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New tenancy rental rates continue to rise across most of UK
The cost of taking on a new tenancy in the private rentals market continues to rise, with the average rental agreement signed in the UK outside of London during the three months to February 2016 costing 4.8% more than in the same period a year ago. The latest data from the HomeLet Rental Index also shows that while that rate of appreciation was down on the 5.5% seen over the three months to January, rents on new tenancies continue to rise much more quickly than inflation in most parts of the country. Year on year Greater London, the East Midlands and the South East of England recorded the fastest rent rises, up 7.7%, 6.7% and 6.5% respectively while rents fell by 2.6% in the North East and by 3.2% in the North West. The rise take the average rent for new tenancies in the UK, excluding Greater London, to £744 per month. In Greater London it is £1,521 but the increase remains below the double digit increases seen last year. The Index shows rents on new tenancies rose in 10 out of 12 regions in the UK on an annual basis over the three months to February 2016. The exceptions were the North West of England, where rents dipped by 3.2% from £657 per month last year to £636 per month, and the North East of England, where rents now stand at £519 per month, 2.6% lower than a year ago. In Scotland rents were up 3.9% year on year and 1% month on month to an average of £649 while in Wales they were up 3.4% year on year and 02% month on month to £596 on average. HomeLet’s research also shows that as rents have risen in recent years, the number of new tenancies signed by a single tenant has fallen. Last year, single tenants accounted for just 33% of new tenancies on rental properties, down from 67% in 2008. By contrast, the proportion of new tenancies signed by two tenants rose from 28% to 52% over the same period. New tenancies signed by three or more tenants have risen from 5% to 15% of the market. The firm says that this trend may in part reflect the increasing number of families moving into the private rental sector as house prices have become less affordable and as people have pursued greater flexibility. The latest data from the Office for National Statistics reveals the number of privately rented homes let to families with dependent children has risen from 30% to 37% over the past 10 years. The increasing number of tenants per property may also suggest people are more inclined to rent together after a sustained period in which rents have risen more quickly than general inflation. The index data shows the proportion of new tenancies taken on by three tenants rose from 3% in 2008 to 8% by last year. Homes with four or more tenants accounted for 7% of the market last… Continue reading
Downsizing in UK could bring windfall of up to £200,000 on average
Nearly half of home movers in the UK plan to downsize in the next three years and on average realise up to £200,000 by doing so, according to new research. Some 46% plan to sell and buy a smaller property and by downsizing from a detached to a semi-detached home they could realise a windfall of £117,230 of £200,000 in London. Downsizing was cited as the single most popular factor for moving, according to data provided by Lloyds Bank with research showing that the popularity of downsizing has grown in recent years, buoyed by the anticipated returns. The figures show that average age for a downsizer is 53, at which point the greatest number, 37%, of downsizers had lived in their home between 11 and 20 years. The main reason people cite for downsizing is to move somewhere which better served their circumstances with 53% wishing to do so while 39% want to reduce bills or free up equity and 31% to provide extra cash for retirement. A fifth say that they are downsizing earlier than they had anticipated, citing reasons such as health, changes in relationship status and a need to be closer to better local amenities. A third also say that they are planning to move to a more affordable area. Some 72% of those downsizing said they expected to profit from their move, with 35% saying that they planned to reinvest their additional capital in a new property, 29% said that they would invest in other financial products, whilst 21% planned to invest in their pension or pass the earnings on to their family. ‘People may consider moving home for a variety of reasons, often tied to their next big step in life whether that’s getting married, starting a family or children growing up and flying the nest,’ said Mike Songer, mortgage director with Lloyds Bank. ‘We typically think of people moving to bigger houses as they move up the housing ladder, but people are increasingly looking to downsize their home because their circumstances or priorities have changed. Whilst financial gain may not be the main driver for those looking to trade down their property it is clearly a factor, with three quarters of downsizers expecting to profit from such a move,’ he explained. ‘There are definitely financial benefits to be gained from trading down, with an average potential windfall of £117,230 when moving from a detached home to a semi-detached house. Downsizing is also healthy for the market, as it helps keep it moving and frees up larger properties which could be perfect for young families about to take their next step up the property ladder,’ he added. A breakdown of the figures show that house prices in the capital mean that London home owners could make the most from downsizing, as they stand to free up an average of £201,052 from trading down from a detached to a semi-detached home. Downsizers from the South West saw the highest rise over… Continue reading
Asking prices and sales activity grows across the UK
Property markets across the UK have seen activity soar with asking prices and sales moving upward, according to the latest national index. Asking prices rose in all parts of the UK with the mix-adjusted average asking?price for England and Wales up 0.9% month on month and by 1% in Scotland. But the average annual home price rise for England and Wales dipped slightly to 7.0%. The West Midlands shows the largest monthly rise of 1.5% as demand outweighed supply in the region and supply continues to contract overall with a decrease of 4% year on year, according to the Home.co.uk index. Homes are also selling faster. The typical time on market fell to 102 days across England and Wales, some 17 days less than in March 2015. The East of England, London and the South East show huge drops in marketing times as buyers snapped up properties at pre-crisis rapidity. The number of properties entering the market is down 4% compared to a year ago, the index also shows. The hardest hit region was the West Midlands where 12% less new stock arrived on estate agents' books during the last month compared to February 2015. The South West of England is also indicating shortages in supply with 8% less stock registered on agent portfolios last month. Prices also rose in the North and Wales over the last month but in both these regions marketing times continue to be the longest in the UK. ‘As a result, we expect only small seasonal rises in these regions over the coming months. Supply remains relatively buoyant and, consequently, prices show little if any significant upward progress,’ said Doug Shephard director at Home.co.uk. By contrast, he explained that fierce competition between buyers has driven the typical time on the market in the South East and East of England down to 47 and 49 days respectively. ‘The last time we witnessed such short marketing times was back in the pre-crisis summer of 2007,’ he added. ‘The changes in stamp duty for buy to let investors has meant that the property market has had the equivalent of an adrenaline burst to kick start what was already going to be an excellent year for house prices. Following this aberrant phase we may find that prices pause for breath, but the underlying fundamentals of cheap borrowing and tight supply will remain overall,’ he concluded. Continue reading
