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Em Morley

Families top renting group in the UK

Published On: June 23, 2016 at 11:43 am

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Families have risen to become the most common household type in the private rented sector in Britain for the first time.

Research from the National Landlords Association shows that more landlords now let to families with children, accounting for 48% of the sector. This is closely followed by young couples, who make up 47%.

Shifting household trends

The latest data indicates a shift in comparison to four years ago, when young singles accounted for 53% of the market, followed by young couples and families with children.

Now, the private rented sector makes up nearly five million households in the UK. According to the English Housing Survey, the proportion of families in the sector has risen from 30% in 2004/05 to 37% in 2014/15

Of those families surveyed, privately renting a property is a steady option. 76% reported that they were happy with the length of their tenancy. 79% said that their tenancy was either renewed or stayed constant at the end of their initial fixed term.

As a result, the perception of renting a property as a barrier to family life is being snuffed out. 77% of renting families said they considered their rental property to be their home. 65% said they had received the green light to personalise their property however they wish.

Families top renting group in the UK

Families top renting group in the UK

Contrast

Richard Lambert, chief executive officer at the National Landlords Association, said, ‘there is a genuine contrast between the experience of renting in the 21st century shown in this research and the prevailing housing culture in Britain that only views it as stopgap, something to be tolerated while waiting for the opportunity to buy your own house.’[1]

‘There is a rogue element to private housing that ruins the experience for far too many people but for the majority of the 11 million private renters, renting offers an inclusive and flexible option which works for them in their current circumstances,’ he added.[1]

Concluding, Lambert said, ‘contrary to popular perception, there’s growing evidence that renting is no obstacle to putting down roots and calling somewhere home. The majority of landlords want good, stable, long term tenancies and these findings show that more and more are becoming receptive to helping families make a home in the private rented sector.’[1]

[1] http://www.propertywire.com/news/europe/uk-rental-homes-research-2016062112055.html

How Do House Prices Compare Across the EU Member States?

Published On: June 23, 2016 at 11:20 am

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Ahead of today’s EU referendum, online estate agent eMoov.co.uk has analysed how house prices compare across each of the 28 EU member states.

The agent’s map shows the average price of property per square foot in each state, when they joined the EU and the property price per square foot for each capital city.

The average house price across all EU member states is currently £2,867 per square foot. Where capital cities are concerned, London storms ahead with the most expensive house prices. At £12,468 per square foot, London’s reputation as the most expensive city in the world to buy a house is apparently confirmed, for the EU at least.

Paris is the second most expensive capital city in the EU for property, however, with an average price that is less than half of that in London, it remains significantly cheaper. Stockholm and Rome also rank highly, both home to an average house price of more than £5,000 per square foot.

Dublin is the ninth most expensive capital city, at £3,489 per square foot. Although Belfast, at £2,205, Cardiff, at £1,583, and Glasgow, at £1,580, all lie within the member state of the UK, they rank as the 15th, 20th and 21st most expensive capital cities for property in the EU.

At just £734 per square foot, Sofia, the capital of Bulgaria, has the cheapest house prices of any capital city in the EU member states.

Although London is the driving force of the UK property market and the most expensive capital city in the EU for house prices, the same cannot be said for the UK as a whole.

At £3,279 per square foot, the UK is only the fourth most expensive EU member state. The top three spots go to Luxembourg, at £4,540, Sweden, at £3,991, and France, at £3,423.

House prices across each EU member state

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In line with its capital, Bulgaria is also the cheapest EU member state for property overall, at just £634 per square foot. This is also the case for Romania and its capital Bucharest, and Hungary and Budapest as the second and third cheapest member states for house prices.

How Do House Prices Compare Across the EU Member States?

How Do House Prices Compare Across the EU Member States?

Although there seems to be no strong correlation between the time a country has been an EU member state and the price of property, there are 15 member states that joined prior to the year 2000. Of these, 13 account for the highest property prices in the EU, with just Portugal and Greece home to an average house price of less than £1,600 per square foot.

The founder and CEO of eMoov, Russell Quirk, comments on the findings: “The UK property market and the influence a Brexit could potentially have has been a big talking point and arguably so, as for the average UK homeowner, their property is the most expensive asset they are likely to own.

“This research isn’t an attempt to sway people either way, simply to show the strength of the UK market against the rest of the EU, but also to highlight that despite the London bubble, there are other areas across Europe where prices outperform that of the UK.”

He continues: “Will property prices drop if we vote to leave? No one really knows for sure, and any potential impact will take a while to come to fruition. Should we vote to leave, any real impact wouldn’t become clear until 2017, and prices could potentially flatten and even go into reverse, which would be a mammoth event given the years of steady upward growth.

