Posts with tag: rent prices

It’s been a Positive Autumn for the Lettings Market, Reports Your Move

Published On: November 28, 2018 at 11:22 am

Tags: property market,rent prices,rental yields,tenants

It’s been a positive autumn for the lettings market, according to the latest figures in Your Move’s Rental Tracker, which covers the month of October.

The South West led the way in October, with rent prices in the region rising faster than anywhere else. The average rent rose by 4.4% in the year to October, which is well above the average for England and Wales (2.2%).

Rents were down in just two regions in October – the East of England and London.

The average rent price in England and Wales was £861 on a seasonally adjusted basis, and £934 on a non-seasonally adjusted basis.

Rent prices

The standout performer in October was the South West, where a combination of strong local economic growth and high housing demand saw rents rise faster than any other region on an annual basis. A typical rent in the region was £686 in October.

But, despite the increase, the South West is still some way behind other parts of southern England. London remains the most expensive region to rent a property, at an average price of £1,271 per month.

However, rents in the capital are falling, by an average of 0.9% in the 12 months to October.

Rent prices in the East of England dropped by an average of 0.4% over the same period, with a typical property now let for £890 per month. It is the third most expensive region to rent.

Just ahead was the South East, which was the only one of the three most expensive regions to record annual rent price growth. Rents in this region – containing many London commuter hotspots – were up by 1.6%, to hit an average of £895 in October.

It’s been a Positive Autumn for the Lettings Market, Reports Your Move

At the other end of the scale, the cheapest region to rent a property in the country was the North East. Prices here rose by 0.8% in the 12 months to October, to reach an average of £535.

Elsewhere, prices in Wales were flat compared to October 2017, with rents standing at an average of £588 a month.

Month-on-month, the North East and West Midlands saw the greatest rent rises. Both regions recorded growth of 0.4% between September and October.

The North West was not far behind, and was the strongest performer of properties along the west coast. The region recorded growth of 0.3% on a monthly basis.

The East of England was the only region to record a decline in rents between September and October.

Rental yields

Each of the ten regions included in Your Move’s index posted the same average rental yield in October as it did in September.

Landlords in northern regions once again enjoyed the highest percentage returns, with average yields much higher than in southern areas.

The average landlord in the North East saw an annual yield of 5.0% in the year to October, while, in the North West, this figure stood at 4.8%.

London recorded the lowest percentage returns, at an average of 3.2%.

Across all of England and Wales, the average rental yield was 4.3%, which was the same as in September.

Rent arrears

Between September and October, there was a decline in the number of households in rent arrears, according to the Rental Tracker.

In a boost to tenants and landlords alike, just 8.6% of tenancies had fallen behind with their rent payments in October, which is down on the 10.1% recorded in September. It is also lower than August’s total of 9.7%.

The proportion of tenants in arrears remains well below the recent and all-time highs recorded by Your Move. The all-time high of 14.6% was seen in February 2010, while the most recent high of 13.7% was recorded in July 2017.

Martyn Alderton, the National Lettings Director of Your Move, says: “The focus of the rental market has now well and truly shifted away from London. Prices in other regions are growing much faster and offering higher percentage returns for landlords.

“The South West was the star region this month, posting faster rent growth than anywhere else.”

He goes on: “Investors in the North East and North West continued to enjoy higher percentage returns than other areas, with some areas looking at a 7.5% yield. Properties by the North West coast prove to be very popular. And, with the area ideal for those who enjoy outdoor activities such as running, biking and walking, it’s understandable why tenant demand is high and why landlords are choosing to buy here.

“All in all, there are positives across much of England and Wales, including the fact that tenant arrears are falling.”

Tenants in Camden Spending Most on Rent of any London Borough

Published On: November 28, 2018 at 9:51 am

Author: Em Morley

Categories: Tenant News

Tags: London,rent prices,tenants

Tenants in Camden are spending the highest proportion of their salaries on rent of any London boroughs, according to a new study by OnTheMarket.com.

