Written By Em

Em Morley

Annual rental prices up in 11 out of 12 UK regions

Published On: February 10, 2016 at 10:08 am

Tags: Buy-to-Let,buy-to-let landlords,landlords,rental prices,rents

Residential rents rose year-on-year in 11 out of the 12 regions of Britain, with the most prominent rises in the South East of England and the East Midlands.

Overall, the typical rent in Britain, with the exception of Greater London, is now £740 per month. In London, average rents stand at £1,510 per month, according to the most recent rental index from HomeLet.

Slow progress

The data indicates that only the North West of England has seen a fall in rental prices over the last twelve months. Prices here fell by 3.4% from £646 per month to £624.

However, rent costs for new tenancies in Greater London are increasing at the slowest rate seen for nearly two years. The January index shows that Greater London prices are 6.2% higher for the three months to January 2016, in comparison to the same point in 2015. This is the least amount of growth seen in the capital since March 2014.

By contrast, rent prices in other regions continued to increase. The South East of England recorded rises in rent prices of 7.2% in the three months to January 2016. The East Midlands also saw a significant rise of 6.8% in rental prices in the same period.

Annual rental prices up in 11 out of 12 UK regions

Monthly differences

On the other hand, monthly data gives a different outlook. Rental prices in the UK, excluding Greater London, were 0.2% greater in the three months to January 2016, than in the three months to December 2015. In Greater London, rents have slipped by 0.9% over the same timeframe.

In all, six out of the twelve British regions recorded rises in rental prices during the three months to January 2016.

Martin Totty, chief executive officer of Homelet’s parent group, Barbon Insurance Group, said,’ it’s notable that there has been a further fall in the rate at which average rents in the Greater London area are rising. In recent years, the capital has seen much faster rates of increase than the rest of the country, but it may be that an affordability ceiling has now been reached in London and that rents will now track other parts of the UK more closely.’[1]

‘The fact that UK wide average rents in the private rented sector continue to show sustained upwards growth reflects there is still strong demand for rental properties, driven mainly by the impact if the long term structural imbalance in supply and demand of property,’ he added.[1]

Concluding, Totty said, ‘landlords achieving higher average rents over time also suggests that tenants starting a new tenancy are proving they can afford higher average rents. With demand outstripping supply, some would-be tenants may be able to outbid rivals for properties, which could drive higher rents.’[1]

[1] http://www.propertywire.com/news/europe/uk-rental-price-index-2016021011539.html

London Rent Price Growth Slowing

Published On: February 10, 2016 at 9:29 am

Author: Em Morley

Categories: Landlord News

Tags: average rent price,London,London property market,London rent prices,rent price growth

Rent price growth for new tenancies in Greater London is at its slowest rate for almost two years, according to figures from the latest HomeLet Rental Index.

The January data shows that rent prices in Greater London were 6.2% higher in the three months to January 2016 compared with the three months to January 2015. This is the slowest pace recorded in Greater London since March 2014.

Comparatively, rents in other regions continue to increase steadily, with the South East and East Midlands experiencing the greatest rent prise rises in the three months to January, at 7.2% and 6.8% respectively.

London Rent Price Growth Slowing

In Greater London, the average rent price for a new tenancy in the three months to January was £1,510 per month. Meanwhile, the average for the rest of the UK, excluding Greater London, was £740 a month.

Although the data shows that the rate of growth in Greater London has slowed, monthly rents on new tenancies are still more than double the average for the rest of the country.

HomeLet’s Rental Index found that 11 out of 12 UK regions saw rent price growth in the three months to January 2016 compared to the same period last year. Just the North West experienced a decrease, of 3.4%, from £646 per month to £624.

On a monthly basis, rent prices have only increased slightly on the previous month. Across the UK, excluding Greater London, rents are 0.2% higher in January compared to December.

In Greater London, rents have dropped by 0.9% over the month. Overall, six out of 12 regions have recorded rent increases in January compared to December. Prices fell in the other six areas.

The CEO of Barbon Insurance Group, Martin Totty, comments on the figures: “It’s notable that there has been a further fall in the rate at which average rents in the Greater London area are rising. In recent years, the capital has seen much faster rates of increase than the rest of the country, but it may be that an affordability ceiling has now been reached in London and that rents will now track other parts of the UK more closely.

“The fact that UK-wide average rents in the private rented sector continue to show sustained upwards growth reflects there is still strong demand for rental properties, driven mainly by the impact of the long-term structural imbalance in supply and demand of property. Landlords achieving higher average rents over time also suggests that tenants starting a new tenancy are proving they can afford higher average rents – with demand outstripping supply, some would-be tenants may be able to outbid rivals for properties, which could drive higher rents.”¹

Have you put your rent prices up yet this year?

