Posts with tag: rents

Buy-to-let expert calls for sector reforms

Published On: May 10, 2017 at 9:20 am

Tags: landlords,private rental sector,rental market,rents,tenants

A leading buy-to-let property expert has called for better enforcement and streamlining of legislation within the private rental sector.

Kate Faulkner wants to see the abolishment of what she calls a ‘two-tier’ rental market, where thousands of renters are forced to settle for, ‘sub-standard, illegal or even dangerous homes.’

Reforms

Faulkner, founder of PropertyChecklists.co.uk, is urging major reforms in the sector, in a report commissioned by the TDS Charitable Foundation.

In this report, Faulkner argues that there are a number of rules and regulations in the sector that are serving only to create confusion among landlords, agents, tenants and enforcement bodies alike.

It is suggested that a typical private landlord in England now has to comply with around 150 rules and regulations. This figure increases should the landlord wish to rent out their property to someone on benefits.

‘There are 4.4 million rental properties in England alone so reforming the market would help millions of people. Legislation should be streamlined and funding should be put in place to support enforcement,’[1] Faulkner noted.

‘Legislation varies dramatically across the UK, with different rules for England, Scotland, Wales and Northern Ireland. Landlords are typically over 55, and employed full-time, so often struggle to keep up with what constantly changing legislation they need to be aware of, and what bodies are responsible for enforcing them. Trading Standards, the Home Office, the Competition and Markets Authority, and local councils all enforce elements of private rental policy, and there is no single point of guidance for landlords and agencies to make sense of where jurisdictions begin and end,’ she continued.[1]

Buy-to-let expert calls for sector reforms

Geographical Disparities

In addition, Faulkner highlights the fact that there are substantial geographical differences from county to county.

London sees a massive difference in the number of rogue landlord prosecutions. The most recent figures indicate that Newham prosecuted 359 rogues, whereas Lambeth and Hammersmith had only 9 each.

However, Faulkner claims that local councils are not always to blame:

‘The issue needs to be tackled on a national level to ensure uniformity in enforcing laws designed to protect both tenants and landlords. Law-abiding agents and landlords are jumping through not inconsiderable hoops, and forking out to meet regulations, while the cowboys know enforcement is lax, and are cutting corners and costs.’[1]

Concluding, Faulkner said: ‘We need a coordinated national strategy on weeding out unenforceable, unclear, and confusing rules, and creating national standards, and enforcement policy. Whoever forms the next government must commit to backing an education campaign for those letting out property to inform them of the law, and how to raise complaints or issues.’[1]

‘By tightening up on implementing legislation, tenants will know what to expect, and how to bring rogue landlords to heel. By tackling the causes of the current two-tiered rental market, the quality of the UK’s rental stock will increase, providing better homes for tenants, and better standards for landlords and agents.’[1]

[1] https://www.landlordtoday.co.uk/breaking-news/2017/5/reform-the-private-rented-sector-so-that-it-is-fit-for-purpose-says-expert

Rents in London fall for first time since 2009

Published On: May 8, 2017 at 8:38 am

Author: Em Morley

Categories: Landlord News

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

The most recent report from Homelet has revealed that rents in London fell for the first time since 2009 during April. This was a direct result of rental price inflation across the UK sliding to its lowest level for more than seven years.

Capital Falls

Homelet’s report found that rents in the capital were down by 1.2% in April, in comparison to the same period in 2016. This is the first time typical rents have fallen year-on-year since December 2009.

This decline in London, alongside marginal decline across the wider South-East region, drove rental price inflation down across the country as a whole.

Rents for new tenancies in Britain during April were 0.4% greater than in the same month in 2016- the lowest figure since February 2010.

This rental price inflation means that tenants signing for a new tenancy over the last month paid an average rent of £904 per month across the UK. When the greater London region is removed from the analysis, the average rent agreed falls to £754.

Rents in London fall for first time since 2009

Inflation

In addition, the data showed that areas of the country where rents are rising more quickly are those that saw less profound rental price inflation during the first six months of 2016.

Wales for example saw rents 2.2% greater in April compared to the same month last year.

Martin Totty, Chief Executive Officer at HomeLet, observed: ‘Rents have been rising at a more modest pace across the whole of the UK in recent months, with lower levels of rental price inflation and even falling rents in areas of the country where prices were previously rising most quickly. We continue to see landlords’ and letting agents weighing tenant affordability considerations very seriously.’[1]

[1] http://www.propertyreporter.co.uk/landlords/london-rents-are-falling-down.html

Millennials spending over one-third of their take home pay on rent

Published On: May 5, 2017 at 10:32 am

Author: Em Morley

Categories: Property News

Tags: rental growth,rents,tenants,young tenants

According to the most recent Rental Index from Landbay, young tenants are spending one-third of their monthly take home pay on rent.

Those residing in a three-bed property spend 30% of their pay on rent, while those in a two bed spend 39% on average. For those living alone, rental payments hit them hard in the pocket, with them spending an average of 69% of their take home pay on rents!

Rents

For tenants aged between 18-39 renting alone, 69% of their monthly post tax-income of £1,447 is spent on £1,012 worth of rent.

For two people sharing a house, overall rent of £1,152 amounts to 39% of each tenant’s income.

