Posts with tag: rent prices

Government Aware that Letting Agent Fee Ban will Increase Rents

Published On: April 10, 2017 at 9:23 am

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Government Aware that Letting Agent Fee Ban will Increase Rents

Government Aware that Letting Agent Fee Ban will Increase Rents

As the Government releases its consultation paper on banning letting agent fees charged to tenants, the document confirms that ministers are aware the ban will increase rents.

On Friday, the Government launched the consultation, with a request for feedback. The ban will prohibit letting agents from charging fees to tenants.

The document also confirmed that landlords would be banned from charging tenants any form of letting fee, to ensure that they do not pass on the costs.

As it is believed that the fees will instead be charged to landlords, many fear that they will be forced to increase rents to accommodate the higher costs.

The Managing Director of StudentTenant.com, Danielle Cullen, is frustrated that the consultation acknowledges that rents will be pushed up.

She reacts to the announcement: “So here we have it, the release of the consultation for the ban on letting fees, and it’s brutal for agents.

“Oh how foolish the Government is to think it is going to help tenants to save money. The contradiction in the paper is incredible; after pages relating to the fairness of fees, later there is a part called Increase in Rents! It is clearly acknowledged that landlords will be increasing their rent to account for the additional costs they will have to pay. But this is okay because tenants are able to pick the rental bracket that suits them better? Surely tenants will end up in sub-standard properties, or homeless because they can’t afford the increased rent, in a market that is already going crazy.”

She continues: “Tenants will end up paying more over the course of the year as rental prices hike and landlords can comfortably increase their rents – probably higher than the cost of the additional fees they will have to pay. All this does is increase the monthly cost for tenants, and this is going to hit students hard. Students struggle as it is to pay their rent and keep up with their bills whilst studying, and now they will be faced with increased costs every month, instead of being able to pay one lump sum and get it out of the way. I completely agree that something needed to be done about agent fees that were spiralling out of control – I was shocked to uncover the extortionate fees charged by some after some research following the announcement last year. However, the Tories just seem to be going about it in completely the wrong way.”

Do you think you will have to increase rents to accommodate the higher costs? Or will you stop using your letting agent altogether?

£1,001 – The Cost of a Holiday Apartment in London hits a New High

Published On: March 22, 2017 at 11:38 am

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What makes London so appealing to the millions of visitors pulling them in every year? People pour in from all over the world, be it to visit, work or just live. Well, we think we know the answer – there are few more cosmopolitan places in the world.

The huge demand is being met by building new Crossrail links into central London and construction of new housing – such as the Battersea Power Station project – these will certainly help to cope with the influx.

So how is this affecting property prices, hotel prices and, in particular, Airbnb rentals? Since the launch of Airbnb, hoteliers in London haven’t had it easy. It took a while for Londoners to really embrace the sharing economy and put their own homes up for rent on the short-term accommodation website, but they’ve never looked back since.

We compared listings from five of the top cities in the world and worked out average prices (in pounds) for a one night stay. As you can see from the graphic, London apartments have an average rental price of £143 per night compared with the most expensive city we checked, which was Sydney, way out ahead at £178 per night.

Visitors looking to spend a romantic seven-day holiday in the UK’s capital city will have to fork out a whopping £1,001 just for their Airbnb stay – that usually won’t include a breakfast – but you will have the luxury of your own private kitchen.

The graphic above displays the cost in GBP of a seven-night stay in each city. Paris, world renowned for being one of the most romantic cities in the world, is the cheapest out of all the famous cities, at just £616 for a seven-night stay.

So, is London worth it? Is the inflated price good value compared to its neighbour Paris? Well if you don’t fancy paying £143 a night for your London stay, then why not stay outside Zone 1 of central London?

The graphic below compares the average London price with the five lowest prices boroughs of London:

As you can see, there’s good value to be had if you’re not particular as to where you’ll be staying. Compared with the most expensive boroughs in London, you can save more than 50% of your accommodation costs by staying in Zones 4, 5 and 6.

Renting an Apartment in the Top Financial Centres of the World

Published On: March 16, 2017 at 9:44 am

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The findings of a new study conducted by apartment search platform RENTCafé expand the understanding of the rental housing markets in the world’s top financial centres.

The research explores the average monthly rent for one-bedroom apartments measuring between 55 and 85 square metres (600 and 999 square feet) in the 30 most powerful financial hubs in the world.

