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Average rents in Scotland down 0.7% in March, biggest monthly fall on record
Average residential rents in Scotland fell by 0.7% in March, the first decline in six months and the biggest monthly drop on record, the latest index data shows. This took the typical rent in Scotland down to £544 per month and suppressed annual growth to just 1.1% in March, a significant downturn from 2.1% in the year to February 2016, according to the buy to let index from lettings agent network Your Move. Annual growth in the rental market is now at a 13 month low and Edinburgh was the only place to see rents rise in March to a new peak for the city of £645 a month. One reason for the growth in Edinburgh is a lack of available properties, according to Brian Moran, lettings director at Your Move Scotland. He believes, however, that rents could start to rise again with buy to let landlords now facing an additional 3% stamp duty and the effects of the new Private Tenancies Bill still to come. ‘What we do know, is that if landlords hit the brakes and cause a roadblock of supply in the private rented sector, tenants will be the casualties paying higher rents in the longer term,’ he said. Rents fell across the majority of Scotland. The steepest monthly drop in rents was experienced in Glasgow and Clyde, with the average rent in March 1.5% lower than in February, taking the average monthly rent to £544. In the Highlands and Islands there was a 1.4% fall in rents since February, and rents in the East dropped 0.8% on a monthly basis. The South of Scotland saw a more modest 0.2% dip in rents month on month. Edinburgh and the Lothians was the only region to buck this trend, with the average monthly rent climbing 0.2% to reach a new peak price of £645 per month in March. However, taking a longer term view, only two of the five regions of Scotland have seen rents fall on an annual basis. Edinburgh and the Lothians are continuing to see record annual rent rises, up 8.5% year on year in March. Rent growth in the capital has been accelerating steadily since June 2015. After this, rents in the South of Scotland have seen the next fastest annual rise, with rents up 3.2% since March 2015. The Highlands and Islands saw a 1.6% uptick in rents compared to a year ago. But two regions have seen rents fall compared to a year earlier. Both Glasgow and Clyde and the East of Scotland have witnessed a 2.5% drop in rents across the twelve months to March 2016. The index report also shows that despite the widespread monthly falls in rents in March, the proportion of late rent in Scotland has risen for the first time since October 2015. Reversing the recent trend of improving tenant finances, tenant arrears… Continue reading
House prices in key cities growing faster than UK as a whole
House prices growth in key cities in the UK was 4.2% higher in the first quarter of this year, the highest for 12 years, the latest index shows. The normal seasonal upturn in demand was boosted by investors rushing to beat the stamp duty deadline in April which saw a 3% rate on buy to let properties and second homes, according to the cities house price index from Hometrack. It suggests that tougher lending criteria and tax changes are likely to push investors into higher yielding, lower priced markets, and city level house price growth is expected to moderate in the second quarter of the year. Overall the annual growth for the 20 city house price index is running at 10.8%, ahead of 8.7% across the UK as a whole, the data also shows. Liverpool recorded the fastest increase in the first quarter of the year but the index report explains that this was due to priced rising off a low base. But it does mean that Liverpool is closing the gap to other major cities such as Manchester and Leeds where house price growth is running at over 7% per annum, the highest year on year growth since 2007. ‘The acceleration in growth in the last quarter has, in part, been down to stronger demand from investors, especially those searching for higher yielding property. Tougher lending criteria for buy to let investors and changes to tax relief on mortgage interest payments are likely to push investors to search for higher yielding property which means more focus of investor demand in lower value cities, with lower buying costs, and further support for house price growth,’ the report says. ‘With the rush to beat the stamp duty deadline now over, the question is how weaker investor demand will impact house price inflation in the second quarter of 2016. This at a time when home buyers start to consider the implications of the European Union referendum for the economy and mortgage rates,’ it points out. ‘We believe house prices will continue to rise but a moderation in investor demand and greater caution in the run up to the EU vote will limit further acceleration in house prices. We expect the rate of house price growth to slow more rapidly in high value, low yielding cities such as London where house prices will be more responsive to weaker investor demand,’ it adds. Continue reading
Majority of Australians feel the housing market is heading for a downturn
Two thirds of Australians now think the housing market is vulnerable to a sustainable downturn with the sentiment affecting all regions of the country, a new poll shows. While the survey results suggests that respondents are concerned about a crash in home values, this remains unchanged from a year ago, and lower than the 68% of respondents who indicated ‘yes’ to this question six months ago. The higher proportion of respondents who were concerned about a large correction in the housing market was broad with all regions indicating at least 61% of respondents were concerned about a housing market crash, according to the CoreLogic-TEG housing market sentiment survey. The result indicates that a significant proportion of the community are wary of substantial value falls across the nation’s largest and most important asset class, which according to CoreLogic RP Data is currently worth an estimated $6.5 trillion. Recent housing market forecasts from CoreLogic RP Data and Moody’s Analytics indicate dwelling values are likely to experience falls, however the peak to trough declines are likely to be short lived and relatively slight, followed by a longer period of relatively sedate housing market conditions. Home values are already trending lower in Perth and Darwin with both cities recording a peak to current fall of 4.6%. Additionally, the pace of capital gains in Sydney and Melbourne, where dwelling values have surged higher over the past two growth cycles, is moderating in what has been a controlled trajectory to date. The survey also revealed a slowdown in the proportion of survey respondents who think now is a good time to buy; 61% indicated they would consider buying a home, however a year ago the reading was much higher at 71%. Perceptions around buying conditions worsened across most regions over the past 12 months, with Tasmanian and Sydney buyers the most pessimistic about buying conditions. Only 40% and 50% of respective respondents in these cities indicated they felt it was a good time to buy. However, buying sentiment improved over the past year in some of the weakest markets where listing numbers are higher and housing prices have reduced. The proportion of survey respondents who indicated that current market conditions represent a good time to buy increased by 1% over the year in Perth while buyer sentiment in the Northern Territory increased by a substantial 20% compared with a year ago. When survey respondents were asked whether they thought home values would rise, fall or remain stable over the coming six and 12 months, most respondents expect values to remain stable, however 17% of respondents are expecting values to fall over both the next six and 12 months. A year ago, 49% of survey respondents were expecting dwelling values to rise over the coming six months compared with only 31% over the most recent quarter. Respondents based in Sydney have seen the most substantial deterioration in the proportion expecting values to rise over the next half year. A year ago,… Continue reading
