Posts with tag: rent prices

More than a Quarter of Letting Agents Seeing Rents Rise

Published On: July 3, 2017 at 9:07 am

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More than a Quarter of Letting Agents Seeing Rents Rise

More than a Quarter of Letting Agents Seeing Rents Rise

Over a quarter of letting agents saw rents rise in May – the highest level since last July, according to ARLA Propertymark (the Association of Residential Letting Agents).

The organisation’s May Private Rented Sector Report found that 27% of letting agents saw rents rise for tenants in May, which is the highest level recorded since July 2016, when 28% experienced growth in rents.

For the second consecutive month, just 2.8% of tenants successfully negotiated a rent reduction. This figure had increased to 3.6% in March, but it appears that their bargaining power is now decreasing.

Meanwhile, the supply of rental stock increased to an average of 189 per member branch in May – up by 11% on last year, when this figure stood at 171.

The increase in rental stock is owed in part to the drop in the number of landlords selling up in May, with agents reporting three sales per branch, down from four in April.

The Chief Executive of ARLA Propertymark, David Cox, comments on the latest report: “Private rents rose by 1.8% in the 12 months to May 2017, and the last thing tenants need is for them to get even higher.

“With the new Government confirming a Tenants’ Fee Bill in the Queen’s Speech, we can expect them to rise by up to £103 a year, hitting loyal tenants looking for long-term agreements hardest. This is on top of any natural organic rent growth as well.”

He adds: “The only thing which could offset this would be to significantly increase rental stock, but, until this happens and supply and demand meet in the middle, rents will only become more and more unaffordable.”

A cap of one month’s rent on tenants’ security deposits was also announced in last month’s Queen’s Speech, which followed the controversial General Election result.

Rents in Scotland “Ticked Down” in May, Reports Your Move

Published On: June 29, 2017 at 9:39 am

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The rental market north of the border slowed in the run-up to this month’s General Election, with rents in Scotland dropping across many areas in May compared with the previous month, show new figures from Your Move Scotland.

Rents in Scotland "Ticked Down" in May, Reports Your Move

Rents in Scotland “Ticked Down” in May, Reports Your Move

The average rent price in Scotland is now £561 per month, which is down by 2.3% on a monthly basis, but still up by 2.2% on the £549 recorded in May 2016.

It was a mixed picture across the country in May, with prices in major city centres continuing to perform strongly along with rural areas, such as the Highlands and south of Scotland, despite the overall downturn in rents.

Four of the five regions included in the research saw rents rise in the past year, led by the south of Scotland, where rents increased by 8.8% since May 2016.

The other regions to experience growth in rents over the past 12 months were the east of Scotland, up by 3.3%, the Highlands and Islands, up by 3.2%, and the Edinburgh and Lothians region, up by 2.6%.

The Glasgow and Clyde area was the only region to record a decline in rents year-on-year, dropping by 0.3% when compared to May 2016.

On a monthly basis, the same pattern was repeated, as only Glasgow and Clyde saw a decrease in the average rent price. Rents here fell by 1% between April and May, to stand at an average of £564 per month.

The Lettings Director of Your Move Scotland, Brian Moran, comments on the data: “With the General Election taking centre stage throughout May, it should come as no surprise that rents ticked down from their previous level.

“Prices in most areas remain above where they were a year ago, with growth coming across a number of areas.

“Tenants are drifting towards city centre living or completely rural life, as it was these areas which saw the most interest during May.

“The Highlands and Islands saw prices rise sharply compared to last month, while in the South, rents are 8.8% more than a year ago.”

Annual Rent Price Growth Drops for First Time in Eight Years

Published On: June 6, 2017 at 9:48 am

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Annual Rent Price Growth Drops for First Time in Eight Years

Annual Rent Price Growth Drops for First Time in Eight Years

Annual rent price growth across the UK dropped for the first time in almost eight years in May, according to the latest Rental Index from HomeLet.

The data shows that the average rent price on a new tenancy commencing in May was £901 per month – 0.3% lower than in the same month of 2016.

Rents on new tenancies in London were also 3% lower than in May last year, at an average of £1,502 – the greatest decline for eight years.

This is the first time since December 2009 that the HomeLet Rental Index has recorded a fall in rent prices on an annual basis.

The rate of rent price growth across the UK has been slowing in recent months, having peaked at 4.7% last summer.

The Chief Executive of HomeLet, Martin Totty, comments on the figures: “May 2017 saw average rents nationally fall for the first time in eight years, when the economy had suffered the shock of the financial crisis.

“HomeLet rental data suggests landlords are now facing a difficult balancing act between ensuring rents are affordable for tenants in a low real wage growth environment, whilst covering their own rising costs.”

He continues: “Tenants will still need a vibrant and growing rented sector to provide them with property options at the time of their choosing. Any constraint to the supply of rental properties, because landlords are unable to achieve the reasonable returns they require, cannot be in the long-term best interests of tenants, especially if, as we’ve now heard from all the main political parties, the UK’s population continues to grow.”

