TSI
New proposals for UK landlords welcomed by the industry
The UK’s National Landlords Association has welcomed new government proposals on immigration that will affect the country’s residential private rented sector. Prime Minister David Cameron announced a number of proposals to be tabled in a new immigration bill which will be a central part of the new Government programme to be announced in the Queen’s speech, next week. They include new powers for councils to crack down on unscrupulous landlords, allowing landlords to evict illegal migrants more quickly and a nationwide Right to Rent scheme. The announcement also includes a new mandatory licensing regime and there will be a consultation on cancelling tenancies when visas expire. ‘We welcome the initiative taken by government to tackle the problem of criminals acting as private landlords to exploit illegal migrants,’ said Richard Lambert, NLA chief executive officer. But he pointed out that it important that councils are given the necessary funding to ensure that they can enforce these powers effectively. ‘This would help drive up standards in the sector and send a powerful message to criminals. One of the fundamental reasons that a minority of criminal landlords are able to get away with providing poor living conditions is that councils do not have the resources to make use of their already significant powers,’ Lambert explained. ‘We would like to see the Treasury allow councils to keep the proceeds of the fines from prosecutions so that councils have both the powers and finances for enforcement, without going cap in hand to the Treasury,’ he added. The NLA is also pleased that the government has given landlords the ability to deal quickly with illegal migrants and Lambert said he hopes this deters those that want to stay in the UK illegally. ‘We are, however, a little concerned regarding the Right to Rent scheme. Landlords are happy to help to check that tenants are who they claim to be. However this should not be a way for the Government to pass the buck on to landlords when tacking illegal immigration,’ Lambert said. ‘We hope, before the scheme is rolled out nationally, that the Government take the time to review how the first phase in the West Midlands has worked and draws on the lessons from that, rather than ploughing ahead regardless,’ he added. He also said that the introduction of a new mandatory licensing regime also raises concerns. ‘We are therefore urgently seeking clarification on whether this would be new policy or related to the current licensing schemes,’ said Lambert. Continue reading
UK city home prices see highest three month price growth for a decade
House prices in key UK cities increases by an average of 1.4% in the three months to April, the highest three month rate of growth for a decade. Overall growth is being supported by house prices playing catch-up with average prices in 11 cities still below their 2007 peak with Belfast down 49.1%, Liverpool down 14.9% and Glasgow down 13.6%. The data from the Hometrack UK Cities House Price Index also shows that despite a recent pick up in housing turnover, the average time between moves in some cities is up to 28 years, twice the average between 2003 and 2007 which was a move every 14 years. It explains that a 30% decline in the proportion of moves by existing mortgaged home owners over the last decade is starving the market of a source of new supply and driving prices up. House price growth across the index is running at an average of 9% and continues to exceed the overall UK rate of growth of 6.8% year on year. At a city level the annual rate of growth ranges from 3.5% in Liverpool to 11% in London. This is the smallest spread in city level house prices since 1996, as the rate of growth in high value markets such as London and Cambridge moderates whilst house prices in regional cities continue to recover off a low base. However, 11 of the 20 cities have house prices that are still below their 2007 peak. The index report says that house price increases are being driven by the improving economic outlook boosting market sentiment, record low mortgage rates and a low churn of housing stock which is creating scarcity of supply. The average number of years between moves is calculated from the number of housing sales in a year relative to the stock of private housing in each city. In the 1980s, the average house was changing hands every 10 years and this increased to an average of 14 years between 2003 and 2007. This has now climbed to an average of 21 years cross all cities and is as high as 28 years in some cities such as Liverpool. ‘Home buyers and investors shrugged off the run up to the general election and continued to bid up the cost of housing,’ said Richard Donnell, director of research at residential analyst Hometrack. ‘Record low mortgage rates, which are more than half the level of 2007, are boosting buying power, while low rates of housing turnover creates housing scarcity and is keeping an upward pressure on house prices,’ he explained. He pointed out that one factor driving housing scarcity has been a marked decline in the proportion of housing sales by existing mortgaged home owners, down to just 35% of all sales in 2014 and almost half the level seen in 2007. ‘This group owns half of all owner occupied housing but fewer… Continue reading
Rents in England and Wales see fastest annual growth since 2010
Residential rents across England and Wales have increased by 4.6% compared to April last year, the fastest annual rise since November 2010, new data shows. Rents are also at a new all-time record in absolute terms with the average rent at £774 the most expensive rental prices on record, according to the latest buy to let index from Your Move and Reeds Rains. The index data also shows that on a monthly basis, rents grew by 0.8% between March to April, the fastest month on month growth since September. Growth is fuelled by a fundamental shortage of housing and renewed wage growth, according to Adrian Gill, director of estate agents Reeds Rains and Your Move. ‘Economic progress has brought about a slow but steady stream of household earnings and employment, the most basic requirements for rent rises and these modest improvements have driven rents up at record speed. People have more money in their pockets, but we’re in danger of seeing that recovery squandered away on a housing shortage,’ he said. A regional breakdown of the figures shows that in the East of England, rents are not just increasing but accelerating on an annual basis. Compared to April last year, rents grew by 12.5%, up from 12% annual growth in March 2015 and 10.2% over the 12 months to February 2015. London comes in second for annual rent rises with a 7.8% increase since April 2014. Again this represents an acceleration compared to 5% annual rent rises in March and 4.9% in February. After London, Yorkshire and the Humber comes in third with a 2.2% annual rent rise. On the other hand rents in Wales are actually 2.8% lower than they were in April last year. On a similar note, rents in the North East have fallen back 0.8% on last April’s figures while rents in the East Midlands have edged down 0.2% over the last 12 months. Looking at monthly rent rises, London is dominant. From March to April, London’s rents increased by 2.3%. The South West came in second, with rents up just 1.1% over the last month, closely followed by the West Midlands with a 1% increase between March and April. By contrast, rents in Wales fell 1.8% on a monthly basis. Similarly, rents in both the North West and North East of England fell by 1.4% between March and April. ‘The East of England has witnessed rapid growth in property purchase prices, and rental prices have taken a similar course, albeit even faster. Away from the East, London is the real figurehead for the housing dilemma. Rent rises tend to follow wage-growth, so it’s no surprise to see this clustered around the South,’ said Gill. ‘However, this could change if demand for jobs and homes in northern England starts to catch up with supply in a similar way…. Continue reading
