Posts with tag: London

Demand for Prime Central London Rental Properties Rises

Published On: June 9, 2016 at 10:13 am

Tags: EU referendum,London,prime central london,rental property

Demand for rental properties in prime central London has risen in the last few months, as prospective first time buyers remain cautious ahead of the EU referendum, according to a new report.

Many landlords in prime central London are experiencing greater demand for rental properties, as tenants adopt a wait-and-see approach until the vote over whether we stay in the EU or not is decided, says independent property buying agency Black Brick.

Demand for Prime Central London Rental Properties Rises

A Managing Partner of the firm, Camilla Dell, reports: “We are seeing a greater interest in renting in prime central London, as would-be buyers wait out the current uncertainties before committing to buy.”

She adds that rents in the heart of the capital have been increasing faster for smaller units.

“The good news for prospective tenants of larger prime central London properties is that rents have not been rising to the degree seen in other parts of London’s rental market,” she says. “According to figures from Savills, rents for five-bedroom and larger properties actually fell by 0.7% last year, while rents on four-bedroom properties rose just 0.1%.”¹

The Black Brick report contrasts with the latest study by specialist residential investor advisors London Central Portfolio (LCP).

Last week, LCP claimed that the private rental market in prime central London is weakening, as tenants capitalise on the existing economic uncertainty ahead of the forthcoming EU vote.

The research found that the market is beginning to subdue, with new lets achieving a price rise of just 0.3% over the last quarter, while re-lets saw a 1.2% drop in rents during the same period.

The CEO of LCP, Naomi Heaton, comments: “The overall suppression in rents reflects a market dynamic which was conspicuous during the credit crunch, as tenants capitalise on economic uncertainty to leverage up their bargaining power. This has been compounded by companies cutting their relocation budgets in the face of global instability and, in some cases, delaying relocations in the run up to the EU referendum.

“In light of the current market conditions, landlords may need to be more flexible to accommodate the higher negotiating power of applicants and to prevent void periods, which may erode any increase in rent ultimately achieved.”¹

This advice will help you reduce void periods in your rental property: https://www.justlandlords.co.uk/news/reduce-void-periods-rental-property/

¹https://www.landlordtoday.co.uk/breaking-news/2016/6/prime-central-london-rental-market-sees-increased-demand

London Tenants Spending 70% of Their Income on Rent and Bills

Published On: June 8, 2016 at 11:36 am

Author: Em Morley

Categories: Property News

Tags: housing crisis,London,London tenants,rent prices,tenants

London tenants are now spending 70% of their average income on rent and essential bills, according to research by London estate agent Portico.

New data analysis by the firm shows that for three-and-a-half out of five working days, Londoners work solidly to pay their rent and other essential expenditure, such as taxes, housing costs and household bills.

The following table details how the typical London tenant’s working week is divided to pay for essential costs:

London Tenants Spending 70% of Their Income on Rent and Bills

Portico claims that it is not until 1pm on a Thursday that the average Londoner has earned enough to cover all of their essential expenses for the week. They are then left with around £201 of disposable income to be spent or saved as they like – although the firm notes that bills do not include food.

From 10am on a Tuesday until 4pm on Wednesday, Londoners are working to pay their rent, whereas all day on Monday, they work to pay their Income Tax and National Insurance.

Portico has also analysed the data on a borough-by-borough basis, adjusting the cost of rent, Council Tax and travel to zone 1 accordingly, but using the average London salary of £34,320 a year.

The agent found huge variations between boroughs; London tenants living in Bexley will have the greatest amount of disposable income left over after rent and essential bills, at £287 a week, while City of London workers have the least amount of disposable income, at £32. If tenants are looking to live in zone 1, Lambeth offers the highest amount of weekly disposable income, at £209.

The Managing Director of Portico, Robert Nichols, comments: “Londoners have to work increasingly later into the week before they start to spend some of their hard-earned money. Working for five hours alone to pay Income Tax, plus almost two days on rent, clearly shows how private rents in the capital have skyrocketed.

