Posts with tag: rent

RICS calls for Government to address shortage of rental homes

Published On: October 4, 2016 at 8:49 am

Tags: rent,rental crisis,rental market,rental property,Stamp Duty

New figures released by The Royal Institution of Chartered Surveyors (RICS) shows that soaring property prices is making homeownership more unaffordable for families.

As such, the report claims that 1.8m more households will be forced to rent by the year 2025.

Pressures

RICS is calling on the Government to cool financial pressures on investors by introducing tax breaks. In addition, it has called on ministers to shift their focus from supporting homeownership to rebuilding the buy-to-let market.

Data from the report indicates that between 2001 and 2014, the number of UK properties renting a property rose from 2.3m to 5.4m. Further investment has been hit by the changes in stamp duty last April.

The report indicates that as a result of the stamp duty changes, 86% of landlords have no plans to add to their portfolio in the coming year.

Supply issues

An extract from the report reads: ‘RICS is urging the Prime Minister to abandon David Cameron’s previous home ownership focus and reverse April’s Stamp Duty measures in order to address short term rental supply issues. However, they are recommending that Government takes a much bolder long-term approach and pioneers a new build-to-rent sector, with the private sector encouraged to build properties specifically for residential letting.’[1]

‘It would like to see pension funds incentivised with tax breaks to build large scale rental properties with affordable elements. Additionally, local authorities holding brownfield sites should be encouraged to release land for such properties.’[1]

RICS calls for Government to address shortage of rental homes

Critical

Jeremy Blackburn, head of policy at RICS, added: ‘it’s time for Theresa May to get out her hard hat. We are facing a critical rental shortage and need to get Britain building in a way that benefits a cross section of society, not just the fortunate few.’[1]

Richard Lambert, CEO of the National Landlords Association, believes: ‘The stamp duty surcharge for second home purchases was nothing more than a crowd-pleasing policy from a Government that was dead set on championing homeownership at all costs.’[1]

‘However, it frankly isn’t raising any money for the exchequer, so it makes sense for Mr Hammond to reverse it and give private residential investors the opportunity to help ease the housing crisis. This government should be commended for setting out a programme for building one million homes by 2020 and it needs to put the effort into making sure this is realised. In the meantime we’ve still got a burgeoning renting population that need to be housed right now,’ he concluded.[1]

[1] http://www.propertyreporter.co.uk/landlords/rics-calls-on-government-to-address-18m-shortage-of-rental-homes.html

Financial stability of British renters revealed

Published On: May 20, 2016 at 12:16 pm

Author: Em Morley

Categories: Finance News

Tags: Buy-to-Let,homeowners,rent,renters

An interesting new report has revealed that a rising number of UK adults are struggling to purchase a home. This in turn is causing them poor levels of financial wellness, according to the Momentum UK Household Financial Wellness Index.

The Index was conducted by the University of Bristol’s Personal Finance Research Centre and is the first of its kind to assess the financial wellness of the UK.

Poor planning

Financial wellness is split between homeowners and non-homeowner, with tenants suffering down to a lack of assets and poor long-term planning.

Those with a mortgage average 71/100 Index points, with those owning a property outright gaining 74/100. However, those in rental accommodation average financial wellness points of 62/100 for private renters and Housing Association tenants and 60/100 for Local Authority.

The lack of substantial difference in score between private renters and those in social housing shows that despite their relatively greater incomes, private tenants are being made financially unstable by their living arrangement.

Spending

The Office for National Statistics’ Economic Review suggests that renters spend almost 20% of their income on rent. This figure rises to 25% for private renters, rising by 10% in the last three decades.

These costs are evidenced in the Index’s findings, which show that renters are half as likely than homeowners to suggest that that their income can cover their monthly outgoings. In addition, renters were revealed to be half as likely to say they are comfortable with their standard of living.

What’s more, double the amount of renters said that they had missed a minimum repayment on their credit card, loan or other debt during the past twelve months.

Financial stability of British renters revealed

Hardship

Ferdi Van Heerden, CEO of Momentum UK, noted, ‘the financial hardships being faced by renters are making it impossible for them to build the deposit necessary to get their foot on the property ladder. Soon we will see a situation where only those who already own or inherit property will be able to own a home.’[1]

‘Private renting is on the increase from 6% of the population in 1988 to 16% in 2014. By contrast, the prevalence of mortgaged home ownership among under 40’s is lower than in 1977, when the Right to Buy was introduced to address just such an issue,’ he continued.[1]

Long-term impact

Renters were also found to be more likely to see their financial prospects hit due to the effect that renting has on their overall income. According to the Index, tenants are twice as likely to have no savings, insurance or pensions in place. In addition, they are twice as likely as homeowners to have nothing in place for their retirement.

Mr van Heerden concluded by saying, ‘if we do not address the UK’s rental trap, we are effectively creating a lasting social divide between the haves and have nots. We cannot simply assume that the current system will resolve this issue and action must be taken to address this.’[1]

[1] http://www.propertyreporter.co.uk/landlords/the-rental-trap-financial-wellness-of-uk-renters-revealed.html

Landbay Rental Index shows 4% rise in 2015

Published On: January 15, 2016 at 3:00 pm

Author: Em Morley

Categories: Property News

Tags: Buy-to-Let,landlords,rent,rental growth,tenants

The latest index to be published assessing the rental market in 2015 shows that rents increased by almost 4% over the course of the year.

