Posts with tag: rents

Extent of surge in BTL activity in March revealed

Published On: April 11, 2016 at 9:22 am

Tags: Buy-to-Let,landlords,rental market,rents,Stamp Duty

New figures from Countrywide have revealed the monetary extent of the surge in buy-to-let investment ahead of the stamp duty surcharge deadline.

The firm said that £28bn worth of sales were completed last month, a rise of 76% in comparison to the previous year.

Increases

Countrywide assessed the entire market and noted that landlords made up 23% of all home sales completed in March. This was compared to 13% at the same period in 2015. What’s more, in the two weeks running up to the deadline, over half of all property transactions were completed by landlords.

This rise in landlord business demonstrates that additional housing is being made available for tenants to rent. 22% more rental properties were on the market in the first quarter of 2016t than in the same period last year, contributing to lower rental growth.

However, this percentage increase in the number of homes to rent has not been followed by the increase in tenants looking for a home, putting increased pressure on rents. The total number of tenants registering their interest in rental property was up 16% in the first three months of 2016, in comparison for the same period in 2015.

Regional Rises

By region, London saw the biggest increase in newly rented properties, with numbers up by 40% on the first quarter twelve months ago. This said, London actually has a lower growth of tenant numbers, up by just 8% in the same period.

As a result, there has been a rapid deceleration in rental price growth, with rents in Greater London growing by 2.9% in March, as opposed to the 7.4% recorded a year ago.

The average rent in the UK increased by 3.4% in the year to March 2016, with rents accelerating quickest in the East of England, rising by 8.5%. This growth was driven by larger numbers of new tenants registering during the first quarter of 2016, with 34% the highest increase seen in any region.

Extent of surge in buy-to-let activity in March revealed

Temporary Effect

Johnny Morris, research director at Countrywide, noted that, ‘quite at odds with the intentions of the policy, the first measurable effect of the introduction of the new stamp duty rate has been to increase the number of homes owned by landlords, although this will likely be a temporary effect as we see reduced investor activity in future months.’[1]

‘The increase in supply of homes to rent from landlords bringing forward purchases seems to have taken the edge off rental growth. A similar increase in tenants looking for a home to rent though would indicate this may not persist. The large number of sharers and people living with parents means there is a big store of pent up demand in the rental market,’ Morris concluded.[2]

[1] https://www.lettingagenttoday.co.uk/breaking-news/2016/4/half-of-homes-sold-in-late-march-were-for-buy-to-let–countrywide

Annual Scottish rent rises slowest in Britain

Published On: March 23, 2016 at 12:10 pm

Author: Em Morley

Categories: Property News

Tags: annual rents,Buy-to-Let,landlords,rents,rents in Scotland,Scotland

Rents north of the border are increasing at only two-thirds the rate of those in England and Wales, according to latest figures.

Data released by Your Move shows that Scottish rents rose by just 2.1% year on year. This was in comparison to 3.3% in England and Wales.

In addition, the figures show that annual rental growth in Scotland has slowed from the 2.1% recorded in January, but has improved from the 1.1% increase shown in February 2015.

Irony

Brian Moran, lettings director at Your Move Scotland, believes it is ironic that Scotland is seeing one the largest Government interventions in the sector when rents are rising at the slowest rate in Britain.

‘Like in any market, affordability is a fundamental check on prices. Rental arrears are a great benchmark in the market and their frequency is falling,’ he noted.[1]

Moran went on to say that the Private Tenancies Bill signed last week indicates a paradigm shift in the sector in Scotland. He feels this will introduce a new artificial influence in the market, alongside territorial supply and demand.

‘Intervention in the market has had negative side effects in the past, noticeably the abolition of tenancy fees in 2012 and it will be interesting to see how landlords recuperate and recover from this regulatory blow,’ Moran continued. ‘Anything that makes buy-to-let investment slightly harder to swallow and managing property portfolios more of a painful process for landlords risks cutting off the inflow of investment. Tenants will ultimately be the ones who feel the effect on their bottom line, if the supply of properties to let dries up.’[1]

Annual Scottish rents rises slowest in Britain

Regional rises

More figures from the report show that in the twelve months to February 2016, three out of the five regions in Scotland have seen positive yearly growth in rents. Edinburgh and the Lothians led the way, with growth of 7.7% recorded. This has taken typical rents to £644, up from £598 in February last year.

Rents in the South of the country currently stand at £515 per month, a rise from £498 twelve months ago. This 5.3% yearly rise is the second fastest increase seen in the year to February. In the Highlands and Islands, rents are 2.5% greater than one year ago, taking rents here to £554.

