Posts with tag: average rents

Renting is More Expensive than Buying in Most of the UK

Published On: May 6, 2016 at 8:31 am

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The cost of renting a home is more expensive than buying a property in the majority of the UK, according to new data from Halifax.

The mortgage lender found that it takes longer to reach rental freedom day than it does to reach mortgage freedom day – this means that tenants spend more of their disposable income on housing than homeowners.

Renting is More Expensive than Buying in Most of the UK

Renting is More Expensive than Buying in Most of the UK

On average, mortgage borrowers would have earned enough to pay off their annual mortgage payments by 19th April, while renters will have only earned enough to cover their annual rent by 5th May.

The Halifax found that homeowners spend 29% of their disposable income on their mortgage, compared to 34% by tenants on their rent.

The figures were calculated by using average rent prices, house prices, net annual income and mortgage rates. The bank found that renting is more expensive than buying in all but one area.

For tenants in London, it takes more than half the year to reach rental freedom day, at 195 days. Londoners must wait until 13th July to have earned enough to cover their rent for the year. It takes homeowners in the capital until 26th June to cover the cost of their annual mortgage.

Contrastingly, renters in the North East take less than half the time to cover annual rent costs, at 96 days.

It takes 143 days to reach rental freedom day in the South West, 137 days in the South East, and 122 days in the North West.

After the North East, the regions with the shortest periods are Yorkshire and the Humber at 100 days, the East Midlands at 104, the West Midlands at 112, and 113 days in the East of England.

The Mortgage Director at Halifax, Craig McKinlay, comments: “For most homeowners, mortgage payments are the biggest outgoing every month; knowing they’ve earned enough to pay off their mortgage for another year should be a reassuring thought.

“On the other hand, those who rent will need to work a further couple of weeks to have earned enough to cover their annual rental cost.”

In Scotland and Northern Ireland, homeowners have earned enough to pay off their annual mortgage payments by 12th March, while in Wales, it is 1st April. There is no data available for rent costs in Scotland, Northern Ireland or Wales.

Rental freedom day is calculated by taking annual rent payments as a percentage of average disposable income.

Average Two-bed London Rental Property to Reach £2,000 Per Month by September

Published On: April 20, 2016 at 8:36 am

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The average price of a two-bedroom London rental property will reach £2,000 per month by the late summer, according to Portico, London estate agents.

The firm’s latest Q1 Rental Report found that the typical rent price on a two-bed property in the capital is currently £1,867. With rents rising rapidly, it is expected that tenants will be paying over £2,000 for the same property by September.

Portico believes that a rush of graduates seeking professional jobs and a new lifestyle in London around September time drives rent price growth. And it’s not just prices that rise – tenant demand surges by a huge 64% in September, as available rental stock drops by 10% when compared with average monthly growth.

Average Two-bed London Rental Property to Reach £2,000 Per Month by September

Average Two-bed London Rental Property to Reach £2,000 Per Month by September

Portico sees almost double the number of enquiries per property in September than it does in an average month, and four times the level of interest compared with the typical December.

The particularly high demand seen in the late summer causes tenants to compete more fiercely for properties. Portico reports that prices achieved for similar properties are generally 11% higher in September than in December.

Based on this data, the firm predicts that two-bed rents will hit £2,008 per month in September this year. Split between two tenants – £1,004 a month – this shared rent will eat up 46% of the average London monthly salary.

Confirming this belief, the Residential Landlords Association recently revealed that almost all landlords (84%) are considering increasing their rents to accommodate the higher taxes they now face.

Buy-to-let landlords are now charged an extra 3% in Stamp Duty when they purchase a rental property, while the amount of mortgage interest that landlords can offset against tax will be reduced from April next year. For more information on how these changes will affect you, see this advice from Paul Mahoney of Nova Financial: /contrary-to-popular-belief-buy-to-let-is-not-dead-insists-finance-firm/

However, if you’re a landlord in London, you’ll be pleased to learn that rents are rising between 1-7% in the majority of London boroughs.

Portico has found that properties in Ealing have seen the greatest increase in rents, at an average of 6.9% for a two-bed property, to £1,825 per month. Richmond-upon-Thames follows with a rise of 6% to £1,934 a month for a typical two-bed, while rents in Lambeth are up by 5.8% to £2,051.

