Posts with tag: rents

Number of rental properties in UK continues to fall

Published On: June 6, 2017 at 9:32 am

Tags: housing supply,private rental market,rental accommodation,rents

Another report has suggested that the number of properties coming onto the privately rented market is continuing to fall.

This in turn is serving to drive up rents across many regions of the UK – particularly in market towns.

Fall in Landlords

This fall in housing supply can be attributed to the lack of new landlords bringing new stock onto the market, according to Belvoir – one of Britain’s largest letting agents.

Chief Operating Officer of Belvoir, Dorian Gonsalves, feels that the decline in property coming onto the market is directly due to the recent changes in legislation – such as increases in Stamp Duty and alterations to mortgage interest tax relief.

Gonsalves observed: ‘As a result of this stock shortage, properties are often rented to the highest bidder, typically the wealthier tenant, which is raising rents beyond the traditional plus or minus four to five percent trend.’[1]

Number of rental properties in UK continues to fall

Increasing Rents

Belvoir’s Q1 rental index, compiled by property expert Kate Faulkner, indicates that the firm’s offices have seen average rents rise by 5.75% year-on-year. This was a rise from £728pcm in Q1 2016 to £770pcm in Q1 2017 – driven by gains in parts of the East Midlands and Yorkshire.

Rents ranged from £602pcm in the North West, £655pcm in the East Midlands, £842pcm in the South West and £1,440pcm in London.

In addition, the report indicates that 43% of tenants are staying put in their properties for between 13-18 months. 29% stay between 19-24 months and 18.2% rent for over 2 years.

Worryingly, void periods are seemingly on the increase with 60% of properties taking up to two weeks to be let.

Concluding, Mr Gonsalves said: ‘Despite increases in rents in some regions, rent arrears are not increasing, suggesting that tenants are currently coping with landlord rent rises.’[1]

[1] https://www.landlordtoday.co.uk/breaking-news/2017/6/number-of-rental-homes-coming-on-market-falls-sharply

[1]

North East property prices steady before election

Published On: June 6, 2017 at 8:47 am

Author: Em Morley

Categories: Property News

Tags: house prices in North East,North East property,property prices,rents

The most recent analysis from Keep It Simple has revealed that property prices in the North East have remained almost unchanged in the run up to the General Election.

Data from the report shows that prices in the region fell by only 0.2% over the course of the last month.

North East Property

A typical property in the North East region is valued at £166,125 – £441 less than at the end of April. House price values in the area had risen by 1.9% in April, after sliding by 0.1% in both February and March.

Average regional property values are 5.8% greater than they were last year, with the typical property value £9,150 greater in May 2017 than 2016.

8 of the 20 regions covered by the report experienced price rises – with strong performances recorded in Easington, Peterlee and Houghton-le-Spring. Prices in these regions rose by 2.2%, 1.6% and 1.5% respectively.

Rent Falls

Rents in the North East dropped to an average of £576 pcm in May – a fall of just £9. What’s more, these values are just £2 per month lower than in May 2016.

Rental yields remain unchanged, with investors in the region continuing to enjoy returns of 4.2%. This is higher than the average yield recorded in London, which presently stands at 3.2%.

Easington is the cheapest place to rent in the region, at just £385 per month. On the other end of the scale, Tynemouth is the most expensive, with rents here averaging at £1125pcm.

North East property prices steady before election

Waiting Game

Ajay Jagota, founder and Managing Director of Keep It Simple, observed: ‘I predicted four weeks ago was that we would see little change in house prices this month with both buyers and sellers adopting a ‘wait and see’ outlook ahead of next week’s General Election – and so it has proved.’

‘What will be fascinating to see is whether this week’s result releases some pent up energy, pushing prices up. This is certainly what happened in 2015, when North East property prices rose by 4.8% in the two months after the General Election,’ he continued.[1]

Assessing the impact of the election, Mr Jagota said: ‘A hung Parliament or slim majority could have the opposite effect, but what’s really striking about our figures is how resilient they show the North East property market to have been over the past 12 months, despite the uncertainty of Brexit and another General Election.’

