Posts with tag: rents

Lettings director hails Osborne’s work on PRS

Published On: January 21, 2016 at 10:14 am

Tags: Buy-to-Let,chancellor,rental market,rents

A lettings director of a leading firm has hailed the Chancellor’s work on the private rental sector.

Marc von Grundherr, director of Benham & Reeves Residential Lettings, believes George Osborne has done more for the rental market in Britain than any other chancellor in history.

Attractive

Mr von Grundherr said, ‘thanks to the changes in stamp duty rates, he has made renting long term a more attractive option for many tenants. Couple that with the fact that many overseas tenants can write their rent off against tax but must pay capital gains on any property they own and renting becomes a no brainer.’[1]

Lettings director hails Osborne’s work on PRS

He said that his company are, ‘advising landlords who are already in the market to hang onto the properties and not be tempted to sell ahead of changes to wear and tear allowance and mortgage relief.’[1]

Continuing, von Grundherr noted that, ‘many nervous investors will leave the market and when they do, supply will be limited even further. The rent increases that will inevitably result will more than mitigate landlords’ extras costs.’[1]

[1] https://www.lettingagenttoday.co.uk/breaking-news/2016/1/rent-rises-will-outstrip-buy-to-let-tax-rises-predicts-agency-chief

Rents for new lets up by 3.1% in 2015

Published On: January 18, 2016 at 12:03 pm

Author: Em Morley

Categories: Finance News

Tags: Buy-to-Let,landlords,rent increases,rents,tenants

Newly released analysis from Countrywide plc suggested that rents for freshly let homes continued to grow in 2015.

Despite growing at a slower pace than in 2014, rents climbed by an average of 3.1% over the course of the year, sending monthly typical monthly rental costs to £919 per calendar month.

Increases

The research shows that rents increased in all regions of England, with the East seeing the highest increase of 6.5%. Central London recorded growth of just 0.5%, which was the lowest of all regions.

Rental growth in 2015 was boosted by high demand for accommodation, with a low stock of homes available. This imbalance had led to increased competition for homes in the market, with the average property let within 20 days of being instructed, two days quicker than in 2014.

A slowdown in rental growth during 2015 for Greater London properties still saw rents increase by 4.7%. With rents spiralling in recent years, tenants have more often looked to less expensive areas of Outer London. This led the proportion of under 25s taking up residence in the rental sector in London to fall by 4% in 2015. What’s more, southern regions near London have seen increases in the proportion of under 25s entering their market, with Londoners looking further out for affordable agreements.

The table below shows that average rent for newly let units in 2015:

Region	Average rent in Q4 2015	Average rent in Q4 2014	Year-on-year increase in rent
Greater London	£1,292	£1,234	4.7%
Central London	£2,497	£2,485	0.5%
East of England	£945	£887	6.5%
South East	£1,139	£1,118	1.9%
South West	£816	£784	4.1%
Midlands	£663	£651	1.8%
North	£636	£627	1.4%
Scotland	£662	£637	3.9%
Wales	£666	£648	2.8%
Total	£919	£891	3.1%

[1]

Rents for new lets up by 3.1% in 2015

Affordability concerns

Johnny Morris, Research Director at Countrywide, noted, ‘a mix of steadily increasing demand and a lack of homes to rent supported rental growth in 2015, even though wage growth remained subdued. In the capital, rising costs meant renters were more likely to move to Outer London or the commuter belt in search of more affordable places to live.’[1]

‘2016 looks to be a complicated year for landlords as the government focuses its efforts on boosting homeownership,’ Morris continued. ‘The additional 3% stamp duty charge, stricter regulation and changes to tax relief from 2017 onwards will all take their toll on investor sentiment and impact behavior. With stock at a premium, the smaller landlords who decide to sell up will add upward pressure to rents, although any rises will be tempered by affordability pressures.’[1]

The table below indicates the average rent for occupied units in 2015:

