Posts with tag: rents

Rents rise by 2.5% year-on-year

Published On: June 28, 2016 at 11:45 am

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New figures released by the Office of National Statistics suggest that rents in Britain increased by 2.5% in the year to May.

This represented a slight fall from the 2.6% annual increase recorded in the last month.

Rental rises

Statistics reveal that rental price increases were led by England, with values increasing by 2.6% year-on-year. Scotland saw a rise of 0.4%, with Wales recording no increases.

In Great Britain as a whole, the average rental price was £512.50, up from £500 per month in the same period in 2015.

Rents in the UK, with the exception of London, rose by 2% over the same period. Rental prices increased in all English regions year-on-year, with rental prices rising most prominently in the South East. Here, rental values rose by 3.4%, up from 3.1% in the previous month.

London saw rents heighten by 3.3% annually, but the yearly rate of growth was down by 3.7% in April 2016.

Rents rise by 2.5% year-on-year

Rents rise by 2.5% year-on-year

Lows

The lowest yearly rental prices were seen in the North East at 0.8%, unchanged from April 2016. The North West saw rises of 1.2% and Yorkshire and the Humber 1.2%.

Since January of 2011, rental prices in England have risen more than those in Wales and Scotland. From the beginning of 2012, England’s rents have seen annual increases between 1.4% and 3% year-on-year. This is partly due to the large imbalance between supply and demand registered in the market.

Could Brexit be beneficial for landlords?

Published On: June 27, 2016 at 9:04 am

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As Britain continues to come to terms with the shock EU referendum result, one property expert has suggested that the sense of doom and gloom could well be premature.

Director of Balogores Property Group, Howard Leicester, has given his reaction to the Brexit vote.

Brexit shock

Mr Leicester noted that, ‘Brexit is certainly a shock to the system and one that will no doubt have far reaching ramifications for our industry moving forward. But the more I think about it, the more I actually think the next few months could be a real boom for our sector.’[1]

Leicester urges Britain to look at the short-term benefits of the result. He feels there could be an immigration boom from Europe, before any exit deal is finalised, which could:

  • lead to more people needing rental property
  • attract more landlords to the market
  • produce a further rise in rental prices

In times of economic uncertainty, people could look to rent for longer. In recent times, a shrinking of the economy has seen the rental market stay strong.

Could Brexit be beneficial for landlords?

Could Brexit be beneficial for landlords?

Short-term pain, long-term gain?

Continuing, Leicester observed, ‘Britain has a very strong trading history and whilst there seems no doubt we will suffer some short term turmoil and a possible recession, or at least much reduced growth. However, there seems very little doubt that we will come out the other side. History tells us we always return much stronger and leaner.’[1]

Summing up, Leicester said, ‘so is it all bad? I don’t think so when you look at our industry and the way it has grown and matured over the last 10-15 years. In actual fact, this should be seen as another opportunity for landlords to expand their portfolios and for the best agents to make sure they are at hand to help clients though, with balanced and professional support and the advice.’[1]

‘In other words, those of us who are experienced, knowledgeable and experts in our fields, will be the ones that actually see the opportunity and grab it,’ he concluded.[1]

[1] http://www.propertyreporter.co.uk/landlords/how-will-the-lettings-industry-be-affected-by-brexit.html

Rental prices fall as market floods

Published On: June 20, 2016 at 9:53 am

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Latest figures have indicated that rents in the UK have started to dip, with landlords who had rushed to buy property before the Stamp Duty changes beginning to rent them out.

In turn, this has provided tenants with a larger selection of properties to choose from, according to the buy-to-let index from Your Move and Reeds Rains.

Rental falls

Rents for residential properties available to be let across England and Wales have fallen by an average of 0.2% during May, in comparison to April. Typical rents now stand at £792 per month.

Annually, rents are 1.8% greater than in May 2015, half of the 3.6% annual rate of rental growth recorded four months ago.

Adrian Gill, director of letting agents Your Move and Reeds Rains, notes that the number of properties coming onto the market has narrowed the supply-demand imbalance.

Gill said, ‘this is the equivalent of a flash food for the market. Just a month ago rents were heating up and spring was in the air-but this has been put on hold as a tide of new properties to let has disrupted the normal dynamics of supply and demand.’[1]

Slows

Further analysis of the data shows that rental increases in the capital fell to just 1% in the year to May 2016. This was substantially lower than the peak of September 2015, when London rents were up by 11.6% year-on-year.

