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Average rental period in UK is 18 months, new research shows
People renting a home in the UK spend an average of 18 months in the property before moving on with vacant properties being filled most quickly in Birmingham, new research has found. Birmingham has the lowest tenant turnover, with renters staying an average of two years and four months in the same property. Cardiff on the other hand, has the highest turnover, with the average property being vacated less than a year after being filled, according to the study by landlord insurance provider Direct Line for Business. Leeds at 12 months and Bristol at 14 months also have a high turnover of tenants, which could prove problematic for local landlords, the report says. The analysis also looked at the average time it takes to fill a vacated property revealing that on average, it takes a landlord 22 days to find a new tenant. This could result in an average loss of £547 in uncollected rent. When calculating the yield for a property, landlords need to take into account this void period and ensure they have sufficient resources to meet any mortgage, ground rent or other charges. Vacant properties in Birmingham are filled the quickest, with a landlord finding a tenant in just 11 days. However, in Liverpool and Aberdeen landlords struggle the most to fill their properties, taking an average of 33 days, to find a suitable candidate. Direct Line for Business's analysis estimates that this gap in rent could cost landlords as much as £761 in Liverpool and £913 in Aberdeen. Even with such a competitive rental market in London, letting agents in the capital claim that it takes 20 days on average to fill a property. With average monthly rents in central London surpassing £2,000 this could amount to a loss of £1,869 in income. The research also found that landlords can't always rely on occupants remaining in a property for the duration of their tenancy agreement, with 9% moving out early. The highest rate of tenancy turnover is in Aberdeen where 19% of tenants leave a property before the end of the tenancy agreement with Leeds and Sheffield both close behind at 13%. ‘This research highlights the pressure landlords are under to replace outgoing tenants in their properties. Vacant properties are obviously a worry for landlords but it's vitally important that they take into account void periods when calculating the affordability of owning a rental property,’ said Nick Breton, head of Direct Line for Business. ‘Staying on top of the on-going changes within the industry can be time-consuming and a battle for landlords and we fully appreciate the challenges they face when it comes to managing their rental properties,’ he added. The business has developed a Mobile Landlord app which can manage up to five properties aimed at alleviating some of the stress. The app can track income, calculate yields, set handy reminders such as when a tenancy agreement may be coming to an end and also keep landlords up to… Continue reading
UK vote on future in EU could have major impact on housing markets
If the UK leaves the European Union there is a risk that the move could have a long last and damaging effect on the country’s residential property markets, according to a new report. It could affect current plans to build hundreds of thousands of new homes, compromise London’s position as a safe haven for property investment, but could also have positive effects for first time buyers. The report from the National Association of Estate Agents (NAEA) and the Association of Residential Letting Agents (ARLA) compiled with the Centre for Economics and Business Research (Cebr), highlights a number of short and long term implications potentially arising from the upcoming vote. While the impact Brexit will have on migration policies is unconfirmed, imposing greater restrictions on foreign workers coming into the UK may compromise the UK’s ability to build homes with the Government having pledged to build one million new homes by 2020. It points out that construction based jobs are decreasing in popularity among UK nationals, and as 5% of current construction workers were born in other EU countries and workers from the are becoming more important than ever in filling the skills gap to boost housing stock. A leave vote could mean that in 10 years’ time there would be a severe skills shortage of construction workers, according to Mark Hayward, NAEA managing director. ‘Even if we then had planning permission, investment and materials to build more housing, we simply wouldn’t have the resource to put the bricks and mortar together. It has the potential to have a very damaging effect on the future housing market,’ he explained. But he added that a leave vote could provide first time-buyers with breathing space as demand for housing would be expected to ease off. The report also says that non EU businesses are currently attracted to the UK’s status as a gateway to the single market as it allows them to establish and grow their presence across Europe. In 2014 some 19% or £5.3 billion) of total FDI inflow into the UK came from EU sources and in 2013 some 17% of sales in London’s prime property market made to non-UK buyers were to European nationals. It suggests that in the event of Brexit, a portion of FDI would be re-directed to EU countries, freeing up housing units, particularly in London, previously purchased through FDI for British buyers. Also, if the UK does not maintain free movement of labour, the total population of the UK could decrease by 1.06 million and the report argues that with fewer people, demand will ease, making the market more accessible for first time buyers, as well as second steppers and last and last time buyers and this is will be especially apparent in London. Reduced migration would also affect the private rental sector. Currently, private renting is a more… Continue reading
UK home buyers most concerned about prices and mortgages
Financial worries dominate the thinking of today's generation of prospective home buyers in the UK with prices and getting a mortgage the biggest concerns, new research shows. The survey from the Home Builders Federation (HBF) also highlights the change in attitudes to home buying between young and old, showing that whilst 84% of 18 to 34 years olds still want to own their own home, there are huge financial obstacles to realising their dreams. Indeed, some 73% cited the difficulty of saving for a deposit, for 69% it is property prices and 53% the difficulty of getting a mortgage. The survey also found that one in four 18 to 34 year olds are totally unaware of any government support available to them, such as the 5% deposit Help to Buy equity loan scheme or the Help to Buy ISA aimed at helping young people save for a deposit. And overall younger people today are more concerned than their elders about the running costs of homes with 67% of 18 to 24 year olds taking this into account when considering whether to buy compared to 40% of 35 to 44 year olds. Younger people are also much more likely to consider buying a new build, which are up to 50% cheaper to run than some second hand homes with 55% saying it is likely they would consider buying a new build compared to just 23% of over 45s. It also identifies the huge amounts of money second hand home buyers spend on their properties with 47% of people spending over £10,000, and more than half incurring the expenditure associated with replacing bathrooms or kitchens. Some 13% of people spent over £40,000 upgrading their home and the HBF estimates it costs around £45,000 to upgrade a second hand home to the standard of a new build. The HBF also believes that there are a number of misconceptions about new build homes. With 34% of people polled saying they have never visited a new build or a show home and a further 18% saying they hadn't for at least 10 years, it points out that the industry faces a huge challenge engaging with the public to explain the many benefits of today's modern, high quality new build homes. Some 84% of 18 to 34 year olds that don't already own their own home aspire to do so and when buying a new home, the most important factors house hunters consider are price and location, both cited by 80%. However a greater proportion of younger house hunters, some 67% of 18 to 24 year olds, take into consideration the running costs of a property, compared to 55% across all age groups. The main obstacles for first time buyers trying to get on to the property ladder are saving for a deposit at 73%, property prices at 69% and getting a mortgage at 53%. Similarly, the main put-offs to buying a home for everyone is the deposit for 72%… Continue reading
