Posts with tag: housing supply

Flat House Price Growth Across UK Masking Regional Variances

Published On: September 15, 2017 at 8:08 am


Categories: Property News

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Flat house price growth across the UK during August 2017 is masking strong regional variances, according to the latest UK Residential Market Survey from the Royal Institution of Chartered Surveyors (RICS).

The results of the August survey show an increasingly divergent picture in key activity metrics across different parts of the country. For instance, sentiment amongst surveyors remains cautious in London and, to a lesser extent, the South East, while, further away from the capital, respondents appear to be generally more upbeat with regards to the near-term outlook.

House prices

Over the month, surveyors reported a rise of 6% in average house prices, compared to 1% in July. Although this signals a return to growth, this measure is consistent only with a marginal rise in national prices.

Behind this nationwide figure, there are significant variances across the UK. London house price growth remains stuck firmly in negative territory, recording the weakest reading since 2008. Furthermore, prices in the South East have turned a little softer, with more respondents in the region reporting a fall, rather than an increase, in prices for a third consecutive month. Both of these markets share a common characteristic in displaying the highest proportion of surveyors sensing the market is overpriced relative to all other parts of the UK.

Flat House Price Growth Across UK Masking Regional Variances

Flat House Price Growth Across UK Masking Regional Variances

Alongside this, East Anglia and the North of England were the only other regions to return marginally negative house price growth. Elsewhere, the latest figures point to solid growth in many parts, with Northern Ireland, the North West, Scotland and the South West recording the firmest increases.

Going forward, house price expectations remain subdued over the near-term, as the UK average was again weighed down by London and the South East. At the other end of the spectrum, respondents in Northern Ireland and Scotland were most confident in seeing further price growth over the coming three months.

At the 12-month horizon, London remains the only region in which price expectations are negative, with all other regions displaying positive forecasts.

Housing demand

Nationally, there was little change in buyer enquiries during August, extending a streak of flat or modestly negative recordings into a ninth consecutive month. Alongside this, agreed sales were again broadly flat, down by 4%. As such, nationally, sales have not seen any growth since November 2016. When disaggregated, weakness in sales was largely concentrated in London, the South East, East Anglia and the North.

Meanwhile, healthy sales growth was reported in Northern Ireland, the South West and Scotland over August. Looking ahead, both near-term and 12-month sales expectations are modestly positive for the UK as a whole.

Property supply

Looking at supply, new sales instructions were down by 1%, compared with a decrease of 11% in July. Having turned progressively less negative in each of the last three months, this perhaps suggests a stabilisation in the flow of fresh listings coming onto the market. In fact, this was the least negative reading since February 2016. Even so, it must be noted that, following such a sustained period of deteriorating sales instructions, average stock levels on estate agents’ books are near an all-time low, at 43.2.

Equally, new instructions have now reportedly increased in London during four of the last six months, with a relatively smart pick-up cited in both July and August. In keeping with this, the average number of properties on agents’ books in the capital has risen from 29 to 36 since February this year. By way of contrast, virtually all other regions have seen stock levels decrease over the same period.

Lettings market

In the lettings sector, tenant demand growth was slightly stronger in August, with 19% of surveyors reporting an increase. At the same time, landlord instructions were more or less flat, and it appears that there are limited prospects of a reversal in this trend anytime soon.

Indeed, respondents were asked if they felt there would be greater numbers of landlords entering or exiting the market going forward (in light of recent and impending policy changes). Nationally, a strong majority of 61% felt that there would be more landlords exiting the market over the coming year, while just 12% believed that there would be a greater number of entrants. Moreover, for the next three years, 52% thought there would be a reduction in landlords, while just 17% felt there would be entries.

Given the current supply/demand mismatch, surveyors continue to anticipate further rent price growth over the coming 12 months. Over the next five years, respondents expect rent price growth to outpace that of house prices, averaging 3% per annum (against 2% house price inflation).

The Sales Director of West One Loans, Marie Grundy, comments on the survey results: “The housing market has faced a tough time in recent months but, despite this, we’re cautiously optimistic that the sector will pick up again in due course. A seasonal lull can be expected at this time of year, although it may take time for the market to regain a more positive note, which we believe will happen. In large part, this is because the chasm between supply and demand persists and cannot be quickly fixed, but also because we are in a period of prolonged economic uncertainty, which is only set to continue as Brexit negotiations take place.”

Tenants Face a Dwindling Supply of Housing, Reports the RLA

Published On: August 14, 2017 at 9:08 am


Categories: Landlord News

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Tenants Face a Dwindling Supply of Housing, Reports the RLA

Tenants Face a Dwindling Supply of Housing, Reports the RLA

Private tenants are set to face a dwindling supply of rental housing, as demand increases, according to the latest quarterly report from the Residential Landlords Association (RLA).

The survey of almost 3,000 landlords found that 22% plan to sell at least one of their rental properties over the next year, while just 18% plan to buy additional properties to let.