“But while rents are increasing, public transport is also improving significantly, so we’re seeing a huge number of tenants move further out to boroughs like Bexley, Barking and Dagenham, and Ealing to benefit from affordable rents, a quick commute – which will become even better with the arrival of Crossrail – and a good sum of disposable income in their pockets at the end of each week.”

Huge Jump in London Rents Prompts Calls for Rent Controls

Published On: June 8, 2016 at 11:16 am

Author: Em Morley

Categories: Property News

Tags: housing crisis,London,London rents,rent controls,rent prices

A huge jump in London rents has prompted calls for rent controls and security of tenure by leading trade union GMB.

After recording a rent price rise of over 50% in one London borough, GMB called for New York-style rent controls and security of tenure for private tenants in the capital.

The GMB Congress in Bournemouth was told how families with children should face greater security in their rental properties, through rent caps and a crash programme for new social housing.

Huge Jump in London Rents Prompts Calls for Rent Controls

The study highlights the change in rents in the capital for one, two and three-bedroom properties between 2011-16. It found that the average cost of a one-bed home in Hounslow surged by 51.3% in the last five years – the highest increase in London.

In 2011, the average rent price in Hounslow for a one-bed property was £825 per month. It is now £1,248 – a rise of £423 a month.

The research found that in 11 London boroughs, rents have increased by 30% or more during the past five years.

For the capital as a whole, average rents for one-bed properties grew from £950 per month in 2011 to £1,250 in 2016 – up by £300 or 31.6%.

This huge leap in London rents compares to a Retail Price Index increase of 12.3% over the same period. It also compares to the average rent for a one-bed home in England in 2011 of £495 per month, which rose by £55 to £550 in 2016 – an increase of 11.1%.

Over the same period, the average rent for a two-bed property in London grew from £1,192 to £1,500 per month – up by £308 or 25.9%.

The average rent on a three-bed in the capital rose from £1,350 to £1,800 a month – up by £450 or 33.3%.

The Senior Officer at GMB, Warren Kenny, comments: “These figures show that the housing crisis in London is getting worse, as rents soar under a Tory Government. Rents in one borough for basic accommodation soared by over 50% at a time when wages are frozen or being cut.

“These soaring rents coincide with the explosion in the size of the private rented sector and the growth in the billions of taxpayers’ money paid in housing benefits to private landlords. Nationally, the figure has ballooned from £21.4 billion when Osborne came to power, to £24.3 billion four years later.”

He insists: “London boroughs and the Mayor have to set up a register of landlords to ensure that standards of accommodation are safe and fit for habitation. There is also a need for new legislation on security of tenure especially for families with children at school.

“Rent controls will have to be introduced as well as a crash programme for new social housing if we want to maintain essential services in the capital.”

He concludes: “There is a free-for-all in the London housing market at a time when wages for essential public sector workers are frozen. Some workers in the capital, like cab drivers, even face pay cuts. This position is not sustainable and new thinking is needed to deal with it.”

Property Repossessions Rate Drops by Over 50%

Published On: June 3, 2016 at 8:40 am

Author: Em Morley

Categories: Property News

Tags: finance,home repossessions,homeowners,London,mortgages,repossessions

The property repossessions rate has dropped by a huge 51% over the past year, according to the latest study by chartered surveyor e.surv.

The firm found that the gap between repossessions in the north and south has almost halved in the last 12 month.

In 2015, repossessions in the north fell to a rate of 2.1 per 1,000 households, compared to 1.4 per 1,000 in the south. This leaves a gap of just 0.7 between the two halves of the country.

In the previous year, the difference stood at 1.3, as the north recorded a repossession rate of 4.1 per 1,000, while the south saw a rate of 2.8. Therefore, the divide between the north and south has now dropped by 46% over a year.

Across England and Wales as a whole, total property repossessions have decreased by 51% in absolute terms, from 39,928 in 2014 to 19,672 in 2015. The average rate of repossessions is now 1.7 per 1,000 households, down from 3.4 per 1,000 in the previous year.