Region	Average rent December 2015	Average rent November 2014	Average rent December 2014	Year-on-Year Increase in rent	Month-on-Month Increase in rent
Greater London	£1,196	£1,192	£1,132	5.7%	0.3%
Central London	£2,449	£2,445	£2,435	0.6%	0.2%
East of England	£862	£859	£829	4.0%	0.3%
South East	£997	£995	£981	1.6%	0.2%
South West	£737	£736	£724	1.8%	0.1%
Midlands	£629	£629	£620	1.5%	0.0%
North	£624	£623	£612	2.0%	0.2%
Scotland	£641	£639	£624	2.7%	0.3%
Wales	£650	£649	£636	2.2%	0.2%
Total	£857	£856	£834	2.8%	0.1%

[1]

[1] http://www.propertyreporter.co.uk/landlords/newly-let-home-rents-up-31.html

2015 rental growth hotspots revealed

Published On: January 16, 2016 at 10:26 am

Author: Em Morley

Categories: Property News

Tags: Buy-to-Let,landlords,rental markets,rents,tenants

New research has revealed the towns and cities where rents increased the most during the last year.

The HomeLet Rental Index shows that Brighton, Bristol, Edinburgh and Newcastle saw the largest rent rises in 2015.

Southern surge

HomeLet’s annual review of the rental market indicates that rents on new tenancies in Brighton and Bristol were 18% higher than on agreements agreed in 2014. Rents were up by 16% in Edinburgh and Newcastle, while London and Liverpool recorded increases of 11%.

In addition, the monthly HomeLet Rental Index shows on average, with the exception of Greater London, rents in Britain were 4.9% up in the final quarter of 2015 in comparison to the same period one year previously.

Average monthly rents outside of the capital now stand at £739 per month. In London, rents were found to be 8% greater than in the final three months of 2014, standing at £1,523.

HomeLet has provided a league table of the regions of Britain that highlights growth in average rents for fresh tenancy agreements during 2015. The results can be seen below:

Region	Average rent 3 months to December 2015	Average rent 3 months to November 2015	Monthly Variation	Average rent 3 months to December 2014	Annual variation
Scotland	£630	£648	-2.8%	£611	3.2%
North East	£531	£530	0.1%	£521	1.9%
Yorks & Humbs	£623	£626	-0.5%	£604	3.1%
East Midlands	£638	£635	0.4%	£600	6.4%
East Anglia	£799	£805	-0.7%	£756	5.7%
Greater London*	£1,523	£1,544	-1.4%	£1,410	8.0%
South East	£936	£943	-0.8%	£875	7.0%
South West	£840	£849	-1.1%	£796	5.5%
Wales	£599	£595	0.8%	£586	2.3%
West Midlands	£666	£659	1.0%	£654	1.7%
North West	£622	£631	-1.5%	£655	-5.1%
Northern Ireland	£570	£580	-1.8%	£574	-0.6%
UK ex Greater London	£739	£743	-0.6%	£704	4.9%

[1]

2015 rental growth hotspots revealed

Strong demand

‘2015 was a year in which rents on new tenancies were up in 2014 in almost every area of the country,’ notes Martin Totty, Barbon Insurance Group’s Chief Executive Officer. ‘While we saw a moderation in the rate at which rents increased during the final months of the year and even some falls in a number of regions, the sector overall has continued to see strong demand.’[1]

‘Beneath the headline figure, HomeLet’s data points to some significant variations in rental market performance in 2014, both from region to region and from town to town. In locations such as Brighton and Bristol, demand for rental property appears to have been particularly strong and rents on new tenancies jumped very markedly, In other areas, we saw slower growth,’ Totty continued.[1]

Concluding, Totty noted that, ‘rents in London have continued to rise more quickly than in most areas of the country, but not at quite the pace of 2014; meanwhile, average rents outside the capital rose more quickly last year than in 2014. As a result, we saw a narrowing of the rent inflation gap between London and the regions last year-is this a trend we will see continuing in 2016 from tenants seeking value for money in the private

[1] http://www.propertyreporter.co.uk/landlords/rental-market-hotspots-released.html

London rent growth stalls in final quarter of 2015

Published On: January 12, 2016 at 2:13 pm

Author: Em Morley

Categories: Property News

Tags: landlords,London,rents,tenants

Rents have finally begun to slow slightly in London, following two quarters of sustained growth. However, experts have forecasted that this fall could only be a temporary one.