Renting an Apartment in the Top Financial Centres of the World

Renting an Apartment in the Top Financial Centres of the World

Among the most potent global financial centres – as ranked in Z/Yen Group‘s Global Financial Centres Index – New York City is home to the world’s highest rents, pegged at $3,680 per month for a one-bedroom apartment home.

Given the increasing global mobility of today’s workforce, the RENTCafé study aims to put rent prices in these cities in context for professionals working in the financial and economic sectors, and provide an overview of potential alternatives to the city they currently live and work in. While most of these urban business hubs have been well-known for asking high rents, the analysis reveals just how much a renter needs to shell out on housing every month and how these cities compare to each other when it comes to apartment rents.

Surprisingly enough, London – currently the leading financial centre of the world – is one of the least expensive cities for renters seeking the benefits associated with living in a thriving business hub. The British capital’s £1,351 average rent ($1,650 in US dollars) means it is only the 20th most expensive rental housing market among the world’s top financial centres.

New York City’s average $3,680 (£3,014) landed the home of Wall St. in 1st place, followed by two further US cities: San Francisco with $3,360 (£2,752) and Boston with $2,930 (£2,400).

Coincidentally, Hong Kong is in 4th place both when ranked by financial performance and average rent ($2,740 or £2,244). Other, financially lower-performing cities with higher rents than London include Geneva ($2,320 or £1,900), Zurich ($2,200 or £1,802), Singapore and Tokyo ($2,050 or £1,679), Sydney and Dubai ($2,040 or £1,671), Los Angeles ($2,030 or £1,663), Washington, DC ($1,940 or £1,589), Shanghai ($1,910 or £1,564), Beijing ($1,900 or £1,556) and Paris ($1,730 or £1,417).

The average rent for one-bedroom apartments in most of the top-performing financial markets is above the £1,000 mark ($1,221), but there are exceptions, like Toronto (£983 or $1,200), Munich (£909 or $1,100), Taipei (£745 or $910), Montreal (£696 or $850) and Casablanca (£674 or $820).

For the US cities analysed in the report, RENTCafé used average rent data provided by Yardi Matrix, the source for rents in Canadian cities was Point2Homes, and Global Property Guide provided the average rents for the remaining international markets, with the exception of London (GOV.UK), Tokyo and Osaka (Utinokati), Hong Kong (HK Rating and Valuation Department) and Dubai (Bayut).

Rent Prices Stall in London and the South East, Reports Countrywide

Published On: March 13, 2017 at 9:18 am

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The Lettings Index for February from Countrywide shows that rent prices in London and the South East have stalled, causing the average rent in Great Britain to record the first annual drop since November 2010.

Nationally, rent prices fell by 0.6% over the last 12 months, taking the average rent to £921 a month – £5 less than in February 2016.

Rent Prices Stall in London and the South East, Reports Countrywide

Rent Prices Stall in London and the South East, Reports Countrywide

However, rents are still £112 (14%) a month more expensive than in the previous peak of 2007.

The decline in the average national rent was driven by London and the South East, where the price of a new let dropped by 4.7% and 2.6% respectively. It has taken seven months for falls in these regions to take national rent price growth to -0%.

Apart from London and the South East, every other region continued to see rent prices rise, albeit at a slower rate than the previous month. Outside London, rents increased by 0.8% annually, but the rate of growth slowed in nine of the 11 regions in Great Britain.

The East and West Midlands were the only regions to record faster rent price growth in February than in January.

The slowdown in average rent price growth was driven by a decline in the number of tenants looking for a home, combined with higher numbers of homes available to let in London and the South East.

In Great Britain as a whole, there were 5% more tenants looking for a home than in the same time last year, while London (-3%) and the South East (-5%) both had fewer renters than last February.

There was more tenant demand in every other region of the country, with the greatest increases recorded in the East Midlands, the East of England and the North West.

The surge in the number of homes available to let following the rush to beat the Stamp Duty deadline last year is now starting to subside, reports Countrywide.

There were 10% more properties available to let in February 2017 than last year across the country, but the rate of growth has halved since January.

London, the South East, the South West and the East of England were the only regions to record double-digit growth in the number of homes available to let. This increased level of stock is likely to continue stalling growth in rent prices over the coming months, the agent believes.