The Director of e.surv, Richard Sexton, comments on the findings: “Repossession levels are retreating, and the narrowing north-south gap is the strongest sign of this decline. Fuelling these improvements has been the triple combination of rising employment, low inflation and a consistently low base rate. More people than ever are managing to hang onto their homes and keep up with repayment schedules. Alongside this, many homeowners are remortgaging to take advantage of the flurry of new deals on offer from lenders. These factors have significantly helped those struggling across England and Wales to get their finances back on track.

Property Repossessions Rate Drops by Over 50%

“The lending market is also playing an important role. This is the era of responsible lending, with prospective homebuyers benefitting from the variety of mortgage options on offer, increased regulatory tests and plenty of advice on how to secure the right deal. The outlook for 2016 seems promising, with increasing numbers of potential buyers finding themselves in a more financially secure position.”

Bolton continues to have the highest repossession rate in England and Wales, a position that it has held since 2004. Within the town, 3.5 per 1,000 households had their homes repossessed during 2015.

Sunderland was not far behind, with a repossession rate of 3.1 per 1,000, accompanied by Oldham at 3.0, Liverpool at 3.0 and Bradford at 2.7 per 1,000 households.

In the north, 73% of towns recorded a higher repossessions rate than the national average. Areas that managed to record a lower rate than average include Carlisle at 1.2, Derby at 1.4 and Leicester at 1.5.

Sexton explains: “The north is battling to change its reputation as a repossession hotspot. Repossessions overall may be dropping, but the reclaiming of homes remains an acutely northern problem. Across the region, almost three-quarters of towns are seeing substantially higher than average repossession rates. Homeowners in Bolton are still, more often than most, struggling to make mortgage repayments and even in Manchester and Liverpool – two of the north’s most prominent cities – repossessions are prevalent. The north has faced heightened challenges to the south in recent years – the loss of public sector jobs, manufacturing industry decline and a tough recession – all of which hit homeowners and potential homebuyers. However, economic conditions in the north are now receiving more attention, with the northern powerhouse initiative and the future promise of devolution drawing more towns into the national spotlight.”

Meanwhile, London recorded the biggest improvement – the repossession rate in the capital dropped by 54% to 1.6 per 1,000 households in 2015, from 3.5 in 2014. The news arrives despite London’s continued struggle with high house prices.

Sexton continues: “London is turning over a new leaf when it comes to repossessions. The capital may boast the country’s highest earners, but still people struggle to keep up with payments. Progress has been made and London’s average repossession rate has more than halved. But there is still cause for concern; some London boroughs are seeing higher rates than the England and Wales average, and there seems to be a fundamental mismatch across the capital. Due to higher house prices, homebuyers and homeowners living in the capital face higher repayments, meaning an unexpected event such as a job loss can have severe financial repercussions more quickly. London is presumed to be the wealthiest region but real poverty remains, meaning repossessions continue.”

Less Than Half of Property in London is Priced at the Average Value or Below

Published On: May 26, 2016 at 8:39 am

Author: Em Morley

Categories: Property News

Tags: average house price,house prices,London,London property market

Less Than Half of Property in London is Priced at the Average Value or Below

Less than half of all property in London is priced at the average value or below, according to the latest research into the capital’s housing market by online estate agent eMoov.co.uk.

The average house price in London now exceeds £500,000, making living in the capital as unaffordable as ever for a typical homebuyer.

eMoov has analysed the current total housing stock level for each London borough, comparing this to the amount of stock listed for £550,000 or less. The agent then calculated this as a percentage of total stock.

The study found that in total, less than half (46%) of housing stock in the capital is for sale at the average London property price or less.

The six worst areas where affordability is concerned are within prime central London. Just 6% of the properties for sale in Kensington and Chelsea are below £550,000, followed by 7% in Westminster, 14% in Hammersmith & Fulham, 14% in Camden, 22% in Wandsworth and 25% in Islington.

In a further 13 of the capital’s boroughs, just 50% or less of their housing stock is listed for the average price or lower.

Offering hope for the average buyer are the following boroughs: Barking and Dagenham, where 97% of its housing stock is £550,000 or less; Bexley at 91%; Havering at 84%; Sutton at 79%; Croydon at 79%; Newham at 78%; Greenwich at 72%; Redbridge at 72%; Lewisham at 66%; Hillingdon at 65%; Enfield at 65%; Waltham Forest at 64%; Bromley at 61%; and Hounslow at 57%.

