Posts with tag: rent prices

Belvoir Issues Rental Index and Calls on Government to Take Urgent Remedial Action in Autumn Budget

Published On: August 28, 2018 at 9:30 am

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Average House Price Drops Between April and May

Belvoir’s 2018 Q2 rental index reveals that more landlords are deciding to sell up, and less are investing in the Private Rental Sector (PRS), due to increased legislation and punitive taxation policies. Belvoir is calling for the Government to take urgent remedial action in the Autumn Budget to incentivise those landlords who are offering necessary high-quality accommodation for the UK’s ever-increasing tenant population.

Belvoir CEO, Dorian Gonsalves, commented: “Property supply and tenant demand is something that Belvoir has been tracking closely, ever since the government embarked on a flawed policy to try and reduce the number of investment landlords so that more first time buyers could enter the market,

“Belvoir has continually warned that this policy would not work, as the UK’s rising population requires more homes across all tenures, including those people wishing to buy, people wanting to rent privately, and of course people requiring social housing.

“Belvoir’s 2018 Q2 rental index shows that more agents than ever before are reporting that landlords are selling up. A sample survey of Belvoir franchisees reveals that there has been a slight increase (from 46% to 48%) in the number of offices reporting that their landlords are selling up to three properties, and an increase from 7% to 17% of landlords selling between six to 10 properties. One Belvoir office reported that they currently have 17 families on notice due to landlords putting their properties on the market.

“Although government policies such as a loss of mortgage tax relief, and increased stamp duty on second homes are hurting landlords, they still have a choice as to how to invest their money, whereas tenants have little or no choice of where to rent due to a reduction in supply.

“Belvoir’s Q2 rental index revealed just a slight increase in average rental inflation across the UK, with a similar number reporting static rents, but if landlords continue to sell up because their business model in the PRS is being continually attacked, it will undoubtedly result in a further shortage of properties, and inevitable increases in rents, as predicted in the latest RICS report, which stated that rents are likely to rise by 15% over the next five years.

“Concerns about the possibility of mandatory three-year tenancies may also influence the decision of landlords, and there are real concerns that there could be an increase in homelessness, as there is insufficient social housing to accommodate people.

“The majority of landlords are not actively against three-year tenancies. Our survey shows that tenants are already remaining in their homes for longer, with 40% staying for 19-24 months, and 17% choosing to rent a property for over two years. One office reported that their average tenants are staying for over four years, with another reporting the average as 2.5 years.

Should three-year tenancies become mandatory, landlords need reassurance that they can gain possession of their property when needed, and will be protected against tenants who do not pay their rent, or abuse a property or indulge in anti-social behaviour.

“We are urging the government to do more in the Autumn Budget to address stock shortages in the UK, by incentivising the new build sector with low maintenance homes through more Help to Buy and Buy to Rent schemes to provide more homes to own.

“Landlords also need rewards and incentives to encourage them to remain in the PRS, such as reversing current tax increases and introducing tax breaks, as well as initiatives such as tax incentives for landlords who buy large properties and turn them into several affordable and low maintenance flats suitable for the rental sector.
“It is anticipated that more landlords will make a decision about whether to retain their portfolio in 2019 when tax bills have been calculated and the true extent of any further erosion to their profits is seen. The Autumn Budget is the perfect time for the government to introduce the incentives that landlords who offer good quality properties at a reasonable rent really need.”

Are Things Improving for the London Rental Market?

Published On: August 2, 2018 at 7:57 am

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London

Prime Central London

It is the general consensus amongst landlords that regional markets are where you should be if you’re attempting to generate profit from buy-to-let. However, when turning the attention to London, the latest data provided by Rightmove has revealed a 0.5% increase in the number of lettings listings in June compared to the previous twelve months.

Subsequent to recent tax changes, there was a pattern of declines. However, this data presents a reverse in this pattern and may indicate pricing expectations for some that were not attained in the sales market.

Moreover, the annual rental value growth was 1.1% in June. This was the second successive month of growth following a twenty-eight-month run of declines. Rental values have toughened as supply has declined due to an increased number of landlords exploring a sale after following tax changes.

Prime Outer London

The number of tenancies agreed in prime outer London was reportedly 17% higher in the year to June in comparison to the previous twelve-month period according to the analysis of data provided by Knight Frank. The recent pattern rises began in October 2017.

In addition, the data reveals that rental values ranging from £500 to £750 per week deteriorated by less than any other price bracket in the year to June. This has been the strongest-performing price band since the beginning of the year, reflecting the relative strength of demand for lettings properties at the price mark.

Knight Frank’s Prime Central and Outer London Rental Indices have monitored the performance of London’s prime rental markets since 1995. Accumulated monthly, the indices are based on the valuation of a comprehensive basket of properties throughout central and outer London office network.

