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Rents in England and Wales up by 3% in 2014, latest index shows
Rents in England and Wales increased by 3% over the course of 2014, despite falling on a monthly basis between November and December, the latest index data shows. The average residential rent across England and Wales now stands at £767 compared to the £745 recorded in December 2013, according to the buy to let index from Your Move and Reeds Rains. The firm said that this ‘strong annual growth’ comes despite falls on a monthly basis, with average rents 0.1% lower than they were in November 2014. ‘Recent months have shown a divergence from usual seasonal norms. Historically, there is a tendency for rents to ease in the winter, particularly December. With fewer tenants willing to relocate in the festive period, landlords usually compete to fill empty properties and agreed rents tend to dip as a result. Last month that happened and rents fell compared to November but by much less than the usual extent,’ said Adrian Gill, director of estate agents Reeds Rains and Your Move. ‘In particular a jobs boom across the eastern regions of England has seen a larger than usual number of people relocating in the winter months. This has pushed up rental prices in these regions even further,’ he added. Indeed, rents are higher than a year ago in eight out of 10 regions of England and Wales. This is led by the East of England, with a 7.6% annual increase. The East Midlands has seen rents rise by 6.2% on an annual basis, followed by London where rents are up 4.1% over the last 12 months, and Yorkshire and the Humber with a 3.4% annual increase. As a result, these four regions have seen a new record for rents in December. By contrast rents in two regions are lower than a year ago. Average rents in the North East fell by 2.1% over the course of 2014, while rents in the South West are 1% lower on an annual basis. Most recently, three regions have seen rents continue to rise between November and December, despite an overall drop on a monthly basis across England and Wales. This is led by London with rents 0.9% higher in December than in November, followed by a 0.7% rise in Yorkshire and the Humber and a 0.2% month on month increase for the East of England. By contrast the South East has seen the sharpest month on month fall in the cost of renting, down 1.5% between November and December. This is followed by a 1.3% monthly drop in the North West and rents in Wales which are now 1.1% lower than in November. The monthly index report also shows that tenant finances deteriorated in December, as is often seen over the festive period. The proportion of all rent in arrears stands at 8.9% as of December… Continue reading
Half of UK home owners planning to improve their property this year
More than half of home owners in the UK are planning improvements in 2015 with 12% of them hoping to extend or convert their property, new research shows. A growing family is the most popular reason for doing this, however, older kids returning home are also behind people’s decisions to extend, according to the survey from mortgage and loans provider Ocean Finance. Accommodating their growing family is behind the majority of homeowners’ desires to create more space in their property, new research has revealed. Overall some 54% of home owners in the UK are planning to carry out improvements of some sort on their properties this year with 12% wanting to create more useable space in their properties. Of these, 7.2% are planning an extension of some sort, and 4.8% are considering converting either their loft, garage or cellar. While decorating is the most popular home improvement being planned by home owners in 2015, with 25% saying they hope to paint and decorate, extending their property is also a popular option. And it seems the main motivation for this is so home owners can ensure there is space for their families to get the most from their properties without moving. Of those property owners who are planning to create more living space by way of either an extension or conversion, 39% said this is so they can accommodate their growing family. Meanwhile, 14% revealed it is because they have grown up children who are returning to the family nest, or older relatives who are moving in with them. Other motivations given for wishing to extend include needing more space for storage cited by 18%, some 10% wanting large open spaces from a stylistic perspective, 8.8% seeing as cheaper than moving, and a further 8.8% wanting to add value to the property. ‘Despite the recent stamp duty changes, moving house is expensive with legal and estate agency fees and moving costs to meet. So it’s no surprise that so many home owners are looking to improve and in some cases extend their existing property,’ said Ian Williams, spokesman for Ocean. ‘Creating more space is clearly a popular option. It’s interesting to see that a leading motivation for this is family; whether that’s more children coming along or grown up kids coming back. It goes to show that many families are willing to put in the work and the investment if it ensures their home grows with them,’ he added. Continue reading
More UK landlords opting for low cost short term buy to let mortgages
The proportion of landlords in the UK favouring shorter two year fixed rates for mortgages has doubled in a year, new research suggests. It means fewer are looking at longer term fixed rate mortgages as the shorter terms loans are offering much lower deals at a time when the prospect of an interest rate rise recedes. The research from specialist broker Mortgages for Business also found that despite cheaper borrowing costs, some 73% of landlords want buy to let lenders to relax their lending criteria, up from 47%. A breakdown of the data shows that as of the final quarter of 2014, the proportion of property investors favouring two year fixed rates has increased to 23% from just 12% in the first quarter of the year. By contrast there was a decline in the proportion of landlords who would choose longer term fixed rates. In a marked reversal, fewer would now fix their mortgage repayments for three years than would prefer a two year deal. Just 15% prefer three year fixed rate products, down from 21%. The proportion of property investors who would fix for five years has fallen less dramatically, from 34% in the first quarter of 2014 to 31% in the final quarter. Moreover, in the latest figures only 8% would opt for a 10 year fixed rate if available, down from one in 10. ‘Tempted by cheap rates, landlords are deciding to take their chances with a shorter term deal. It’s true that these ultra-competitive mortgage rates will probably continue for some time as the financial world increasingly predicts virtually zero inflation in the UK and Eurozone, plus a cooling rate of economic growth,’ said David Whittaker, managing director at Mortgages for Business. ‘That doesn’t mean there’s no room for caution. Even in such an exceptional situation, rates are still expected to rise in due time. However, landlords now seem willing to take the chance that won’t happen for at least a couple of years,’ he explained. ‘However, we maintain our recommendation to fix for longer, particularly where the pricing difference between three and five year fixed rates is narrow,’ he added. Overall, the proportion of landlords who say lenders should be doing more to support property investors has risen since the start of last year. This is now 64%, up from 58% in the first quarter of 2014. As borrowing costs have fallen, substantially fewer property investors feel mortgage rates should be lower, 10%, down from 19% at the start of 2014. Similarly, fewer respondents said they would like lenders to reduce fees at 12%, down from 20%, and only 5% felt that lenders should be lending more, down from 14%. The survey revealed that landlords with larger portfolios continue to feel marginalised by the majority of lenders. They would like to see lenders remove age restrictions and non-property related income requirements, increase lending to limited companies and take a more common sense approach to underwriting. ‘Unfortunately for the more seasoned… Continue reading
