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England and Wales see fastest annual residential rent rises since May 2013
Average residential rents in England and Wales increased by 3.1% year on year to stand at £766 in February 2015, the fastest annual rise since May 2013. The latest buy to let index from estate agents Your Move and Reeds Rains also shows that the East of England recorded a 10.2% annual rent rise, the strongest growth of any region in over five years. The overall annual boost follows a monthly uplift of 0.4% in February 2015, a £3 increase which comes after a series of monthly drops in January of 0.6%, a fall of 0.1% in December 2014 and a fall of 0.2% in November. In real terms, average residential rents in England and Wales now stand at £766, compared to £763 in January 2015 and £743 in February last year. The index also shows that tenant finances are worse with 7.6% of all rent in arrears in February 2015, compared to 6.9% a year ago and returns for landlords have stabilised with total returns up to 11.5% over the last 12 months. According to Adrian Gill, director of Reeds Rains and Your Move, the rental sector is carrying the weight of the housing crisis. ‘More homes are needed to house an ever growing population. The supply simply isn’t there. The result is that landlords are catering to those who can’t afford to buy as well as those who choose renting for the flexibility it offers them such as workers moving into new jobs, or people wanting to get a feel for an area before committing to property ownership and setting down roots,’ he explained. ‘House prices rising out of reach for people at the lower end of the market makes increasing demand in the private rented sector inevitable. A serious and substantial commitment to new builds is the only way to bring supply in line with demand,’ he added. A regional breakdown of the figures shows that tents in the East of England have rocketed up to £787 in February 2015 compared to £714 a year ago. It forms the latest link in a chain of accelerating annual rent rises for the East stretching back to July last year. London saw the second highest annual rise with rents resting 4.9% above levels in February 2014. The North West saw rents down 0.3% and in the North East they were down 0.4%, the only regions to see a year on year drop in rents, while prices in the West Midlands and South West remained stable compared to last year. On a monthly basis, the South West took the lead with a 1.7% increase in rental prices, closely followed by Wales up 1.2% and the West Midlands up 0.9%. Although rents in the East of England saw a more modest 0.7% boost, it is the only region to have experienced monthly rises for 10 consecutive months, contributing to its dominant position in… Continue reading
Steady property sales and price market forecast for Canada this year
Residential real estate prices in Canada are expected to remain stable this year while sales will vary considerably on a regional basis, according to the latest forecast report from the Canadian Real Estate Association (CREA). National sales are now projected to reach 475,700 units in 2015, representing an annual decline of 1.1% which would place annual activity slightly above but still broadly in line with its 10 year average. British Columbia is projected to post the largest annual increase in activity in 2015 at 4.9% followed closely by Nova Scotia at 3.7% Quebec at 2.5%, New Brunswick also at 2.5%, Ontario at 1% and Prince Edward Island at 1.4%. These numbers represent upward revisions to CREA’s previous forecast. Alberta is expected to post the largest annual decline in sales this year at 19.2% although the trend for activity is expected to begin recovering from a weak start to the year as consumer confidence recovers. Sales are also forecast to decline on an annual basis in Saskatchewan by 11.2% and in Manitoba by 1.3%. The national average home price is now forecast to rise by 2% to $416,200 in 2015. Only British Columbia at 3.4% and Ontario at 2.5% are forecast to see gains in excess of the national increase. Prices are projected to remain largely stable elsewhere, with increases or decreases of around 1% or less this year. The exception is Alberta, where average price is forecast to fall by 3.4%, reflecting a pullback in sales for luxury properties compared to homes in more affordable price segments. In 2016, national sales activity is forecast to reach 482,700 units, representing an annual increase of 1.7%. Much of the annual increase reflects an anticipated recovery for sales activity in Alberta and Saskatchewan in line with expected economic improvement in those provinces. Strengthening economic prospects are expected to result in improving sales activity in other provinces where sales have struggled, keeping prices more affordable amid ample supply. Meanwhile, anticipated mortgage rate increases are expected to keep activity in check in markets where homes are already less affordable and prices have continued rising. The national average price is forecast to rise by a further 1.9% to $424,100 in 2016. Given an ongoing shortage of supply for single family homes in and around the Greater Toronto Area, price growth in 2016 is forecast to be strongest in Ontario at 2.5% and Alberta at 2.4%. Gains of around 2% are forecast for British Columbia and Manitoba, and around 1% for Saskatchewan and Quebec. Average home price in the Atlantic region is forecast to hold steady in 2016. Continue reading
New UK housing zones widely welcomed
Twenty areas across the UK have been selected as the country’s first Housing Zones amid a pledge to build hundreds of thousands of new homes in the next five years, including more affordable properties. In the annual Budget Statement it was also announced that in London there will be nine new housing generation areas with the aim of building 28,000 new homes on brown field and public sector land. A London Land Commission will be created and tasked with identifying the best places to build and there will be strong incentives to dispose of public land for housing use. The government also announced that it wants communities to have a strong say over how their local area is developed. It confirmed it will support locally led plans for two more Garden Communities at Basingstoke and North Northants. The British Property Federation, an early supporter of housing zones, welcomed the plans. ‘Spending cuts have meant that support for brown field development all but disappeared during the recession. Housing Zones are welcome recognition that we can deliver significant amounts of desperately needed housing on brown field land, but that this will often need both central government support and clarity of purpose at local level,’ said chief executive Melanie Leech. Any building that takes place on brown field sites, rather than in open countryside must be welcome, according to Edward Heaton of Heaton and Partners property search agency who pointed out that around the UK and even in London it is surprising how many potential sites remain unlocked because of planning policy. But he pointed out that extra funding for new homes will not completely solve the housing crisis. Alison Platt, chief executive of Countrywide, one of the largest property services group in the UK, wants the government to go further. ‘Our analysis shows that there is land for 500,000 homes within walking distance of the train stations in the greenbelt around our cities. We ask the government to review the greenbelt with a vision to freeing up appropriate land for development,’ she said. ‘Last week we put forward 10 proposals to make the property market work better. We believe there is not yet enough clarity in the debate to impact policy and see structural shifts in both the residential and commercial property markets. We want to encourage debate around these proposals and any other solutions to our property market troubles, to get to a position where real positive change is possible,’ she added. According to Rick de Blaby, chief executive of London developer United House Developments, said that cutting the red tape strangling London development is key to this announcement. ‘The Chancellor and the Mayor need to ensure that the delivery of public sector land and brownfield sites to developers is backed by an efficient, lean machine to free up this land to avoid the delays currently snarling up the system,’ he explained. Nicholas Leeming, chairman of national estate agents,… Continue reading