In contrast, the East Midlands saw rents rise by 7.3% in the year, followed by the West Midlands, where a 5.5% rental increase was recorded in the year.

All 10 regions of England and Wales experienced a rental rise during May, in comparison to the same month of last year.

Despite monthly rents falling as a whole, rental yields are seemingly resilient, due to a similar dip in property prices on a month-on-month basis. Gross yields on typical rental property, pre account factors such as void periods, stand at 4.9%, the same as in April.

Rental prices fall as market floods

Rental prices fall as market floods

Rising returns

When rental income and capital growth are taken into account, before property-specific costs such as maintenance, the average landlord in England and Wales saw returns of 10.2% in the year to May.

This was slightly lower than the 10.7% recorded on month previously, which reflects the slowdown in house price growth.

However, in comparison to the year ending May 2015, this stood at 9.4%, showing that landlords have seen stronger returns over the last 12 months.

In absolute terms, this means that the typical landlord in England and Wales has seen gross returns of £8,712 in the last year.

Mr Gill concluded by saying, ‘Landlords are vital in matching an escalating demand for homes from tenants. Such a scale of demand doesn’t look set to change dramatically just because of a few tax tweaks – so professional and accidental landlords will always be an essential part of the solution. Financial rewards for investing in property, taking on risk and maintaining homes will have to reflect the importance of landlords for our economy and our society.’[1]

[1] https://www.landlordtoday.co.uk/breaking-news/2016/6/rents-fall-as-landlords-flood-rental-market

Abolish rental deposits, property expert urges

Published On: June 13, 2016 at 9:45 am

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A leading property expert has moved to welcome plans to reform rental deposits. What’s more, Southampton MP Alan Whitehead Labour MP has called for policy makers to abolish the legislation altogether.

Chancellor George Osborne has recently revealed the Government’s intention to change rental deposit laws, while deputising for David Cameron at Prime Minister’s Question.

Pot luck

Mr Whitehead also said that letting agents are, ‘completely unregulated,’ which in turn led tenants to rely on, ‘pot luck’ when trying to find scrupulous property owners.

Osborne noted, ‘we are looking at what we can do to make sure that people who rent have proper consumer protection, including protection from landlords who withhold deposits unreasonably.’

Property expert Ajay Jagota, owner and founder of property firm KIS, the first letting agents to abolish monetary deposits, feels that these kind of deposits should be scrapped across the sector.

Solutions

Mr Jagota said, ‘Alan Whitehead was quite right when he said renters can face pot luck when it comes to choosing the right landlord or letting agent. The irony is that a glaringly obvious solution to that problem has been staring everyone in the face for some time. He was less right when he claimed the lettings industry is unregulated. In fact landlords and letting agents need to comply with almost 150 individuals pieces of legislation.’[1]

Instead of churning out more red tape for good landlords or creating new costs to be passed on to tenants, the simplest and most effective landlords or creating new costs to be passed on to tenants, the simplest and most effective solution to guarantee a better deal for renters is to abolish deposits and move the private rented sector towards the insurance-backed model used in almost every other industry on the planet,’ Jagota continued.[1]

Abolish rental deposits, property expert urges

Abolish rental deposits, property expert urges

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Rising rents

Continuing, Jagota noted, ‘study after study concludes that they are the biggest barrier to entering and moving house in the private rented sector, with our research showing the average renter needs to stump up more than £1,000 to get the keys to a new home before they’ve even paid the first month’s rent.’[1]

‘But time and time again policy-makers ignore this in favour of the same old cul-de-sacs and clichés like banning of letting agent fees or rent controls. Not only would abolishing deposits mean the £3.2billion being release into the wider economy, £2bn of which is literally just gathering dust and interest right now, it would make it easier for renters to move house, easier for them to keep a house and easier for them to save for a property of their own.’[1]

‘A survey recently showed that 78% of renters want greater protections from their landlords – this is the simplest and most effective way of giving them that piece of mind,’ he concluded.’[1]

[1] http://www.propertyreporter.co.uk/landlords/politicians-urged-to-abolish-rental-deposits.html

Rise in retirees renting in seaside locations

Published On: June 10, 2016 at 1:17 pm

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An increasing number of British retirees are choosing to rent a property by the sea, due to the soaring cost of purchasing property

Latest research from the Halifax indicates that the average price of a property in a British seaside town has risen by 32% in the last decade. This is the equivalent to £440 per month.