However, the East of Scotland has seen rents drop by 2% year-on-year. This is the fourth consecutive month of negative annual growth in the area and has taken rents to £520 per month. Glasgow and Clyde has also seen a drop in yearly rents, which have fallen by 0.8%.

[1] http://www.propertywire.com/news/europe/scotland-buy-let-index-2016032311706.html

Stamp Duty to drive rents and cut supply

Published On: March 23, 2016 at 10:52 am

Author: Em Morley

Categories: Landlord News

Tags: Buy-to-Let,landlords,rents,Stamp Duty,tenants

New research from the Association of Residential Letting Agents (ARLA) has suggested that the stamp duty reforms for buy-to-let properties will push rental prices up for tenants. In turn, the firm warns this will lead to a further decline in available properties.

Rise and fall

Data in the report from ARLA shows that 52% of letting agents recorded an increase in buyers looking to beat the deadline and invest in buy-to-let property. This represented a 47% increase from data recorded in January.

However, 63% of agents feel that once the deadline has passed, the supply of property will fall as landlords are slowly forced out of the market.

57% of ARLA members believe rents will rise after the stamp duty reforms come into force, with landlords pushing their increased costs through to tenants.

Impact

David Cox, managing director of ARLA, noted, ‘the stamp duty changes are now imminent and as well as hitting small landlord’s, they will also impact institutional investors. Although members are reporting a rush from landlords trying to snap up their buy-to-let investments now, it’s likely that we’ll see the buy-to-let market drop like a stone come April and probably not pick up again until next year. This will most certainly cause rents to increase, with supply dropping, as competition for the limited availability of properties intensifies.’[1]

Demand for buy-to-let properties rose by 19% during February, with around 37 prospective tenants registered per member branch. Interestingly, the supply of rental properties on agents’ books actually increased to 176 in February, rising from 172 in January.

Stamp Duty to drive rents and cut supply

Intensifying

‘The demand for housing continues to intensify as supply remains an issue across most of the country,’ Cox continued. ‘We are concerned that the government rhetoric of wanting to help people onto the housing ladder does not tally with their action of continuing to target the rental market with additional costs. Some landlords will simply withdraw from the market whereas others who can take the hit of the extra stamp duty will simply raise rents to cover the extra costs.’[1]

‘The dream of home ownership will remain out of reach for many as we move closer towards becoming a nation of forever renters,’ he concluded.[1]

[1] http://www.propertyreporter.co.uk/landlords/arla-landlord-stamp-duty-will-see-btl-market-dr0p-like-a-stone.html

Could tenants be priced out of market?

Published On: March 14, 2016 at 11:15 am

Author: Em Morley

Categories: Landlord News

Tags: Homes,landlords,private landlords,rental market,rents

A new investigation has predicted that private rental tenants could soon face similar financial challenges to those buying a new home.

Research on behalf of financial comparison website money.co.uk by the Centre for Economics and Business Research suggests that the cost of an average rental deposit will grow by 40% by 2026 to £1,111. The average monthly rent is predicted to rise by 28% over the same period of time.

Increases

If these predictions are true, the average monthly rental deposit will be 70% of the typical monthly salary. However, strong regional variations must be taken into account.

For example, in London, the average rental deposit is expected to rise to £2,733 by 2026. This would amount to 120% of the average monthly salary, a rise from 99% in 2015.

Across the South, deposits are expected to rise sharply. In the South East, the average deposit is predicted to hit £1,469 in 2026. This represents 83% of the average monthly salary at £1,761, a rise from the 72% recorded in 2015. In the South West, the typical deposit is thought to hit 80% of average monthly earnings at £1,437.

Rental rises

Average monthly rents are due to increase by 28% by 2026, 8% greater than average salaries over the same timeframe, which are set to grow by 20%.

The greatest increase in in rents during the next ten years is expected to occur in the capital, with growth expected to hit 39%. Other regions expected to perform well are the South West and South East, where rents are expected to grow by 32% and 34% respectively.

On the other hand, the lowest increases in rent are likely to be Yorkshire and the Humber, with a 17% increase expected. Overall monthly salary is not expected to keep up with the pace of the rental market.

Between 2015 and 2026, the typical monthly salary is expected to increase by an average of 20% to £1,576. This is lower than the projected increase in both monthly rental costs and deposits, which in turn could see many finding the cost of renting just as unaffordable as buying.

Could tenants be priced out of market?