‘Prices are currently almost 6% higher than they were twelve months ago, adding more than £9000 to the value of the average property. In the case of Blyth, it’s nearly 13% and £15,000 higher.’

‘With rents practically unchanged in the same period, dare I say that the North East property market is strong and stable – good news for both the many and the few,’ he continued.[1]

[1] http://www.propertyreporter.co.uk/property/north-east-house-prices-strong-and-steady.html

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Supply of rental accommodation in London falls

Published On: May 25, 2017 at 11:39 am

Author: Em Morley

Categories: Landlord News

Tags: landlords,rental properties,rents,tenants

The most recent report from ARLA Propertymark reveals that the number of rental properties available in London fell substantially in April.

From 148 properties per member branch in March, this figure fell to 101 in April – a drop of 32%.

Across the UK as a whole, the number of properties managed per branch actually rose, from 183 to 185.

Rents

24% of letting agents saw landlords increasing rents during April – a fall of just 1% from March.

The number of tenants negotiating rent reductions also slipped during the last month, with 2.8% of agents seeing rent reductions – down from 3.6% in March.

In April, the volume of landlords selling their buy-to-let properties remained constant to the previous month. In March, the number of landlords looking to sell-up increased from three to four per branch for the first time since November.

Supply of rental accommodation in London falls

What’s more, tenants were found to have stayed in their rental accommodation for an average of 17 months – a fall from the 18 months recorded in March.

David Cox, Chief Executive of ARLA Propertymark, noted: ‘Although the rental market in London has seen a large drop in the supply of properties available to rent, it’s a different picture in the rest of the UK where we have seen little or no change to activity since March. It’s likely we’re seeing the rest of the rental market outside of the Capital plateau as a result of the election in June, with renters potentially holding back on their property searches until after 8th June. It’s important that housing is at the top of the new Government’s agenda, as we have had two elections and a referendum in the last three years which is stalling the policy process meaning that we do not have the right houses available to provide the homes people need.’[1]

[1] http://www.propertyreporter.co.uk/property/rental-supply-falls-by-a-third-in-london-as-uk-plateaus.html

Is the lettings market in London favouring tenants?

Published On: May 23, 2017 at 9:00 am

Author: Em Morley

Categories: Landlord News

Tags: landlords,landlords in London,London,private rental sector,rents

New data reveals that private landlords in London are beginning to feel the impact of reduced tenant demand, with many being forced to cut rents to attract new tenants.

With more properties to select from, tenants are in control of the private rental market in the capital, according to the most recent analysis from HomeLet.

What’s more, the capital’s new build housing market has been particularly impacted by the slowdown in the rental market, according to London Central Portfolio’s (LCP).

Period Homes

A recent report from LCP showed that sales in London have fallen by as much as 41%, with the company suggesting that many new build properties are being left vacant as more renters are targeting period homes.

With a number of regions seeing falls in demand, LCP believes that places with vast numbers of planned new homes are, ‘really beginning to suffer.’

One of these regions is between Battersea and Nine Elms. Typically, foreign buyers look to purchase in this region as rental investments. There has been an increase in stock of 28.1% during the course of the last year. What’s more, there has been a reduction in asking rents of 6% during the last quarter.

Despite this, the number of properties actually let has fallen by 14.8% during the same period, alongside a fall of 2.8% in achieved rents.

Is the lettings market in London favouring tenants?

Fragmentation

Naomi Heaten, CEO of LCP, observed: ‘In much the same way as we see in the sales market, there is increasing fragmentation in the lettings market, according to property type (new build or traditional stock) and by price point.’[1]

‘Alongside the oversupply of rental stock in new build heartlands, the uncertain economic outlook has resulted in tighter tenant budgets. It is therefore not surprising that recent reports indicate a 14.8% fall in the number of properties rented south of the river over the last three months and a 6% discount on asking rents,’ she continued.[1]

The research also found that the rental market in London was far stronger in areas with more limited new build potential.

In prime central London, where stock levels has risen by only 5%, rents have not been negatively impacted. In addition, they have seen an increase of 1.5% in the last three months. The number of properties being let out has also risen by 2.5% in the same period.

