Tag Archives: crisis
Affordability is the most important factor for UK tenants, research finds
When looking for rented accommodation in the UK the overriding priority for tenants in every age group and in every region is affordability, new research shows. Nearly two thirds of respondents in the Knight Frank UK Tenant Survey, one of the largest of its kind ever carried out, said this was their main concern when compared to location or space in the property. Around a quarter said that location was the most important factor when choosing a rental property, while 10% said that the size of the property was the key consideration. Those earning between £30,000 and £35,000 a year were slightly above average in their concern about affordability with 67% citing it as an issue but moving up the income scale location becomes a bigger priority, with 39% of those earning between £50,000 and £60,000 a year citing this as their main concern. When asked how much of their gross income they would be willing to pay on rent, the average response was 40% but there are some significant regional variations. Only 17% of those in the North East would spend more than 40% of their salary on rent, but this more than doubles in the South West, to 32%. In London and the South East, around a fifth, 22% and 20% respectively, of respondents are prepared to pay between 40% and 50% of their income on rent, while 11% of Londoners are prepared to pay more than 50%, underlining the cost of renting in the Capital. Some 23% of those aged under 25 are also prepared to pay between 40% and 50% of their monthly pay on rent, highlighting the relatively weaker earning power of those just starting out in their careers against the cost of renting a property. There is also evidence of a rent ‘ceiling’, even for those on higher earnings. While a third of those earning between £20,000 and £25,000 a year said they would pay a maximum of between 30% and 40% of their income on rent, only 24% of those earning between £45,000 and £50,000 a year said the same. ‘Even if their income rises, there is still a natural limit to what tenants are prepared to pay on rent,’ the report says. After affordability is factored in, it is clear that location plays a crucial role. Some 55% of respondents said that having a rental apartment or house close to where they work or study was important, with more than a half also identifying proximity to transport links, shops and other amenities as a priority. Breaking down the results by age, it is clear that young professionals value living close to their office, fitting with the trend for demand for city centre private rented sector accommodation. Some 73% of those under 25 and 66% of 25 to 34 year olds said that when looking for a rental property, being within reasonable proximity of where they work and study was a key priority. Around 58% of those… Continue reading
Falling property prices in Singapore expected to dive next year by up to 20%
Singapore's private residential property prices experienced steady declines in September, according the latest quarterly data from the Urban Redevelopment Authority. Both private and public home prices continued to slip in the third quarter of the year. Private home prices fell 0.6% and are now down 3.8% on an annual basis. This is the fourth straight decline, albeit a slight deceleration, after a fall 1.0% in the second quarter. But private home prices are still 56% above the last trough in 2009. Public housing continued to fall for the fifth straight quarter by 1.6% compared with 1.4% in the second quarter of the year and have now fallen 6.8% from the peak of the market. In August sales fell 15% month on month and 43% year on year. It is the lowest monthly figure since December 2013. But the outlook is pessimistic, according to a report from Barclays which says that prices are expected to plunge by 20% in 2015, with vacancy rates expected to hit a record high 10% in 2016. According to Barclay's, the drop is in view of market expectations of rising interest rates, and will coincide with peak supply as unsold inventory rises across both high and low end property sectors. ‘We expect both volumes and prices to slide given the ongoing government curbs, looming oversupply, and rising interest/mortgage rates in the second half of 2015. We maintain our negative stance on the Singapore residential sector,’ the report says. ‘We see an oversupply of private housing properties and we expect prices to fall 20% by 2015, in view of market expectations for interest rates to rise, coinciding with peak supply and our assumption that the vacancy rate could reach a record 10% by 2016,’ it adds. ‘We believe the government will only start unwinding measures when prices fall a cumulative steeper 10 to 15%, perhaps in the middle of 2015,’ it concludes. Continue reading
Average rents in England and Wales hit all-time high
Average rents across England and Wales have reached a new all-time record high of £768 per month despite a slowdown in annual rises, the latest data shows. Rent rises increased by just 1.5% in the year to September, down from 2.4% in the year to August, according to the buy to let index from lettings agent networks Your Move and Reeds Rains. On a monthly basis September’s average rents are 0.8% higher than in August, representing a rise of £7 in absolute terms since the previous month. David Newnes, director of estate agents Reeds Rains and Your Move, said that historically rent rises have broadly tracked inflation and as the wider cost of living grows ever more slowly, so too has the cost of renting a home. ‘That said, autumn is always a busy period for the lettings industry, and this has been no exception. Looking ahead, it is likely that rents in most parts of the UK will have now reached their seasonal peak so as the market cools along with the autumn weather there may be opportunities for some tenants to pick up a favourable deal,’ he explained. ‘Landlords predict slower rent rises to continue for at least a year. The latest LSL Landlord Survey shows expected rent rises of just 1.8% over the next 12 months, below the target rate of inflation,’ he added. Newnes pointed out that another critical development in the rental market is the resurgence of demand in regions outside of London and the South East. ‘Regions with a new charge of economic growth, like the North West or East of England, have now led annual rental growth on an equal basis with the capital for most of this year. London’s rents were rising by 8% at the start of 2013 but are now climbing at around a quarter of that pace,’ he said. A breakdown of the figures show that rents in five out of 10 regions of England and Wales are higher than a year ago. The East of England has seen the fastest annual increase, of 3.1%, followed by the South West at 2.3% and London with a 2.2% rise in rents since September 2013. Meanwhile, rents in the West Midlands are now 2.4% lower than a year ago, followed by an annual fall of 2.3% in the North East and rents in Wales dropping 1.1% compared to September last year. However on a monthly basis none of the ten regions has seen rents fall. Between August and September the average rent in the South East rose by 1.8%, while the North West has seen a monthly increase of 1.4% and in the North East rents are now 1.2% higher than in August. By contrast, Yorkshire and the Humber has seen no change in rents since August, while the slowest monthly rent rises were seen in the East Midlands, up just… Continue reading
