Written By Em

Em Morley

London Homes have Risen in Value by £105 a Day in the Past Five Years

Published On: March 3, 2017 at 10:43 am

Tags: house price growth,house prices,London,London property market

London homes have risen in value by a huge £105 a day over the past five years, while salaries in the capital have grown by just 54p per day, shows new research.

London Homes have Risen in Value by £105 a Day in the Past Five Years

The study found that, despite recession blues and political and economic uncertainty, London homes have comfortably outpaced growth in salaries, pushing the gap between average incomes and average house prices to its widest point ever.

In December 2011, average London homes cost £292,284. Today, this has soared to a huge £483,803, according to Savills.

Meanwhile, average London salaries have inched up slightly from £34,336 to £34,531.

This means that the majority of property owners in the capital have almost certainly earned less than their homes since 2011.

Frances Clacy, the Research Analyst at Savills, says: “The £105 per day increase in house prices over the past five years means the average home has earned £38,325 a year, against the average pre-tax salary of £34,531.”

And, she points out, once tax has been taken into account, the gap between average incomes and property prices only widens further.

The study found that the two boroughs where London homes have grown fastest, in cash terms, are Westminster and Kensington and Chelsea – by more than £200 per day since 2011. Prices in more than half of the capital’s boroughs have risen by more than £100 a day over the last five years.

Even in Barking and Dagenham – the worst performing borough – property values have risen by an average of £69 per day.

The research includes a graphic illustration that proves just how difficult it is for Londoners to get onto the property ladder, particularly since, in the same period, rent prices have soared by 23%, making it increasingly harder for generation rent to save for a deposit for their own homes.

The Mortgage Products Director at Lloyds Bank, Andy Mason, comments: “Affordability levels have worsened for four consecutive years, as average City house prices continue to rise more steeply than average wage growth.”

Buy-to-Let Expert Paul Shamplina Back for Third Series of Nightmare Tenants, Slum Landlords

Published On: March 3, 2017 at 9:51 am

Author: Em Morley

Categories: Landlord News

Tags: letting agents,Nightmare Tenants Slum Landlords,Paul Shamplina,rogue landlords,rogue tenants

Buy-to-let expert Paul Shamplina, the Founder of Landlord Action and a brand ambassador of Hamilton Fraser, is back for a third series of Nightmare Tenants, Slum Landlords.

Buy-to-Let Expert Paul Shamplina Back for Third Series of Nightmare Tenants, Slum Landlords

The 12-part series starts this Sunday (5^th March) on Channel 5. Once again, the programme will delve into the dark side of the buy-to-let sector, showing the complexities that landlords and tenants face on a daily basis.

The first episode, which starts at 8pm, highlights one lady’s desperate fight to win back the home she grew up in from a woman she once considered a family friend.

Wendy Rose, from Bristol, was forced to call in buy-to-let expert Shamplina to help evict her nightmare tenant, who didn’t pay the rent and owed almost £3,000.

Shamplina confirms that Wendy’s story concerns a common landlord issue – rent arrears: “Wendy’s mother was seriously ill and needed to be moved into a nursing home. A friend asked if she could rent the house, which Wendy was delighted about, as the rental income would help cover her mother’s care costs and the place would be looked after. Things didn’t quite go as expected for Wendy unfortunately, and she needed help to get her family friend evicted from her home.

“Renting to a friend or indeed a family member can cause problems if the correct procedures aren’t followed, like with any other tenant. Regardless of the relationship, landlords need to understand the risks upfront as well as their legal obligations, and have clear, methodical referencing in place.”

Commenting on the new series, the buy-to-let expert says: “This series sees me travelling up and down the country uncovering the struggles landlords are faced with when dealing with nightmare tenants, and vice versa in some cases. We also experience rogue letting agents – I even get locked in one of their offices!

“I believe this show really highlights the fact that there should be a centralised database that lists rogue tenants, in order to help safeguard landlords. It’s all well and good that the Government are trying to improve the industry by having a database of rogue landlords and letting agents available to local councils, but what about protection for landlords from bad tenants? Surely there needs to be similar safety measures in place for them also?”

Rental price inflation running below general inflation

Published On: March 3, 2017 at 9:43 am

Author: Em Morley

Categories: Finance News

Tags: Buy-to-Let,landlords,rental inflation,tenants,UK rents

New figures indicate that rental price inflation is running below general inflation, as many landlords are coming to the conclusion that a number of tenants have, or are approaching, an affordability ceiling.

