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Average rental period in UK is 18 months, new research shows
People renting a home in the UK spend an average of 18 months in the property before moving on with vacant properties being filled most quickly in Birmingham, new research has found. Birmingham has the lowest tenant turnover, with renters staying an average of two years and four months in the same property. Cardiff on the other hand, has the highest turnover, with the average property being vacated less than a year after being filled, according to the study by landlord insurance provider Direct Line for Business. Leeds at 12 months and Bristol at 14 months also have a high turnover of tenants, which could prove problematic for local landlords, the report says. The analysis also looked at the average time it takes to fill a vacated property revealing that on average, it takes a landlord 22 days to find a new tenant. This could result in an average loss of £547 in uncollected rent. When calculating the yield for a property, landlords need to take into account this void period and ensure they have sufficient resources to meet any mortgage, ground rent or other charges. Vacant properties in Birmingham are filled the quickest, with a landlord finding a tenant in just 11 days. However, in Liverpool and Aberdeen landlords struggle the most to fill their properties, taking an average of 33 days, to find a suitable candidate. Direct Line for Business's analysis estimates that this gap in rent could cost landlords as much as £761 in Liverpool and £913 in Aberdeen. Even with such a competitive rental market in London, letting agents in the capital claim that it takes 20 days on average to fill a property. With average monthly rents in central London surpassing £2,000 this could amount to a loss of £1,869 in income. The research also found that landlords can't always rely on occupants remaining in a property for the duration of their tenancy agreement, with 9% moving out early. The highest rate of tenancy turnover is in Aberdeen where 19% of tenants leave a property before the end of the tenancy agreement with Leeds and Sheffield both close behind at 13%. ‘This research highlights the pressure landlords are under to replace outgoing tenants in their properties. Vacant properties are obviously a worry for landlords but it's vitally important that they take into account void periods when calculating the affordability of owning a rental property,’ said Nick Breton, head of Direct Line for Business. ‘Staying on top of the on-going changes within the industry can be time-consuming and a battle for landlords and we fully appreciate the challenges they face when it comes to managing their rental properties,’ he added. The business has developed a Mobile Landlord app which can manage up to five properties aimed at alleviating some of the stress. The app can track income, calculate yields, set handy reminders such as when a tenancy agreement may be coming to an end and also keep landlords up to… Continue reading
Demand for prime property in central London slows after stamp duty change
Demand for property in London's most prestigious locations has fallen a few weeks after a new stamp duty charge of 3% was introduced on buy to let and second homes, new research shows. Property demand in the prime central London sector is at just 10% on average, having fallen 23% since the new surcharge was introduced, according to the PCL index from fixed fee estate agent eMoov. It is now at its lowest since the firm began recording its data over a year ago in the index which records the change in supply and demand for property above £1 million across London's most prestigious areas, by monitoring the total number of properties sold in comparison to those on sale. On the run up to the stamp duty deadline eMoov found that the rush to complete had revived the capital's top end market, with demand bucking the prime central London’s downward spiral and increasing for the first time since May last year. However, it seems that this resurrection was short lived as just one month since stamp duty deadline day, demand has plummeted to its lowest level on record. In fact, just one area across the prime central London market has maintained March's upward trend of demand growth. Fitzrovia is the only locations where demand hasn't dropped or remained static since March. Year on year the area is joined by Belsize Park, Maida Vale, Primrose Hill, Holland Park and Marylebone as the only other areas to have seen a positive movement in property demand since May last year. Where current demand levels are concerned, Islington is the most in demand area at present, with demand at 21% followed by Belsize Park at 19%, Chiswick at 18%, Maida Vale at 16% and Notting Hill at 12%. At the other end, at 4%, St Johns Wood and Mayfair are not only the coldest spots in prime central London but are suffering from some of the lowest demand levels recorded. ‘It's now abundantly clear that the brief resurrection of London's prime central London market witnessed in March, was an artificial skew as many scrambled to complete a sale before April's stamp duty deadline,’ said eMoov chief executive officer Russell Quirk. ‘It seems the extra 3% levy has slowed London's top end market and this will inevitably lead to further, sizable reductions in property values,’ he added, and pointed out that other potential threats include the UK voting to leave the European Union, economic slowing in countries like Russia and China and low oil prices. Continue reading
Student property investment in UK hit record high in 2015
Investment volumes in student property in the UK reached a new record at £5.1 billion in 2015, more than doubling the previous year’s figure of £2.41 billion. It also accounted for 7.12% of total UK commercial real estate investment volumes with growth expected to continue due to strong market demands, according to the latest report from property firm Knight Frank. Indeed, Knight Frank predicts that the year-on-year rental growth witnessed in 2015 within student accommodation will continue in 2016, leading to a rental uplift of 3.5% over the year, providing a relatively secure income base for investors. ‘2015 was a bumper year in terms of transaction volumes, and whilst portfolios dominated activity, we expect to see an increase in single asset opportunities throughout 2016,’ said James Pullan, head of student property at Knight Frank. ‘We predict a rise in institutional and international investors looking to invest in a buoyant asset class as pipeline opportunities come to market and investors look to diversify their asset portfolios,’ he pointed out. ‘Despite predictions that the London development pipeline will fall, we anticipate that other UK markets will open up and that there will be a consolidation in the sector,’ he added. The report also explains that this increased momentum within the student property industry demonstrates a broader trend of a substantial shift to the alternative asset classes by investors, with purchasers now viewing specialist sectors as a resilient asset class, delivering longevity and stable income flows. The data from the firm shows that some 18% of all commercial property investment transactions in 2015 were in specialist property and Knight Frank predicts that total investment into these sectors will increase by 10% year on year to reach £14.3 billion by the end of 2016. All four core specialist sectors; hotels, healthcare, student property and automotive, saw volumes exceed their five and ten year averages in 2015. Since 2006 some £46.6 billion has been invested into these sectors, with a record £13 billion invested in 2015 alone. Continue reading