Capital rents

Many parts of central London saw rents stay fairly constant, or experience increases of less than two percent. These statistics marry with market conditions across the majority of east and south London, which also experienced rental growth slips after a prolonged period of growth.

One notable exception is the Covent Garden area of the city, where rental growth is rising as the area becomes a more established residential location. Another is the up and coming trendier area of Hackney, where young professionals are continuing to relocate.

On the other hand, parts of north London saw price falls similar to those in the previous quarter. Issues on the Northern Line and the closure of the interchange at Tottenham Court Road have moved to deter many potential commuters.

London rent growth stalls in final quarter of 2015

Future falls?

‘Successive budget announcements have seen many landlords’ tax advantages disappear while regulations increase,’ said Marc von Grundherr, Lettings Director of Benham & Reeves Residential Lettings. ‘With stamp duty attracting an extra three percent from April, we anticipate supply will fall as amateur landlords exit the market or seek out other asset classes.’[1]

‘When supply falls, rents will invariably go up. This will be the last chance for many tenants to move into a nice apartment while rents are plateauing and there is a choice of properties. Once Osborne’s measures really start to be felt, the market will change,’ von Grundherr went on to forecast.[1]

[1] http://www.propertyreporter.co.uk/landlords/rents-plateau-after-two-quarters-of-growth.html

Councils tell tenants to stay put until legally evicted

Published On: January 11, 2016 at 4:05 pm

Author: Em Morley

Categories: Landlord News

Tags: Buy-to-Let,councils,landlords,rents,Section 21,tenants

An extraordinary move from councils across Britain is seeing many calling on tenants to stay put in buy-to-let property when asked to leave by their landlord.

This in turn has left many law-abiding landlords hundreds of pounds out of pocket after paying legal costs.

Remarkable

Councils are said to be using this tactic as the latest attempt to deal with Britain’s housing shortage.

Remarkably, some owners returning to their properties after living abroad are being faced with tenants refusing to move until they are legally evicted.

The eviction process takes around four months on average and is extremely costly for landlords. Experts believe the ‘sit-in’ problem is more acutely found in London and Birmingham, where demand for rental homes far outweighs supply.

David Lawrenson of LettingFocus.com, described the councils’ plan as, ‘stupid,’ before adding that, ‘it doesn’t encourage landlords to take on people who are financially vulnerable.’[1]

Worsening

Landlords having to deal with tenants staying put in their homes has gradually got worse as Britain’s house shortage continues to escalate. According to Rightmove, almost five people compete for every property available to let across the country. This figure rises to one in nine for rental property in the capital, as Rightmove says demand is at an, ‘all time high.’[1]

A rise in population and immigration has not been matched by the country’s housing stock. As a result, rents have spiralled.

For many, particularly in the South, suitable properties are unaffordable and would-be buyers are turning to local authorities for assistance. Those that have approached councils are being told that they cannot get help unless they are homeless and are being advised to stay put in rental accommodation until they are legally forced out.

Waiting game

Alan Ward, Chairman of the Residential Landlords Association, said it is a standard procedure for tenants to be told to stay put, providing there was no other homes in the area that they could afford. Ward said that tenants needed to wait until they were evicted before looking for a council property.

Councils tell tenants to stay put until legally evicted

Mr Ward said that the problem is, ‘becoming acute in some areas, not necessarily because there are fewer homes due to landlords exiting the market, but because there are more people seeking them. It partly comes back to immigration, as there are lots of people coming to this country and they typically want to rent properties.’[1]

‘The council only gets involved when a tenant is looking for social housing. Tenants are told they cannot be rehoused until the bailiffs are at the door,’ he added.[1]

Section 21

Landlords faced with tenants who will not vacate their property need to serve a Section 21 notice. Should the fixed term in the contract have already ended, this gives the tenant two months to find a new property.