“It all comes down to confidence in the market, and whilst the media and campaigners from both sides continue to scaremonger, the seesaw remains finely balanced. A few gloomy headlines and people will understandably sit tight and play it out. However, this lack of investment and activity in the residential market will prompt a fall in buyer demand and this is what will result in a drop in property prices.”

However, he adds: “This said, with the precarious mix of easily obtained credit and inflated property prices continuing to inflate the UK property bubble, something will eventually give, Brexit or no Brexit. I for one think that a cool in demand caused by uncertainty in the market, be it as a result of a leave or remain outcome, could be a healthy thing and help return the UK market back to some level of stability.”

Scottish Landlords Making Losses of £3,800 Per Year

Published On: June 23, 2016 at 9:59 am

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Scottish landlords are seeing a decline in their returns, of £3,800 per year, according to the latest Scotland Buy to Let Index by Your Move.

Falling house prices and higher taxes for buy-to-let properties have caused returns to drop for landlords in Scotland. Over the year to May, annual returns decreased by 2.2%.

In absolute terms, the average Scottish landlord has seen a paper loss of £3,782 in the last 12 months.

Scottish Landlords Making Losses of £3,800 Per Year

Scottish Landlords Making Losses of £3,800 Per Year

Your Move reports that the initial Land and Buildings Transaction Tax, introduced in April 2015, and this year’s 3% Stamp Duty surcharge for buy-to-let landlords have held down prices in May.

This has also created a shortage of homes to rent, pushing up costs for private tenants, says the index.

The average rent is Scotland now stands at £549 per month, compared with £538 in the previous month. This is the highest Scottish rent on record, surpassing the previous peak seen in July 2015.

Rents rose in all parts of Scotland in May, with Glasgow & Clyde recording the greatest increase, of 1.9%. This equates to an £11 jump in prices compared to the previous month.

On an annual basis, Edinburgh and the Lothians saw the sharpest rise of any region, at 12%, or £69, to reach £662 per month.

The Lettings Director of Your Move Scotland, Brian Moran, comments: “Rents are rising rapidly as a result of the new Land and Building Transaction Tax surcharge for buy-to-let properties.

“This tax hike has dissuaded landlords from investing in the sector, leading to a shortage of homes to rent, compared to the demand for housing.

“With the limited supply of rental properties, potential tenants have been forced to compete to secure homes, pushing up rents. The introduction of this anti-landlord legislation from Holyrood has ensured the cost of the policy has hit tenants hardest.”

The research also found that the average rent price in Scotland has risen by 7.9%, or £40 per month, since May 2011, when the Scottish National Party (SNP) gained an overall majority in Holyrood.

Moran explains: “Since the SNP came to power five years ago, monthly rents have increased by an average of £40. However, the rent control policy in the Scottish government’s private tenancies bill will only treat the symptoms, not the cause, of rising rents. By limiting the rent that can be charged on a property, becoming a landlord will become less appealing, limiting investment and forcing many to consider leaving the sector. This will lead to an even greater shortage of homes to rent.

“In addition, without the potential incentive of higher rents, landlords will lack the motivation and finance to improve the quality of their properties. The government needs to look at incentivising landlords to increase the supply of rental properties in Scotland. With more homes available to rent, tenants wouldn’t need to compete for properties and rents would be more affordable.”

East of England property prices soaring

Published On: June 23, 2016 at 9:42 am

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Concerns are being raised over the sustainability of the property market in the East of England, as house prices continue to rise in the region at a quicker rate than anywhere else in the UK.

Home.co.uk’s Asking Price Index indicates that property prices in the area have risen twice as fast as the rest of the country during the past year.

Rising values

Between June 2015 and June 2016, values in the East of England have risen by 13.9% in comparison to the average of 6.8% in England and Wales and 6.7% in Scotland.

The rise recorded in the East of England is far greater than the 7% seen in London over the same period.

Analysis of asking price figures for May and June 2016 further underline how the East of England has become the sharpest market in the UK. In this monthly period, the regions asking prices increased by 1.6%. London’s fell by 0.4% and prices in the South East only rose by 0.2%

England and Wales as a whole saw a rise of 0.4%.

East of England property prices soaring

East of England property prices soaring

Fastest selling region

Properties are also selling quicker in the East of England than in any other region. The average time on the market for homes in the area is 54 days, in comparison to 80 days in England and Wales as a whole.

Lack of supply is a key reason in variations in asking price by region. There was an 8% drop in supply of property in the East of England between May 2015 and May 2016. In the same period, the UK-wide drop in supply was 7%.

