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Em Morley

Current London rental market values exceed pre-pandemic levels

Published On: November 3, 2021 at 10:09 am

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Categories: Lettings News,Property News

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Nine in ten outer London landlords report rising tenant demand 

Rental values across London have exceeded pre-pandemic levels in all but three areas, the latest property market analysis from Benham and Reeves shows.

The research shows that between 2019 and 2020, the average London rent price fell -3.4%. Some areas of London saw an even greater impact, with Camden rental values plummeting -20.7% in a year.

However, the London lettings and estate agent found that in 2021 tenant demand returned and current rental values now sit 9.4% higher than they did during 2020.

Rents prices are up 20.1% year on year in Kingston, with Bexley (18.3%), Newham (15%), Croydon (14.1%) and Hillingdon (13.6%) also amongst the largest increases. The City of London remains the only area yet to recover, with rental values still down -11.4% annually.

While a bounce-back from pandemic decline is encouraging, Benham and Reeves say the real positivity lies within the fact that the average London rent is now 5.7% higher than it was in 2019, prior to the market slowdown. Only the City of London (-22.5%), Camden (-18.9%) and Westminster (-4.6%) are yet to see rental market values return to pre-pandemic levels.

They also note that the volume of properties they are seeing let to tenants is up 67% year-on-year and 22.7% versus pre-pandemic levels, while landlords are now securing re-let rental prices some 10% to 20% higher than they were prior to the COVID-19 outbreak.

Marc von Grundherr, Director of Benham and Reeves, comments: “The London rental market has arguably been the worst hit as a result of the pandemic and we’re unlikely to see a period of such unexpected uncertainty again in our lifetime. Demand for rental homes evaporate almost overnight during the pandemic causing a surplus of stock on the market while rental prices plummeted.

“But the London market is nothing but resilient and when the tide starts to turn, it turns very quickly indeed. We’ve seen house prices in the capital enjoy the largest monthly bounce of all regions in a single month having trailed the rest of the nation for almost two years and the same revival is also apparent across the rental market.

“Demand is lifting and rental values have not only recovered, but they’ve also exceeded levels seen prior to the pandemic. Even better still, we’re seeing further positivity in the trenches and this current market activity is yet to materialise at a topline level where market statistics are concerned.

“As a result, we can say with confidence that the London rental market decline is now firmly behind us and so any lower confidence forecasts of further price reductions can now be disregarded with yet further positive growth forecast for 2022.”

Survey highlights tenant sustainability expectations for UK rental sector

Published On: November 2, 2021 at 11:26 am

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Survey highlights tenant sustainability expectations for UK rental sector

Environmental issues have become increasingly important to UK tenants, according to the results of a survey from rental platform LettingaProperty.com.

When asked if they prefer a property that is optimised to increase energy efficiency, reduce energy costs and minimise environmental impact, 98% responded yes.

The results also imply that many tenants are prepared to pay more to rent in line with their principles. 53% said they would pay more for a greener property.

Jonathan Daines, Founder and CEO, LettingaProperty.com, comments: “We’ve heard a lot recently about the cost to landlords of making their properties greener, from replacing gas boilers with heat pumps to installing insulation. This survey has revealed that tenants are prepared to play their part too, with over half of renters happy to pay more for greener homes. It is overwhelmingly clear that tenants are demanding greener choices than the rental sector currently offers.”

85% of renters said they were happy to consider a ‘green lease’ to help improve sustainability in the rental sector. Green leases include clauses designed to ensure the tenant and landlord work together to improve the home’s energy efficiency, while reducing costs and environmental impact.

The survey also looked into tenant’s current sustainability expectations for rental properties. 95% expect their property to have double glazing and 92% expect it to have loft or wall insulation. 92% expect recycling bins as standard, while 73% expect LED lightbulbs. In terms of technology, 56% of renters expect smart meters and 38% expect smart thermostats. 50% of renters, meanwhile, expect dual flush toilets, while 26% expect solar panels and ground source heating.

Daines comments: “Clearly, renters know what they want when it comes to green credentials. And while many landlords can’t afford solar panels or heat pumps, smaller eco improvements can help properties stand out and increase renter appeal. Landlords should be mindful of this sentiment and take any steps they can to make their properties ‘greener’.”

