Posts with tag: rent prices

Working Tenants Spend More than a Quarter of Earnings on Rent

Published On: August 15, 2017 at 9:13 am

Tags: private rental sector,rent prices,renting,tenants

Working Tenants Spend More than a Quarter of Earnings on Rent

Working tenants in England are spending more than a quarter of their monthly earnings on rent, new data from the GMB Britains General Union shows.

Research by the union found that the median rent in England for a two-bedroom property is now £650 per month – up from £550 in 2011.

At the same time, median monthly earnings in England, based on Office for National Statistics (ONS) data, are £2,375, meaning that working tenants are spending 27.4% of their income every month on rent. This is up from 24.9% in 2011.

The situation is worst in London and the South East, as the study found that working tenants are spending a huge 53.3% and 34.1% of their income on rent every month respectively.

This proportion drops slightly to 30% in the East of England.

The union comments: “Pay has to rise to allow workers to afford these ever-rising rents, so the public sector pay cap and the below inflation pay rises in both the public and private sectors has to end, to avoid a drop in consumer spending, which, if not checked, will lead to a further recession.

“We have been talking about this problem for far too long, and there can be no excuses for not providing housing to people that they can afford to live in on average wages.”

These findings correspond with a new report from The Independent, which shows that almost a third of private rental households struggle to pay their rent every month. Meanwhile, almost a quarter of tenants are now forced to claim housing benefit to help pay their rent.

As a result, private tenants are now the largest group of people being made homeless.

Even more worryingly, it appears that working tenants are now spending large proportions of their wages on unsafe and unsecure housing; the research revealed that around a third of private rental homes are now failing basic health and safety standards.

At a time when rent costs are rising so significantly, we urge all landlords to provide safe, secure and comfortable homes for their tenants – stick to the law at all times and consider their needs.

Rental Competition is Pushing London’s Commuter Belt Further East

Published On: August 3, 2017 at 9:19 am

Author: Em Morley

Categories: Property News

Tags: average rent,commuter belt,London,rent prices,tenants

Strong rental competition from tenants looking to leave the capital is pushing London’s commuter belt further east, according to the findings of the latest Landbay Rental Index.

Rents in the East of England grew by an average of 2.35% in the 12 months to July – the fastest rate of any UK region over this period and almost four times the average UK increase of 0.64%.

High rental competition for low-rent accommodation from long-distance commuters is thought to be a contributing factor, pushing rents up by more than 2% in eight of the ten counties in the region, and more than 3% in four of the ten.

Rental Competition is Pushing London’s Commuter Belt Further East

Of the capital’s five hottest commuter belt spots outside of the M25, four are located in the East of England. Luton (+4.23%), Peterborough (+3.75%), Thurrock (+3.56%) and Bedfordshire (+3.19%) all have average rents less than half the London average (£1,873), but have all experienced significant rental growth in the past year. In the capital, rents have dropped by 1.05% over the last 12 months.

The current pace of growth means that a tenant in Luton is now paying £789 for rent each month, compared to £757 a year ago, which is an extra £384 over the year.

The index highlights the growing affordability crisis facing young people working in the capital, suggesting that many are moving further afield to reduce their rent burden, possibly while they try to save for a home of their own.

Transport for London (TfL) recently revealed that Southern Rail trains are now the most overcrowded in the country, with some services carrying more than twice the number of passengers they were designed for. Meanwhile, new figures suggest that more young people than ever, particularly in London, are frustrated by the struggle to save and now feel like they will never be able to buy their own homes.

The study corresponds to recent research, which found that one in four young Londoners plan to leave the capital to buy their first homes.

Less affordable areas in London’s commuter belt – those with higher than average rents, such as the South East – have seen lower levels of rental competition and therefore slower price growth.

While the East of England has seen rental competition drive up prices, just three out of 19 counties in the South East have recorded rent price growth above 2%. It’s telling that those that have – Medway (+3.16%), Kent (+2.28%) and West Sussex (+2.03%) – all have more affordable average rents, at less than half the London average.

