Posts with tag: rental properties

PCL lettings see strong end to 2016

Published On: February 21, 2017 at 12:18 pm

Tags: London landlords,new listings,prime central london,rental properties

The final three months of 2016 saw a strong growth in lettings volumes in the Prime Central London market. Activity was particularly strong at the highest and lowest end of the sector, according to the latest index from Knight Frank.

Data from the report indicates that the decline in annual rental value growth slowed marginally, down by 5% in January. In addition, there was a 5% year-on-year increase in the number of super-prime deals during 2016.

Supply

There was a 12% rise year-on-year in the supply of new listings during the final quarter of last year. However, this was lower than the 30% increase seen in the first nine months.

The largest falls in rents in the year to January 2017 were in Knightsbridge (-9.9%), followed by Notting Hill (-9.5%), Riverside (-9.3%) and South Kensington (-9%).

There were also substantial falls in Chelsea (-5.3%), Belgravia (-5.15%) and Mayfair (-3.8%).

However, other regions in Prime Central London are fairing better. City and Fringe, King’s Cross and Tower Bridge saw small year-on-year declines of 0.7%, 0.6% and 0.2% respectively.

Stronger

Tom Bill, head of London residential research at Knight Frank, observed that the annual rental value decline of 5% seen in January was marginally stronger than that seen in the two months previously.

‘Rental values have been declining since May 2015 in part due to higher levels of rental stock. The fact landlords face a less favourable tax environment from April, has contributed to the slowdown in supply to some degree,’ Bill added.[1]

He also noted that demand continues to improve in the higher and lower end of the Prime Central London market. Particularly, the above £5,000 per week market, or the super prime, is seeing sustained demand.

PCL lettings see strong end to 2016

The number of new tenancies agreed in Prime Central London was 20% greater in the final quarter of 2016 in comparison to 2015. Bill believes this will put upward pressure on rental values.

‘For rental properties between £1,500 and £5,000 per week, activity is improving but remains comparatively slower. The primary cause is that budgets for senior executives at financial institutions have been reduced due to the wider mood of economic uncertainty. While the UK’s decision to leave the European Union has raised some questions over the status of London as a leading global financial centre, this trend for greater efficiency pre-dates Brexit and relates to the increased regulatory pressures on banks as well as a low interest rate environment that curbs profitability,’ Bill concluded.[1]

[1] http://www.propertywire.com/news/uk/lettings-volumes-prime-central-london-saw-improvement-end-2016/

Rental Market has Robust Start to the Year

Published On: February 16, 2017 at 9:23 am

Author: Em Morley

Categories: Property News

Tags: lettings market,properties to let,rental market,rental properties

The rental market across the UK had a robust start to the year, according to the latest Property Activity Index from Agency Express.

Rental Market has Robust Start to the Year

The firm found that the UK rental market gained momentum during January, with new property listings up by a record 50.8%, while the number of properties let also soared, by 47.1%.

Analysing its historical data, Agency Express found that January’s figures for new listings to let marked the greatest rise in activity for the month since its first records. The firm also found that activity in January has been steadily increasing over the past three years.

Back in January 2015, new listings in the rental market rose by 39.8%, while they were up by 43.6% in January 2016.

The amount of properties let has also shown strong growth over the past three years, up by 44.7% in 2015 and 46.1% in 2016.

Looking at the rental market across the UK’s 12 regions, Agency Express reports that the hotspots for January included:

New property listings

Scotland: +84.1%
Wales: +81.5%
London: +67.7%
East Anglia: +62.4%
North East: +62.1%

Properties let

Wales: +89.5%
South West: +83.4%
North East: +73.1%
London: +55.8%

Last month’s top performing region was Scotland, with a record number of new listings to let. Wales followed suit with a record best January for the amount of properties let.

The smallest growth was recorded in the East Midlands. The number of properties coming onto the rental market rose by just 3.2%, while the amount of properties let was up by 22.1%. Looking back at historical data, this level of activity was last reported in 2013, says Agency Express.

