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Average rents in the UK increased by almost 4% in 2015
Average UK rents increased by 3.8% in 2015 despite a small seasonal dip of 0.2% in December, according to the latest index to be published. Housing shortages across the country means that rental increases have outpaced wages in many parts and three bedroom properties have seen the fastest rent rises, according to the Landbay Rental Index. This takes the average rent to £1,280 per month, with the highest rents found in London at £2,047, followed by the South East at £1,019 and then a big drop to the East of England at £863. Every region has seen rents up year on year. This was led by Northern Ireland with rents up 6.7% compared to 2014, followed by the East of England up 5.6%, Scotland up 4.5%, the West Midlands up 4.4%, the South West up 4.1% and London up 4%. The South East saw annual growth of 3.7%, followed by the East Midlands and Wales, both at 3%, then Yorkshire and the Humber at 2.1%, the North East 1.8%, and the North West at 0.9%. Compared to 2014, three bedroom properties have seen the biggest increase in the average rental price, up 5.2% to £1,484 in 2015 suggesting that family homes and properties for sharers are in highest demand. The average rent for a one bedroom home has climbed 3.2% to £1,042, a two bedroom home by 3.9% to £1,243, and above three bedrooms by 1.5% to £2,166. Commuter hotspots surrounding London were amongst the country’s top risers in rental prices. Luton with a rise of 11.1%, Medway up 8.8% and Thurrock up 7.3 were in the top five for rent price increases during 2015 when comparing rents from December 2014 to December 2015, a sign that many working in the capital are priced out from living there. With counties to the North, East and South of London all showing higher than average increases in rent prices during 2015, an evident ripple effect is appearing in southern parts of England, the index report suggests. ‘Despite a small seasonal dip towards the end of the year, rents rose significantly ahead of wages in 2015,’ said John Goodall, chief executive officer of Landbay. ‘Rents often track wages as consumers with more pay compete for the most desirable rental properties, but the fact that rents are outpacing wages is a clear sign of the shortage in properties to rent as large parts of the UK face an acute housing shortage. This trend is clear in London and the South East, along with large parts of the East Midlands and East Anglia, and it is most evident for three bedroom properties,’ he explained. ‘Based on its recent policy changes for the private rental sector such as the new stamp duty surcharge and changes to tax relief on mortgage interest, the Government seems intent on weeding out amateurs from the ranks of new buy to let investors. If it is successful, our rental index suggests that… Continue reading
Rents in Australian capital cities up just 0.3% in 2015
Last year was lackluster for residential property rental growth in cities in Australia with rents increasing by just 0.3%, the latest index data shows. Rents increased by 2.2% in Melbourne, by 1.9% in Sydney and Canberra, and by 0.6% in Hobart. They fell by 13.2% in Darwin, by 8% in Perth, by 0.3% in Brisbane and by 0.2% in Adelaide. ‘We’ve never seen rental growth as sluggish as it is at the moment. Furthermore, we’re expecting to see more of the same over the coming months due to increases in the supply of new housing, rental stock and a further slowdown in migration rates,’ said CoreLogic RP Data research analyst Cameron Kusher. The CoreLogic RP Data index also shows that combined capital city rental rates are at $483, an increase of just 0.3% over the past 12 months which is a record low rate of annual growth based on records back to December 1996. A comparison between December 2015 and December 2014 shows in 2014 annual rental growth was slowing but was tracking at a much higher 1.8% which highlights just how much the rental market eased throughout 2015. ‘The construction boom across the capital cities, coupled with slowing population growth, low mortgage rates and the recent heightened level of activity from investors are the major contributing factors to the slowing rental growth in 2015,’ said Kusher. ‘Although Sydney and Melbourne saw the largest ramp up in new housing supply, both cities still recorded rental increases over the year, although rental growth is slowing relative to 12 months earlier,’ he explained. ‘It is clear that the increase in investment stock continues to provide landlords with little scope to lift rental rates while the low mortgage rate environment provides little incentive to push yields higher,’ he added. The firm predicts that growth in rental rates is likely to remain weak or potentially slow even further over the coming months. The good news for those looking to rent is the possibility that rental rates will fall even further over the coming year. ‘While the news for renters will be welcomed, investors may be facing weaker capital gains coupled with little in the way of rental growth or yield. The large pipeline of residential construction activity and recent high levels of investment demand means that renters are likely to continue to have plenty of choice,’ added Kusher. Continue reading
£140 million to be spent on regenerating housing estates in the UK
Some of the UK’s most rundown housing estates will be replaced with attractive and safe homes with a new fund for regeneration projects, it has been announced. Prime Minister David Cameron released details of what he called a comprehensive approach to estate regeneration with the creation of a new £140 million fund. He said that the government will work with 100 housing estates across the country to either radically transform them or, in the worst cases, knock them down and replace them with high quality new homes. ‘Within these so-called sink estates, behind front doors, families build warm and welcoming homes. But step outside in the worst estates and you’re confronted by brutal high rise towers and dark alleyways that are a gift to criminals,’ Cameron explained. Secretary of State Greg Clark said that there is a belief that the worst estates offer huge potential to be revived so that they become thriving communities and places which people want to live and work in. ‘That’s why we’re so determined to kick-start work which will benefit the lives of thousands of people by providing high quality homes,’ he added. To help tackle the problem the nationwide strategy will be supported by a new Estate Regeneration Advisory Panel, which will be chaired by Lord Heseltine, the former Deputy Prime Minister who has long championed the regeneration of Britain’s inner cities. The Panel will report in detail by this year’s Autumn Statement. The Prime Minister’s announcement comes ahead of a report from property advisor Savills which will show the approach to regeneration could help catalyse the building of hundreds of thousands of new homes in London alone. ‘For decades, sink estates had been seen as something simply to be managed. It’s time to be more ambitious at every level. The mission here is nothing short of social turnaround, and with massive estate regeneration, tenants protected, and land unlocked for new housing all over Britain, I believe we can tear down anything that stands in our way,’ Cameron added. Yolande Barnes, Savills research director, explained that the research shows that housing estates can deliver more homes and be made into better neighbourhoods by re-integrating them into the wider street network and creating or repairing the streetscape. The British Property Federation (BPF) welcomed proposals and praised the Government for ensuring that binding guarantees will be put in place for tenants and homeowners, to ensure that that their right to a home is protected. ‘There are some very old council estates that are in need of regeneration, but that process must treat existing residents fairly,’ said Ian Fletcher, director of policy for real estate at the BPF. ‘The Government is therefore right to put some sorts of guarantees at the forefront of its policy and encourage a partnership approach. There are investors in our membership, pension funds and the like, who will be very interested in how they can contribute to those partnerships,’ he pointed out. ‘Communities need not only… Continue reading
