Posts with tag: landlords

Large decline in homes to rent over the last six years

Published On: June 22, 2017 at 8:51 am

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New research has revealed that there has been a sharp decline in the number of homes listed for rent over the last six years.

Figures from Home.co.uk reveal that there has been an 11.6% decline in available rental stock since July 2011. This was led by a 34.7% fall in properties to rent in Scotland.

Falls

In Wales, there have been falls of 28.1% while the South West of England also saw a substantial decline of 26.5%.

Overall, seven out of eleven regions in the UK saw a fall more than the UK wide average. More prominent falls included a 24.6% slip in the East Midlands, 20.8% in the South East and 16.7% in the West Midlands.

Only one region, the North East of England, experienced a rise in supply, with a substantial increase in rental stock of 33.4%. This is owed in part to the number of accidental landlords, with many would-be sellers looking to let out there properties as opposed to selling at a loss.

Demand

While supply in the PRS has fallen, demand from tenants continues to rise, with many would-be buyers mean priced out of the market.

A number of tax changes, such as the phasing out of mortgage interest tax relief and Stamp Duty rises, have led many landlords to leave the market – further exacerbating the imbalance.

In turn, this is moving to drive up rents across many regions of the UK.

Large decline in homes to rent over the last six years

Large decline in homes to rent over the last six years

Wales has seen rents rise by 113% during the last year, while Yorkshire has seen increases of 8.4% over the same period. Scotland too has seen rises, of 5.4% on average.

The South West saw rents rise by 5.7%, while there was a less profound rise in the South East, of 0.9%.

London however has actually seen rents fall by 5.3% in the last twelve months, largely as a result of the rush in investment seen before the Stamp Duty changes came into force in April 2016.

Backfired

Director of Home.co.uk, Doug Shephard, observed: ‘It is ironic that the government’s justification for tax changes in the PRS was to ‘level the playing field’ for wannabe homeowners. The result of this barrage of red tape and taxation, at both local and national government levels, has meant that the supply of rental properties has fallen behind demand in most regions thereby driving up rents. Of course, it’s not the first time that government tinkering and tax grabs have backfired but the upshot for Generation Rent is appalling.’[1]

‘The ‘elephant in the room’ for the government is that record low mortgage interest rates have driven unprecedented investment in the PRS over recent years. Simply put, those already with significant home equity have been able to come up with deposits for properties intended to let whilst aspiring homeowners are as cash-strapped as ever as they pay out huge sums in rent. However, ultra-low interest rates and the associated pain for renters look set to persist for the foreseeable future,’ he added.[1]

[1] https://www.landlordtoday.co.uk/breaking-news/2017/6/sharp-decline-in-homes-to-let

 

Ban on letting agent fees confirmed in Queen’s Speech

Published On: June 21, 2017 at 1:47 pm

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Categories: Property News,Tenant Fees Ban

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The Queen’s Speech has taken place today, with her Majesty seemingly confirming the pledge to introduce a ban on letting agents’ fees levied on tenants in England.

Outlining the Government’s proposals for the next two years, the Queen mentioned the fees ban- announced by Chancellor Phillip Hammond in November.

Consultation

A consultation on the proposed ban closed during the recent General Election campaign. However, there has been no news on the contents of any responses.

Some industry members hoped that the failure of Theresa May to secure a majority would mean the end for the proposals, but today’s announcement shows it remains firmly on the agenda.

The draft Tenants’ Fees Ban bill includes a reference that alludes to, ‘banning landlords and agents from requiring tenants to pay letting fees as a condition of their tenancy.’ It also says there may be – subject to approval from Parliament- a provision for tenants to be able to recover unlawfully charged fees.

Ban on letting agent fees confirmed in Queen's Speech

Ban on letting agent fees confirmed in Queen’s Speech

There was also no specific reference to Tory manifesto pledges such as: ‘We will crack down on unfair practices in leasehold, such as escalating ground rents’ or: ‘encouraging landlords to offer longer tenancies as standard.’

The Queen did however announce a commitment from the Government to build more properties.

 

 

 

 

How have UK property prices altered since Brexit vote?

