Tag Archives: crisis
UK lettings agents see surge from buy to let landlords ahead of April tax change
New tenants and rental housing supply fell in the UK in December but agents are seeing buy to let investment demand rise ahead of new tax changes. Overall the number of prospective tenants in the private rental sector dropped 15% last month with agents registering an average of 29 per branch, down from 34 in November. The data from the monthly report from the Association of Residential Letting Agents (ARLA) also shows that a quarter of agents saw an uplift in buy to let investments as landlords rush to get in before the April stamp duty change deadline. It also points out that letting agents expect to see decline of buy to let properties once the extra 3% stamp duty is charged from April. Supply also decreased marginally in December, with an average of 182 properties managed per branch, down from 189 in November. Those looking for rental properties in London in particular continue to struggle, with an average of just 108 properties managed per branch, some 43% less than the national average. Alongside supply and demand, the number of tenants seeing rent hikes also dropped in December with 18% of ARLA letting agents reporting a growth in rent, a drop of 5% compared to November and the lowest reported in 2015. ‘As we’d expect in December, the UK saw a lull in activity, with people putting off any moves until January. The supply of housing stock was down, and fewer tenants were on the hunt for new properties,’ said David Cox, ARLA managing director. ‘It’s reassuring to see the number of agents reporting rent increases is still on the decline, which is some encouraging news for tenants as we start 2016,’ he added. The stamp duty reforms to buy to let properties are causing concern amongst ARLA letting agents. Some 62% of agents predict that the changes from April will push up rent costs, and a further 65% predict the new reforms will push landlords out of the market after April, and decrease supply. However, the announcement is already having an effect on landlords as 24% said that they have seen uplift in interest from buyers looking to invest in buy to let properties before the new changes come into play in April. ‘Buy to let landlords determined to complete purchases before the changes come into force in April are storming the UK housing market, meaning the lull we’d usually see is less significant,’ Cox explained. ‘But subsequently, after April, we’re very likely to see the number of buy to let properties on the market begin to decrease, and this will most certainly have a detrimental effect on renters across the country,’ he added. Continue reading
US residential rents set to slowdown in 2016
Residential rent growth in the United States is expected to level off over the next 12 months, slowing to an annual rate of 1.1% by December 2016. The average at the end of 2016 is projected to be $1,396 compared to $1,381 in December 2015, according to the latest rent forecast from real estate data firm Zillow. The firm is forecasting a decrease in the rate of rental appreciation amid a rental affordability crisis that has renters in some markets spending almost half of their income on rent. Some of the fastest growing metros had double digit annual rental appreciation at the end of 2015 and Zillow expects rental appreciation to slow down most significantly in Nashville, San Francisco, Portland and Denver. Rents in San Francisco saw a 12.5% rise in 2015 and the Zillow forecast is for growth in San Francisco to be 5.9% in 2016, half as fast as in 2015. Even with the slowdown, rents will remain unaffordable in many of the major markets across the US, especially on the West Coast. Renters in San Francisco and Los Angeles can expect to spend 40% of their income on a rental payments. ‘Hot markets are still going to be hot in 2016, but rents won't rise as quickly as they have been. The slowdown in rental appreciation will provide some relief for renters who've been seeing their rents rise dramatically every single year for the past few years. However, the situation remains tough on the ground and rents are still rising and renters are struggling to keep up,’ said Zillow chief economist Dr. Svenja Gudell. She pointed out that the slowdown in rental appreciation indicates that supply of new multi-family homes is catching up to demand. Substantial new housing supply is becoming available in Atlanta, Denver, Portland, Seattle, and other markets. Continue reading
Modest house price growth expected in UK in first months of 2016
UK house prices increased by 0.3% in January and annual growth is broadly stable at 4.4%, according to the latest residential index to be published. This takes the average price to £196,829 but the monthly rate of increase slowed from 0.8% in December which was unseasonally high, the report from the Nationwide Building Society says. Robert Gardner, Nationwide's chief economist, pointed out that annual house price growth has remained in a fairly narrow range between 3% and 5% since the summer of 2015. This annual trend was maintained in January, with house prices up 4.4% over the year, broadly in line with the 4.5% increase recorded in December. ‘As we look ahead, the risks are skewed towards a modest acceleration in house price growth, at least at the national level. The labour market appears to have significant forward momentum,’ said Gardner. ‘Employment has continued to rise at a robust rate in recent months and, while the pace of earnings growth has slowed somewhat, in inflation adjusted terms regular wages continue to rise at a healthy pace,’ he added. He also pointed out that this trend expected to continue and with interest rates also likely to stay on hold for longer than previously anticipated, the demand for homes is likely to strengthen in the months ahead. ‘The concern remains that construction activity will lag behind strengthening demand, putting upward pressure on house prices and eventually reducing affordability. Indeed, the market is already characterised by a shortage of stock, with the Royal Institute of Chartered Surveyors reporting that the number of properties on estate agents’ books remains close to all-time lows,’ Gardner added. Continue reading