However, average rents on two-bed properties have fallen in seven London boroughs, including two parts of prime central London. Rent prices in Westminster and Kensington and Chelsea are down by 5.7% and 1.1% respectively. These figures reflect those reported recently, suggesting that the London property market is running out of steam.

During Q1, Bromley experienced the largest decrease in rents for all properties, with a drop of 6.3%, followed by Hillingdon at 4.4% and Kingston-upon-Thames at 4.1%.

If you are worried that you need to revise your rent prices, this advice will help you set the perfect rent for your property: https://www.justlandlords.co.uk/news/setting-perfect-rent-price-property/

Are Rents Really as Expensive as Claimed?

Published On: December 22, 2015 at 2:05 pm

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Are Rents Really as Expensive as Claimed?

Are Rents Really as Expensive as Claimed?

The news is full of how renting is extortionate and landlords exploit tenants… But is this actually true? Just how expensive is renting?

Recently, rents have performed strongly year-on-year, in line with earnings growth – almost for the first time since the start of the recession.

Rent price indices from LSL Property Services and Belvoir use advertised rents, showing the highest increases, while Countrywide studies prices for existing tenants, which although indicate growth, show rents rising at a much slower rate than for those new to the market.

This data shows that landlords do not exploit tenants with huge increases and reflects the true movements of the rental market.

Regionally, the Office for National Statistics (ONS) found that property prices range massively – from an average of £158,000 in the North East to 3.36 times that in London, at £531,000.

The lowest average rent is in the East Midlands, at £609 per month, with the typical rent in the capital set at £1,442 a month – just over double. This indicates that rents do not rise at the same rate as house prices. And although there have been some high increases, 8-10% annually, these are predominantly for newly advertised rental homes.

Countrywide found that for existing tenants (the majority), rent prices hardly rise at all.

Rent price growth should also be put into context. Since the recession, private sector rents dropped by between 5% in London and 20% in Nottingham. Since then, many increases have been reported as rises, but were simply recoveries. While rents in the East Midlands have grown by 6-8% yearly, today’s prices are only just back to levels recorded in 2008.

Ideally, rents should rise in line with inflation, meaning that landlords have, in fact, seen a price cut over the years.

How have your rent prices changed over the last few years? And do you believe this is correct?

Scotland and South West show big rent rises

Published On: August 10, 2015 at 10:55 am

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Rent values in the South West and in Scotland continued to rise sharply in the three months to July, according to a new report.

The HomeLet Rental Index indicates that rent prices rose in many regions of the UK during the period, with many areas either keeping pace with or exceeding the rate rises seen in the capital.

Increases

Data from the Index shows that average rents agreed for new tenancies in the second quarter of 2015 in the UK was £977 per month. What’s more, the typical rent price was found to be 11.8% at the same time in 2014.[1]

In addition, figures from the report show that all regions, with the exception of the North West, registered a rise in rent values over the period.

Values in the South West of England for rents agreed in the first three-months of 2015 were 11.4% greater year-on-year. Scotland recorded an annual rise of 11.2% while the South East saw prices 10.3% higher in the three-months to July than at the same time in 2014.[1]

In the capital, average rents for new tenancy agreements are more than twice as much than in the rest of the country, in cash terms. For new agreements in the three months to July, rents were 9.5% more than a year ago.[1]

Broad-based

Martin Totty, Chief Executive Officer of Barbon Insurance Group, the parent company of HomeLet, commented, ‘the July HomeLet Rental Index demonstrates just how broad-based the rise in rent prices has now become-this is a UK wide trend.’ He noted that, ‘regions which have long been associated with a buoyant rentals sector, such as London, continue to experience rising prices, but rents are also rising in many other parts of the country at similar rates.[1]

Scotland and South West show big rent rises

Scotland and South West show big rent rises

‘The South-West of England, for example, is benefiting from its popularity with those attracted to the area for lifestyle reasons, as well as the strong local economy in many of the towns and cities of the region, Totty continued.’[1]

Mr Totty went on to say that, ‘over the past few years, price trends in the rental market and house purchase market have been very similar. However, across the first half of this year, house price growth has slowed whilst rental values have continued to increase, perhaps reflecting a change in the relative attractiveness of renting versus buying over this recent period.’[1]

He also feels that, ‘with early signs of the cost of mortgage finance starting to edge up, it will be interesting to see if this recent trend continues or if the change in buy-to-let mortgage interest tax relief announced in the Summer Budget has any indirect impact on rental values with some suggesting it could further stimulate rental values over time if supply of rental properties is constrained as a consequence.’[1]

[1] http://www.propertyreporter.co.uk/landlords/south-west-and-scotland-lead-the-way-for-rent-rises.html

 

 

Most Expensive Place to Rent in Britain (and it’s not London!)