If the tenant is unable to find a new home after two months, the landlord can apply for an eviction in court. Following this, it can take between six and eight weeks for the judge to grant a possession order.

[1] http://www.telegraph.co.uk/news/uknews/12092051/Councils-responding-to-Britains-housing-crisis-by-telling-tenants-to-stay-put-in-buy-to-let-properties-when-landlords-ask-them-to-leave.html

Flatsharing is answer to save cash-Rightmove

Published On: January 8, 2016 at 11:38 am

Author: Em Morley

Categories: Finance News

Tags: Buy-to-Let,flatsharing,rents,tenants

Save-to-buy renters can save up to £210 per month for a deposit by flatsharing, according to a new report by Rightmove.

Newcastle was found to be the city offering most value, with a two-bed flat just 11% more expensive than a one-bed.

Rises

Average asking rents were found to have increased in all regions during 2015. This was particularly felt in the East of England, where rental increases were higher than anywhere else in Britain. Rents here rose by 6.5%, compared to 0.5% in London.

Rightmove also hinted at a strong start to 2016, announcing that page views for both sellings and lettings increased by 22% over the Christmas period, in comparison to 2014. Renters in Bristol, Birmingham and Manchester were most likely to put down their mince pies to look at the site.

The traditional seasonal fall in quarter four couldn’t prevent all regions ending 2015 with an annual rise in rental costs. However, Rightmove believe that flatsharing is the answer to a number of tenants’ financial problems.

Cost-effective

In Newcastle, a typical one-bed flat sets a renter back £553 per month, with an average two-bed costing just £614. This indicates a possible saving of £246 per month, should a renter choose a two-bed with a housemate.

‘The potential saving of renting and sharing a two-bed rather than a one-bed flat is before factoring in reduced costs from splitting the bills,’ noted Sam Mitchell, Rightmove’s Head of Lettings. ‘It could be a good option for renters looking to save up for a deposit to buy or other financial commitment. The Government has various well-publicised initiatives to encourage the home-ownership that some tenants would love to achieve and while sharing can have its pitfalls it is a potentially lucrative solution.’[1]

Neighbouring Gateshead offers the second best value for a two-bed flat in comparison to a one-bed, with the difference being 11.3%. In Swindon, a two-bed flat is 16.9% more expensive, in Bracknell 18.7% and in Milton Keynes 20.5%.

Flatsharing is answer to save cash-Rightmove

Highs

Mitchell went on to say, ‘demand from tenants is at an all-time high and the amount of properties available to rent hasn’t been keeping pace. This has led to more people considering house sharing, a trend that is already very common in London and now growing in other areas. Rather than look at house shares or studios, tenants could team up with friends and look at bigger flats in some of these best value areas, they just need to make sure they’re aware of their legal obligations when signing a joint tenancy agreement. For those that want to buy but are struggling to save a deposit this could help speed up the savings process.’[1]

Concluding, Mitchell observed that, ‘after a 7.8% annual rise in London asking rents last year, a slowing of the rate of growth was due as more and more tenants found their affordability stretched. Outside of the capital last year rents rose by just 0.3%, so this year’s 3.8% could be a result of more professional renters moving into areas outside of London, to sought-after cities like Bristol and Birmingham. Looking ahead to 2016, it’s likely there will be an initial injection of supply onto the market as investors rush to complete purchases before the stamp duty change in April, so renters thinking about moving could find they have a better choice early in the year. From April onwards, we could see a restriction in supply which could feed through into even higher rents. [1]

[1] http://www.propertyreporter.co.uk/finance/sharing-a-2-bed-flat-could-save-%C3%A3%C2%A2200-claims-rightmove.html