Tag Archives: industry
Rents overtake home values in the US, latest index shows
Residential rents in the United States grew 4% year on year in April, overtaking home values growth which was at an annual rate of 3%, the latest data shows. It means that rents grew at their fastest pace in two years in April, and surpassed home value growth in 20 of the 35 largest US housing markets, according to the data from real estate market report firm Zillow. Rents reached $1,364 and home values reached an average of $178,400 and growth in home values is expected to slow further in the second half of the year as the for sale housing market stabilises. The switch comes after years of rapid home value increases and has been boosted by the improving economy. The Zillow report points out that US home values peaked in 2007, and then crashed during the recession between 2008 and 2010. Since then, they have risen rapidly, returning to their peak levels in many markets. Home values have both risen and fallen over the past decade, but rents have been steadily rising. Indeed, rental growth has been outpacing home value growth for several months in some of the nation's hottest markets. In San Francisco, rents started rising faster than home values in July 2014, and have been growing faster ever since on an annual basis. In Boston, annual rental growth has outpaced home value appreciation since August 2014. The report points out that low mortgage rates have helped make buying a home much more affordable than renting. On average, US home buyers can expect to spend about 15.3% of their income each month on a typical house payment. Renters can expect to spend about 30% on a monthly rent payment. ‘There are tremendous incentives to get into home ownership these days: mortgage access is improving, interest rates are low, and home values remain below prior peaks,’ said Zillow chief economist Stan Humphries. ‘But it will be increasingly difficult for many renters to realize these benefits as this country's growing rental affordability crisis continues to worsen. More income going to rent means less going to savings for a down payment and other costs, keeping renters renting longer and feeding into the high demand that is contributing to rising rents in the first place,’ he explained. ‘This cycle will be difficult to break, and is a symptom of the imbalances that still exist in the housing market as we struggle to get back to normal. New construction and rising wages will help, but neither is coming very quickly,’ he added. Over the next year, home value growth is expected to slow even further, to 2% annually, according to the Zillow home value forecast. In 2014, home values rose 4.9%. Continue reading
New proposals for UK landlords welcomed by the industry
The UK’s National Landlords Association has welcomed new government proposals on immigration that will affect the country’s residential private rented sector. Prime Minister David Cameron announced a number of proposals to be tabled in a new immigration bill which will be a central part of the new Government programme to be announced in the Queen’s speech, next week. They include new powers for councils to crack down on unscrupulous landlords, allowing landlords to evict illegal migrants more quickly and a nationwide Right to Rent scheme. The announcement also includes a new mandatory licensing regime and there will be a consultation on cancelling tenancies when visas expire. ‘We welcome the initiative taken by government to tackle the problem of criminals acting as private landlords to exploit illegal migrants,’ said Richard Lambert, NLA chief executive officer. But he pointed out that it important that councils are given the necessary funding to ensure that they can enforce these powers effectively. ‘This would help drive up standards in the sector and send a powerful message to criminals. One of the fundamental reasons that a minority of criminal landlords are able to get away with providing poor living conditions is that councils do not have the resources to make use of their already significant powers,’ Lambert explained. ‘We would like to see the Treasury allow councils to keep the proceeds of the fines from prosecutions so that councils have both the powers and finances for enforcement, without going cap in hand to the Treasury,’ he added. The NLA is also pleased that the government has given landlords the ability to deal quickly with illegal migrants and Lambert said he hopes this deters those that want to stay in the UK illegally. ‘We are, however, a little concerned regarding the Right to Rent scheme. Landlords are happy to help to check that tenants are who they claim to be. However this should not be a way for the Government to pass the buck on to landlords when tacking illegal immigration,’ Lambert said. ‘We hope, before the scheme is rolled out nationally, that the Government take the time to review how the first phase in the West Midlands has worked and draws on the lessons from that, rather than ploughing ahead regardless,’ he added. He also said that the introduction of a new mandatory licensing regime also raises concerns. ‘We are therefore urgently seeking clarification on whether this would be new policy or related to the current licensing schemes,’ said Lambert. Continue reading
UK property market sees lowest annual price growth since 2013
Annual UK property price growth was 3.7% in April, taking the average price of a home to £208,717, the lowest level of annual growth since July 2013, the latest index shows. Month on month prices were up 0.5%, according to the latest monitor report from haart estate agents. In London prices were up 1.9% month on month and 6.8% year on year to an average of £513,154. The data also shows that in April new buyer registrations fell by 1.6% compared with March, the first monthly fall this year, as buyers adopted a pre-election ‘wait and see’ attitude. Seller activity also slowed in April with new property instructions up just 1.5% month on month. The report also shows that house sales were up 3.3% in April compared to March but down 17.1% from April 2014. But there has been a post-election pick up in seller activity with the weekend after polling day seeing a 34% surge in new property instructions compared with the previous weekend. The average price of a first time buyer home increased 3.5% annually and 0.8% on the month. The report says that the new Help to Buy ISA, when the product is designed and implemented, will provide further assistance to first time buyers seeking to buy a home. First time buyers now make up 42.9% of all mortgages written, which is up slightly on March but still falls below 46.1% in April 2014. The average mortgage granted to first-time buyers is up 1.2% on the month in April and 2.5% annually. ‘The pre-election property market held its breath in April but the election uncertainty did not have an overall stifling effect on the market average property price growth for the UK slowed but did not come off the boil,’ said Paul Smith, chief executive officer haart, which has a network of over 200 branches across the country. ‘However, there was a drop in activity from sellers and prospective buyers in the run up as a wait and see attitude took hold of the market. We are already seeing the reversal of this with a flurry of activity from prospective sellers in the weekend immediately following the election,’ he explained. ‘Continuity of government, no mansion tax and supportive policies like the Help to Buy ISA should keep the property market on its upward trajectory for the rest of 2015,’ he added. Continue reading