The property portal found that, when renting a one-bedroom property in Camden, 61% (£1,944,28) of the average tenant’s salary is spent on rent. For a two-bed, this drops to 46% (£1,471,05), while a three-bed eats up 51% (£1,614,44). Four-bed homes will eat up 60% of a tenant’s rent (£1,911,65). These percentages are based on one tenant per bedroom.

The average gross salary of tenants in Camden is £3,181.17 per month.

However, the data shows that Camden does not, in fact, boast the highest average rent price in London. Instead, it is the borough where private tenants are spending the highest proportion of their wages on rent, in relation to the average salary for that specific borough.

Tenants in Camden Spending Most on Rent of any London Borough

Kingston upon Thames is the borough with the lowest percentage of earnings spent on rent across the capital. The average gross salary of a tenant in the borough is £4,352.78 per month.

When renting a one-bed property in Kingston upon Thames, the percentage spent on rent is 25% (£1,099.15), while a two-bed is 17% (£740.65). A three-bed is 15% (£648.55) and a four-bed is 14% (£627.40). This also assumes one tenant per bedroom.

Vikki Bennett, the Spokesperson for OnTheMarket.com, says: “Costs within the London rental market have been driven up in recent years, as first time buyers have battled to enter the housing market and second steppers have struggled to trade up while prices have risen.

“While it’s no surprise that cost remains the most likely primary factor when considering a new home, our analysis shows some stark variations across each borough of salary percentages being spent on rent. So, while London rents remain high across the board, considering all available options, such as moving to a nearby borough just a few miles away, can prove to have significant cost savings.”

She points out: “Hampstead, within the borough of Camden, is likely to be of high significance as to why Camden comes out with the highest percentage, due to the exceptionally high rental prices within this particular area.”

Mark Birch, the Director of Lettings at estate agent Jackson-Stops in Teddington, looks at Kingston: “Kingston upon Thames is an ancient market town located on the banks of the River Thames and nestled between London’s two largest Royal Parks. It’s an attractive place to rent for many people, offering many things such as great shopping and leafy walks in beautiful parkland. It is also cheaper than neighbouring areas, such as Richmond.

“It’s easy to see why so many commuters might choose to settle here and benefit from being outside the hubbub, while remaining close enough to connecting transport links into London.”

And Charlie Benn, the Director of Lettings at Bexley estate agent Anthony Martin, also comments: “It takes around 45 minutes to an hour to get from Bexley into central London. This is ideal for city workers, especially at a time where two-hour commutes are on the rise.

“City workers living in Bexley are in easy reach of central London, while also benefitting from the affordable rental prices.”

They add: “This makes Bexley attractive to those working in the City who want to keep a higher percentage of their salary for disposable income!

“Next year, the borough will be within an easy commute to the highly anticipated Crossrail Link (at Abbey Wood), providing even more time saving commutes.”

Rent Prices have Fallen in Real Terms over the Past Decade

Published On: November 13, 2018 at 9:45 am

Author: Em Morley

Categories: Lettings News

Tags: rent prices,tenants

The cost of renting for private tenants has improved over the past decade, albeit with substantial regional variations, thanks to the decline in rent prices in real terms, according to new figures.

Rents in real terms (adjusted for inflation) have dropped by an average of 2.2% in Great Britain since October 2008, which means that the average cost of living has risen more than typical rents, analysis by Hamptons International shows.

Over the last ten years, inflation, which measures the average cost of goods and services (or the cost of living), has increased by 24%, outpacing rent prices, which have risen by an average of 22% over the same period.

Inflation has surpassed rent price growth in all regions across Great Britain, resulting in negative growth in rents in real terms, with the exception of the East of England and London, where rental growth has outpaced inflation over the past decade, at an average of 7.5% and 0.5% respectively.

The Midlands has recorded the greatest fall in real rents, which are down by 7.8% since October 2008, while rents in real terms in the north have fallen by 6.9%, as inflation has outpaced rental growth.

The Head of Research at Hamptons International, Aneisha Beveridge, says: “Real rents in Great Britain have been falling for the last 21 consecutive months. This comes as a result of sluggish rental growth and a post-EU referendum backdrop of rising inflation.”

