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Over half of UK letting agents think buy let surcharge will push up rents
Over half of UK letting agents believe the new buy to let stamp duty surcharge from April will push up rent costs, new research has found. It could also trigger a decline in the supply of available properties coming onto the rental market, according to the report from the Association of Residential Letting Agents (ARLA). The report also points out that in February demand for rental properties grew to an average 37 per letting agent branch, the highest since February 2015, as supply increased marginally. Some 52% of letting agents reported an uplift in interest from buyers looking to invest in by to let properties before the stamp duty reforms come into effect, up from 47% in January. However, after the 01 April deadline some 63% predict that supply will fall as landlords are pushed out of the market. Some 57% of ARLA members agree rents will be pushed up once the stamp duty reforms have come in to effect, as increased costs for landlords are passed through to tenants. This is especially high in London, where 73% of letting agents expect to see this happening. ‘The stamp duty changes are now imminent, and as well as hitting small landlord’s, they will also impact institutional investors,’ said David Cox, ARLA managing director. ‘Although members are reporting a rush from landlords trying to snap up their buy to let investments now, it’s likely that we’ll see the buy to let market drop like a stone come April and probably not pick up again until next year. This will most certainly cause rents to increase, with supply dropping, as competition for the limited availability of properties intensifies,’ he explained. The report also shows that demand rose by 19% in February, with an average 37 prospective tenants registered per member branch. This is the highest level seen since February last year, when an average 40 tenants were registered per branch. Alongside growing demand, the supply of rental properties on letting agents’ books increased to 176 in February, a rise from 172 in January. ‘The demand for housing continues to intensify as supply remains an issue across most of the country. We are concerned that the government rhetoric of wanting to help people onto the housing ladder does not tally with their action of continuing to target the rental market with additional costs,’ said Cox. ‘Some landlords will simply withdraw from the market whereas others who can take the hit of the extra stamp duty will simply raise rents to cover the extra costs. The dream of home ownership will remain out of reach for many as we move closer towards becoming a nation of forever renters,’ he added. Continue reading
UK construction industry sets out plans to increase training for building new homes
Over 45,000 new home building workers will be trained by 2019 to help tackle the UK’s housing shortage through a £2.7 million initiative announced by the Construction Industry Training Board (CITB) and Home Builders Federation (HBF). The first of its kind, the Home Building Skills Partnership will bring together firms of all sizes to ensure that the industry has the skills it needs to build more homes. This will include initiatives to promote collaboration on skills across the supply chain, so that the industry can better plan for its future needs. The partnership will support over 3,500 construction businesses and, by 2019, train 45,000 new entrants and 1,000 experienced workers with the new home building training qualifications. The housebuilding industry has delivered unprecedented increases in house building over the past two years with the latest figures showing that 181,000 new homes were provided last year, up 25% year on year. The largest companies are increasing their output by 50% since the troughs in the aftermath of the global economic downturn and the industry as a whole is now looking to meet Government ambitions to increase output still further. Experts point out that to maintain high levels of build quality and customer service, it is imperative industry capacity is increased and the new partnership aims to use industry insight to understand skills needs and develop new training and qualifications ideally suited to the modern homebuilding sector. It will create long term skills solutions to meet the government’s target of one million new homes by 2020 and will be overseen by a Board that will be chaired by Redrow chief executive officer John Tutte and include a range of senior industry representatives and CITB. ‘The number of new homes is up 25% in the last year because the country is building again and delivering the homes the nation wants. That’s why the Home Building Skills Partnership is an important initiative and will help deliver the training of skilled workers we need to get the job done and to improve quality across the industry,’ said Housing and Planning Minister Brandon Lewis. ‘Construction offers an exciting and rewarding career and we need to build a new generation of home grown talented, ambitious and highly skilled construction workers,’ he added. Stewart Baseley, HBP executive chairman, pointed out that to enable increased output to deliver the high quality new homes the country needs it is absolutely crucial to build up industry capacity. ‘To allow us to do it is essential we have a clear focus on delivering the training the industry needs. The partnership will enable us to develop targeted training that meets the specific needs of our industry in a structured way so we can grow steadily and sustainably,’ he said. According to Steve Radley, CITB policy director, the major challenges faced by home builders can only be met through new ways of working. ‘Home builders have said they want to work with CITB to anticipate their skill… Continue reading
Scottish rents rise at two thirds the speed of England and Wales
Scottish rents are rising at just two thirds the speed of those in the rest of England and Wales with a rise of 2.1% year on year, the latest index data shows. This compares with a 3.3% rise in England and Wales and month on month in Scotland average rents have stagnated at £548 and some areas, such as the Highlands and Glasgow have seen rents fall compared with January. The figures from the latest buy to let index from lettings agent network Your Move also shows that while rental growth has seen a slowdown from 2.3% in the 12 months to January, it is an uptick from the 1.1% annual change recorded in February 2015. According to Brian Moran, lettings director at Your Move Scotland, it is ironic that Scotland is witnessing one of the biggest government interventions into the private rented sector, at a time when rents have been moving at a much slower pace than in other parts of the UK. But he pointed out that Scottish rents are still making incremental upwards progress but crucially, against a bedrock of stronger tenant finances. ‘Like in any market, affordability is a fundamental check on prices. Rental arrears are a great benchmark of affordability in the market, and their frequency is falling,’ he said. However, he also pointed out that the passing of the Private Tenancies Bill last week signals a paradigm shift in the private rented sector in Scotland, introducing a new artificial influence in the market, aside from regional supply and demand. ‘Intervention in the market has had negative side effects in the past, noticeably the abolition of tenancy fees in 2012, and it will be interesting to see how landlords recuperate and recover from this regulatory blow,’ he explained. ‘Anything that makes buy to let investment slightly harder to swallow, and managing property portfolios more of a painful process for landlords, risks cutting off the inflow of investment. Tenants will ultimately be the ones who feel the effect on their bottom line, if the supply of properties to let dries up, Moran added. A breakdown of the figures show that in the year to February 2016, three of five regions in Scotland have recorded positive annual growth in rents. Edinburgh and the Lothians is leading rent growth across Scotland, with the strongest year on year rise in rents, at a record speed of 7.7%. This is the fifth successive acceleration in annual rent growth and has taken average monthly rents in the region to a new peak of £644, up £46 from £598 in February 2015. Rents in the South of Scotland are also now standing at a record high of £515 per month, up from £498 a year ago. This 5.3% annual rise is the second fastest increase recorded in the year to February. In the Highlands and Islands, rents are now 2.5%… Continue reading