Heaton went on to note: ‘In contrast to the dynamics south of the river, the mainstream rental market in prime central London has continued to perform positively as demand for well-presented rental property remains high and stock remains scarce.’[1]

[1] https://www.landlordtoday.co.uk/breaking-news/2017/5/its-a-tenants-market-in-london

Rents carry on rising as supply falls

Published On: May 16, 2017 at 9:10 am

Author: Em Morley

Categories: Landlord News

Tags: property,property supply,rental values,rents

The number of new properties coming onto the market was down again during April, according to the most recent RICS Residential Market Survey.

This marked the fourth consecutive month of lower supply, which is subsequently putting severe pressure on rental values across Britain.

What’s more, tenant demand was also slightly down in the first three months of 2017.

Stock

A lack of housing stock continues to be a real challenge for the sector. Simon Rubinsohn, RICS chief economist, feels tax changes are having a material effect on transaction levels, especially at the top end of the market.

Mr Rubisohn said: ‘It is noticeable in the April report that the amount of new rental instructions coming through to agents is continuing to edge lower which is not altogether surprising given the changing landscape for buy-to-let investors.’[1]

Rents carry on rising as supply falls

‘One consequence of this is that rents are expected to continue rising not just in the near term but also further out and at a faster pace than house prices,’ he continued.[1]

In addition, the figures seen in the report revealed that buyer interest, alongside the volume of property sales, continued to drop. This suggests that volume of homes being listed to let is not likely to increase at anytime in the near future.

Stephen Wasserman, managing director of West One Loans, observed: ‘There is a persistent supply and demand issue in the UK’s housing market and this is creating an increasingly competitive environment.’[1]

[1] https://www.landlordtoday.co.uk/breaking-news/2017/5/rents-are-expected-to-continue-rising-as-supply-falls

Buy-to-let landlords contribute £15.9bn per year to British economy

Published On: May 15, 2017 at 3:55 pm

Author: Em Morley

Categories: Landlord News

Tags: Buy-to-Let,landlords,rents,UK economy

A revealing new report has shown that buy-to-let landlords presently contribute £15.9bn per year to the UK economy through pre-tax spending on running their portfolios.

This is more than double the forecasted £7.1bn in 2007 and is a direct result of the significant growth of the private rental sector and the cost of acquiring property.

Tax

Further analysis of the report from Kent Reliance shows that 36% of landlords questioned are looking to cut-back on their yearly spending. It is feared that this could reduce overall spending by over £500m- a real blow to tradesman and professionals that support the industry.

17% of landlords said that they would cut down on property upkeep in order to cut costs, followed by 10% who said they would cut letting agent fees and mortgage costs.

These landlords feel they will cut spending on letting agent fees by 28%, servicing by 21% and mortgage costs by 15%.

Fees

The cost of property upkeep, maintenance and servicing was found to be the largest outlay for landlords at a combined total of £5.5bn.

Landlords commutatively spend £2bn on service charges and ground rent, £963 on insurance, £904 on utilities and £1.1bn on associated costs.

Letting agents’ fees came to £4.7bn each year, with £644m spent on legal and accountancy fees.

Buy-to-let landlords contribute £15.9bn per year to British economy

Vital

John Eastgate, sales and marketing director of OneSavings Bank, noted: ‘Landlords may seem like an easy target for political point scoring, but they play a vital role in the economy. Not only do they house a huge proportion of the country’s workforce, bridging the housing demand and supply gap, their spending supports thousands of jobs – whether builders, cleaners, lawyers and accountants or letting agents.’[1]

‘Trying to tackle the housing crisis by targeting landlords with punitive taxes is very simple and politically highly palatable, but has unintended consequences. Either it means less work for all those who support the property industry, or it means tenants will have to foot the bill for the government’s tax raid, or both,’ he continued.[1]

Concluding, Mr Eastgate said: ‘One side effect of the recent changes, and rising running costs, will be the professionalisation of the sector as amateur and accidental landlords leave the market. There is nothing wrong with having fewer, bigger landlords, but that alone will not help more young people get homes.’[1]

[1] https://www.landlordtoday.co.uk/breaking-news/2017/5/buy-to-let-landlords-contribute-15-9bn-a-year-to-uk-economy-study-finds