Posts with tag: Buy-to-Let

House prices up 7.7% in November-ONS

Published On: January 19, 2016 at 12:13 pm

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Figures released today from the Office for National Statistics (ONS) reveal that average property prices in the UK rose by 7.7% in the year to November 2015. This figure was up from the 7.0% recorded in the year to October.

Rises

Property price annual inflation was found to be 8.3% in England, 1.3% in Wales, 0.4% in Scotland and 4.6% in Northern Ireland. Annual house price increases in England were propelled by a yearly increase of 10.2% in the East, 9.8% in the South East and 9.8% in London.

With the exception of the capital and the South East, UK property prices rose by 5.8% in the twelve months to November of last year.

In November 2015, property prices paid by first-time buyers were 7.4% greater on average than those recorded one year previously. For existing owner-occupiers, values increased by 7.8% over the same period.

‘House prices in November saw the biggest annual increase in eight months, despite traditionally being a quieter time in the housing market,’ observed Brian Murphy, head of lending at the Mortgage Advice Bureau. ‘Those lucky enough to already be on the property ladder are the clear winners of this boom, as homeowners trading up to the next rung take advantage of improving property values. Increased equity means even those not looking to sell can benefit by switching to a more affordable mortgage deal.’[1]

House prices up 7.7% in November-ONS

House prices up 7.7% in November-ONS

Rush

Murphy feels that, ‘the heat is set to rise in the buy-to-let and second home market in the short-term, as buyers rush to complete before the changes to Stamp Duty kick in in April.’ Continuing, he said, ‘in the long-term, the dearth of properties available combined with rampant demand means house price growth isn’t likely to slow any time soon. This creates clear affordability concerns for first-time buyers.’[1]

‘Government schemes to increase affordable housing will put a bandage over the wound: but without a significant and sustained increase in the construction of new homes, the current housing crisis isn’t likely to be cured any time soon,’ he concluded.[1]

Adrian Whittaker, Sales Director at New Street Mortgages, noted, ‘these figures from the ONS are typical of the strong growth that the housing market experienced last year, as house prices rose well above the level of inflation. A supply deficit and rising demand as more people looked to purchase property is squeezing the market and this puts vendors in a position where the can select the most appropriate buyer.’[1]

‘Increasing gulf ‘

Stephen Smith, Director of Legal and General Housing Partnerships, also said, ‘house prices are continuing to rise well above inflation which is pricing many prospective buyers out of the market. Prices have also risen significantly on an annual basis, exposing the increasing gulf between supply and demand.’[1]

‘Suitably sized housing needs to become more readily available at both ends of the market, to enable first time buyers to take their first steps onto the housing ladder and help last time buyers to ‘rightsize’, making life better for all. The Government needs to build  around 250,000 extra houses this year to give potential buyers any hope of finding their dream home. There are currently a number of constraints which elongate the house building process and the country should consider exploring alternative avenues to help speed up construction, such as modular housing,’ he added.[1]

[1] http://www.propertyreporter.co.uk/property/november-house-prices-gained-77.html

 

Property market enjoys positive start to the year

Published On: January 19, 2016 at 10:38 am

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Categories: Property News

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Latest index figures released by Rightmove suggest that the residential market has seen a positive start to 2016.

According to the data, property prices in England and Wales have risen by 0.5% month on month. In addition, values are up by 6.5% year on year, taking the average price of a property to £290,963. This represents the second highest festive period rise since 2007.

Positivity

There was good news for people looking to get onto the property market, with prices in the lower reaches of the sector, typically two bedroom homes, increasing by just 0.1%. Rightmove also said that traffic to its website was up by 21% on the same period in 2015.

Miles Shipside, Rightmove director and housing market analyst, said, ‘upwards price pressure remains, with the second highest rise seen at this time of year for nine years but encouragingly for first time buyers there’s more fresh choice with more property coming to market in their target sector.’[1]

‘With their asking prices pretty much the same as a month ago, perhaps the knock-on effects of the more punitive landlord tax regime have arrived early and they now face a dilemma over whether to buy now or wait to see if prices drop in this sector over the next few months,’ he added.[1]

Location variation

Further analysis of the data indicates that there are variations in different regions. Prices dropped by 0.9% in Greater London over the month to an average of £610,741, but were up by 7.8% year on year. In the East Midlands, monthly prices slipped by 1.8% to £182,318 and by 0.2% in Yorkshire and the Humber to £165,722. However, prices were up by 2.9% and 2.8% respectively in these regions over the course of the year.