Blow

Hannah Maundrell, editor in chief of money.co.uk, said, ‘the rapid rise in deposits as well as rents is a double blow for everyone on the rental ladder. With the forthcoming changes to tax legislation and crackdown on buy to let mortgages likely to erode landlords’ profits, there’s little doubt these costs will be passed onto tenants. The current booming property market means deposits are likely to continue shooting upwards in the future and we could well see six weeks’ worth of rent extended to eight. Many not only face being priced off the property ladder but also the rental ladder too.’[1]

‘The Government needs to take action, without intervention the spiralling cost of deposits and rent could have a huge economic impact on the UK. Giving renters a lifeline is equally as pressing as helping people buy a house. Taking steps to address this now could be a far easier solution than dealing with the prospect of pricing home hunters off the private rental ladder,’ she added.[1]

[1] http://www.propertywire.com/news/europe/uk-buy-rent-costs-2016031411664.html

New initiative offers advice for landlords and tenants

Published On: March 8, 2016 at 11:51 am

Author: Em Morley

Categories: Landlord News

Tags: advice for landlords,Buy-to-Let,landlords,rents,tenants,training for landlords

A new initiative has promised to offer charities and other organisations free training to pass on to both landlords and tenants, advising them ‘how to rent.’

The partnership is between the Residential Landlords Association (RLA) and the Tenancy Deposit Scheme Charitable Foundation. Entitled train2rent, the initiative will see groups such as housing associations, trusts and residents’ groups offered access to features such as training packs and learning material. In turn, this will allow them to pass on information about renting a property.

Details

There is to be a separate information pack offering advice for landlords and tenants. These will include the course presentation and workbook, plus a timetable for training and practical exercises.

Included in the information for landlords resource pack will be details of their legal responsibilities, including:

how to conduct Right to Rent checks
protecting deposits
making gas, fire and electrical safety assessments
starting and ending a tenancy

New initiative offers advice for landlords and tenants

The tenant resource will cover topics including:

their legal rights and responsibilities
how to find the correct property
different types of tenancy agreements

Positive outcome

Chair of the Tenancy Deposit Scheme Charitable Foundation, Martin Partington, said, ‘it’s been a common theme in the bids we have received that small organisations have wanted funding to produce educational materials or host a workshop. The trustees felt that our money was better spent commissioning a set of materials that these groups could use, free of charge, to deliver the same outcome.’[1]

These courses will apply to properties located in England, with the licence to use the resources lasting for a period of 30 days.

[1] https://www.lettingagenttoday.co.uk/breaking-news/2016/3/industry-groups-push-training-for-landlords-and-tenants-on-how-to-rent

Prepare your property properly!

Published On: March 4, 2016 at 11:52 am

Author: Em Morley

Categories: Property News

Tags: Buy-to-Let,buy-to-let property,investment,landlords,property,rents

Becoming a buy-to-let landlord requires a lot of preparation. As the saying goes, failing to prepare means preparing to fail!

There are a number of ways in which landlords can prepare their property to make it available to rent. Making sure this is done properly will help in securing a quality tenant and the desired rental return.

Presentable

Allison Thompson, lettings director at Leaders, said, ‘presenting a home to rent in an appealing way, with quality fixtures and fittings, is a must for attracting good tenants and getting the best possible rent.’[1]

‘But it can be expensive and time-consuming so landlords need to find the right balance between short-term costs and long-term gains. Over the years Leaders has guided thousands of landlords in preparing their properties for letting in a way that will help them to secure and keep good tenants and maximise their returns while saving time and money in the long run,’ she continued.[1]

As such, here are some to tips to help landlords prepare their investment properly:

Don’t over décor-By sticking to neutral colours throughout the property, a home will appeal to all tenant groups. High-quality paints are the sensible option, as it will last for longer, meaning landlords will have to redecorate on a less regular basis. Doorstops are also a savvy choice, to protect walls from being damaged by doors handles.

Fit similar flooring- Fitting the same carpet or flooring in as much as the property as possible should ensure a discount for buying in bulk. What’s more, by keeping quantities aside, damaged areas can be easily replaced.

Prepare your property properly!

Keep the kitchen modern- A clean, modern kitchen will undoubtedly attract better tenants and a higher rent. Being the creative hub of the home, a well-thought out kitchen will go a long way in attracting the right people. Choose standard shapes and tiles for the worktops, which again can easily be replaced should they become damaged.

Boss the bathroom-There are a number of things that can be done to heighten the appeal of a bathroom. Installing a power shower or heated towel rails for example could be the little features that make all the difference. Again, installing a modern, stylish floor and features can also prove vital. Just don’t install a carpet!

Build the bedroom-Providing built in wardrobes in bedrooms is becoming more and more a required element for tenants. This will also save on having to buy and replace standalone wardrobes in case of damage. Allow tenants to add their own stamp to the room and the property as a whole.

[1] http://www.propertyreporter.co.uk/landlords/top-money-saving-tips-for-landlords-preparing-a-property-to-let.html