Posts with tag: rent prices

Liverpool is the Top City for Price Growth and Rental Yields

Published On: September 24, 2019 at 9:03 am

The latest Hometrack Cities UK Cities House Price Index has shown that Liverpool saw a property price increase and a boost in rental yields over the last 12 months. The city is rapidly becoming a favourite with property investors and seems to be a profitable option for buy-to-let landlords.

Hometrack UK Cities House Price Index reveals that Liverpool, along with Edinburgh, saw property price increases of 5.8% which is higher than any other city in The UK. As for rental yields, Portico Host has reported that some landlords are pulling in short-term letting yields of around 27%, with longer-term ones achieving in excess of 13%.

Liverpool’s economy appears to be growing stronger by the day, with a new stadium for Everton Football Club on the horizon, along with a £250 million road infrastructure investment and a £14billion regeneration, the city is looking more and more attractive. An ever-expanding population of students and graduates combined with low property prices, make Fairfield, Walton, Kensington ideal areas for investors.

Area	Short-let Yield (%)	Short-let Gross Income	Rental Yield (%)	Rental Gross Income	Avg. House Price	Postcode
Fairfield, Liverpool	27.2%	£32,883	13.6%	£16,716	£126,779	L6
Walton, Liverpool	25.5%	£18,493	7.9%	£5,700	£72,317	L4
Kensington, Liverpool	24.2%	£27,405	9.8%	£12,260	£119,150	L7
Kirkdale, Liverpool	23.9%	£15,930	8.5%	£5,786	£73,564	L4
Anfield, Liverpool	22.7%	£23,766	9.6%	£10,457	£102,772	L6, L4
Toxteth, Liverpool	20.9%	£13,779	9.0%	£5,775	£74,250	L8
Orrell Park, Liverpool	17.5%	£13,779	7.5%	£6,360	£91,500	L9
Vauxhall, Liverpool	15.5%	£20,885	6.8%	£ 20,885	£ 139,061	L2, L3, L

Liverpool landlords can benefit from more than just high yields. Despite the darling of property investment, London increasingly showing signs of a plateau, forecasts predict that the north-west region and its cities will benefit from the UK’s highest levels of capital appreciation over the next five years.

On analysing Land Registry data, Portico has found that average property prices in Liverpool have jumped by 19.34 percent over the past five years, expanding from £108,267 in June of 2013, to £129,562 in June of 2018.

Tenants see increase in rent prices for eighth month in a row

Published On: September 17, 2019 at 8:13 am

Author: Em Morley

Categories: Tenant News

Tags: rent prices

Rent prices in the UK are due to increase even more for tenants as a result of the demand for private rental housing outstripping supply.

This is according to information provided in the Royal Institution of Chartered Surveyors’ (RICS) August 2019 RICS Residential Market Survey.

This report highlights that the demand for private rental housing has increased for the eighth month in a row. This comes as supply continues to fall, a trend which the RICS says stretches all the way back to 2016.

Towards the end of the report it states: “In the lettings market, the August results show tenant demand increased for an eighth month in succession, as a net balance of +23% of contributors cited a pick-up (non-seasonally adjusted figures).

“Set against this, landlord instructions remain in decline, an ongoing trend stretching all the way back to 2016. Given the consistent imbalance between rising demand and falling supply, rents are seen being squeezed higher over the next three months.”

This warning provides a mirror of the one that came from Professor David Miles, a former member of the Bank of England’s Monetary Policy Committee. He recently stated in an exclusive article for the Residential Landlords Association (RLA) that “rents are likely to be higher as supply gradually shrinks.”

David Smith, Policy Director the RLA, has commented: “The Government’s approach to the private rental sector (PRS) is hurting but it is not working. Despite its efforts to boost homeownership, demand for new rental properties is continuing to increase.

“It is plain wrong to be making landlords the scapegoat for the housing crisis. Ministers need to change tack and introduce a range of pro-growth measures to boost the supply of homes for private rent. If they fail it will be tenants who lose out as they face less choice and higher rents.”

Who’s enforcing The Tenant Fees Act? New law relies on honesty and tenants being in the know

Published On: September 6, 2019 at 8:46 am

Author: Em Morley

Categories: Tenant Fees Ban

Tags: landlord law,rent prices,tenant fees ban

Despite the introduction of the tenant fees ban back in June, there are still some glaringly obvious flaws in the Government’s plan to simplify and reduce tenant fees. The act relies on all parties being fair and honest, and being up to date on the law rather than true enforcement of the new rules.