The largest monthly increase was in the South West, up by 3.5% in the month to £282,373 and by 5.5% year on year. Prices also increased by 2.3% in the West Midlands to £198,595 and by 0.6% in the South East to £383,787. Year on year, prices in these regions rose by 4.9% and 7.3%.

In Wales, prices were up by 1.6% month on month and up 5.5% year on year, with prices standing at £166,051.

Property market enjoys positive start to the year

Property market enjoys positive start to the year

Shortage

Rightmove’s report also shows that a shortage of property being made available on the market was the catalyst for both higher prices and unsatisfied demand. Encouragingly, there has been an annual increase of 1.8% in fresh to market properties.

The most prominent increase has been in two-bedroom homes, with the likely beneficiaries first-time buyers or investors looking to purchase buy-to-let property before the stamp duty hike in April.

‘Perhaps because of the increased competition among sellers and a keenness to attract buy-to-let investors before the April deadline, prices have hardly increased month-on-month for properties with two bedrooms or fewer,’ Shipside noted.[1]

‘Rather than waiting until later in the year, having a good look around now while choice is up and interest rates remain unchanged could get you onto the ladder sooner and at an acceptable price. For several years buy to let investors have been enticed by high tenant demand and attractive returns, but as their window of opportunity starts to close it already appears to be opening wider for first time buyers,’ he concluded.[1]

[1] http://www.propertywire.com/news/europe/england-wales-home-prices-2016011911450.html

Buy-to-let clampdown beginning to work?

Published On: January 18, 2016 at 2:36 pm

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Categories: Landlord News

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The Chancellor’s clampdown on buy-to-let investment is already beginning to show signs of working, according to new research conducted by Rightmove.

Data released by the property website suggests that more properties have become available to first-time buyers, with prices also slowing. The firm suggests that there has been a 6.6% rise in two-bed flats, popular with this group, over the past year.

Availability

Two-bed flat availability is now at its greatest since 2007, according to the firm. In addition, their research suggests that buy-to-let landlords may be looking to sell their property before changes in tax relief and stamp duty come into effect.

‘With the monthly price increase in this sector at a near standstill, this suggests that some of the dynamics of the changing tax regime for buy-to-let investors are starting to play out sooner than expected,’ said Miles Shipside, director of Rightmove.[1]

‘For several years buy-to-let investors have been enticed by high tenant demand and attractive returns,’ he continued, before saying, ‘as their window of opportunity starts to close it already appears to be opening wider for first-time buyers.’[1]

Buy-to-let clampdown beginning to work?

Buy-to-let clampdown beginning to work?

Changes

During the summer, Chancellor Osborne slashed tax reliefs for buy-to-let landlords and went on to increase stamp duty on investment and ‘second’ homes in the Autumn Statement.

Prices in the mainstream market continued to rise, with Rightmove’s data suggesting the cost of a property coming to market was up by 0.5% in January, in comparison to December. In addition, demand on the Rightmove website in the first week of 2016 was up by 21% on the same period in 2015.

However, there was little in the way of relief for struggling tenants, with separate analysis by Countrywide suggesting rents rose by 3.1% in 2015. Company research director Johnny Morris said that, ‘2016 looks to be a complicated year for landlords,’ with the, ‘additional 3% stamp duty charge, stricter regulation and changes to tax relief from 2017 onwards will all take their toll on investor sentiment and impact behaviour.’[1]

‘With stock at a premium, the smaller landlords who decide to sell up will add upward pressure to rents although any rises will be tempered by affordability pressures,’ Morris added.[1]

[1] http://www.theguardian.com/business/2016/jan/18/jump-two-bed-flats-for-sale-landlords-selling-up?CMP=share_btn_tw

 

Rents for new lets up by 3.1% in 2015

Published On: January 18, 2016 at 12:03 pm

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Categories: Finance News

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Newly released analysis from Countrywide plc suggested that rents for freshly let homes continued to grow in 2015.

Despite growing at a slower pace than in 2014, rents climbed by an average of 3.1% over the course of the year, sending monthly typical monthly rental costs to £919 per calendar month.

Increases

The research shows that rents increased in all regions of England, with the East seeing the highest increase of 6.5%. Central London recorded growth of just 0.5%, which was the lowest of all regions.