The Research Director at Countrywide, Johnny Morris, comments: “Rents are growing in most of the country, but falls in London and the South East are dragging down the national growth rate. Recent falls in London and the South East are small in the context of growth in recent years. Rents are a third higher in London and the South East than in 2007.

“Early signs point towards 2017 being a rare year where rents rise faster in the north of the country than in the south. While rents are likely to track any increase in earnings, affordability in London and the South East remains stretched. That is likely to limit rental growth.”

Tax Changes Restricting Access to Homes for Vulnerable Tenants

Published On: March 9, 2017 at 10:38 am

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The Government’s tax changes for landlords are restricting access to rental homes for vulnerable tenants, warns new research.

Tax Changes Restricting Access to Homes for Vulnerable Tenants

Tax Changes Restricting Access to Homes for Vulnerable Tenants

Following yesterday’s Budget that failed to address the housing crisis, the Residential Landlords Association (RLA) is highlighting figures that show that surveyors believe private sector rents will rise by more than 20% over the next five years, severely restricting access to homes for vulnerable tenants.

The forecasts arrive just weeks before changes are introduced that will mean landlords are taxed on their turnover rather than profit, and mortgage interest tax relief will be reduced to the basic rate of Income Tax.

The new research confirms assertions by David Miles, a former member of the Bank of England’s Monetary Policy Committee, that rents will be pushed up by between 20-30% in order for landlords to offset the impact of the measures, alongside the Stamp Duty surcharge on the purchase of investment properties.

Research by both the Council of Mortgage Lenders and Paragon Mortgages has, in recent weeks, suggested that landlords are already raising rents. This echoes concerns first raised by the RLA in its own study conducted shortly after the tax changes were announced.

According to the research released by the Royal Institution of Chartered Surveyors, around one third of those who responded believe vulnerable tenants are finding it more difficult to access rental housing.

Last year, Dame Kate Barker, who authored an independent review of UK housing supply for the Government, issued a warning that the tax changes risked vulnerable tenants losing their homes, “because the buy-to-let landlord no longer finds the yield acceptable or can’t afford it”.

The Policy Director of the RLA, David Smith, responds: “Today’s survey is a reminder that it is tenants who will ultimately suffer as a result of the Government’s punitive tax changes.

“We need a tax system that supports rather than hinders housing growth, but yesterday’s Budget did nothing to achieve this, despite repeated warnings from the RLA and others over the last 18 months that these changes would have negative effects on landlords and tenants.”

He adds: “Even at this late stage, we call on all sides to work with the RLA as it develops its own blueprint for a sector that provides the homes to rent we so desperately need.”

Prime London Rents to Remain Stable Until 2018

Published On: March 8, 2017 at 9:53 am

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Prime London rents are expected to remain stable until 2018, following a drop in values during the fourth quarter (Q4) of last year, according to JLL.

Prime London Rents to Remain Stable Until 2018

Prime London Rents to Remain Stable Until 2018

The firm’s latest prime central London report shows that rent prices fell by 3.1% in Q4 2016, marking the fourth consecutive quarter of decline, which left prime London rents 8.6% lower during the course of 2016.

The 3.1% decrease in the final quarter was greater than the 1.9% and 2.3% drops recorded in Q2 and Q3 respectively. But, importantly, JLL does not expect the trend to continue.

The company expects prime London rents to remain stable over 2017, before rising again from 2018 onwards, due in part to higher underlying consumer price inflation.

The Head of Agency at JLL, Lucy Morton, says: “Demand and activity remained robust during the second half of 2016. Importantly, the imbalance between supply and demand was corrected by the end of the year, with much of the excess stock soaked up.

“There continues to be strong demand for apartments in new developments, as tenants buy into the lifestyle of concierge, gyms, business facilities and smart living, with easy access to the City.”

She continues: “Overall, fewer overseas families moved to London with companies in 2016 compared with previous years, as organisations preferred to house their senior directors in high-end one and two-bedroom apartments to use more as a pied-à-terre, while leaving their families at home.

“There was another year-on-year increase in demand from high net worth international students last year, and we anticipate this will increase again during 2017.”

With prime London rents plummeting, landlords should be looking to more lucrative hotspots for their future property investments. Finance expert Paul Mahoney, of Nova Financial, believes that buy-to-let can still be a profitable investment option if landlords choose major UK cities, excluding London: /buy-let-still-profitable-major-uk-cities/