Posts with tag: rents

Rental growth slows in the UK during Q1 of 2017

Published On: April 10, 2017 at 1:34 pm

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An increase in property options for tenants has led to a slower rate of rental growth in 2017 to date, with asking prices rising by just 1.8% year-on-year.

This is the smallest rate of annual growth since the final quarter of 2014 and less than half of the rate recorded one year ago, according to the most recent report from Rightmove.

Ups and downs

In addition, the data shows that for the first time since 2014, asking rents outside of London fell by 0.4% in the opening quarter of the year. This takes the average rent per month in the capital to £768.

Greater London saw average asking rents in the first three months of the year hit £1,937 per month-a rise of 1.5% quarter-on-quarter. Annually, falls have gone from a decline of 4.4% during the fourth quarter of 2016 to 4.2% in the first quarter of 2017.

What’s more, the report shows that new rental properties coming onto the market have been rising since the rush to purchase before last April’s 3% stamp duty hike. There are 12% more available properties for tenants to select from as opposed to the first quarter of 2016.

Lets

Rightmove also looked at the time taken to let a property, based on agents marking properties as let agreed on the portal. Nationally, this time is 10% longer on average than in the same period in 2016.

The time being taken to secure tenants has risen in all areas, with the exception of Wales, which has actually decreased by 5%.

Head of lettings at Rightmove, Sam Mitchell, said: ‘The supply boost following last year’s buy to let frenzy in the first few months of the year has continued through to 2017, introducing more competition in the market for letting agents trying to secure suitable tenants for their landlords’ properties.’[1]

Rental growth slows in the UK during Q1 of 2017

Rental growth slows in the UK during Q1 of 2017

‘This extra choice for tenants in many areas has inevitably led to properties taking longer to let than this time last year. However, agents are still reporting that well-priced properties in popular areas are letting quickly,’ Mitchell continued.[1]

Concluding, Mitchell said: ‘Agents’ properties need to stand out even more than before, so carefully considering how your property is presented is really important. Now might be the right time to encourage landlords to give the place a lick of paint or some new furniture to give them the edge to help secure the right tenant.’[1]

[1] http://www.propertywire.com/news/uk/rental-growth-slowed-uk-first-quarter-2017/

 

Wales sees largest rental growth in the UK

Published On: March 27, 2017 at 10:19 am

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Rents throughout England and Wales increased in all bar two of the eight regions analysed by the latest Your Move England & Wales Buy to Let Index during February

This was led by increases in Wales, where rents grew by an average of 7.7% year-on-year to February to hit £593 per month. Despite this, Wales remains one of the cheapest places to rent.

Rental Costs

The North East and Yorkshire and the Humber were found to be the only regions in the report with cheaper rents than Wales, with average rents of £545pcm and £566pcm respectively.

In terms of rental growth, the East and South East of England led the way, with rents in these regions rising by 5.6% and 3.4%. Average rents in the East of England currently stand at £868 per month, while in the South, this figure rises slightly to £878pcm.

Valerie Bannister, Letting Director at Your Move, said: ‘Areas in the South East and East of England have traditionally offered much better value than the capital and this has tempted many Londoners to look further afield for rental properties.’[1]

Capital Pains

In London, rents continued to fall, with the city the only region surveyed to see rents slide both month-on-month and year-on-year.

The average rental property in London was let for £1,280pcm in February 2017-1% lower than at the same period one year ago.

Continuing, Bannister noted: ‘The dramatic rent increases in London have now slowed as people look outside the capital in order to meet their housing aspirations. Renters in London could be reaching the limits of their affordability as prices dropped back 1% in the last year. This will be one to watch as the year progresses.’[1]

Wales sees largest rental growth in the UK

Wales sees largest rental growth in the UK

Falls

London was not the only region to see rents slip year-on-year. In the South West prices fell by 1.5% in the last 12 months to reach £662pcm.

Taking England and Wales as a whole, the average rent stood at £798 in February. This was the same as in January, but was down from the £811 seen at the end of 2016.

In terms of yields, the report found that the average was 4.1% in February. This is down on the 4.9% seen at the same period last year.

Unsurprisingly, places with higher house prices command the smallest yields. It is not a surprise then to see that the average yield in London was only 3.2%, lower than in any other part of the country.

On the other hand, properties in the North East saw the largest yields, returning an average of 5.3% in the last month.

[1] https://www.landlordtoday.co.uk/breaking-news/2017/3/wales-sees-rents-rise-faster-than-anywhere-else-in-the-uk

 

Leeds is attracting heightened investment

Published On: March 16, 2017 at 11:04 am

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Leeds is enjoying a sustained period of high tenant demand, according to the latest data released by Knight Frank.