Here’s how rent price growth has varied across the UK:

Region

 Average monthly rent – May 2017 Average monthly rent – April 2017 Average monthly rent – May 2016 Monthly variation

Annual variation
East Midlands £614 £604 £595 +1.6% +3.3%
North West £679 £677 £664 +0.2% +2.2%
South West £803 £802 £787 +0.2% +2.1%
Wales £605 £610 £594 -0.8% +1.8%
East of England £909 £904 £904 +0.5% +0.6%
Northern Ireland £609 £614 £606 -0.9% +0.4%
West Midlands £658 £661 £656 -0.5% +0.3%
Yorkshire and the Humber £614 £619 £618 -0.7% -0.6%
South East £998 £1,003 £1,014 -0.4% -1.5%
Scotland £622 £632 £634 -1.6% -1.9%
North East £522 £525 £534 -0.7% -2.3%
Greater London £1,502 £1,519 £1,548 -1.1% -3.0%
UK £901 £904 £904 -0.3% -0.3%
UK excluding Greater London £753 £754 £750 -0.1% +0.5%

Are you still considering who to vote for in Thursday’s (8th June) General Election, online estate agent eMoov has analysed which political party has been best for the property market since 1970: /best-political-party-house-price-growth/

Hannah Maundrell, the Editor in Chief of money.co.uk, also comments on the HomeLet statistics: “Tenants have been bashed by rising rents for years, so signs the sharp rises may have subsided will come as welcome relief for anyone looking to move. Not least because the surprise slowdown is the exact opposite of what we expected would happen following the tax changes that cropped profits for many buy-to-let landlords.

“The slowdown may sound like good news, but it comes after years of steep hikes that have left rent unaffordable for many. It’ll be interesting to see how the rental market fares post-election, as all of the larger parties have made bold pledges over the housing market.”

She continues: “While some may take the slowdown as proof the economy is about to take a turn for the worst, this may not necessarily be the case. It’s true that inflation is starting to hit pockets and that skyrocketing rents has made life difficult for many. However, this could simply be the market evening out; the demand for rental property is certainly still there.

“On the plus side, this does shift the power away from landlords slightly and give tenants a little more negotiation power on price if they’re looking to move to a new property or renew their contract.

“Taken together with the slowdown in car and retail sales, it’d be easy to paint a bleak picture; but we have to remember that sales exceeded expectations in the first quarter and at the end of last year. So much so, the Bank of England became very worried about consumer spending and debt. There’s only so much money we can spend; it’s quite possible these figures are a reflection of the fact we’ve already made our big purchases for the year.”

Tenants Securing Lower Rents Ahead of Lettings Fee Ban

Published On: April 26, 2017 at 9:22 am

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Tenants are getting savvier, by securing lower rents ahead of the lettings fee ban, according to a study of letting agents by ARLA Propertymark.

In the March Private Rented Sector report from the organisation, 3.6% of letting agents had seen rents drop, compared with 2.2% in February. There were still increases, however, with 25% of agents reporting that landlords had put their rents up, down from 32% last year.

Tenants Securing Lower Rents Ahead of Lettings Fee Ban

Tenants Securing Lower Rents Ahead of Lettings Fee Ban

Worryingly, however, letting agents also reported an increasing number of landlords selling their rental properties during March. An average of four landlords per letting agent branch had announced plans to sell up last month.

No reason was given for the decision, but it does coincide with the reduction in mortgage interest tax relief and forthcoming letting agent fee ban.

The last time the number of landlords selling their properties rose above three per branch was in November last year, when the fee ban was announced.

David Cox, the Chief Executive of ARLA Propertymark, believes that this shows that tenants are already being affected by the Government’s buy-to-let tax changes.

It is believed that rent prices will go up following the lettings fee ban, as landlords will instead be forced to foot the charges.

Meanwhile, the supply of rental stock remained flat, at an average of 183, but was 8% higher than March 2016.

Letting agents also had a higher number of tenants registered, at 36 per branch, up from 34 in February.

Cox comments on the report: “It’s concerning that, despite supply increasing over last year, stock failed to return to the market after dipping in February.

“When we also consider that this is coupled with a rise in the number of landlords selling their properties, this is bad news for those searching for a rental property.

“The introduction of mortgage interest relief means the market is becoming less and less attractive to investors, and it appears some landlords are, as we predicted, choosing to exit the market rather than pay the higher taxes.”

He continues: “What’s more, two thirds of our members are concerned the Government will introduce even more landlord taxes in 2017, which will only further dampen supply.

“Following the announcement of the ban on letting agent fees, we expect the situation to only get worse for tenants when, inevitably, the costs are passed on to tenants through higher rents.