Rents have continued to spiral in the last five years, rising by 9% across Britain since April 2012. London has seen rental growth of 8% over the same period. This of course is impacting on those struggling to save for a deposit, despite the pace of rental growth slowing from August 2015, from 2.66% and 0.82%.

Despite rents beginning to show signs of stabilising for young people, spending such a high percentage of their take home pay on rent leaves them little to play with for essentials, never mind for savings.

Millennials spending over one-third of their take home pay on rent

Tough

John Goodall, CEO and founder of Landbay noted: ‘For intermediaries, this generation is the future of their client base, a generation who will face a tough financial journey.’[1]

‘Whether these millennial tenants are renting as a stepping stone on the way to home ownership – or in some cases choosing to rent for life – this generation are relying on a well-served buy-to-let market to ensure rental growth doesn’t become unbearable. What is now needed is some firm Government commitment to improving standards, affordability and supply of rental properties,’ he continued.[1]

Concluding, ‘Institutional investment and the subsequent growth and professionalism of the private rental sector are already helping control rental growth and improve living standards for renters, so we hope to see some clear plans outlined in this month’s party manifestos ahead of the General Election in June.’[1]

[1] http://www.propertyreporter.co.uk/finance/millennials-spend-over-a-third-of-take-home-pay-on-rent.html

Prime rents in the West End hit record highs

Published On: May 3, 2017 at 9:05 am

Author: Em Morley

Categories: Property News

Tags: average prime rents,landlords,rents,West End

There has been a substantial increase in prime rents in the West End of London during the opening quarter of 2017, according to a new report from Savills.

Research reveals that average prime rents in the West End reached £122.30 per sq ft in the first three months of the year. This was 11% greater than the level seen at the same time last year.

What’s more, this was above the previous high of £114.31 per sq ft in the final three months of 2007.

Records

A record rent of £190 sq ft seen in March in St James’ Square helped increase the average rent in Q1 to 11% above 2016’s average prime Grade A rent of £160.41 sq ft.

What’s more, the average Grade A rent in Q1 2017 was £85.03 sq ft, 10% above 2016’s Q1 average of £77.25 per sq ft.

The West End’s take up during the opening quarter of 2017 reached 1.05 million sq ft, a rise of 1% year-on-year and 10% greater than the 10 year average. This was driven by strong demand from the tech and media sector, which accounted to 22% of take up.

Prime rents in the West End hit record highs

Stable Supply

Savills suggest that supply is still fairly stable, hitting 4.63m sq ft at the end of March. This amounts to a vacancy rate of 3.8%.

Brian Allen, director of the West End leasing team at Savills, noted: ‘The first quarter of the year has seen strong take up and rental levels in the West End, with the deal at 5 St James‘s Square helping prime Grade A rents to hit a ten year high.’[1]

‘Whilst headline rents remain strong there is some upward pressure on the level of incentives being offered to tenants, with the average rent free period on a ten year lease now 18 months, compared to the average of 13 months in Q1 2016. Nevertheless, the market remains robust,’ Mr Allen added.[1]

[1] https://www.propertyinvestortoday.co.uk/breaking-news/2017/5/prime-rental-levels-in-the-west-end-hit-a-new-record-high

Where are the best regions for rental growth?

Published On: April 28, 2017 at 8:39 am

Author: Em Morley

Categories: Property News

Tags: Buy-to-Let,landlords,rental rises,rental yields,rents

New figures from Your Move show that the average rent in England and Wales during March stood at £800, a rise of £2 in comparison to the previous month.

However, this was a fall from the £811 per month seen at the back end of 2016.

Rental Rises

The latest Your Move England & Wales Buy to Let Index shows that rents increased in six of the ten regions covered by the analysis during March, in comparison to February.

This was driven by rises in the East of England, with prices here increasing 1.6% in the last month. Now, values are 7.4% greater than in March last year.

Valerie Bannister, letting director at Your Move, noted: ‘In previous months we have seen rents in the South East rise as people looked to move beyond the capital, but it is the East of England which appears to be seeing the benefit as rents here have risen 7.4% in the last year.’[1]

Capital Slowdown

On the other hand, rents in London continue to slow. The capital saw rental decline on both a monthly and yearly basis. The average rental property in the capital let for £1,203pcm during March 2017, a fall of 6% month-on-month.

Bannister continued by saying: ‘Rents in London have declined in the last 12 months, falling from £1,297 a year ago to £1,203 in March 2017.’[1]

The capital was not the only region to experience a rental decline in the last month and year. In the North East, prices now average at £525pcm, after seeing a fall of 3.7% since February and 3.1% since March 2016. However, it remains the cheapest place to rent, according to the survey.

When are the best regions for rental growth?

Yields

In terms of yields, the average in England and Wales was 4.5% in March, a fall from the 5% seen in March last year.

Regions with greater house prices continue to have the lowest yields, therefore it is not a surprise that the average yield in London was 3.2% last month.

At the other end of the scale, properties in the North East saw the largest yields, of 5.2% in March. The North West also saw healthy yields of 5% over the same period.

[1] https://www.landlordtoday.co.uk/breaking-news/2017/4/where-are-rents-rising-fastest-in-england-and-wales

Rents Rising Significantly Below the Rate of Inflation

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

Author: Em Morley

Categories: Property News

Tags: average rent price,rent price growth,rent prices,rents

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%