official Data Shows

Published On: November 14, 2017 at 10:34 am

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Categories: Property News

The average house price in the UK was up by 5.4% in the year to September, according to the latest official data from the Office for National Statistics (ONS) and Land Registry. This is higher than the 4.8% rate of growth recorded in August, but is broadly in line with the increases seen during the year so far.

This rise took the average UK house price to £226,000 in September – £11,000 higher than in September 2016 and £1,000 up on August 2017.

By country

The main contribution to this rate of growth was England, where the average property value increased by 5.7% over the 12 months to September, taking typical house prices to £244,000. In Wales, the average rise of 5.3% took property values to £153,000. Following a 3.1% increase in Scotland, the typical house price is now £145,000. In Northern Ireland, the average property value is £132,000, following a rise of 6.0% in the year to the third quarter (Q3) of the year.

Regionally

On a regional basis, London continued to boast the highest average house price, at £484,000, followed by the South East and East of England, which stood at £324,000 and £289,000 respectively. The lowest average price continued to be in the North East, at £130,000.

The North West experienced the highest rate of annual house price growth in September, at an average of 7.3%. This was followed by the South West (6.6%) and East Midlands (6.4%). The lowest annual increase was recorded in London, where the average price rose by 2.5% over the 12 months to September, followed by the North East, ay 4.4%.

By local authority

The largest annual growth of any local authority in the UK in the year to September was seen in Hinckley and Bosworth, where the average property value increased by 15.9% to stand at £215,000. By contrast, the lowest rise was recorded in Halton, where prices actually dropped by an average of 5.2% to hit £127,000.

In September, the most expensive area to buy a property was the Royal London Borough of Kensington and Chelsea, where the average home costs £1.2m. The cheapest location to purchase a home was Blaenau Gwent, at an average value of £85,000.

Comments 

The Founder and CEO of online estate agent eMoov.co.uk, Russell Quirk, comments on the index: “The market has continued to splutter along, registering yet more marginal positive price growth despite a sustainably lower level of buyer demand. This is certainly promising for those on the ladder and we should see a large degree of stability return, with a heightened level of buyer interest come January.

“It is yet to be seen what, if any, impact the marginal increase in interest rates will have. It is likely that, while many will sit back and see through the Christmas period as a result, there will be no medium to long-term impact on the UK’s appetite to buy property, with the cost of borrowing still very affordable for the masses.”

Ishaan Malhi, the CEO and Founder of online mortgage broker Trussle, also says: “Many people expressed concern for the housing market after Brexit, but prices are 5.4% higher than they were this time last year. That’s an £11,000 increase on the average UK home. With wages growing just 2.2% in the last 12 months, the growing challenge facing first time buyers is plain to see.

“The Budget is now a little over a week away, and rumours are already swirling about some Government support for first time buyers. If Phillip Hammond proposes to boost housebuilding and make homeownership more affordable for young people, it will be a welcome move for those currently priced out of the market. The mortgage sector is slowly innovating to make the process of buying a home less stressful and time consuming, but, until more housing supply brings down the cost of property, homeownership will remain a pipedream for some.”

We also have the thoughts of Richard Snook, the Senior Economist at PwC: “The trend that has been emerging over the summer and autumn is the rest of the UK outperforming London. Annual price growth in London was just 2.5% in September – far behind the strongest performing regions, the North West (7.3%) and South West (6.6%), and less than half the national average.

“Our latest market projection, published in July, was for growth of between 3% and 5% in 2017, with 4% as the central scenario. Growth for the year is now likely to be around the upper end of this range. The other notable trend is that these price gains are being experienced on increasingly low transaction volumes, which were 15.2% lower in July 2017 than July 2016. This does point to a lack of broader market momentum and may lead to a softening in price growth as we move into 2018.”

John Goodall, the CEO and Co-Founder of buy-to-let specialist Landbay, adds: “House prices showed no signs of slowing down in September, as they continued on in their upward climb. Up until this point, a combination of low mortgage rates and high rates of employment have helped balance out the squeeze on household incomes from stagnant wages and rising inflation. However, last week’s rate rise signalled the start of raised borrowing costs for the first time in a decade, which is likely to curtail buyer activity in the coming months.

“As the Budget draws closer, we hope to see some ironclad commitments from the Government on its plan for tackling the growing demand for housing. There may be no quick fix, but now more than ever, the private rented sector will be relied upon by those unwilling or unable to buy a house outright. Without a radical housebuilding plan for both first time buyer homes and purpose-built rental properties, prices will continue to rise over the coming decades.”

 

Many Adults Unaware of Laws Governing the Private Rental Sector, Survey Shows

Published On: November 14, 2017 at 9:59 am

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Categories: Lettings News

New research claims that many adults, including landlords and tenants, do not understand or are unaware of the laws governing the private rental sector.

A survey among over 2,000 UK adults by online letting agent LetBritain claims that many landlords and tenants across the country are unaware of the laws governing the lettings sector.

The study found that 16% of landlords do not realise that a tenant must be given at least two months’ notice under Section 21 of the Housing Act 1988 if they wish to evict them. 37% of tenants were also unaware of this.

Similarly, 12% of landlords do not know that they must provide 24 hours’ notice before entering their rental property; 28% of tenants were also unaware.

Another 14% of landlords weren’t aware that they must put a tenants’ deposit in a tenancy deposit protection scheme, which was also unknown by 34% of those living in private rental accommodation.

27% of landlords also have no idea that tenants have the right to challenge the rent being charged, if it is not comparable to similar properties in the area. A huge 50% of tenants were also unaware of their rights in this instance.

More worryingly, tenants were unaware of other rights they have under the laws governing the private rental sector, such as their right to challenge any excessive charges made by a landlord via an ombudsman. 34% also didn’t know that a landlord must provide an Energy Performance Certificate (EPC) for the property when they move in.

The CEO of LetBritain, Fareed Nabir, comments on the findings: “It is clear that a huge proportion of UK renters – a population growing in size – do not truly understand the legislation and regulation in place to protect them. Likewise, a concerning number of landlords are also in the dark about exactly what rights and responsibilities they have.

“Such a lack of awareness increases the risk of renters and landlords being exploited – it must be addressed, and letting agents certainly have a duty to better inform all their customers about the vital legislative framework governing the rental sector.”

We encourage all landlords and tenants to stay on top of the law. For this, we offer FREE helpful guides on all the laws governing the private rental sector. Sign up to read them here: https://landlordnews.co.uk/register/