This in turn is driving rents up, with a number of national and international investors looking to purchase in the city.

Prime Rents

The firm predicts that rents in prime areas of the city could rise from £27.50 per sq ft to £30 per sq ft by the end of the year, which would be an all-time record.

With the Northern Powerhouse driving it forwards, Leeds is becoming an attraction for young professionals, both for work and study. Add to this a thriving nightlife and many landlords are starting to see the potential that the city undoubtedly offers.

Eamon Fox, head of office agency at Knight Frank in Leeds, observed: ‘£27.50 sq ft is currently the established norm [for rents in the city centre], but I anticipate rents in new builds such as 6 Queen Street, Wellington Place, 3 Sovereign Square and Central Square will hit £28 sq ft in the very near future.’[1]

“And rents won’t stop there. I see them moving forward to £30 sq ft as occupiers compete for the best space in these buildings, as well as in Bruntwood’s Platform by Leeds Station. These are exciting times for the Leeds office market,’ he added.[1]

Leeds is attracting heightened investment

Leeds is attracting heightened investment

Professional

Knight Frank’s data shows that professional services accounted for 28% of the total take up in the last year. The Technology, Media and Telecoms sectors made up 25%.

Mr Fox went on to say: ‘Grade A availability currently sits at about 441,000 sq ft, which includes 280,000 sq ft of brand new Grade A accommodation delivered during the second half of last year at 3 Sovereign Square, Central Square, 5 Wellington Place and 6 Queen Street.’[1]

‘New supply in 2017 will comprise 271,000 sq ft, made up of 120,000 sq ft, 40,000 sq ft, and 120,000 sq. ft at 3 Wellington Place, 6 Park Row and Platform respectively,’ he concluded.[1]

[1] https://www.propertyinvestortoday.co.uk/breaking-news/2017/3/leeds-continues-to-attract-strong-interest-from-investors

UK rental growth at slowest level since 2013

Published On: March 13, 2017 at 9:46 am

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The most recent data released by Landbay has revealed that UK rental growth is currently at its lowest level since April 2013.

Rental growth across Britain slowed to 1% year-on-year in February, according to the analysis.

Capital Pains

In London, rents fell for the ninth straight month and fell -0.53% in the course of the year. As a result, the average rent paid by a tenant in the capital has fallen to £1,882, the lowest since September 2015.

Typical rents in the boroughs of Kensington & Chelsea, Westminster and Camden saw the most substantial falls in the last year. Rents here slid by -3.50%, -2.23% and -1.79% respectively.

On the other hand, rents in the boroughs of Barking and Dagenham, Havering and Redbridge have risen by 2.88%, 2.64% and 2.08% respectively. This is a sign that demand for properties in the outer boroughs of London is increasing.

In the rest of Britain, while rents continued to move upwards, the rate of this growth slowed to just 0.10% in February. With the exception of London, rents in England saw the top rate of growth, reaching 1.92%. This was followed by Wales (1.37%) and Scotland (1.26%). Only Northern Ireland saw growth rise below the UK average of 1%, with rents here increasing by just 0.47% in the last twelve months.

UK rental growth at slowest level since 2013

UK rental growth at slowest level since 2013

Masked Relief

John Goodall, CEO and founder of Landbay, observed: ‘While it may seem as though we are starting to see some much-needed relief for renters, the cost of renting a property remains a huge burden for the 4.3 million people in the private rented sector across the UK, especially in London where average rents are significantly more expensive than the rest of the country. Although this could give the impression that the market is beginning to turn a corner, this is a situation that is unlikely to change in the foreseeable future. Demand for rented accommodation will remain robust over the coming months and years and continue to stoke up rental values, as rising house prices, falling wages and rising inflation dampen the ability of aspiring homeowners to save for a property of their own.’[1]

‘Whether tenants are renting as a stepping stone on the way to home ownership or, increasingly, renting for life, people rely on a well-served buy-to-let market to ensure rental growth doesn’t become unbearable. The Chancellor’s decision not to raise the stamp duty threshold in this month’s Budget was yet another blow for first time buyers, so it’s important that we now see some clear follow through to the promises made in the housing white paper to ease at least some of the pressure on Generation Rent,’ he added.[1]

[1] http://www.propertyreporter.co.uk/landlords/uk-rental-growth-slows-to-lowest-level-since-2013.html

 

Fastest rental rises in January seen in the East

Published On: February 24, 2017 at 9:47 am

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Another new piece of research has underlined the fact that the rental market in England and Wales has seen a strong start to 2017.

