Tag Archives: europe
Almost all towns and cities in UK see new rental supply drop dramatically
New rental properties listed by landlords in the UK in May fell by 15.4% compared to the previous month with 91% of towns and cities recording a fall in supply, new research shows. The biggest fall in rental supply was in Worcester with a decline of 42.6% month on month, followed by Bedford with a fall of 41.7% and in Derby it was down by 41%, according to the figures from property crowdfunding platform Property Partner. Much of the decline is probably due to a rush of landlords putting rental properties on the market in April ahead of stamp duty changes, according to the firm’s report. It also shows that new listings fell so far in many areas of the country in May, that they actually dropped substantially below March levels, before the 3% stamp duty surcharge for additional homes came into force. ‘As anticipated, the rush of investors buying before April’s stamp duty hike caused a temporary spike in rental supply, which now seems to have been swiftly reversed,’ said Dan Gandesha, chief executive officer of Property Partner. ‘New rental listings in May were down almost 6% on March, before the surcharge spike. With high and rising demand, any prolonged fall in rental supply would only have negative consequences for tenants,’ he explained. He predicts that it’s likely that rents would increase as landlords, facing less competition, pass on their additional purchase costs to tenants and a lack of available properties would also force more tenants into accepting poorer quality accommodation, particularly in areas with an acute shortage of stock. ‘June’s figures will show whether this is just a market adjustment, or something more fundamental. It’s unfortunate timing with the European Union referendum just two weeks away,’ Gandesha pointed out. ‘But April’s stamp duty changes are just the first in a series of additional costs being piled on traditional buy to let. In the longer term, the private rented sector must be professionalised, to provide Generation Rent with enough good quality homes at rents they can afford,’ he added. Continue reading
UK rents continue upward trend but growth slowing
Rents in the UK continued to rise over three months to May 2016, although increases slowed more in line with house price growth, according to the latest index report. Average rent in the UK, excluding Greater London, is now £771 per month, some 4.4% higher than a year ago while the average rent in London is £1,563, up 6.2%. The data from the HomeLet rental index also shows that Scotland leads the way with rents rising faster than in any other part of the country. The report said that the figures provide some encouragement for both landlords and tenants. Landlords may have been expecting some impact from the increase in the supply of rental property in May, as those who rushed to complete buy to let property purchases before higher rates of stamp duty came into force in April 2016 began offering their properties to tenants. But HomeLet’s data suggests landlords continue to enjoy healthy rental yields after costs. As for tenants, they will be encouraged to see the pace of rent rises now beginning to moderate, particularly compared to a year ago. While an average rise of 4.4% means increases are still running ahead of inflation, there is some evidence of moderation of the long term trend, perhaps as affordability ceilings are approached. The slowing of the pace of rent rises in May is broadly in line with a similar cooling in the rate at which house prices are rising and may be part of a broader story about economic uncertainty ahead of this month’s referendum on the UK’ s membership of the European Union. Nevertheless, the May 2016 HomeLet rental index reveals that rents continue to rise in almost every area of the country, with 11 out of the 12 regions surveyed seeing an increase over the three months to the end of May. In Scotland, rents are currently rising faster than anywhere else in the UK, with new tenancies costing 10.6% more than in the same period a year ago. However, the East Midlands with a rise of 8.3% in rents compared to last year, is also showing strong gains. London’s rental market, where the average rent on a new tenancy is now £1,563, up 6.2 per cent, also continues to see rents rise more quickly than in most other areas of the country. The rental market is characterised by steady growth in rents as the number of tenants looking for property runs ahead of the supply in the market, according to Martin Totty, chief executive officer of Barbon Insurance Group, HomeLet’s parent company. He pointed out that this remains the picture in most regions of the country. ‘While this growth has begun to slow, which tenants will welcome, landlords will also be encouraged by the vote of confidence in the sector evidenced by the increase in buy to let completions in the past few… Continue reading
Pending home sales in US reach highest level for over a decade
Pending home sales in the US rose for the third consecutive month in April and reached their highest level in over a decade, according to the latest index data to be published. All major regions saw gains in contract activity last month except for the Midwest, which saw a meagre decline, the pending homes index from the National Association of Realtors shows. The index, a forward looking indicator based on contract signings, increased by 5.1% to 116.3 in April from an upwardly revised 110.7 in March and is now 4.6% above April 2015 when it was 111.2. After last month's gain, the index has now increased year on year for 20 consecutive months and Lawrence Yun, NAR chief economist, said that vast gains in the South and West propelled pending sales in April to their highest level since February 2006. ‘The ability to sign a contract on a home is slightly exceeding expectations this spring even with the affordability stresses and inventory squeezes affecting buyers in a number of markets,’ he explained. ‘The building momentum from the over 14 million jobs created since 2010 and the prospect of facing higher rents and mortgage rates down the road appear to be bringing more interested buyers into the market,’ he added. On the topic of mortgage rates, which have remained below 4% in 16 of the past 17 months. Yun pointed out that it remains to be seen how long they will stay this low. Along with rent growth, rising gas price and the fading effects of last year's cheap oil on consumer prices could edge up inflation and push rates higher. For now, he foresees mortgage rates continuing to hover around 4% in coming months, but inflation could potentially surprise the market and cause rates to increase suddenly. ‘Even if rates rise soon, sales have legs for further expansion this summer if housing supply increases enough to give buyers an adequate number of affordable choices during their search,’ he added. Following the housing market's best first quarter of existing sales since 2007, Yun expects sales this year to climb above earlier estimates and be around 5.41 million, a 3% boost from 2015. After accelerating to 6.8% a year ago, national median existing home price growth is forecast to slightly moderate to between 4% and 5%. A breakdown of the figures show that in the Northeast it climbed 1.2% to 98.2 in April, and is now 10.1% above a year ago. In the Midwest the index declined slightly by 0.6% to 112.9 in April, but is still 2% above April 2015. Pending home sales in the South jumped 6.8% to an index of 133.9 in April and are 5.1% higher than last April. The index in the West rose 11.4% in April to 106.2 and is now 2.8% above a year ago. Continue reading