In comparison, property supply in Greater London rose by 2% and by 1% in the South East.

Doug Shephard, director of Home.co.uk, said, ‘a cooling London market has changed the dynamic of the UK property market and is now less of a focus for property investors. The new regional champion is by far the East of England where terrific price rises look set to rival even London in its heyday.’[1]

[1] http://www.propertyreporter.co.uk/property/are-prices-rising-too-fast-in-the-east-of-england.html

 

 

Property Sales Will Rise Regardless of EU Referendum Result

Published On: June 23, 2016 at 9:12 am

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Property sales will continue to rise, regardless of the result of today’s EU referendum, according to an estate agent in Surrey.

David Cantell, of Cantell & Co in Richmond, believes that transaction levels will remain strong whether we vote to leave or stay in the EU.

Property Sales Will Rise Regardless of EU Referendum Result

Property Sales Will Rise Regardless of EU Referendum Result

In the past four months, the agent has witnessed a stable market, with property trading at fair prices for both vendors and buyers.

Cantell observes that pent-up demand from buyers has been building throughout the year, while vendors have adopted a wait-and-see approach ahead of the Brexit vote.

“Uncertainty breeds caution,” he says. “A definitive result, regardless of in or out, will lead to more sellers and more buyers and ultimately to more transactions after today’s vote.”

Cantell has witnessed similar trends ahead of general elections in previous years.

However, he has also seen the majority of estate agents scaremongering their clients into price reductions over the last few weeks, having over-valued at the outset.

Disappointingly, he says that it’s not just the “usual suspects” adopting this approach, but also the higher-end estate agents that are normally considered reputable and respectable.

In his own area, however, Cantell claims that demand is still strong from buyers and the firm has been agreeing property sales in May and June with no reductions in price, “proving that there are still deals to be made if you price fairly from the outset”1.

While the property market looks to remain strong following today’s vote, the Association of Residential Letting Agents (ARLA) also reports that the lettings sector will prove resilient to the result.

ARLA member agents believe that the private rental sector will be unaffected in the short-term by the EU referendum, regardless of the outcome.

While we will have to wait until tomorrow for the result to be announced, our own research has found that over 60% of landlords and property professionals believe we should stay in the EU.

1 http://www.propertyindustryeye.com/transactions-will-rise-no-matter-what-the-result-of-todays-referendum/

Lettings Market Will be Unaffected in Short-Term by EU Referendum Result

Published On: June 23, 2016 at 8:27 am

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The lettings market will be unaffected in the short-term by the result of today’s EU referendum, regardless of the outcome, according to the Association of Residential Letting Agents (ARLA).

ARLA’s member letting agents believe that supply, demand and rent prices will stay at the same level for the near future, whatever the result of today’s crucial vote.

Lettings Market Will be Unaffected in Short-Term by EU Referendum Result

Lettings Market Will be Unaffected in Short-Term by EU Referendum Result

Although the private rental sector looks to be unfazed by the referendum result, Stamp Duty changes continue to be an issue for the lettings market.

ARLA’s May Private Rental Sector report found that two thirds of agents expect supply to stay the same if the UK votes to leave the EU, compared to just a fifth who predict it will decline, as international investors leave the market.

Almost one third (31%) believe that demand will drop as a result of a Brexit, while 55% think it will remain as high as it is currently.

However, two months on from the introduction of the 3% Stamp Duty surcharge for buy-to-let landlords, letting agents are starting to feel the effects.

A third (37%) of agents have reported a decrease in the supply of rental properties since the Stamp Duty changes came into force. The proportion rises significantly in Wales, where 80% witnessed a dip in supply, as well as in the East Midlands and Yorkshire and the Humber, where exactly half of ARLA member agents saw a decline.

Around half (48%) of agents predict that supply will continue to drop, as more landlords vacate the private rental sector as a result of the changes to mortgage interest tax relief, which come into force from next year.

The Managing Director of ARLA, David Cox, comments: “There is no avoiding the EU referendum at the moment, and whatever the outcome, we are likely to feel the impact of the fall-out of this debate in different ways.

“However, it’s important to put this into perspective and not get carried away. As outlined in our recent Brexit report, the lettings market hosts a large number of non-UK born citizens, and any change in migration policy is likely to have an impact down the line, especially in London.

“However, our monthly report clearly shows the sentiment among members is that the immediacy of this effect is likely to be minimal.”

Yesterday, we released the results of our own EU referendum poll, which found that over 60% of landlords and property professionals believe that we should stay in the EU.