Tag Archives: housing
Rental prices in Scotland increased at end of 2015, latest index shows
There was a last minute end of year surge in Scottish rent growth with average residential rents up 0.4% in December, the highest monthly rise since June, the latest index report shows. This was uptick from a modest 0.1% rise the previous month and took the average monthly rent in Scotland to £548, just £1 below the summer peak reached in July, according to the data from lettings agent network Your Move. On an annual basis, rent growth is also starting to accelerate. Year on year rent rises had been steadily slowing since June when they stood at 3.1% but Scottish rents are now on average 2.2% higher than a year ago, up from 1.4% in the 12 months to November. The rise is due to a shortage of supply and an improvement in wages means that tenants can afford the rents, according to Brian Moran, lettings director at Your Move Scotland. ‘Outside of the summer months, the New Year often sees the second biggest cycle of new tenancies, and ushers in a busy time for the lettings market. It’s the period where people typically take up fresh career opportunities, and implement new life changes and this wave is already evident in the uptick of rents over November and December, as savvy tenants act quickly to beat the January rush,’ he explained. He pointed out that one major factor likely to affect the market in 2016 include the extra 3% property tax on buy to let properties from April. ‘It is likely to distort the natural flow of the market, with any further buy to let investment likely to be front loaded into the early months of the year. Once that deadline passes, and if investment into the private rented sector becomes more hesitant, tenants’ rents may become much more exposed to the problem of supply,’ added Moran. A breakdown of the figures show that in December, three of five regions saw month on month rent increases. The South saw the biggest with average rents rising 1.3% while Edinburgh and the Lothians saw a rise of 0.7% and Glasgow and the Clyde up by 0.5%. The Highlands and Islands saw the most significant monthly fall in rents in December with a fall of 0.9% while in the East of Scotland they fell by 0.3% month on month. On an annual basis, rents are higher across four of the five regions of Scotland. The biggest rise was in the Highlands and Islands with rents up 4.9%, Edinburgh and the Lothians they increased 4.8%, in Glasgow Clyde rents were up by 0.2% and in the East of Scotland rents dropped 0.7%. The report also shows that while there is typically a seasonal spike in arrears around the Christmas period, tenant arrears in Scotland dropped for the second month in a row in December, with the proportion of rent in arrears falling to 11.9% of… Continue reading
Equity release by UK home owners reaches new record
Equity release lending in the UK reached a new high of £1.61 billion in the final quarter of 2015 as home owners over the age of 55 unlocked a record amount of housing wealth, new data shows. Lending via drawdown products totalled £271 million between October and December 2015, the largest quarterly total since this type of lifetime mortgage first emerged in 2004, the data from the Equity Release Council sows. Some 70% new plans agreed in the fourth quarter of 2015 were drawdown, up from 63% in the previous quarter as more people opted to withdraw their housing wealth in stages to boost their retirement income as and when they need it. Drawdown lending for the whole of 2015 was also the highest on record at £961 million. It pushed total equity release lending activity by members of The Council to an unprecedented £1.61 billion, up 16% from £1.38 billion in 2014. Last year saw more than 22,500 new plans agreed for the first time since 2008. At 22%, the year on year lending growth rate in the final quarter of 2015 was the largest of any quarter last year, despite a slight dip in quarterly lending from £453 million in the third quarter to £445 million. Since falling to a post-recession low of £789 million in 2011, annual equity release lending has more than doubled in the last four years and now exceeds its pre-recession peak of £1.21 billion. Over the whole of 2015, drawdown lifetime mortgages accounted for 66% of new plans agreed, while lump sum lifetime mortgages made up 34% and home reversions were below 1%. ‘These year-end figures are the latest sign of growing reliance on housing wealth as a key pillar of later life financial planning. The rising popularity of drawdown has been one of the success stories of the last decade, and product features have since appeared allowing customers to protect a percentage of their equity as an inheritance, make part-repayments of capital or make interest repayments on their loan,’ said Nigel Waterson, chairman of the Equity Release Council. ‘Looking ahead, the challenge is to continue developing products which meet consumer needs while ensuring that innovation is combined with protection and long- term sustainability. The work led by The Council and its members to uphold standards for equity release products and advice has been fundamental to creating a safe market for consumers, and we will continue these efforts to meet growing customer demand alongside regulators and the Government,’ he explained. ‘Housing wealth is often people’s greatest asset and it makes sense for equity release to be on every homeowner’s checklist to consider as part of their retirement and estate planning. At the same time, it is not suitable for every circumstance, which is why professional financial advice and independent legal advice are essential so that customers understand how the products work, and what they can offer…. Continue reading
Rental values increased across almost every London borough in 2015
Residential rental values have climbed to record highs across almost every borough in London as renting a home has become a more attractive option that buying, a new report suggests. Changes in stamp duty, fluid job markets and the way many overseas professionals are taxed in the UK, means that many people are opting to rent, according to the report from Benham & Reeves Residential Lettings. With demand continuing to rise and the anticipated exit of amateur landlords from the market due to more restraints such as the new 3% top up stamp duty, rental values in 2016 are likely to continue on this upward trajectory, the firm says. Its figures for 2015 show that virtually every borough in zones 1 and 2 saw rental values increase by more than 4% year on year. Indeed, only Richmond-upon-Thames and a small area around Edgware Road in central London saw rents fall. However, rental values became slightly more modest the further away from the city centre with even outlying boroughs such as Barnet and Ilford seeing significant growth, the report points out. Hackney saw the biggest increase in rental values in 2015, up 33% while Bow, Bethnal Green and Haringey all experienced double digit growth as well. As the British economy has emerged from recession and tenants have finally moved to bigger accommodation in line with increasing household income, the rental market has benefitted, the report also points out. The most significant change, however, has been the changes to stamp duty which have affected London more than any other area of the country. With the average of a house in London now standing at over £500,000, many family homes are now liable for the 10% stamp duty rate with many modest family homes even incurring the 12% stamp duty rate. Many tenants have calculated that they can rent for years, often in better neighbourhoods than those in which they could afford to buy, for the sum they'd pay in stamp duty alone. ‘George Osborne has done more for the rental market than any other chancellor in history. Thanks to the changes in stamp duty rates, he has made renting long term a more attractive option for many tenants. Couple that with the fact that many overseas tenants can write their rent off against tax but must pay capital gains on any property they own and renting becomes a no brainer,’ said Marc von Grundherr, the firm’s lettings director. ‘We are advising landlords who are already in the market to hang onto the properties, and not be tempted to sell ahead of changes to wear and tear allowance and mortgage relief. Many nervous investors will leave the market and when they do, supply will be limited even further. The rent increases that will inevitably result will more than mitigate landlords' extra costs,’ he added. Continue reading
