Posts with tag: rental market

Homes are Being Let in Record Time

Published On: June 30, 2015 at 4:31 pm

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A third of new rental properties put up for let are being agreed before the existing tenant moves out, reveals Countrywide letting agents.

The firm found that the average UK rental home is let within 32 days, which is the shortest time on record.

Countrywide found that so far this year, 33% of all new lets were agreed while the property is still occupied, up from 27% in 2014.

Homes are Being Let in Record Time

Homes are Being Let in Record Time

The average rent price agreed while tenants are living in the property is 105% of the asking rent, an average of £35 a month more.

Comparatively, tenants moving into an empty property negotiate an average of £21 a month off the asking rent price.

In the capital, 51% of all new rental properties coming onto the market are agreed while the home is occupied, up from 41% last year. Contrastingly, just a quarter of new lets are agreed before the existing tenant moves out in the North East of England.

When an agreement is made before the tenant leaves the property, there is an average of just six days between the existing renter leaving and the new one moving in.

In one-in-ten cases, a new tenant moves in on the day that the existing tenant moves out.

If a property has not been let before the tenant leaves, the first week of marketing is when a landlord is most likely to achieve the highest rent.

During the first seven days of marketing, the average rent is agreed at the full asking price. This figure drops the longer the property is on the market.

Most potential tenants view a property in the first weekend after it comes onto the market. In London’s booming market, however, twice as many lets are agreed on a weekday than in any other part of the country.

Research Analyst at Countrywide, David Fell, says: “In larger rental markets, more new lets are being agreed well in advance of the current tenant leaving.

“As a result, we’ve seen void periods fall with a growing number of landlords having a new tenant lined up over a month before their existing tenant leaves. While leaving some time for maintenance between tenancies is advisable, increasingly, there’s just a matter of hours between a tenant moving out and one moving in.

“In more competitive markets, the first tenant to view a home is often willing to pay a small premium to ensure the landlord takes the property off the market and that no further viewings take place.”1

1 http://www.propertyindustryeye.com/properties-being-let-within-shortest-time-on-record/

Investors seeing potential in Derby

Published On: June 25, 2015 at 11:42 am

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Investors are finally starting to notice the fantastic living potential in the wonderful city of Derby, according to a leading property entrepreneur.

Alongside being home to the greatest football team in England, excellent nightlife and known affectionately as ‘Derbados,’ the city has exciting scope for property development. Taking my biased-hat off, room for development has also been spotted by Graham Bates, chief executive of Eddisons Residential.

Potential

Mr Bates will today forward his plans to develop empty land in the city into a number of high-quality apartments at the yearly Derby Property Summit, held at the home of football, the iPro Stadium.

This years summit is titled, ‘Midlands: The UK’s Engine Room’ and will see a number of delegates from the regeneration sector discuss issues for growth in the East Midlands. Joining Mr Bates on the panel will be Midlands HCA executive director Christine Addison and Compendium Living managing director Dace Bullock.

‘London values make it difficult to achieve decent rental returns, so the big players are now focusing on the regions, which includes not only prime locations such as Manchester but also secondary cities like Derby, where there is big rental demand,’ commented Bates.[1]

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Rough Diamond

Bates believes that, ‘developing city living is one of the massive opportunities in Derby,’ and describes the city as, ‘a diamond in the rough, in that if you turn over a stone, you’re going to find a diamond.’ He went on to say that he is, ‘very excited about the city,’ as it brings, ‘some of the country’s best graduates in advanced engineering and has world-class employees.’[1]

‘These young people are in their 20’s-but where do they live? Many want city apartments, but there isn’t anything in Derby. That’s why I’m so excited about the city,’ he continued. ‘Derby is not the size of Manchester, so you can’t go totally crazy. But these kind of sites of perfect for 100-250 apartments.’[1]

Concluding, Bates said that the rental market as a whole is growing and believes it is not in peoples’ mindset, ‘to settle down so early. That is why renting suits them.’[1]

 

[1] http://m.derbytelegraph.co.uk/Big-players-turning-Derby-says-expert-ahead/story-26752148-detail/story.html

 

 

Surging BTL sector earned landlords £112bn

Published On: May 29, 2015 at 3:37 pm

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Figures released today indicate that the surging buy-to-let market earned British landlords a staggering £112bn in rents and capital gains over the last year. The findings appear to spell bad news for first-time buyers, with the popularity for investment pushing their dreams of homeownership further away.

