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Rent rises in England and Wales slowing but reach record high
Residential rents have eased across England and Wales, slowly up to reach an all-time record high as the rental market approaches its autumn peak, according to the latest buy to let in The average residential rent across England and Wales is now £761 per month, some £3 higher than the previous record £758 set in October 2013, the data from lettings agent networks Your Move and Reeds Rains shows. On a monthly basis August rents are on average 1.1% higher than was seen in July, an increase of £8 which leaves monthly rents 2.4% higher than a year ago. In absolute terms this annual growth represents an increase of £15. ‘Autumn is when more people move to take up new opportunities, to build new careers and to start new chapters. That is what the rental market is all about for many people by providing flexibility and it’s what it does well at a cost that’s risen in line with inflation for at least half a decade,’ said David Brown, commercial director of LSL Property Services. ‘No year is the same, and already 2014 has been like no other. The reawakening of mortgage lending startled the property market into a new spring of life earlier in the year. The benefits have been felt across the board, not just for first-time buyers but for tenants too. Investment means rents are now only 1% higher in real terms than at the start of 2010,’ he explained. He pointed out that now that the independence vote is over in Scotland the main issue is over tenant fees. ‘Banning tenant fees in Scotland pushed up rents by £312 per year, or multiple times what a tenant would have paid at the start of a tenancy. Across every corner of Britain this should serve as a lesson in fully thought through policy making,’ said Brown. A breakdown of the data shows that rents in seven out of 10 regions of England and Wales are higher than a year ago. This is led by the South West, where rents are up 3.5% on an annual basis, followed by the South East at 3.4%, and the North West with a 3.3% annual rise. London was not in the top three, with annual rent rises of only 3% while rents in the North East are in fact 1.6% lower than a year ago, while the West Midlands and Wales experienced annual falls of 0.4% and 0.1% respectively. On a monthly basis rents in the North East have by contrast matched London, with both seeing a 1.5% increase in rents since July. Only rents in the South East and the South West of England grew faster on a monthly basis, up 1.7% from July. In total three regions are now seeing lower rents than in July. Alongside annual falls, rents in Wales and the West Midlands are lower… Continue reading
Survey reveals opposition to big housing developments in UK
With general agreement that a major uplift in new home building is crucial to resolution of the UK's housing crisis, half of the population would oppose a major house building programme if it was in their immediate neighbourhood, a survey has found. Some 49% of Britons would be opposed to building more than 300 properties in their neighbourhood and 53% are anti-developments of 100 and 299 properties, according to the Property Tracker survey from the Building Societies Association (BSA). But when asked how much of the UK they believe should be ‘urban’, which is defined as housing, gardens, train lines and parks, nine out of 10 said more than 10% of the country should be developed when currently just 7% of the country is. The majority of Britons are only willing to support developments of one to 10 properties being built in their local area. Against that, the research also shows that Britons are increasingly open to the types of properties they want to live in and want greater diversity in the types of properties and tenures available to them. One in five people say they would be open to buying a shared ownership property, living in an off the shelf kit home, living in a converted retail or office space and even renting long term. And despite the fact that less than 10% of properties built in the UK are custom build, more than a third of Britons are open to building their own home. The research also shows that access to mortgage finance is now the single biggest barrier to owning a home among first time buyers, rising above raising a deposit for the first time since 2012. Now 57% of these buyers say that getting a mortgage is the most difficult hurdle to overcome, compared to 41% in June 2014 and 33% in September last year. Difficulty in accessing finance for home movers has been marginally less striking, rising from 42% in September 2013 to 51% in September 2014. Substantial press coverage around the changes to mortgage regulation implemented in April may be one of the reasons why first-time buyers are especially concerned about getting a mortgage. Recommendations from the Financial Policy Committee (FPC) to bring in a cap of 15% on the total number of mortgages available at or above 4.5 times a borrowers' income may also have affected confidence, especially to those buying for the first time in London and the South East. ‘These consumer views results illustrate the major barrier that governments has to overcome when it comes to boosting housing supply in the UK. People are open to new developments and even different types of housing and tenure, but the message is clear: not in my backyard,’ said Paul Broadhead, head of Mortgage Policy at the BSA. ‘Local opposition is a major barrier to any government building its way out of the current housing crisis and is why we need the position of Housing Minister to be a full Cabinet position… Continue reading
Property industry says Scotland No vote will bring renewed enthusiasm
Scotland’s property market is likely to see renewed enthusiasm and a rise in prices in sales after the historic referendum vote which saw independence rejected. The residential real estate industry welcomed the No vote and said that the market, which has been stalled to a certain extent, can now not only return to normality but is also likely to see growth as those who put buying or selling on hold are now reassured. ‘With the outcome now certain and Scotland voting to remain part of the United Kingdom, we can expect to see some positive movement in the Scottish housing market. It is good news for Scottish estate agents and their customers who can now look forward to a less frenetic housing discussion and market,’ said Mark Hayward, managing director of the National a Association of Estate Agents (NAEA). ‘Although the outcome does not necessarily guarantee clarity for the market, the mist of ambiguity will clear much earlier than if the outcome to Scottish independence was Yes. Therefore, there is likely to be a substantial increase in market activity in the coming months, with an increase seen in the volume of sales and investments,’ he explained. But he warned that this could disrupt house prices in the short term, although not significantly. ‘The existing concerns around increases in interest rates and a significant hike in stamp duty will undoubtedly have a bigger impact over the next 12 months,’ added Hayward. According to Ran Morgan, head of Knight Frank Scotland, the certainty provided by the No vote will allow the property market to return to more normal trading conditions. ‘The fundamentals are in place to ensure a full recovery, led by the key cities of Edinburgh, Aberdeen, Glasgow and rural counties within commuting distance of large employment hubs. Improving economic activity levels in the UK, better consumer sentiment and higher bank lending will all help to kick-start the market,’ he said. ‘We expect we will be very busy in the coming months as vendors and buyers, many of whom have put off making a decision to buy or sell a property in Scotland due to the referendum, return to the market. This will lead to an increase in the number of transactions at all levels of the market,’ he pointed out. ‘We believe that the outlook for the prime property market in Scotland is positive. Our forecast is that prime values will rise by 3% by the end of this year and by a further 3% to 6% in 2015,’ he added. Andrew Rettie, head of agency for Strutt & Parker in Scotland, also believes that the No vote will inject confidence, optimism and stability into the market which will experience a renewed vigour in the latter months of 2014. ‘We all hope this will be a shot in the arm for the Scottish housing market and that the momentum seen earlier in the year returns to the sector. Buyers and sellers who have stalled in… Continue reading
