Tag Archives: finance-update
Landlords get most stressed about late rent payments, survey shows
Late rent payments cause the most stress for buy to let landlords in the UK followed by badly behaved tenants, new research has found. A quarter of landlords emerged as the top cause of concern with ‘tenants from hell’ cited by 20%, property damage at 18%, deposit disputes 13% and dealing with evictions 7%. The research by online letting agent PropertyLetByUs also found that despite the recent HMRC crackdown on landlords’ undeclared income, only a tiny percentage, 1%, are stressed by tax issues. It also appears that the sharp rise in the number of tenants looking for rented property in 2014 is making life a lot easier for landlords who are looking for new tenants as only 1% say this is stressful. However, void periods are still bothering some landlords, with 4% citing this as a major cause of stress. ‘On the whole, 2014 was a good year for landlords, with increased tenant demand, rising rental income and asset value growth but late payment of rent is still a big issue for landlords,’ said Jane Morris, managing director of PropertyLetByUs. Indeed, the latest research from the National Landlords Association (NLA) showed that 32% experiencing rent arrears in 2014. Landlords could see a spike in the problem this month as households struggle to keep up with payments after the expense of Christmas. ‘But all the signs are showing that 2015 could be another bumper year for landlords, with the rental market set to continue its growth, from the current nine million tenants renting in the UK. The good news is that the stress of void periods and finding new tenants will further diminish, as demand starts to outstrip supply,’ added Morris. Continue reading
UK housing price growth slowed at end of 2014, index data confirms
House prices in the UK in the last three months of 2014 were 0.3% higher than in the previous quarter and are expected to increase by up to 5% in 2015, according to the latest index report. A monthly rise of 0.9% took the average price of a home to £188,858, the data from the Halifax shows. However, growth is clearly slowing. The quarterly rate of increase declined for the fifth consecutive month and was the lowest since November 2012 when it was 0.3%. Prices in the three months to December were 7.8% higher than in the same three months a year earlier and based on this annual house price growth has fallen from a peak of 10.2% in July and is now at its lowest rate since January 2014 when it was 7.3%. The Halifax expects a further moderation in house price growth over the coming year. House prices nationally are predicted to increase in a range of 3% to 5% in 2015. The index points out that home sales at 98,490 in November were below 100,000 for the first time since November 2013.Overall, sales in the three months to November were 1% lower than in the previous three months. Despite this recent modest decline, sales during September to November were 5% higher than in the same period last year. ‘The deterioration in housing affordability as a result of rising house prices, earnings growth that has been consistently below consumer price inflation until very recently and speculation of an interest rate rise, have combined to temper housing demand since the summer. The weakening in housing demand has led to a reduction in both price growth and sales in recent months,’ said Halifax housing economist Martin Ellis. ‘We expect a further moderation in house price growth over the coming year with prices nationally predicted to increase in a range of 3 to 5% in 2015. Housing demand, however, should continue to be supported by a growing economy, rising employment levels, still low mortgage rates and the first gain in real earnings for several years,’ he added. Peter Williams, executive director of the Intermediary Mortgage Lenders Association (IMLA), said that the falling rate of house price increases at the end of 2014 might suggest greater market stability. 'But this should not disguise the need for ground breaking action on housing policy in the upcoming election. Declining affordability has tempered demand and the housing market in its present state is still a long way from supporting the nation’s home owning ambitions,' he pointed out. 'Housing policy is in need of fundamental reform rather than short term voter appeasement that has brought a host of temporary measures and tinkering at the edges without a long term plan. Successive governments have failed to address changing housing needs and left us on a downwards trajectory that will see owner occupation drop to 59% by 2020 if current trends continue,' he explained. … Continue reading
Private equity investment boosts commercial property market in Northern Ireland
The value of commercial property investment in Northern Ireland reached pre-economic crisis levels in 2014, according to a new report from Savills Northern Ireland. The emergence of private equity in the market resulted in approximately £500 million worth of commercial property deals completed by the end of the year, a 186% increase on 2013. Retail investment was to the fore accounting for 88% or £440.27 million of all deals and according to Savills, resilient jobs growth and positive momentum in occupational markets, particularly in the retail sector, has resulted in attractive returns for investors. Ben Turtle, a director of Savills Northern Ireland, expects this trend to continue in 2015. ‘One of the key drivers of investment activity has been rental growth and we expect both retail and office rents to increase this year,’ he said. ‘As a result, we see strong investor demand continuing into 2015 with £300 million of assets already scheduled for sale. This time last year that figure was £200 million,’ he added. Key investment deals which took place in 2014 included; The Obel, Donegall Quay, Belfast, Shane Retail Park, Belfast and Cityside Retail Park, Belfast. Savills NI transacted 78% of all investment deals in 2014. In the Belfast office market, Savills report that lettings in 2014 reached 348,500 square feet and were driven by improvements in the labour market, with private sector employment increasing by nearly 3.5% in the year to the third quarter of 2014. ‘This has resulted in a significant reduction in the availability of prime office space in Belfast and will result in continued rental increases this year. We estimate that approximately 500,000 square feet is currently required to meet occupational demand and it is expected that rents in the region of £183 per square meter will be agreed for deals in 2015,’ said Neal Morrison, a director of Savills Northern Ireland. The report also says that a strong economic backdrop has led to resurgence in retail activity with a number of new entrants coming into the market, according to Savills. Fashion and footwear and food and catering dominated take up of retail space in 2014, accounting for 61% of all deals in the year. ‘Renewed consumer confidence is now beginning to be reflected in the retail property market. While rents remain below peak levels and the supply of space exceeds demand, new entrants have started taking space in prime and secondary locations. With new arrivals across a variety of sectors, the broad based nature of the recovery is encouraging,’ explained Paul Wilson, a director of Savills Northern Ireland. Looking ahead, Savills say the rating revaluation in April 2015 could have a significant impact with a reduction in rates expected. For example, Donegall Place could experience a reduction of between 40% and 50%. Savills expect that the revaluation will put Belfast on a competitive footing with other UK regions. Limited supply of new housing development, in addition to strong demand, are expected to drive… Continue reading
