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Residential rents in Scotland rising at slowest pace for over two years
Scottish rents have increased by just 1.1% in the year to February 2015, their slowest pace for over two years, according to the latest buy to let index. But despite this slower and more affordable pace of rent growth in Scotland, the financial health of tenants has declined over the same period, and February saw the highest proportion of late rent since December 2012. The Scotland buy to let index from letting agent network Your Move, also shows that the average residential rent across the country has increased only £6 in the last year, reaching £537 per month in February. This represents a significant downtrend in annual rent rises, which peaked at 4.3% a year previously in February 2014 equal to a £21 annual boost in cash terms. On a monthly basis, Scottish rental prices have climbed a modest 0.2% since January, but this marks the first monthly rent rise witnessed since November 2014, as the market had slowed down. ‘Such an incremental rise in Scottish rents over the past year shows admirable stability in the private rented sector. Despite high demand for homes to let in the face of the current housing shortage, rent inflation in the lettings market has remained remarkably affordable for tenants,’ said Brian Moran, area lettings director at Your Move. ‘After cruising along on a pretty even keel until late 2012, we then saw steep rent rises stack up against tenants as the abolition of tenancy fees in Scotland knocked the market out of kilter. The Scottish private rented sector has subsequently been on quite a rollercoaster ride, but rent growth has its feet firmly on the ground once again, and is making steady strides forward,’ he explained. ‘But while improvements in the affordability of the lettings market mean that tenants are able to keep up with rent rises, other economic factors are holding them back from making solid financial progress and continuing to drag tenants into the red,’ he added. A breakdown of the figures shows that rents are now higher than a year ago in three out of five regions of Scotland. Edinburgh and the Lothians have experienced the strongest annual rent growth, with prices climbing 2.5% in the 12 months to February 2015. This is closely followed by Glasgow and Clyde where rents are up 2.3% year on year. The East of Scotland saw a 2.2% annual rise in average rents, setting a new record of £530 per month. However, rents have fallen in two regions in the past year. The Highlands and Islands experienced the biggest annual drop in average rents, falling 1.6% while monthly rents in the South of Scotland are 1.5% lower than in February 2014. On a monthly basis, rents have increased in just two out of five regions of Scotland. For the first time in eight months, rents in the South rose on a monthly basis, up 1.3% since January 2015 to £489. In the East of Scotland rents climbed… Continue reading
UK home owners should be aware of new building safety rules
New Construction Design and Management (CDM) regulations due to come into force in the UK next month could affect the sale of a property if any renovation or other work is carried out by a builder who does not comply with the rules. The CDM legislation which to reduce accidents during construction projects also specifies legal requirements on site safety standards that cover work including that carried out for home owners who live in the property after work has been completed. Louise Hosking, managing director of health and safety environmental specialists Hosking Associates, pointed out that the legislation recognises that large construction sites are no longer where most people are being badly injured or killed, and as a result focus is shifting to smaller projects including those within the domestic sector. ‘The way a building project is organised can reduce risks to workers significantly. It is imperative that everyone involved including architects, engineers, builders and the homeowner, work together to meet the new standards,’ she said. She also pointed out that the Health and Safety Executive (HSE) commissioned a report last year that showed very few home owners consider safety when they choose their contractor and this may have to change. ‘For some projects a health and safety file, which outlines how the work was undertaken and what was installed, will be required at the end of the work and if this isn’t provided it could affect the future sale of the property,’ she added. Under the rules, from 06 April all builders, whatever their size, working in the domestic sector, will have to create a construction phase safety plan for all building projects and all domestic projects will have to meet the same basic standards for the provision of welfare facilities as commercial projects. Any domestic projects finishing after 06 April where there has been more than one contractor must have a health and safety file presented at the end which is in effect a handover pack that should include ‘as built’ drawings or specifications of components that have been installed. Conveyancing solicitors are likely to request this when property is bought and sold. For home owners, CDM duties are passed to the contractor where there is only one or the principal contractor for more than one. Where there is more than one contractor, a principal designer must also be appointed and they coordinate all matters relating to health and safety. Also, if the principal designer changes or is not engaged to the end, the responsibility for the file moves on and may rest finally with the principal contractor and the principal contractor is responsible for operational site safety and passing information to the principal designer for the health and safety file. ‘I would anticipate the HSE will start visiting home improvement sites more routinely and it will probably focus on the provision of welfare facilities and safe working practices… Continue reading
Vast majority of UK tenants don’t think they can afford to buy
Over 90% of tenants in the UK don’t think they will be able to afford a property as rents continue to escalate and property prices stay firmly out of their reach. The study shows that just 7.5% of tenants feel confident that they will be able to afford to buy their own property in the future despite the government’s recent initiatives like the Help to Buy scheme, the stamp duty changes and the recent Budget announcement on ISA savings. Indeed, according to the research from Property Let By Us, two thirds of tenants believe the government is still not doing enough to help them onto the property ladder. A further 62% of tenants aspire to owning their own home but a massive 87% of tenants feel trapped in their rental accommodation. ‘These stats show that many tenants are still unable to afford to buy a property and believe more should be done to help them,’ said Jane Morris, managing director of Property Let By Us She pointed out that recent research from the Halifax shows that homes in a fifth of local authority districts across the UK have increased in value by more than the average employee's annual wages over the past two years. The vast majority of these areas are in London, the South East and the East. ‘In eight local authority districts across the UK, the increase in house prices over the last two years has outstripped the amount someone would have typically earned over the period by more than £80,000,’ she explained. And she added that according to Rightmove, the average new seller asking price across England and Wales in March was £281,752, some 1% higher than the previous month and £30 below an all-time high recorded in June last year. ‘These price rises have made it much tougher for first-time buyers to get on the property ladder in areas where they are renting. Many tenants are stuck in a difficult cycle of saving just enough for a deposit, only to find that prices have risen out of their reach again,’ Morris concluded. Continue reading
