Housing Market
News covering issues affecting the UK residential property market, house prices, interest rates and buying and selling trends.
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Britain’s biggest landlord increases rents 33%
One of the UK’s largest and most controversial private landlords is reportedly increasing rents across his 900 buy-to-let properties in Kent by up to 33 per cent. Fergus Wilson (left) told the press that when he let a three-bedroom mid-terrace home in Maidstone, Kent, last weekend, he managed to increase the rent from £900 a month to £1,200, thanks to a high demand from tenants, fuelled largely by an influx of eastern European migrants. He will now be seeking similar rent hikes across his residential property portfolio. He commented, “I will not be asking them to leave but will serve them with a Section 13 Notice to increase the rent so that they have the opportunity to move to another landlord should they wish. That is if they can find a house of the same quality and a price they can afford. By the time they have paid out fees etc, some will take the view there is not much in it.” Wilson said that he was increasing rents to ensure that his property empire remains profitable in light of the recent tax relief changes announced by Chancellor George Osborne, who has made it his goal to create what he…
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Supply of rental housing on the rise
The number of available private rented properties rose in July, the latest Association of Residential Letting Agents (ARLA) monthly Private Rental Sector (PRS) Report has revealed. ARLA registered letting agents, which managed an average of 189 properties per branch in July, compared to 178 in June, have continued to see increases in the cost of renting for tenants. Some 37 per cent of agents reported that rents rose between June and July; the highest number since tracking began in January, when levels were at 27 per cent. The report also revealed that tenants in the West Midlands have been affected the most by rent increases, with 64 per cent of agents reporting that rents had increased in July, followed by the East of England where 53 per cent of agents witnessed rent rises. In contrast, less than a quarter – 21 per cent – of tenants in the North West experienced an increase. But despite the rise in the volume of available private rented homes in July, it would appear that higher rental prices are deterring some tenants from moving home, with demand across the UK having fallen marginally in July to 35 prospective tenants registered per ARLA branch, down…
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Young investors set to fuel buy-to-let boom
Many young people may be struggling to get a foot on the housing ladder, but that does not mean that they do not recognise the potential benefits of investing in residential property. Fresh research provided by letting agent Rentify shows that nearly half – 49 per cent – of 18-39 year olds believe that acquiring buy-to-let property represents the best investment option in the UK today, with almost 4million people in this age group actively seeking to buy an investment property. With buy-to-let landlords having benefitted from a booming property market earning returns of up to almost 1,400 per cent since 1996 – capital growth and returns combined – it is easy to understand why it is an investment type that appeals to many people across all age groups, not just the young. George Spencer (left), CEO at Rentify said, “The fact that 49 per cent of first-time buyers would consider investing in buy-to-lets is fantastic and shows that there are more options out there and more people who want to get on the ladder.” But-to-let continues to beat returns on all other mainstream investments, including commercial property, UK government bonds, shares and cash, and that trend looks set to…
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First-time buyer activity hits pre-recession high
There was a sharp increase in the volume of first-time buyers in the UK in July, as the prospect of a rise in mortgage borrowing costs encouraged more young purchasers to acquire their first home. The latest First Time Buyer Tracker index from Your Move and Reeds Rains reveals that the number of first-time buyers reached their highest level in July since the recession, paying £161,985, on average, which is 8.9 per cent higher than in the corresponding month in 2014. Overall, there were 29,700 sales of residential properties to first-time purchasers in July, up 4.9 per cent month-on-month. This is in spite of the fact that the average first-time buyer now requires a deposit of £27,975, which is up 10 per cent compared with July 2014’s figure of £25,429. While rising deposit costs may have deterred some prospective purchasers in recent months, increasing real wages have enabled some first-time buyers “to shoulder the short term burden of a slightly higher deposit” to spare the risk of losing out on a good mortgage deal, according to Adrian Gill (left), Director of estate agents Your Move and Reeds Rains. He added, “This month’s particularly high transaction rate is also partially due…
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Residential transactions fall 4.4% – HMRC
The number of residential property transactions fell in July, the latest figures from HM Revenue and Customs (HMRC) has revealed, with 100,720 transactions recorded last month, up 0.2 per cent compared to the corresponding month in 2014. But HMRC’s seasonally adjusted estimate shows that the number of home transactions actually fell by 4.4 per cent between June and July. There were also 10.100 non-residential transactions, down from 10,460 from the previous month. The volume of non-adjusted residential transactions was 2.4 per cent higher than in June and 8 per cent higher than in July last year. The number of seasonally adjusted transactions has steady increased over the past seven years, according to the HMRC report, with the volume of seasonally adjusted transactions remaining broadly stable at around 100,000 per month. The latest figures reflect a “shift-change of late”, with property sales over the past couple of months “stepping up to the mark of last summer”, Peter Rollings (left), CEO of Marsh & Parsons noted. He said, “In July, sales may have slipped back slightly month-on-month, but we need to remember that the market was working overtime in June to regain lost ground lost before the election.” Doug Crawford (right), Chief…