The HomeLet Rental Index shows that the annual rate of rental price growth reached 0.8% in February. This is below the general rate of inflation, which stands at 1.8%, according to statistics.

Rents

In addition, the figures show that the average UK rent for a new tenancy starting in February was £895pcm. This was a rise from £888 seen at the same period last year.

Annual rental price growth has slipped from a high point of 4.7% in June 2016. There has been a fall in pace of rental inflation in regions of the country where rents were previously rising most.

HomeLet’s research suggests that more than half of the 3,726 landlords questioned could have no alternative but to raise rents in the face of increasing pressures. These have been caused by upcoming tax changes, though almost a third said they will defer rent rises until 2018.

The table below shows how rents have risen month-on-month and year-on-year in twelve regions surveyed:

Region	Average rent in February 2017	Average rent in January 2017	Average rent in February 2016	Monthly variation	Annual variation
Yorkshire & Humberside	£623	£615	£604	1.3%	3.0%
Northern Ireland	£604	£602	£589	0.3%	2.5%
North West	£677	£673	£661	0.7%	2.5%
Wales	£602	£606	£589	-0.6%	2.1%
East Midlands	£596	£583	£586	2.3%	1.8%
West Midlands	£660	£658	£650	0.2%	1.5%
East of England	£896	£893	£885	0.3%	1.2%
Greater London	£1,520	£1,497	£1,514	1.6%	0.4%
North East	£524	£527	£524	-0.7%	0.0%
South West	£791	£791	£791	0.0%	0.0%
South East	£992	£989	£994	0.3%	-0.2%
Scotland	£597	£606	£603	-1.5%	-0.8%

Rental price inflation running below general inflation

Affordability

What’s more, the survey found that landlords appear to be sympathetic to ensuring that rents are affordable for tenants. Pleasingly, 96% of landlords said that they are happy with their existing tenants.

Martin Totty, Chief Executive of Barbon Insurance Group, parent company of HomeLet, said: ‘Our research again demonstrates that the vast majority of landlords have positive working relationships with their tenants.’[1]

‘In recent months, we have seen landlords treading very carefully with rental price rises, amid concerns about tenants’ ability to pay. With more than one in five landlords blaming an increase in their tax liability for raising rents, it remains to be seen if this can sustain. Landlords will hope the Chancellor does not make it harder for them to continue supporting their tenants in this way, with further changes to the tax system or legislation, as he prepares to unveil his Budget on the 8^th March,’ he added.[1]

[1] https://www.landlordtoday.co.uk/breaking-news/2017/3/private-sector-rents-rise-below-inflation

Private Tenant Population Highest Since 1961

Published On: March 3, 2017 at 9:23 am

Author: Em Morley

Categories: Property News

Tags: English Housing Survey,homeownership,housing crisis,private rental sector,tenants

Yesterday’s English Housing Survey revealed that the private tenant population in the country is now at the highest level since 1961.

Private Tenant Population Highest Since 1961

The Headline Report, which can be found here, shows that the private tenant population in England now stands at 4.5m, including 1.6m families with dependant children and 1.5m households whose head is aged 45 or over.

According to the Department for Communities and Local Government (DCLG) Live Table 104 on Tenure in England, there were 4.377m private rental households in 1961. However, the tenure was larger at the start of the 20^th Century.

Responding to the report that shows that the private tenant population has now hit 4.5m, the Director of tenant lobby group Generation Rent, Dan Wilson Craw, says: “Runaway house price inflation and the difficulty of saving a deposit have trapped millions in private rented housing – even more than in the day of slum landlords like Rachman in the early 1960s.

“Private tenants have few protections from landlords who want to raise the rent or evict them without a reason. People can’t enjoy a good quality of life with no certainty over their home – and it is especially difficult for the growing number of families and older people renting from private landlords.”

He adds: “The Government knows that the housing market is broken, but it is failing to do enough to fix it. Ministers need to expand their ambitions to build homes, while reforming the law to provide stability for the millions who will be unable to buy in the foreseeable future.”

In its Housing White Paper last month, the Government shifted its long-standing focus on homeownership to the private tenant population.

Some of the measures announced in the crucial document include longer-term tenancies for private renters. However, ARLA Propertymark believes that only a minority of tenants want longer-term tenancies.

What are you doing to help the private tenant population feel more secure in their homes?

