Posts with tag: rent prices

Most Rental Properties Going for the Full Asking Price

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

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Most rental properties in the UK are going for the full asking price, according to the latest data from Countrywide.

The property firm found that the average rental property achieves 99.9% of its asking price – the highest since 2007, and evidence that tenants are losing their bargaining power.

In London, the average agreed rent is just over the asking price, at 100.9%. In Wales, the price achieved is lower, at 98.7%, but is still extremely close to the advertised rent.

Most Rental Properties Going for the Full Asking Price

Most Rental Properties Going for the Full Asking Price

Countrywide discovered that in the last year, 12% of lets were agreed at more than the initial asking price.

This figure is higher in London, where one in five tenants pay more than the advertised rent. On average, they pay an extra £94 per month, which equates to an additional £1,578 over the course of the average 17-month tenancy.

In the UK as a whole, tenants who pay over the asking price hand over an average of £44 a month. In Wales, this figure drops to £24 per month.

Countrywide has found that London has had the largest rate of growth in rent prices of anywhere in the UK since 2007, with rents up by 34% over their pre-recession peak. In the UK as a whole, rents have risen by 12% over the same period.

Despite these increases, the proportion of lets agreed at more than the asking price has risen in each year since 2008, indicating the power that landlords have over those stuck in the private rental sector.

In 2008, just 3.5% of lets were agreed at over the asking price, while 23.5% of tenants were able to negotiate a lower rent price.

This year, the amount of tenants able to negotiate price reductions has tumbled to 8%.

The Research Director at Countrywide, Johnny Morris, comments: “The combined effect of growing numbers of people renting and a lack of supply has seen tenants’ ability to negotiate diminish.

“Tenants are having to compete more often and with more people in order to rent the home they want, meaning they need to offer more to stay ahead of the crowd.”1

A month ago, Countrywide reported that average rents are now the highest on record, at £906 per month.

1 http://www.propertyindustryeye.com/tenants-lose-bargaining-power-and-face-paying-over-he-odds/

 

 

Will the Private Rental Sector be Out of Reach for Many in the Future?

Published On: March 10, 2016 at 12:23 pm

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Worrying new research suggests that spiralling rent prices and high deposit requirements will put even the private rental sector out of reach for many in the future.

It is well known that young first time buyers are struggling to get onto the property ladder, but now Money.co.uk has estimated that in ten years’ time, the average rent deposit could hit £1,111 – a huge 70% of the average Briton’s monthly income of £1,576.

In London, deposits are expected to rise to £2,733 – a whopping 120% of a Londoner’s average monthly salary of £2,281.

Will the Private Rental Sector be Out of Reach for Many in the Future?

Will the Private Rental Sector be Out of Reach for Many in the Future?

The website believes that private landlords will require a deposit equivalent to six weeks’ rent by 2026, while monthly rent prices will go up by over a quarter (28%) to £1,111 over the same period.

Overall, rent price growth is expected to exceed average monthly salary inflation across the UK, which is estimated to increase by just 20% in the next decade.

Money.co.uk predicts that deposits will increase significantly across the whole of the south of England.

In the South East, the average deposit is expected to reach £1,469 by 2026 – over four-fifths (83%) of the average monthly income of £1,761, and up from 72% in 2015.

Meanwhile, in the South West, the average deposit is set to be equivalent to 80% of the average monthly earnings by 2026, up by 14% from 66% of the average salary in 2015.

The Editor-in-Chief of Money.co.uk, Hannah Maundrell, explains the forecast: “The rapid rise in deposits as well as rents is a double blow for everyone on the rental ladder.

“With the forthcoming changes to tax legislation and crackdown on buy-to-let mortgages likely to erode landlords’ profits, there’s little doubt these costs will be passed on to tenants.

“The current booming property market means deposits are likely to continue shooting upwards in the future, and we could well see six weeks’ worth of rent extended to eight.”

She continues: “Tenants are stuck between a rock and a hard place, and the situation is only likely to get worse. Many not only face being priced off the property ladder, but also the rental ladder too. This could force people to borrow the extra cash they need for a deposit on loans or credit cards, pushing up the cost and creating a perfect storm for a major renting crisis. Maybe the bank of mum and dad should prepare itself for another withdrawal? Or, we could see many left with little choice but to live with their parents well into their 40s.”

