Posts with tag: rent prices

December was the Calm Before the Storm for Tenants

Published On: January 31, 2019 at 10:00 am

Author:

Categories: Tenant News

Tags: ,

December appeared to be the calm before the storm for private tenants in the UK, as they’re in for a rough ride in 2019, according to ARLA Propertymark (the Association of Residential Letting Agents).

The organisation’s latest Private Rented Sector Report, covering December 2018, reveals that tenants ended last year in the driving seat, but are set to experience a rocky ride this year.

Rent prices

The number of tenants experiencing rent price increases fell for the fourth consecutive month in December, with 18% of ARLA Propertymark member agents reporting that landlords put their rents up.

This is the lowest figure recorded since December 2017, when the amount of tenants experiencing rent rises stood at 16%.

Since rent increases hit a peak in August 2018 (40%), the number of tenants seeing their prices go up has fallen.

Rental supply

The supply of properties available to let rose to an average of 193 per ARLA Propertymark member branch in December, from 183 in the previous month.

Annually, this level has dropped by 4%, from 200 in December 2017.

Tenant demand

Demand for homes from prospective tenants declined in December, with the number of home hunters registered per branch down to an average of 50, from 55 in November.

Demand is also down year-on-year, as 59 potential tenants were registered on average in December of the previous year.

David Cox, the Chief Executive of ARLA Propertymark, comments: “Although December’s figures indicate that tenants finished the year in the driving seat, they’re in for a rocky ride this year. With the Tenant Fees Bill passing its final hurdle in Parliament last week, it is now waiting to receive royal assent before being passed into law and implemented on 1st June. This means it’s only a matter of time until we could see rent prices starting to creep up again.

“As we’ve said repeatedly, landlords have faced continued regulatory change and increasing costs over the last few years, and the tenant fees ban will only add to this burden, meaning many will either have to start increasing rents for tenants or exit the market.”

Renting Became More Affordable Last Year, Reports The DPS

Published On: January 23, 2019 at 11:00 am

Author:

Categories: Tenant News

Tags: ,

Renting became more affordable in 2018, thanks to a combination of a once-in-a-decade annual decline in rent prices and wage inflation, according to The Deposit Protection Service (The DPS).

2018 was the first calendar year since the global financial crisis of 2008 that the average rent price in the UK dropped, with the percentage of typical wages spent on rent falling by 0.5%, to 31%, according to the latest Rent Index from The DPS.

The average wage rose by 2.83% between January and December last year, according to the Office for National Statistics (ONS).

Julian Foster, the Chief Operating Officer at Computershare Investor Services, which produces the annual report, comments: ”This first drop in average annual rents for almost ten years is good news for UK renters, especially if wages continue to climb in 2019.”

The average rent price fell by 1.17% (£9) over the past 12 months, from £774 per month in 2017 to £765 in 2018.

The greatest annual decline was recorded in Yorkshire and the Humber, where the average rent dropped by 3.63% (£21) to £546 a month, making it the third most affordable region in the UK, after the North East (£529) and Northern Ireland (£544).

Prices in the North East decreased by 1.47% (£8) on an annual basis, with the average rent in the region standing around 32% lower than the national average.

The second most affordable region was Northern Ireland, although rent prices rose from historically low levels by 2.38% last year, from £532 per month to £544.

Scotland and Wales witnessed modest rent price growth on 2017, with Scottish rents rising by a marginal 0.19% (£1), while rents increased by 1.42% (£8) in Wales.

In England, only the South West (0.21%) and West Midlands (0.12%) experienced annual rent price growth last year, with these increases equivalent to around an additional £1.

As in 2017, London, the South East and East of England were the only regions in 2018 where average rents were above the UK national average.

London continues to hold the most expensive rent price in the UK, at an average of £1,294 a month. This is 69% higher than the national average and represents 41% of a typical wage in the capital.

Decreases in rents were experienced for all property types in 2018, with terraced houses recording the greatest decline (2.49%), taking a typical rent on this type of property to £711 per month.

This report should come as good news for tenants!

