Written By Em

Em Morley

Scottish rental market slowed in May

Published On: July 4, 2017 at 11:59 am

Tags: landlords,rents in Scotland,Scotland,Scottish rents

The latest report from Your Move Scotland has revealed that the Scottish rental market slowed during May, with prices falling ahead of the UK General Election.

As such, the average rent in the country stood at £561 in the month- a fall of 2.3% from April but 2.2% greater than in May 2016.

Performance

Prices in key city centres of Scotland continue to perform strongly- as have rural regions, such as the Highlands and the South. These areas are highly attractive to people relocating.

Four of the five regions in the survey saw rents rise during the last year. The front-runner was the South of Scotland, where rents rose by 8.8% in the last year.

Other regions to see year-on-year increases were the East (3.3%), Highlands and Islands (3.2%) and Edinburgh and Lothians (2.6%).

The only region to see a fall in prices year-on-year was Glasgow and Clyde, where prices slipped by 0.3%.

Scottish rental market slowed in May

Returns

Landlords in Scotland are continuing to see strong returns, despite the overall fall in rents. The average yield in May was 4.9%- the same rate as recorded one year ago.

However, tenant finances were not as healthy, with 12.3% of tenancies having arrears on one day or more during May. This was slightly higher than the 11.3% recorded in April.

Brian Moran, Lettings Director of Your Move Scotland, observed: ‘With the General Election taking centre stage throughout May, it should come as no surprise that rents ticked down from their previous level.’[1]

‘Prices in most areas remain above where they were a year ago, with growth coming across a number of areas. Tenants are drifting towards city centre living or completely rural life as it was these areas which saw the most interest during May,’ he added.[1]

[1] http://www.propertyreporter.co.uk/landlords/scottish-rental-market-pauses-for-breath-in-may.html

One in seven tenants spend half of their income on rent

Published On: July 4, 2017 at 10:06 am

Author: Em Morley

Categories: Property News

Tags: deposits,landlords,rental prices,rents

Nearly one in seven private renters are spending more than half of their total income on rents, according to new research. This comes in contrast to just 2% of homeowners spending the same on their mortgage.

These figures have been released by the Local Government Association (LGA) and suggest that renters are facing difficulty in not just finding an affordable home to live in, but to save up for a deposit.

Indeed, the average deposit is now 71% of a first-time buyer’s annual income.

New Wave

The LGA believe that the Government should start a new wave of rental properties that reflect what families can afford, which seemingly is no more than one-third of total income.

In addition, the research suggests:

43% of private sector tenants spend more than 30% of their income on rent

37% renting from a local authority also spend over this amount on rents

Rents currently average at £852 across the country

While affordable and social rents are lower typically than private rents, the high number of social tenants spending in excess of 30% of their income on rent shows low total household incomes.

One in seven tenants spend half of their income on rent

Deposits

Greater house prices and rents are making it more difficult for UK youngsters to save up for a deposit for their own property.

In the South East, deposits are 85% of the average household income, but in the North West, this figure relaxes to 55%. London however is seeing the highest price, with 133% of a household’s average yearly income.

The LGA has called for councils to be given powers and access to funding to resume their historic role as a key builder of affordable homes- including those for social and affordable rents.

Tenth Anniversary of EPCs Becoming Legal Requirement Approaches

Published On: July 4, 2017 at 9:38 am

Author: Em Morley

Categories: Landlord News

Tags: energy efficiency,energy performance certificates,EPCs,MEES

The tenth anniversary of Energy Performance Certificates (EPCs) becoming a legal requirement is approaching.

Tenth Anniversary of EPCs Becoming Legal Requirement Approaches

Ahead of 1^st August – ten years since EPCs came into law in England and Wales – leading energy performance measurement specialist Elmhurst Energy is issuing a timely reminder.

EPCs first came into law as part of the Home Information Pack (HIP) for domestic property sales with four or more bedrooms. Valid for a decade, they were rolled out with different milestones over the following years, for different property types and in different regions of the UK.

Elmhurst Energy is now recommending that those responsible for checking the validity of EPCs must do more than simply check an EPC exists – they must ensure that it is valid.