The new data shows that 33% of landlords have experienced an increase in demand for homes to rent over the past three years.

Faced by an imbalance of supply and demand of rental housing, 47% of landlords said that they expected to increase rent prices over the next year. The main reason why rents might increase was the change to mortgage interest tax relief, which will see landlords taxed on their turnover rather than profit – unlike all other businesses – by 35%.

The Chairman of the RLA, Alan Ward, comments on the findings: “As demand continues to increase for homes to rent, punitive tax changes are discouraging investment by the majority of good landlords who want to provide accommodation.

“Whilst efforts by the Government to support institutional investment in the sector are welcome, this will remain a drop in the ocean.”

He urges: “To meet demand, we need pro-growth taxation that actively supports and encourages the majority of landlords, who are individuals providing good housing, to invest in the new homes to rent we so desperately need.”

Landlords, are you planning to put your rents up or sell your properties in the near future?

We encourage all those that let properties to private tenants to consider how they will be affected by your actions – always remember to consider how their finances and lives will change if you put rents up or sell the property they’re living in.

We’d also like to highlight recent research that found that a third of rental homes fail to meet basic health and safety standards; it is imperative that you protect your tenants’ health.


Number of rental properties in UK continues to fall

Published On: June 6, 2017 at 9:32 am


Categories: Property News

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Another report has suggested that the number of properties coming onto the privately rented market is continuing to fall.

This in turn is serving to drive up rents across many regions of the UK – particularly in market towns.

Fall in Landlords

This fall in housing supply can be attributed to the lack of new landlords bringing new stock onto the market, according to Belvoir – one of Britain’s largest letting agents.

Chief Operating Officer of Belvoir, Dorian Gonsalves, feels that the decline in property coming onto the market is directly due to the recent changes in legislation – such as increases in Stamp Duty and alterations to mortgage interest tax relief.

Gonsalves observed: ‘As a result of this stock shortage, properties are often rented to the highest bidder, typically the wealthier tenant, which is raising rents beyond the traditional plus or minus four to five percent trend.’[1]

Number of rental properties in UK continues to fall

Number of rental properties in UK continues to fall

Increasing Rents

Belvoir’s Q1 rental index, compiled by property expert Kate Faulkner, indicates that the firm’s offices have seen average rents rise by 5.75% year-on-year. This was a rise from £728pcm in Q1 2016 to £770pcm in Q1 2017 – driven by gains in parts of the East Midlands and Yorkshire.

Rents ranged from £602pcm in the North West, £655pcm in the East Midlands, £842pcm in the South West and £1,440pcm in London.

In addition, the report indicates that 43% of tenants are staying put in their properties for between 13-18 months. 29% stay between 19-24 months and 18.2% rent for over 2 years.

Worryingly, void periods are seemingly on the increase with 60% of properties taking up to two weeks to be let.

Concluding, Mr Gonsalves said: ‘Despite increases in rents in some regions, rent arrears are not increasing, suggesting that tenants are currently coping with landlord rent rises.’[1]





Number of House Sales Agreed Reaches Ten-Year High

Published On: March 31, 2017 at 8:18 am


Categories: Property News

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The number of house sales agreed in February hit a ten-year high, according to the February Housing Report from NAEA Propertymark.

House sales agreed

The number of house sales agreed increased to a ten-year high in February, to an average of 11 per branch. The last time this figure surpassed ten per branch was in September 2007, suggesting that buyer confidence is growing. In January, estate agents agreed eight house sales per branch, up from six in December.

Number of House Sales Agreed Reaches Ten-Year High

Number of House Sales Agreed Reaches Ten-Year High

Although high house sales were recorded in February, three in every four (74%) of the sales made were below the original asking price, indicating that sellers are taking a pragmatic approach to their property transactions.

Sales to first time buyers

The proportion of house sales that were agreed for first time buyers dropped to 22% in February, down from 30% in the previous month.

Housing supply

The number of properties available to buy on estate agents’ books rose to 44 in February. In January, just 38 were available per branch.

This figure has increased by 26% from last February, when agents had just 35 properties on their books.

Demand for properties

The number of homebuyers registered per estate agent branch remained at 425 in February for the second month in a row.

Housing White Paper

Only 7% of estate agents expect the remedies outlined in the Government’s Housing White Paper to be enough to fix the broken housing market.

Two fifths (43%) don’t think they will make a difference, while 39% believe the proposals could positively impact the market, but can’t yet tell how.

The Chief Executive of NAEA Propertymark, Mark Hayward, comments: “The number of sales agreed reaching a ten-year high indicates the housing market is moving in the right direction.

“However, first time buyers need to be a priority – the number of sales made to the group dipped in February, when it should be growing. As house prices continue to rise, the market’s most vulnerable buyers are being priced out and the only way to address this is to increase housing stock.”

