Posts with tag: rents

Rents for new UK tenancies stable in July

Published On: August 24, 2017 at 9:35 am

The total number of letting agents who experienced rent rises for their tenants stayed constant at 31% in July, according to the latest private rental survey from the Association of Residential Letting Agents.

This was a rise of 3% on the 28% seen in July, with the report also revealing a further increase in demand.

Demand Increases

In all, the number of properties managed per member branch rose slightly during July, up to 192 from the 190 recorded in June. This is the highest level seen since January, when agents were managing 193 on average.

Year-on-year, this figure rose by 4%, with July 2016 seeing agents managing 184 properties on average. Demand from new tenants rose to 70 in July from 61 in June.

Rents for new UK tenancies stable in July

David Cox, Chief Executive of ARLA, observed: ‘Landlords really are stuck between a rock and a hard place. All the tax increases they’ve incurred over the last 18 months have meant they either need to sell their properties and exit the market, or increase rent payments to plug the deficit.’

‘Neither of these outcomes benefit tenants. If landlords exit the market, supply is even more strained and matched with growing demand, rent prices will increase anyway. The Government may claim they are helping tenants but the unintended consequences of their actions on the private rental sector are now really being felt by tenants in terms of lack of homes to choose from and the feeling of being constantly priced out of the market. This needs to change,’ he added.[1]

[1] http://www.propertywire.com/news/uk/rents-new-tenancies-uk-stable-july-latest-agent-data-shows/

PCL rents fall despite increased activity

Published On: August 24, 2017 at 8:46 am

Author: Em Morley

Categories: Property News

Tags: demand,housing market,prime central london,rents

The Prime Central London lettings market has seen gradual improvements during the opening two quarters of the year, according to new research released by JLL.

This report indicates that transaction levels increased by 3% in the opening quarter of the year and by another 1% during the second. In turn, this has boosted the annual turnovers to over 9,670 – the highest amount in nearly three years.

Activity Increases

The reported activity recovery has been led from the lower-end of the market, according to the data. Lettings in the below £500 per week market – accounting for nearly 30% of all transactions in the region – were up by 16% in the year to the second quarter of 2017.

On the other hand, the volume of new tenancies agreed in higher price brackets was just 1.9% across the same period.

Despite a slight increase in tenant demand, oversupply of property on the housing market has led to further rental value slips during the second quarter.

Price slips for rentals below £1,000 per week have averaged out at 0.9% during Q2, while the upper-end of the market has seen rents fall roughly 10% in the year to Q2 2017.

PCL rents fall despite increased activity

Subdued

JLL said that subdued turnover during the past two years, coupled with weaker demand and several owners renting out properties having been unable to sell have all contributed to increased levels.

The agency moved to warn that: ‘Furthermore, tenants are bargaining with the choice available to them. The gradual increase in transactions witnessed during the course of the past two quarters will help to lower available supply in the coming quarters, but the very steady increase will take some time to have a meaningful impact.’[1]

[1] https://www.lettingagenttoday.co.uk/breaking-news/2017/8/rents-fall-up-to-10-in-prime-london-despite-increased-activity

Almost one-third of landlords plan on increasing rents

Published On: August 22, 2017 at 8:47 am

Author: Em Morley

Categories: Landlord News

Tags: buy to let investment,landlords,legislation,rents

A rising number of private landlords are looking at plans to increase rents, in order to combat alterations to mortgage interest tax relief.

New research from Cover4LetProperty discovered that 32.5% of landlords are planning to raise rents during the next 12 months. This is in order to keep up with heightened tax liabilities and costs, due to these legislation changes.

Mortgage Interest Tax Relief

In April, alterations to mortgage interest tax relief began to be phased in. The four-year cycle will eventually see landlords only able to deduct 50% of their taxable income generated through their buy-to-let investment.

While rents are set to increase, the research also suggests that most buy-to-let investors are not planning on altering the size of their portfolios. 83% of those asked said they were not looking to either increase or decrease the size of their portfolio in the next year.

Actually, only 14% private investors said they were looking to expand their portfolio within the next 12 months.

Almost one-third of landlords plan on increasing rents

Landlord Happiness

Positively, when landlords were asked how happy they were with their tenants, 93% replied that they were happy. Just 6% said they were 50/50 and 1% said they were unhappy.