Investment

Rising property prices and more condensed mortgage-lending criteria have lead more and more investors to come into the rental market. The report from mortgage lender Kent Reliance showed that landlords in Britain made an incredible £67.2bn in capital gains, with an additional £44.3bn in rent, in the year to March 2015. This combined total was an increase of £5.8bn on same period one year ago.[1]

Ever growing rents are a key contributor to the increase, with particular strong growth in London and the South-East enhancing profits. The figures suggest that landlords are making almost £4bn per month in rental yields from their properties. The average monthly rent grew by 3.9% in the first quarter of this year, to now stand at £832. These figures suggest the largest rise since the Autumn of 2013.[2]

Bright forecast

New pension reforms that came into force last month are likely to bring even more money into the Buy-to-Let sector. Kent Reliance predict that by the year 2020, the total number of rental properties will by 5.5m, which would represent about 20% of all homes.[3]

The Office for National Statistics and Land Registry’s latest figures show that landlords now own properties with a total value of £990.7bn. This is more than three and a half times the £262bn what the sector was worth in 2001.[4]

Surging BTL sector earned landlords £112bn

Surging BTL sector earned landlords £112bn

Andy Golding, chief executive of OneSavings Bank, owner of Kent Reliance, feels that, ‘buy-to-let has come of age, moving from a niche asset class to one big enough to rival the stock market.’ He thinks that, ‘landlords are seeing the benefit of a structural change in Britain’s housing market, with tenant demand ever strengthening.’[5]

He acknowledges that, ‘house prices are showing signs of steadying somewhat,’ but says that, ‘growth remains brisk.’ Golding also states that, ‘long-term price inflation is not in danger, given the gaping chasm between growing demand for housing and the number of houses being built each year.’[6]

Concluding, Golding said, ‘combined with the dearth of high LTV lending to first-time buyer, this will continue to buoy demand for rental accommodation as well as landlords’ returns and the sector will continue to expand.’[7]

[1] http://www.theguardian.com/money/2015/may/28/booming-buy-to-let-112bn-landlords

 

 

 

First Time Buyers Rushing to the Prime London Market

Published On: May 8, 2015 at 2:17 pm

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The number of first time buyers is almost even with the amount of investors in the prime London property market, found estate agent Marsh & Parsons.

Investors are still making the most home purchases in prime London, but the gap has closed in after first time buyers rushed into the market in the last three months.

Marsh & Parsons’ London Property Monitor found that around one in three (29%) of prime London property sales were made by investors in the three months to March 2015. This fell from 37% at the end of 2014.

In the same period, the number of first time buyer sales rose from only 21% in the last quarter (Q4) of 2014, to 28% in Q1 2015. This increase has boosted the total number of sales in the prime market funded by mortgages to 17% in the last three months.

First Time Buyers Rushing to the Prime London Market

First Time Buyers Rushing to the Prime London Market

In Q1 2015, demand for prime London homes grew by 20%. This has caused added competition for available properties on the market and increased the amount of registered buyers per home from ten in December 2014 to 12 in March 2015.

CEO of Marsh & Parsons, Peter Rollings, says: “First time buyers have been riding a wave of fortuitous circumstances recently, with almost unheard of mortgage rates, reduced up front Stamp Duty costs and support schemes like the Help to Buy Isa inflating confidence.

“Combined with a more accessible pace of property price growth so far in 2015, many more have been able to take the plunge into the property market. Prime London property has always been a bastion of investment, but it’s encouraging to see the drawbridge being lowered for everyday Londoners who live and work in this city.

“However there is, and has always been, some aspirational prime central areas that are out of grasp for new buyers, and will remain an investment stronghold. Addresses like Kensington and Chelsea resonate around the world, and will forever entice buyers looking for unparalleled capital returns.”

One-bedroom properties

Due to the high demand for starter homes, one-bedroom properties in prime London have experienced the largest increase in value in the last year, with the average price up 5% compared with the 1.7% annual growth in the whole market.

The price of the average one-bedroom home in London has increased by £75 a day in the last 12 months.

Likewise, buy-to-let investors favour one-bedroom properties, as rents on these homes have risen at the fastest rate of all house types. The average weekly rent on a one-bedroom property has increased 5.8% year-on-year in the cheaper parts of outer prime London. Young professionals are particularly keen on renting these homes.

Rollings adds: “With more and more young professionals climbing onto the property ladder, one-bedroom properties have outperformed the market across prime London.

“Historically, buyers rated property on the number of bedrooms and a check list of desirable features. But the speed at which the London property market has moved in recent years has shifted the goalposts.

“Today’s Londoners are far more likely to prioritise location, overall square footage and well-thought through living space, compromising on that second bedroom accordingly. For the same reason, savvy investors who find the right one-bedroom property have the golden ticket to rental returns.”1

1 http://www.landlordexpert.co.uk/2015/05/07/first-time-buyers-flying-through-the-prime-london-property-market/