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Rents in the UK continue to trend upwards, latest rental index shows
Residential rents increased in all but one region of the UK over three months to April taking the average rent, excluding Greater London, to £764 per month, the latest index data shows. It means that the average rent in the UK outside of Greater London us now 5.1% higher than a year ago while the average rent in London is now £1,543, up 7.7% Scotland and the East Midlands lead the way with fastest rising rents while the North West is the only region to register declines in rent, according to the HomeLet rental index for April. The index report says that fears that higher stamp duty charges on buy to let rental property purchases might destabilise the market have so far proved unfounded. Indeed, HomeLet’s figures show that rents agreed on new tenancies across the UK over the three months to the end of April have continued to grow at remarkably consistent rate. The index also shows that rents on new tenancies signed over the three months to April 2016 were, on average, 5.1% higher than in the same period of last year. That was barely changed from March’s figure of 4.9%, with rent rises having remained in a very narrow band since the beginning of the year. However, in London rents on new tenancies signed over the three months to the end of April were 7.7% higher than a year ago, the third successive month that London has registered this rate of increase. The latest figures show that rents in Scotland are currently rising faster than anywhere else in the UK, with new tenancies costing 11.4% more than in the same period a year ago while the East Midlands saw a rise of 7.9% in rents compared to last year. London’s rental market, where the average rent on a new tenancy is now £1,543, also continues to see rents rise more quickly than in most other areas of the country. The 2.6% gap between rent rises on new tenancies in London and the rest of the UK, where rents average £764, is barely changed on the previous. Just one area of the country, the North West of England, saw lower rents on new tenancies over the three months to March, as was the case in the previous month’s index. However, the speed at which rents are falling in the region continues to slow, to an annual rate of just 1% over the three months to April, compared to 3.5% over the three months to March. Rents agreed on new tenancies in April alone were 1.7% higher than in March. ‘It may be that over the next several months, the trends observed in the rental market begin to reflect the signs of some slowdown in the rate of house price growth that we are now beginning to see and that will be something to watch closely,’ said Martin Totty, chief executive officer of HomeLet… Continue reading
Spanish home sales continue their upward trend with prices also showing signs of recovery
Home sales in Spain have recorded their highest figure for three years having increased by 15.8% in February compared to the same month in 2015. The data from the National Statistics Institute is further evidence that the housing market recovery remains underway after a stutter in January saw transactions fall 2.9% after 16 months in a row of growth. It would appear that the recovery is being led by existing homes rather than new builds. Sales of existing homes increased 21.4% year on year while sales of new homes fell by 0.2%. The data also shows that in the first two months of 2016, home sales increased by 6% compared to the same period in 2015 and again this growth was led by existing homes which saw a rise of 13.7% compared to new home sales falling 15.5% in this period. Andalucía saw the largest number of sales followed by Catalonia, Madrid and Valencia. The lowest number of sales were recorded in La Rioja, Navarre and Cantabria. In relative terms, all of Spain’s regions registered increases in home sales, except for La Rioja and Castilla y León with falls of 8.6% and 3.9%, respectively. The regions where housing transactions increased most were the Basque Country with growth of 50.3%, Asturias up 40% and Cantabria up 38.9%. Meanwhile, data from the latest house price index from property portal Fotocasa shows that the price of existing homes increased by 0.5% in the first quarter of the year to an average of €1,627 per square meter. This seems to confirm that the housing market recovery is now being seen in terms of price growth as it is the first quarterly rise for the first quarter of any year since 2007 when prices increased by 1.6%. On top of this a trend is emerging as the Fotocasa index also recorded quarterly price increases in the second and third quarters of 2015 of 1.1% and 0.7%, respectively. The data also shows a year on year price rise of 0.6% for existing homes in March, the highest annual increase since October 2007, when prices rose by 1.2%. Again, a trend is emerging. Year on year prices increases were recorded in 2015 in July, October and November at 0.1%, 0.1% and 0.3% respectively. Since the peak of the Spanish property market in April 2007 when prices averaged €2,952 per square meter, they have fallen by 44.9% so there is some way to go before values catch up but the initial signs of improvement are there. Quarter on quarter the picture is also positive with eight regions seeing increased prices compared to the last quarter of 2015. This was led by the Canary Islands with growth of 6.3%, the Balearic Islands up 2.2%, Valencia up 1.4%, Andalucía up 1.2%, Madrid up 1%, Catalonia up 0.9%, Navarre up 0.2% and Cantabria up 0.1%. The most expensive house prices are in the Basque Country at €2,736 per square meter, followed by Madrid at €2,225 and Catalonia… Continue reading
Rents rising across most of the UK, latest rental index shows
Rents continue to rise in many parts of the UK with Greater London, the East Midlands and Scotland seeing the fastest rent rises in the first quarter of 2016. The figures from the latest HomeLet index also show that overall the average rent in the UK, excluding Greater London, is now £755 per month, some 4.9% higher than a year ago. It also shows that the average rent in London is not £1,536, up 7.7% year on year and the North West is the only area to see a quarterly decline. The figures are published as the private rental sector is anticipating the impact of tax changes and new regulations coming into force, and HomeLet said it has been the busiest ever month for landlord insurance. HomeLet’s research shows that rents continue to rise significantly ahead of inflation, with demand for property remaining strong. However, this comes ahead of reforms that are predicted to have a major impact within the sector, including a stamp duty increase for landlords buying new properties to let, new rules from regulators on buy to let lending and limiting tax relief on mortgage interest payments to the basic rate. HomeLet’s own data already shows evidence of landlords taking action ahead of the stamp duty changes. In March it saw a marked increase in enquiries from property investors, with 37% of insurance policies being purchased by landlords with new properties compared to just 24 per cent in the same period last year. This fits with recent data from the Council of Mortgage Lenders showing a spike in buy to let lending ahead of the stamp duty increase. London’s rental market, where the average rent on a new tenancy is now £1,536, continues to see rents rise more quickly than in other areas of the country. At 2.8 percentage points, the gap between rent rises on new tenancies in London and the rest of the UK, where rents average £755, was almost identical to last month at 2.9 percentage points. Just one area of the country, the North West of England, saw lower rents on new tenancies over the three months to March, with the HomeLet Rental Index recording a fall of 3.5% over the year. ‘We’ve continued to see increases in rents on new tenancies in almost every part of the UK during the first quarter, as the private rental market has responded to the pressures of an imbalance between demand and supply,’ said Martin Totty, Barbon Insurance Group’s chief executive officer. ‘However, external factors may now come into play: the stamp duty increase has already had an impact and that surge in the acquisition of property by landlords could now cause a short term increase in the supply of rental property in some areas of the country,’ he pointed out. ‘In the longer term, changes to rules around buy to let mortgage interest being offset against tax bills, coupled with the… Continue reading