Outer city rental markets continue to show stronger growth vs inner city

Published On: November 1, 2021 at 9:59 am

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Outer city rental markets continue to show stronger growth vs inner city

Rental homes in outer city areas have seen stronger growth over the last year, while inner city rental properties continue to command a higher monthly rental income, says buy-to-let specialist Sequre Property Investment.

Its research involved an analysis of rental market data for London, Manchester and Birmingham, revealing how it differed when comparing inner and outer city area.

Sequre Property Investment reports that inner city rental markets attract the strongest levels of monthly rent. On average across all three cities, the monthly cost of renting within an inner city area is at £1,152 versus £908 per month in the outer city market, highlighting a difference of 27% or £244 per month.

The biggest difference has been recorded in London, where rents across the inner city rental market are 37% higher on average. In Manchester there was an increase of 26% and in Birmingham it was 9%.

Looking at annual rental growth, however, it has remained largely flat in the outer city areas, while across inner city rental areas it has fallen -4.4% in the last 12 months.

Manchester has performed the strongest, with inner city rental values remaining largely unchanged in the last year, while across the city’s outer rental market values have climbed by 3.7%. In Birmingham, outer city rental values are up 2.2% versus a marginal 0.3% uplift across the inner city.

London’s rental market has struggled across the capital, with only a 1.1% increase in rental values across outer city areas and a -7.8% drop across inner city areas.

Daniel Jackson, Sales Director at Sequre Property Investment, commented: “It’s clear inner city rental markets are still struggling due to the decline in demand caused by the pandemic, despite a gradual return to normality from a social standpoint and with regard to the workplace.

“This is particularly evident across the London market, where rental values have plummeted across inner city areas, while they’ve also struggled in outer city areas. 

“The good news is that elsewhere, outer city rental values are on the up, with both Manchester and Birmingham seeing very healthy levels of growth. This suggests that tenants are now starting to make their return and this is a trend that should soon reach our city centres and help boost values across inner city rental markets.”

The current rental values for inner and outer city rental markets and the inner city rental premium

CityInner city average rent 2021 (per month)Outer city average rent 2021 (per month)Inner city rental price premium
London£1,874£1,37237%
Manchester£838£66726%
Birmingham£743£6859%
Average£1,152£90827%
Data sourced from the Office for National Statistics – Private rental market summary statistics

The current rental values for inner and outer city rental markets and the annual change across both

CityInner city average rent 2021 (per month)Inner city annual rental changeOuter city average rent 2021 (per month)Outer city annual rental change
London£1,874-7.8%£1,3721.1%
Manchester£8380.0%£6673.7%
Birmingham£7430.3%£6852.2%
Average£1,152-4.4%£9080.1%
Data sourced from the Office for National Statistics – Private rental market summary statistics

Tenant survey reveals the creepiest rental interior trends in the UK

Published On: October 29, 2021 at 9:21 am

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Tenant survey reveals the creepiest rental interior trends in the UK

Just in time for Halloween, 2,284 UK tenants were surveyed to find out what items of furniture they would find the scariest when looking to rent a property.

Manor Interiors, provider of build-to-rent furnishing solutions, found the clear winner was inflatable furniture and waterbeds. Also ranking highly were wicker furniture and tile countertops.

What would be the scariest item of furniture to find in a rental property?

AnswerRespondents
Inflatable/water bed54%
Wicker furniture10%
Tile kitchen countertops10%
Fast furniture (cheap imitations)8%
Jacuzzi Bath6%
Bean bag chairs5%
Futon3%
Leather sofa or arm chair1%
Platform bed1%
Breakfast bar stools1%

The same tenants were then asked which interior design trends they found the scariest when it comes to looking for a rental property. Carpeted bathrooms received the most votes, with ceiling mirrors also giving them the creeps.

What are the scariest interior design trends to find in a rental property?

AnswerRespondents
Carpeted bathrooms18%
Ceiling mirrors17%
Matching wallpaper and carpets10%
Textured ceilings or walls10%
Fake flowers or fruit9%
Empty picture frames8%
Lace8%
Inspirational wall art – Live, Laugh, Love7%
Bright coloured interiors7%
Floral5%

Farhan Malik, CEO of Manor Interiors, comments: “While tenants might not have a say in how a rental property is presented, it can certainly impact their likelihood to rent it and as our research shows, there are plenty of outdated interior design trends that could scare them away.

“This is an important consideration for landlords and it really highlights the significance of presenting a property that appeals to the modern-day tenant. While initial factors such as size, location and cost will always drive their initial search, design, style and appearance are becoming increasingly influential.