Tenancy deposits are now capped at a maximum of 5 weeks’ rent providing the annual rent is under £50,000. This cap increases to 6 weeks’ for properties with a higher rent. The Act also bans the charging of additional fees such as agency fees, pet deposits and so-called admin fees.

The Deposit Protection Service (DPS) highlighted last month that despite seeing a drop in the number of deposits that exceed the cap, more than 40% are still higher than current legislation allows. It may be the case that many of these deposits are left over from tenancies that began before the ban and will simply be reduced once they are renewed.

And whilst the change to the law specifically stops extra fees and deposits going above the limit, it did not protect against landlords and letting agents simply increasing monthly rent payments to make up for their reduced income elsewhere. Back in July, David Cox at Arla Propertymark released figures showing that rents had increased across the country since the ban came into effect:

“Unsurprisingly, rent costs hit a record high in June as tenants suffered the impact of the tenant fee ban.

“Ever since the government proposed the ban, we warned that tenants would continue to pay the same amount, but the cost would be passed onto tenants through increased rents, rather than upfront costs.”

In another example, landlords across England have started charging additional rent for pets as they are no longer allowed to ask for a higher ‘pet deposit’. Whilst it is understandable that landlords may be concerned about extra cleaning charges or damages caused by animals, and must cover those costs somehow, the tenant fees ban has forced them into a corner in which they have no other choice.

Tenants with animals now find themselves in a situation in which they were better off before the ban: owners that made sure their pets didn’t cause additional damage got their money back, but by adding it onto the rent, they will never see that money again.

It is clear that the banning of tenant fees has been ineffective, but it has also arisen that the policing of the new law is equally impotent. The system relies almost entirely on landlords knowing their responsibilities and being honest about the way they conduct business, whilst on the other side, tenants are expected to keep up to date with their rights and report landlords that they believe are flouting the rules.

The new law was meant to protect vulnerable tenants and punish the small minority of rogue landlords, but has shown itself to have very little effect on the groups it was meant for.

In the case of landlords exceeding the maximum deposit cap, the deposit schemes themselves cannot enforce legislation. A spokesperson from The DPS had this to say:

“Our systems provide landlords with information that helps them understand the regulations affecting tenancy deposits, and we remind them of the cap specifically when they are registering deposits. We also have extensive communication and training programmes that help both landlords and renters understand the responsibilities that come with a tenancy.

“Nevertheless, all tenancies are different, and it is ultimately the responsibility of landlords themselves to make sure they are compliant with any relevant laws and regulations. While our systems are designed to help inform landlords and tenants, we are not responsible for enforcing legislation.”

With no clear direction or follow-up from the Government, rogue or unaware landlords are essentially free to continue charging high deposits and unfair fees until they are (un)luck enough to be reported by a clued-up tenant. More must be done to ensure that The Tenant Fees Act is being followed and enforced.

Private rents falling in real terms

Published On: August 15, 2019 at 8:35 am

Author: Em Morley

Categories: Tenant News

Tags: rent prices

The ONS’s Index of Private Housing Rental Prices for July 2019 has now been released. The main points include:

Private rental prices paid by tenants in the UK rose by 1.3% in the 12 months to July 2019, unchanged since May 2019.
In England, private rental prices grew by 1.4%, Wales experienced growth of 1.0%, while in Scotland private rental prices increased by 0.9% in the 12 months to July 2019.
London private rental prices rose by 0.9% in the 12 months to July 2019, unchanged since May 2019.

David Smith, Policy Director for the Residential Landlords Association (RLA), has responded:

“Today’s figures show that the market is working. It demonstrates clearly that introducing rent controls linked to inflation, as called for by some, would leave tenants worse off as rents would rise faster than they currently are.

“Welcome though today’s news is rising demand for and falling supply of homes for private rent risks considerable increases in rents which will only hurt tenants. It is vital that the Government stops blaming landlords for the housing crisis and introduces positive, pro-growth measures, to support the majority of landlords who do a good job in providing the homes to rent the country desperately needs. All the talk of longer tenancies will mean nothing if the homes to rent are not there in the first place.”

According to the data published by the Office for National Statistics, private rental prices paid by tenants in the UK rose by 1.3 per cent in the 12 months to July 2019, unchanged since May 2019. In London they rose by 0.9 per cent in the 12 months to July 2019, unchanged since May 2019. Over the same period, inflation was 2.1 per cent as measured by CPI and 2.8 per cent as measured by RPI.