Rent Prices Hit an All-Time High in London, Rightmove Reports

Published On: January 18, 2019 at 9:09 am

Author:

Categories: Lettings News

Tags: ,,

Rent prices hit an all-time high in London in December, due to a worrying lack of supply of rental properties, according to the latest data from Rightmove.

Figures from the property portal for the period from October to December show that rental listings dropped by 22% on an annual basis in London, and have fallen by 10% outside of the capital.

This lack of supply has pushed the average asking rent up by 2.7% year-on-year, although it has declined by 0.6% on a quarterly basis, to £798 per month.

In London, the average asking rent hit an all-time high in December, of £2,034 a month, which follows annual growth of 5.4% and a quarterly increase of 2.1%.

Rightmove predicts that asking rents will rise by 3% outside of the capital this year and 4% in London.

Up to the end of 2018, Hertford recorded the greatest increase in tenant demand outside of London, while East Ham saw the biggest rise in the capital.

This widening supply-demand imbalance has led to a lack of choice for tenants, leading to the new all-time high rent prices, which surpass the peak seen in 2016.

The Commercial Director and Housing Market Analyst at Rightmove, Miles Shipside, says: “The increasing rents in London reflect that demand has been exceeding supply over the past year.

“When the Government introduced higher Stamp Duty on second home purchases back in 2016, it deterred many landlords from investing in the buy-to-let market, which, in turn, has exacerbated this ongoing dearth of available properties, and we’re yet to see any significant boost in stock from the many build to rent programmes. In addition, the more punitive treatment of tax reliefs has meant some landlords are also exiting.”

Outside of London, it is parts of the North West that have experienced the greatest increases in tenant demand, with six towns from the region making the top ten in 2018.

The top five comprises Hertford, Bootle, Bracknell, Winsford and Prenton.

In the capital, east London dominated the top five: East Ham, Forest Gate, Biggin Hill, Elephant and Castle, and Chadwell Heath.

Hayes, Notting Hill, Hammersmith, Canary Wharf and Highgate all featured in the top five London areas where the average asking rent has increased the most, with Newbury, Swansea, Dundee, Dudley and Hinckley being the spots where rent prices rose the most across the rest of the country.

Shipside believes: “We forecast that average asking rents will continue to slowly strengthen further in 2019, by perhaps 3% outside London. In the capital, there are no signs of an increase in buy-to-let activity, which may lead to asking rents growing further by around 4%.

“A mutually beneficial plan for both buy-to-let landlords and tenants is to strike up a genuine rapport. It eases landlords’ concerns if they have a tenant in situ for several years, while a tenant with a good relationship with their landlord will stand a better chance of negotiating more favourable rents.”

UK Rents are Expected to Rise by 11.4% by 2024, According to CBRE

Published On: January 15, 2019 at 9:00 am

Author:

Categories: Lettings News

Tags: ,

UK rents are expected to rise by an average of 11.4% over the next five years, according to a prediction by CBRE.

Alongside fairly moderate growth of 1.8% in the average UK house price this year, the property group expects rents to rise by 1.3% during 2019.

The report, which looks at how economic, political, financial and technological trends could affect the property market, foresees further growth in rents leading up to 2024, supported by a drop in housing supply in the private rental sector, amid “dampened investor demand for buy-to-let”, and growing demand for rental homes, particularly from lower-earning young people.

CBRE estimates that UK rents will rise by 1.3% in 2019, followed by growth of 1.9% in 2020, 2.5% in 2021, 2.7% in 2022, and a further 2.6% in 2023. This equates to total growth of 11.4% during the whole period.

House prices, on the other hand, are expected to increase by 1.8% this year, followed by growth of 2.3%, 3.4%, 3.7%, and 1.3%, equating to 13.1%.

Miles Gibson, the Head of UK Research at CBRE, says: “We expect rather weak house price and rental growth over the next year, but we think that the lack of supply and low interest rates for mortgages will hold prices up.”

He adds that weak supply and strong demand is “creating a lot of interest among investors” in the student accommodation and build to rent sectors, especially in terms of institutional capital.

