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Referendum waiting game pushes rents to all-time peak in Scotland
The Scottish independence referendum contributed to the recent rise in rents to a new record high of £537 per month, up 2.7% in the last 12 months, the latest index shows. Rent growth accelerated on a monthly basis over the past three months as polling day approached, according to the Scotland Buy to Let Index from Your Move, one of Scotland’s largest lettings agents network. The data shows that rents have increased in every region of Scotland over the past year with new records in Edinburgh and Glasgow. Cumulatively, average residential rents have risen 1.3% in the three months to August 2014. Doubt over the outcome of the referendum and lack of clarity over the mortgage and taxation consequences of a possible ‘Yes’ vote, prompted people to delay purchase decisions, and consequently heightened demand in the private rented sector. The average residential rent across Scotland is now 2.7% higher than in August 2013, currently standing at £537 per month. In cash terms, this represents a rise of £14 from a year ago. This is the highest level of average residential rent in Scotland on record, and is up 0.5% since July. ‘While the independence debate has been raging, many households have been battening down the hatches and waiting to see which way the wind blows before buying property. This has boosted demand in the private rental sector, which has acted as a safe harbour and stop-gap on the journey to home ownership,’ said Gordon Fowlis, regional managing director of Your Move. A breakdown of the figures shows that rents have risen on an annual basis across all five regions of Scotland and have climbed to new record peaks in both Glasgow and Clyde, and Edinburgh and the Lothians in August. Glasgow and Clyde saw the fastest annual increase, with average monthly rents up 5.5% or £30 on August 2013, and now standing at £575. This is followed by 3.8% annual growth in Edinburgh and the Lothians, where rents rose by £22 over the past year to an average £602 per month. In three out of five regions, rents are higher than the previous month. The steepest month on month increase is in Glasgow and Clyde, with rents increasing 4.2% between July and August 2014. In Edinburgh and the Lothians, rents have risen 0.2% over the past month, and rents in the East are up 0.1% from July. Two regions have seen rents dip on a monthly basis. The South witnessed the biggest fall in average rents, down 2.2% in the month to August, while in the Highlands and Islands rents were 0.2% lower than in July. As of August the gross yield on a typical rental property in Scotland stands at 4%. This represents a fall of 0.2 percentage points since August 2013 when the gross yield on a rental property averaged 4.2%. However, yields are holding steady on a monthly basis, at 4% over the past four months. Taking into… Continue reading
Property sales in UK down 1.7%, says latest seasonally adjusted figures
Property sales in the UK fell by 1.7% between July and August but were 8.4% higher than a year ago, according to the latest seasonally adjust figures from HMRC. There were 99,930 residential and 9,090 non-residential transactions. The data also shows that since the beginning of the 2013/2014 financial year there has been a general month on month increase in transactions for the seasonally adjusted data. In February 2014 there was a gradual decrease followed by a flattening out of transaction numbers. July 2014 and August 2014 have seen new peaks for recent non-seasonally adjusted Transactions to their highest level since November 2007. According to Peter Rollings, chief executive officer of Marsh & Parsons, after a stirring start to the year, the UK property market has calmed, and trading conditions are beginning to look reassuringly more familiar again. ‘Steep house price growth during the first three months has softened to a steadier and more sustainable upward slant, as demand is finally being matched by an encouraging amount of new housing stock on the market,’ he said. ‘The volume of house sales dipped in the month to August 2014, but if we look at the figures through a longer term lens, there has still been a healthy step forward compared to the same point last year,’ he explained. ‘The market may have wound down for summer as it recovered from the adjustment of tighter lending regulation coming into force, but there’s still plenty of gas left in the tank. We expect sales to move up a gear in the autumn, as calmer competition for available homes boosts the confidence of home buyers and pedals the wheels of activity,’ he added. Meanwhile, the latest figures from the British Banking Association show that gross mortgage lending of £11.1 billion was 15% higher than in August last year. But gross mortgage lending in August remains below the £11.3 billion per month average of the last six months. The overall mortgage stock continues to rise in response to stronger demand and is 1.4% higher than a year earlier and sustained growth in business lending is beginning to be seen in the manufacturing, retail and wholesale sectors. Overall net business lending to non-financial companies was £1.5 billion in August, up from minus £0.9 billion in July. According to Duncan Kreeger, director of lender West One Loans, property market activity will remain muted unless lenders do something active about it. ‘High street banks have lent in the same way to the same customers against very similar properties for the last hundred years. In the 21st century, we shouldn’t expect old ways of doing things to power a red blooded recovery,’ he said. ‘Lending must be about getting homes on to the market as well as simply getting them off the market. In other words lenders will solve the biggest problem for the property industry by increasing supply, as well as demand,’ he pointed out. ‘Alternative finance is… Continue reading
