Posts with tag: rent prices

Number of Tenants with a Spare Bedroom Drops to Lowest Level on Record

Published On: November 14, 2016 at 9:38 am

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The number of tenants with a spare bedroom has dropped to the lowest level on record, according to the latest Lettings Index from Countrywide.

Just one in three tenants (35%) rented a home with a spare bedroom in 2016, down from a peak of 59% in 2010.

Number of Tenants with a Spare Bedroom Drops to Lowest Level on Record

Number of Tenants with a Spare Bedroom Drops to Lowest Level on Record

In London, where rent prices are highest in the whole country, only 26% of tenants were able and willing to pay for an extra bedroom this year, down slightly from last year.

As rising rent prices have pushed the cost of an extra bedroom to an average of £295 per month, tenants have increasingly shied way from paying for space that they don’t absolutely need.

Tenants in the capital are the least likely to have a spare bedroom, however, the figure is very similar in big cities across the south of England. Less than three in ten tenants in Oxford (28%), Cambridge (27%) and Bristol (24%) have a spare room.

But in cities further north, such as Newcastle, Manchester and Liverpool (where the cost of an extra bedroom is much lower), tenants are almost twice as likely to have a spare bedroom.

Those living in city centre flats are a third more likely to have a spare room than their suburban counterparts, the research found.

Countrywide has also analysed the average rent prices across the country, finding that rents have risen by 1% in the past year – the slowest October increase since 2010.

London and the South East continue to bear the brunt of the slowdown, with rents in the capital up by just 0.2% in the last 12 months, while the South East saw a decline of 3%.

In October, the average London rent stood at £1,302 per month, compared to £1,300 last year.

In Great Britain as a whole, the average rent price for new lets is now £947 a month.

The Midlands, north of England and Scotland all experienced rent increases of more than 2% over the year since October 2015.

Johnny Morris, the Director of Research at Countrywide, comments on the findings: “As affordability pressures have risen, for many tenants, extra space has become a luxury. Sacrificing extra bedrooms and sharing has helped renters to absorb higher prices. But those living in the south are close to a point where there’s not much more room to squeeze, meaning rental growth is likely to be capped by tenants’  incomes for some time.

“The second half of 2016 has seen the rental market slowly swing towards the tenant. The pace of rental growth has slowed throughout the year. October was the first time in over two years the cost of renting a home didn’t rise faster than the rate of inflation.”

North-South Rent Price Divide Narrows by 4.6%

Published On: October 17, 2016 at 8:35 am

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The north-south rent price divide across Great Britain has narrowed by 4.6% over the last 12 months, according to the latest Monthly Lettings Index from Countrywide.

The research shows that rental growth has slowed across the country over the past year, but price growth in northern cities has remained at a similar rate to recent months.

Of the 20 largest cities in the country, the five with the fastest growth in new rent prices were in northern England or Scotland.

Manchester recorded the greatest growth in September, with rents rising by 7.1% for new lets over the past 12 months – faster than anywhere else in the country and more than three times faster than the average.

York, Leeds, Liverpool and Glasgow make up the top five, with all seeing the rate of rental growth pick up over the past three months.

North-South Rent Price Divide Narrows by 4.6%

North-South Rent Price Divide Narrows by 4.6%

Most southern cities have seen rental growth slow over the year so far. Seven of the ten cities where rents are rising most slowly are in southern England. Oxford, Cambridge and London recorded the largest slowdown in growth, and all drop at least five places from last year.

In the capital, rents are rising fastest in outer London, while across central and inner London, they remain fairly unchanged on last year.

Greater price sensitivity has caused rental growth to slow across the south. The proportion of landlords cutting the asking rent has doubled over the past 12 months in cities in southern England. In September, Cambridge (18%) and London (17%) recorded the greatest proportion of homes with a cut in the asking rent.

Countrywide reports that a spike in the number of homes available to rent since April’s Stamp Duty change has given tenants more choice, increased competition among landlords and slowed the pace of rental growth.

Regionally, the rate of rent price growth has slowed right across the country, falling from 2.8% in September 2015 to 2.2% this year.

Rents are rising more slowly than last year in eight of the 11 regions – northern England and Wales were the only exceptions. With rental growth slowing across the south, the gap between rents in northern and southern cities has narrowed by 4.6% (or £31 per month) over the last 12 months. However, the gap remains 26% wider than it was in 2010.

The Research Director at Countrywide, Johnny Morris, comments on the findings: “A different type of two-speed rental market is emerging, with falling stock and growing demand driving rental growth in many northern cities at a higher rate than those in the south.

“With London rents growing at the slowest rate since the downturn (2008) and northern cities recorded rent rises three times as large as their southern counterparts, there are signs that the north-south rental divide is starting to close. Although at current rates it would take at least five years for the gap between rents in the south and north to close back to 2010 levels.”