According to the latest figures from the Royal Institution of Chartered Surveyors (RICS), a fall in the supply of private rented housing whilst demand from prospective tenants increases is “likely to squeeze rents higher.” Tenant demand has picked up despite the Government’s efforts to boost homeownership and RICS notes that many respondents to its latest residential market survey saw a rise in the number of enquiries from new home buyers in July.

Rental Growth Across England Outperforming National Average

Published On: July 25, 2019 at 9:44 am

Author: Em Morley

Categories: Landlord News

Tags: rent prices

Rental growth in cities across England that are undergoing extensive regeneration has now overtaken the national average.

Research from Bunk, the lettings platform, has found that the average rental price has increased by 21% during the last five years, compared to 16% across England as a whole.

This study looked into the impact of gentrification on rental prices, along with a comparison of rental growth in cities that have been through extensive regeneration to the national average.

The relocation of the BBC and regeneration of Salford Quays has resulted in Manchester seeing the most significant boost. This has resulted in rent prices rising by 38% in the last five years.

Cambridge was close behind, with rent prices up 31% since 2014. Planning consent has been given for 200 new homes on the Mill Road Depot site, which could mean this increase is set to continue.

Newcastle also saw an increase of 31%, with Bristol following on 29%. The latter has been earmarked as a gentrification hotspot, with wages up and cultural investment on the rise.

Tom Woollard, co-founder of Bunk, commented: “Regardless of your opinion on gentrification, one thing is clear. These transformations are positive in terms of the level and quality of housing stock being provided and there is certainly an appetite for these developments and for housing in areas to have seen drastic improvements.

“The silver lining for the nation’s landlords is that this maintained demand pushes up prices and these areas provide a very good return on investment in a landscape that is currently rather tough.

“So for those looking to invest, the best option is to get in early to an area that has been earmarked for regeneration but is still affordable at present, and you should see a healthy return despite the changes to the sector of late.”

29% of Private Renters Struggle to Pay Rent, English Housing Survey Figures Reveal

Published On: July 18, 2019 at 9:08 am

Author: Em Morley

Categories: Tenant News

Tags: English Housing Survey,rent prices

The results of the English Housing Survey 2017-2018 for the private rented sector (PRS) have been released. The findings include:

29% of private renters said they found it difficult to pay their rent
14% of private renters who had moved had been asked to leave or faced rent increases
63% of private renters report having no savings. Just over a third (37%) of private
renters reported having some savings. 11% of private renters had savings of
£16,000 or more
Over half (58%) of private renters thought they would eventually buy a home. Of the 42% of private renters who did not think they would eventually buy a home, most (68%) said this was because they could not afford to do so

Dan Wilson Craw, Director of Generation Rent, has commented: “High rents are making life miserable for private renters. Today’s figures reveal that 3 in 10 find it difficult to pay their rent, forcing them to choose between going hungry or getting into debt.

“Even for those who can cover the rent, escaping the sector by moving into home ownership is a long way off – nearly two-thirds cannot save and just 1 in 10 have more than £16,000 in the bank.

“With millions of people growing older in private rented homes, the next Prime Minister must make it an acceptable long term tenure. That means protecting tenants from unfair evictions and rent rises, and doing what it takes to make rents affordable.”

The English Housing Survey report also highlights that 65% of homeowners aged 65+ live in an under-occupied property, which is not helping the already limited UK housing market, in regards to available property for sale.

Private Finance mortgage consultant Chris Sykes has commented on this statistic: “The baby boomer generation is holding onto at least 4.8 million spare bedrooms across the UK, with 67% of households aged 65+ currently living in an under-occupied home with two or more spare bedrooms.

“The cost of stamp duty is discouraging these empty nesters from downsizing, leaving them in homes too large for their future needs, but too costly to give up. As a result of this inactivity at the top end of the ladder, housing stock is limited and the UK property market is somewhat paralysed.

“To free up housing stock and re-energise the property market, we’re calling on the UK government to introduce a stamp duty exemption for last-time buyers. Minimising the tax liabilities for older generations could encourage and enable them to finally downsize, freeing up housing stock and thereby helping to fix the supply issue that has hindered the market for so long.”

The full report can be read on the GOV.UK website: https://assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_data/file/817630/EHS_2017-18_PRS_Report.pdf