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Em

Em Morley

Barking and Dagenham Cheapest London Borough to Buy a Home

Published On: September 29, 2015 at 5:59 pm

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There are just two London boroughs left where the average house price is under £300,000, reveals a new report.

Recent data from Land Registry shows that despite recording the highest monthly rise in prices, Barking and Dagenham is still the cheapest borough in the capital to buy a home, with an average price of £288,809.

Barking is therefore a favourite with first time buyers, due to its good value homes and thousands of new build flats. The Essex town is just nine miles east of central London and a 15-minute commute to Fenchurch Street.

London’s cheapest boroughs to buy a home

Position

 Borough Average house price Annual change

Monthly change
1 Barking and Dagenham £288,809 11.7% 2.2%
2 Bexley £297,507 11.1% 0.8%
3 Newham £316,045 15.5% 1.4%
4 Sutton £328,091 8.5% -0.1%
5 Havering £328,822 12.4% 0.9%
6 Croydon £344,018 10.9% 0.8%
7 Enfield £347,562 12% 0.1%
8 Hillingdon £352,202 13.3% 0.9%
9 Redbridge £371,694 11.1% 0.6%
10 Greenwich £372,993 10.4% 0.2%

With an average asking price of £297,507, Bexley is the second most affordable borough to buy a home in the capital and the area is attracting young families that are priced out of more central spots.

The borough’s most popular locations, such as Bexleyheath, boast highly rated local schools and good value properties, while journeys to the City of London take just over half an hour.

Managing Director of London estate agent Stirling Ackroyd, Andrew Bridges, reports: “Today’s new hubs of activity aren’t in Kensington and Chelsea – they’re emerging in boroughs like Newham and Barking.

“Volumes matter as much as prices, and it’s here that there’s a greater supply of relatively affordable homes.”1

Newham, East London, is the capital’s fastest growing borough, in terms of annual price rises. Its average house price stands at £316,045 after a year-on-year increase of 15.5%.

The Royal Borough of Kensington and Chelsea houses some of the most expensive homes in the capital, despite experiencing the greatest monthly price decreases.

1 http://www.homesandproperty.co.uk/property-news/news/london-house-prices-barking-and-dagenham-tops-list-10-cheapest-boroughs-which-buy-london-home

Shadow Chancellor Calls for Rent Controls, But Are They Needed?

Published On: September 29, 2015 at 4:55 pm

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The new Labour Shadow Chancellor, John McDonnell, has attacked the private rental sector.

During his Labour Party conference speech yesterday, McDonnell spoke of cutting the “billion pound tax breaks given to buy-to-let landlords” and called for controls on “exorbitant”1 rents.

However, new figures reveal that rents have barely hit 2008 levels across many parts of the UK.

Recent data from Belvoir letting agents shows how affected landlords’ rental incomes were during the recession, and how little they have recovered since.

Shadow Chancellor Calls for Rent Controls, But Are They Needed?

Shadow Chancellor Calls for Rent Controls, But Are They Needed?

In 12 counties where Belvoir has had offices since the beginning of the recession, average rents are still below 2008 levels.

Analysis of these branches shows that average rents in the second quarter (Q2) of this year surpassed the record high of Q3 2008 by just £6 per month.

Additionally, the 2008 peak was not hit again until Q4 2014.

The lowest rents in the past seven years were recorded in Q3 2009, at an average of £670 a month.

In Q1 2015, rent prices reached £710, but dropped to £708 in Q2.

For all Belvoir offices, including new ones, the average monthly rent for the second quarter of this year was £756.

In London, the story is completely different, with rents standing much higher than in 2008.

In 2008, the average monthly rent in the capital was just under £1,200. Although they fell slightly the following year, by Q4 2009, they had surpassed 2008 levels.

London rents continued to increase irregularly, hitting a new peak of around £1,700 per month in Q1 2012.

In Q2 this year, they dropped again, to an average of £1,460.

Dorian Gonsalves, Director of Commercial and Franchising at Belvoir, comments on the data: “The Belvoir quarterly rental index, which is prepared by property analyst Kate Faulkner, has picked up rises in rents in most places across the country since Q4 2014, but contrary to media reports, these are far from extortionate or spiralling out of control.

“Belvoir’s data shows that in 12 counties where Belvoir has been trading for the last seven years, Q2 2015 average rents have still to recover to the highs of 2008. These include Cheshire, Dorset and Northamptonshire.

“In contrast, inflation has risen by 19.17%.”

