Posts with tag: London

Majority of London Tenants Expect Rent Discounts for Poor Internet Connections

Published On: July 26, 2018 at 8:09 am

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The majority of London tenants expect to receive a discount on their rent prices for poor internet connections in their homes, a new study from property firm Cluttons reveals.

Private tenants are certainly pickier about the type of property that they are willing to rent now than they were a generation ago. This means that landlords can no longer get away with offering rundown properties with second-hand furniture and simply expect the rent to come streaming in. But, above all else, many young renters have come to expect high speed, reliable internet connections.

In London, 73% of tenants consider a good internet connection to be important when choosing a rental property, while 70% of those that work from home at least one day a week would reconsider renewing their tenancy agreement if their homes had poor internet connections.

The research also found that almost 60% of those living in the capital would expect some discount in their rent as compensation for poor internet connections, with close to one in five requesting a 10% reduction.

Unfortunately, slow and unreliable internet connections plague many residential properties in the capital, the study revealed, which was conducted in partnership with YouGov.

The report shows that London currently ranks 30 out of 63 UK cities for the number of premises covered by ultrafast broadband and is positioned in the bottom five UK cities for 4G coverage, which is clearly unacceptable for many private tenants.

John Gravett, the Head of Infrastructure at Cluttons, comments: “As London’s property market becomes more competitive, it is important for landlords to think of their tenants as customers and offer them properties that meet current demand.

“While traditionally it would fall to tenants to find the best offering from broadband service providers, now landlords are realising how important it is to make sure their buildings are well connected.”

The research found that half (49%) of landlords are already working to improve internet connections in their buildings and, of those surveyed, 72% said that this is a direct result of tenant demand.

Gravett continues: “Good connectivity has knock-on effects to many aspects of our lives, from how we communicate with each other to maintaining flexibility and, therefore, diversity in the UK’s workforce.

“Despite this, the British capital not only lags behind other UK cities, but it also ranks poorly compared to other European hubs, as well. In fact, London ranks 29th out of 30 EU cities last year for 4G speeds.”

He concludes: “We believe connectivity is now a utility, not just a nice-to-have, and our research clearly shows that there is a commercial benefit to both commercial and residential landlords in prioritising it as such.”

Landlords, have you considered how poor internet connections could be putting potential (and existing) tenants off your properties? This study proves that it is definitely worth looking into!

Will Regional Property Markets Catch the Capital?

Published On: July 23, 2018 at 9:26 am

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Categories: Property News

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The latest UK Cities House Price Index from Hometrack predicted a narrowing of the price gap between regional property markets and the capital over the next year or two.

For landlords, the general consensus is clear: regional property markets are the places to be if you’re looking to profit from buy-to-let. But are we at risk of completing the same cycle that we saw just over a decade ago, or has the market learned from its mistakes?

Jonathan Stephens, the Managing Director of property investment firm Surrenden Invest, says: “While many factors mirror the housing market’s performance back in the early 2000s, there are some substantial differences that look set to bring about different outcomes from this state in the cycle. Tax changes are playing a key role in this, as are the rising quality and security standards of regional city developments.”

At present, according to Hometrack, house price growth stands at an average of 4.3% for the UK as a whole on an annual basis. For London, this figure drops to just 0.4% over the same period. Edinburgh has experienced the greatest increase in values, at an average of 7.1%, closely followed by Manchester, at 7.0%. Birmingham has also fared better than average, at 6.5%, as did Liverpool, at 5.9%.

The success stories of regional property markets stands in stark contrast to the price falls experienced in 20 of London’s 33 boroughs.

The same trend of regional property markets racing to catch up with London’s inflated prices was seen between 2002-05, when the capital recorded weak growth after a period of strong performance from 1996-2000. Regional property markets had lagged behind, but began reporting solid growth from 2001 onwards, thus narrowing the price gap.

Nevertheless, Surrenden Invest is quick to highlight that the current market has a number of significant differences to that of the early to mid-2000s. While the cycle appears similar, secondary cities may actually stand a more realistic chance of catching up to London’s prices than they did previously.

“People have been saying that London is too expensive since before Black Monday in 1987, yet, over the last 30 years, property prices there have grown enormously,” Stephens explains. “Still, there comes a point when a market becomes too expensive to bounce back quickly, even when there are chronic underlying supply issues, as is the case with London.”

He adds: “The city remains one of the world’s most significant and sophisticated property markets, but that doesn’t mean that it can’t suffer a sharp, swift price correction – or that it could quickly recover from such an occurrence.”

In past property market cycles, regional property markets have narrowed the price gap between their cities and London, only for the capital’s prices to race ahead once more. This time, though, the quality, security and corporate governance of nationwide developers are far stronger than they were even ten years ago. Previously a concern for risk-averse buyers, these strong credentials – and the attractive rental yields on offer – mean that regional cities stand a good chance of catching up to London’s prices outside of the standard cycles that we’ve seen over the last 20 years.

