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Rents in England and Wales close to record high, latest index shows
Rents in England and Wales are now £768 per month with average annual rent rises growing at their fastest pace in two years, up 3.7% over the last 12 months. The last time rents rose so quickly was in the year to April 2013, when this previously stood at 3.9% per annum, according to the latest buy to let index from Your Move and Reeds Rains. Between February and March rents have risen by 0.3% on a monthly basis and are now just £2 away from the all-time record high of £770 per month, set in October 2014, the data also shows. ‘Since 2010 the private rented sector has absorbed over a million extra households. With social housing in decline, alongside a parallel decay in the number of people owning their own home with a mortgage, private renting has stood in to fill the gap,’ said Adrian Gill, director of estate agents Reeds Rains and Your Move. ‘With only small real terms rent rises, this has generally been a success and tenants are now half as likely to fall behind on rent as at the peak of the financial crisis. However, this sector is carrying the weight of the housing crisis and that will mean faster rent rises in future if supply doesn’t keep up,’ he pointed out. ‘Without more homes every year to match a rising population, housing will inevitably become more expensive. And with one in five households now renting privately, this section of the population won’t be an exception to those fundamentals. Britain needs more homes, and over the long term, investment by landlords will only provide places to live as quickly as those homes are given planning permission and completed,’ he added. A breakdown of the figures shows that rents in the East of England stand out with 12.0% annual growth. The average property to let in the East of England region is now considerably more expensive than the South East. London is second in terms of annual rent rises with rents in the capital 5% higher than in March 2014, while Yorkshire and the Humber has seen rent rises of 3.3% over the last 12 months. At the other end of the spectrum, rents in the East Midlands are now 0.2% lower than a year ago, while the South West has seen no annual change. Most recently, rents have also risen the fastest month on month in the East of England, up 2.5% just since February 2015. However on a monthly basis the North West is not far behind, with rents up 2.3% over the last month, while this is followed by Yorkshire and the Humber with rent rises of 0.4% since February. By contrast, rents in the East Midlands have dropped by 0.6% between February and March, while the North East and Wales both saw rents 0.5% lower in… Continue reading
UK housing trends survey finds more people living alone and renting
The housing market in the UK is experiencing a number of key trend changes which mean the more people are living along and more are renting a home for the long term, new research has found. Of the 43% of those taking part in the Housing Futures Survey by Strutt & Parker who are single and planning to move in the next five years, some 75% expect to be living along and 45% of those aged 18 to 29 indicated they would consider living in a professionally managed private rental unit. The research suggests that future housing types and location decisions are being altered by access to technology. Nearly 36% of the respondents who were intending to move listed broadband connectivity as important or very important in their motivations for moving, and nearly 20% listed mobile coverage. It also suggests that alternative family structures are becoming more common, with 15% of respondents who intend to move anticipating living with more than one generation under the same roof compared with 10% in the previous survey. There is little sign of home owners planning to raise capital for pensions and their children’s housing needs by selling their property. Only 9% of those aged 40 to 59, and 0.4% of those aged 60 or older, rated financial support for children or relatives as important or very important when asked about motivations for moving, and 8% and 16% respectively for pension support or top-up. ‘The trends identify that single occupied households and alternative family households are growing, the younger generation is more open to the idea of renting and those moving into retirement are seeking more interactive environments. The impact of these trends inevitably means that in the future the homes we plan, design, build and live in must be different,’ said Stephanie McMahon, head of research at Strutt & Parker. ‘Lifestyle change remained the dominant motivation for moving, but in light of pension challenges and parents seeking to help their children onto the housing ladder, we were surprised to see that so few respondents ranked release of equity, pension top up and financial support for relatives as their reasons for moving home,’ she added. Continue reading
UK mortgage brokers report impact of rules change a year ago
A quarter of mortgage brokers in the UK say they have experienced a decrease in volumes since new mortgage rules came into being almost a year ago, a new survey shows. The self-employed and retirees are the most difficult to find a mortgage for and mortgage intermediaries are very much divided on the impact of the Mortgage Market Review (MMR) on business volumes. The research by Paragon Mortgages that covers the first quarter of sought to establish the impact of MMR in terms of intermediaries’ business levels as we reach the one year anniversary of the changes coming into force. Of the 200 intermediaries who took part in the survey, 43% said that in their view there had been no change to their business volumes as a result of MMR and 24% said that business had increased. However, some 25% of those surveyed said they had experienced a decrease and only 3% said there has been no change in business. The majority of intermediaries who said they had experienced a decrease reported this had been up to 30% and only 14% said the decrease in business had been any higher. Looking ahead, 15% of intermediaries said they did not know what the long term impacts of the new regulations would be. Intermediaries were also asked which of their customers are now the most difficult to find a mortgage for. Top of the list were the self-employed at 75%, followed by retired customers at 52% and 51% said it was those customers with complex incomes. ‘The research shows is there is still some uncertainty in the market about the long term impact the MMR changes will have on business volumes. This isn’t unexpected, as with any significant change in regulation there will always be a period of adjustment, but it is important the industry monitors this carefully,’ said John Heron, director of Paragon Mortgages. ‘Looking at the feedback from intermediaries on the underserved areas of the market also provides a valuable insight into what lenders could be doing better. We need to recognise that there is no such thing as the average mortgage customer anymore, people have a greater variety of circumstances and we need to be more innovative in order to meet increasingly varied demand from customers,’ he added. Continue reading
