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Rents in the UK continue to trend upwards, latest rental index shows
Residential rents increased in all but one region of the UK over three months to April taking the average rent, excluding Greater London, to £764 per month, the latest index data shows. It means that the average rent in the UK outside of Greater London us now 5.1% higher than a year ago while the average rent in London is now £1,543, up 7.7% Scotland and the East Midlands lead the way with fastest rising rents while the North West is the only region to register declines in rent, according to the HomeLet rental index for April. The index report says that fears that higher stamp duty charges on buy to let rental property purchases might destabilise the market have so far proved unfounded. Indeed, HomeLet’s figures show that rents agreed on new tenancies across the UK over the three months to the end of April have continued to grow at remarkably consistent rate. The index also shows that rents on new tenancies signed over the three months to April 2016 were, on average, 5.1% higher than in the same period of last year. That was barely changed from March’s figure of 4.9%, with rent rises having remained in a very narrow band since the beginning of the year. However, in London rents on new tenancies signed over the three months to the end of April were 7.7% higher than a year ago, the third successive month that London has registered this rate of increase. The latest figures show that rents in Scotland are currently rising faster than anywhere else in the UK, with new tenancies costing 11.4% more than in the same period a year ago while the East Midlands saw a rise of 7.9% in rents compared to last year. London’s rental market, where the average rent on a new tenancy is now £1,543, also continues to see rents rise more quickly than in most other areas of the country. The 2.6% gap between rent rises on new tenancies in London and the rest of the UK, where rents average £764, is barely changed on the previous. Just one area of the country, the North West of England, saw lower rents on new tenancies over the three months to March, as was the case in the previous month’s index. However, the speed at which rents are falling in the region continues to slow, to an annual rate of just 1% over the three months to April, compared to 3.5% over the three months to March. Rents agreed on new tenancies in April alone were 1.7% higher than in March. ‘It may be that over the next several months, the trends observed in the rental market begin to reflect the signs of some slowdown in the rate of house price growth that we are now beginning to see and that will be something to watch closely,’ said Martin Totty, chief executive officer of HomeLet… Continue reading
Number of home loans in UK in March stable, bank figures show
The number of loan approvals for house purchases in the UK reached 71,357 in March, broadly in line with the average over the previous six months, according to the latest figures from the Bank of England. A breakdown of the figures show that the number of approvals for remortgaging was 41,347, compared to the average of 40,755 over the previous six months while the number of approvals for other purposes was 12,875, compared to the average of 12,267 over the previous six months. According to Kevin Purvey, chairman of the Independent Mortgage Lenders Association (IMLA), approvals dipped just slightly from February as the short term effect of the buy to let stamp duty surcharge fades away. He pointed out that remortgaging rose slightly over the average established over the previous six months. ‘Having seen the remortgage market bounce back during summer and autumn of 2015, it’s a positive sign to see it remaining in rude health in the first quarter of 2016. This is likely to be influenced by intense competition among mortgage lenders, which has driven mortgage rates down to record lows,’ he said. ‘Following house price rises, it means now could be a sensible time to consider remortgaging whether simply to refinance or release equity. We expect remortgaging to be one of the strongest growth areas within the mortgage market this year, with home owners looking to remortgage benefitting very much from lender competition and the plethora of products available,’ he added. David Brown, chief executive officer of Marsh & Parsons, said that the first three months of 2016 was by no means a typical quarter. ‘Activity in the opening three months of this year has been exceptionally skewed by the additional layer of stamp duty for both buy to let and second home purchases,’ he pointed out. ‘Naturally, the knee jerk reaction among these groups has been to hurry through property purchases before the deadline, and make savings while they can. Second home owners really jumped to it this spring, and were much more prominent in the market than we would typically expect,’ he explained. ‘Now that the ruckus has passed, we’ll see much more orderly transactions over the summer months, as the market rebalances towards first time buyers and other owner occupiers for whom it will just be business as usual,’ he added. Meanwhile, separate research shows that just a third of remortgagors consulted a mortgage broker in March and at 35% this was the lowest amount since September, leading to concerns borrowers may be missing out on best available rates. Overall the number of remortgagors consulting brokers has declined since the start of the year, according to the latest research from LMS. It fell to just 35% in March, the lowest amount since September last year and down from 39% in February. It is also 11% lower than the 46% who consulted a broker at the start of the year. This leads to… Continue reading
Buying a home costs less in more than half of UK cities
Buying a home now costs less than renting in over half of the cities in the UK, according to new research which shows where monthly mortgage repayments are less than rent. Buying is most cost effective Doncaster, Hull and Bradford while London, Brighton, Bristol and Swansea are the only cities where it is more cost effective to rent, the study from Strata Homes shows. Using available statistics, the firm has calculated the average sale price of two bedroom properties in the UK and worked out the typical average monthly mortgage repayments in contrast with average monthly rental fees of two bedroom properties. The research also reveals that monthly mortgage repayments or using the ISA help to buy scheme works out cheaper than renting in over half of UK cities Doncaster, Hull and Bradford scored the top three cheapest areas in the UK to purchase a house, with mortgage repayments totalling as little as £520 per month for a two bedroom house in Glasgow in comparison to £729 average rent per month. In Peterborough, a first time buyer using the ISA scheme would actually save £344 a month paying off a standard mortgage on a house than renting one. To rent a two bedroom house in Manchester would cost an average of £762 a month, but to buy would mean only paying an average monthly mortgage repayment of £676 per month. While to live in the second city, Birmingham residents would only be paying a £2 difference to own a home over renting per month. ‘Once you get over the initial deposit sum, people are surprised at how much you can save in some areas of the UK than to rent. Thanks to the Government's ISA Help to Buy scheme, it is easier than ever to get onto the property ladder with over 3,000 accounts opened so far this year,’ said Gemma Smith, sales director at Strata Homes. She pointed out that from the research gathered, southern cities such as London, Brighton, Bristol and Swansea were least cost effective when buying a house due to sky high house prices. Continue reading
