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Home Counties prime property rents down month on month and year on year
Prime rents across the English Home Counties, locations that are popular with people who commute to work in London, fell by 0.6% between April and June, according to the latest index. The Knight Frank rental index also shows that on an annual basis rents were 0.8% lower than a year previously and adds that the fall in quarterly and annual rental growth has been driven by higher stock levels and a desire from landlords to remain competitive and keep void periods to a minimum in what is increasingly a tenant’s market. However, the index report points out that underlying demand for rental property remains strong, with the number of new prospective tenants registering in the second quarter some 6% higher than the same period in 2015 and the number of viewings up by 12% year on year. The data also shows that the number of new tenancies agreed between April and June was almost identical to the same period in 2015 and 28% higher than in 2014. However, despite robust activity levels, agents note that any upwards pressure on rents has been countered by rising stock, especially at the top end of the market. ‘In the wake of the European Union referendum, there is already anecdotal evidence that some vendors are deciding to let their property until more clarity emerges, and this could further weigh on rental values in the medium term,’ said Knight Frank associate Oliver Knight. The index reveals that the market continued to attract international tenants in the second quarter. Indeed, some 38% of new renters across the prime Home Counties market were non-UK nationals between April and June in Ascot, Cobham and Esher, where corporate tenancies tend to be more prevalent this rose to 47%, although some of these tenants will already be domiciled in the UK. Individuals from North America were the most active movers during this time, with the start of the American school term in August likely to have been a factor, the report explains. Corporate enquiries were more than double the level in June and 19% higher than in February, the second busiest month of the year to date. Executives being relocated by their companies for work, both from London and internationally, have historically formed a large part of demand within the Home Counties lettings market. ‘As such, any rise in economic and business uncertainty as a result of the vote to leave the EU has the potential to weigh on demand for rental property as companies take stock of the new environment or look to make budget cuts,’ Oliver explained. ‘However, while our figures show a notable slowdown in the number of enquiries from relocation agents in the immediate run-up to the referendum, the number of enquiries in July was at the highest level all year, suggesting a degree of pent-up demand in spite of the UK’s vote to leave the EU,’ he added. The report also points out that the prime rental market in… Continue reading
Homes to buy are more affordable in many US metros than renters think, research suggests
Home ownership in the United States has slowly fallen in recent years to currently its lowest level since 1965 but new research from the National Association of Realtors suggests that could be halted. The research shows that there are many affordable metro areas and a large segment of current people who rent their home earn enough income to qualify to buy a property. NAR reviewed employment growth, household income and qualifying income levels in nearly100 of the largest metropolitan statistical areas across the country to determine which areas with employment gains above the recent national average also have the largest share of renters who can currently afford to buy a home. Of the top 10 metro areas with the highest share of renters who earn enough to buy, nine were either in the South or Midwest, including three cities in Ohio. Lawrence Yun, NAR chief economist, pointed out that there has been a significant increase in renter households both among young adults and those who lost their home since the economic downturn, especially in metro areas that have seen robust job creation and a resulting influx of new residents. ‘Even in a time of expanding home sales, steady job growth and historically low mortgage rates, the homeownership rate recently tumbled to its lowest level in over five decades as many renters struggle to juggle escalating rents without commensurate income gains,’ he said. ‘However, this new study reveals that there are several affordable, middle tier markets with solid job gains and a large segment of renters who earn enough to buy,’ he added. The top 10 metro areas highlighted in NAR’s study were all outside of the West Coast and each had a share of renters who qualify to buy that was well above the national level of 28%. Top is Toledo in Ohio and Little Rock in Arkansas both with 46%, followed by Dayton in Ohio at 44%, Lakeland in Florida, St. Louis in Missouri and Columbia in South Carolina all at 41%, Atlanta at 40% and then Columbus in Ohio, Tampa in Florida and Ogden in Utah all at 38%. According to Yun, it's no surprise that many of the markets with the most renters qualified to buy are in the Midwest and South. The median existing home sales price in these two regions continue to be lower than the Northeast and West, and while many of these areas were slower to recover from the recession, improvements in their local labour markets in the past year have pushed their hiring levels to at or above the national average growth rate. ‘Overall housing affordability and local job market strength play a pivotal role in a renter's decision on whether to buy a home or sign another lease. The good news is that other recent NAR survey data shows that those residing in the two regions were the most likely to say that now is a good time… Continue reading
Rents still rising across most of UK but growth is slowing
Average residential rents in the UK continued to rise in July with demand still more than supply but the rate of growth is slowing, the latest index data shows. Excluding Greater London the average rent agreed is now £779 per month, some 2.3% higher than a year ago while the average rent in London is now £1,599 per month, up 4% over the year. The growth has continued since the beginning of the year and the outlook remains strong despite the growth slowing, says the rental index report from HomeLet. The data suggests that landlords have been able to continue securing higher rents on new tenancies despite the economic uncertainties created by the UK’s vote to leave the European Union in June. It mirrors data from the housing market, with mortgage lenders also reporting modest growth in house prices in the month following the Brexit vote although many agree that is still too early to measure what affect Brexit sentiment has had on the market. Looking forward, the fundamental forces in the private rental sector remain unchanged, the report suggests with Britain’s growing population, the relative unaffordability of house prices, and the lack of new homes being built combined with the reduction in social housing suggest that the private rental sector will continue to be an ever important source of homes in the years and decades to come. A breakdown of the figures show that there is considerable regional variation recorded by the index. Month on month rents increased the most in East Anglia with a rise of 3.7% and the region also topped the annual growth with a year on year rise of 9.7%, taking the average to £897. But rents fell by 3.7% month on month in Scotland but are up 1.4% year on year to an average of £676. The only other region to see a month on month fall was the North East with a decline of 0.4% to £537 and a year on year fall of 5%. Year on year rents have fallen in the South West by 2.1% but are up by 0.7% month on month to £894 and by 0.5% in the North West to £660 but the region has seen month on month growth of 0.5%. Ultimately, rents will be determined by supply and demand in the private rental sector, according to Martin Totty, chief executive officer of HomeLet’s parent company Barbon Insurance Group. ‘Population growth will continue to increase demand, and that the housing stock isn’t growing quickly enough to meet that demand. However, with rents ultimately limited to a tenant’s ability to pay, rents are likely to continue to climb, albeit at the slowing pace noted most recently,’ he said. ‘We won’t know exactly how Brexit is impacting the private rental sector and it will be several months yet until we see some clearly established trends in the marketplace. It seems likely that with lenders concerned about the prospect… Continue reading