North East property prices stagnant in February

Published On: March 2, 2017 at 12:22 pm

Author: Em Morley

Categories: Property News

Tags: Buy-to-Let,landlords,North East,North East property

New analysis from North East based property firm KIS has shown that property prices in the region have been largely unchanged in the last four weeks.

Prices increased by just 0.1% or £203 in cash terms.

Steady

This is in comparison to a fall of 3.1% in January, which saw £5,200 taken of the value of a typical North East property. Now, a typical property in the region will cost £163,794-4.3% greater and £5,609 more than figures seen in February 2016.

Seaham (1.7%), Whitburn (1.5%) and Darlington (1.4%) saw above average rises in house values. However, nine out of twenty areas surveyed prices fall, including Blyth (-2.9%), Houghton-le-Spring (-1.2%) and Peterlee (-1.1%).

Year-on-year, Killingworth leads the way for property price growth, with values 6.9% greater than in 2016. Other strong performers included Tynemouth (6.8%) and North Shields (6.2%).

Rents

North East rents increased slightly to £589 in the last month, a rise of just £3 in the last four weeks. Year-on-year, rents are £34 higher on average-6.1% more.

Rental yields stayed the same, with landlords receiving an average return of 4.3% on their investment.

Investors in the North East are seeing returns 25% greater than in London and almost double than those in Cambridge. Blyth is the cheapest place to rent in the region, at £418pcm, while Tynemouth is most expensive (£993pcm).

North East property prices stagnant in February

Waiting Game

Ajay Jagota, founder and Managing Director of sales and lettings firm KIS Group, noted: ‘With a budget just around the corner and the government intending to trigger Article 50 at the end of March it’s pretty predictable property buyers and sellers alike are adopting a ‘wait and see’ approach for the time being.’[1]

‘It’s fascinating that although house prices across the region were static as a whole house prices behaved markedly differently in the different halves of our region. With the exception of Blyth, prices followed the regional trend of stability North of the Tyne. In the South, there was a lot more volatility – with property values noticeably exceeding regional growth in places like Seaham, Whitburn and Darlington, but bucking the North East trend by falling in Houghton-le-Spring and Peterlee,’ he continued.[1]

Concluding, Jagota said: ‘From a buy to let perspective, the North East continues to perform strongly, offering returns for investors which are on average 25% higher than London, and as good as twice as strong as perceived investor hotspots like Cambridge.’[1]

[1] http://www.propertyreporter.co.uk/property/north-east-house-prices-remain-flat-in-february.html

Prime Scottish locations luring overseas buyers

Published On: March 2, 2017 at 11:31 am

Author: Em Morley

Categories: Property News

Tags: Buy-to-Let,investors,prime Scottish locations,property market,Scotland

An increasing number of high-end property investors, including many from overseas, are looking for prime central Scottish hotspots.

This has helped to boost property market activity in Scotland, with the residential market at its strongest since 2008.

Rises

Research conducted by Savills reveals that the number of residential sales in Scotland last year was 9% above the ten-year annual average.

The firm said that the Scottish property market lured more top-end buyers from outside of the country, partly as a result of more favourable exchange rates.

Andrew Perratt, head of Savills residential sales in Scotland, noted: ‘In times of political and economic uncertainty, high net worth investors are drawn to prime central hotspots which are considered safe investments and good value for money. That is exactly what we are seeing here: interestingly not only is there more investment from outside Scotland in residential property, but also in commercial and rural markets.’[1]

‘Scotland is being seen as a sensible place to do business and invest in land and property across the sector. Scotland is not depicted by boom and bust but by a healthy functioning market,’ he continued.[1]

Prime Scottish locations luring overseas buyers

Supply/Demand imbalance

A growing imbalance between rising demand and lack of supply in central regions is leading to increased price growth. This is now filtering through to the heartlands of Tayside, Stirlingshire and Fife.

In 2016, transactions and prices in Scotland rose by 3% and 3.5% respectively.

Faisal Choudhry, head of research at Savills, said: ‘Buyer sentiment across the UK market will remain sensitive over the next few years as the process to leave the EU unfolds. However, so far, the market north of the border as been more protected from political vagaries: we anticipate a slowdown in value growth and for realistic pricing to drive a continued recovery in transactions.’[1]

[1] https://www.propertyinvestortoday.co.uk/breaking-news/2017/3/prime-hotspots-provide-safe-investments-and-offer-good-value-for-money