Number of Tenants Experiencing Price Hikes Increases

Published On: July 30, 2018 at 8:06 am

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The number of private tenants experiencing rent price hikes has increased to a ten-month high, according to the Private Rented Sector Report for June from ARLA Propertymark (the Association of Residential Letting Agents).

The study assesses conditions across the private rental sector in the UK.

Price hikes

The amount of tenants witnessing price hikes in June rose to 35%, which is up from 28% in May. This is the highest level recorded since August 2017, when the number of tenants experiencing price hikes also stood at 35%.

On an annual basis, price hikes have increased by 13% from June 2017.

Rental stock

The amount of rental properties managed per ARLA Propertymark member letting agent branch rose to an average of 191 in June. This is the highest figure recorded for this year so far, up by 3% on May, when agents managed 186 per branch.

Tenant demand

The report also found that the number of prospective tenants registered per member branch increased in June, at 71, compared to 60 in May – an 18% rise.

Landlords selling

Positively for the health of the lettings market, the amount of landlords exiting the sector by selling their properties dropped to four per branch in June.

David Cox, the Chief Executive of ARLA Propertymark, says: “It’s positive to see the number of properties available to rent slowly rising, but it still isn’t anywhere near enough to slow down the pace of rent rises, which are continuing to climb.

“Over the last few years, we’ve seen taxes to both purchase and let a rental property increase. This combination – coupled with continued regulatory change – has unsurprisingly started pushing landlords out of the market. We predicted back at the end of last year that renters would be in for a rough ride in 2018, and we warned Government about the impact on the market. Our fears are now being realised and renters are suffering as a result.”

Is Bexley the Place to Be for London Commuter-Tenants?

Published On: July 27, 2018 at 8:56 am

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Property website OnTheMarket.com has released data showing that of all the ways to rent in London, living as a group of four in Bexley is the cheapest.

The data assumes the scenario that this situation involves one person per bedroom. It has then used averaged private rental prices in order to determine whether one, two, three or four bedroom properties provide the best value in each London borough.

Looking at a four-bedroom property in Bexley, tenants would be paying a monthly rent price of £1,633.52. However, if this were to be split between four people, they would be paying £408.38 each. The average cost of renting a room in London is £629 per month, according to the Government’s April 2017 – March 2018 Private Rental Market Summary Statistics.This means that it is 35% cheaper to rent in Bexley.

Other benefits of this borough include travel. Bexley station is situated in Travelcard zone six, which is only about 14 miles away from London Charing Cross station. This means a journey time of 38 minutes when travelling by a Southeastern train. Looking at the costs, a daily return journey would be as much as £6.23 or £62.30 for a weekly season ticket. A monthly season ticket would cost £239.30.

Take a look at the below ‘best value’ table to see the cheapest scenarios in each area of London. It shows that Bexley is the cheapest borough for each scenario, assuming that the living situation is one person per bedroom.

Bexley

Contrastingly, the ‘most expensive’ table reveals the most costly scenarios in each borough of London. This again assumes one person per bedroom.

Bexley

Unsurprisingly, the boroughs with the highest rents are within Central London.

 

Views from estate agents

Helen Whiteley, Commercial Director at OnTheMarket.com commented: “The data shows that at a time when tenants in the capital are becoming increasingly stretched, they can potentially reduce their overall rental outgoings by examining different cost scenarios based on the number of flatmates. The findings also highlight that considering moving to a different borough can save notable amounts of money for the difference of just a few miles.”

Charlie Benn, Director of Lettings at Anthony Martin estate agents in Bexley has said:“We often see people relocating from price inflated areas within South East London to much more affordable Bexley postcodes.

“With a journey time into central London falling within 45 minutes to an hour, at a time when two hour commutes are on the rise, it proves ideal for city workers. Bexley is also within an easy commute to the highly anticipated Crossrail Link (at Abbey Wood), which is due to open in December 2018, providing more time saving commutes.

“The suburban area of Bexley provides the best of both worlds with its close proximity to excellent schools, green spaces and affordable prices while also within driving reach of places such as Bluewater Shopping Centre and the centre of London under an hour away.”

Jake Blackman, Branch Manager, Acorn, Bexleyheath, commented: “This research confirms what we’ve long predicted – that Bexley Borough is going to be in high demand for the next few years. It’s one of the reasons we’re opening two more offices in the borough (Sidcup and Blackfen), in addition to our existing ones in Bexleyheath and Welling.

“With the introduction of Crossrail into the area, improving the already vast transport links into the city, and the plethora of good schools and entertainment options, Bexley has proved to be a hotspot for those moving out of the humdrum of city life.

“This is mainly due to Bexley still being very much an affordable place to rent. In addition, there aren’t many boroughs that can offer the diverse entertainment and shopping facilities of Bexley. These include the Broadway Shopping Centre in Bexleyheath which has modern shops and food chains, complemented by Bexley Village which has a more alternative array of independent restaurants, boutique shops and bars.”

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!

Rent Prices Rising Steadily Across Great Britain

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

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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.