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Buying a home costs less in more than half of UK cities
Buying a home now costs less than renting in over half of the cities in the UK, according to new research which shows where monthly mortgage repayments are less than rent. Buying is most cost effective Doncaster, Hull and Bradford while London, Brighton, Bristol and Swansea are the only cities where it is more cost effective to rent, the study from Strata Homes shows. Using available statistics, the firm has calculated the average sale price of two bedroom properties in the UK and worked out the typical average monthly mortgage repayments in contrast with average monthly rental fees of two bedroom properties. The research also reveals that monthly mortgage repayments or using the ISA help to buy scheme works out cheaper than renting in over half of UK cities Doncaster, Hull and Bradford scored the top three cheapest areas in the UK to purchase a house, with mortgage repayments totalling as little as £520 per month for a two bedroom house in Glasgow in comparison to £729 average rent per month. In Peterborough, a first time buyer using the ISA scheme would actually save £344 a month paying off a standard mortgage on a house than renting one. To rent a two bedroom house in Manchester would cost an average of £762 a month, but to buy would mean only paying an average monthly mortgage repayment of £676 per month. While to live in the second city, Birmingham residents would only be paying a £2 difference to own a home over renting per month. ‘Once you get over the initial deposit sum, people are surprised at how much you can save in some areas of the UK than to rent. Thanks to the Government's ISA Help to Buy scheme, it is easier than ever to get onto the property ladder with over 3,000 accounts opened so far this year,’ said Gemma Smith, sales director at Strata Homes. She pointed out that from the research gathered, southern cities such as London, Brighton, Bristol and Swansea were least cost effective when buying a house due to sky high house prices. Continue reading
UK private sector rents up 2.6% year on year
Private rental prices paid by tenants in Great Britain rose by 2.6% in the 12 months to March 2016, unchanged when compared with the year to February 2016. The figures from the private housing rental index from the Office of National Statistics also show that rental prices grew by 2.8% in England, 0.2% in Wales and 0.6% in Scotland. Rental prices increased in all the English regions over the year to March 2016, with rental prices increasing the most in London at 3.7%. Since January 2011 England rental prices have increased more than those of Wales and Scotland. The annual rate of change for Wales at 0.2% continues to be below that of England and the Great Britain average while rental growth in Scotland has gradually slowed to 0.6% in the year to March 2016, from a high of 2.1% in the year to June 2015. Private rental prices in England show three distinct periods with rental price increases from January 2005 until February 2009, rental price decreases from July 2009 to February 2010, and increasing rental prices from May 2010 onwards. When London is excluded, England shows a similar pattern but with slower rental price increases from around the end of 2010. Since the beginning of 2012, English rental prices have shown annual increases ranging between 1.4% and 3% year on year, with March 2016 rental prices being 2.8% higher than March 2015 rental prices. Excluding London, England showed an increase of 2.1% for the same period. In the 12 months to March 2016, private rental prices increased in each of the nine English regions. The largest annual rental price increases were in London at 3.7%, down from 3.8% in February 2016, followed by the East at 3% and the South East at 2.9%, both unchanged over the same period. Annual price increases have been stronger in London than the rest of England since November 2010. The lowest annual rental price increases were in the North East at 0.8% down from 0.9% in February 2016, followed by the North West at 1.1%, up from 1% and Yorkshire and the Humber at 1.2%, down from 1.3% over the same period. According to Adrian Gill, director of lettings agents Your Move and Reeds Rains, rents will start to build a gradual but inevitable path, ultimately reaching the very peak of the market in the autumn. ‘Early spring is just the calm before the storm. Demand for homes in the private rented sector is driven by the flow of jobs and the flux of a generally more mobile workforce looking for a place to live,’ he said. ‘This reflects the strengths of private renting, the opportunity for young independent adults to strike out on their own, or for families to move across the country and earn the best possible livelihood. In the towns and cities with the biggest renting populations it is a constant struggle for supply from landlords to match demand from tenants. With a… Continue reading
Residential rental stock falls in UK
The supply of rental housing stock on letting agents’ books in the UK fell in March, to the lowest level since the start of last year, the latest data shows. Demand also dropped in March, according to the March private rental sector report from the Association of Residential Letting Agents (ARLA). ARLA agents had 33 prospective tenants registered per branch on average, down 11% from 37 in February. This stands below the figure recorded in March last year when agents registered 36 on average. Supply has also fallen year on year. In March 2015, the average number of properties managed per branch was 192, which is down 12 per cent this year with just 169 rental properties managed per branch, the lowest level since records began in January 2015. It’s a brighter picture in Scotland, where agents had on average 273 properties on their books, and Yorkshire and Humberside, where 207 properties were recorded on average per branch. In London however, agents had just 122 properties on their books per branch. In March 65% of ARLA agents predicted that current and prospective buy to let landlords will walk away from the market following the April stamp duty changes, causing a decrease in the supply of rental properties. Rent costs rose in March for 32% of tenants and 61% of ARLA members fear they will increase further as a result of the changes, a growing sentiment since last month when 57% of agents agreed on this. ‘We don’t expect falling supply to stop here. The recent stamp duty changes are very likely to cause supply to decrease even further, as landlords withdraw from the market,’ said David Cox, ARLA managing director. ‘Not only do our agents predict that rent costs will increase further, but rental homes may also face a decline in quality over time, as landlords struggle to keep up with maintenance costs alongside the higher stamp duty charge,’ he explained. ‘Whilst landlords adjust to the increase in costs we can expect to see one of three outcomes prevailing in the buy to let market: landlords absorbing the cost and taking the hit; landlords withdrawing from the market causing supply to fall; or landlords regaining those costs through hiking rents. Next month we can start to assess the damage,’ he added. Continue reading