“Up to now, everyone assumes that an EPC is valid if it simply exists,” says Martyn Reed, the Managing Director of Elmhurst Energy. “We are clarifying that this can no longer be assumed, and an extra check is required to ensure valid EPCs are in place for property sales and lettings.”

He recommends: “We advise all people and organisations that check the validity of EPCs to firstly obtain the EPC for the property – a simple check that it exists is no longer rigorous. Secondly, check the date of certificate, normally displayed on the first page, to identify if the document is legally valid and, if it is older than ten years, then it is out of date.”

The issue date of an EPC can be obtained from the National Energy Performance Certificate Registers, of which there are three in total: one for properties in England and Wales, one for Scotland and one for Northern Ireland.

Reed continues: “We have written to the Government (DCLG) in England and Wales about the possible changes to the registers, to make it more obvious that EPCs are out of date. They have replied that they are minded not to alter anything on the registers; thus it is down to enforcement agencies to understand that even though an EPC is available from the register, this doesn’t mean it is a legally valid document.”

Elmhurst Energy’s reminder is particularly timely, as the private rental sector prepares for the introduction of new Minimum Energy Efficiency Standards (MEES), which will prohibit landlords from granting a new tenancy on homes with an EPC rating of F or G from 1^st April 2018.

Limited Companies Borrow more than Individual Landlords for First Time

Published On: July 4, 2017 at 9:12 am

Author: Em Morley

Categories: Landlord News

Tags: buy to let mortgages,limited companies,limited company,property investment

Limited companies are borrowing more than individual landlords for the first time, according to Mortgages for Business.

Limited Companies Borrow more than Individual Landlords for First Time

The firm’s latest Limited Company Buy-to-Let Index found that over half the value of buy-to-let lending in the second quarter (Q2) of the year was provided to limited companies.

Based on lending transactions brokered by Mortgages for Business, data from Q2 shows that limited companies borrowed more per quarter than individual landlords for the first time, including both purchase and remortgage transactions.

Limited company structures are particularly common when making new purchases, and Q2 proved no exception. Of buy-to-let purchase completions in Q2, 73% were performed by limited companies – up by more than 10% from 62% in Q1.

Similarly, limited companies accounted for 76% of buy-to-let lending by volume, up from 63% in Q1. This was caused by high volumes of purchase applications from limited companies, accounting for 77% of buy-to-let purchase applications in Q1 and 78% in Q2.

Steve Olejnik, the COO of Mortgages for Business, comments on the findings: “Landlords are increasingly looking to limited company structures because of the benefits they bring in the form of tax efficiencies and softer affordability testing. The structures are not without their hurdles, however, and we recommend all our clients take professional tax advice before deciding how to proceed.”

The index also shows pricing improvements, particularly three and five-year fixed rate deals, as buy-to-let lenders seek to compete in the ever-increasing limited company sector.

Among buy-to-let products available to limited companies, the average three and five-year fixed rates dropped by 0.4% each, to 3.7% and 4.0% respectively. This further narrows the gap with the wider market, with the average three-year fixed rate across all buy-to-let products just 0.2% lower, at 3.5%.

The appeal of limited company structures has become stronger following the Government’s reduction in mortgage interest tax relief for individual buy-to-let landlords.

The Mortgages for Business figures arrive as the Residential Landlords Association (RLA) calls on the Government to scrap its recent tax changes.

Rise in the number of retiree tenants recorded

Published On: July 4, 2017 at 8:47 am

Author: Em Morley

Categories: Property News

Tags: property,renters,retiree renters,tenants

A new report from letting agency Countrywide has revealed that there has been a substantial rise in the number of retiree renters.

Data from the analysis shows that retirees have paid a total of £3.7bn in rent during the last year – a rise of 200% in comparison to the £1.2bn paid in 2007.

In addition, the research highlights that retired people now make up 8% of all private tenants, a rise of 5.2% in comparison to ten years ago.

Older Tenants

Households aged over 65 presently account for nearly 12% of all those living in the private rental sector, with this figure set to increase.

Girlings Retirement Rentals believe that this increase can be attributed to changing attitudes and perceptions to renting by the older generation. The firm has seen a steady growth in the number of enquiries received since 2002, with figures seen in 2015 and 2016 the highest on record.