Another contributing factor is the new Stamp Duty regime. Many of the capital’s properties are located in prime and super prime locations, costing upwards of £1m. The sale of these properties has been significantly hampered by the higher tax rates, as well as the additional 3% charge on second and buy-to-let homes. With regional properties available for significantly less money, the tax burden is reduced sufficiently to make property purchases outside of London more attractive in the eyes of many investors.

Stephens concludes: “Are we likely to see the regions catch up relative to London in terms of their property prices? Probably not, as London remains a uniquely appealing market. However, what we are likely to see is a sustained and significant narrowing of the price gap, as regional cities hold fast in the wake of London’s price correction.”

Rent Prices Rising Steadily Across Great Britain

Published On: July 19, 2018 at 10:03 am

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Categories: Lettings News

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Average rent prices are rising steadily across Great Britain, with the latest Index of Private Housing Rental Prices from the Office for National Statistics (ONS) finding that the price paid by tenants has increased by 1% in the year to June 2018, which is unchanged since April.

In England, rent prices grew by an average of 1% in the 12 months to June, while Wales experienced an average rise of 1.1%. At the same time, Scotland recorded an increase of 0.6%.

Rent prices in London dropped by 0.2% in the year to June, which is unchanged from May.

Growth in private rent prices has slowed since the end of 2015, rising by just 1% in the 12 months to June. For instance, a property that was let for £500 per month in June 2017, which experienced the average annual growth rate, would have been let for £505 in June 2018. This slowdown across Great Britain is driven mainly by a decline in London over the same period.

Excluding London, the average rent price in Great Britain increased by 1.6% in the year to June, which is unchanged since January 2018.

Focusing on the English regions, the largest annual rent price increase in June was recorded in the East Midlands (2.8%), which has dropped from 2.9% in May. This was followed by the South West (2.1%), up from 2% in May, and the East of England (1.9%), which is down from 2% in the previous month.

The lowest annual rent price rise was seen in London (-0.2%), which is unchanged from May. It was followed by the North East (0.2%), which is up from 0.1% in May.

The May 2018 Residential Market Survey from the Royal Institution of Chartered Surveyors (RICS) claims that demand for rental properties remained unchanged in May, extending a run of five consecutive reports where respondents have reported flat tenant demand. Alongside this, landlord instructions remain in decline.

Given the lack of supply, the RICS suggests that rent prices are expected to increase nationally over the year ahead. These changes can take time to feed through to the official rent price index, which reflects prices for all private rental properties, rather than just newly advertised rentals.

In contrast, ARLA Propertymark (the Association of Residential Letting Agents) reported in its Private Rented Sector Report for May 2018 that rental property supply rose to the highest level recorded for 2018 so far. In context, they continue to report a supply shortage in the market.

Playing the Property Game: Modern London vs. the Monopoly Board

Published On: July 18, 2018 at 9:08 am

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Categories: Property News

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Ah, Monopoly. Everyone’s favourite cut-throat game. Success is largely based on your initial luck, so the eventual winner can be spotted early on. Meanwhile, everyone else is left to squabble amongst themselves simply to stay afloat.

Wait, is this the board game, or the actual London property market?

The Landlord’s Game, as it was originally titled in 1903, was designed as a teaching tool to highlight the inequalities of privilege and the evils of capitalism. Yet, despite its lessons being keenly felt by everyone who has painstakingly mortgaged their properties and handed their last few bills to a wealthy neighbour, the system it’s based on is still strikingly familiar over a century later.

The only real changes? The fashionable locations have changed and rent has gone up – everywhere.

Property values

In the world of Monopoly, it only costs £200 to build a house in Mayfair. When players subsequently visit that property, rent is charged at a measly £200 – although it rises to £1,700 if all four houses have been purchased. In the real world? A house in the W1 postcode will currently set you back around £3m, while renting is going to cost about £6,000 a month.

Even “the cheapest home in Mayfair” (as it was dubbed when sold in February last year) was valued at £500,000. Bargain. If this sounds too good to be true, that’s because it was. The flat was leasehold only, with a term that had only 12 years remaining – which, let’s face it, is barely enough time to finish your first game of Monopoly. That meant that the buyer would essentially be paying £868 a week for little over a decade, after which they would be handing the keys over to the freeholder with nothing to show for it. Although… considering the rent prices mentioned above, maybe this isn’t such a bad deal after all.

This whole issue was addressed in a customised board update designed by London Fox lettings in 2017, which listed more accurate prices for all the Monopoly locations across the capital. Of course, to make this version of the game truly realistic, the bank would need to be stocked with a lot more cash… but the players wouldn’t get to see any of it.

Key locations

Prices go hand-in-hand with location. Spaces on the cheap side of the board would have been originally chosen for their undesirability, but, thanks to gentrification, most of these locations look very different today. Equally, there are places midway around the Monopoly board that have had their position usurped by up-and-coming areas.

For example, Old Kent Road is the cheapest plot of land on the board, but the real-life road runs through Southwark, where average property values are currently around £700,000. This would bump it up to somewhere in the orange section of properties. Meanwhile, somewhere like Bond Street will lose its cushy spot amongst the green tiles to Piccadilly, where house prices have soared to over £2m.