However, this trend could be set to change, as inflation begins to fade and rent price growth starts to pick up pace, according to Beveridge.

Rent price growth on new let properties accelerated to 2.0%, to hit an average of £977 per month across the country in October 2018 – the highest since February, as every region recorded a rise in rents.

The East of England recorded the greatest jump in rent prices, which rose by an average of 3.9% year-on-year, while Scotland saw the slowest rent price growth, of 1.1%.

Meanwhile, rents in London grew for the second consecutive month, up by 1.4% annually, driven by a 2.7% increase in inner London.

With so much talk of high costs for tenants, are you surprised to learn that rents have actually dropped in real terms over the past decade?

Rents Rising in Central London, as Tenants Bid Against Each Other

Published On: November 8, 2018 at 9:05 am

Author: Em Morley

Categories: Lettings News

Tags: London,rent prices

Rental demand shows slight decline in Q2

Rent prices are rising in central London, as tenants have to bid against each other, due to a sharp decline in housing supply, according to Knight Frank.

The property firm claims that supply in the private rental sector is on a sharp decline, owed to a jump in the number of buy-to-let landlords exiting the market, in response to the Government’s tax changes for investors.

Knight Frank’s latest Prime Lettings Index indicates that many prospective tenants are being squeezed from the centre of London and pushed into the suburbs, as landlords offload their expensive property investments in the capital.

Using data from Rightmove, the firm’s research arm found that the number of rental property listings in prime central London has fallen by 18% in the year to September, placing upward pressure on rent prices.

Knight Frank reveals that the average rent price rose by 1.2% in September, in response to declining levels of supply, which has been prompted by landlords seeking to sell their properties due to tax changes. The Chancellor announced further reforms in his recent Budget.

However, as supply continues to drop, the number of new prospective tenants registering in prime central London has been on an upward trajectory since the start of this year, suggesting that the pressure on rent prices will continue to hit.

With fewer rental properties available in prime central London, the amount of tenancies agreed per Knight Frank office in prime outer London increased by 16.7% in the 12 months to September.

But it’s not all bad news, as residential property outperformed other asset classes in 2018, despite total annual rental returns dropping in prime London markets.

Gold fell by 4.4% in the year to October, while the FTSE 100 dropped by 5.0% over the same period. Global stock markets have also decreased in recent weeks, over concerns about trade tensions.

Scottish Private Rental Sector Continues Upward Trend, Reports Citylets

Published On: November 7, 2018 at 9:57 am

Author: Em Morley

Categories: Lettings News

Tags: property market,rent prices,Scotland

The Scottish private rental sector recorded an average increase of 2.2% in rent prices, to reach £789 per month, in the 12 months to the third quarter (Q3) of the year.

Continued demand for properties of all sizes in the Scottish private rental sector pushed rent prices higher, with four-bedroom homes recording the steepest annual increase, at an average of 5.5% (as per the previous two quarters of 2018), reports Citylets.

The average time to let a property averaged one month (31 days) in Q3, which is one day quicker than in Q3 2017. A significant 61% of properties in the Scottish private rental sector are let within a month, reports the lettings portal.

Gillian Semmler, the Communications Manager at Citylets, comments: “Strong demand for rented accommodation in Scotland continued in Q3 2018, most notably in the central belt, where both Edinburgh and Glasgow experienced rental growth in excess of recent quarters. The continued shift in demographic towards families renting appears evident in the uplift in rents achieved for larger properties.”

Edinburgh

Once again, rent prices in Edinburgh rose again during Q3 (by 5.6%), bringing the market to another all-time high of £1,107 per month on average.

All property sizes recorded strong annual growth, with four-bed homes rising the fastest over the year, at an average of 10.8%, in part likely to reflect the continued strong demand for family rental housing.

Scottish Private Rental Sector Continues Upward Trend, Reports Citylets

Of concern to tenants will be the uptick in the rate of growth for rents in Edinburgh back to the 5-6% range, after sitting between 3-4% for around a year prior to Q2 2018. It is the 36^th consecutive quarterly recording of annual rent price growth for the Scottish capital.

