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Scottish residential tenants are generally happy with the PRS property mark
Over 35% of tenants in Scotland have lived in their current home for longer than a year with 10% living longer than three years, a new survey has found. The poll by Lettingweb, described as the largest ever undertaken in Scotland, shows that 88% of tenants believed they had been treated fairly during their current tenancy. It also found that 86% reported that there had been no increase in rent during their tenancy, with over 90% believing the frequency of rent reviews being reasonable in their experience. Almost 95% had never been asked to leave a tenancy for an unexplained or unreasonable reason but tenants are concerned by the lack of supply of properties to let with only 42% being confident of finding another suitable home if they had to. The firm says that the overall picture is in stark contrast to moves in the Scottish Parliament to control rents. It indicates that tenants welcome the flexibility of the private rented sector (PRS), whilst appreciating that they have considerable security of tenure and are generally able to stay as long as they want. That accords with a long term growth in the Scottish PRS, which has doubled in size over the past decade, with significant increases in the numbers of prospective tenants looking for affordable, high quality property to let. ‘This is a myth buster report as it destroys many preconceptions of the sector. The overwhelming picture is that rents are unlikely to rise during leases and that landlords treat their tenants well. The private rented sector can be proud of their ability to supply good property at a price tenants are willing to pay, and increases have been less than inflation for a period of over eight years,’ said Dan Cookson, head of research at Lettingweb. ‘The stand out figure for me is that only 42% of tenants are confident of finding alternative rented accommodation if they had to. That’s a consequence of limited supply, and more needs to be done to bring greater investment into the sector to meet that demand, and widen confidence that alternatives are available,’ he explained. ‘Our market reports indicate that the time taken to re-let properties at the end of each lease are very short indeed. The market is demanding an expansion of the private rented sector. Government needs to respond by creating conditions for increased supply to come forward,’ he added. According to Malcolm Warrack, chairman of Letscotland, it is a significant survey and as the Scottish Government moves towards legislating for a new type of tenancy agreement for use in the private rented sector, they must listen to the voices of tenants, who are overwhelmingly well served by landlords and letting agents. ‘The challenge must be to implement change in a way which increases the supply of rented accommodation reaching the market. Any reforms brought forward must not lead to reductions… Continue reading
Ski property market in French Alps likely to be boosted by low interest rates
With snow finally arriving across the French Alps a flurry of interest is expected in ski property, especially since interest rates offered by lenders in France are so low. Rates below 3% were available in 2014 and the beginning of 2015 may herald even lower rates in France as the long term outlook for growth in Europe remains weak, according to John Busby, private clients director of French Private Finance. He pointed out that the TEC 10 index dropped below 1% for the first time in December, hitting 0.86%. ‘It is worth stressing again that this is now the rate investors will receive when lending to the French Government for a 10 year period. Hopefully this drop will continue to make it through to retail mortgage rates and so buyers will continue to benefit, said Busby. He also pointed out that it seems that the controversial social charges of 15.5% which were added to French capital gains and rental income tax are in fact illegal under European law and many people who sold a property during 2014 are now making cases to reclaim the tax which they have overpaid. ‘This is also reassuring news for those looking to buy over the busy ski property season,’ added Busby. According to Francois Marchand, general manager at Erna Low Property, the ever lower interest rates offered by the French Banks and a weakening Euro versus the Sterling has triggered earlier property searching by clients in the French Alps. ‘Enquiries from savvy investors are up 20% year on year since the end of the summer. Site visits have been taking place since the beginning of September,’ he said. He explained that over the past 12 months, many exciting new developments have appeared in the French Alps with a few new hot spots for investors for example Châtel, part of the Portes du Soleil ski area. Erna Low Property has sourced a few new property developments ready for this ski season or for next December 2015 with leaseback options. Les Gets, also part of the Portes du Soleil and a short drive from Geneva Airport, having been short of new property developments for sale for a few years, due to a need to upgrade the draining systems and water supplies, now has a greater variety of new properties for sale. Tignes les Brevieres has long been popular for its flexible leaseback investment with the British market, with direct access to the world renowned Espace Killy ski domain and in the same ski area, La Plagne has a new leaseback property investment, ski-in ski-out, of fully furnished apartments ready in December 2016. ‘Over the past two years, we have experienced a great increase in activity levels, the winter season has started in the middle of summer for us, which is something we last saw in 2008,’ said James Ross, sales manager at Erna Low Property . ‘It appears that the French Alps is enjoying a renaissance as a favourite… Continue reading
US home owners more confident than those who rent, new analysis suggests
Home owners in the United States are generally more confident than renters in their local housing market’s performance, according to the latest research from Zillow. But this confidence gap is widening in areas with rapid home value growth and narrowing in areas with more restrained growth, the firm says. Overall home owners have become more confident about their decision to invest in a home where home values in their area have increased more rapidly. By contrast, renters feel that they cannot escape renting and have lowered their aspirations for homeownership in areas where home values have increased more rapidly. Rapidly rising home values have powerful psychological effects on both home owners and renters and research has shown peoples’ expectations about the future are strongly anchored in recent experience. Rapid asset price growth can contribute to what has sometimes been labelled ‘irrational exuberance’, or overly optimistic and self-perpetuating positive feedback in price trends. Zillow’s Housing Confidence Index (ZHCI) is designed to be a forward looking measure of housing market health by gauging the beliefs and aspirations of home owners and renters towards the future state of the housing market. There are two groups, those that have experienced rapid recent home value growth in excess of 9% annually between July 2013 and July 2014, when the survey was last conducted, and those that have experienced more restrained growth of less than 9% over the same period. By this classification, nine metro areas have experienced rapid home value growth and in general, the ZHCI is higher for home owners than for renters. The firm says this is not surprising since, relative to renters, home owners typically have higher incomes and a more optimistic perspective about the economy and housing market. But as the economy has improved, the gap between home owners’ and renters’ confidence index levels has widened in metros where home value growth has been rapid, and narrowed in metros where home value growth has been more restrained. Home owners and renters have very similar perspectives on the overall housing market and the ZHCIs for both groups tend to move together. A larger improvement in outlook among renters is the primary driver of converging optimism levels in slow home value growth markets. But the opposite is true in markets where home values are growing more rapidly. In these markets, optimism levels are diverging. Because home owners’ wealth is largely tied to the value of their home, slower home value growth results in a smaller change in home owners’ housing market outlook. In markets where home values are appreciating at a slower pace, renters have become increasingly optimistic about their potential for future home ownership. The Home ownership Aspirations Index, which measures how optimistic owners and renters are about their future home ownership prospects, increased more for renters in slow growth markets than for home owners. But in markets where home values are rising rapidly, renters are becoming increasingly disillusioned, as they likely see the possibility for future… Continue reading
