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New tenancy rental rates continue to rise across most of UK
The cost of taking on a new tenancy in the private rentals market continues to rise, with the average rental agreement signed in the UK outside of London during the three months to February 2016 costing 4.8% more than in the same period a year ago. The latest data from the HomeLet Rental Index also shows that while that rate of appreciation was down on the 5.5% seen over the three months to January, rents on new tenancies continue to rise much more quickly than inflation in most parts of the country. Year on year Greater London, the East Midlands and the South East of England recorded the fastest rent rises, up 7.7%, 6.7% and 6.5% respectively while rents fell by 2.6% in the North East and by 3.2% in the North West. The rise take the average rent for new tenancies in the UK, excluding Greater London, to £744 per month. In Greater London it is £1,521 but the increase remains below the double digit increases seen last year. The Index shows rents on new tenancies rose in 10 out of 12 regions in the UK on an annual basis over the three months to February 2016. The exceptions were the North West of England, where rents dipped by 3.2% from £657 per month last year to £636 per month, and the North East of England, where rents now stand at £519 per month, 2.6% lower than a year ago. In Scotland rents were up 3.9% year on year and 1% month on month to an average of £649 while in Wales they were up 3.4% year on year and 02% month on month to £596 on average. HomeLet’s research also shows that as rents have risen in recent years, the number of new tenancies signed by a single tenant has fallen. Last year, single tenants accounted for just 33% of new tenancies on rental properties, down from 67% in 2008. By contrast, the proportion of new tenancies signed by two tenants rose from 28% to 52% over the same period. New tenancies signed by three or more tenants have risen from 5% to 15% of the market. The firm says that this trend may in part reflect the increasing number of families moving into the private rental sector as house prices have become less affordable and as people have pursued greater flexibility. The latest data from the Office for National Statistics reveals the number of privately rented homes let to families with dependent children has risen from 30% to 37% over the past 10 years. The increasing number of tenants per property may also suggest people are more inclined to rent together after a sustained period in which rents have risen more quickly than general inflation. The index data shows the proportion of new tenancies taken on by three tenants rose from 3% in 2008 to 8% by last year. Homes with four or more tenants accounted for 7% of the market last… Continue reading
UK landlords fear more woe in UK Budget
Landlords in the UK are concerned that the forthcoming Budget speech by the Chancellor of the Exchequer George Osborne could hold more bad news for their property investments. Some 66% feel there will be more bad news and a fifth are already planning to pull out of buy to let this year, according to new research by property crowd funding platform The House Crowd. It suggests that property investors feel increasingly under attack, with legislation such as the EU Mortgage Credit Directive and increase in stamp duty on buy to let properties coming into force. Over 70% of those surveyed believe that these changes will have a negative impact on their investments, with smaller investors set to be hit hardest by ever tightening profit margins. 43% feel that the government is trying to squeeze small investors out of the market altogether. Over half, 54%, of landlords indicated that they do, however, support tighter regulation from the Bank of England to clamp down on rogue landlords. Despite sentiment towards traditional buy to let turning sour, it appears that investors still view bricks and mortar as the best way to secure their futures. The UK wide survey found 33% still prefer to invest their money in property as it is a tangible asset. It also found that 38% think landlords need to be looking at smarter ways to invest while 57% think buy to let will remain a strong option as there is a continued housing shortage in the UK. ‘With house prices continuing to rise and the property market outperforming the FTSE, bricks and mortar presents a strong investment option,’ said Frazer Fearnhead, chief executive officer of The House Crowd. ‘Despite this, new legislation is making buy to let ever less accessible for the small landlords who want to invest in something sensible and tangible to secure their futures. As many of the landlords surveyed identified it's time for beleaguered investors to be looking at their options,’ he pointed out. ‘February was our strongest month yet, as investors turn to property crowdfunding to achieve the returns that property offers minus the stress and risk of being a landlord. Times are hard for the UK's small property investors but it's time to adapt, not despair,’ he added. Continue reading
Downsizing in UK could bring windfall of up to £200,000 on average
Nearly half of home movers in the UK plan to downsize in the next three years and on average realise up to £200,000 by doing so, according to new research. Some 46% plan to sell and buy a smaller property and by downsizing from a detached to a semi-detached home they could realise a windfall of £117,230 of £200,000 in London. Downsizing was cited as the single most popular factor for moving, according to data provided by Lloyds Bank with research showing that the popularity of downsizing has grown in recent years, buoyed by the anticipated returns. The figures show that average age for a downsizer is 53, at which point the greatest number, 37%, of downsizers had lived in their home between 11 and 20 years. The main reason people cite for downsizing is to move somewhere which better served their circumstances with 53% wishing to do so while 39% want to reduce bills or free up equity and 31% to provide extra cash for retirement. A fifth say that they are downsizing earlier than they had anticipated, citing reasons such as health, changes in relationship status and a need to be closer to better local amenities. A third also say that they are planning to move to a more affordable area. Some 72% of those downsizing said they expected to profit from their move, with 35% saying that they planned to reinvest their additional capital in a new property, 29% said that they would invest in other financial products, whilst 21% planned to invest in their pension or pass the earnings on to their family. ‘People may consider moving home for a variety of reasons, often tied to their next big step in life whether that’s getting married, starting a family or children growing up and flying the nest,’ said Mike Songer, mortgage director with Lloyds Bank. ‘We typically think of people moving to bigger houses as they move up the housing ladder, but people are increasingly looking to downsize their home because their circumstances or priorities have changed. Whilst financial gain may not be the main driver for those looking to trade down their property it is clearly a factor, with three quarters of downsizers expecting to profit from such a move,’ he explained. ‘There are definitely financial benefits to be gained from trading down, with an average potential windfall of £117,230 when moving from a detached home to a semi-detached house. Downsizing is also healthy for the market, as it helps keep it moving and frees up larger properties which could be perfect for young families about to take their next step up the property ladder,’ he added. A breakdown of the figures show that house prices in the capital mean that London home owners could make the most from downsizing, as they stand to free up an average of £201,052 from trading down from a detached to a semi-detached home. Downsizers from the South West saw the highest rise over… Continue reading