Indeed, the two counties in the South East with the highest average rents – Surrey (£1,439), and Windsor and Maidenhead (£1,270) – have both seen rents drop over the past year, by 0.13% and 0.23% respectively.

Elsewhere, already expensive areas surrounding the capital have experienced far lower rental growth. For someone living in Windsor and Maidenhead, traditionally deemed as a desirable location for commuters, rents have seen the greatest slowdown.

Average annual rent price growth across the UK slowed to 0.64% in July – less than half the 1.83% rate recorded last year. Outside of London, the pace slowed to 1.56%, with average rents reaching £756 per month.

Within the capital, especially central London, rents have now been falling for over a year – by 1.05% over the past 12 months.

The CEO and Founder of Landbay, John Goodall, comments: “With rising inflation and rock-bottom interest rates, it is little surprise to see demand in the more affordable Home Counties rising faster than pricier parts of London and the South East. Naturally, these surrounding areas are starting to experience a surge in rental prices, creating a ripple effect out from the capital. There are of course a number of factors at play, but as yields tighten in the capital, landlords may well be branching out to the East of England in a bid to meet this demand.”

Tenants should be wary, however, as new research claims that landlords are cutting back on how many under 35s they accept as tenants. This will only make rental competition more fierce, which will push rents even higher in high-demand areas.

Scottish Rental Yields Continue to Perform Better than England and Wales

Published On: July 31, 2017 at 9:18 am

Author: Em Morley

Categories: Landlord News

Tags: rent arrears,rent prices,rental yields,Scotland

Scottish rental yields for landlords continue to perform more strongly than those in England and Wales, according to the latest index from Your Move Scotland.

While returns across much of England and Wales have been squeezed in the last 12 months, Scottish rental yields have remained solid. The average rental property in the country returns 4.9% to investors – exactly the same as a year ago.

Rent price growth

The Buy-to-Let Index for June 2017 also shows that rents have continued to rise across many parts of Scotland. The average rent in the country is now £569 per month – 1.8% higher than last June, when the typical price was £559, and up by 1.4% on May 2017.

Scottish Rental Yields Continue to Perform Better than England and Wales

The Edinburgh and the Lothians region continues to boast the highest rents in Scotland, at £661 per month. Prices in these areas have also enjoyed strong growth over the last 12 months. In June last year, the average property let for £639 a month, meaning that prices have risen by 3.5% in a year.

The only other area of Scotland to record rents above the £600 mark in June was the Highlands and Islands region, where the average price hit £602 – 2.9% higher than last year.

At the other end of the scale, the East of Scotland, including Aberdeen, is currently the cheapest place to rent in the country. The average price here is £541 per month.

On a monthly basis, prices rose in most parts of Scotland. The Edinburgh and the Lothians region saw rents increase by 0.8% – higher than anywhere else.

The South and East of Scotland both experienced growth between May and June, of 0.4% and 0.1% respectively.

Scottish rental yields

Scottish rental properties continued to reward landlords with high returns in June, Your Move Scotland also reports.

Across the country, the average yield was 4.9% during June, which is exactly the same as both May and June 2016.

This stability compares favourably with properties in England and Wales, where investors have continued to see their yields squeezed over the past year.

In June, the average yield in England and Wales was 4.4%. Only landlords with properties in the North East and North West of England enjoyed higher returns than those in Scotland – 5.2% and 5.0% respectively.

Tenant finances

Across the entirety of Scotland, some 18.3% of tenancies had rent arrears of one day or more during June, the index reveals.

This is higher than the 12.3% recorded in May, suggesting that tenant finances have deteriorated. Scotland’s arrears rate remains above the level seen in England and Wales. Across both nations, the average level was 7.0% in June.

The Lettings Director of Your Move Scotland, Brian Moran, says: “Slow and steady is the name of the game in Scotland. While the political landscape has changed dramatically, the rental market continues its solid progress.

