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Residential rents in England and Wales reach new record
Rents across England and Wales have reached a new record of £770 per month, up 1.5% over the last 12 months, according to the latest buy to let index. Tenants have paid down rent arrears despite the new record for monthly rents in October, the index from the UK’s largest lettings agent networks, Your Move and Reeds Rains, also shows. On a monthly basis, rents in October 2014 rose 0.3% but the October rise follows faster average rent rises of 1.9% in the previous 12 months ending October 2013, and rental growth of as much as 3.4% over the preceding year. ‘Rents have edged to a new record and the rental market is pulsing with new demand. Yet at the same time, tenants are getting on top of their finances helped by a cooling pace of such rent rises,’ said David Newnes, director of estate agents Reeds Rains and Your Move. ‘Better affordability is good for tenants in the longer run too and for landlords who can rely on steady revenue to pay the bills. That helps to support a virtuous cycle of only gradual rent rises. Alongside slower overall inflation, a material boost to the supply of properties available to let has helped keep rents from rising as quickly as in previous years,’ he added. Overall tenant finances improved in October, with just 6.9% of all rent in arrears, down from 7.2% in September and 7.1% in October last year. Rent arrears are also just 0.3% above the record low 6.6% set in November 2013. In absolute terms this represents £244 million in late rent in October, down from £256 million in the previous month or a drop of £12 million since September. Levels of the most severe tenant arrears have also improved. Households facing rental arrears of more than two months now represent just 1.4% of all tenancies, compared to 1.6% in the third quarter of 2013, according to the latest quarterly Tenant Arrears Tracker from Your Move and Reeds Rains. ‘Tenants have battled a broadly stagnant jobs market for years. Recent progress on the unemployment rate has helped bring down the most serious cases of rent arrears. But for others consistently falling just a little behind on the rent, the trouble is more with incomes that just haven’t kept pace with the cost of living,’ said Newnes. ‘Instead of wage growth, a growing supply of homes to let and much slower rent rises have been far more useful in tackling the proportion of households falling behind. Looking ahead, if more homes to rent can coincide with a true renewal of real wages, this could prove a powerful combination and would take rent arrears even lower,’ he explained. A breakdown of the figures shows that rents in nine out of 10 regions of England and Wales are higher than a year ago. Leading all other… Continue reading
UK mortgage lending hits highest October level since 2008
Gross mortgage lending in the UK reached £19 billion in October, some 5% higher than September and 8% higher than October last year, according to figures from the Council of Mortgage Lenders. This is the highest lending total for an October since 2008 when it was £18.6 billion and CML economist Mohammad Jamei said that the market is in a steadier state than it was earlier in the year. ‘As the temporary impact of implementing the mortgage market review fades, a clearer picture of the mortgage and housing market is emerging. Nearly all indicators in the housing market align with our view of a gentle easing in market conditions,’ he explained. ‘While the housing market has cooled in recent months, mortgage lending continues to be underpinned by positive factors. With expectations of the first interest rate rise moving to the fourth quarter of next year, as well as positive forecasts for growth, pay and unemployment, there is potential for market activity to gain traction in the new year,’ he added. ‘These new figures show that lending is alive and well and breaking records despite stricter borrowing criteria, according to Paul Smith, chief executive officer at haart. ‘Lenders are keen to grow market share so first time buyers and ladder steppers alike are currently benefiting from a new range of excellent mortgage deals. Pre-election calm has descended on the market but savvy buyers and sellers will run with the window of opportunity that this creates,’ he said. Peter Rollings, chief executive officer of Marsh & Parsons, believe that there is a renewed spring in the step of mortgage lending this October. He pointed out that the introduction of the Mortgage Market Review and stricter affordability regulations in April have not clouded the overall progress that has been made over the past year. ‘With an interest rate rise not expected before late next year, spurring on a host of attractive mortgage products, buyers and sellers still have a lot to be feeling confident about,’ he explained. ‘Calmer trading conditions, more choice on the market, and less fierce competition will ensure activity finishes on a strong note at the end of the year,’ added Rollings. Continue reading
One bedroom apartments in London see prices rising more than bigger flats
Property sales prices increased by an average of 4% across some key areas in London this year but there has been a slowdown overall, new research shows. Midtown, City and Docklands saw the price of one bedroom apartments rising by 7% compared with just 2% for two bedroom apartments, according to the bi-annual research from property advisors and development consultants Hurford Salvi Carr. The research also shows that the rental market picked up and recovered in the second half of 2014 with higher numbers of tenants registering and taking out new leases across Midtown, City and Docklands. Rent levels ended the year down 1% or largely unchanged over the year and the report explains that the upturn in the second half of the year coincides with a downturn in enquiries in the sales market across central London. It also shows that the average yield on a typical one bedroom apartment has now fallen to 4% with the yield of new homes averaging between 3% and 3.5%. Looking to 2015, the research indicates that there will be fewer properties being offered for sale in the first six months of next year. It is anticipated that confidence will remain weak in the sales market building up to the general election in May and prices of existing homes will remain unchanged, as owners across Midtown, City and Docklands are not highly geared or in the majority of cases have no borrowings and will not consider selling below full value. It is expected that the price of new homes up to £1 million will continue to sell at current levels and the price of new homes over £1 million may see asking prices fall by between 5% and 10% as the supply of new homes above £1 million is expected to increase in 2015. The research also indicates that residential rents will firm up in 2015 and will increase by 5%. If this happens, it will be the first time rents will have risen since 2010. Hurford Salvi Carr this week opened their new office on City Road, N1, expanding their network of offices to 5 across the City, City Fringes, Midtown and Docklands. Continue reading
