Posts with tag: rental housing

First Time Buyers Spend £50k on Rent Before Buying a House

Published On: February 12, 2016 at 9:44 am

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The average first time buyer purchasing a home this year will have already spent £52,900 on rent by the time they get onto the property ladder, according to the Cost of Renting report from the Association of Residential Letting Agents (ARLA).

The report, compiled with the Centre for Economics and Business Research (Cebr), reveals that the average first time buyer in England in 2016 will have spent 16.4% of their total lifetime earnings on rent for all the years they were a private tenant. It is expected that future first time buyers will spend 22% more than those buying today.

First Time Buyers Spend £50k on Rent Before Buying a House

First Time Buyers Spend £50k on Rent Before Buying a House

First time buyers purchasing this year in the North East will have spent £31,000 on rent – the lowest in England. Contrastingly, those in London will have spent double that, at £68,300.

The South East is the only region other than London where the total spent on rent is above the average, at £55,900.

In 2015 alone, the average tenant in the UK spent 22% of their wages on rent, rising to 30% in the capital. Those in the East of England enjoyed the most affordable rents, due to relatively high earnings in the region. However, rent still ate up 18.9% of their disposable income.

Britons that move out of their family home at the age of 18 will typically rent for 13 years before they buy their own property.

ARLA’s Cost of Renting report revealed that those leaving home and starting to rent this year will spend an average of £64,400 on housing before they can buy their first home – one fifth (22%) higher than the current first time buyer.

Those leaving home and renting privately in London will continue to be worse off, spending an average of £91,500 on rent before they buy a property – £23,100 more than those buying in the capital this year.

The Managing Director of ARLA, David Cox, comments on the findings: “The rising cost of rent in this country is a huge issue, and is preventing tenants from being able to save to buy a home. Our Cost of Renting report reveals that tenants are already spending a significant proportion of their income on rent, and therefore struggling to save any money.

“However, as house price affordability worsens and interest rates start rising, more pressure will be put on renting, with weekly rent likely to rise, so homeownership will remain out of reach for many.”

He continues: “Rents are becoming alarmingly unaffordable due to the lack of available housing; the north-south divide we’re currently seeing in the UK is a clear illustration of this. The London rental market is competitive, with far more prospective tenants looking for properties than actual houses available. This is pushing up rents in the capital, which will continue to put pressure on surrounding areas, including the South East, as Londoners relocate to avoid high rent costs.”1

1 https://www.landlordtoday.co.uk/breaking-news/2016/2/lifetime-cost-of-rent-exceeds-50-000

Could American-Style Renting Arrive in the UK?

Published On: November 19, 2015 at 1:24 pm

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Categories: Landlord News

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An American style of private renting, called multi-family renting, could arrive in the UK after a conference was held in London on the idea by US property trade body, the National Apartment Association.

The firm said that it was pleased with the success of its first UK conference, with plans to establish itself in the British market and hold further events.

Multi-family is similar to institutionally-backed build-to-rent schemes that are beginning to appear in the UK, through brands like Be:Here, Essential Living and Fizzy Living.

Could American-Style Renting Arrive in the UK?

Could American-Style Renting Arrive in the UK?

Countrywide has also entered the build-to-rent industry.

The American multi-family style of renting is a much more advanced and longer established model. Multi-family is also focused on putting tenants with very similar interests or lifestyles together.

More than 300 UK property professionals attended the conference.

It highlighted how much more evolved and professional the rental sector is in the USA. In America, branding and customer service are two of the most important aspects of the multi-family industry.

As with the UK, the US rental market is thriving, with homeownership declining slightly to 64% of the population.

It is unknown whether the term multi-family will ever be used in the UK, but key features of the regime were discussed at the conference.

It explained how US schemes offer a range and variety of facilities for residents. Fitness suites and pools are common, but wine rooms and bike workshops are also popular, alongside pet spas. Social communal space is also provided, with a wide range of resident events on offer.

These services are designed to be convenient to the resident. Amenities are offered on renters’ doorsteps, forming a community atmosphere and a place for residents to spend their leisure time.

Many developments feature a 24-hour tech café, with high-speed wifi, printing facilities and refreshments. These spaces have become increasingly popular as more people work from home, giving them a change of scenery.

An on-site concierge is usually available during business hours, providing a range of additional services, from dry cleaning to room service meals, made by an on-site restaurant. High quality customer service means that maintenance and repairs are dealt with within a specified timeframe.

Apartments are often let unfurnished, but managers usually offer a furniture rental service. They use third party firms to provide furniture without the landlord having to kit out the property.

Revenue management systems are in place with these schemes, designed to maximise revenue by updating rents on a daily basis. In the UK, properties are valued when they are empty, but in the US, the rent price is set based on market demand and income achieved. The average lease is 12 months and firms prefer a break in the agreement to review rents for potential increase at the end of the tenancy.

The model emerging in the UK includes all costs in one monthly payment, whereas the US charges for everything separately. As well as providing additional income, this method can benefit the environment, as occupiers paying their own utility bills are more like to use less, with consumption down 25% in these situations.

As a landlord, would you be interested in this type of lettings scheme? And do you believe it is more professional than the British private rental sector?