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Residential rents in Scotland rising at slowest pace for over two years
Scottish rents have increased by just 1.1% in the year to February 2015, their slowest pace for over two years, according to the latest buy to let index. But despite this slower and more affordable pace of rent growth in Scotland, the financial health of tenants has declined over the same period, and February saw the highest proportion of late rent since December 2012. The Scotland buy to let index from letting agent network Your Move, also shows that the average residential rent across the country has increased only £6 in the last year, reaching £537 per month in February. This represents a significant downtrend in annual rent rises, which peaked at 4.3% a year previously in February 2014 equal to a £21 annual boost in cash terms. On a monthly basis, Scottish rental prices have climbed a modest 0.2% since January, but this marks the first monthly rent rise witnessed since November 2014, as the market had slowed down. ‘Such an incremental rise in Scottish rents over the past year shows admirable stability in the private rented sector. Despite high demand for homes to let in the face of the current housing shortage, rent inflation in the lettings market has remained remarkably affordable for tenants,’ said Brian Moran, area lettings director at Your Move. ‘After cruising along on a pretty even keel until late 2012, we then saw steep rent rises stack up against tenants as the abolition of tenancy fees in Scotland knocked the market out of kilter. The Scottish private rented sector has subsequently been on quite a rollercoaster ride, but rent growth has its feet firmly on the ground once again, and is making steady strides forward,’ he explained. ‘But while improvements in the affordability of the lettings market mean that tenants are able to keep up with rent rises, other economic factors are holding them back from making solid financial progress and continuing to drag tenants into the red,’ he added. A breakdown of the figures shows that rents are now higher than a year ago in three out of five regions of Scotland. Edinburgh and the Lothians have experienced the strongest annual rent growth, with prices climbing 2.5% in the 12 months to February 2015. This is closely followed by Glasgow and Clyde where rents are up 2.3% year on year. The East of Scotland saw a 2.2% annual rise in average rents, setting a new record of £530 per month. However, rents have fallen in two regions in the past year. The Highlands and Islands experienced the biggest annual drop in average rents, falling 1.6% while monthly rents in the South of Scotland are 1.5% lower than in February 2014. On a monthly basis, rents have increased in just two out of five regions of Scotland. For the first time in eight months, rents in the South rose on a monthly basis, up 1.3% since January 2015 to £489. In the East of Scotland rents climbed… Continue reading
Vast majority of UK tenants don’t think they can afford to buy
Over 90% of tenants in the UK don’t think they will be able to afford a property as rents continue to escalate and property prices stay firmly out of their reach. The study shows that just 7.5% of tenants feel confident that they will be able to afford to buy their own property in the future despite the government’s recent initiatives like the Help to Buy scheme, the stamp duty changes and the recent Budget announcement on ISA savings. Indeed, according to the research from Property Let By Us, two thirds of tenants believe the government is still not doing enough to help them onto the property ladder. A further 62% of tenants aspire to owning their own home but a massive 87% of tenants feel trapped in their rental accommodation. ‘These stats show that many tenants are still unable to afford to buy a property and believe more should be done to help them,’ said Jane Morris, managing director of Property Let By Us She pointed out that recent research from the Halifax shows that homes in a fifth of local authority districts across the UK have increased in value by more than the average employee's annual wages over the past two years. The vast majority of these areas are in London, the South East and the East. ‘In eight local authority districts across the UK, the increase in house prices over the last two years has outstripped the amount someone would have typically earned over the period by more than £80,000,’ she explained. And she added that according to Rightmove, the average new seller asking price across England and Wales in March was £281,752, some 1% higher than the previous month and £30 below an all-time high recorded in June last year. ‘These price rises have made it much tougher for first-time buyers to get on the property ladder in areas where they are renting. Many tenants are stuck in a difficult cycle of saving just enough for a deposit, only to find that prices have risen out of their reach again,’ Morris concluded. Continue reading
Planning permission for new UK homes up 12% but only half what is needed
Planning permissions were granted in principle for close to 200,000 new homes a year in the UK in 2014, an increase of 12% compared to 2013 and up 39% on 2012, according to new data. However, local Authorities now need to ensure departments are able to process applications if more homes are to be built, says the latest report from the Home Builders Federation and Glenigan, adding that the pace is only half what is needed. The homes identified in the report will, once they have navigated the remainder of the planning process, in the main be completed over the next two to three years and the research also shows that the number of new homes started in 2014 was up 36% on 2012. It says that as demand for new homes continues to increase, due to improved consumer confidence and the Help to Buy equity loan scheme, existing sites are getting built on quicker and so builders are looking to get on to more new sites more quickly than before. But it points out that whilst the increases are positive, they can only be translated into desperately needed new homes if local authorities ensure their planning departments have the capacity to process these permissions to the stage that they can actually be built. Too many sites are ‘stuck’ in the planning system, with an estimated 150,000 plots at ‘outline permission’ stage awaiting full sign off by local authorities. New government initiatives to introduce deemed discharge of conditions will greatly assist in making sure the planning system will not be a constraint on increased housing provision but the overall resourcing of planning departments is still a concern, the report explains. It add that central and local government must prioritise proper resourcing of planning departments if authorities are to be able to efficiently process more applications, as recommended by the HBF. It believes that speeding up the rate at which permissions are granted is one of the keys to a significant, sustainable increase in housing supply. Local Authorities must be resourced sufficiently to be able to sustain this increase in the rate of planning permissions being granted in order that the industry can increase housing output. Figures in the latest report show that more permissions were granted in 2014 that in any year since 2008. It also shows that the number of sites getting permission continues to trend upwards. Getting more sites operational is absolutely key to a sustained increase in actual build numbers as more sites, means more construction work and sales outlets. ‘Over the past 18 months, demand for new homes, largely driven by the Help to Buy equity loan scheme has increased markedly. House builders have responded by significantly increasing house building activity,’ said Stewart Baseley, executive chairman of the HBF. ‘We are still only building around half the number of new homes the country needs. Getting the required number of permissions, in a timely manner, is absolutely key… Continue reading