He concludes: “As some would-be buyers and sellers sit on their hands, Brexit-induced uncertainty has continued to boost the rental market. Overall, this is yet to stoke rental inflation, but September saw record activity, with increasing numbers of lets agreed and tenants choosing to renew their contracts. On current trends, 2017 could be the first time since the 1930s that more homes are let than sold.”

Number of Homes Let Above Asking Price Drops in Central London

Published On: September 12, 2016 at 8:42 am

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The number of homes let above the asking price in central London has dropped, according to the Countrywide Lettings Index for August.

Number of Homes Let Above Asking Price Drops in Central London

Number of Homes Let Above Asking Price Drops in Central London

Just 8% of homes were let above the asking price in the capital, down from 17% in the same month last year. This is the lowest proportion recorded in August since 2011.

In Greater London as a whole, 13% of homes were let above the asking rent in August, down by 4% on the same period in 2015.

Nationally, the number of homes let above the asking price rose slightly, by 0.2%. Only Wales and the north experienced similar declines to London, by 3% and 0.3% respectively.

The index also found that the majority of rental homes are still let at the asking price, caused by a greater supply of private rental sector properties.

In Greater London, 76% of homes are now let at the asking price, up by 10% on last year. Meanwhile, 89% of homes in central London are let at the asking price, 20% higher than in August last year. Across the country as a whole, 78% of homes are let at the asking price, up by 13% on last year.

Supply in the private rental sector still remains high, which is reducing competition between tenants. Following both the Stamp Duty deadline rush at the beginning of the year and June’s EU referendum, supply has matched or grown faster than tenant demand across the country, particularly in the south.

Both London and the South East experienced growth in the number of homes to let in August, up by 26% and 22% respectively. This is faster than tenant demand growth, which rose by 8% in London and 3% in the South East over the same period. Contrastingly, supply grew by 26% across the country as a whole, while demand was up by 17%.

The average rent across the country is now £960 per month, although the lower rate of rent price growth that has been seen across most of this year so far has continued.

Rents in August rose by 1.5% on average, down from the 4% rate of growth recorded last year. In some parts of the country, this slowdown has caused rent prices to drop.

Rent prices in central London have fallen by 2%, while they dropped by 1.4% in the South East. In Greater London, which saw a decrease in rents in July, prices were up by 0.9% in August. However, this still marks the lowest annual growth rate rise since 2012.

The average rent prices for new lets across the country, as of August, are as follows:

[table id=25 /]

The Research Director at Countrywide, Johnny Morris, comments on the data: “In London and the South East, recent increases in the number of homes available to rent, outpacing the growth in tenants looking for a home, has meant that bargaining power is shifting towards tenants from landlords. This is slowing rental growth.

“Overall, slightly more tenants are offering above asking prices than last year. The majority continue to pay asking prices. Unlike the sales market, rental prices adapt very quickly to changes in market conditions, meaning asking prices are finely tuned to tenant demand.”

Excess Supply in Prime Central London Leads to Further Drop in Rents

Published On: August 23, 2016 at 9:22 am

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Excess property supply in prime central London has led to a further drop in rents, according to the latest study by JLL.

Excess Supply in Prime Central London Leads to Further Drop in Rents

Excess Supply in Prime Central London Leads to Further Drop in Rents

Activity in the prime central London lettings market was subdued over the second quarter (Q2) of the year, as demand dropped following a rise in the number of properties to let.

Consequently, tenants have had ample choice over the properties they want to live in, which has caused a fall in rents in some price ranges – particularly when properties are not presented to the highest standard. JLL has found that immaculate properties presented in top class condition are not dropping in value.

The Residential Research Director at JLL, Neil Chegwidden, comments: “The main feature of the current market is an oversupply of stock. With weakened tenant demand, the increased supply of properties on the market is not being eroded. Available supply has also been boosted by owners electing to rent out their properties as opposed to selling them, given the diminished demand in the sales market.

“Sources of new demand have been limited in 2016, and this has left existing tenants in a strong bargaining position. Although most are choosing to remain in their current accommodation due to the upheaval and cost of a move, some are moving elsewhere to take advantage of these conditions.”

The surplus of property supply has led to pressure on rents across prime central London, the firm reports. The lower end of the market had previously been relatively immune, but over Q2, rent prices have dropped.

On average, rents in prime central London fell by 1.9% during Q2. In the year to Q2, rents decreased by 4.3%, although declines of 8-10% were recorded across higher rent levels.

However, rental market activity across prime central London has remained stable, with the number of transactions in the 12 months to Q1 down by just 1% on the previous year.