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Average rents in England and Wales reach record high
Average residential rents in England and Wales rose above £800 for the first time in July following the fastest monthly increase since records began six years ago. The figures from the latest buy-to-let index from Your Move and Reeds Rains reveal that rents increased by an average of 1.9 per cent across England and Wales to £804 per calendar month in July, up from £789 the previous month and a rise of 6.8 per cent year-on-year. Rental price increases in July were led by London, where rents rose by an average of 12.1 per cent year-on-year, followed by the East of England, up 12 per cent to stand at £838pcm. A breakdown of the figures reveal that all 10 regions saw rents increase on an annual basis last month, with London, Yorkshire and the Humber (£582 on average), and the East (£584) and West Midlands (£583) all seeing record rent peaks. Two regions saw rents decline on a monthly basis, with a 0.1 per cent month-on -month fall in Wales and the East of England. Higher rents are unsurprisingly being fuelled primarily by the widening supply-demand imbalance in the rental market, according to Adrian Gill (left), Director of Reeds Rains…
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Housing completions soar in England
House building in England is now at its highest level since 2008 following a significant rise in the volume of new homes being developed, new Government figures show. In the year to June, 131,060 residential properties were completed, a rise of 15 per cent on the same period a year ago. The latest quarterly house building statistics from the Department for Communities and Local Government (DCLG) show that between April and June, the number of completions rose by 22 per cent year-on-year. The Housing Minister, Brandon Lewis (right), welcomed the figures, but admitted there was more to do, vowing that the Government would “deliver 275,000 affordable homes by the end of this Parliament”. However, the number of new homes being started dropped by 1 per cent over the year, to 136,320, and by 6 per cent on a quarterly basis. The data was described as “encouraging” by Henry Gregg (left), the National Housing Federation’s(NHF) Assistant Director of Campaigns. But he also said that it was crucial that we as a nation continue to increase our efforts “to build the homes that are desperately needed”. He commented, “Last year alone we built less than half of the homes needed, pushing house…
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Mortgage approvals surge
There was a significant rise in the volume of mortgage deals secured in the first half of August, with early indications suggesting that this could be a record month for mortgage approvals. With property buyers and existing homeowners not wanting to miss out on record low mortgage borrowing rates, conveyancing firm QCAS has suggested that we could see record transactions this month following a sharp increase in the number of mortgage deals for August so far – already the highest since 2010. Victoria Mortimer, Head of QCAS, the conveyancing division of corporate law firm Shulmans LLP, said, “Normally transactions are low in August due to holidays, but we’ve got more work on than ever compared with the same time in previous years. As a national, large scale conveyancer we are well placed to spot emerging trends and there’s no doubt about this one. People are getting their finances sorted before the end of the year.” Mortimer described activity levels over the past 12 months as “incredible”, with her firm having handled more than £3 billion worth of property transactions during that time. “We believe this is due to a combination of factors; there are some great deals out there at…
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The growing supply-demand imbalance is pushing up residential property prices
Residential property prices look set to increase further this year, as demand from buyers continues to heavily outstrip the supply of homes coming on to the market, the latest residential market survey from the Royal Institution of Chartered Surveyors (RICS) has revealed. The report shows that while 44 per cent more chartered surveyors saw prices rise in July, the supply of homes coming onto the market continued the drop with 22 per cent more surveyors reporting a decline in fresh instructions. Furthermore, the shortage of housing inventory worsened further during July, with the average volume of homes for sale per surveyor falling to an all-time low. As a result, all areas of the UK are now expected to witness property price growth over the next 12 months, with the greatest level of confidence currently being seen in East Anglia and Northern Ireland. RICS expect home prices to be pushed higher on the back of the growing supply-demand imbalance, with 41 per cent of members expecting prices to continue to appreciate over the next three months. Increasing prices does not appear to have deterred buyer interest, with new purchaser enquiries growing for the fourth consecutive month, with 25 per cent of…
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Repossessions fall to historic low
Repossessions in the UK dropped to the lowest level since records began in 2008 during the second quarter of 2015, the latest data shows. The figures from the Council of Mortgage Lenders (CML) reveals that the repossession rate in the last quarter was just 0.02 per cent, which is equivalent to just one in 5,000 mortgages and the data from the CML revealed that arrears also continued to drop. Record low interest rates were a major factor in helping homeowners stay on top of their mortgage payments in the second quarter of the year, along with falling unemployment and a strengthening domestic economy. In total, there were 2,500 properties taken into possession in the second quarter, down from 3,000 the previous quarter and 5,400 in the second quarter of 2014. Of these, 1,800 were in the owner-occupier market and 700 in the buy-to-let market. In terms of arrears, the total number of mortgages with arrears equivalent to 2.5 per cent or more of the mortgage balance was 106,400, or 0.96 per cent of all mortgages, which again, was the lowest rate since quarterly records began seven years ago. Of all loans with arrears of over 2.5 per cent of balance,…
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