Some £2.1 billion of institutional funds have been invested in the year to the third quarter (Q3) of 2018, which is 51% higher than in the same period of 2017.

Investment is on a firm upwards trajectory, with volumes in 2019 likely to exceed 2018’s total, according to CBRE.

Do you believe that UK rents will rise by 11.4% by the year 2024?

Rents Rising Below the Rate of Inflation, Reports Your Move

Published On: January 8, 2019 at 9:04 am

Author:

Categories: Lettings News

Tags: ,

Rent prices continued to rise below the rate of inflation in most UK regions during November, according to the latest report from Your Move.

The estate agent found that the average UK rent price rose by 1.8% in the year to November 2018, to hit £864 per month. This compares to a current inflation rate of 2.3%.

The greatest increase of the month was in the South West, at an average of 4.3%, taking rents to £701 a month, followed by 1.9% growth in the East Midlands, which took the average value to £663.

Rent prices in the East of England and London fell by an average of 1.1% and 0.9% respectively over the same period.

Private tenants in the East of England paid £881 per month on average in November, but those in the capital are still paying the most, at £1,263.

Your Move also found that landlords can now earn annual rental yields of 5% in the North East and 4.8% in the North West, due to low house prices and large student populations, which are resulting in good rent prices, meaning solid yields and few void periods for landlords.

Landlords in eight of the ten surveyed regions saw their yields remain firm between October and November.

The East of England and East Midlands both saw a marginal decline in yields over the month, with the former falling from 3.7% to 3.6%, while, in the latter, the typical return dropped from 4.3% to 4.2%.

London continued to record the smallest percentage returns, at an average of 3.2% during November. Across all of England and Wales, the average rental yield was 4.3% in the month – the same as in October.

Martyn Alderton, the National Lettings Director of Your Move, says: “Properties in the north appear to offer high percentage returns to property investors and, as a result, they are attracting interest even more.

“This strong appetite to buy has been accompanied by a rise in demand for rental properties, since the north is attracting many young professionals and families with its good transport links and job prospects.”

He goes on: “As the London market continues to gently slow down, other regions are coming to the fore and proving attractive to investors.

“In the South West, there was also good news and rental prices increased faster than anywhere else. The region boasts both the up-and-coming city of Bristol, and some of the most picturesque parts of the world in Devon and Cornwall.”

Your Move’s figures also reveal that the proportion of tenancies in rent arrears fell from 8.6% in October to 8.1% in November.

ARLA Propertymark Predicts Stormy 2019 for Tenants

Published On: December 20, 2018 at 9:00 am

Author:

Categories: Tenant News

Tags: ,

ARLA Propertymark (the Association of Residential Letting Agents) is predicting a stormy 2019 for tenants, following the release of its latest Private Rented Sector Report, covering November.

Rent prices

The number of private tenants experiencing rent price rises fell for the third consecutive month in November, with 21% of ARLA Propertymark member letting agents reporting that landlords put their rents up in the month. This is down from 24% in October and 31% in September.

However, on a year-on-year basis, the amount of tenants experiencing rent increases is up from just 16% in November 2017.

Rental supply

The supply of properties available to let fell to an average of 183 per member branch in November, from 198 in the previous month.

This is the lowest level seen since April this year, when supply stood at an average of 179 properties, and is down by 4% on November 2017.

Tenant demand

Demand from prospective tenants was also down in November, with the number of home hunters registered per member letting agent branch dropping to an average of 55, compared to 71 in October.

Having assessed these statistics, the Chief Executive of ARLA Propertymark, David Cox, is predicting a stormy 2019 for tenants.

He says: “It looks like tenants are starting to take control, with the number of landlords hiking rents falling for the third month in a row. However, as we look ahead to 2019, things don’t look as positive for tenants. Our members expect more landlords to be driven out of the market by rising costs, which will increase competition and push up rent costs. If we want to secure market stability in the New Year, we need to increase stock, and making the market more attractive for buy-to-let investors is the only way this can be done.”

Do you believe that the end of this year is the calm before the storm for tenants?