Tag Archives: real estate
Average city rents up almost 5% in the US in 2014
Americans paid out $20.6 billion more in rent in 2014 compared to 2013 as nationally average rents in cities increased during the year, new data shows. Cumulatively, they paid $441 billion in rent in 2014 compared to $420 billion last year, an increase of 4.9% as both the number of renting households and the average rent rose, according to an analysis from real estate firm Zillow. In California the Bay Area, consisting of the San Jose and San Francisco metros, saw the largest jump in cumulative rent paid in 2014, up 14.4% and 13.5% respectively. Rent per household in the San Jose metro rose by $197 per month, while rent in the San Francisco metro rose by $163 per month. Out of the top 50 largest US metro areas, the largest amount of cumulative rent was paid in the New York/Northern New Jersey and Los Angeles metros at $50 billion and $34 billion respectively. The smallest amount of cumulative rent was paid by renters in Birmingham, Alabama, at $1 billion, Louisville, Kentucky at $1.2 billion and Buffalo, New York at $1.2 billion. Nationally, the total number of renters is estimated to have grown 1.9% in 2014 and over the same time period, the median rent paid increased by 2.9%. ‘Over the past 14 years, rents have grown at twice the pace of income due to weak income growth, burgeoning rental demand, and insufficient growth in the supply of rental housing,’ said Zillow chief economist Stan Humphries. ‘This has created real opportunities for rental housing owners and investors, but has also been a bitter pill to swallow for tenants, particularly those on an entry-level salary and those would-be buyers struggling to save for a down payment on a home of their own,’ he explained. ‘Next year, we expect rents to rise even faster than home values, meaning that another increase in total rent paid similar to that seen this year isn't out of the question. In fact, it's probable,’ he added. Continue reading
CML voices concerns over European mortgage changes
The Council of Mortgage lenders has identified four main areas where a change of approach is needed to achieve minimum disruption to the UK mortgage market from European changes. In its response to the Financial Conduct Authority’s consultation on implementing the European Mortgage Credit Directive (MCD) in the UK, it says there are not sufficient measures to manage the transition to MCD rules. The submission says at present, there is no provision for ‘pipeline cases. Such a provision was crucial in the successful implementation of the Mortgage Market Review and the CML believes this approach should be replicated for the MCD. It also says that fundamental changes to the sales process that will confuse customers. The new requirement for a reflection period following a binding offer does not need to introduce a new step in the conveyancing process, as the current implementation proposal suggests. The CML says that the formal offer should be treated as the binding offer and this fully addresses the MCD requirements while minimising confusion. Another major issue is ensuring the MCD applies to new lending only. As currently drafted, the proposal is confusing and could be taken to apply to contract variations, which is not the intention. The FCA should make this explicit, says the CML report. The other concern is the disruptive definition of foreign currency loans. While the CML agrees with the objective of mitigating the risk of currency variation, the proposals apply too widely and the scope should be more narrowly defined. ‘The Directive provides little if any benefit to UK consumers or the operation of the market. We believe that both the government and the regulator share this view,’ said CML director general Paul Smee. ‘So, while we naturally recognise the need to comply, we believe that the UK should do so in a pragmatic way that disrupts the existing robust regulatory regime as little as possible,’ he added. Continue reading
