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Average rents in England and Wales hit all-time high
Average rents across England and Wales have reached a new all-time record high of £768 per month despite a slowdown in annual rises, the latest data shows. Rent rises increased by just 1.5% in the year to September, down from 2.4% in the year to August, according to the buy to let index from lettings agent networks Your Move and Reeds Rains. On a monthly basis September’s average rents are 0.8% higher than in August, representing a rise of £7 in absolute terms since the previous month. David Newnes, director of estate agents Reeds Rains and Your Move, said that historically rent rises have broadly tracked inflation and as the wider cost of living grows ever more slowly, so too has the cost of renting a home. ‘That said, autumn is always a busy period for the lettings industry, and this has been no exception. Looking ahead, it is likely that rents in most parts of the UK will have now reached their seasonal peak so as the market cools along with the autumn weather there may be opportunities for some tenants to pick up a favourable deal,’ he explained. ‘Landlords predict slower rent rises to continue for at least a year. The latest LSL Landlord Survey shows expected rent rises of just 1.8% over the next 12 months, below the target rate of inflation,’ he added. Newnes pointed out that another critical development in the rental market is the resurgence of demand in regions outside of London and the South East. ‘Regions with a new charge of economic growth, like the North West or East of England, have now led annual rental growth on an equal basis with the capital for most of this year. London’s rents were rising by 8% at the start of 2013 but are now climbing at around a quarter of that pace,’ he said. A breakdown of the figures show that rents in five out of 10 regions of England and Wales are higher than a year ago. The East of England has seen the fastest annual increase, of 3.1%, followed by the South West at 2.3% and London with a 2.2% rise in rents since September 2013. Meanwhile, rents in the West Midlands are now 2.4% lower than a year ago, followed by an annual fall of 2.3% in the North East and rents in Wales dropping 1.1% compared to September last year. However on a monthly basis none of the ten regions has seen rents fall. Between August and September the average rent in the South East rose by 1.8%, while the North West has seen a monthly increase of 1.4% and in the North East rents are now 1.2% higher than in August. By contrast, Yorkshire and the Humber has seen no change in rents since August, while the slowest monthly rent rises were seen in the East Midlands, up just… Continue reading
Second steppers finding it hard financially to move up housing ladder
Second Steppers in the UK need to find an extra £58,400 to fund the move to their second home, over double the average first time buyer deposit, according to new research. This gap is around £15,000 bigger than in 2013 and £18,000 bigger than in 2012, the fourth annual second steppers report from Lloyds Banks shows. Almost half, 46%, say the costs and fees associated with moving house is the biggest barrier to moving up the ladder. However, 40% of second steppers think it will be easier to sell this year, almost double the figure of 2013 and treble that of 2012. The report points out that growing house prices mean there is an ever widening gap for those making the move to the second step on the housing ladder. Yet despite this, many have increased confidence in the housing market and as a result, more confidence in being able to make the jump to the next step. Second steppers are the link between first time buyers and the rest of the housing ladder. They are living in the homes that the first time buyers need to buy to keep the market moving. Without movement from second steppers, movement on the ladder comes to a standstill on the second rung. Despite increasing house prices boosting equity levels for second steppers, the findings show people living in their first home have to find an extra £58,400 to plug the gap between the sale price of their current property and the cost of the house they would ideally move to. This figure is over double the amount of the average first time buyer deposit of £25,848, meaning it is far more expensive to move up the ladder than to get on it in the first place. Year on year, this figure has significantly increased. Nationally, the figure of £58,400 has risen by £14,900 since 2013 and £17,900 in 2012, when the figure was £40,500. However, across the country, there are significant regional variations in the perceived size of this gap. In the West Midlands, people will need to find just £21,000 extra to make the step to their desired second home. At the other end of the scale, people in East Anglia say they need £80,800 to make the jump. The report also points out that despite the growing financial gap between first and second properties, confidence in the market is improving. Just a quarter of second steppers see economic uncertainty as a key challenge, reducing by 10% in a year. Unsurprisingly, the number seeing negative equity as a challenge also reduced by 11 percentage points to just 14% of respondents. The Help to Buy Mortgage Guarantee scheme has had an impact on the mortgage market, with Treasury data showing that 79% of purchases with a mortgage guarantee were completed by first time buyers. This has contributed to second steppers being more confident that there is the demand coming through allowing them to sell. Just 29% see a lack of first time… Continue reading
Calls for key business districts in London to retain their office space
The Mayor of London is bidding to preserve city’s key business districts by urging the government to reconsider proposals that could see valuable office space in the capital turned into homes. Last year the Mayor negotiated for four defined areas in central London to be exempt from a Government policy that allowed office space to be converted into homes without developers applying for change of use planning permission. These areas included the Central Activities Zone which incorporates the City of London, the South Bank and the West End. More than a third of London's jobs are within this area, and a further 280,000 jobs are expected to be created here in the next 25 years. The Mayor also successfully gained exemptions for the commercial area north of the Isle of Dogs and London's Enterprise Zones in the Royal Docks, plus the part of the City Fringe in east London which makes up the emerging Tech City opportunity area. The UK government has just finished consulting on a raft of planning proposals including one that would see the exemption for these areas removed, a move that the Mayor, Boris Johnson, says would damage London's internationally important business locations. Johnson points out that London is the beating heart of the UK economy and accounts for over a fifth of GDP. It is also a global centre for business, so the Mayor believes it is vital to maintain a stock of quality office space in key areas to ensure the city can continue to attract jobs and growth. The city is home to a number of unique clusters of economic activity from government offices, to financial services, institutions and professional bodies, which employ millions of people, contributing billions to the national economy. The Mayor believes that if these clusters were to be broken up in piecemeal residential conversions these benefits would disappear. ‘London is a colossal powerhouse of jobs and growth, and the motor of the UK economy. While increasing housing output is of vital importance, I am concerned that removing the exemption in our most thriving business districts could compromise both London and the UK's future economic growth,’ said Johnson. ‘London's success depends on a rich mix of uses and more high value residential property in central London could upset this balance and change the area for good,’ he added. In a letter to the Secretary of State for Communities and Local Government, Eric Pickles, the Mayor, together with London First, the British Property Federation and the Planning Officers Society London say that ‘incremental unplanned loss of office accommodation in strategically important office areas of London can significantly weaken the agglomeration benefits provided by these locations’. The Mayor and signatories to the letter also argue that criteria should be in place to protect other, strategically important business locations across the country. They argue that due to the large variation in size and function of office clusters throughout the country, especially between London and other cities in England, it would be challenging to agree… Continue reading