The Managing Director of the firm, Stephen Watson, comments: “Following the December lull, a spike in activity is always predicted. While month-on-month figures for January are heavily affected by the change in seasonal activity we continue to see overall growth for the UK lettings market, with some unexpected regions returning record bests.”

Foreign Investors Snapping Up Rental Properties in the North West

Published On: February 9, 2017 at 11:04 am

Author: Em Morley

Categories: Property News

Tags: foreign investors,North West,property investment,property investors,rental properties,rental yields

Foreign investors are snapping up rental properties in the North West of England, according to new research from The Mistoria Group, a specialist in high-yielding property investment.

Foreign Investors Snapping Up Rental Properties in the North West

The firm believes that foreign investors are taking advantage of the weak pound, high yields and excellent occupancy rates in the region’s university towns and cities.

The study found that there has been a surge in foreign investors purchasing student properties in Liverpool and Salford, up by 42% year-on-year. The vast majority of investors are from China and Hong Kong, followed by the UAE, Russia and Singapore.

Chinese buyers are especially keen on apartments and Houses in Multiple Occupation (HMOs), says The Mistoria Group, many of which have high rental yields. The Government’s ambition to create a Northern Powerhouse is also helping to drive foreign investors to the North West, the firm believes.

Mish Liyanage, the Managing Director of The Mistoria Group, comments: “The Brexit vote reduction in the value of sterling against the dollar and the yuan has boosted Chinese investment in the likes of Salford and Liverpool.

“The Chinese are not alone in their enthusiasm for newly-affordable UK bricks and mortar. The Brexit effect means that British property is 20% cheaper for many foreign investors, and there are no signs that this is likely to be reversed in the near future.”

He continues: “Many foreign investors buy student accommodation in the North West for their children who are studying at university. Indeed, foreign investors need to look no further than Salford and Liverpool for great investment opportunities, with yields far exceeding those found in London and the South East. Investors enjoy lower property prices and minimal void periods in many towns and cities in the North West. Both in Salford and Liverpool, we have already achieved over 80% occupancy for 2017/18 academic year with more than six months still left in this year to fill up the rest of the rooms.

“Last year, we were only at 55% at this time of the year. This clearly shows the keen interest students show in going for high quality refurbished properties, managed by a reputed student management company.”

He concludes: “Both Salford and Liverpool are undergoing a significant redevelopment, and this is providing jobs and boosting tenant demand. Investors can acquire a high quality three-bed HMO which will house four students from £120,000 onwards. The return on investment is very attractive too, with 13% (8% cash rental and 5% capital growth).”

Rate of Rental Growth Halved in 2016

Published On: January 16, 2017 at 9:32 am

Author: Em Morley

Categories: Property News

Tags: rent prices,rental growth,rental properties,rents

The rate of rental growth halved in 2016 when compared to the previous year, from 3.1% to just 1.6%, reports Countrywide.

The average rent in Great Britain increased by 1.6% over the past 12 months – half the rate of rental growth recorded in 2015 – to stand at £927 per month.

Rate of Rental Growth Halved in 2016

Rent prices in the north of England increased faster than those in the south, while London dropped from having the second fastest rental growth of the country to the third slowest.

The average cost of renting a home in the capital fell by 2.9% over the year – the greatest decline seen since March 2009 – to £1,246. In central London, it will cost a typical renter £2,381 per month to rent a home.

The slowdown in rental growth was driven by an increase in the number of new homes available to rent, believes Countrywide. Over the year, the average number of available rental properties rose by 12% across the country when compared to the previous 12 months.

While every region experienced an increase in available rental stock, London saw the largest rise, with 22% more homes to rent than in 2015. Faced with greater choice, tenants have been able to negotiate on price, explains the firm.

Slowing rental growth has also led to a decline in the amount of tenants agreeing an increase in rent when renewing contracts. In 2016, a third (33%) of tenants who renewed their contract saw their rent go up, down from 37% in 2015.

The average change in rent prices remained unchanged, at 2.1%, over the course of the year. Only renewing tenants in central London and Scotland saw their average rent decrease, by 2.8% and 0.2% respectively.

