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Average rent for newly let properties in England reach new record level
The average rent for a newly let property in England has increased by 3.8% in the last 12 months to £946 per calendar month, according to the latest index figures. In August the month on month average increase was 2.5% the data from one of the UK’s largest letting agents, Countrywide, shows and rent levels have reached their highest level since the index began. Annual growth in rent for new let properties was recorded in all regions except central London. The South West saw an increase of 7% and the Midlands and increase of 6.3%, the highest growth year on year. Overall some 45% of tenants renewing their tenancies had rent increases in August, the highest since the index began and in London and the South East more than half of tenants renewing faced higher rents, according to the analysis. The report explains that rents have been growing throughout 2015, driven by a lack of homes available to rent and high levels of tenant demand. The total number of homes advertised to let was down 8% in August compared to last year, whereas the number of registered applicants was up 4%. With fewer options available for tenants looking to move, those choosing to renew their tenancy are more likely to see their rent increase. However, they are still better off compared to those moving home. The average increase in rent of 2.5% for a renewing tenancy is still less than the annual increase in rent for newly let homes, the report points out. It also explained that rental growth remains well above CPI inflation, which slipped back to zero this month. The South West and Midlands saw rents rise faster than anywhere else in the country with growth of 7% and 6.3% respectively. Growth in newly let rents was seen in all regions except in Central London where rents decreased 1.4% year on year. Greater London, although still growing, has seen its rate of growth in rent halve since the start of the year. The South West has seen the highest rental growth in the UK since the start of the year. ‘Falling numbers of homes available to rent and increasing demand from tenants have been the defining features of rental market so far in 2015. Competition for rented homes has intensified and led to accelerating rent growth,’ said Johnny Morris, research director at Countrywide. Indeed, there are now nine tenants are registered for every home available to rent, up from 7.5 in August last year. ‘With pressure on rents and increased competition for homes on the market, the proportion of renewing tenancies seeing an increase in rent has grown. Faced with the choice of staying put or moving in a market with more competition and increasing rents, more tenants are choosing to accept a smaller increase in rent to extend their existing tenancy,’ Morris explained. ‘Rental price growth in the South of England, outside of London is being fuelled by an… Continue reading
RICS backs idea of older home owners downsizing to boost supply crisis
The Royal Institution of Chartered Surveyors has waded into the debate over housing supply in the UK, saying that measures such as downsizing could help alleviate the current problems. Last week the head of mortgages at the Financial Conduct Authority was criticised for saying that older people should move out of family homes to make way for younger families but RICS appears to also back the idea. In its latest policy review RICS suggest it is one measure that could help the current shortage of supply in the housing market and that more downsizing could release almost three million homes. It also suggests other measures such as the expansion of affordable ownership via planning controls insisting developers offer a percentage of new homes for affordable rent, regulations to oblige second home owners to release their properties for rental, and the creation of Self Invested Personal Pensions which would allow investors to put their money into Build To Let schemes. But it adds that downsizing is considered perhaps the most effective way of improving supply in the market. ‘Britain’s older home owners are understandably reluctant to move out of much loved, but often under occupied family homes,’ said Jeremy Blackburn, head of policy at RICS. ‘Clearly, it’s an emotive issue and one that needs to be treated with sensitivity, but we would like to see central and local government provide older people with the information, practical and financial support they need to downsize if that is their choice,’ he added. He explained that this might include offering a fund to support with moving costs and pointed out that Bristol City council is already piloting a scheme along these lines, and another suggestion is a stamp duty discount for retired people who are downsizing. RICS believes that the most consistent feature of the housing market over the last 18 months has been a shortage of homes on sale with stock levels on surveyors’ books dropping to lows not seen for at least three decades. ‘Almost a third of over 55s have considered downsizing in the last five years yet we know only seven per cent actually did. If we are to get to grips with this country’s housing crisis, we need to look at supply-led measures across government and the wider industry in order to get the market moving,’ Blackburn added. Continue reading
Newly listed properties in UK hits eleven year low
There is no sign of the supply issues in the UK housing market abating with estate agents reporting that the number of new properties has dropped to an eleven year low. The data from the National Association of Estate Agents (NAEA) shows that the number of properties available to buy per estate agent branch fell by a third in the last month. There are now 38 houses available per branch in August, compared to 55 in July. This is the lowest level of supply seen since January 2004, when 38 properties were also available. The NAEA monthly data report also shows that August saw a dip in house hunters, with an average of 408 house hunters registered per member branch, compared to 462 in July, a 12% drop. The number of sales completed in August rose by one to an average of 10 properties per branch in August, however, sales made to first time buyers fell to the lowest level since July 2014. One in five sales, 20%, were made to first time buyers in August, compared to 23% in July and 24% in June, indicating movement in the market is taking place higher up the ladder and it’s second and third steppers pushing through sales. ‘We’ve been banging the drum about the dwindling supply of housing for a while and this month’s report reiterates what we’ve been saying that there simply aren’t enough houses to match demand and we’re reaching crisis point,’ said Mark Hayward, NAEA managing director. ‘There are now 11 house hunters fighting after every available house which isn’t sustainable. First time buyers are finding themselves being squeezed out of the competition, which of course means it’s taking young buyers longer to get their foot on the first step of the ladder, which will in turn increase pressure on the rental market,’ he added. Continue reading
