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UK rental market sees sharp rise in demand for one bed flats
Rent rises for one bedroom flats in the UK accelerated sharply in September, sparked by high demand from recent graduates renting to live near their first job, new research has found. Rents for one beds saw an annual rise of 3.9%, from 2.9% in August, reaching an average of £1,054 according to the monthly Landbay Rental Index. The new index, which launched last month, is the first to track rental trends to the county and London borough level in combination with the number of bedrooms. Edinburgh with a rise of 12%, Swindon up 11% and Southend on Sea also up 11%, saw the biggest rises in rents for one bed flats, albeit from lower average rents than some of the other areas to see big year on year increases. The index also shows that rents for three bed properties are seeing the biggest overall rental rises, up 4.8% year on year to £1,489 in September. Across all properties, UK rents rose by 3.7% in the last year to an average £1,288. This was the first increase in annual growth since February, when the average monthly rented price was £1,277. ‘The upward trend in UK rents can simply be explained with one word, jobs. The UK’s job market is going from strength to strength and the rental market is staying hot on its heels,’ said John Goodall, chief executive officer of Landbay. ‘The sharp seasonal jump in rental growth for one beds reflects a buoyant graduate job market as people move to their first job. Flexibility and freedom is the order of the day for first jobbers, and one bedroom flats offer the perfect springboard to take the plunge into full-time working life. One bed flats are also popular for couples and young professionals who don’t want to flat share,’ he explained. ‘Higher housing costs can be a nightmare for tenants when other costs are rising and their wages are stagnating. Fortunately these rent increases come at a time of growing wages and falling costs, according to the latest inflation figures, so while they may not be welcome they don’t leave the same dent in consumers’ pockets,’ he pointed out. ‘For potential investors, these rental figures show how resilient residential property is as an asset class, even when you have unusual economic forces combining like the current mix of low inflation, low interest rate, and high wages,’ he added. Across all property sizes, the top rental risers outside of London were in the southeast, with all but two of the top 10 rental risers of Swindon and Edinburgh, clustered around London. By contrast only one of the top 10 rental fallers, Buckinghamshire, was located in the southeast. According to Joe Macklin, director of index compilers MIAC, there is likely to be a small decline in data volume in the run up to… Continue reading
Fewer UK landlords putting up rents, latest monthly data shows
The number of letting agents in the UK reporting rent increases for tenants has fallen, with only 33% putting up rents, the lowest amount since April. For the first time this year, the number of lettings agents seeing rent hikes for tenants has decreased from the previous month, with just 33% of landlords putting up rents in August, according to the latest survey. Data from the monthly Private Rental Sector report from the Association of Residential Letting Agents (ARLA) shows that it has dropped from 37% in the previous month and is the lowest since April this year. But it is not a universal trend. Tenants in the South West are not benefiting with 42% of agents in the region continuing to see rent prices hiked, up 4% from the previous month. This is compared to only 12% of agents in the North West who have witnessed a rent increase. In Wales, tenants are worse off too. The number of landlords putting rents up for their tenants has increased threefold from July. This month 36% of letting agents in Wales saw increases, up 25% from July when just 11% agents reported rent hikes. The report also shows that after a spike in the number of houses available to rent last month, supply has fallen back down to levels seen in June 2015. ARLA letting agents managed an average 178 properties per branch in August, compared to 189 in July. The report found the number of house hunters in the rental sector increased marginally in August. Letting agents reported an average 36 prospective tenants registered per branch, compared to 35 in July. The number of properties available to rent in London continued to fall in August, pushing demand for housing even harder in the capital and putting further pressure on house hunters. With 110 properties registered per branch, compared to 117 in July, the task of finding a property in the capital’s rental sector is becoming increasingly difficult. ‘Our findings this month are good news for the majority of tenants, as less are experiencing rent hikes. However, a third of agents are still seeing landlords pushing rents up, which reflects the sorry state of affairs in the market,’ said David Cox, ARLA managing director. ‘With increasing pressure on the dwindling supply of housing, and the number of house hunters growing, rent increases are unfortunately very common as one in three tenants are experiencing. Despite the fact they have fallen this month, it’s likely they will go back up again over the next few months,’ he added. Continue reading
Mortgage lending in UK up after summer dip
Gross mortgage lending in the UK reached £20 billion in September, up 2% from the previous month and up 12% year on year, the latest figures show. It is the fourth month in a row that there has been a sharp improvement in year on year lending, says the report from the Council of Mortgage Lenders. Gross lending in the third quarter of 2015 was therefore an estimated £61.4 billion some 18% higher than the £52.2 billion advanced in the second quarter, and an increase of 12% on the third quarter in 2014, when lending totalled £55 billion. ‘Mortgage lending is currently enjoying its best spell since 2008. As we expected, the second half of 2015 has seen a pickup in activity in the housing market after a slow start to the year,’ said CML economist Mohammad Jamei. ‘Low inflation, strong wage growth, falling unemployment and competitive mortgage deals are all helping to support housing demand. We expect to see further modest growth towards the end of the year, although affordability pressures are likely to limit gains for home movers and first time buyers,’ he added. According to Henry Woodcock, principal mortgage consultant at IRESS, buoyant house purchase lending, paired with a buy to let mortgage market at its strongest level for two years has sustained momentum. ‘On top of this, the number of mortgage products available is at an all-time high, providing consumers with far more choice and a healthy remortgage market are all combining to create a real buzz,’ he said. ‘With speculation around an interest rate rise dying down and unlikely to happen until the first half of 2016, consumers should benefit. Historically attractive rates will be available for longer, continuing to support buyer demand,’ he added. John Eastgate, sales and marketing director of OneSavings Bank, also believes that it is the buoyancy in the market supported by persistently low mortgage rates that is boosting lending. ‘The recent global economic uncertainty has caused central bankers to hit the pause button on possible rate rises, with many speculating that the UK may not see rates increasing before late 2016. House prices also grew at their slowest rate for two years last month, and if this trend continues, should ease affordability issues for buyers,’ he explained. Continue reading
