TSI
Rents in England and Wales fall for first time since March
Residential rents across England and Wales have fallen on a monthly basis for the first time since March, despite fresh records in three regions, according to the latest index. Average rents fell by 0.1% on a monthly basis, down from £804 in July to stand at an average of £803 in August, the data from the Your Move and Reeds Rains index shows. However, on an annual basis rents are now 5.5% higher than in August 2014, representing a slowdown since July when annual rent rises stood at an all-time record of 6.8%. ‘August has witnessed a break in a series of blistering rent rises. Yet this mild correction comes on the back of a whole year of acceleration. Rents are rising rapidly on an annual basis, underpinned by an improving economic picture for many potential tenants and the peak lettings season is only just about to start this autumn,’ said Adrian Gill, director of estate agents Reeds Rains and Your Move. ‘There is also no major change to the fundamentals of supply and demand. This means that in the longer term, faster rent rises may become a semi-permanent feature of the British property market. Alongside purchase prices, rents will continue to rise rapidly until something happens to address a drastic shortage of homes in the UK,’ he added. A regional breakdown show that despite a slower picture across the board, three individual regions of England and Wales saw rents hit fresh records in August. In the West Midlands average rents of £586 per month represent the highest levels on record, while rents in the East Midlands have set their own record at £596. As the third region to see record rents, the East of England has also overtaken London to see the fastest annual growth of 11.5%, ahead of 10.2% annual increases in the capital. This takes average rents in the East of England to £843 per month. Meanwhile, while relegated to second place in terms of annual rent rises, London’s tenants still pay by far the most in absolute terms, with average rents of £1,278 in August. Annual rent rises in the West and East Midlands were also particularly strong, standing at 4.6% and 5.9% respectively. At the other end of the spectrum, Welsh rents are 3.1% lower than a year ago and the only region to see an annual fall. This comes as Wales has also seen the most negative trend on a monthly basis, with rents in the principality dropping 4% since July. In total five out of 10 regions have seen rents fall on a monthly basis. After Wales this is led by the South East, with rents 1.4% lower than in July, and the North East with a 1.1% monthly decrease. In London rents have seen a rapid reversal with a 0.3% fall following a 3.3% increase over the previous month. Leading the field on a monthly basis, South Western rents rose 3.2% between July and August,… Continue reading
UK reinvigorated Right to Buy programme hailed a success
A reinvigorated Right to Buy programme in the UK has created nearly 40,000 new home owners in the last three years, according to new figures published by the government. Housing Minister Brandon Lewis said it is further evidence of how government-led efforts to help aspiring home owners are working, adding that there were 3,644 new starts and acquisitions since the Right to Buy was reinvigorated in 2012. He explained that this means that the 3,054 additional homes sold in the first year of the scheme are already being replaced on a one for one basis nationally. ‘For years, the discounts available under the Right to Buy were left to dwindle, denying thousands of people the opportunity to own their own home,’ he explained. ‘This reinvigorated scheme has turned that around, and means nearly 40,000 people have been able to buy the home they love, many of whom might otherwise never have had the chance to become homeowners. On top of that, it’s getting homes built, with councils replacing the additional homes sold on a one for one basis,’ he added. The data also shows that since the reinvigoration of the Right to Buy scheme, nearly £964 million in sales receipts are being re-invested into building new homes, levering a further £2.2 billion of investment over the next three years. This means that in total, over £3.2 billion will be raised to invest in affordable house building as a result of Right to Buy. A breakdown of the figures shows that in the three months to June, some 2,779 households bought their homes under Right to Buy. Local authorities received approximately £223 million from Right to Buy sales, 5% higher than the £212 million in the same quarter of 2014 to 2015. Lewis also pointed out that since 2010 the government has introduced a range of measures to support aspiring homeowners to buy their own home. In addition to reinvigorating the Right to Buy, this includes the Help to Buy scheme, which has enabled nearly 120,000 people to buy with a fraction of the deposit they would normally require. Overall, since 2010 232,000 households have been helped to purchase a home through government backed schemes including Help to Buy and Right to Buy. On top of this, the government has also pledged to build 200,000 new Starter Homes, which will be available to young first time buyers under 40 at a 20% discount, while a new Help to Buy ISA will help aspiring home owners to save up a deposit for a new home. Continue reading
Households across the UK positive about property price growth
UK house price sentiment remains positive with households in all regions believing that property prices increased in September, the latest index shows. Some 22.5% of households surveyed across the UK said that the value of their home had risen over the last month, while 3.8% said that prices had fallen, according to the index from Knight Frank and Markit Economics. The index, which is a bellwether for house price movements across the country, recorded a reading of 59.3 and has now had a reading above 50 for 30 months in a row. Any figure over 50 indicates that prices are rising, and the higher the figure, the stronger the increase. Any figure below 50 indicates that prices are falling. However there is a north-south divide with the average reading for the north of England in September at 54.9 and the south of England at 64.1. This is the second widest gap between the two readings this year. While households in all UK regions perceive that property prices rose in September, Londoners perceived the highest rate of house price growth over the course of the month, followed by those in the East of England. However, in Yorkshire and the Humber perceptions of house price growth eased notably in September after rising for the previous three months to reach 60.4 in August. While households in the region still perceive that prices are rising, they are reporting that the pace of increases has slowed, with a reading of 54 this month. The index also shows that households in all UK regions expect house prices to rise over the next 12 months, led by households in the East and South East of England while some 5.9% of households expect to buy a property over the next 12 months, while a further 6.4% said that they would purchase a house within one to two years. The future HPSI, which measures what households think will happen to the value of their property over the next year, rose in September to 70 from 69.5 the previous month. However, the future HPSI remains well below its peak of 75.1 achieved in May last year, the report points out. ‘UK price sentiment remains in positive territory, and has stayed broadly stable since the election in May. However the north-south divide is evident, with the average reading for the north of England in September at 54.9 and the south of England at 64.1,’ said Gráinne Gilmore, head of UK residential research at Knight Frank. ‘This is the second widest gap between the two readings this year. Overall, households expect prices to rise over the next 12 months, with eight times as many households anticipating a rise in the value of their home as anticipating a decline,’ she explained. ‘Sentiment is being underpinned by the improving economy, with positive employment data as well as wage growth boosting buyer confidence. At the same time a shortage of stock on the market is serving, in some cases,… Continue reading