“However, it’s positive that more tenants are taking action and negotiating rent reductions before the consultation ends and they see their rents increase.”

Have your tenants been requesting lower rents recently?

Rents Rising Significantly Below the Rate of Inflation

Published On: April 24, 2017 at 9:14 am

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Rents Rising Significantly Below the Rate of Inflation

Rents Rising Significantly Below the Rate of Inflation

Growth in rent prices in the UK remains sluggish, sitting significantly below the rate of inflation, according to the latest HomeLet Rental Index.

The annual rate of rent price growth reached 1.1% in March – much lower than the UK consumer price index (CPI) of 2.3% recorded last month, which is putting continuing pressure on incomes.

The average UK rent on a new tenancy in March was £904 per month, which is up on last year’s average of £894 and £9 more than the previous month.

Annual rent price growth has dropped from a high of 4.7% in June 2016, with the decrease in rents most marked in areas of the country where prices were previously increasing fastest.

Rents in March rose in every area of the country except two when compared to February, with Yorkshire and the Humber and the North West as the only decliners.

Annually, rents were higher in March than a year previously in 11 out of the 12 regions covered in the Index, with the South East recording a marginal decrease.

The Chief Executive of Barbon Insurance Group – HomeLet’s parent company – Martin Totty, comments on the data: “In the current housing market, where demand for homes continues to outstrip supply and house prices are out of reach for many buyers, the long-term trend in the private rental sector is likely to be for rental price inflation to continue; however, the HomeLet Rental Index continues to reflect landlords’ focus on offering tenants affordable rents, with rents now increasing at a rate significantly below the general rate of inflation in the UK economy.”

The following table looks at rent price changes recorded in March:

Region Average rent – March 2017 Average rent – February 2017 Average rent – March 2016 Monthly variation

Annual variation
Wales £616 £602 £598 +2.3% +3.1%
Yorkshire and the Humber £619 £621 £607 -0.3% +2.1%
North East £522 £522 £512 +0.0% +1.9%
North West £675 £680 £664 -0.7% +1.7%
East Midlands £602 £595 £593 +1.1% +1.6%
Northern Ireland £614 £604 £605 +1.6% +1.5%
West Midlands £663 £659 £654 +0.6% +1.4%
Scotland £610 £597 £602 +2.1% +1.2%
Greater London £1,546 £1,520 £1,527 +1.7% +1.2%
East of England £902 £896 £892 +0.7% 1.1%
South West £798 £791 £791 +0.9% +0.0%
South East £997 £992 £1,000 +0.5% -0.3%
UK £904 £895 £894 +1.1% +1.1%
UK excluding Greater London £751 £746 £744 +0.7% +1.0%

 

One in Five Rental Properties now Owned by Company Landlord

Published On: April 18, 2017 at 8:18 am

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The proportion of rental properties owned by a company landlord reached 20% in the first quarter (Q1) of 2017 – the highest level since records began in 2010, according to research by Countrywide.

The number of homes owned by a company landlord has been steadily rising since 2013, but Q1 2017 recorded the greatest annual jump, of 4%.

One in Five Rental Properties now Owned by Company Landlord

One in Five Rental Properties now Owned by Company Landlord

Changes to buy-to-let tax relief, introduced earlier this month, may be behind the rise, believes Countrywide.

From 6th April 2017, the amount of tax relief that buy-to-let landlords can claim on finance costs, such as mortgage interest, is being reduced gradually to the basic rate of Income Tax.

The changes make it more tax efficient for some landlords to own their portfolios through a limited company, rather than hold as a personal asset.

Rental properties in London are most likely to be owned by a company landlord, with 27% of all homes let in the capital owned in this structure – the largest proportion in the UK.

Company landlord properties drive both the top and bottom of the rental market, with the most and least expensive homes likely to be owned by a company landlord.

Over the past year, a quarter of homes let by a company landlord cost less than £500 per month. Meanwhile, almost one in ten homes (9%) costing between £1,500 and £2,000 per month were owned by a company landlord, compared to 6% owned by individual investors.

In separate research, Countrywide found that rent prices across the UK fell in March. The cost of a new let was an average of 0.3% lower than in the same month last year, marking the second consecutive monthly drop.

The average rent in the UK is now £928 per month – £3 less than in March last year. The decline in rents was driven by London, the South West and Wales, where prices fell by 0.4%, 0.2% and 6% respectively.

The Research Director of Countrywide, Johnny Morris, comments: “The number of rented homes owned through a company is on the up. The incoming tapering of mortgage tax relief is likely driving the increase. Companies are generally taxed more favourably, particularly with recent changes by Government to tax relief. So, in many cases, landlords can make cash savings by operating through a company rather than as an individual.

“Rents fell again in March, mostly driven by falls in London. Stock growth continues to outpace demand in the capital, giving tenants more negotiating power, pushing down rents. In much of the rest of the UK, rents continued to growth, although at a slower rate.”