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More new residential lets in the UK being agreed before tenants move out
An increasing number of landlords in the UK are able to re-let their property before their existing tenant moves out with the average property being let in 32 days, the lowest figure on record. So far in 2015 some 33% of all new lets were agreed while the property is still occupied, up from 27% last year, according to new research from Countrywide. The average let agreed while tenants are in place is equal to 105% of the asking rent, or an average of £35 a month more than the asking rent. With landlords still receiving rent from the vacating tenant, they are under less pressure to negotiate. In comparison tenants moving into an empty property have more room to negotiate on the rent, knocking an average of £21 a month off what the landlord was looking for. The research also shows that in London 51% of new lets are agreed while there is still a sitting tenant in the property, up from 41% in 2014. The level of demand from tenants in markets where the level of demand is highest and the time to find a tenant is shortest, means landlords are able to reduce the time a home is empty. Where a deal is agreed before the existing tenant leaves the property, there is an average of just six days between the existing tenant moving out and a new one moving in. 10% of the time a new tenant moves in on the same day that the existing tenant moves out. Where a property hasn’t been let prior to a tenant leaving the property, the first week of marketing is when landlords are most likely to achieve the highest rent. During the first seven days, the average let is agreed at full asking price, a figure which falls the longer a rental property is on the market. The first weekend after coming onto the market is when the majority of the most motivated would-be tenants view the property. In London’s fast paced rental market, fewer landlords need to wait until the weekend to find a tenant. Twice as many lets are agreed on a weekday in London than in any other part of the country. Every day a rental property is on the market without a tenant, the landlord is losing rent. If a deal is not agreed during the first week of marketing, landlords become increasingly receptive to offers. 98% of the cases where a landlord accepts an offer below the asking rent are after the property has been on the market for more than a week. In slower rental markets, generally outside of cities, the average landlord has to wait an extra 15 days to find a tenant willing to pay the full asking price compared to those letting a property in the city centre. ‘In larger rental markets, more new lets are being agreed well… Continue reading
Southern cities leading house price growth in the UK, latest index data suggests
UK house prices have increased by an average of £11,500 over the12 months to May 2015 with seven cities in the South of England significantly outperforming this level, the latest index shows. The average house in a city now costs £189,400 with London more than double this figure at £425,700, according to the data from residential property analyst Hometrack. The data also shows that on a month on month basis prices increased by 0.8% in May which is 3.8% above the peak of the market in 2007. Oxford has recorded the highest rise in the last 12 months with growth of £41,700, nearly quadruple the UK average of £11,500, followed by London at £38,900, Cambridge at £23,900, Bristol at £22,400, Southampton at £15,300, Bournemouth at £15,300 and Portsmouth at £15,000. Hometrack said that these house prices gains are a result of robust demand underpinned by the strength of these cities’ local economies and all 20 cities covered by the index recorded annual price rises. Those that saw the smallest rises were all in the north. In Liverpool prices increased by £4,200, Newcastle by £4,700 and Sheffield by £5,300 and these cities are still 14%, 8.5% and 3.8% respectively below their 2007. They are part of a group of nine cities in the north of England, Scotland and North Ireland that are recovering at a much slower pace due to weaker demand from house buyers. All cities except Aberdeen with a fall of 0.4%, recorded month on month price rises and Hometrack said that this could be partly due to a post-election bounce. Bristol led the way with a 1.3% increase followed by Cambridge, Leicester, Liverpool and Belfast all at 1.2%. ‘House prices have picked up momentum post-election. An increasing proportion of households are feeling the benefits of the improving economy, which means that house price growth is set to continue in the coming months. The greatest risk is an earlier than expected increase in interest rates which would knock market sentiment,’ said Richard Donnell, director of research at Hometrack. ‘The strong demand side recovery seen in southern England has yet to spread to other cities revealing the diverse nature of the housing market. All cities are making gains at different rates of growth, but the cities with the biggest increases all have something in common and that is strong local economies,’ he explained. He predicted that affordability pressures will bite at some point in the high value, high growth markets. ‘The double digit price growth registered in cities such as London, Oxford and Cambridge is being sustained by a lack of supply and below average transaction volumes with a third of sales funded by cash or buy to let mortgages,’ he pointed out. ‘London has the highest price to earnings ratio, but it covers a wide range of sub-markets. Over the last three years, the impetus for house price growth has shifted… Continue reading
US sales to foreigners down but they are buying higher value real estate
Total property sales in the United States to international home buyers have decreased from last year, but in terms of price the sales dollar volume increased 13%, the latest data from estate agents shows. From April 2014 through March 2015 total international sales were estimated at $104 billion, compared to the previous year's estimate of $92.2 billion, according to the figures from the National Association of Realtors. In 2014 sales transaction to buyers outside of the US dropped 10%, possibly due to the strengthening of the US dollar in relation to international currencies and weakening foreign economies, according to NAR chief economist Lawrence Yun. ‘However, the amount of money spent has increased; this means international purchasers in the US have become an upscale group of buyers, spending more money on fewer homes,’ he explained. In 2014 five countries accounted for 51% of all purchases by international buyers. These were led by China, followed by Canada, Mexico, India and the United Kingdom, the data also shows. For the first time, buyers from China exceeded all other countries in terms of units purchased and dollar volume, purchasing an estimated $28.6 billion worth of property. Buyers from Canada followed with $11.2 billion in purchases, followed by India with $7.9 billion, Mexico with $4.9 billion and the UK with $3.8 billion. International buyers tend to purchase more expensive properties with the average purchase price being $499,600, compared to the overall US average house price of $255,600. Chinese buyers typically purchased the most expensive properties, at an average price of $831,800. Some 35% of real estate agents reported working with an international client in 2014, up from 28% in 2013 and 46% said international buyers were seeking main homes, 20% wanted buy to let and 26% was for investment rentals. Global buyers also purchased properties for commercial rentals and as residences for children studying in US educational institutions. Indian buyers were the most likely to purchase a primary residence with 79% doing so, while Canadian buyers were most likely to purchase property as a vacation home with 47% doing so. While international buyer clients purchased property across the nation, four states accounted for half of all international sales: Florida, California, Texas and Arizona. Florida remains the top destination for international buyers with 21% of all foreign purchases, followed by California at 16%, Texas at 8% and Arizona 5%. Chinese buyers tended to gravitate towards the West Coast, which provides ample education, business and trade opportunities, while Canadians seeking winter vacation opportunities focused on the Southwest and Florida. The majority of international purchases, some 55%, were all-cash, compared to about 25% of all purchases made by domestic buyers. Mortgage financing tends to be an issue for non-resident international clients because of a lack of a US based credit history or Social Security number, difficulties in documenting mortgage requirements, and financial profiles that can be different from those normally submitted to financial institutions by domestic residents. Continue reading