Maundrell insists: “The Government needs to take action; without intervention, the spiralling cost of deposits and rent could have a huge economic impact on the UK. Giving renters a lifeline is equally as pressing as helping people buy a house. Taking steps to address this now could be a far easier solution than dealing with the prospect of pricing home hunters off of the private rental ladder.”1

How do you see the upcoming changes to landlord finances affecting how you set your rent prices and deposit requirements?

Advice for landlords on setting the perfect rent price can be found here: https://www.justlandlords.co.uk/news/setting-perfect-rent-price-property/

1 https://www.landlordtoday.co.uk/breaking-news/2016/3/are-people-being-forced-off-the-rental-ladder

 

Average House Price Almost at £300,000, According to Rightmove

Published On: February 15, 2016 at 3:53 pm

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House prices have reached a new record high this year and are set to hit £300,000 in the near future, according to data from Rightmove.

The property portal found that new vendor asking prices have risen by 2.9%, or £8,324, in February, taking the average house price in England and Wales to £299,287.

Average House Price Almost at £300,000, According to Rightmove

Average House Price Almost at £300,000, According to Rightmove

The Director of Rightmove, Miles Shipside, comments on the figures: “The New Year’s market has hit the ground running in many locations, continuing last year’s momentum and resulting in the price of property coming to the market hitting a new high.”1 

The previous peak was recorded in October last year.

Rightmove also reports that the supply of new homes is improving. In February, there was a 5% rise in the amount of new properties coming onto the market compared with last year.

Supply of first time buyer homes has grown the most, up by almost 10%.

However, supply is not consistent across regions. Only four regions have seen supply increase by more than the average 5% – London, the South East, South West and Yorkshire and the Humber.

Supply has decreased in the West Midlands, where buyers are struggling to find homes.

The Managing Director of Chancellors estate agent, Robert Scott-Lee, says: “January has seen a huge jump in demand that has surpassed the normal seasonal increase.

“Undoubtedly, this is partly fuelled by investors looking to take advantage of a quick purchase before the tax change in April, and sellers looking to secure a sale to an investor who is panic buying.”1

We recently reported that a surge of buy-to-let landlords into the property market is pushing prices higher. Investors are looking to avoid the 3% Stamp Duty surcharge, which will be in effect from 1st April.

As house prices rise, as do rents. This morning, Countrywide revealed that rent prices are now the highest on record. Find out more: /rents-are-highest-on-record-says-countrywide/

Remember to check back to our latest news for property market updates.

1 http://www.independent.co.uk/news/business/news/house-prices-approach-record-300000-rightmove-reports-a6874816.html

 

Are Rents Really as Expensive as Claimed?

Published On: December 22, 2015 at 2:05 pm

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Are Rents Really as Expensive as Claimed?

Are Rents Really as Expensive as Claimed?

The news is full of how renting is extortionate and landlords exploit tenants… But is this actually true? Just how expensive is renting?

Recently, rents have performed strongly year-on-year, in line with earnings growth – almost for the first time since the start of the recession.

Rent price indices from LSL Property Services and Belvoir use advertised rents, showing the highest increases, while Countrywide studies prices for existing tenants, which although indicate growth, show rents rising at a much slower rate than for those new to the market.

This data shows that landlords do not exploit tenants with huge increases and reflects the true movements of the rental market.

Regionally, the Office for National Statistics (ONS) found that property prices range massively – from an average of £158,000 in the North East to 3.36 times that in London, at £531,000.

The lowest average rent is in the East Midlands, at £609 per month, with the typical rent in the capital set at £1,442 a month – just over double. This indicates that rents do not rise at the same rate as house prices. And although there have been some high increases, 8-10% annually, these are predominantly for newly advertised rental homes.

Countrywide found that for existing tenants (the majority), rent prices hardly rise at all.

Rent price growth should also be put into context. Since the recession, private sector rents dropped by between 5% in London and 20% in Nottingham. Since then, many increases have been reported as rises, but were simply recoveries. While rents in the East Midlands have grown by 6-8% yearly, today’s prices are only just back to levels recorded in 2008.

Ideally, rents should rise in line with inflation, meaning that landlords have, in fact, seen a price cut over the years.

How have your rent prices changed over the last few years? And do you believe this is correct?

Buying is Cheaper than Renting in the Whole of the UK

Published On: December 14, 2015 at 10:38 am

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Prospective first time buyers would have lower monthly outgoings if they bought their own property as opposed to renting, according to a recent report from Santander.

In every region of the UK, the average monthly rent now exceeds the average monthly mortgage repayment.