“The best bet is to keep to a clean, neutral style and avoid any blasts from the past such as carpeted bathrooms and textured walls or ceilings. In doing so, you’re going to best present your property while also leaving a little room for a tenant to put their own personal stamp in terms of their preferred style.”

Autumn Budget announced: Changes welcome but not enough

Published On: October 28, 2021 at 10:18 am

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Autumn Budget announced: Changes welcome but not enough

In yesterday’s Autumn Budget announcement, Chancellor Rishi Sunak announced that the Universal Credit taper will be cut from 63% to 55% from 1st December 2021.

Ben Beadle, Chief Executive of the National Residential Landlords Association (NRLA), comments: “(Yesterday’s) announcement is welcome news for those private tenants who have struggled to afford their rents throughout the pandemic, despite private rents falling in real terms.

“However, it does not undo the damage that previous decisions to freeze housing benefit rates in cash terms will cause. It is simply bizarre to have a system in which support for housing costs will no longer track market rents. The Chancellor needs to undo this unjust policy as matter of urgency.”

Another key announcement welcomed by the NRLA is that the deadline for residents to report and pay Capital Gains Tax after selling UK residential property has increased from 30 days after the completion date to 60 days as of 27th October 2021.

Nicky Stevenson, Managing Director at national estate agent group Fine & Country, also comments on this news: “Millions of homeowners across the country will be pleased to hear that the Chancellor has resisted calls to increase Capital Gains Tax.

“Though CGT has long been an emotive issue for some, there is no amount of amending that would have assisted in making up for gaps in public finances created by the pandemic.

“HMRC has already seen CGT receipts jump 62% in the last five years. Increasing taxes further at a time when the economy is still recovering from the worst shock on record would not have been a wise move by the Chancellor in the Autumn Budget.”

The NRLA also welcomes the Government’s pledge to bring forward exemptions to the Shared Accommodation Rate for victims of domestic abuse and victims of modern slavery from October 2023 to October 2022. The Shared Accommodation Rate limits housing benefit support for single people under 35 to a room in a shared house. Those vulnerable will be able to claim the higher 1-bedroom self-contained Local Housing Allowance rate.

Call for Government to introduce national landlord register

Published On: October 26, 2021 at 8:19 am

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Categories: Landlord News,Law News

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Call for Government to introduce national landlord register

Councils that require landlords to be licensed take more than twice as much enforcement action as those that don’t, a new analysis from Generation Rent has found.

Government figures show that 32 councils with selective licensing schemes identified an average of 158 unsafe homes each, compared with 63 on average across 200 councils without such schemes during 2019-20. Councils with licensing schemes also go on to resolve a higher proportion of these cases. The findings come as the Centre for Public Data (CFPD) publishes a report setting out how the Government should introduce a national landlord register in England.

The CFPD estimates that just 7.4% of England’s private rented homes are covered by council licensing schemes. In contrast, 100% of properties in Scotland, Wales, and Northern Ireland are required to register. Such schemes allow private renters in Wales, Scotland and Northern Ireland to find out online if their landlord is legally allowed to let out their home. Meanwhile, in England the vast majority of renters cannot check their landlord’s credentials.

Licensing gives councils greater powers to investigate homes and take action where they are found to be unsafe. Of the English councils that reported data in 2019-20, 32 councils that operated selective licensing schemes in that period reported finding 5,052 private rented homes with ‘category 1’ hazards following an inspection. This was an average of 158 homes per council, and 85% of these homes were made free of hazards. There were 200 councils without selective licensing and they reported 12,607 unsafe homes in total. This is just 63 homes per council, and only 65% of cases were resolved.

Anna Powell-Smith, Director of the CFPD, said: “In England, you have to register to run a takeaway or work as an art therapist, but anyone can be a landlord – remarkable given how dangerous it is to live in a property with faulty wiring, boilers or mould. A patchwork of schemes will never give renters the protection they need, and are an inefficient use of council resources. A national register will be cheaper to run and more effective in raising standards.”

Alicia Kennedy, Director of Generation Rent, said: “Existing licensing schemes have a clear track record of helping councils to identify unsafe homes and bring them up to standard, but the vast majority of private renters are not protected by them. Nationwide landlord registration would give enforcement authorities valuable intelligence about this sector, make it easier to inform tenants of their rights, and prevent criminals from renting out homes in the first place.”