If you’re curious about other locations that might be more realistic options for a modern monopoly board, you can find the details of a fully re-vamped layout here. Imagined in 2015, it might not quite reflect current property values, but certainly sparks up some conversation and provides some inspiration if you’re thinking about taking a Sharpie to your current version.

Train stations

The stations are due for an update, too. Liverpool Street still qualifies as one of the country’s busiest train hubs, but it’s time for King’s Cross, Fenchurch and Marylebone to move over. Waterloo, Victoria and London Bridge see the most entries and exits every year, although Clapham Junction receives the highest number of interchanges (27.3m in 2016-2017).

We should probably re-consider the rent on these at the same time. Whenever a player lands on one they should be charged the cost of an annual Oyster card for zones 1-3. £1,600 sounds fair, right?

Chance cards

Chance cards are a critical element of Monopoly, acting as a beacon of hope for players that are experiencing financial difficulties. Paying £15 for a speeding fine is hardly representative of modern life though, so we’d make these changes:

  • Speeding fine £100 – and take three points off of your next roll
  • Advance to Mayfair and roll a dice. If it’s even, pay another player £10 for being your Uber driver. If it’s odd, pay the bank £50 for your black cab hire.
  • Pay school fees of £5,700. We’re not kidding.
  • Congratulations, you’ve found a fiver in your pocket! (What, they can’t all be bad!)

Free parking

Free parking? In London? Yeah, right.

Are Regional Cities the Future of the UK Housing Market?

Published On: July 9, 2018 at 9:46 am

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Categories: Landlord News

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Manchester's Mayor Andy Burnham to Address Future Renting North Conference

With the latest official rent price index showing that growth in regional cities is outstripping that in London, some experts believe that hotspots such as Manchester, Liverpool and Birmingham are the future of the UK housing market.

As a landlord or property investor, it is essential that you understand which locations are performing most strongly for buy-to-let, so that you can steer your investment strategy in that direction.

Looking at the Government’s most recent Index of Private Housing Rental Prices (IPHRP), covering the month of May, it is clear that the slowdown seen recently in the London market is continuing to decline, with rent prices down by 0.2% on an annual basis. This compares to growth of 1% in Great Britain as a whole.

The figures also reveal that the slowdown in rent prices across England and Great Britain is being driven by the decreases in the capital.

Over the last two years, London rent prices have experienced a significant decline, from a growth rate of 4.1% in November 2015. It is expected that, if London continues to record drops, rent price growth for Great Britain will fall to negative territory over the next few months.

Jonathan Stephens, the Managing Director of property investment firm Surrenden Invest, has already told us that London is dead for buy-to-let.

Now, he has reacted to the recent index with his views: “The news that regional rental price growth is outstripping that of London further emphasises the role of second cities as the future of the UK housing market, particularly when it comes to attracting investment into that market.

“Regional cities such as Liverpool, Birmingham and Manchester offer rapidly growing rental sectors with good scope for strong yields, while London has little to offer investors looking for healthy returns. This trend towards regional growth – and high levels of investment interest in that growth – looks set to continue until the London market corrects and realigns itself with the opportunities to be found in the regions.”

Does this persuade any London landlords to look instead to regional cities for property investment?

London Assembly Takes Action to Stop Section 21 Evictions

Published On: July 9, 2018 at 9:28 am

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Categories: Law News

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The motion to abolish Section 21 of the Housing Act 1998 has now been called for by the London Assembly Members. This unanimous decision will call for the Mayor of London to lobby the government, with the aim of making changes to the law.

Section 21 is a clause that allows private landlords the option to evict tenants, regardless of any fault.

Sian Berry AM, who proposed the motion, said: “The Assembly has firmly put its weight behind Generation Rent’s campaign to end Section 21.

“London renters need to feel secure in their homes and know they can’t be thrown out on the streets for no reason. I’ve known far too many friends and colleagues forced to move out of their homes at really short notice at times when they would least choose to move.

“Having to move at short notice is one of the worst parts of being a private renter and ending section 21 would make a dramatic difference and solve this problem – it would also align our policies with other countries.”

Tom Copley AM, who seconded the motion, commented: “Our tenancy laws were introduced 30 years ago when only one in ten Londoners rented from a private landlord. Now more than a quarter of us do, including increasing numbers of families with children.

“It is unacceptable that landlords can use Section 21 to evict tenants for no reason. Private tenants deserve security to protect them from arbitrary or revenge eviction, the fear of which makes tenants reluctant to come forward to complain about substandard housing.

“The Government has just announced a consultation on three-year private tenancies, but this will be meaningless unless no-fault eviction is abolished. I hope the Mayor will use this consultation to urge the government to abolish section 21 eviction.”

The full text of the motion states: “This Assembly welcomes the campaign to end Section 21 – the clause of the Housing Act 1988 that allows private landlords to evict tenants without reason.

“We acknowledge that the threat of a no-fault eviction causes insecurity and stress for Londoners who rent privately and can discourage tenants from complaining about substandard housing.

“We welcome the action taken by the Scottish government to restrict no-fault evictions.

“We urge the Mayor to state his backing for the campaign to abolish Section 21 of the Housing Act 1988 and to lobby government for this change in the law.”