Posts with tag: rental market

UK rental market bounces back in May

Published On: June 20, 2017 at 8:56 am

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Rental market activity recovered during May – putting an end to fears of a prolonged slowdown in the market.

The most recent report from Agency Express shows that after slower market conditions throughout Britain last month, activity improved during May.

Improvement

Agency Expresses’ Property Activity Index shows that national figures for properties ‘let’ in May increased by 13.8% month-on-month. New listings ‘to let’ rose by 15.8%.

Across the UK, 11 out of 12 regions recorded by the Index saw a rise in new listings to let, alongside those actually let.

The top performing region in May was the South East of England, where homes to let rose by 29.2% month-on-month. Properties let increased by 31.4%.

Other strong performing regions included the North East, London, Wales and the South West, where properties to let rose by 25.6%, 23.7%, 23.5% and 21.6% respectively.

In addition, the West Midlands, East Midlands and the South West saw a rise of 23.4%. 21.8% and 17.9% respectively in the number of homes let.

UK rental market bounces back in May

UK rental market bounces back in May

Falls

The largest falls in this month’s Index were recorded in the West Midlands and East Anglia. In the West Midlands, figures for new listings to let fell to stand at -2.4%, while a dip in East Anglia saw the number of properties let sit at -0.9%.

However, a slowdown in May is certainly not uncommon for these regions – with both faring better than they did 12 months earlier.

Stephen Watson, managing director of Agency Express, observed: ‘The Property Activity Index historically reports a decline in activity throughout May for many regions. This month however we have witnessed a good level of activity across the UK lettings market with some regional pockets recording record bests. Moving in to June and July we would expect a further increase in activity.’[1]

[1] https://www.landlordtoday.co.uk/breaking-news/2017/6/uk-rental-market-bounces-back-with-greater-activity-anticipated-over-summer

 

Landlords looking outside of London for the best yields

Published On: June 13, 2017 at 10:01 am

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Categories: Landlord News

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Latest industry research suggests that buy-to-let landlords are looking away from London and towards the regions, in order to find the best rental yields.

Provincial cities with notoriously large populations of university students within the North and the Midlands have been named in the top-ten UK buy-to-let hotspots.

Just three London boroughs- namely Southwark, Newham and Tower Hamlets- made it into the top 20.

Location, Location, Location

It appears that a number of landlords are being thoughtful about location before deciding the go ahead and purchase an investment property. Many are conscious of the fact that its value will appreciate at a greater rate than mortgage borrowing.

Significantly-higher property prices in some regions of the capital appear to be putting off some landlords from purchasing property, with the knowledge that they could get better returns elsewhere.

Liverpool was recently named as the top-region for buy-to-let, with average annual rent achieved here £12,252. The average property price here is £122,283, and the typical mortgage cost £2,421. This means that the net rental yield before tax is 8%.

Landlords looking outside of London for the best yields

Landlords looking outside of London for the best yields

In addition, the Midlands could also prove attractive to would-be investors, with yields of 5.6% and 5.4% in Nottingham and Coventry respectively.

Greater Manchester is seeing average rental yields of 4.3%, while Portsmouth offers 4.2%.

London however offers rental yields of just over 3%, with savvy investors looking outside of the capital.

Rental growth was subdued in May

Published On: June 7, 2017 at 11:50 am

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Categories: Property News

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The most recent report from Landbay has shown that UK rental growth rather flat-lined during May.

Rental growth increased by 0.02% over the month – the slowest pace in more than half a decade. In addition, this was a fraction of the five-year average growth total of 0.14%.

Slowdown

The capital continues to be the main region driving the slowdown. Rents in London dropped by -0.94% year-on-year to May, in comparison to growth of 1.62% for the rest of the UK.

Rents have now slipped for a whole year in London – a 12 month decline in demand but greater supply- with homeowners opting to rent out properties until the sales market picks up.

In fact, London was the only region to see rents fall in May, with seven of twelve regions ending the month with a slower rate of growth than in April.

Rental growth was subdued in May

Rental growth was subdued in May

Delays

John Goodall, CEO and founder of Landbay, observed: ‘The election is one of many external factors influencing activity in the buy to let market at the moment. Yes, uncertainty about the future of the UK will cause some people to delay a decision to move, but affordability pressures are also starting to pinch the pockets of renters across the country. Wage growth is now lagging behind inflation for the first time since mid-2014, and with less money to spend on such a major monthly outlay, renters will be factoring this into their tenancy decisions.’[1]

‘On the supply side, a wave of new rental properties caused by last spring’s hike to Stamp Duty, together with falling house prices, will no doubt both be playing a small part in the ongoing softening of rental growth. Nevertheless, barring a major surprise from either the election or the Brexit negotiations, long term population and construction trends suggest that rents will soon be growing faster than inflation again,’ Mr Goodall added.[1]

[1] http://www.propertyreporter.co.uk/landlords/rental-growth-flat-lines-in-may.html

 

Investors in Scotland enjoying higher returns

Published On: May 30, 2017 at 8:53 am

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Buy-to-let landlords in Scotland are enjoying better returns on their investment than their English counterparts, according to the most recent Scotland Buy to Let Index from Your Move.

The Index reveals that the average Scottish rental price increases by 6% during the year to April. As such, the typical Scottish rental property let for £574 per month, with all regions of the country seeing an increase in the average rental price.