He continues: “The number of Belvoir counties that exceeded the 2008 rental highs during Q2 2015 was 19, and these include Bedfordshire, Worcestershire and Wiltshire.

“Unsurprisingly, the highest increase over this time was in London, where rents have increased by 22% since 2008, in line with inflation.

“However, in the East Midlands, rents are still 2.5% lower than they were in 2008.”1

1 http://www.propertyindustryeye.com/labour-shadow-chancellor-lays-into-private-rented-sector-and-calls-for-rent-controls/

 

 

Late summer tenancies give London landlords a boost

Published On: September 29, 2015 at 4:05 pm

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Gove’s cladding plans are ‘based on lazy and false assumptions’, says NRLA

Landlords in the capital have been provided with a late summer rental boost, according to a new report compiled by London estate agent Portico.

Research from the organisation suggests that landlords in the region whose tenancies begin in the back end of the summer achieve rents 11% higher than those starting in December.

Increases

The firm suggests that a reason for this surge in prices is down to a 10% reduction of available housing supply in September, combined with a 64% increase in tenant demand. This is primarily driven by the student and graduate markets.

Portico says that it gets double the amount of enquiries per property in September, in comparison to the national average. In addition, the firm said this figure was four times the number of enquiries per property than in December.

Late summer tenancies give London landlords a boost

Late summer tenancies give London landlords a boost

Fluctuation

‘We are advising landlords to take advantage of these seasonal fluctuations which can see rental income boosted,’ said Robert Nichols, director of Portico. ‘With much smaller void periods and higher rents, landlords should seriously consider inserting a break clause at the next renewal point in their tenancies to re-synchronise tenancy dates. A tenancy starting in September is just good business.’[1]

Just last week, a report from the Association of Residential Letting Agents indicated that the supply of rental property fell in August, from an average of 189 properties per agency in July to 178. In addition, the report confirmed that fewer letting agents reported rent increases during the last month.

[1] https://www.landlordtoday.co.uk/breaking-news/2015/9/late-summer-tenancies-provide-london-landlords-with-11-rent-boost

 

 

Alternative Tube Map Shows Average Rent at Each Station

Published On: September 29, 2015 at 3:54 pm

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A new alternative Tube map shows how much it costs to rent near each London Underground station in the capital.

The map, compiled by Thrillist.com, reveals the sky-high prices tenants must pay for a one-bedroom home within a kilometre of each Tube station.

The illustration uses data from property website, Find Properly, and highlights the highs and lows of the central London rental sector, including prices in thriving tourist areas, such as Oxford Circus and Leicester Square.

Another super expensive area on the map is Bank, which is at the heart of the City of London financial district. One-beds here can cost £2,128 per month.

Renters in the upmarket West London areas of Hyde Park Corner and South Kensington are also paying similar prices.

However, the map does indicate a divide in prices, with the average rent near the East London station of Dagenham Heathway costing £796 a month, while prices close to the suburban West London station of Hatton Cross are just £324 per month.

Data from June reveals that London rent is almost double the national average and rose by 10.7% over the year.

London has been ranked the third most expensive place to live, after the Cayman Islands and Switzerland.

 

 

8 out of 10 tenants satisfied with landlord

Published On: September 29, 2015 at 3:03 pm

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Fresh research commissioned by Paragon Mortgages has revealed positive news for landlords and tenant relations.

The Q2 tenant market analysis, carried out by BDRC Continental suggests that 80% of tenants are currently satisfied with their current landlord. 87% said they felt their rented property was their home, as opposed to a short-term living arrangement. 800 people that are currently privately renting a property in the UK took part in the research.

Homely

Data from the report also shows that the average duration of tenants living in their current rental home is seven years. Their total typical stay in the private rented sector is 12 years.

When quizzed on their long-term housing plans, 35% of respondents said they intend to stay within the private rented sector. 24% said they intend to buy a house in the future. However, the proportion of tenants who citied unaffordability as their main reason for continuing to rent rose from 74%, from 69% in the previous survey.[1]

In addition, the research shows that 65% of tenants believe their rental payment to be either good or very good, in terms of value.