Rental growth in 2015 was boosted by high demand for accommodation, with a low stock of homes available. This imbalance had led to increased competition for homes in the market, with the average property let within 20 days of being instructed, two days quicker than in 2014.

A slowdown in rental growth during 2015 for Greater London properties still saw rents increase by 4.7%. With rents spiralling in recent years, tenants have more often looked to less expensive areas of Outer London. This led the proportion of under 25s taking up residence in the rental sector in London to fall by 4% in 2015. What’s more, southern regions near London have seen increases in the proportion of under 25s entering their market, with Londoners looking further out for affordable agreements.

The table below shows that average rent for newly let units in 2015:

Region Average rent in Q4 2015 Average rent in Q4 2014 Year-on-year increase in rent
Greater London £1,292 £1,234 4.7%
Central London £2,497 £2,485 0.5%
East of England £945 £887 6.5%
South East £1,139 £1,118 1.9%
South West £816 £784 4.1%
Midlands £663 £651 1.8%
North £636 £627 1.4%
Scotland £662 £637 3.9%
Wales £666 £648 2.8%
Total £919 £891 3.1%

[1]

Rents for new lets up by 3.1% in 2015

Rents for new lets up by 3.1% in 2015

Affordability concerns

Johnny Morris, Research Director at Countrywide, noted, ‘a mix of steadily increasing demand and a lack of homes to rent supported rental growth in 2015, even though wage growth remained subdued. In the capital, rising costs meant renters were more likely to move to Outer London or the commuter belt in search of more affordable places to live.’[1]

‘2016 looks to be a complicated year for landlords as the government focuses its efforts on boosting homeownership,’ Morris continued. ‘The additional 3% stamp duty charge, stricter regulation and changes to tax relief from 2017 onwards will all take their toll on investor sentiment and impact behavior. With stock at a premium, the smaller landlords who decide to sell up will add upward pressure to rents, although any rises will be tempered by affordability pressures.’[1]

The table below indicates the average rent for occupied units in 2015:

Region Average rent December 2015 Average rent November 2014 Average rent December 2014 Year-on-Year Increase in rent Month-on-Month Increase in rent
Greater London £1,196 £1,192 £1,132 5.7% 0.3%
Central London £2,449 £2,445 £2,435 0.6% 0.2%
East of England £862 £859 £829 4.0% 0.3%
South East £997 £995 £981 1.6% 0.2%
South West £737 £736 £724 1.8% 0.1%
Midlands £629 £629 £620 1.5% 0.0%
North £624 £623 £612 2.0% 0.2%
Scotland £641 £639 £624 2.7% 0.3%
Wales £650 £649 £636 2.2% 0.2%
Total £857 £856 £834 2.8% 0.1%

[1]

[1] http://www.propertyreporter.co.uk/landlords/newly-let-home-rents-up-31.html

 

2015 rental growth hotspots revealed

Published On: January 16, 2016 at 10:26 am

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Categories: Property News

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New research has revealed the towns and cities where rents increased the most during the last year.

The HomeLet Rental Index shows that Brighton, Bristol, Edinburgh and Newcastle saw the largest rent rises in 2015.

Southern surge

HomeLet’s annual review of the rental market indicates that rents on new tenancies in Brighton and Bristol were 18% higher than on agreements agreed in 2014. Rents were up by 16% in Edinburgh and Newcastle, while London and Liverpool recorded increases of 11%.

In addition, the monthly HomeLet Rental Index shows on average, with the exception of Greater London, rents in Britain were 4.9% up in the final quarter of 2015 in comparison to the same period one year previously.

Average monthly rents outside of the capital now stand at £739 per month. In London, rents were found to be 8% greater than in the final three months of 2014, standing at £1,523.

HomeLet has provided a league table of the regions of Britain that highlights growth in average rents for fresh tenancy agreements during 2015. The results can be seen below:

Region Average rent 3 months to December 2015 Average rent 3 months to November 2015 Monthly

Variation

 Average rent 3 months to December 2014 Annual variation
Scotland £630 £648 -2.8% £611 3.2%
North East £531 £530 0.1% £521 1.9%
Yorks & Humbs £623 £626 -0.5% £604 3.1%
East Midlands £638 £635 0.4% £600 6.4%
East Anglia £799 £805 -0.7% £756 5.7%
Greater London* £1,523 £1,544 -1.4% £1,410 8.0%
South East £936 £943 -0.8% £875 7.0%
South West £840 £849 -1.1% £796 5.5%
Wales £599 £595 0.8% £586 2.3%
West Midlands £666 £659 1.0% £654 1.7%
North West £622 £631 -1.5% £655 -5.1%
Northern Ireland £570 £580 -1.8% £574 -0.6%
UK ex Greater London £739 £743 -0.6% £704 4.9%