The time to let remains very low in Edinburgh, with 76% of all properties let within one month.

Glasgow

For so long the bastion of rental stability in Scotland, with consistent and low annual growth, Glasgow recorded an unexpected and sharp rise in rents, of an average of 4.9% in the year to Q3. A typical rental property in Glasgow now lets for £785 per month, in just 24 days.

Citylets notes that it is unclear why all markets saw high annual growth over and above what would usually be expected in the traditionally busiest period of the year. Consequently, the gap between Scotland’s largest and the granite cities has opened up, with a material gap now emerging between them.

Citylets is interested in viewing the figures for the end of Q4, to determine whether a new city dynamic has emerged.

Aberdeen

Aberdeen landlords can remain cautiously optimistic that their market may soon level off completely, and, as the price of oil has been on an upward trend for almost three full years, may well start to return to positive growth.

Rent price growth stood at an average of -3.6% in Q3, with one-bed homes recording -2.7% growth for the second consecutive quarter.

The average time to let has come down by four days, to an average of 45 days. 42% of rental properties in Aberdeen let within a month, which is up from 37% in Q3 2017.

Dundee/West Lothian/South Lanarkshire/Renfrewshire

Dundee also experienced a rise in the annual growth rate for rent prices, at an average of 3.4%, taking typical rents to £604 per month. Strong demand for large family and student properties led increases, at 11.0% and 7.9% respectively.

Nearly half (48%) of properties in Dundee let within one month, which is up significantly on recent quarters.

The West Lothian lettings market has again recorded strong annual growth of 4.8%, to hit £697 a month, with a substantial decline in time to let of nine days.

Growth in South Lanarkshire continued for the fourth consecutive quarter, albeit easing to 1.9% from 3.8% in Q2.

Adrian Sangster, of estate agent Aberdein Considine, comments on the state of the Scottish private rental sector: “In the north of Scotland, we are continuing to experience a market where stock is not an issue, whilst, in the south, there is insufficient availability of properties to meet tenant demand. This is resulting in the almost evitable increase of rent values in the south, compared to the continued reduction in the north, albeit at a much slower pace.

“Whilst there are some encouraging sounds from the oil industry, with several new projects being announced, I do not anticipate it making too much of an impact in the north in the short to medium-term. However, whilst the country’s legislators seem hell bent on discouraging landlords to remain in the sector, I can only see the rental trends in the south continuing unabated.”

Lenders may have to Legally take Tenants’ Rent Payment History into Account

Published On: October 29, 2018 at 9:52 am

Author: Em Morley

Categories: Tenant News

Tags: credit scores,rent prices

Lenders may have to legally take tenants’ rent payment history into account when they apply for mortgages, after the matter was raised in Parliament last week.

During Prime Minister’s Questions, Justine Greening, a former cabinet minister, raised the Creditworthiness Assessment Bill, which was read in the House of Commons on Friday.

Greening pointed out that MPs across all parties want to see tenants’ rent payment history contribute towards their credit scores, just as prompt mortgage payments do.

Experian, which issues credit reports, claims that it is now taking into account the rent payment history of over 1.2m private tenants.

It also says that rental data is appearing on tenants’ statutory credit reports, with 79% of tenants who report their rental payments to Experian seeing a noticeable improvement in their credit score.

CreditLadder works with over 2,500 letting agent branches to report verified rent payments to Experian.

The firm’s CEO, Sheraz Dar, says: “As the first and largest of the players offering rent recognition to people who rent, we are proud to play our part in helping responsible tenants gain equal access to affordable credit, both now and increasingly so in the future.”

Lord Bird’s Creditworthiness Assessment Bill was read in the Commons, after it passed through the House of Lords with no amendments.

The bill aims to make it a legal requirement for credit providers to take into account both tenants’ Council Tax and rent payment history.

Rent payment history being included in tenants’ credit scores has long been called for in the lettings industry, with one proptech firm insisting that the change can’t come soon enough.

Do you believe that a tenant’s rent payment history should be included in their credit score, in order to hopefully make it easier for them to obtain mortgage finance?

We will continue to keep you updated with developments to the bill.