Johnny Morris, the Research Director at Countrywide, comments on the data: “As the number of homes available to rent has grown, landlords have had to work harder to attract tenants. The average time to let spiked in April and has remained resolutely high ever since. Landlords are increasingly tempting sitting tenants to renew contracts with the promise of unchanged or even lower rents.

“Rental growth will likely increase in 2017. Squeezed yields, fewer tax breaks and higher Stamp Duty rates are likely to deter landlords from expanding their portfolios. Fewer homes on the market will leave tenants with less choice and negotiating power.”

Have you been forced to reduce rents in order to keep tenants and prevent void periods?

More professional landlords are need, claims mortgage lender

Published On: November 25, 2016 at 11:09 am

Author: Em Morley

Categories: Landlord News

Tags: buy to let investors,Buy-to-Let,landlords,rental properties

A specialist lender has issued a positive outlook for the buy-to-let market, despite the raft of legislations threatening to drive many landlords away.

Paragon Mortgages, which has just posted a 14.2% fall in buy-to-let completions in the year to September, believes the market will pick up sharply. This is due to the fact more rental properties are required to meet demand.

Challenges

John Heron, director of mortgages at Paragon, noted: ‘Whilst the buy-to-let market has had a challenging year, we continue to see the potential the sector has to offer.’[1]

Mr Heron observes that 2016 has been a year of two halves for buy-to-let. Completion levels were very strong in the run up to the stamp duty increases seen in April, since when, as Heron says, there has been a ‘commensurate reduction in activity levels.’[1]

‘With strong rental demand, there will continue to be a growing need for professional landlords to provide quality private rental accommodation and with our 20 years’ experience in the market, we remain very-well positioned to work with these landlords,’ Heron stated.[1]

More professional landlords are need, claims mortgage lender

Autumn Statement

The challenges facing buy-to-let landlords are likely to heighten, following this week’s Autumn Statement. Many have been left frustrated with Chancellor Hammond’s failure to cut or amend stamp duty or the proposed mortgage interest tax relief.

However, the main move was to introduce a ban on letting agent fees. This has led to fears that these charges will be passed onto tenants, in the form of higher rents.

[1] https://www.landlordtoday.co.uk/breaking-news/2016/11/strong-rental-demand-means-growing-need-for-professional-landlords

Shelter’s Statements About Private Rental Housing are “Plain Wrong”, Says RLA

Published On: October 18, 2016 at 8:31 am

Author: Em Morley

Categories: Property News

Tags: housing crisis,private rental sector,rental properties,tenants

Shelter’s “ongoing assault” on the state of private rental housing in the UK is “plain wrong”, insists the Residential Landlords Association (RLA).

Shelter’s Statements About Private Rental Housing are “Plain Wrong”, Says RLA

The RLA is responding to yesterday’s report from the homelessness charity that over one in four homes are in an unacceptable standard. The study focused on the instability and insecurity of living in private rental housing.

However, the RLA has highlighted statistics that show that 82% of tenants in the private rental sector are satisfied with their homes, which is higher than in the social rental sector.

These figures were taken from the annual English Housing Survey.

While Shelter refers to the instability that those living in private rental housing face, the most recent English Housing Survey shows that, on average, tenants are living in their homes for four years. Additionally, a version of the survey published last year found that landlords end just 8% of tenancies.

The Vice Chairman of the RLA, Chris Town, says: “Shelter is once again making extravagant claims about the standard of all housing in Britain, let alone private rented property.

“Though we share Shelter’s ambition for every rented home to be of a decent standard, the answer is not more regulation.

“With over 400 regulations covering the sector, what is needed is not new powers, but better enforcement of existing powers to root out the crooks, rather than tying the majority of good landlords up in excessive red tape.”

He concludes: “The most effective way of ensuring housing is affordable is to increase supply. We hope Shelter will support landlords in calling on the Government to change recent tax policies and on councils to scrap ineffective, but costly, licensing schemes, all of which discourage investment.”

Positively, the Chancellor, Philip Hammond, has pledged to put housebuilding ahead of the deficit, in a bid to solve the country’s chronic housing shortage.

However, many groups have called on the Chancellor to scrap the many tax changes that landlords currently face, as they believe that these measures will only hit those living in private rental housing.