Almost half of the respondents also revealed that they are property investors, while the others said that they are accidental landlords, due to features such as inheritance or other circumstances.

Looking to the future, many investors were found to be concerned about further Government legislation changes, alongside increased tax liabilities and ongoing uncertainty surrounding Brexit.

Professionals and families more likely to see rent rises

Published On: August 17, 2017 at 11:42 am

Author: Em Morley

Categories: Property News

Tags: investment,legislation,rent,rents

Another report has suggested that rents are likely to increase in the third quarter of the year, as less rental properties are coming onto the market.

This is due to more landlords beginning to sell more properties as a direct result of the raft of legislation changes aimed at deterring investment, according to Belvoir.

Spiralling?

Despite the forecasted rent rises, the property franchise insists that rents across Britain are not spiralling out of control.

Belvoir’s Q2 rental index shows that private rents have risen by an average of 2.75% during the last year. This was an increase of £730pcm in Q2 2016, to £751pcm in the second quarter of this year.

When comparing the Q2 2017 average with the 2016 yearly average of £783pcm, this suggests rental price growth of just below 2% – more or less consistent with ONS statistics and other rental indexes.

Dorian Gonsalves, CEO of Belvoir, said: ‘Sensationalist media reports that rents are spiralling out of control across the country are at odds with what our offices are reporting, and that other letting agents across the country are currently experiencing. However, feedback from our franchisees confirmed that fewer properties were seeing static rents than in the previous quarter, and more offices experienced rent rises of £25 and £50 per month.’[1]

Professionals and families more likely to see rent rises

Rental Rises

The data indicates that rents range from £597pcm in the North West, £665pcm in Yorkshire, £1,048pcm in the South East and £1,446pcm in London.

In fact, the average rent recorded in Q2 2017 in London was £1,454 excluding Central London. This represented an increase of 4.5% year-on-year.

40% of Belvoir offices in the South East saw slight rises in rent during Q2 of 2017, with 40% reporting little falls and 20% remaining static. This pattern was also seen in East Anglia, Yorkshire and the East Midlands.

Looking to the third quarter, Mr Gonsalves observed: ‘Families and professionals are most likely to experience rent rises. Demand from tenants on benefits saw the biggest increase versus Q1 and therefore rents are expected to rise for this sector. Two to three bed properties remain in demand and are in short supply.

Although we are not currently seeing a huge exit of landlords from the market it is apparent that landlords are beginning to sell their properties. Most agents expect investor enquiries to remain the same, or to fall, especially for room rents.’[1]

[1] https://www.landlordtoday.co.uk/breaking-news/2017/8/families-and-professionals-most-likely-to-experience-rent-rises

[2]

Rental growth in London rises for first time in 8 months

Published On: August 14, 2017 at 9:05 am

Author: Em Morley

Categories: Property News

Tags: Buy-to-Let,landlords,London rental growth,rents

The most recent data released from Countrywide has revealed that the run of eight straight months of falling rents came to a halt in July.

Rents in the capital ended the month up by 2.1% on the same period last year, with the number of properties available to rent in the capital falling sharply. Across Britain, the rate of rental growth rose from 1.1% in June to 2.2% in July.

Rental Rises

Rental growth across the South of the country is beginning to rise, with three of the four English regions boasting the quickest rental growth located here, namely the South West, South East and Greater London.

Across Britain, the number of homes to rent rose by 4% year-on-year. However, the rate of growth slowed in each of the last 10 months. London (-18%), the East of England (-6%) and the South East (-5%) all saw fewer homes on the market than at the same period last year.

In April 2016, when Stamp Duty surcharges of 3% were added on buy-to-let and second homes, the number of homes on the market in Britain was 14% greater than in the previous 12 months.

Rental growth in London rises for first time in 8 months

Capital Pains

A steady fall in the number of properties available to rent in London has been driven by a drop in the number of landlords purchasing since the Stamp Duty changes came into force.

July saw the proportion of London homes purchased by landlords fall to their slowest rates for seven years. Only 10.5% of the homes sold in the capital last month were bought by a landlord – the lowest figure since August 2010.

The drop in the number of homes to rent in London has not been matched by a decline in tenant numbers. The number of would-be renters in the capital was unchanged from last year, meaning that a similar proportion of renters were in fact chasing less homes.