The survey from Countrywide suggests that there are several reasons that the over 65s wish to downsize in their retirement. 34% of respondents said that they would move should they come to need more support, while 33% wanted lower property maintenance.

26% cited wanting fewer stairs for their reasons. Others highlighted wanting to live in a smaller house, reducing their outgoings and having a smaller garden to keep on top of.

Rise in the number of retiree tenants recorded

Pipe Dream

However, moving is but a pipe dream for many, with 42% believing there is a lack of suitable properties in the UK in which to move into.

Peter Girling, Chairman of Girlings Retirement Rentals, noted: ‘As people get older they want different things from a home and the option to downsize is something many would consider. Renting in a specialist retirement development is becoming a popular lifestyle choice. We offer properties on assured tenancies, so people have security of tenure which is very important for older people.’[1]

‘Renting enables people to step off the property ladder, sell their homes and release capital to help fund retirement. They can downsize to a more manageable sized property, with added support services included in the rent – and be free from the burden of property maintenance or upkeep,’ he added.[1]

[1] https://www.landlordtoday.co.uk/breaking-news/2017/2/sharp-rise-in-number-of-older-tenants

Wimbledon’s Property Market Aced by the Competition

Published On: July 4, 2017 at 8:11 am

Author: Em Morley

Categories: Property News

Tags: house prices,London,property market,tennis,Wimbledon

With Wimbledon kicking off yesterday, online estate agent eMoov.co.uk has compared the property performance of each of the four tennis Grand Slam locations over the past year – and Wimbledon’s property market has been aced by the competition…

The agent analysed the latest house price data in all four neighbourhoods that host the world-class tennis events – London’s Wimbledon, Paris’ 16ème arrondissement, Melbourne’s Fitzroy, and New York City’s Queens – to see who is the top for property price growth.

The average house price across all four neighbourhoods to host a Grand Slam is £987,743 – up by 5.32% on last year.

Wimbledon’s property market

Wimbledon’s Property Market Aced by the Competition

The average property value in Wimbledon is on the higher end of the scale compared to the overall borough of Merton (£604,935) and London as a whole (£607,112), at £753,354.

Additionally, the prices in Wimbledon’s prestigious neighbourhood of Wimbledon Village further outshine those across the rest of the area, with price tags averaging £1,526,752.

However, Wimbledon’s property market is the only one of the four Grand Slam venues to have recorded a drop in house prices since Andy Murray won last year. Values in Wimbledon Village fell by 2.01% over the past 12 months, while Wimbledon as a whole declined by 2.43%, ranking it in fourth place overall.

Values in Fitzroy

Melbourne’s Fitzroy is a few minutes’ drive from Melbourne Park, where the Grand Slam series sees the first serve of the year in January.

Fitzroy enjoyed a 3.50% (£27,903) house price hike over the past year, from an average of £798,010 to £825,913, placing the Australian city in third place for property value growth.

Paris house prices

Heading to Paris’ 16ème arrondissement, home to the Stade Roland Garros, the average property is valued at £10,885 per square metre – up by 4.80% from £10,386 in 2016.

The average home is around 181m², but can range from 30m²to 500m². An average property of this size could set you back £1,970,185 today.

Queens’ property values

The final tournament of the season is played in New York City’s Queens neighbourhood, where homes are currently valued at an average of £401,482 – up by a whopping 15.40% on 2016’s £347,903. This is the largest growth of all four venues.

Furthermore, house prices in Queens are expected to surge by another 5.60% to an average of £420,647 over the coming year.

Queens is the only area of the four locations to have a larger growth than the average, despite a much lower average price, making it the most affordable of all the Grand Slam neighbourhoods and crowning it as the champion in the property stakes.

Russell Quirk, the Founder and CEO of eMoov, comments on the results: “Hosting a major sporting event of any kind can have a positive impact on the property landscape hosting these competitions, as well as the additional economic benefit enjoyed for the duration of the event.

“The London market has slowed in price growth pace over the last year due to uncertain political and economic influences, and so it is no surprise that the more prestigious end of Merton has seen prices fall.

“This research would suggest that London’s high-end market is no longer the cream of the international crop where property is concerned, however, while prices may remain flat for the remainder of the year, we should see stability return for Wimbledon in 2018.”