Published On: June 20, 2017 at 10:17 am

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Categories: Property News

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A new report has assessed how property prices in Britain have altered in the year since the historic vote for the UK to leave the European Union.

eMoov’s Brexit House Price Report shows that the average price of a property in the UK has risen by 3.35% in the last 12 months. In real terms, this has taken the average price from £212,950 to £220,094.

Post-Referendum Rises

The figures suggest that then Chancellor George Osborne’s comments that prices could slide by 18% in the next two years are well wide of the mark.

Analysis of the figures indicates that regions where a majority voted to leave the EU saw the largest rises in price. Values here rose by 2.27% from an average of £191,611 to £195,957.

Average house prices across regions that voted to remain were higher back in June 2016 at £247,471, but have seen a rise of only 1.36% thereafter. This has taken the average price to £250,840.

Voters

The top five regions to see the biggest price growth since the Brexit vote were all home to majority leave voters. The East Midlands saw the largest increase of 3.84%, followed by the West Midlands with 3.62%.

Completing the top five were the East, North West and Yorkshire and the Humber, where values increased by 3.46%, 2.92% and 2.92% respectively.

When looking at each region individually by areas within them that voted to leave or remain, all bar four have seen house price growth amongst regions that won the overall vote.

In London, the majority of people voted to remain – but house price growth in boroughs that voted to leave has increased by 11.1%, in comparison to only 1.90% across boroughs where the majority voted to remain.

The North East, North West, East Midlands and Wales all saw the majority of people vote to Leave the EU. Areas within these regions that voted to remain however have seen greater price growth than those that voted to leave.

How have UK property prices altered since Brexit vote?

How have UK property prices altered since Brexit vote?

Other UK countries

Scotland voted unanimously to remain and property prices here have risen by 2.84% in the last year. Northern Ireland also voted to remain, with prices here seeing more subdued growth of 0.61%.

Founder and CEO of eMoov.co.uk, Russell Quirk, said: ‘We thought it would be interesting to run this research from a neutral standpoint to assess what impact, if any, the EU Referendum has had on the UK property market.

What is clear is that those areas that voted to remain were home to a much higher average house price in general and it would seem that it is this upper end of the market in each region that has seen price growth slow the most.’[1]

‘Encouraging news for those at the other end of the ladder, who seem to be benefitting the most since the decision to leave. What it certainly does highlight is that there are still swathes of the market, even in London, where the UK property market remains immune to any external political uncertainty, and this should stand us in good stead as we exit the EU and with the recent general election in mind,’ he added.[1]

[1] eMoov Press Release, eMoov’s Brexit House Price Report, 20.06.17

 

UK rental market bounces back in May

Published On: June 20, 2017 at 8:56 am

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Categories: Property News

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Rental market activity recovered during May – putting an end to fears of a prolonged slowdown in the market.

The most recent report from Agency Express shows that after slower market conditions throughout Britain last month, activity improved during May.

Improvement

Agency Expresses’ Property Activity Index shows that national figures for properties ‘let’ in May increased by 13.8% month-on-month. New listings ‘to let’ rose by 15.8%.

Across the UK, 11 out of 12 regions recorded by the Index saw a rise in new listings to let, alongside those actually let.

The top performing region in May was the South East of England, where homes to let rose by 29.2% month-on-month. Properties let increased by 31.4%.

Other strong performing regions included the North East, London, Wales and the South West, where properties to let rose by 25.6%, 23.7%, 23.5% and 21.6% respectively.

In addition, the West Midlands, East Midlands and the South West saw a rise of 23.4%. 21.8% and 17.9% respectively in the number of homes let.

UK rental market bounces back in May

UK rental market bounces back in May

Falls

The largest falls in this month’s Index were recorded in the West Midlands and East Anglia. In the West Midlands, figures for new listings to let fell to stand at -2.4%, while a dip in East Anglia saw the number of properties let sit at -0.9%.

However, a slowdown in May is certainly not uncommon for these regions – with both faring better than they did 12 months earlier.