The latest Your Move England and Wales Buy to Let Index shows that rents rose in all but one of the right regions analysed in the year to January.

Eastern Rises

Rents rose fastest over the year in the East of England, where average rents now stand at an average of £870pcm-a rise of 6.9%. Rental price growth in the region was also the quickest month-on-month, with rents up by 0.7% in January.

Other regions experiencing strong growth were Wales and the East Midlands, with rents rising here by 6.5% and 4.5% respectively.

In Wales, the average rent stands at £586pcm, while in the East Midlands, this figure is £634pcm.

On the other hand, London saw rents fall most quickly in January, down by 0.4% month-on-month. The North West was the only other area to see prices fall, albeit by an average of just 0.1%.

Fastest rental rises in January seen in the East

Fastest rental rises in January seen in the East

Rents

Taking England and Wales as a whole, average rents stood at £798 in January 2017, up from £790 in the same month last year. This represents a fall from the £811 recorded in December 2016.

Valerie Bannister, letting director at Your Move, noted: ‘Rents in nearly every region surveyed have increased compared to the same point last year.’[1]

It comes as little surprise to learn that London was the region with the lowest rental yields. Homes in the capital returned 3.2% on their investment in the last month, down from the 3.3% recorded in December 2016.

By contrast, investors in the North East are enjoying the strongest yields. In this region, the typical property returned 5.3% in January.

In England and Wales as a whole, the typical rental return was 4.6%, below the 5.1% seen in January 2016.

Concluding, Bannister said: ‘Yields continue to be squeezed in most areas of England and Wales, with all regions recording lower returns than at the same point a year ago.’[1]

 

[1] https://www.landlordtoday.co.uk/breaking-news/2017/2/rents-are-increasing-fastest-in-the-east-of-england

 

Backlash over Santander mortgage clause continues

Published On: February 16, 2017 at 2:13 pm

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Categories: Finance News

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The backlash towards Santander rumbles on, following last month’s revelations of a clause in its buy-to-let mortgage contracts requiring landlords to raise rents by, ‘as much as can be reasonably achieved.’

Now, The Acorn Group, which lobbies for a more ethical letting policy, plans to hold demonstrations outside Santander branches across England this Saturday.

Rents

The Santander contract says when: ‘rents are up for renewal the landlord must get written advice from a qualified valuer (as to) whether the market rent at the date of the review is likely to be higher than the rent currently payable.’[1]

Acorn members are hoping to get signatures for a nationwide petition, which calls for Santander to drop the clause.

An Acorn spokesman said: ‘Santander Bank is screwing tenants with a clause in their buy-to-let mortgages requiring landlords to charge maximum possible rent. We’ll be picketing them, collecting signatures for our petition and handing out leaflets to inform the public of their dodgy practices. It’s a day of action demanding that they scrap the clause.’[1]

‘Private tenants in the UK already pay the highest rent in Europe. Average rents have increased faster than wages, and Santander made £2 billion profit last year have been forcing up rents since 2011 with this clause. With tenants facing a triple burden of insecurity, poor standards and already extortionate costs, Santander’s lust for profit above all else is making it harder for tenants to afford a home,’ they continued.[1]

Backlash over Santander mortgage clause continues

Backlash over Santander mortgage clause continues

Calls

Moving on, the spokesperson said: ‘We are calling on Santander to scrap the clause in its contracts and enable landlords and tenants free to negotiate costs

If Santander do not act quickly to remove the clause, it will not only continue to put pressure on hard-pressed renters, it will continue to threaten long-standing relationships between responsible landlords and their tenants.’[1]

Responding, a Santander spokesperson said that their policy is under review.

They noted: ‘We recommend that landlords should set their rents at a prudent level that is fair for the tenant and based on market rates, ensuring that they are able to continue to service their mortgage. The clause in question has formed part of our mortgage terms and conditions since we re-entered the buy-to-let market in 2011. It forms part of our terms and conditions because it is important to us that our customers can continue to afford their loan repayments.[1]

“It is in no-one’s interest for a landlord to default on a loan (including the tenant). We recognise that it is for the landlord to set a rent that both they and the tenant agree upon. As with all our products, the mortgage terms and condition remain under constant review and we will review this particular clause now that we are aware that it can be misunderstood.’[1]

 

[1] https://www.landlordtoday.co.uk/breaking-news/2017/2/tenants-backlash-against-santander-over-mortgage-clause-continues