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Rents up across most of UK, but down in Wales, latest index shows
Rents in the British private rental sector increased by 2.4% in the 12 months to June 2016, down from 2.5% when compared with the year to May 2016, the latest index shows. Rents increased by 2.5% in England and by 0.1% in Scotland but fell by 0.1% in Wales, according to the data from the Office of National Statistics (ONS). Rental prices increased in all the English regions over the year to June 2016, with rental prices increasing the most in the South East at 3.4%, but overall when London is excluded rents grew by 2%. The index report reveals that since January 2011 England rental prices have increased more than those of Wales and Scotland. The annual rate of change in Wales continues to be well below that of England and the Great Britain average. Meanwhile, rental growth in Scotland has gradually slowed to 0.1% in the year to June 2016, from a high of 2.1% in the year to June 2015. Rental prices in England show three distinct periods; increasing from January 2005 until February 2009, decreasing from July 2009 to February 2010, and increasing from May 2010 onwards. When London is excluded, England shows a similar pattern but with slower rental price increases from around the end of 2010 and since the beginning of 2012, English rental prices have shown annual increases ranging between 1.4% and 3% year on year. The largest annual rental price increases were in the South East with growth of 3.4%, unchanged from May 2016, followed by the East of England up 3.1%, down from 3.2% in May 2016 and London up 3%, down from 3.3%. The lowest annual rental price increases were in the North East at 0.8% and the North West at 1.2%, both unchanged when compared with May 2016 and Yorkshire and The Humber at 1.3%, up from 1.2% over the same period. Looking at data from the UK House Price Index over a longer period shows residential house price growth has typically been stronger than rental price growth for a number of years, with an average 12 month rate of house price inflation between January 2013 and May 2016 of 5.9%, compared with 2.1% for rental prices. The report suggests that inflation in the rental market is likely to have been caused by demand in the market outpacing supply. On the demand side, the Royal Institute of Chartered Surveyors (RICS) reported an increase in demand in June in their residential market survey, however, demand from prospective tenants decreased marginally in May according to the Association of Residential Letting Agents (ARLA). On the supply side, RICS reported that new landlord instructions fell slightly in June and ARLA reported that the supply of rental stock fell in May 2016 and was lower than in May last year. The report also suggest that with the UK economy… Continue reading
Property price growth in UK set to fall to 5.7% by end of 2016 and 2.2% in 2017
Residential property price growth in the UK will half in the rest of 2016 but house prices are set to by 5.7% over the whole of the year, a new analysis suggests. The fall in growth in the rest of the year will largely be due to the rush of buyers looking to beat April’s stamp duty surcharge having pushed prices up in the middle of the year and Brexit uncertainty now impacting the market. According to the analysis from economic forecaster the Centre of Economics and Business Research (Cebr) London will be most impacted by Brexit uncertainty. Average house price in the capital is expected to increase by 8% in 2016, but fall 5.6% the following year, it predicts. The report suggest that in the medium and long term housing market performance will heavily depend on the economic and immigration policies agreed during the UK’s exit negotiations with the European Union. It points out that average prices increased by 8% year on year in the first quarter of the year so a slowdown will materialise in the second half of the year. As a result of Brexit, Cebr has downgraded its short term house price expectations and now expects prices to grow by just 2.2% over 2017 but expects a smaller impact further down the line. In the medium term Cebr expects house price growth to pick up as exit negotiations with the EU progress and investors and households gain clarity on how post-Brexit UK will look. This expectation is in line with Cebr’s central view of the upcoming post-Brexit negotiations progressing relatively smoothly with the ultimate outcome seeing the UK maintain a close economic relationship with the rest of the continent, without necessarily agreeing to an unrestricted flow of labour or goods and services. The report also says that beyond 2020/2021, housing market developments will depend heavily on the immigration and economic policies the UK negotiates with the EU and the rest of the world. And it explains that although Brexit does have a far reaching impact on housing, it is important to keep in mind that the property market was losing steam even before the referendum. In April, the stamp duty surcharge on second homes was introduced and this is on top of reductions in buy to let tax relief that were announced in the July 2015 Budget. Furthermore, in London, the prime end of the market was showing cracks well before the referendum vote on June 23rd. Also, some of the global regions that many of London’s non-UK buyers come from such as Russia and the Middle East are experiencing economic turmoil and are not as able to invest. ‘Although Brexit has certainly sent shockwaves Cebr expects the housing market to slow down but not plummet. Years of under building mean that demand would have to fall very dramatically to… Continue reading
Poll shows over half of UK landlords refuse requests to improve energy efficiency
Over half of UK tenants claim their rental property is cold and draughty and 58% say their landlords has refused to make energy efficiency improvements, a new poll shows. Since the beginning of April 2016 tenants living in F and G rated homes have been able to request improvements, such as more insulation and landlords are legally bound to bring the property up to the minimum of EPC (Energy Performance Certificate) E rating. Under the new legislation, if a tenant requests a more efficient home and the landlord fails to comply, the landlord could ultimately be forced to pay a penalty notice. The survey, conducted by online letting agent PropertyLetByUs, found that seven out of 10 tenants have indeed made requests to their landlord to make improvements to the property but over half have been refused. The survey also found that 76% of tenants claim the property they rent has an old gas boiler, which is unreliable and 48% say their property does not have double glazing. According to data from the European Union it is estimated that over 10 million British families live in a home with a leaking roof, damp walls or rotting windows. Damp, condensation and mould is a big problem in many rental properties as a result of older, single glazed homes. Jane Morris, managing director of PropertyLetByUs, said it is very disappointing to see that so many tenants have been refused when they have requested their landlords make improvements to the property. ‘Landlords that are trying to rent cold, draughty and damp accommodation should immediately start improving their properties. Otherwise, they could be falling foul of the legislation that requires them to bring their properties up to an E rating,’ she explained. ‘It is estimated that around one million tenants are paying as much as £1,000 a year more for heating than the average annual bill of £1,265. These excessive costs are mainly down to poorly insulated homes, many of which are thought to be the oldest and leakiest rental properties in Europe,’ she pointed out. ‘Landlords that are currently renting out F and G rated properties should be looking at the improvements they can make and researching costs and available help, through the Energy Saving Advice Service (ESAS) or Home Energy Scotland,’ she added. Continue reading
