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UK rental market returns to growth, latest rental index shows
Residential rents for new tenancies in the UK increased by 2.5% during first month of the year, according to the latest figures to be published. It means that the rental market has returned to growth with nine out of 12 regions covered by the HomeLet rental index reporting rising rents, taking the average rent in the UK to £889 or £707 excluding Greater London. The figures show the highest growth occurring in the East Midlands, Scotland and East Anglia with rents rising 6.2%, 5.7% and 5% respectively. Only the North East of England, Northern Ireland and the West Midlands have seen a decline in rental prices,’ the index data also shows. Overall the index report says that after a period of seasonal adjustment towards the end of 2014, which saw rental prices falling in many parts of the country, the rental market has started 2015 with a return to growth. The average rent in the UK is now £889, compared to £867 at the end of 2014, and £799 in January 2014. A breakdown of the figures show that the average rent in the East Midlands is now £617, a monthly rise of 6.2% and an annual increase of 7.2%. In Scotland it is £651, a month on month rise of 5.7% and year on year up 9.4%. East Anglia has seen a monthly rise of 5% but year on year average rents are up only 1.6%, taking the average to £762 while in the South West the average is £830, up 3.5% month on month and up 10.2 compared with January 2014. Yorkshire and Humber has seen rents rise by 3.2% month on month and 10.1% year on year to £613. Greater London has seen the steepest rise with average rents reaching £1,425 in January, up 2.3% month on month and an annual rise of 13.4% while other regions have seen more muted rise with Wales seeing a month on month rise of 2.3% and an annual rise of just 1% to an average of £586. The North West saw a month on month rise of just 0.8% and an annual rise of 5% taking average rents to £650 while the South East was up 0.7% month on month but over 12 months average rents were up 4.2% to £873. Everywhere else saw rents fall month on month, down 1.1% in the West Midlands to £635 but the region has seen rents rise by 4.8% year on year. In North East they were down 2.6% month on month to £518 but up 2.6% year on year. Northern Ireland has had the poorest performing rental sector. Average rents were down 0.5% to £556 and down 2.3% year on year, the only annual decline in the whole of the UK. Continue reading
PRS issues further guidance on unfair lettings agent fees in UK
The Property Redress Scheme (PRS) has issued further guidance on unfair fees being charged by letting agents in the UK. The PRS is one of three consumer redress schemes authorised by the government whose role it is to provide fair and reasonable resolutions to complaints between members of the public and property agents and professionals. In England and Wales, letting agents are able to charge prospective and existing tenants for services and administration in addition to any rent or deposit paid. Such practices are illegal in Scotland where tenant fees have been outlawed since 1984. In a report issued by the PRS last month, it was revealed that of the complaints about agent members raised with the scheme, the most common grievance involved unfair or excessive fees being charged to the consumer. This has been reinforced by figures recently issued by Citizens’ Advice, who have hit out at agent’s ‘inexplicable fees’. In order to aid fee transparency and educate Member Agents, the Property Redress Scheme has issued two guides, one for agents and their landlords and another for agents and their tenants. It is not the role of redress schemes to prescribe or prohibit any fee in general. However, agents must be able to provide evidence to support the fees that they charge. A PRS Ombudsman may choose to make an award to the consumer if it is decided that the Member’s fees are unfair or have not been presented in a clear and transparent way. The guides have been summarised from the Competitions and Markets Authority Guidance (CMA) for lettings professionals on consumer protection law and are designed to help each party understand what may be deemed as an obscure or unjustifiable fee. ‘As a scheme, we felt that the subject of agent fees needed to be looked at in an objective and reasoned way and that agents should be provided with guidance on what they can and can’t charge. Tenants and landlords also need help understanding what they can complain about and which practices are legitimate and legal,’ said Sean Hooker, head of redress for the PRS. ‘Given the importance of this area and the fact that the redress schemes are now a major part of the mainstream lettings industry, it would have been remiss of the scheme to duck the issue and not make our agent members fully aware of their obligations,’ he added. The main purposes of the Property Redress Scheme are to allow agents to comply with their legal requirement to be a member of a government authorised consumer redress scheme and to settle or resolve complaints made by consumers against members. It is authorised by the Department for Communities and Local Government to offer redress to lettings and property management agents and the National Trading Standards Estate Agency Team (formally the OFT) to… Continue reading
Stamp duty changes in UK push first time buyer deposits to 18 month high
First time buyer deposits in the UK have increased by 15% in a year to average almost £30,000, driven by lower stamp duty bills for new buyers, according to the latest analysis. The average first time buyer deposit was £29,127 in January, up 7% compared to December 2014 and 15% higher than £25,314 in January 2014, the first time buyer tracker report from estate agents Your Move and Reeds Rains shows. The data also shows that first time buyers are saving the largest amount for their deposit since July 2013, some 18 months ago, as savings from December’s stamp duty changes take effect. This has also helped drive rising purchase prices for first time buyer homes, which have climbed to a new record. New buyers paid an average of £160,304 in January, 12% more than £143,343 a year ago. Revisions to the stamp duty slab system have reduced the upfront costs for many first time buyers, allowing them to divert that cash into a deposit fund. First time buyers paying the average purchase price would have been liable for stamp duty fees of around £1,600 before the graduated system was implemented, but this would now have been reduced to £700, saving them roughly £900. The report also says that simultaneously, as wages start to see a significant pick-up in real terms, growing purchasing power is reflected in the average first time buyer Loan to Value ratios and these have fallen 1.1% over the last three months, suggesting deflation and growing wages are allowing first time buyers to put together slightly larger deposits. Despite this, the average loan to income ratio for first time buyers has risen on an annual basis. On average, deposits now represent 75.4% of a first time buyer’s income, compared to 70.6% a year ago. ‘A fusion of economic factors is alleviating some of the financial burden of forming a deposit. Wages are starting to recover and inflation has fallen to a record low, meaning buyers have slightly more cash to play with day to day. And stamp duty fees were slashed for many new buyers when the government reformed the old slab system, freeing up further funds. It’s still difficult to save, with savings rates tied closely to the low base rate. But it’s easier to put cash aside than it was a year ago,’ said Adrian Gill, director Your Move and Reeds Rains. ‘However, property prices have pushed a new record for first-time buyers, meaning these extra funds are being diverted directly into larger deposits. Putting together a deposit to buy a property remains one of the most arduous tasks for prospective home-buyers, and schemes like Help to Buy are essential to allow the swathes of buyers reliant on higher LTV mortgages to get onto the housing ladder,’ he explained. The data also shows that there were 21,200 first time buyer… Continue reading
