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More supply sees residential property rent growth slow in the US
Annual rent growth in the United States has slowed for the third month in a row but rents are still rising faster than historical norms, according to the latest index data. Rents appreciated 4.5% year on year in October, down from 5.3% in September, down from a high of 6.6% in July and it is mostly due to more properties, specifically apartments, coming onto the market, the Zillow real estate market report shows. A breakdown of the figures shows that tents in large multifamily buildings rose 3.9% annually, while single family home rents grew 4.5%. Overall, newly built apartment buildings are finally opening for new residents and slowing the rate of rental appreciation across the country, but rents are still rising much faster than the historical norm and continue to rise faster than incomes, according to the report. The report points out that multifamily housing starts have been increasing since late 2009, and as units become available, the pace of rental appreciation is slowing. Lack of inventory has been a leading cause of the ongoing rental affordability crisis, especially in fast growing markets. Even the hottest rental markets, which have seen double digit rent appreciation for the past five months, are growing at a slower pace although rents are still rising there more than twice as fast as the national average. The San Francisco metro has the fastest rental appreciation among the nation's 35 largest markets. Rents there are up 15.2% from last year, but they were growing as fast as 19% annually in June and July. ‘Rental appreciation has started to slow down in part due to more rental supply. Many of the bigger multifamily rental projects that were begun a couple years ago in cities nationwide are finally starting to open for occupancy, easing pressure on rents somewhat,’ said Zillow chief economist Svenja Gudell. ‘But despite this recent slowdown in rental appreciation, the rental affordability crisis we've been enduring for the past few years shows no signs of easing, especially as income growth remains weak. It will take a lot more supply, and a lot more renters turned home owners, to fully reverse this trend,’ Gudell added. As rents have grown and rental affordability continues to suffer, the stability and relative affordability of homeownership may be pushing some qualified renters to make the jump to home ownership. A widely expected December rate hike from the Federal Reserve could be an additional incentive for buyers to enter the market while rates remain low. Reflecting this, home values are growing at their fastest pace since November 2014, up 4.3% to a Zillow Home Value Index of $182,800. Continue reading
UK’s first compulsory registration scheme for private residential landlords launched
A new registration and licensing scheme aimed at preventing rogue landlords and agents from letting and managing properties has been launched in Wales but there is concern that not enough tenants know about it. According to Welsh Housing Minister Lesley Griffiths Rent Smart Wales will also raise awareness by landlords, agents and tenants of their respective rights and responsibilities and drive up standards in the private rented sector. Under the scheme all private landlords will be required to register with Rent Smart Wales. They will also have to register their properties if they want to manage the property themselves and must demonstrate they are ‘fit and proper’ to hold a licence, and then undertake, and pass, approved training. Alternatively, they will be able to appoint a licensed agent to manage the property on their behalf. Landlords and agents have one year to comply with their new legal obligations, without fear of legal action. ‘With around one in seven homes in Wales now privately rented, a strong sector with good working practices is absolutely vital. I am proud Wales is leading the way on improving professionalism across the private rented sector,’ said Griffiths. ‘Our new, landmark scheme will drive up standards by making Wales the first country in the UK where managing landlords and agents are required to undertake training to ensure they are clear on their responsibilities,’ she explained. ‘The changes will prevent rogue, and even criminal, landlords and agents from being involved in the management and letting of properties. This will help to protect tenants in the private rented sector, including students, lone parents and young families. Rent Smart Wales will also support good landlords and agents by helping them keep abreast of their responsibilities and legal obligations, and raising the reputation of the sector as a whole,’ she added. However, new research from the National Landlords Association suggests that many are unaware of the new laws. It found that 65% of tenants in Wales are unaware of the change but despite low awareness levels among tenants, the findings show that 69% believe they will feel more confident renting from private landlords and letting agents once they are all registered and more 56% believe that the scheme will help them to find appropriate housing. ‘The NLA will be working to help landlords and agents comply with this new law but we’ve always been concerned that a mandatory registration and licensing scheme will not provide the benefits the Welsh Assembly says it will,’ said Richard Lambert, chief executive officer of the NLA. ‘As the licensing authority, Cardiff City Council must start working with other local authorities from the outset in order to fine and prosecute those who fail to comply within the year’s grace period. Without proper enforcement the scheme will do nothing to stop criminals in the sector but as yet we’ve seen no detail about how Cardiff City Council plans… Continue reading
London mayor gives approval for over 12,600 new homes in Greenwich
The Mayor of London has given his seal of approval for the city's largest single regeneration development in the Greenwich Peninsula which includes over 12,600 new homes. A revised masterplan on the previously disused gasworks will create an entire new district formed of five neighbourhood zones and 12,678 homes on the 80 hectare site. Developers Knight Dragon are already in the process of building a further 2,822 homes on the site, which will bring housing delivery on the Greenwich Peninsula to 15,720. Plans also include 220 serviced apartments, 24,000 square metres of retail use, 60,000 square metres of business use, two new schools and two new hotels. The development will also feature a 40,000 square metre film studio, a visitor attraction and increased green open space including an extension to the existing Central Park. In August, Greenwich council gave outline planning permission for the site, which runs along the River Thames, and the Mayor Boris Johnson has now also given the masterplan the go-ahead. The Greenwich Peninsula site is part of the Mayor's ambitious plans to release surplus public land to boost construction jobs, drive investment and deliver the additional housing to meet a growing population. Of the developable land taken on by the Mayor in 2012 some 99% is now in the development pipeline, while the Greenwich Peninsula is a key element of Johnson's City in the East masterplan, which looks to deliver at least 200,000 homes in east London over the next 20 years. ‘This gigantic site at Greenwich Peninsula has sat dormant for far too long, so I'm pleased that since City Hall took control of this land, we are already beginning to see construction underway. This will not only provide thousands of much-needed new homes for Londoners, but also bring jobs as part of the wider regeneration towards the east of the capital,’ said Johnson. Developers Knight Dragon has 2,882 homes already under construction as part of existing planning permission, of which 1,002 are affordable. The masterplan approved by the Mayor includes 2,928 affordable homes, while a review mechanism has been included in plans, which could deliver an additional 1,572 affordable homes. The affordable housing mix, which will be delivered in all five neighbourhoods in the new district, will be split between social rent and intermediate. Councillor Danny Thorpe, Royal Borough of Greenwich Council member for regeneration and transport explained that the Council has long held a vision to make the most of the huge potential offered by the Greenwich Peninsula. ‘The approval of this planning application makes it one of the most exciting developments in London, bringing huge long term regeneration benefits to the peninsula and cementing it as a new district for London,’ he said. ‘We are particularly proud that, at a time of critical housing shortage, this development will deliver so many affordable homes, of which more than two thirds will be for social rent, at no more than 50% of market rent…. Continue reading