Published On: May 7, 2015 at 8:45 am

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The most expensive place in the UK to rent a room in a shared house or flat is Woking in Surrey.

A new study has found that renting in Woking, a 30-minute train journey from London Waterloo, cost £755 per month in the first quarter (Q1) of 2015, up from £503 in Q1 2014.1

Most Expensive Place to Rent in Britain (and it's not London!)

Most Expensive Place to Rent in Britain (and it’s not London!)

The serious housing shortage in Britain has caused property price surges and is fuelling room rent rises in popular areas and cities, according to the latest rental index from the flat and house share website EasyRoommate. The average rent per person in the UK was £451 a month in Q1 2015. This has risen from £433 in Q1 2014.1

Young professionals are moving to Surrey and other Home Counties in a bid to find more value for money whilst still working in London.

London’s density is increasing, causing young renters to leave the capital, where their work and social life is.

Chief Executive of EasyRoommate, Karim Goudiaby says: “There are also large corporations based in Woking, such as SABMiller and Cap Gemini, which is drawing young professionals out into the town who tend to share.”1

London is also in the top five most expensive places to rent in the UK, where rents rose by 6% this year compared to Q1 2014. The average room rate was £672 in Q1 2015. Furthermore, for every available room in the capital, there were around six people looking for a room.1

In an attempt to stop rents spiralling, Ed Miliband has pledged rent controls on three-year tenancies, with rent increases in this period limited to inflation rates.

The Residential Landlords Association (RLA) has criticised the plans. It believes they will reduce the supply of homes and discourage investment in the buy-to-let sector.

Research from the RLA indicates that two thirds of landlords in the UK will leave the private rental sector if Labour wins the general election and a rent controls policy is introduced.

Three Welsh cities, Pontypridd, Swansea and Carmarthen, featured in the 20 cheapest cities. Lowestoft in Suffolk was ranked the cheapest place to rent in 2015.1

1 http://www.telegraph.co.uk/finance/property/11583894/Rip-off-rents-Britains-priciest-place-to-flat-share-and-its-not-London.html

UK Rents are 10.2% Higher than Last Year

Published On: April 15, 2015 at 10:32 am

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Rent prices around the UK are now 10.2% higher than last year, the HomeLet Rental Index reveals.

UK Rents are 10.2% Higher than Last Year

UK Rents are 10.2% Higher than Last Year

In the first quarter (Q1) of 2015, the average rent on an agreed tenancy document was £902, compared to the Q1 2014 figure of £819.1 Every region of the UK has experienced rent growth in the last 12 months, except Wales.

Not including Greater London, average rents in the rest of the UK are 6.7% more than a year ago.1 This is the highest rate of yearly growth record by HomeLet since its 2008 launch.

The strongest growth was found in the South West of England, as rents were 13.7% higher in Q1 2015 compared to the same period in 2014.1

Excluding Greater London and the South East, the South West has the most expensive rents in the UK, as the average rent in this region is now £851 per month.

Ten out of 12 UK regions showed price increases in the first three months of the year compared to the previous months. For the three months to March, average rents grew by 1.5% compared to the three months to February.1

HomeLet also found that rent price growth in the Greater London market and those in the rest of UK are beginning to meet. In London, rents steadied in Q1 2015, but have been rising more quickly elsewhere in the country.

CEO of Barbon Insurance Group, parent company of HomeLet, Martin Totty, says: “With average rents for new tenancies across the UK now more than 10% higher than a year ago, what we are seeing is a market that is experiencing sustained demand from increasing numbers of people requiring privately rented property.

“However, rent price growth in London is no longer outpacing that of the rest of the UK. The HomeLet Rental Index shows that during the first three months of 2015, rents on new tenancies in six regions of the UK rose more quickly than Greater London. Demand for rental property in London remains high, but rent price growth in many regions outside of the capital has matched or exceeded London over the past three months.”1

1 http://www.propertyreporter.co.uk/landlords/average-uk-rent-surges-10-in-a-year.html