Tag Archives: house
Landlords of sought after lets in London getting 12 months rent in advance, research shows
Price may be falling in some parts of the prime London property market but new research shows that rich tenants are paying the entire cost of six or 12 month tenancies and deposits in advance in a battle to secure homes in London’s best addresses. A typical wealthy up front tenant letting a two bed flat in London's West End on a £3,500 per week let are willing to pay the landlord over £200,000 up front before moving in, according to the research from lettings firm E J Harris. Indeed in the first 10 weeks of 2015 it is estimated that over £100 million has been paid up front by affluent tenants, many of whom are part of a new breed from countries such as Russia, the Ukraine, China and Nigeria. The research suggests they are business people, socialites and students from very wealthy families and are able to pay anything from £9,000 to £10,000 per week on a luxurious residential property in London’s best addresses. In a normal year one in 10 tenants in the prime central London will typically pay their entire rent and deposit up front in order to secure the property they want, however this year this has jumped to one in five tenants. According to the firm this surge in up front rental payments since the start of 2015 reflects the current frenzy in the London lettings market as stamp duty and pre-election mansion tax concerns have turned vendors into landlords and buyers into tenants. The Central London £2 million to £20 million sales market has stalled and been replaced by a buoyant lettings market for properties within the same value range. The top 10 locations for up front rental payments are Mayfair, Belgravia, Knightsbridge, St James’s, Soho, Fitzrovia, Marylebone, Westminster, Chelsea and Kensington. The top London address for up front rental payments is Mount Street in Mayfair where over 80% of the tenancies are secured by up-front payments and the firm says that this is because the number of tenants seeking properties on Mount Street vastly exceeds supply. Mount Street is closely followed by Mayfair’s Dover Street, where 70% of tenancies are secured by upfront payments. This is followed closely behind by Eton Place in Belgravia, Trevor Square in Knightsbridge and St James’s square where over 60% of tenancies are secured by up-front payments. In Ward our Street in Soho, Charlotte Street in Fitzrovia, Cadogan Square in Knightsbridge and New Cavendish Street in Fitzrovia over 50% of the tenancies are done by up-front payments. ‘The dramatic rise in up front tenancy payments is driven by several factors. Stamp duty and mansion tax concerns has turned purchasers into tenants and so competition has risen for the best homes which has led to a rise in up front bids,’ said Elizabeth Harris, managing director of E J Harris . ‘Alongside this the London lettings market has become increasingly international with a new wave of wealthy tenants from Russia,… Continue reading
Duty for UK lettings agents to publicise fees welcomed
Measures which impose a duty on UK lettings agents to publicise fees both on websites and in branches have been welcomed by a leading industry organisation. The new Consumer Rights Act stipulates that charges displayed must include a description of each fee and the service it covers and state clearly if the charge applies to the property being let or each individual tenant. The Association of Residential Lettings Agents (ARLA) said that it supports the view that letting agent fees should be transparent and this will help consumers understand what services they are paying for. ‘In the interests of consumer protection, we would have liked to see legislation go further than it did and continue our call to make it mandatory for letting agents to be members of a client money protection scheme,’ said David Cox, managing director of ARLA. ‘We urge the next government to review this after the general election as the schemes provide guaranteed protection to both landlords and tenants should a letting agent abscond or misuse any money they are holding for either party; such as a deposit or rent,’ he added. However, the association, which backs the eradication of unnecessary bureaucracy and red tape, it believes that further measures outlined in the Deregulation Act will have a detrimental and unintended effect on the UK lettings market. ‘ARLA greatly welcomes the new tenancy deposit legislation contained within the Act. However, the provisions in the Act designed to prevent retaliatory evictions by landlords, creates a number of unintended consequences,’ said Cox. ‘ARLA supports the principle of legislation seeking to stop landlords from evicting tenants in response to a genuine disrepair issue. The measures will mean that protections previously afforded to compliant landlords may be eroded by dishonest tenants using the new powers to defend against legitimate possession proceedings, possibly by intentionally causing damage to properties,’ he explained. He pointed out that Section 44 of the new Act, relaxing the restrictions on the use of residential properties for short term lettings in London, will have an adverse effect on the capital’s long established and unique communities. ‘The added ability for residential homeowners to use their properties as ‘pseudo-hotels’ will lead to a constant churn of short term tenants, eroding the foundations of existing communities. Moreover, the new measures may lead to longer term, more established tenants being forced out, an increase in anti-social behaviour, reduced security and an increased risk of crime for permanent residents. London’s success is predicated upon its varied but long established community identities, coupled with the ever growing strength of its booming lettings market,’ Cox added. Meanwhile, the National Landlords Association (NLA) is claiming a victory for landlords in Liverpool after gaining two significant concessions from Liverpool City Council (LCC) in the run up to the launch of their city wide licensing scheme. Although the council has refused the NLA’s request to postpone the launch of the scheme that is due to go live on… Continue reading
Home affordability in UK cities deteriorates to 2009 levels
The past year has seen a deterioration in affordability in UK cities, driven by rising house prices across the country, with Oxford names as the least affordable. Stirling in the most affordable and Aberdeen as seen the highest house price growth since 2005, according to the latest Lloyds Bank Affordable Cities Review. The average UK city house price has risen by 7%, from £181,667 in 2014 to £195,107 in 2015 and this has resulted in affordability in the nation’s cities worsening in the last 12 months from 5.8 to 6.1 times gross average annual earnings, the second successive annual decline in affordability. Affordability in UK cities is, on average, now at the same level as in 2009 but is 15% lower than the peak of 7.2 times earnings in 2008 at the height of the last housing market boom. The overall improvement in affordability across UK cities as a whole over the past seven years has been caused by a combination of an average house price decline of 6% and an increase in the gross average annual earnings in UK cities of 11%. Oxford’s average house price is 11 times the gross average earnings in the city. At an average price of £361,469, houses in Oxford are more expensive compared with local average earnings than any other UK city. This is partly due to Oxford’s attractiveness to commuters working in London. Winchester at 10.11, Cambridge at 9.76, Chichester at 9.19 and Brighton and Hove at 9.10 make up the top five least affordable cities. Greater London is not far behind with average property prices 8.75 times average gross annual earnings. This average figure disguises considerable variations across the capital with central boroughs being significantly less affordable than the Greater London average. The data also shows that Lichfield at 6.95, York at 6.83 and Leicester at 6.54 are the least affordable cities outside southern England. Stirling remains the UK’s most affordable city despite a deterioration in affordability over the past year. The average property price in the Scottish city of £158,645 is 3.9 times gross average annual earnings. Four of the 10 most affordable UK cities are in Northern Ireland due primarily to the relatively low house prices in the country with Londonderry at 3.92, Belfast at 4.49, Newry at 4.51 and Lisburn at 4.63. The most affordable cities in England are Lancaster at 4.03 and Bradford at 4.17. ‘House price rises in the past two years have resulted in a deterioration in home affordability in the majority of UK cities, and generally widening the north/south affordability divide as the market has been strongest in the south,’ said Andy Hulme, Lloyds Bank mortgages director. ‘The UK’s most successful cities economically have tended to see the strongest property price rises. Aberdeen, the country’s oil and gas capital, has recorded the biggest gains over the past decade whilst London has been the top performer during the economic recovery,’ he added. An analysis reveals a significant north/south divide in city… Continue reading
