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Housing rents up across the whole of the UK, latest index data shows
Residential rental prices increased in every region of the UK in the three months to May taking the average rent to £935 a month or £738 excluding London. The latest HomeLet rental index shows that the pace of growth in London has picked up again after a period of slower growth, with average rents agreed on new tenancies in May 2015 exceeding £1,500 per month for the first time. With rents now 10.7% higher than the same time last year, it is only the third time that rents have risen across the country since the index began, once in October 2014 and once in December 2010. The South West of England saw the largest increases, with average rent prices 13.6% higher than a year ago while Scotland saw growth of 9.6%, the South East of England 9.4% and Greater London 9.2%. In Greater London, the average rent now stands at £1,472 for the three months to May 2015, however, when looking solely at new tenancies agreed in the month of May, the average rent has exceeded £1,500 for the first time in the history of the Index. The average rent on new tenancies signed during May 2015 was £1,506 per month. ‘Rental values are now increasing year on year across the country, with no exception. After a short period of London rents rising more slowly, when it seemed the rest of the UK may catch up or even exceed the capital in the speed at which rent prices were increasing, we now see the rate of price rises in London returning towards double digit growth, while the rest of the UK continues to rise steadily,’ said Martin Totty, chief executive officer of Barbon Insurance Group, the parent company of HomeLet. ‘With the whole of the UK experiencing increases in rent prices agreed on new tenancies, it is possible this is an early indicator of a post-election private rental market where both landlords and tenants might expect rent prices to keep rising as demand continues to grow,’ he added. Continue reading
UK mortgage industry urged to do more for older buyers
The mortgage industry in the UK must better respond to the challenges of an ageing society and fit in with the increasing number of retirees taking out loans for homes, it is suggested. Speaking at a conference organised by the Council of Mortgage Lenders, David Sinclair, director of the International Longevity Centre-UK (ILC-UK), urged the industry to ensure they do not discriminate on basis of age alone. Sinclair also urged older people to think very carefully before looking to buy to let and an investment option to give them a return on their pension savings. He welcomed the work being done by the CML on this topic and urged the industry body to continue to work with providers to ensure they are better equipped to respond to the challenges of demographic change. Since 2010, both the number and percentage of mortgages extending into retirement has increased and ILC-UK research in 2014 revealed that the average housing wealth of retirees is £122,000 or £1.4 trillion in total. While lending criteria has been tightened across the board as a consequence of first the credit crunch and then the MMR, ILC-UK says that this may not fully explain the rising numbers of people who appear to be excluded from the mortgage market purely on the basis of age. Sinclair said that broader demographic trends, financial insecurity and public policy change is resulting in increasing numbers of people needing to take a mortgage into retirement but property investments can be risky and they do not guarantee returns. ‘The industry and the regulatory environment have been seemingly struggling to respond to ageing and demographic change. We are, however, very pleased to see that the industry have begun to respond to these challenges through the important work being led by the CML,’ Sinclair told the conference. ‘We are living longer, our family structures are changing, we are marrying later and we are working longer. At the same time, financial insecurity will result in more people needing to borrow more and later in life. We should be particularly worried about those retirees with interest only mortgages but no linked investment,’ he pointed out. He explained that whilst the introduction of pension freedoms could be a boon to the buy to let sector, older people should make sure they take advice before making the jump and with older people holding almost £1.4 trillion in wealth in their homes, equity release is going to be an attractive way of supplementing a pension for many. ‘The industry needs to ensure that the income poor asset rich pensioners are well served by this market. That said, the recent growth in the number of people aged 55 to 64 taking equity release is potentially very worrying,’ he added. Sinclair also called on the industry and government to work to address the fear of borrowing faced by many income poor, asset rich customers and to work together to ensure that individuals have access to advice. He added… Continue reading
Increase in lending for new homes across the board in Australia
There has been an increase in lending for new homes in Australia to both owner occupiers and investors, according to the latest housing figures from the Australian Bureau of Statistics. The data shows that there was a 4.3% increase in the number of owner occupier loans for construction, while the equivalent number of loans for the purchase of a new property rose by 1.6% in April. The figures include an increase in lending for investment in new residential dwellings which took the annual value to in excess of $9 billion for the first time ever. Harley Dale, chief economist of the Housing Industry Association, said the number of first home buyer loans for owner occupiers remains low, but is running at its highest annual level in a year, although that of course excludes those first time buyers entering the investment market. He also pointed out that the number of trade-up buyer loans reached its highest level since prior to the global financial crisis and described the data as a positive update for the new home building industry. A regional breakdown of the figures, however, shows wide disparities in new housing conditions. The total number of owner occupier loans for new housing increased in six out of eight states and territories. Over the three months to April this year the seasonally adjusted estimate of new loans increased by 4.9% in New South Wales, by 4.7% in Victoria, by 3.4% in Queensland, by 1.6% in South Australia and by 20.6% in the Northern Territory. The number of loans fell over the same period by 4.4% in Western Australia, by 10.3% in Tasmania and by 8.7% in the Australian Capital Territory. Continue reading
