Investment
Majority of UK private rented sector tenants don’t want long leases, research shows
Almost 80% of tenants in the UK want a lease that is between six months and two years, with just one in five tenants wanting longer leases of two to five years, new research has found. Over half of tenants are hoping to move up the rental ladder and rent a nicer property when they can afford to, according to the study by online letting agent PropertyLetByUs. It also found that over 60% of tenants would like to redecorate their property and over half of tenants want to change the carpets and floorcoverings a further 23% want to install decking, 18% want to add a hot water tub and 13% want to create a patio. ‘Clearly tenants don’t want long leases. For many, longer than two years does not give them the freedom and flexibility they need. They may find a job, then move on to another one, start out living with friend and then want to move in with a partner,’ said Jane Morris, the agent’s managing director. ‘However, landlords like longer leases as they get charged fees each time their agent needs to find new tenants. Our research also shows that many tenants do aspire to owning their own home and a large proportion of them want to redecorate their rental accommodation,’ she explained. But she pointed out that this can cause a major headache for landlords, with many facing redecorated properties at the end of the lease, with no prior approval secured by the tenant. The latest Tenant Deposit Scheme report shows that redecoration is a major cause of dispute, taking 32% of the share. ‘We have seen properties with walls painted in bright colours, despite landlords specifying that the décor must be a neutral and standard lettings property colours, from off-whites and beige to magnolia. One tenant decided to decorate the whole house black and white. Another tenant chose a dark burgundy for all the walls, throughout the property,’ said Morris. ‘Even when a tenant repaints in the correct or authorised colour scheme, there are still problems. We have seen instances of bad paint application, patchy walls, paint spills on carpets, curtains, fixtures and fittings, all of which the tenants will be responsible for at the end of the tenancy,’ she added. The firm says that it is vital that landlords carry our mid-term property inspections and ensure the inventory and check-in stipulates the colour and quality of the decoration. If tenants do want to decorate, they should be given colour swatches to choose from and clear instructions on what can be painted and how. Continue reading
Property sales in Scotland up 4% in 2015, down from 11% the previous year
Residential sales in Scotland increased by 4% in 2015, well below the 11% recorded in the previous year, a new analysis report points out. Tougher mortgage lending conditions during the first half of 2015 impacted the recovery of Scotland’s housing market, according to the report from real estate services firm Savills. However, the market adjusted during the second half of 2015 due to a recovery in mortgage lending for house purchases across Scotland, which increased by 9% from 59,500 in 2014 to 64,800 in 2015. On a Local Authority level, East Renfrewshire witnessed the strongest annual growth in the number of transactions during 2015 at 13% which the report says was boosted by the good schools effect. Other star performers include Glasgow City, West Dunbartonshire and West Lothian, where annual transactional growth in 2015 was higher than Scotland as a whole. Considering 2015 as a whole, prime sales, transactions at £400,000 and above, outperformed the overall market, with an 8% annual increase and much of this activity took place prior to the introduction of LBTT which brought higher rates of taxation to the prime market. Furthermore, the number of transactions at £1 million and above reached its highest level since 2008. Prime markets in suburban and commuter areas across Scotland’s Central Belt performed strongly during 2015, with growth spreading out from core urban hotspots. ‘This upturn in demand is driving an improving development land market. Sentiment for development land in Scotland’s cities remains positive,’ said Faisal Choudhry, director of Savills Scottish Research. With strong annual growth in the Savills Residential Development Land Index, particularly for greenfield land around Edinburgh, Perth and Stirling. The overall Savills index for greenfield land in Scotland increased year on year by 9.6% during December 2015 compared with December 2014. Choudhry explained that the development market has been further supported by Government incentives, such as the Help to Buy Mortgage Guarantee and new build schemes, which made up 8% of all residential activity in Scotland between October 2013 and September 2015. The recently announced extension of Help to Buy (Scotland) scheme to 2019 is expected to further support Scotland’s new home sales. The overall Savills index for urban land in Scotland increased year on year by 20.4% during December 2015 compared with December 2014.The increase in values, particularly in Edinburgh and Glasgow, reflects a rise in demand from housebuilders and developers, due to an improved economy, stronger markets and increased viability, Choudhry pointed out. However, he also pointed out that the fall in sentiment within the Aberdeen development land market, due to the continued low oil price and uncertainty over the future of the industry, has impacted negatively on the overall Scottish development land index. Continue reading
High property prices and deposits preventing people from buying a home
High property prices, affording a deposit and associated costs are the biggest barriers to buying or moving home in the UK, new research has found. Some 51% of are considering buying a home or trading-up the property ladder but, 61% can’t see that they’ll be in a position to do so in the next 12 months and 21% worry they may never afford to buy or move home. The research, commissioned by Gocompare.com Mortgages, also found that those considering buying or moving home have been thinking of doing so for an average of 3.2 years. For 22% it is high property prices in the area they want to buy that prevents them from doing so, for 18% it is getting enough money together for a deposit and for 11% it is the associated costs of buying a property and moving. Other barriers to moving home include a lack of availability of the type of property in the area they wish to live, affecting 11%, while 19% cited job or income insecurity and the ongoing costs of running a home including mortgage repayments, utility bills and council tax. The survey found that while high property prices are a key obstacle for all would be home movers, other difficulties varied considerably with age. For example, 45 to 54 year olds cite a poor credit history or credit score and job/income insecurity among their top three barriers to buying or moving home. For those in the 55 to 64 and 65 plus age brackets, the main obstacle they face is a lack of availability of the type of housing they wish to move to in the area they want to live in. ‘Affordability is a big concern for both first time buyers and those wishing to move-up the property ladder,’ said Matt Sanders, spokesman for Gocompare.com Mortgages. He pointed out that according to the Office for National Statistics house prices are continuing to increase due to rising demand and a lack of supply. Indeed, the average house price in the UK now stands at £288,000 and with house price inflation exceeding wage growth it’s even harder to save enough money for a deposit, potentially putting home ownership out of reach for many people. But he also pointed out that there has recently been a resurgence in the number of lenders offering low-deposit mortgages. Most lenders now have a mortgage product aimed at home buyers with a deposit of 10% of the purchase price of their property and, subject to stricter eligibility criteria, some lenders offer 5% deposit mortgages. ‘The obvious advantage of a low-deposit mortgage is that you’ll be able to buy a home or move sooner, but, interest rates and fees for these products tend to be higher than for mainstream mortgages. So, if you are concerned about the ongoing costs of home ownership, then it might be better off saving… Continue reading