Falling

Johnny Morris, Research Director at Countrywide, observed: ‘The rush to beat higher stamp duty rates in April 2016 caused a spike in the number of homes to rent, but that has now worked its way through the market. The stock of homes to rent is now falling in the more expensive parts of the country because higher tax rates have dissuaded large numbers of landlords from buying. Ultimately this means fewer homes on the market and higher rents.’

‘Across the Midlands and the North, higher rates of stamp duty are much less of a disincentive to investors. Here the number of homes on the market remains up on last year, buoyed by investors living in London and the South East choosing to buy in the Midlands and the North.’[1]

[1] http://www.propertyreporter.co.uk/landlords/rental-growth-up-in-the-capital-for-first-time-in-eight-months.html

UK rental prices rise in July

Published On: August 7, 2017 at 8:54 am

Author: Em Morley

Categories: Property News

Tags: HomeLet,private rental sector,rents,tenants

The latest HomeLet Rental Index has revealed that UK rental prices returned to growth in July, for the first time in three months.

Now, the average monthly cost of a new tenancy stands at £925 per calendar month, up 1.1% from the £916pcm in the same month of last year.

Rising Rents

This rise was the first time April that the HomeLet rental index revealed a rise in rental prices, after falls of 0.3% and 0.2% seen in May and June respectively.

However, inflation in the private rental sector is still lagging the general rate of inflation, which was 2.7% in June.

In addition, the Index reveals that rents increased in 9 of the 12 regions of the UK covered by the research. Northern Ireland saw the largest rises, with an increase of 5.7% year-on-year. This was followed by Scotland, where rents rose by 3.6%.

On the other hand, London continues to lag Britain as a whole, with rents sliding by 0.6% in July, in comparison to 2016. The average monthly rent in the capital now stands at £1,564pcm.

The South East and North East also saw declines of 0.9% and 1.7% respectively.

Rental figures from the July 2017 HomeLet Rental Index were:

Region	Average rent in July 2017	Average rent in June 2017	Average rent in July 2016	Monthly variation	Annual variation
Northern Ireland	£625	£610	£589	2.4%	5.7%
Scotland	£630	£636	£607	-1.0%	3.6%
East Midlands	£620	£614	£600	1.0%	3.2%
West Midlands	£680	£662	£663	2.7%	2.4%
South West	£823	£800	£803	2.9%	2.4%
North West	£698	£688	£682	1.4%	2.3%
East of England	£919	£906	£904	1.5%	1.6%
Wales	£613	£608	£605	0.8%	1.3%
Yorkshire & Humberside	£625	£615	£618	1.6%	1.1%
Greater London	£1,564	£1,524	£1,573	2.6%	-0.6%
South East	£1,025	£1,015	£1,033	0.9%	-0.9%
North East	£526	£525	£535	0.3%	-1.7%
UK	£925	£908	£915	1.9%	1.1%
UK excluding Greater London	£769	£757	£757	1.5%	1.6%

UK rental prices rise in July

Summer Rises

Martin Totty, Chief Executive of Barbon Insurance, parent company of HomeLet, noted: ‘It’s often been the case in recent times that rents have strengthened over the summer period. It’s a time when renters contemplate moving, demand increases, tenancy terms are set, and when the anniversary of the tenancy often occurs. This year, that ‘seasonal’ factor brings some relief for landlords, who’ve endured a gradual erosion in rent prices over many months.’

‘At the same stage last year, the South East was the main driver of UK average rents. This time around it’s regions throughout the country leading the strengthening in rents. If we exclude the London region, the average UK rent for a private rental property has hit a new high of £769 a month, up 1.6% on this time last year.’

Continuing, Mr Totty said: ‘Whether the market has now found some equilibrium remains to be seen, but landlords at least will be grateful for even some short respite. Predicting where the market heads from here is very difficult given the number of competing forces impacting the sector, either already being felt or still being contemplated.’

‘We know housing stock for sale is in short supply and the Bank of England has expressed concerns about the ‘credit overhang’ and lenders’ resilience should economic activity start to slow. At the very least, these factors should not be unhelpful to the rental sector in the immediate future, encouraging landlords to stick with property owning as an asset class, with potential still to provide relatively attractive returns compared with alternative investment choices,’ he concluded.[1]

[1] https://www.landlordtoday.co.uk/breaking-news/2017/8/rents-bounce-back-in-july-but-london-weak–homelet