^{1 http://homelet.co.uk/news/article/lowest-growth-rate-in-london-rents-for-two-years}

Why Landlords Should Buy in East London

Published On: February 9, 2016 at 4:05 pm

Author: Em Morley

Categories: Landlord News

Tags: buy to let investors,East London,London,London property market,Stamp Duty

With changes to buy-to-let taxes looming, landlords are seeking the most profitable investments before they are hit by major financial changes.

Recently, we reported that buy-to-let investors are rushing to buy new rental properties ahead of the 3% Stamp Duty surcharge, which will be brought in on 1^st April. Read more: /landlords-rushing-to-avoid-buy-to-let-tax-changes/

And opportunities are rife in east London, where the capital’s homebuyers and renters are moving.

The area has been experiencing a wave of activity since Stratford was selected to host the 2012 Olympic Games back in 2005.

Over the past decade, house prices have surged by over 300%, and they continue to rise. Last year alone, property values rose by 22% in Newham – more than in any other part of the UK.

The change in the east of the capital is continuing. More Londoners now live east of Tower Bridge than in the west, and east London’s population is expected to grow by a further 600,000 in the next 15 years.

Why Landlords Should Buy in East London

With so many Londoners heading east, this area is proving profitable for property investors. And while prices may have increased significantly, there are still good value homes to be found.

A new wave of professionals – think the digital/design community – is sitting alongside Canary Wharf’s bankers to form a sophisticated spot. East London is also becoming a cultural hub; the English National Ballet recently relocated from upmarket Kensington to Canning Town.

But all of this is unsurprising – over £13 billion was invested in the area over the Olympics period. New infrastructure projects, such as Crossrail, are bringing more and more people into this thriving, yet still affordable, zone.

Boris Johnson has also revealed a City in the East master plan, suggesting how 203,500 homes and 283,300 jobs can be created over the next 20 years. With transport improvements such as an Overground extension to Barking Riverside, a new river crossing and train stations, the expansion seems likely.

The area in question stretches from London Bridge, through the Docklands, to Rainham Marshes in Essex and Dartford in Kent.

The Mayor of London’s document contains several maps that show how the city is moving eastwards. The individual areas’ growth can be seen here: http://www.london.gov.uk/press-releases/new-city-in-the-east

Alongside a change in residents, a building boom in east London is bringing better new homes.

New luxury high-rise housing at Canary Wharf is attracting wealthy buyers from Fulham, Putney and Chelsea. Meanwhile, modern lofts in Spitalfields and popular spots around Victoria Park are still affordable for young Londoners, especially due to shared ownership schemes.

While Whitechapel, Bethnal Green, Mile End and Bow might traditionally be known as rough-and-ready, they are now becoming cool places to be for the capital’s youngsters.

Additionally, inner-city quarters are being created through the release of disused public land. One example is a former postal depot in Stephenson Street, Hackney, where Berkeley Homes is building 3,500 new homes, a new school and shops.

The London Legacy Development Corporation, which owns most of the land, has taken control as the planning authority and is fast-tracking change.

Could you find a sparkling new investment with great promise of strong returns in east London? It seems so!

Landlord Insurance Company Seeks Payment from Tenant

Published On: February 9, 2016 at 1:56 pm

Author: Em Morley

Categories: Landlord News

Tags: accidental damage,Generation Rent,landlord insurance,rental property,tenants,winter

A landlord insurance company is seeking payment from a tenant over damages to a rental property.

The outcome of the case could prove worrisome for generation rent.

Landlord Insurance Company Seeks Payment from Tenant

Galina Govina, a scientist, rented a £1m cottage in Wiltshire for £2,800 per month. In 2010, she went away over the Christmas period. While she was away from the property, a pipe burst and flooded the cottage.

Govina later received a bill for £128,000 to cover the damage from her landlord’s insurance company, NFU Mutual.

The case is resting on whether Govina left the heating on to prevent pipes freezing when she was away, as is required by her tenancy agreement. She claims that she did keep the heating on and blames the damage on a “mechanical failure”¹.

However, NFU Mutual says Govina turned the heating off, therefore breaching her tenancy agreement. Although the firm has paid the landlord for the damage, it is still pursuing Govina.

Govina is refusing to pay, insisting that the landlord’s insurance policy was in place to protect her from any financial consequences of accidental damage to the property too.

Her barrister, Andrew Butler, warns that victory for NFU Mutual could prove dangerous for many tenants in a similar position in the future.

He says the case is unique, but that it will be “a concern” to anyone living in private rental housing.

He adds: “This was not an uncommon form of tenancy agreement. There hasn’t really been a case like this before in a residential context.