Amount of stock currently listed for the average price or less

[table id=12 /]

The founder and CEO of eMoov, Russell Quirk, comments: “It’s no surprise to anyone that the majority of London is unobtainable to many from a property point of view. However, this research highlights just how out of reach the capital actually is for UK homebuyers, even for those with the sizeable budget of £550,000.

“When you talk about the average cost of buying in the capital being over half a million pounds, the mind really does boggle. Regardless, for many, the average house price is a benchmark, a milestone, on just what they need to have in the bank to live in a certain area. But this average price masks the true cost of living in the capital or even where in the capital you can live for that matter.”

He adds: “When you consider that even with that sort of healthy budget, you would have to restrict your property search by removing more than half of the properties currently for sale in the capital, it really highlights how little £550,000 can get you in the London market.”

London Property Market Still Going Strong as Homebuyers Continue to Borrow

Published On: May 25, 2016 at 10:59 am

Author: Em Morley

Categories: Property News

Tags: homebuyers,London,London property market,Mortgage lending

The London property market is still going strong, as homebuyers continue to borrow in order to fund their purchases, according to the latest mortgage lending data from the Council of Mortgage Lenders (CML).

In the first quarter (Q1) of 2016, homebuyers in the capital borrowed £7.1 billion for house purchase, up by 6% over the quarter and 41% annually. This equated to 21,400 loans, which was down by 2% on the previous quarter, but up by 20% compared to Q1 2015.

First time buyer borrowing was down over the quarter, by 7%, but up by 19% when compared to Q1 last year. This type of buyer borrowed £2.9 billion in the form of 10,700 loans – down by 10% quarter-on-quarter, but up by 3% on the year.

London Property Market Still Going Strong as Homebuyers Continue to Borrow

Those moving home borrowed £4.2 billion in Q1 2016, up by 18% on a quarterly basis and 63% compared to last year. Some 10,600 loans were approved for home movers, up by 8% on the previous quarter and 43% on last year.

Remortgaging activity totalled £4 billion over the same period, up by 4% on Q4 2015 and 36% on the previous year. This totalled 13,500 loans – up by 2% quarter-on-quarter and 21% compared with Q1 2015.

The Director General of the CML, Paul Smee, says: “The usual seasonal dip in lending in the first quarter of the year didn’t seem to impact London as strongly as the UK overall, mainly due to a strong uptick in home mover activity. Remortgage lending also performed well, resulting in the highest first quarter remortgage levels in the capital since 2009.

“The housing market in Greater London has some unique characteristics compared to the rest of the UK – more first time buyers, but lower overall levels of homeownership. Affordability and the supply of housing remain critical factors for the London market, and we will be pleased to work with the new mayor and his deputy on how to deliver appropriate strategy over his term of office.”

Estate agent Marsh & Parsons has also recorded growth in the London property market.

In Q1, the firm saw buyer demand increase by 9% annually in prime London, and by 19% in the outer prime belt.

The number of registered buyers for every available property for sale has risen to 14 in Q1, up from 13 buyers in the previous quarter and 12 in the same period last year.

The CEO of Marsh & Parsons, David Brown, comments: “Mortgage lending in London got off to a lively start this year, jumping leaps and bounds ahead of 2015 levels across all sectors. And it’s encouraging to see home movers at the forefront of the pack – at a time when the supply of new housing is dragging its heels, it’s vital that existing homeowners are taking opportunities to sell up and move up the property ladder, freeing up properties at the lower end of the market.

“It’s also a great vote of confidence in the capital. People sell their homes when they recognise strong house price growth and the favourable returns to be made, plus the belief that they’ll be able to find a buyer easily. In London, all these elements are firmly in place. We saw buyer demand increase 9% year-on-year in Q1, with an average of 14 buyers competing for every available property on the market. It’s important in the long-term that first time buyers in London remain similarly assured of the affordability and possibility of climbing onto the ladder.”