Tag Archives: australia
Quarter of UK lettings agents report higher rents in first month of 2015
One in four letting agents in the UK have seen private sector rents rise at the beginning of 2015, according to the first of a new monthly report from the Association of Residential Letting Agents (ARLA). The index tracks key market trends within the private rented sector and also found that London has the highest demand for rental property in the UK and on average it takes five viewings for a property to be let. The January report, which was conducted among ARLA members, reveals that on average 27% of licenced branches saw an increase in the cost of monthly rent for tenants from December 2014 to January 2015. The East of England, which includes Bedford, Cambridge and Norwich, saw the highest number of landlords increasing rent per calendar month, with 35% of ARLA letting agents reporting an increase in the New Year. Welsh agents on the other hand only saw 11% of landlords increasing monthly rent, leaving less tenants facing rising costs. ‘The new ARLA Private Rented Sector Report is designed to gain invaluable insight on the lettings market month to month from ARLA member agents,’ said David Cox, managing director of ARLA. ‘With house prices still high, along with stricter lending criteria for mortgages, the rental market is currently a much more accessible and affordable option to buying. Due to this, the demand for rental property is increasing, which impacts the cost of renting and people are willing to pay more to secure their desired property. If house prices continue to rise in 2015, we expect this trend to continue in the rental sector,’ he explained. Despite rising rent costs, on average, ARLA letting agents reported it takes around five viewings for a property to be taken off the market. Whilst rent increased the most in the East of England, ARLA letting agents revealed it also only takes an average of three viewings for a property to be let in the region. This is less than half the viewings it takes for properties in London, which take an average of seven viewings. ‘With rental properties in the East of England being quickly snapped up off the market, people don’t appear to be put off by the rising cost of rent in the region. Clearly property in the area is popular and this will be an interesting trend to watch,’ said Cox. ARLA licensed agents reported an average of 38 prospective tenants registered per branch in January. Unsurprisingly this was the highest in London, with an average 45 registered prospective tenants per branch. However, it seems that unlike the sales market, there is more supply in the rental market. The average number of managed rental properties per branch was 184. The highest was recorded in East Midlands at an average of 266 per branch, while the lowest was recorded in London at… Continue reading
Northern UK cities catching up in house price growth terms
UK house prices in key cities rose by 7.9% in the 12 months to January 2015, however prices were up just 1.1% in the last quarter of the year as the slowdown continued. The data from the latest Hometrack cities house price index shows that year on year house price growth ranged from 4.1% in Glasgow, where house prices average four times average earnings, to 8.6% in Oxford and London where house prices average 12 times average earnings. The high growth cities of 2014 continued to see the rate of growth slow with London down to 13.6%, Bristol at 10.8%, Oxford at 8.6% and Cambridge at 5.3% while six out of the 20 cities hit their post downturn lows just two years ago, but are now up by an average of 9% and will drive future growth. It means that house prices have risen by as much as £144,000 in cities that bottomed out in 2009 but as affordability has affected growth elsewhere Overall the impetus behind continuing UK house price growth is shifting towards cities like Liverpool, Sheffield and Glasgow, which bottomed out only two years ago, away from the cities that started to recover in 2009 but have since slowed due to pressures on affordability. Over the last six years, London and Oxford have experienced house price growth of 55.2% and 42.1% respectively since the trough. However affordability pressures will limit growth in the medium term with both cities registering over 12 times the price to earnings ratios, almost twice the UK average of 6.3 times. By contrast in cities that only started their recovery two years ago such as Edinburgh (10.7%), Leeds (10.1%), Newcastle (8%) and Glasgow (6.3%), house prices are averaging between three and six times the average earnings. There are 14 UK cities in total that have been recording house price growth since 2009, but the length of the recovery does not provide a guide to the level of house price growth. While London has seen the average house value increase by 55% or £144,000, the rebound in house prices in Manchester and Birmingham have been just over 10% or £12,500 over the same period. The six cities that have been recovering for the last two to three years have recorded an average increase of just 9% or £11,000 led by Belfast and Edinburgh. The weakest growth has been seen in Glasgow with average prices up 6.3% or £6,300 since July 2012. ‘A focus on average UK house price movements masks critical trends at a city and sub-regional level. This is important for both businesses operating in the housing market and policy makers trying to address the challenges of growing housing supply,’ said Richard Donnell, director of research at Hometrack. ‘House price growth within cities reflects the strength of their local economies and the demand for housing. While Manchester and Birmingham saw prices bottom out in 2009, growth has been more subdued than in other cities… Continue reading
January saw 14% fall in mortgage lending in the UK
Gross mortgage lending in the UK reached £14.3 billion in January, a 14% decrease from December, according to the latest estimate from the Council of Mortgage Lenders. It is well below December 2014’s gross lending total of £16.6 billion and is also 11% lower than the £16.1 billion lent in January 2014. According to CML chief economist Bob Pannell, the softer pace of approvals through the second half of last year contributed to the relatively weak pace of mortgage lending in January. ‘Although seasonal factors will continue to weigh on activity levels for a while longer, we expect the underlying picture to pick up over the coming months, in line with stronger earnings and employment, gentle interest rate trends and recent stamp duty changes,’ he explained. ‘As we forecast at the end of last year, gross mortgage lending remains on course to reach an expected £222 billion this year,’ he added. According to Adrian Gill, director of Your Move and Reeds Rains estate agents, regulatory change has actually improved the borrowing process, making it more efficient, and leading to better outcomes for buyers. ‘Mortgage approvals may take longer to navigate, but this is because brokers are doing a more thorough job, and front end demand is vibrant and warming up,’ he said. He also pointed out that January activity is not a fair foreteller of what’s to come. ‘The stride of lending may have slowed, but the underlying appetite is growing. House price growth has tapered off at the higher end market, but in places where properties are more affordable and within reach of a leg up from Help to Buy, demand is energetic,’ he explained. ‘The market is only just starting to feel the effects of stamp duty changes, which is taking the edge of buying, and confidence is also buoyed by low interest rates and attractive mortgage products. All the footings are in place for savvy buyers to make great deals on homes, building further on the housing recovery,’ he added. Continue reading