Retirees rental rise

The annual Halifax Seaside Town Review showed that average property prices have risen from £166,565 in 2006 to £219,386. Scottish seaside towns have led the way in terms of price growth. Fraserburgh in Aberdeenshire showed the largest increase, with property prices increasing by 139%, from £63,540 in 2006 to £151,719 in 2016.

In Macduff, typical property values doubled from £66,226 to £133,567, or 102%, over the same period. This was followed by Peterhead (95%), Cove Bay (94%) and Newtonhill (91%).

Peter Girling, chairman of Girlings Retirement Rentals, observed, ‘we have seen continual demand from people wanting to retire to the coast. House prices in popular resorts can be prohibitive and renting may prove a better financial option, which is why we are seeing more people downsizing, selling the family home and choosing to rent in a purpose built retirement complex.’[1]

‘The benefits are threefold-releasing equity in a home to invest for the future, affordable rents on assured tenancies that include property maintenance, access to services and a ready-made community and a slower and healthier pace of life. People are also free from the worry of unexpected bills and the upkeep of a home, so they have more time to make the most of their golden years,’ Girling continued.[1]

Popular South

Outside of Scotland, the greatest levels of property price growth in seaside locations has been seen in southern resorts. Mr Gilding said that the most popular areas for Halifax clients were Bournemouth, Hastings and Clacton-on-Sea.

Brighton saw the largest rise outside of Scotland, with values rising by 59% from £214, 863 to £341,235 over the decade. Other English seaside resorts to record growth in excess of 50% were:

  • Whitstable, Kent
  • Shoreham on Sea, West Sussex
  • Leigh on Sea, Essex
  • Truro, Cornwall
Rise in retirees renting in seaside locations

Rise in retirees renting in seaside locations

The most expensive seaside town was found to be Sandbanks in Poole, where the average property price is £664,655. Other expensive towns in the South West include Padstow, Dartmouth and Fowey. Outside of the South West, the most expensive towns are Aldeburgh in Suffolk and Lymington in Hampshire.

Staycation

Peter Sherrard, managing director of PropertyPriceAdice.co.uk, noted, ‘since the last recession, the so-called staycation trend has grown increasingly popular in Britain, with many people now more willing to take take a short trip on these shores instead of venturing overseas, which has increased demand for property in coastal areas.’

‘Seaside towns typically provide a high quality of life and remain popular places for people to live, while also attracting those seeking second homes or holiday properties which can place added upward pressure on property prices,’ Sherrard added.[1]

[1] https://www.landlordtoday.co.uk/breaking-news/2016/6/pensioners-choose-to-rent-by-the-sea-as-property-prices-soar

Rents set to rise faster than house prices

Published On: June 9, 2016 at 10:39 am

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Tenants are set to see rents spiral quicker than their incomes and faster than property price growth, according to a concerning new report.

The study from the Royal Institution of Chartered Surveyors (RICS) suggests that while house prices are likely to rise, rents look set to outstrip them.

Rent rises, tenant concerns

People currently residing in privately rented accommodation are thought to bear the brunt of the tax increases for buy-to-let landlords. The fear is that this will lead to a reduction of properties on the rental market, that will in turn push rents higher.

RICS forecast that rents in Britain will rise by an average of 4.7% year-on-year for the next five years. This is in comparison to house prices, which are predicted to increase by 4.1%.

However, the RICS survey is not the only investigation pointing at bad news for renters. The most recent HomeLet Rental Index shows that cost of a new tenancy in the private markets in Britain, increased by 4.4% in the three months to May. This was with the exception of Greater London.

Rents set to rise faster than house prices

Rents set to rise faster than house prices

Increases

Rental price growth in Britain was led by Scotland, where rents increased by 10.6% year-on-year. This was followed by rises of 8.3% in the East Midlands. London saw a rise of 6.2%, with rent for new tenancies standing at £1,563.

Martin Totty, chief executive of Barbon Insurance Group, HomeLet’s parent company, observed, ‘the May HomeLet Rental Index continues to show a rental market characterised by steady growth in rents, as the number of tenants looking for property runs ahead of the supply in the market-that remains the picture in most regions of the country.’[1]

[1] https://www.landlordtoday.co.uk/breaking-news/2016/6/rent-price-increases-set-to-outstrip-house-price-growth