Rises

Rental prices in the Edinburgh and Lothians region rose by 2% in the last 12 months to hit an average of £655pcm, according to the report.

The price growth here is being driven by a fall in suitable housing stock, particularly in the city centre, where demand is strong.

However, there was faster growth in the south of Scotland, where rental values increased by 7.1% in the 12 months to April to hit an average of £564pcm.

Investors in Scotland enjoying higher returns

Investors in Scotland enjoying higher returns

Family Demand

In the East of Scotland, average rents rose by 2% to reach £655pcm – largely due to a rise in demand from families searching for three and four bedroom properties.

Inverness was another region to see an increase in demand for family properties.

Brian Moran, letting director of Your Move Scotland, said: ‘Demand continues to outstrip supply in Edinburgh, with this driving the price increases in all areas of the capital. The wider Lothians area remains very popular and any property with an EH postcode is in very high demand. Prices here continue to outstrip the rest of Scotland by some margin.’[1]

‘Yet Edinburgh wasn’t the area which had the fastest growth in the country. Prices in the south of Scotland have risen 7.1% in the last year, a stellar performance. Landlords across Scotland also continue to enjoy higher returns on their investment than their counterparts in England and Wales, with the typical property offering a 5% yield,’ Mr Moran added.[1]

 

[1] https://www.landlordtoday.co.uk/breaking-news/2017/5/landlords-in-scotland-enjoy-higher-returns-on-their-investment

 

Buy-to-let investment is still a reliable asset class

Published On: May 25, 2017 at 1:47 pm

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Categories: Landlord News

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Buy-to-let landlords have certainly had a rough time of it lately. A raft of legislation changes, such as alterations to mortgage interest tax relief, Stamp Duty surcharges and the Right to Rent scheme have all provided difficulties for investors.

The fact is that these tax changes mean that buy-to-let does not offer as lucrative returns as it once did. However, many people still believe that this asset class offers a solid, stable investment.

A soaring demand for rental property is underlined by the fact that the average age of a first-time buyer in the UK is now 35 – as opposed to 24 one decade ago.

Rewarding

Offering his assessment, Stephen Reade, letting operations manager at Harrison Murray Lettings, part of the Nottingham, said: ‘Becoming a landlord can be a rewarding experience and, if done correctly, provide a steady and sustainable return as an income investment, especially compared to lower savings rates and stock market swings.’[1]

‘Investors are snapping up property in the hope that it will not only return a reliable yield but also a benefit from capital growth given enough time. Mortgage rates at record lows are helping buy-to-let investors make deals stack up,’ he continued.[1]

Buy-to-let investment is still a reliable asset class

Buy-to-let investment is still a reliable asset class

Moving on, Reade urged landlords to make sure their figures add up before investing.

‘One day they [rates] must rise and you need to know your investment can stand that stress test, a criteria sought by many lenders recently. Recent history provides an important lesson in how returns can be hit. Many buy-to-let investors who bought in the boom years before 2007 struggled as mortgage rates rose. A sizeable number were thrown a lifeline when the base rate was slashed to 0.5 per cent. Rates stuck there until this summer and then were cut again after Brexit, but they will rise again.’[1]

‘Even considering the recent tax changes and potential for buy-to-let mortgage costs to rise, there are many positives. We are becoming a nation who sees renting as a flexible lifestyle choice and is far more sociably acceptable. With greater demand from tenants, rents that should rise with inflation and the long horizon for interest rate rises, mean many investors are still tempted by buy-to-let,’ Mr Reade concluded.[1]

[1] https://www.landlordtoday.co.uk/breaking-news/2017/5/buy-to-let-remains-a-steady-and-sustainable-income-investment

 

Rental market activity falls substantially

Published On: May 18, 2017 at 10:05 am

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Categories: Landlord News

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There was a sharp fall in both the number of new property listings and properties let during the last month, according to a new report.

The most recent Agency Express Property Activity Index reveals that following a good improvement in activity levels during March, figures fell significantly in April.

Falls

Properties let in April saw a 22.1% month-on-month fall, while new listings ‘to let’ slid by 19.7%.

These figures appear consistent with recent ones released by the Association of Residential Letting Agents (ARLA Propertymark). This data suggests that more landlords are looking to exit the sector as a result of higher stamp duty costs and the phasing out of mortgage interest tax relief.

Assessing the performance across Britain, all 12 regions assessed by the Property Activity Index recorded falls in new listings ‘to let’ as well as homes actually let.

The regions seeing the smallest declines in properties ‘to let’ were:

  • West Midlands -13.4%
  • East Midlands -13.5%
  • North West -14.1%

In terms of properties let, the smallest declines were seen in:

  • Scotland -2.8%
  • Yorkshire and Humberside -13.3%
  • North West -18.2%
Rental market activity falls substantially

Rental market activity falls substantially

Capital Pains

London saw the most profound falls in both the volumes of listings ‘let’ and ‘to let,’ with falls of -26.1% and -24.3% respectively.

Stephen Watson, managing director of Agency Express, observed: ‘This month we have witnessed a slowdown across the UK rental market. While our figures will be affected by the bank holiday weekends and reduced number of working days, the fall in activity seems greater than what we would anticipate.’[1]

‘As we now move in to what is usually a robust period for the market, it will be interesting to see what advances are made in light of the difficulties that landlords and agents face,’ he added.[1]

[1] https://www.landlordtoday.co.uk/breaking-news/2017/5/rental-market-activity-slows-sharply