The bank’s study found that hopeful buyers would save an average of £2,300 per year if they buy their own home. The average rent in the UK is currently £995 a month, compared to monthly mortgage repayments of £805 for the typical first time buyer household. This means that homeowners could save £190 a month.

The difference between renting and buying

Region

 Average house price Average rent per month Average monthly repayment with 21% deposit

Difference between rent and mortgage
South West £187,416 £902 £710 £192
Greater London £363,555 £1,555 £1,376 £179
Scotland £137,504 £678 £521 £157
Wales £129,582 £618 £491 £127
North West £137,874 £643 £522 £121
Yorkshire and the Humber £136,834 £631 £518 £113
West Midlands £151,224 £674 £572 £102
East Midlands £144,712 £636 £548 £88
North East £121,072 £541 £458 £83
South East £246,023 £959 £931 £28
East of England £215,082 £816 £814 £2
UK average £212,610 £995 £805 £190
Buying is Cheaper than Renting in the Whole of the UK

Buying is Cheaper than Renting in the Whole of the UK

First time buyers in the South West would make the biggest savings by purchasing a property, as the average monthly rent in this region surpasses mortgage repayments by more than £192.

Those in London, where rents are 56% higher than the UK average, would be £179 better off per month by buying.

However, buyers in the East of England would not see much difference, as the typical monthly mortgage repayments in this region is just £2 more than the average rent.

Managing Director of Mortgages at Santander, Miguel Sard, says: “People assume that buying a property will put them under greater financial pressure, but often the reverse is true. With annual savings averaging well over £2,000, this can really mount up over time and of course, once the mortgage is paid off, you have a valuable asset to show for it.

“Many prospective first time buyers see the cost of saving for a deposit as prohibitive, but there are many deals available for smaller deposits.”

He explains: “Buying a property is a big financial commitment and there are upfront costs to consider, but over the long term, the financial benefits can be very significant. Getting independent advice and looking for competitive rates either online or through a mortgage adviser is crucial to get the best mortgage to meet potential homeowners’ individual needs.”1

Santander found that the average first time buyer home costs £212,610 in the UK. This means that a buyer with the average deposit needed – 21% – must have £44,648 in order to get onto the property ladder.

1 http://www.propertyreporter.co.uk/property/buying-is-cheaper-than-renting-across-all-of-the-uk.html

 

 

 

 

 

 

 

 

 

 

 

 

London Tenants Need to Earn Over £21k Just to Cover Rent

Published On: November 28, 2015 at 2:22 pm

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Tenants in London need to earn over £21,000 per year just to cover the rent, according to new research.

The average rent price in the capital grew to £1,467 a month in October, up from £1,402 in June, says the Rentify Property Index. This is more than a £21,000 annual salary, which provides an income of £1,447 per month after tax.

The study revealed that rents in London increased by 4.67% since June, with the greatest rises recorded in Greenwich.

Rents in Greenwich increased by £340 per month, followed by a rise of £210 a month in Brent and £197 per month in Newham.

Most expensive London boroughs to rent in

Position

 Borough

Average rent per month
1 Westminster £2,182
2 City of London £2,149
3 Kensington and Chelsea £2,030
4 Camden £1,836
5 Hammersmith & Fulham £1,776
London Tenants Need to Earn Over £21k Just to Cover Rent

London Tenants Need to Earn Over £21k Just to Cover Rent

Could these price rises be the result of the announcement that buy-to-let landlords will see their mortgage interest tax relief cut?

Earlier this year, Chancellor George Osborne revealed that this change would be gradually introduced from April 2017. By reducing the amount of tax relief that landlords can claim, investors could lose thousands of pounds per year.

Chief Executive of Rentify, George Spencer, says: “The high cost of rent in central London is continuing to drive people away to outer boroughs in search of affordable housing. This however, means that these so-called cheaper locations are seeing a remarkable rise in rent due to their popularity. They are hot on the heels with central London due to strong demands.

“Furthermore, the recent buy-to-let tax hike introduced by the Chancellor will further constrain supply as less people invest in property to rent, making life increasingly hard for Londoners.”1 

Rents dropped in areas such as Wandsworth, by £33 per month, and Kingston-upon-Thames, by £90 a month.

Cheapest London boroughs to rent in

Position

 Borough

Average rent per month
1 Bexley £1,064
2 Croydon £1,114
3 Sutton £1,118
4 Waltham Forest £1,146
5 Barking and Dagenham £1,192

1 http://www.dailymail.co.uk/property/article-3333353/Tenants-London-need-earn-salary-21k-just-cover-rents-s-not-including-bills.html