In Q2, activity also picked up slightly, with the volume of transactions up by 12% on Q2 2015. This comprised a 1% decrease in flat lettings and an 8% rise in house rentals.

The Director of Residential Agency at JLL, Lucy Morton, is much more optimistic about Q3: “Whilst the first six months of 2016 were challenging for the prime central London lettings market, Q3 is more active. Along with an increase in transactions, we expect the current oversupply of available properties to diminish as demand increases. We are seeing and letting to an influx of high net worth students and families eager to get settled before the start of the next school year. There is a marked increase in enquiries from relocation agents acting for the City corporations relocating expats into London.”

Do you have a rental property in prime central London? How have you been affected by excess supply issues?

£500 a Month Room Rents in London Now Extinct

Published On: August 17, 2016 at 10:38 am

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£500 a Month Room Rents in London Now Extinct

£500 a Month Room Rents in London Now Extinct

It is now impossible to find £500 per month room rents in London, according to estate agent Portico.

The London estate agent found that although average rents dropped by 1.7% in London following the Brexit (between May to July), rents of £500 a month for a two-bedroom property in the capital are now extinct.

Portico’s data found that Bexley is the cheapest borough in London to rent a room, with the average rent price for a two-bedroom property in July standing at £1,108 a month, or £554 per room.

And tenants will pay even more if they live alone: Even in the most affordable borough, the average rent on a one-bed property in Bexley is £847.

On the other end of the scale, if you’re looking to live in the exclusive borough of Kensington and Chelsea, you’ll have to fork out a huge £3,989 a month in rent on a two-bed home, or £1,995 per room.

Across the capital as a whole, the average monthly rent on a two-bed property is £1,756, or £878 per room.

Average monthly rent for a two-bed property in all London boroughs

[table id=23 /]

The Managing Director of Portico, Robert Nichols, comments: “Many Londoners now consider renting as a long-term norm, as a result of rising property prices. It’s therefore good to know where you can find the most affordable rent – and our data lists the London boroughs’ two-bedroom rental prices from the cheapest to the most expensive.

“Bexley in southeast (£1,108) and Havering (£1,156) in the east offer the capital’s cheapest rents, and they’re soon to become well connected too, with stations planned on the eastern edge of the Elizabeth line. If you want to live in inner London, Lewisham offers the most affordable rent (£1,430).”

The latest figures from the estate agent further highlight the problem of sky-high rents in London.

First Drop in London Rents for Six Years, Reports Countrywide

Published On: August 15, 2016 at 9:25 am

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Rent price growth has slowed in every region of the UK, with the first drop in London rents for six years recorded in July, according to the latest Countrywide Lettings Index.

First Drop in London Rents for Six Years, Reports Countrywide

First Drop in London Rents for Six Years, Reports Countrywide

Rents in the capital dropped by 0.5% over the last 12 months, making the average London rent £7 cheaper per month than in 2015. Countrywide found that the last time rents in the capital dropped annually was in November 2010, when the average monthly rent in London was £923 – 39% less than today.

Across the UK, rents rose by just 1.5% in the year to July, marking the slowest rate of growth since 2012.

Although tenant demand has increased nationally, the number of rental homes coming onto the market has slowed, or in some cases, reversed price growth. In July, there were 23% more homes available to rent in the UK than in July 2015, while the capital recorded a 33% increase.

Countrywide believes that part of this rise was driven by landlords rushing to beat the Stamp Duty deadline in April, however, it adds that the number of homes available to rent has continuously risen in recent months, particularly in London and the South East.

The report concludes that an increase in the number of homes on the market has meant that fewer deals were agreed above the asking rent. In July last year, 16% of tenants paid more than the asking price to secure a home, compared to 7% in July 2016. In London, the fall was greater – down from 32% last year to 11% this year.

Last month, the average rent price in the UK was £951 per month, up by 1.5% over the year, but rising half as fast as in July 2015.

Rents in London (-0.5%), the South East (-1.1%), Wales (-2.0%) and Scotland (-1.0%), are all down on last year.

Contrastingly, the rate of rent price growth across the north of England and the Midlands reached the highest level for two years.

Average rents across the UK

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The Director of Research at Countrywide, Johnny Morris, comments: “The large rise in numbers of homes available to rent has certainly slowed rental growth, even with tenant numbers increasing. Stock levels were already running higher than usual, due to investors bringing forward purchases in the rush to beat the Stamp Duty deadline in April. Added to that, uncertainty in the sales market in the run up to and after the EU referendum has caused more discretionary sellers to turn to the rental market.

“While rental price growth has slowed, current market dynamics are likely to accelerate the growth of renting. It seems that with more stock and demand from tenants, we will see the number of households renting increase in 2016.”