Tag Archives: real estate
Rents overtake home values in the US, latest index shows
Residential rents in the United States grew 4% year on year in April, overtaking home values growth which was at an annual rate of 3%, the latest data shows. It means that rents grew at their fastest pace in two years in April, and surpassed home value growth in 20 of the 35 largest US housing markets, according to the data from real estate market report firm Zillow. Rents reached $1,364 and home values reached an average of $178,400 and growth in home values is expected to slow further in the second half of the year as the for sale housing market stabilises. The switch comes after years of rapid home value increases and has been boosted by the improving economy. The Zillow report points out that US home values peaked in 2007, and then crashed during the recession between 2008 and 2010. Since then, they have risen rapidly, returning to their peak levels in many markets. Home values have both risen and fallen over the past decade, but rents have been steadily rising. Indeed, rental growth has been outpacing home value growth for several months in some of the nation's hottest markets. In San Francisco, rents started rising faster than home values in July 2014, and have been growing faster ever since on an annual basis. In Boston, annual rental growth has outpaced home value appreciation since August 2014. The report points out that low mortgage rates have helped make buying a home much more affordable than renting. On average, US home buyers can expect to spend about 15.3% of their income each month on a typical house payment. Renters can expect to spend about 30% on a monthly rent payment. ‘There are tremendous incentives to get into home ownership these days: mortgage access is improving, interest rates are low, and home values remain below prior peaks,’ said Zillow chief economist Stan Humphries. ‘But it will be increasingly difficult for many renters to realize these benefits as this country's growing rental affordability crisis continues to worsen. More income going to rent means less going to savings for a down payment and other costs, keeping renters renting longer and feeding into the high demand that is contributing to rising rents in the first place,’ he explained. ‘This cycle will be difficult to break, and is a symptom of the imbalances that still exist in the housing market as we struggle to get back to normal. New construction and rising wages will help, but neither is coming very quickly,’ he added. Over the next year, home value growth is expected to slow even further, to 2% annually, according to the Zillow home value forecast. In 2014, home values rose 4.9%. Continue reading
Rents in England and Wales see fastest annual growth since 2010
Residential rents across England and Wales have increased by 4.6% compared to April last year, the fastest annual rise since November 2010, new data shows. Rents are also at a new all-time record in absolute terms with the average rent at £774 the most expensive rental prices on record, according to the latest buy to let index from Your Move and Reeds Rains. The index data also shows that on a monthly basis, rents grew by 0.8% between March to April, the fastest month on month growth since September. Growth is fuelled by a fundamental shortage of housing and renewed wage growth, according to Adrian Gill, director of estate agents Reeds Rains and Your Move. ‘Economic progress has brought about a slow but steady stream of household earnings and employment, the most basic requirements for rent rises and these modest improvements have driven rents up at record speed. People have more money in their pockets, but we’re in danger of seeing that recovery squandered away on a housing shortage,’ he said. A regional breakdown of the figures shows that in the East of England, rents are not just increasing but accelerating on an annual basis. Compared to April last year, rents grew by 12.5%, up from 12% annual growth in March 2015 and 10.2% over the 12 months to February 2015. London comes in second for annual rent rises with a 7.8% increase since April 2014. Again this represents an acceleration compared to 5% annual rent rises in March and 4.9% in February. After London, Yorkshire and the Humber comes in third with a 2.2% annual rent rise. On the other hand rents in Wales are actually 2.8% lower than they were in April last year. On a similar note, rents in the North East have fallen back 0.8% on last April’s figures while rents in the East Midlands have edged down 0.2% over the last 12 months. Looking at monthly rent rises, London is dominant. From March to April, London’s rents increased by 2.3%. The South West came in second, with rents up just 1.1% over the last month, closely followed by the West Midlands with a 1% increase between March and April. By contrast, rents in Wales fell 1.8% on a monthly basis. Similarly, rents in both the North West and North East of England fell by 1.4% between March and April. ‘The East of England has witnessed rapid growth in property purchase prices, and rental prices have taken a similar course, albeit even faster. Away from the East, London is the real figurehead for the housing dilemma. Rent rises tend to follow wage-growth, so it’s no surprise to see this clustered around the South,’ said Gill. ‘However, this could change if demand for jobs and homes in northern England starts to catch up with supply in a similar way…. Continue reading
Research reveals the cost of bungled DIY by UK home owners
As home owners in the UK gear up for a bank holiday of DIY, new research shows that bungled workmanship leads to 90% paying the cost rather than claiming on insurance. Britain’s amateur handymen are set for a disastrous May bank holiday, according to research from the Nationwide Building Society and just 10% are likely to recover the costs of their mistakes by claiming on their insurance. But many people are completely unaware they can claim for accidental damage caused in this way, according to Nationwide’s head of general insurance, Martyn Dyson, when some 80% carry out home improvements themselves rather than asking a professional for help. Many undertake manageable tasks with 70% opting to do some wallpapering and painting, 65% bleeding a radiator and 62% improving the garden. Some tackle more onerous DIY with 24% knocking down walls, 21% laying loft insulation, 12% fitting a new kitchen or fitting a new bathroom. The research reveals the top disasters. Some 35% suffer spillages, including paint, glue or white spirit, 22% marking the walls, and 10% damage to furniture, breaking a window and damage to flooring. Some 90% of those who admitted to home improvement horrors ended up paying the cost of their mistakes themselves rather than claiming on their home insurance. And with 19% of people with DIY horror stories causing over £200 of damage, not knowing what your home insurance covers you for can prove quite costly. ‘The May bank holiday is prime time for getting stuck into jobs around the home you’ve been putting off. Unfortunately, you can end up causing more damage than good, especially if you’re inexperienced,’ said Dyson. ‘Nationwide’s advice to anyone looking to do home improvements this weekend is to not rush into it, stop and think about the job in hand, be realistic about your capabilities and make sure you are covered if things do go wrong, as not all policies include accidental damage like Nationwide’s Home Insurance. As the survey shows, many people may be completely unaware they can claim for accidental damage in this way,’ he added. Continue reading
