Posts with tag: rental values

PCL rents unchanged during August

Published On: September 8, 2017 at 9:07 am

Tags: Buy-to-Let,lettings market,prime central london,rental values

Average rents in the Prime Central London residential property market were consistent for the second straight month in August, according to the latest report from Knight Frank.

The firm’s monthly review shows that average rental values fell by 3.4% in August, the slowest decline in over 12 months.

Decline

A decline of 1% in the six months to August was also the lowest fall on this basis since December 2015.

Tom Bill, head of London residential research at Knight Frank, noted that the figures provide further evidence that a recent run of declines in the lettings market is starting to level out.

Bill said: ‘The fall in rental values in prime central London over the past two years has primarily been due to high levels of stock, which means that landlords have had to reduce rents in order to attract tenants.’

‘Higher levels of rental properties are the result of slower activity in the sales market following a succession of tax hikes, however this trend has started to reverse as asking prices adjust and demand improves,’ he continued.[1]

PCL rents unchanged during August

Favourable

In addition, Mr Bill notes that curbs on mortgage interest tax relief and the 3% stamp duty surcharge have seen the market become more favourable for landlords, due to less new rental stock appearing on the market.

45% of landlords in prime central London have reviewed their portfolio size, according to a separate report carried out by BDRC Continental in August. Across the whole of the UK, 19% of landlords with 20 or more rental properties have cut the size of their portfolio.

Knight Frank’s data indicates that there was a 6% decline in the number of new rental properties coming onto the market in prime central London between January and July 2017.

This comes as UK Finance has revised down its forecast for buy-to-let lending in 2018 by 13%, from £38bn to £33bn.

[1] http://www.propertywire.com/news/uk/average-rents-londons-prime-property-sector-unchanged-august/

Rents carry on rising as supply falls

Published On: May 16, 2017 at 9:10 am

Author: Em Morley

Categories: Landlord News

Tags: property,property supply,rental values,rents

The number of new properties coming onto the market was down again during April, according to the most recent RICS Residential Market Survey.

This marked the fourth consecutive month of lower supply, which is subsequently putting severe pressure on rental values across Britain.

What’s more, tenant demand was also slightly down in the first three months of 2017.

Stock

A lack of housing stock continues to be a real challenge for the sector. Simon Rubinsohn, RICS chief economist, feels tax changes are having a material effect on transaction levels, especially at the top end of the market.

Mr Rubisohn said: ‘It is noticeable in the April report that the amount of new rental instructions coming through to agents is continuing to edge lower which is not altogether surprising given the changing landscape for buy-to-let investors.’[1]

Rents carry on rising as supply falls

‘One consequence of this is that rents are expected to continue rising not just in the near term but also further out and at a faster pace than house prices,’ he continued.[1]

In addition, the figures seen in the report revealed that buyer interest, alongside the volume of property sales, continued to drop. This suggests that volume of homes being listed to let is not likely to increase at anytime in the near future.

Stephen Wasserman, managing director of West One Loans, observed: ‘There is a persistent supply and demand issue in the UK’s housing market and this is creating an increasingly competitive environment.’[1]

[1] https://www.landlordtoday.co.uk/breaking-news/2017/5/rents-are-expected-to-continue-rising-as-supply-falls

Rents for prime property in central London slow during November

Published On: December 8, 2016 at 10:13 am

Author: Em Morley

Categories: Property News

Tags: buy-to-let in London,London,prime central london,rental values,rents

Increased activity levels in the prime rental property in central London have served to put downwards pressure on rental values. In turn, this has improved affordability for tenants, according to the latest analysis from Knight Frank.

This has strengthened the negotiation position of tenants during the course of the year, with the number of tenancies agreed in the three months to November 23.2% higher than in the same period in 2015.

Increasing yields, falling rents

The prime central London rental index report indicates that the average gross rental yield achieved was 3.18% during November. What’s more, average rents fell by 5.2% in the year. This was the lowest it has been since December 2009.

Despite this, the firm predicts that this will ease to a fall of just 2% in prime central London West during 2017.

There is however strong variation in the market. In City and Fringe, annual rental growth was fairly stagnant, but in Kings Cross, it rose by 0.3%. In Tower Bridge, there was a slight increase of 0.1%. In all other regions of prime central London, rents decreased year-on-year.

Rents for prime property in central London slow during November

Decline

Riverside led the way in terms of decline, with rents down by 9.3%. This was followed by Hyde Park (-9%), Marylebone (-8.8%), Notting Hill (-8.6%), Knightsbridge (-7.3%) and Belgravia (-7.1%).

At the same time, the number of viewings rose by 18.4%, with would-be tenants also rising by 7.8% over the same period.

Tom Bill, head of London residential research at Knight Frank, feels that the figures represent the increased regulatory uncertainty in the sales market. This has led to a number of vendors opting to let their property as opposed to selling, until more security around future pricing arises.

‘While broader uncertainty persists over issues including the UK’s decision to leaves the European Union and the election of Donald Trump, the extent of the cost pressures faced by banks was underlined in November when several banks failed to meet certain Bank of England stress tests,’ Bill explained.[1]

[1] http://www.propertywire.com/news/europe/prime-property-rents-central-london-affordable-latest-report-shows/

London rents up as sales slow

Published On: July 13, 2015 at 12:34 pm

Author: Em Morley

Categories: Landlord News

Tags: lettings market,rental values,rents in London

New research has indicated that as a result of changes to stamp duty rates, restrictions on borrowing and the rising value of the pound, property sales across the capital have cooled.

According to Benham and Reeves Residential Lettings, the much-expected post election surge in sales has not happened and as a result has led to stale prices and a dip in transaction numbers.

Rental rise

On the other hand, the lettings market in the capital was found to be growing, with values increasing sharply across the majority of London postcodes. Data from the report shows that rental values rose by between 2%-4% in London during the last quarter, with particularly strong growth recorded in the centre of the capital.[1]

Kensington saw rents rise by just over 7% in the period, with Chelsea almost matching this substantial growth rate. However, even better rises were recorded in parts of East London with growth of 11% in both Bethnal Green and Bow.[1]

London rents up as sales slow

Lettings Director of Benham and Reeves Residential Lettings Marc von Grundherr, commented, ‘George Osborne reformed the stamp duty system in his Autumn Statement last December, it had a huge impact on the property market in London. Most homebuyers in London are paying considerably more in stamp duty with the top rate now standing at a staggering 12%.[1]

‘Inevitably, people are choosing to rent rather than buy and even those who are hoping to buy will end up renting for longer to save for this additional cost. The stamp duty changes have been a gift horse for many landlords who have seen rents stagnate over the last few quarters,’ von Grundherr added.[1]

[1] http://www.propertyreporter.co.uk/landlords/rents-rocket-as-londons-sales-market-finally-cools.html