“If the judge finds that the insurance policy didn’t apply for both the landlord and the tenant, that would certainly be a point of concern for tenants.”¹

The outcome of the case is yet to be announced.

¹http://www.telegraph.co.uk/news/uknews/law-and-order/12140902/Physicist-renting-1m-cottage-in-High-Court-test-case-over-128k-bill-for-damage-from-burst-pipes.html

‘New approach’ to construction on floodplains needed

Published On: February 9, 2016 at 12:55 pm

Author: Em Morley

Categories: Property News

Tags: flooding,flooding homes,floodplains,housebuilding,housing,property

With the UK being battered by storm Imogen and with the bad weather showing no signs of abating, a land agent has called for a different approach to construction of homes.

Aston Mead believes that a change in approach is required if Britain is to continue to construct properties on flood plains.

Flooding

Almost 10,000 homes a year are built on floodplains in the UK, with an average of one in fourteen homes constructed on land with a significant threat of flooding.

‘This country needs to get rid of its sandbag mentality and start building homes which have flood prevention at the core of their construction,’ said Aston Mead Director Richard Watkins. ‘We can’t go on treating flooding as an afterthought. Instead, we should be building properties which are specifically designed to rise and fall with the flood water. The technology is already available out there; all we have to do is make best use of it.’[1]

Watkins believes that homes that are built on top of a pre-cast pontoon, which sits inside an excavated concrete void, are the way forwards. These would be appropriate as when flood water enters the void, the pontoon rises, assisted by vertical rails which can be obscured within walls or chimney breasts.

When flood water levels drop, the house goes back to its original position, with a pump to get rid of any excess water. Access will be available at all times, using an articulated pathway, with services remaining connected through a number of flexible knuckle joints.

‘Completely Scalable’

Mr Watkins feels, ‘this system is completely scalable and designs of properties can range from the very traditional to the highly contemporary, with the footprint of the floating pontoon extending beyond the building itself to include garages, terraces and gardens. The pontoons can also be used as fully habitable basements and there are few limitations to size, design or even the number of storeys that can be added on top. An additional advantage is that as water fills the void, it reduces the amount of flood water passing onto neighbouring properties.’[1]

‘New approach’ to construction on floodplains needed

‘These buildings can be mortgaged on standard terms by most high-street lenders and they also qualify for standard household insurance-despite being on the floodplain. What’s more, if they are also fitted with grey water recycling and photo-voltaic panels, they can remain fully functional safe havens-even in the worst flooding conditions,’ he added.[1]

Record

The most recent Met Office figures suggest that December 2015 was the wettest month ever recorded in the UK, with almost twice the amount of the typical expected rainfall.

As a result, Watkins notes that, ‘resorting to a supply of sandbags in the garage just in case is no longer good enough. We can’t continue fighting floods forever. Rain will always fall and water will always rise. And with annual rainfall set to continue to rise, even areas not currently at risk may become vulnerable to flooding in the future.’[1]

‘These new construction methods mean that we can help develop floodplain sites, in the certain knowledge that future owners won’t experience the sort of devastation from flooding that we’ve already seen across the country this Winter,’ he concluded.[1]

[1] http://www.propertyreporter.co.uk/property/building-homes-which-rise-with-flood-water.html

RLA warns landlords of SDLT avoidance con

Published On: February 9, 2016 at 11:18 am

Author: Em Morley

Categories: Landlord News

Tags: Buy-to-Let,landlords,property,Stamp Duty,Treasury

Landlords are being warned not to be conned into a scam scheme ahead of the changes to Stamp Duty tax in April.

The Residential Landlords Association is urging private investors to avoid schemes that allegedly claim to help them avoid the 3% Stamp Duty surcharge.

Careful

RLA Policy Director David Smith, who has met with the Treasury to talk about the new measure. He said that the Government has worked tirelessly to fill in any loopholes.

Smith said that, ‘landlords should be very careful about making plans for their property purchases until after the budget. Any property purchases must be completed before April 1 if the buyers want to avoid paying the new levels of Stamp Duty Land Tax. The Treasury has made it abundantly clear that anyone offering schemes to get around the changes is talking nonsense.’[1]

RLA warns landlords of SDLT avoidance con

Restrictions

Mr Smith continued by noting that the Treasury has made it clear that the new legislations will be greatly restrictive. Additionally, he said that no further guidance would be available until after the Budget in the middle of March. The Budget will announce alterations to the implementation following the official consultation process on the additional homes issue.

In addition, it has been revealed that investors purchasing 15 or more properties would be exempt from the surcharge. However, this would only apply to buyers purchasing all 15 properties on one contract and in a single transaction.

[1] https://www.lettingagenttoday.co.uk/breaking-news/2016/2/warning-against-falling-for-stamp-duty-surcharge-avoidance-scam