TSI
New tenancy rental rates continue to rise across most of UK
The cost of taking on a new tenancy in the private rentals market continues to rise, with the average rental agreement signed in the UK outside of London during the three months to February 2016 costing 4.8% more than in the same period a year ago. The latest data from the HomeLet Rental Index also shows that while that rate of appreciation was down on the 5.5% seen over the three months to January, rents on new tenancies continue to rise much more quickly than inflation in most parts of the country. Year on year Greater London, the East Midlands and the South East of England recorded the fastest rent rises, up 7.7%, 6.7% and 6.5% respectively while rents fell by 2.6% in the North East and by 3.2% in the North West. The rise take the average rent for new tenancies in the UK, excluding Greater London, to £744 per month. In Greater London it is £1,521 but the increase remains below the double digit increases seen last year. The Index shows rents on new tenancies rose in 10 out of 12 regions in the UK on an annual basis over the three months to February 2016. The exceptions were the North West of England, where rents dipped by 3.2% from £657 per month last year to £636 per month, and the North East of England, where rents now stand at £519 per month, 2.6% lower than a year ago. In Scotland rents were up 3.9% year on year and 1% month on month to an average of £649 while in Wales they were up 3.4% year on year and 02% month on month to £596 on average. HomeLet’s research also shows that as rents have risen in recent years, the number of new tenancies signed by a single tenant has fallen. Last year, single tenants accounted for just 33% of new tenancies on rental properties, down from 67% in 2008. By contrast, the proportion of new tenancies signed by two tenants rose from 28% to 52% over the same period. New tenancies signed by three or more tenants have risen from 5% to 15% of the market. The firm says that this trend may in part reflect the increasing number of families moving into the private rental sector as house prices have become less affordable and as people have pursued greater flexibility. The latest data from the Office for National Statistics reveals the number of privately rented homes let to families with dependent children has risen from 30% to 37% over the past 10 years. The increasing number of tenants per property may also suggest people are more inclined to rent together after a sustained period in which rents have risen more quickly than general inflation. The index data shows the proportion of new tenancies taken on by three tenants rose from 3% in 2008 to 8% by last year. Homes with four or more tenants accounted for 7% of the market last… Continue reading
UK landlords fear more woe in UK Budget
Landlords in the UK are concerned that the forthcoming Budget speech by the Chancellor of the Exchequer George Osborne could hold more bad news for their property investments. Some 66% feel there will be more bad news and a fifth are already planning to pull out of buy to let this year, according to new research by property crowd funding platform The House Crowd. It suggests that property investors feel increasingly under attack, with legislation such as the EU Mortgage Credit Directive and increase in stamp duty on buy to let properties coming into force. Over 70% of those surveyed believe that these changes will have a negative impact on their investments, with smaller investors set to be hit hardest by ever tightening profit margins. 43% feel that the government is trying to squeeze small investors out of the market altogether. Over half, 54%, of landlords indicated that they do, however, support tighter regulation from the Bank of England to clamp down on rogue landlords. Despite sentiment towards traditional buy to let turning sour, it appears that investors still view bricks and mortar as the best way to secure their futures. The UK wide survey found 33% still prefer to invest their money in property as it is a tangible asset. It also found that 38% think landlords need to be looking at smarter ways to invest while 57% think buy to let will remain a strong option as there is a continued housing shortage in the UK. ‘With house prices continuing to rise and the property market outperforming the FTSE, bricks and mortar presents a strong investment option,’ said Frazer Fearnhead, chief executive officer of The House Crowd. ‘Despite this, new legislation is making buy to let ever less accessible for the small landlords who want to invest in something sensible and tangible to secure their futures. As many of the landlords surveyed identified it's time for beleaguered investors to be looking at their options,’ he pointed out. ‘February was our strongest month yet, as investors turn to property crowdfunding to achieve the returns that property offers minus the stress and risk of being a landlord. Times are hard for the UK's small property investors but it's time to adapt, not despair,’ he added. Continue reading
London to get another 11 new housing zones
The Mayor of London has announced 11 new Housing Zones that will provide 24,554 new homes and create new neighbourhoods across the capital. An additional £200 million has been designated to the final 11 zones, which stretch from Havering to Kingston and Enfield and bring the total number planned in London to 31 which will see 77,000 new homes built. The aim is to boost housing supply, stimulate building and produce the new low cost homes London needs to meet its growing population. Some 34% of the 77,000 new homes will be affordable, alongside transformational regeneration of key town centres, train station hubs and housing estates. The Mayor made the announcement as he officially opened a new affordable housing development in the heart of London's West End. Trenchard House, spanning across Broadwick and Hopkins Street, is a former derelict Metropolitan Police hostel, on Greater London Authority acquired land released by the Mayor. The site has undergone a £54 million redevelopment to build 78 new homes, including 65 affordable one to three bedroom apartments. The affordable apartments are intermediate rent with some offered at 75% discount to market rates. Exact rents are based on resident's incomes, and many of them work night shifts in the theatres and bars surrounding Soho and will now be within walking distance of their jobs. The site, which had lain vacant for almost 13 years, is one of the 414 hectares of land transferred to the Mayor with every surplus site owned by City Hall now released for development. The intermediate homes are part of the 100,000 affordable homes the Mayor is on track to deliver by the end of his term. ‘Meeting the unprecedented demand for housing after 30 years of historic failure to build new homes is a critical issue affecting the capital. That is why I have led an enormous programme of regeneration with my 31 housing zones that will transform communities across London, creating nearly 80,000 new homes, plus new transport hubs and schools,’ said Johnson. ‘This new housing development in the heart of the West End is delivering a life line to hard working local people who were priced out of Soho and desperate to reside nearby their places of work. These apartments are just some of the 100,000 new affordable homes being delivered over my two mayoral terms,’ he explained. ‘This site forms part of more than 400 hectares of developable land the GLA inherited and which I have now released every inch of, to ensure as many homes as possible are built throughout London,’ he added. As part of the Mayor's commitment to double house building, London's Housing Zones will unlock regeneration on hundreds of hectares of brownfield land across the capital. The special status has been awarded to areas identified and packaged up by local authorities. It removes all unnecessary planning restrictions, combined with the funds to maximise development, and fast track homes and supporting infrastructure. Continue reading