Stephen Watson, managing director of Agency Express, observed: ‘The Property Activity Index historically reports a decline in activity throughout May for many regions. This month however we have witnessed a good level of activity across the UK lettings market with some regional pockets recording record bests. Moving in to June and July we would expect a further increase in activity.’[1]

[1] https://www.landlordtoday.co.uk/breaking-news/2017/6/uk-rental-market-bounces-back-with-greater-activity-anticipated-over-summer

 

AIIC calls for inventories to be made compulsory

Published On: June 19, 2017 at 1:27 pm

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The Association of Independent Inventory Clerks has called on the Government to introduce compulsory, unbiased and regulated inventories as an industry standard.

Boasting more than 850 members nationwide, the AIIC feels that regulated inventories could assist in raising standards in the lettings market.

Deposits

A recent tenant survey from HomeLet has revealed that 12.5% of over 20,000 renters asked have had a deposit withheld.

The most common reasons for this were cleaning and redecoration fees – which could have been prevented with a solid, photographic inventory.

Interestingly, the research found that just 70% of tenants asked received an inventory of their property and its content from an agent before they moved in.

Danny Zane, joint chair of the AIIC, noted: ‘With the election over and a new housing minister now in place, it’s time for the government to think about housing and in particular the growing private rented sector, which now accounts for around a fifth of all households.’

‘Independent, third party inventories are a fundamentally important part of the lettings process and they need to be made obligatory.’[1]

Digital signature on tablet. Man hand puts digital signature on tablet. Vector illustration in flat design. Businessman approves deal or offer by electronic signature.

AIIC calls for inventories to be made compulsory

Biased

Moving on, Mr Zane said that: ‘Landlords and letting agents should not be compiling what can very easily be considered as biased inventory reports that tenants must sign prior to getting access to their new home.’

‘The proposed ban on letting agent fees charged to tenants has hogged all the headlines in recent months but there are other industry issues the government needs to think about. This ban seems very short-sighted to me as it is likely to encourage a rise in rents as well as a reduction in the protection of unbiased inventory reports being used.’

An unbiased and independently compiled inventory can save both tenants and landlords money, ensuring a fair move-in/move-out process for all parties,’ he concluded.[1]

[1] http://www.propertyreporter.co.uk/landlords/calls-for-government-to-make-independent-inventories-compulsory.html

 

Sales up but prices down, according to Rightmove

Published On: June 19, 2017 at 9:54 am

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Categories: Property News

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The most recent report from Rightmove indicates that the number of sales agreed by agents over the last month rose by 7%, in comparison to the same period in 2016.

This is the greatest level recorded for this time of year since 2007, apart from one other higher figure seen in 2014.

Despite this, the average asking price of properties being listed on the portal has fallen by 0.4% during the last month.

Falls

This was the first monthly decline in prices recorded at this time of year since 2009 and the first monthly fall in 2017.

Yearly asking price growth is now at 1.8% – the slowest rate recorded since April 2013. As such, Rightmove predicts that the average asking price of properties coming onto the market is £316,109.

In terms of sales times, May saw properties take 59 days on average, down from 60 in April and 79 in January.

The average stock per agent is 60 properties, up from the 57 recorded in April.

Sales up but prices down, according to Rightmove

Sales up but prices down, according to Rightmove

Instability

Director of Rightmove, Miles Shipside, noted that a recent lack of stability has contributed towards sliding asking prices.

Shipside said: ‘The price of property coming to the market had increased in June in every year since 2009, so buyer confidence has clearly been affected by inflation outstripping their pay packets and current political events.’[1]

‘The high levels of sales being agreed show that the underlying fundamentals are largely unchanged with high first-time buyer demand which drives movement higher up the ladder, all aided by the cheap cost of borrowing,’ he continued.[1]

According to Shipside, markets in different local markets and sectors are reacting differently to the air of uncertainty. For example, a typical first-time buyer property consisting of two-bedrooms or less, represents the fastest growing property type, with newly-listed prices rising by 3.5% monthly and by 5.5% annually.

‘Those at the traditional starter level are brushing aside uncertainty, with demand being fuelled by the ongoing desire for home-ownership, government assistance, and mortgage repayments often being cheaper than rent for a similar property. In contrast, sectors higher up the ladder with a larger proportion of discretionary movers have seen the greatest recent price wobbles,’ Shipside concluded.[1]

[1] https://www.estateagenttoday.co.uk/breaking-news/2017/6/sales-agreed-up-but-asking-prices-down–rightmove