He adds: “The Government has pledged yet again to build more homes, but our members aren’t feeling optimistic about the plans. If promises are kept and we see construction sites set up across the UK, we’ll be in a better position in a few years than the stark reality we will be facing if this doesn’t happen.”

Bath Named as next Spot for Legal & General Build to Rent Homes

Published On: March 21, 2017 at 11:36 am


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Legal & General has today announced that Bath is the next spot for its Build to Rent homes scheme.

Over 170 new Build to Rent homes will be built in Bath on the £47.5m city centre development site, as part of the firm’s wider approach to address the UK’s housing shortage.

Bath Named as next Spot for Legal & General Build to Rent Homes

Bath Named as next Spot for Legal & General Build to Rent Homes

This is Legal & General’s fourth Build to Rent homes scheme, with existing sites progressing well in Bristol, Salford and Walthamstow. It has £1 billion of firepower to invest in developing new large-scale rental development properties, which will provide rental income for pension funds to pay their pensioners, and create an economic stimulus for UK urban regeneration areas, delivering new jobs and growth.

The Roseberry Place development is ideally located on brownfield land in the Bath City Riverside Enterprise Area on the river, which represents the best opportunity to accommodate new development growth in the city.

The site will include 171 apartments, 126 car parking spaces and 17,000 square feet of retail space. It already benefits from outline planning, and Legal & General will be working closely with the developer to provide high quality Build to Rent homes within a city in need of additional housing supply.

The Bath scheme has been acquired by LGIM Real Assets on behalf of its Build to Rent fund, together with its joint venture partnership between Legal & General Capital (LGC) – the group’s principal investment arm – and PGGM – the Dutch pension fund manager.

The Build to Rent Fund Manager at LGIM Real Assets, Dan Batterton, says: “This acquisition is a prime example of the type of compelling opportunities there are in the market at the moment, as we continue to build our pipeline. We are targeting well-located sites where there is the opportunity to influence all aspects of design and construction from the start to create a best-in-class product that will provide a positive lifestyle choice for elective renters. We remain on track to deliver on the growth plans for our major Build to Rent platform, focused on holding assets for the long-term on behalf of investors.”

The Director of Housing at LGC, James Lidgate, also comments: “This latest acquisition is in line with our strategy of increasing our direct investment exposure to housing and establishing Build to Rent as an institutional asset class – investing Legal & General’s balance sheet capital, alongside other third party capital, to achieve high-quality risk adjusted returns.

“This scheme is an excellent example of the partnership’s asset acquisition strategy – investing in long-term, sustainable urban schemes that support wider urban regeneration by better utilising the local existing infrastructure, and maximising land density in areas where there is a shortage of housing supply.”

New Bristol Build to Rent Scheme Gets the Go-Ahead

Published On: March 1, 2017 at 10:51 am


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Bristol City Council has given a new Bristol Build to Rent scheme, ND7, the go-ahead.

New Bristol Build to Rent Scheme Gets the Go-Ahead

New Bristol Build to Rent Scheme Gets the Go-Ahead

LGIM Real Assets has announced that the new 255-unit Bristol Build to Rent scheme, in the city centre, has now been approved. The regeneration scheme will provide a much-needed boost to Bristol’s rental housing supply and will help deliver the new mayor’s housing targets.

ND7 is the first Build to Rent scheme to receive planning committee support in Bristol. The development will provide high-quality homes for elective tenants that will support them for the long-term, offering a level of flexibility and choice.

LGIM Real Assets insists that the scheme will champion the rights of renters, offering longer and more flexible tenancies with no hidden fees and long-term certainty over rent prices, making renting a more affordable and active choice.

Legal & General, through Legal & General Capital (LGC) and LGIM Real Assets, entered the Build to Rent market in 2016, in partnership with PGGM. Committed to raising the standard of UK renting across the board, LGIM Real Assets’ Build to Rent fund, alongside LGC and PGGM, has £1 billion to invest in developing new large-scale rental developments. It currently has more than 1,000 Build to Rent homes under construction or in planning, with an aim of building over 4,000.

To date, Legal & General has invested £8 billion in UK infrastructure, direct investments and urban regeneration projects, aiming to invest over £15 billion.

The new Bristol Build to Rent scheme is located within the Temple Quay Enterprise Zone, behind PwC and Burges Salmon, near Temple Meads station.

Sustainability will be at the heart of the development’s design, with green infrastructure incorporated into the scheme. Options to embed energy generation, reduce energy consumption, appropriately resource sensitive materials, optimise water and waste efficiency, and mitigate pollution during construction will all be incorporated.

Assael Architecture is the architect on the project.

The Build to Rent Fund Manager at LGIM Real Assets, Dan Batterton, says: “In Bristol, there are increasing numbers of people needing to rent and an urgent need for high-density, city centre rental accommodation. It is great news that this innovative scheme has been approved by Bristol City Council, who recognise that ND7 will make a major contribution towards Bristol’s rental housing supply.”