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Rents in England and Wales see fastest annual growth since 2011
The private rental sector in England and Wales has seen its fastest year for rent rises since 2011, with values up 3.4% in 2015, the latest index data shows. The rise took average rents to £794 per month with the East of England seeing rents rise at twice the wider annual pace, up 7.8%, followed by London at 6.3%. The data from the Your Move buy to let index also shows that Yorkshire & Humber and West Midlands both saw new all-time record high rents in December. The significant rent rises over the course of 2015 also come despite a month on month drop in the latest market rents, falling 0.6% between November and December. ‘The fact that the majority of tenants can afford higher rents is certainly good news, and should be seen as a positive indicator as we enter 2016. Yet over the longer term, higher rents also raise a serious challenge for the future affordability of housing in this country,’ said Adrian Gill, director of estate agents Reeds Rains and Your Move. A breakdown of the figures shows that in December, six out of 10 regions saw monthly falls in rents, in line with the overall month on month drop across England and Wales. This was led by London with rents down 1.6% lower, down 0.9% in the North West and down 0.6% in the North East. Four regions saw rents rise on a monthly basis in December, led by Wales at 1.8%, followed by the South West up 0.9%, and Yorkshire and Humber and the West Midlands both up 0.3%. This took rents in both Yorkshire and Humber and the West Midlands to all-time record highs at £556 and £593 per month respectively. Year on year rents increased in eight out of 10 regions led by the East of England with a rise of 7.8%, London up 6.3%, and the East Midlands up 4.7%. Rents fell by 1% in Wales and by 2.6% in the South East. The index also shows that the gross yield on a typical rental property in England and Wales, before taking into account factors such as void periods, dropped to 4.9% in November, down from 5% in November 2015. On an annual basis, this is fractionally lower than the 5.1% gross yield seen in December 2014. The report points out that accelerating property purchase prices are responsible for suppressing rental yields, but have also boosted landlords’ total returns. Taking into account both rental income and such capital growth, the average landlord in England and Wales has seen total returns of 11.3% over the course of 2015, up from 10.4% in the 12 months to November 2015 and the highest for a year. In absolute terms this means that the average landlord in England and Wales has seen a return of £21,110 during 2015, before any deductions such as property maintenance and mortgage payments. Of this, the average capital gain contributed £12,438 while rental income made… Continue reading
Prices and sales in Scotland expected to keep rising in first quarter of 2016
House prices and sales in Scotland are likely to keep rising in the first quarter of this year following an unusually buoyant December, according to a new report. The latest monthly survey from the Royal Institution of Chartered Surveyors (RICS) in Scotland said rising demand from would be buyers and a slight increase in the number of properties coming onto the market led to a rise in newly agreed sales last month. Throughout 2015, surveyors reported almost continual growth in prices and this went on into December, with a net balance of 29 per cent more respondents reporting a rise in house prices. A net balance of 35% of Scottish respondents forecast a rise in transactions in the January to March period, with 24% of surveyors also expecting average prices to increase in this quarter. ‘The Scottish housing market has experienced an unusually buoyant December, with growth in transactions, demand and a small increase in properties coming onto the market,’ said Sarah Speirs, director of RICS Scotland . ‘Despite this growth in new instructions, the chronic shortage of housing supply in Scotland continues to result in rising house prices and rents across the country. To remedy the shortage, Scottish Government policy is, and for a considerable amount of time has been, aimed at supporting demand and, more crucially, the new build market and home ownership,’ she added. RICS has launched its manifesto Shaping Scotland’s Housing Future which aims to inform political parties of the role property plays in driving Scotland’s economic growth ahead of the parliamentary elections in May. It calls on policy makers to recognise the scale of the housing crisis, and elevate housing to the top of their political priorities as well as increasing the supply of housing and taking action to maintain and renew Scotland’s existing housing stock. The report also recommends ta review of tax and incentives around all properties and the creation of a Housing Land Agency, which would work with local authorities and developers identifying land, primarily in areas of market failure, and installing any necessary infrastructure for sites. ‘Adequate housing supply is vital to economic growth and the much coveted stabilising of house prices and rents. It is estimated that between 25,000 and 35,000 homes need to be built, per year, to meet demand adequately. This target covers all tenures, not just affordable housing,’ the report says. ‘An independent agency would work with local authorities and developers by identifying new development sites and installing any necessary infrastructure for sites, primarily in areas of market failure,’ it adds. RICS envisages that land acquired by the agency, through reformed Compulsory Purchase Order (CPO) powers, could be sold to less established participants, such as small and medium enterprises (SMEs), private rented sector (PRS) investors, self-build and co-ownership and thus widening participation and assisting a vibrant SME sector and the wider economy. It also points out that the PRS market in Scotland has been dominated by small scale investments from individual landlords who… Continue reading
Residential property sales in Hong Kong up over 40% month on month in December
Residential property sales in Hong Kong rebounded in December, up 43.1% from the previous month, according to data from the land registry. A total of 2,153 primary residential sales transactions were recorded, more than doubling those in November, while secondary home sales increased 6.4%. The data also shows that in December, over half of new home sales involved three major developments: Capri in Tseung Kwan O, The Bloomsway in Tuen Mun and Yuccie Square in Yuen Long. The latest monthly Hong Kong review report from international real estate firm Knight Frank points out, however, that total residential sales volume for 2015 was still down 12.3% from 2014, with primary sales dropping only 0.2% and secondary sales losing 16.6%. The report suggests that both landlords and buyers held a wait and see attitude amid various uncertainties in both local and external markets. The housing supply target in the coming 10 years was reduced from 480,000 to 460,000 units, according to the Transport and Housing Department, as the projected number of new households during the period was less than previously forecast. ‘With the US interest rate hike and a projected increase in housing supply, home prices are expected to come under pressure this year. We expect luxury home prices to fall up to 5%, while mass residential prices could decrease by 5% to 10%,’ the report says. When it comes to the office market, the report explains that, facilitated by various policies to enhance cross border financial integration, mainland Chinese financial firms expanded rapidly in Hong Kong’s CBD, driving up Grade-A office rents in Central by as much as 13.7% in 2015. In December, for instance, a Mainland firm secured a 14,773 square foot office space in Cheung Kong Center in Central and Kowloon East continued to see robust leasing activity, with many companies relocating from Hong Kong Island and other business districts to the area, attracted by the abundant supply of cost effective new space. The Knight Frank report suggest that in 2016 landlords will face pressure in rental negotiations as they compete for tenants to drive down vacancies. This comes on the back of a year in which the office sales market improved, with the total volume and value of transactions rising 21.7% and 49.6% respectively, driven by increased demand from both investors and owner-occupiers seeking to reduce rental costs. However, the report point out that some Mainland firms which had actively taken up Grade-A office space run into various problems. For example, some delayed renovating the space they had let, while others failed to take up the units at the start of the lease term. There were even cases of firms exiting their Hong Kong business. ‘However, with limited supply in core business areas, we still expect their vacancy rates to remain low and their rents to rise by 5% this year. In decentralised areas, however, rents could drop by up to 5% in 2016,’ the report adds. In the retail… Continue reading