[1]

2015 rental growth hotspots revealed

2015 rental growth hotspots revealed

Strong demand

‘2015 was a year in which rents on new tenancies were up in 2014 in almost every area of the country,’ notes Martin Totty, Barbon Insurance Group’s Chief Executive Officer. ‘While we saw a moderation in the rate at which rents increased during the final months of the year and even some falls in a number of regions, the sector overall has continued to see strong demand.’[1]

‘Beneath the headline figure, HomeLet’s data points to some significant variations in rental market performance in 2014, both from region to region and from town to town. In locations such as Brighton and Bristol, demand for rental property appears to have been particularly strong and rents on new tenancies jumped very markedly, In other areas, we saw slower growth,’ Totty continued.[1]

Concluding, Totty noted that, ‘rents in London have continued to rise more quickly than in most areas of the country, but not at quite the pace of 2014; meanwhile, average rents outside the capital rose more quickly last year than in 2014. As a result, we saw a narrowing of the rent inflation gap between London and the regions last year-is this a trend we will see continuing in 2016 from tenants seeking value for money in the private

[1] http://www.propertyreporter.co.uk/landlords/rental-market-hotspots-released.html

 

Landbay Rental Index shows 4% rise in 2015

Published On: January 15, 2016 at 3:00 pm

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The latest index to be published assessing the rental market in 2015 shows that rents increased by almost 4% over the course of the year.

According to the Landbay Rental Index , the average UK rents rose by 3.8% in 2015, despite a seasonal fall of 0.2% in December.

In addition, the Index suggests that a lack of housing across the country has led to rental increases outpacing wages in large parts. Three bedroom properties have seen the greatest rise.

Regional rises

Each region of the UK saw rents up year on year, with the average rent now standing at £1,280 per month. London recorded the highest average rent, of £2,047 per month, with the South East recording £1,019 and the East of England at £863.

Northern Ireland recorded the largest yearly increase in rents per region, with 6.7%. This was followed by the East of England (5.6%), Scotland (4.5%), West Midlands (4.4%), the South West (4.1%) and London (4%).

The South East saw annual growth of 3.7%, with the East Midlands and Wales showing increases of 3%. Yorkshire and the Humber recorded yearly increases of 2.1%, the North East 1.8% and the North West just 0.9%.

In comparison to 2014, three bedroom homes have seen the greatest increase in the average rental price. Rents were up by 5.2% to £1,484, indicating that family homes and people sharing properties were in high demand.

For a one-bed home, rents climbed by 3.2% to £1,042 and for a two bedroom by 3.9% to £1,243.

Hotspots

Among the country’s top risers in rental prices were commuter hotspots around London. Luton saw a rise of 11.1%, Medway 8.8% and Thurrock 7.3%, indicating that many workers in the capital are priced out of living there.

‘Despite a small seasonal dip towards the end of the year, rents rose significantly ahead of wages in 2015,’ noted John Goodall, chief executive officer of Landbay. ‘Rents often track wages as consumers with more pay compete for the most desirable rental properties, but the fact that rents are outpacing wages is a clear sign of the shortage in properties to rent as large parts of the UK face an acute housing shortage. This trend is clear in London and the South East, along with large parts of the East Midlands and East Anglia and it is most evident for three bedroom properties, ‘ he continued.[1]

Landbay Rental Index shows 4% rise in 2015

Landbay Rental Index shows 4% rise in 2015

Weeding out

‘Based on its recent policy changes for the private rental sector such as the new stamp duty surcharge and changes to tax relief on mortgage interest, the Government seems intent on weeding out amateurs from the ranks of new buy-to-let investors. If it is successful, our rental index suggests that the result is likely to be higher rental income for the professional investors who are not impacted by the changes,’ Mr Goodall added.[1]

Concluding, Goodall said, ‘as a peer to peer lender to the residential property sector, we enable any investor to benefit from a solid, dependable rate of return that is underpinned by UK bricks and mortar and the growing rental income it generates by lending to professional property investors.’[1]

[1] http://www.propertywire.com/news/europe/uk-average-rents-index-2016011511440.html