According to the Landbay Rental Index , the average UK rents rose by 3.8% in 2015, despite a seasonal fall of 0.2% in December.

In addition, the Index suggests that a lack of housing across the country has led to rental increases outpacing wages in large parts. Three bedroom properties have seen the greatest rise.

Regional rises

Each region of the UK saw rents up year on year, with the average rent now standing at £1,280 per month. London recorded the highest average rent, of £2,047 per month, with the South East recording £1,019 and the East of England at £863.

Northern Ireland recorded the largest yearly increase in rents per region, with 6.7%. This was followed by the East of England (5.6%), Scotland (4.5%), West Midlands (4.4%), the South West (4.1%) and London (4%).

The South East saw annual growth of 3.7%, with the East Midlands and Wales showing increases of 3%. Yorkshire and the Humber recorded yearly increases of 2.1%, the North East 1.8% and the North West just 0.9%.

In comparison to 2014, three bedroom homes have seen the greatest increase in the average rental price. Rents were up by 5.2% to £1,484, indicating that family homes and people sharing properties were in high demand.

For a one-bed home, rents climbed by 3.2% to £1,042 and for a two bedroom by 3.9% to £1,243.

Hotspots

Among the country’s top risers in rental prices were commuter hotspots around London. Luton saw a rise of 11.1%, Medway 8.8% and Thurrock 7.3%, indicating that many workers in the capital are priced out of living there.

‘Despite a small seasonal dip towards the end of the year, rents rose significantly ahead of wages in 2015,’ noted John Goodall, chief executive officer of Landbay. ‘Rents often track wages as consumers with more pay compete for the most desirable rental properties, but the fact that rents are outpacing wages is a clear sign of the shortage in properties to rent as large parts of the UK face an acute housing shortage. This trend is clear in London and the South East, along with large parts of the East Midlands and East Anglia and it is most evident for three bedroom properties, ‘ he continued.[1]

Landbay Rental Index shows 4% rise in 2015

Weeding out

‘Based on its recent policy changes for the private rental sector such as the new stamp duty surcharge and changes to tax relief on mortgage interest, the Government seems intent on weeding out amateurs from the ranks of new buy-to-let investors. If it is successful, our rental index suggests that the result is likely to be higher rental income for the professional investors who are not impacted by the changes,’ Mr Goodall added.[1]

Concluding, Goodall said, ‘as a peer to peer lender to the residential property sector, we enable any investor to benefit from a solid, dependable rate of return that is underpinned by UK bricks and mortar and the growing rental income it generates by lending to professional property investors.’[1]

[1] http://www.propertywire.com/news/europe/uk-average-rents-index-2016011511440.html

September sees West Midlands rent rise

Published On: November 3, 2015 at 10:54 am

Author: Em Morley

Categories: Landlord News

Tags: Buy-to-Let,landlords,rent,rental market

A new investigation by ARLA has indicated that tenants in the West Midlands saw the largest rent increase in all UK regions during September.

Data from the report shows that rents in the region soared during the month, with 59% of tenants reporting a rise.

Rental Rises

This was in comparison to 22% in letting agents in London who noted rental increases in the same period. The UK average in September was 32%.

In addition, there was more success in the Midlands, this time in the East, as the survey found that there were 272 managed properties per member branch in the region. This was compared to the UK average of 182.

However, London recorded the lowest number of managed rental properties, with just 124 on average per branch, with supply still way behind satisfying demand.

Prominent

The North West saw the most prominent rental property demand, with agents registering 40 new prospective tenants per branch in September.

Demand continues to be prominent in the South, with ARLA agents in London, the South East and South West all registering an average of 39 new potential tenants per branch. However, agents in the East Midlands and Scotland are seeing the lowest number of new potential tenants coming through the doors.

UK rents rise in West Midlands

Happiness

Tenants in the East of England also seem the happiest, with people in this region staying in their home for the longest period. On average, people in the area are staying for 20 months. However, those living in the North West only tend to live within a property for an average of 15 months at a time, which could be a reason why it has the greatest number of prospective tenants per branch.

Additionally, the report shows that rental properties in the capital have an average of 6 viewings before they are let, the highest in the UK. This is in comparison to properties in the East of England, which command an average of 3 viewings before a tenant moves in.

‘It’s interesting to see how tenants across the country are affected in different ways when it comes to the rental market,’ said David Cox, ARLA managing director.’ He believes that, ‘each region has its own issues, whether it’s a lack of suitable housing, no available housing at all, or over inflated rent prices.’[1]

Cox went on to say that, ‘it’s a surprise to see that those renting in the West Midlands are suffering from rent increases the most, when many of us would automatically think tenants in London would be the most prone to rent increases due to the competition in the capital.’[1]

‘The rental property market remains a significant concern, as prospective house buyers either can’t afford to get onto the housing ladder, or simply can’t find a house they are willing to buy, putting increasing pressure on the rental market. Until the issue of supply and demand is addressed, we will continue to see tenants across the country struggling to get a good deal on rental properties,’ he concluded.[1]

[1] http://www.propertywire.com/news/europe/uk-rental-marekt-rents-2015110311159.html