“Rents across Scotland are now 1.8% higher than a year ago and have risen by 1.4% in the last month alone.”

He continues: “Landlords are enjoying excellent returns on their investment, with the typical property returning 4.9% to owners – a strong performance in today’s economic context.

“Landlords south of the border will be envious of the Scottish market, as returns are much stronger than in most regions of England and Wales.”

Perhaps you’ll be encouraged to invest in Scotland thanks to the strong performance of Scottish rental yields?

General Election Result has Little Impact on Rents, Reports Your Move

Published On: July 28, 2017 at 8:04 am

Author: Em Morley

Categories: Property News

Tags: rent arrears,rent prices,rental market,rental yields

It appears that the General Election result had no immediate impact on rents across England and Wales, according to the latest Buy-to-Let Index from Your Move.

Rent prices

All regions saw rents rise or remain level in June on a monthly basis, as the average rent price now stands at £827 per month.

Between May and June, the average rent across England and Wales rose by 1.6%, while annual growth stands at 2.1%.

The estate agent believes that the uncertainty caused by the General Election had no short-term impact on the rental market; in three of the ten regions of England and Wales, rents remained stable month-on-month, with the remaining regions reporting increases.

General Election Result has Little Impact on Rents, Reports Your Move

The greatest rises were seen in the North West and West Midlands, where prices grew by an average of 0.3% in June to reach £629 and £609 per month respectively.

In the East Midlands, South East, and Yorkshire and the Humber, rents all rose by 0.2% over the month.

On an annual basis, Wales boasted faster rent growth than anywhere else. Prices were up by 7.2% over the year to June, although this area still remains one of the cheapest places to rent a property. The average rent in June was £599, compared to £559 in June 2016.

The next strongest growth was recorded in the East of England, where the average property was let for £872 – 3.6% more than last year.

Just two regions saw prices fall compared to June 2016. The South West experienced the greatest decline in rents, with the average property costing £664 per month in June – 2.6% less than 12 months ago.

London was the other area to see rents drop, although it still remains the most expensive place to rent in England and Wales. The typical rent price in the capital stood at £1,277 in June – 1% lower than a year ago.

However, there remains a significant disparity within the capital itself. Rents in the London transport Zone 2 cost an average of £1,629 per month, compared with £1,101 for those located in Zone 5 – a 48% difference.

Rents in areas that fall under Zone 3 and 4 were the lowest of all eight districts, at £944.44 in June.

Landlord returns

June saw some welcome relief for landlords, as yields in some parts of England and Wales showed signs of improvement.

While returns have been squeezed for some time, Your Move found that the average yield improved in both the North East and North West in June, although only by a small margin. These two regions continue to offer the largest yields, at an average of 5.23% and 5.01% respectively.

However, the majority of regions saw returns drop year-on-year, meaning that it remains a mixed picture for investors.

While the largest declines came in the East Midlands and East of England, yields fell by only 0.2% over the month and by just 0.5% over the year.

London offered the smallest percentage return for landlords in June, with an average yield of just 3.1%.

Landlords are also battling with different expectations regarding tenancy length, depending on where in the country their properties are situated.

In both Filton, Gloucestershire and Taunton, Somerset, the average tenancy lasts six months. This compares to an average tenancy length of 44 months in Sevenoaks, Kent – the highest recorded by Your Move.

Tenant finances

The financial situation of tenants improved again in June, as the proportion of renters in arrears dropped, the report shows. The percentage of households in England and Wales in arrears was 7% in June – well below the 9.6% recorded in May.

The number of tenants in rent arrears remains well below the all-time high of 14.6%, which was seen in February 2010.

While this is encouraging news, we urge all landlords to protect their rental incomes against rent arrears with Rent Guarantee Insurance – a peace of mind cover that ensures you still get paid, even if your tenant can’t.

