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Average UK rents up 11.8% year on year, led by the South West and Scotland
The South West of England and Scotland saw rents increase faster than anywhere else in the UK over the three months to July 2015, according to the latest index. The average rent in the UK for new tenancies over the three months to July 2015 was £977 per month or £761 excluding Greater London, the data from the HomeLet index shows. Indeed, the average rent on a new tenancy in London now stands at £1,538 per month, 9.5% higher than a year ago and overall rent price increases are running ahead of inflation and house price growth. The index, which claims to provide the most up to date figures on UK rent prices, shows that rent price growth in the private rental sector is now extremely broad based with average rental values up in every region of the UK except the North West and are 11.8% higher when compared to the same period in 2014. Three regions of the UK have seen rent prices rise at a rate exceeding that of London in the three months to July 2015. In the South West of England rent prices on new tenancy agreements signed in the three months to July were 11.4% higher than in the same period of last year, in Scotland they increased 11.2% and in the South East of England there was growth of 10.3%. In London where, in cash terms, the average rent on new tenancies is more than twice as high as in the rest of the country, prices continue to rise. New tenancies signed over the three months to July came with rents that were 9.5% higher than in the same period of last year. ‘The index demonstrates just how broad based the rise in rent prices has now become, confirming that this is a UK wide trend. Regions which have long been associated with a buoyant rentals sector, such as London, continue to experience rising prices, but rents are also rising in many other parts of the country at similar rates,’ said Martin Totty, chief executive officer of Barbon Insurance Group, parent company of HomeLet. ‘The South West of England, for example, is benefitting from its popularity with those attracted to the area for lifestyle reasons, as well as the strong local economy in many of the towns and cities of the region,’ he pointed out. He explained that over the past few years, price trends in the rental market and house purchase market have been very similar. ‘However, across the first half of this year, house price growth has slowed whilst rental values have continued to increase, perhaps reflecting a change in the relative attractiveness of renting versus buying over this recent period,’ he said. With early signs of the cost of mortgage finance starting to edge up, it will be interesting to see if this recent trend continues or if the change in buy to let mortgage interest tax relief announced in the Summer… Continue reading
Number of people moving home in UK falls in first half of 2015
The number of home movers in the UK in the first six months of 2015 was 9% lower than in the same period in 2014, new research has found. Despite this decline, the number of movers in the first half of 2015 was 32% higher than in the same period in 2009 at the depth of the housing market recession, according to the latest Lloyds Bank home movers review. It explains that the rise in house prices over the past few years has boosted home owners’ equity in their current homes making it easier for them to fund a deposit towards the purchase of their next property. Notwithstanding the improvement since 2009, the number of home movers in the first half of this year was less than half the total in the first six months of 2007 when it was 327,600. The research also shows that the percentage decline in the number of home movers between the first halves of 2014 and 2015 was closely in line with the 10% fall in first time buyers. First time buyer numbers have, however, risen significantly more quickly than home movers over the last few years. As a result, home movers have declined as a proportion of all new mortgage financed home purchasers from 72% in 2004 to 54% in 2015. ‘There was a modest decline in the number of home movers in the first half of the year compared with 2014, which was in line with the general softening in housing market activity,’ said Andrew Mason, Lloyds Bank mortgages director. ‘Whilst the number of home movers has risen significantly since 2009, it remains well below previous levels and has recovered less strongly than first time buyer numbers. This is likely to partly reflect the high costs associated with moving home, as well as highlighting the difficulties that homeowners can face in finding somewhere suitable to move to due to the shortage of properties available for sale,’ he added. The figures show that the average price paid by a home mover has grown by 25% over the past five years from £208,654 in 2010 to £261,524 in 2015, an increase of £52,869, equivalent to a monthly rise of £881. Home mover property prices have increased by 6%over the past year. The average deposit put down by a home mover in 2015 was £87,954, some 8% higher than in 2014 or £81,549. This equates to 34% of the average price paid by home movers of £261,524. Regionally, home movers in London put down the largest average deposit at £175,273 or 36% of the average property value of £492,882. This is more than four times the average deposit put down by home movers in Northern Ireland where it was £43,625 and the lowest. Nationally, the recent changes to the Stamp Duty system have saved the average home mover £4,769, reducing the tax bill for someone buying the average priced home mover property of £261,524 from £7,845 to… Continue reading
Homes in Australia are less affordable, particularly in Sydney and Melbourne
Homes in Australia are less affordable but there are wide variations across the country with price growth having an effect in some locations. The latest affordability index from the Housing Industry Association (HIA) fell by 2.9% in the June quarter to 79.7 as an interest rate cut was negated by house prices rising and sluggish earnings growth. HIA chief economist Harley Dale said that during the second quarter of 2015 affordability deteriorated by 3.6% in capital city markets, driven by Sydney and Melbourne and described this as ‘a stark contrast’ to a 2.7% improvement for regional Australia. Compared to the second quarter last year, capital city affordability worsened by 0.6% while in regional Australia affordability saw a 5.2% improvement. ‘The large differences in the results for the capital city Affordability Index and its regional counterpart, together with the variation in outcomes between capital cities, exposes the folly of sweeping generalisations which refer to an Australian housing boom,’ said Dale. ‘That is simply not what is occurring. ‘In many parts of Australia the extremely low interest rate environment is delivering historically favourable affordability conditions. It is against this backdrop that authorities have escalated their requirements for the rationing of credit to residential investors. The risk is that this will obstruct new housing supply, aggravating affordability conditions in markets around Australia,’ he added. Meanwhile the latest HIA new home sales report, a survey of Australia’s largest volume builders, recorded its fifth rise in six months in June 2015. Total seasonally adjusted new home sales increased by 0.5%. Dale said that detached houses drove the modest increase in new home sales in June this year, with a 1.7% rise offsetting a 2.9% decline in the sale of multi-units and New South Wales and Victoria continue to display upward momentum in detached house sales, but the other three mainland states are heading in the opposite direction. A breakdown of the figures shows that detached house sales increased by 3.5% in New South Wales, by 1.5% in Victoria, and by 4.2% in Queensland. Detached house sales fell by 2% in South Australia while in Western Australia sales eased by 0.9%. Detached house sales increased by 7.9% in New South Wales and 0.6% in Victoria while quarterly sales fell by 7% in Queensland, 10.2% in South Australia and 3.1% in Western Australia. Continue reading