8 out of 10 tenants satisfied with landlord

8 out of 10 tenants satisfied with landlord

Satisfaction

‘This research provides a valuable insight into the sector,’ said John Heron, Managing Director of Paragon Mortgages. ‘There are many surveys of landlords and many academic reports on the Private Rented Sector. There are, however, too few surveys that poll tenants directly on their experience of renting privately.’[1]

Heron believes that, ‘this survey has identified high levels of tenant satisfaction and an appreciation of the good value that rented accommodation can offer across the country.’ He feels however that it is disappointing, ‘to see that affordability constraints are impacting negatively on future choices in housing with less than a quarter of tenants expecting to buy their own home in due course.’[1]

[1] http://www.propertyreporter.co.uk/landlords/8-out-of-10-tenants-like-their-landlord.html

 

 

Bank of England Commissions Analysis of Buy-to-Let Market

Published On: September 29, 2015 at 2:52 pm

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The Bank of England (BoE) fears that the buy-to-let mortgage market, alongside the economic crash in China, could have a detrimental effect on the UK’s banking system.

Policymakers are examining the buy-to-let sector, seeking any measures by lenders that could make it easier for prospective landlords to obtain loans.

The Bank is also concerned that a substantial drop in house prices could cause landlords to sell their properties, worsening the decrease.

The BoE reports that the “downside risks” of stability have grown since July, specifying the market insecurity caused by China’s stock market crash in August. On so-called Chinese Black Monday, the FTSE 100 index of leading stocks lost over £60 billion.

The Bank is commissioning a study of this contagion and the impact of computer trading strategies.

Bank of England Commissions Analysis of Buy-to-Let Market

Bank of England Commissions Analysis of Buy-to-Let Market

In its quarterly report on potential risks to the financial market, the BoE says it is not taking any immediate action to slow down the buy-to-let sector, where the majority of mortgages are interest-only. However, it is considering whether the buy-to-let boom could aggravate rises and falls in house prices.

The Bank has published figures revealing that buy-to-let mortgage lending rose by over 40% since the 2008 financial crisis, while owner-occupier lending increased by just 2% over the same period.

The Financial Policy Committee (FPC), which was created by the coalition government to spot potential threats to financial stability, reports: “Buy-to-let mortgage lending has the potential to amplify the housing and credit cycles, though the extent of the amplification is hard to judge because the market has only recently grown to significant levels.

“Any increase in buy-to-let activity in a upswing could add further pressure to house prices. Buy-to-let investors may further exacerbate a downturn if they expect rental incomes to fall below their interest payments, and consequently add to selling pressure.”

The FPC says there is evidence that 40% of buy-to-let landlords would sell their properties if their rental income fell below their interest payments.

The FPC first began monitoring the buy-to-let market in July, when it expressed concerns over the level of household debt.

In its most recent update, the BoE states that the rapid growth of the buy-to-let sector is the reason for its call for the Government to give it powers to intervene in the market, as it can with residential mortgages. A consultation is scheduled for this year.

The Bank says: “The FPC is alert to the rapid growth of the market and potential developments in underwriting standards. As the market continues to grow, particularly if driven by loosening of underwriting standards, the sector could pose risks to broader financial stability, both through credit risk to banks and the amplification of movements in the housing market. Intensified completion among lenders could lead to loosening underwriting standards in future.”

The FPC has also conducted an annual review of the effect of the Help to Buy scheme on the sector. The incentive allows buyers with 5% deposits to purchase a home. Its conclusion states: “The scheme does not pose material risks to financial stability.”

It its latest study, it also considers global risks, highlighting the potential lessons from Chinese Black Monday, when there were over 1,000 temporary suspensions on individual equities on the New York Stock Exchange. The FPC has called for analysis from the Financial Conduct Authority (FCA) on the way contagion spreads between markets.

The FPC says: “The committee is alert to the possibility that future heightened volatility and reductions in market depth could have more widespread and persistent effects, including on the provision of credit to the real economy.”

In July, the FPC was wary of Greece’s financial situation, but concludes that the risk has subsided: “However, other downside risks to UK financial stability stemming from the global environment, and to which the United Kingdom as a global financial centre is exposed, have increased. These risks come from both China and emerging market economies more broadly.”

The results of bank stress tests will be revealed in December, looking at their ability to endure global threats and the impact/scale of future fines for misconduct.

The FPC adds: “The scale of future misconduct and redress costs for the UK banking sector is highly uncertain and banks should hold sufficient resources to pay these costs without affecting their ability to continue to lend to the real economy.

“The committee will review potential future costs as part of the 2015 stress test of the UK banking system.”1

1 http://www.theguardian.com/business/2015/sep/25/bank-england-buy-to-let-scrutiny-china-mortgage-lending