Find out more about the essential policy from Just Landlords: https://www.justlandlords.co.uk/rentguaranteeinsurance

Rent Hikes have Hit a 14-Month High, Report Letting Agents

Published On: July 27, 2017 at 8:59 am

Author: Em Morley

Categories: Property News

Tags: letting agents,rent prices,rental market,tenants

Rent hikes across the UK hit a 14-month high in June, according to the latest Private Rented Sector Report from ARLA Propertymark (the Association of Residential Letting Agents).

Rent Hikes have Hit a 14-Month High, Report Letting Agents

Rent hikes

The number of member letting agents that saw landlords putting rent costs up for tenants rose to 31% in June – up from just 27% in May.

This is the highest level of agents reporting rent hikes since April 2016, when 31% saw increases.

Lettings law

Predominantly, letting agents would like the new Government to scrap the impending ban on letting agent fees (83%), while three quarters (73%) would also like the Government to focus on improving enforcement for rogue operators.

More than three in five (62%) want the new Government to regulate the sector, while a quarter (26%) think it should provide tax breaks to encourage longer-term tenancies.

Rental stock

The number of properties managed per letting agent branch increased marginally in June, to an average of 190 – up from 189 in May.

Year-on-year, this figure has risen by 8%. In June last year, letting agents managed just 176 properties on average.

Tenant demand

In June, demand from tenants dropped slightly, with an average of 61 new tenants registered per branch. In April and May, agents registered 65 on average.

The Chief Executive of ARLA Propertymark, David Cox, comments on the latest report: “With the cost of living on the rise and inflationary pressures tightening, the last thing tenants need is for their rents to continue rising. However, the fact that supply looks to be rising, while demand has dropped slightly, indicates a move in the right direction for the market.

“Ultimately, to stop rent prices from increasing too much, we need to find the balance between supply and demand. While there’s still a long way to go, if the supply of rental stock continues to increase and the number of tenants searching for new properties drops off, we’ll be making headway towards achieving this.”

Landlords and agents, have you witnessed rent hikes over the past month?

Catch up with what’s going on in the sales market with NAEA Propertymark’s latest report: /homebuyers-pushing-summer-transactions/

London Rents Drag Down the Average Across the UK

Published On: July 5, 2017 at 9:41 am

Author: Em Morley

Categories: Property News

Tags: average rent,London,private rental sector,rent prices

London rents are dragging down the average growth rates for the rest of the UK, according to the latest data from HomeLet.

London Rents Drag Down the Average Across the UK

The figures show that newly agreed rent prices across the UK fell by 0.3% in June on an annual basis, to an average of £908 per month – the same rate recorded in May, when new rents dropped for the first time since December 2009.

London rents continue to record annual declines, falling by 2.6% in the year to June, to stand at an average of £1,524 per month – a long way from the 7.1% rate of rent price growth seen this time last year.

When London rents are taken out of the equation, new rents actually rose by 0.5% annually, to an average of £757.

Just five regions recorded a decline in rent price growth in June, with the East of England, South East, Yorkshire and the Humber and the North East also experiencing annual decreases.

On a monthly basis, most regions recorded growth, with just the East Midlands, South West and East of England experiencing drops.

The Chief Executive of HomeLet, Martin Totty, says: “It is now a full year since rental price inflation in the UK peaked at 4.7%, since when we’ve seen progressively more modest rent increases and, over the past two months, falls in some areas of the country.

“June’s figures are the first indication that this trend may now be beginning to flatten out, but it’s too early to say this with any certainty – the next few months will provide crucial intelligence on the direction the market is taking.”

The data contrasts to new figures released by Hometrack, which suggest that London rents are now at the most unaffordable level for ten years.

Recently, the Local Government Association (LGA) has also attacked private rents for being too high, reporting that one in seven tenants now spend more than half of their income on rent.

Calling on central Government to provide more support for the building of homes that families can afford, the LGA revealed that just 2% of homeowners spend the same proportion of their income on mortgages.