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Average rents in England and Wales reach over £800 for first time
Average residential rents in England and Wales hit a record high above £800 for the first time in July with the fastest month on month increase since records began in 2009. Rents peaked in Yorkshire and the Humber, East and West Midlands, and London, according to the data from the latest buy to let index from Your Move and Reeds Rains. On a monthly basis, rents across England and Wales rose by 1.9% to £804 in July, up from £789 the previous month and up 6.8% year on year, the largest annual rise on record. ‘Just when you think the rental market is accelerating at full throttle, it finds a way to shift into a higher gear. We’re seeing rent rises manage to hit record breaking speeds on both monthly and yearly time frames as far back as our data can go,’ said Adrian Gill, director of estate agents Reeds Rains and Your Move, . He explained that with house prices rising and demand outstripping supply in the sales market the demand for rental properties has also begun to outstrip the available stock and this is driving up rents even faster than house prices. ‘A clear and concerted effort towards new-build properties is the most sensible way to address this issue. It boils down to supply and demand. However, it’s not the only possible response. The government could also ensure that we’re making the most efficient use of our small supply of homes, for instance by doing more to make it easier for people to downsize their properties when they want to,’ he added. A regional breakdown of the figures reveals that four of the 10 regions of England and Wales saw record rent peaks in July; London, Yorkshire and the Humber, and the East and West Midlands while every region saw increases compared to last year. Stronger than usual improvements in the West Midlands saw rents rise 3.6% over the 12 months to July 2015, bringing the average rent in the region up to £583. It’s a similar story in the East Midlands, with a 2.5% annual increase carrying rents up to £584. Yorkshire and the Humber, by comparison, edged its way to a new record with a 2% year on year increase to £582 on average. Rents grew 12% on an annual basis in the East of England, to stand at £838 in July. Though it’s second only to London with growth of 12.1%, in terms of the speed of the 12 month improvement, this is actually the first time in 15 months that the rate of year on year rent increases has not accelerated. Only two regions saw falling rents on a monthly basis with a 0.1% month on month drop in Wales and the East of England. Though rents are at a peak, Yorkshire and the Humber saw a modest 0.3% monthly increase. London took the lead with a 3.3% month on month rental increase…. Continue reading
Ireland needs 21,000 new houses a year, but smaller homes are required
Demand for new housing In Ireland will continue to increase in accordance with population trends and a reduction in household sizes with 21,000 new homes needed per year for the next three years. Details from the National Housing Statement by the Housing Agency points out that the population is currently at its highest for 150 years at 4.5 million and demand for homes is high as a result. It also shows that affordability is an issue for those looking to buy in the greater Dublin area. Overall house prices have increased across the country with the median price nationally at €152,000, up from €140,000 in 2013. In Dublin it is €260,000, up from €220,000 in 2013. Rental prices have also increased, particularly for apartments. Nationally rents were 6.9% higher in the first quarter of 2015 compared with the same period in 2014 with growth of 9.6% in Dublin and 5.3% outside Dublin. Mortgage arrears and negative equity remain a serious concern, the report says, with a total of 110,366 mortgages in arrears at the end of 2014 but it adds that changes mean that smaller homes will be needed because household requirements have changed and the average household size has fallen dramatically. ‘Proportional household composition has changed and we see an increase in smaller households and a corresponding decrease in larger households. The average household size in the country has fallen significantly over the last nine years from an average of 3.04 in 2002 to 2.77 in 2011. Based on an assessment of regional trends, it has been calculated that it will fall further to 2.67 by 2018 so the majority of new housing will now accommodate fewer people,’ it says. Minister for State with responsibility for Housing, Paudie Coffey, said that the report provides a much needed analysis of the true picture of housing supply and demand in Ireland along with future projections, allowing for emerging imbalances to be identified and rectified at an early stage. ‘It contributes greatly to an overall understanding of housing needs in Ireland, ensuring that the most up to date and comprehensive data is available relating to current housing supply and emerging needs. Importantly, this data will help ensure policy responses are evidence based and needs led, as we endeavour to build sustainable communities for the present and future generations,’ he added. According to Conor Skehan, chairman of the Housing Agency, the data is now in place to ensure housing needs are met through a whole suite of initiatives which are underway including those addressing issues such as housing supply, housing land availability, and provision of social housing ‘Keeping those initiatives on target requires accurate data and progress reports on extent to which these needs are being met. This is the first of a series of annual reports to deliver a state of the nation picture of what housing needs are and how we are addressing housing supply,’ he explained. Continue reading
Two tier house prices growth continues in Australia led by Sydney and Melbourne
The two tiered growth evident across Australia’s housing markets continued in July with Sydney and Melbourne driving home values higher, the latest monthly index shows. The CoreLogic RP Data Home Value Index increased by 2.8% month on month and 11.1% year on year and the total aggregated value of Australian housing increased by just over half a trillion dollars over the past 12 months to $6 trillion. Melbourne has traded places with Sydney to record the highest rate of capital gain, with values in the city up 6.1% over the three months ending in July, the highest rolling quarterly rate of growth since the three months ending August last year when values grew 6.4%. Growth in Sydney wasn’t quite as strong over the rolling quarter, up 5.4% but still the highest rate of growth since the March quarter this year when it was 5.8%. ‘To date, the capital cities have seen remarkable differences over the growth cycle which broadly commenced at the end of May 2012 and since that time dwelling values across our combined capitals index have increased by 30.4%,’ said Tim Lawless, CoreLogic RP Data’s head of research. Sydney values are 47.9% higher over the current cycle and Melbourne values are 32.1% higher while every other capital city has seen growth of less than 13% over the same period. Lawless explained that this highlights the extent to which the Sydney and Melbourne markets have outperformed other markets over the past three years. He pointed out that over the last year several cities have seen price corrections. Darwin has seen values falling the most, down by 5.3% while in Perth values also drifted lower over the year, down 0.3%. At the same time, the annual rate of capital gain in Sydney reached a new cyclical high with home values moving 18.4% higher over the year to the highest annual rate of growth for Sydney since the 12 months ending in December 2002. The strongest growth conditions outside of Sydney and Melbourne have been in Brisbane where dwelling values were 3.9% higher over the year. Based on the median dwelling price, Sydney prices are now 72% higher than Brisbane’s and Melbourne’s are 24% higher. Detached housing continued to outperform the unit sector, with house values substantially outperforming unit values over the past year apart from Hobart and Darwin. Detached home values are up 11.6% compared with a 7.2% increase in unit values over the past year. The differential is most pronounced in Melbourne where house values have surged 12.3% higher over the year compared with a 4.8% rise in unit values. ‘The higher growth rates for houses compared with units is likely to be supply related, with the underlying land component driving detached housing values higher at a time when new apartment supply has seen a substantial boost from new construction,’ Lawless said. While dwelling values continue to rise across most cities, the pace of rental growth has slipped to a new record low, which has… Continue reading
