Posts tagged ‘renting’

More than a third of landlords increasing rents

The cost of renting a home in the private sector edged ahead by just 1 per cent during the past year, Government figures showed today.

Renting 3

The increase means someone who was paying £500 a month in rent in June 2013, would now be paying £505, according to the Office for National Statistics.

Tenants in London saw the biggest increase during the 12 months, with their rents rising by 1.4 per cent.

At the other end of the scale, the cost of renting in the private sector rose by only 0.2 per cent in Wales during the same period, while in the North East and North West rents edged ahead by 0.3 per cent.

The pace at which rents rose in all regions of Great Britain was significantly below the rate of inflation as measured by the Consumer Price Index, was stood at 1.9 per cent in June, meaning being a tenant is getting cheaper in real terms.

The low increase in the cost of renting a property is good news for potential first-time buyers saving for a deposit.

The small rise is also unlikely to bother many buy-to-let landlords, who are still benefitting from strong growth in property values and record low interest rates.

Recent research from lender BM Solutions showed that rental yields remained strong at an average of 6.2 per cent during the second quarter.

The highest yields were seen in the North West, North East, West Midlands and Wales, while the lowest were seen in Central London, where house prices are highest.

Around 35 per cent of landlords said they had increased their rents during the past year, with 26 per cent planning to hike them in the coming six months.

Meanwhile, financial information group Moneyfacts.co.uk said the number of different buy-to-let mortgages available had increased to a level not seen since 2008.

The group said landlords currently had a choice of 665 different products, 43 per cent more than were available in July last year.

The increased competition in the market has also driven the interest rates charged on the loans down to a record low.

The average cost of a fixed rate loan is now 4.17 per cent, while the typical rate charged on a variable mortgage is 4.03 per cent.

Sylvia Waycot, editor at Moneyfacts.co.uk, said:“Lender interest in the buy-to-let market may be fuelled by the knowledge that it falls outside of the recent Mortgage Market Review.

“This makes the process of granting any buy-to-let mortgage quicker and simpler as it is not subject to the new affordability criteria that is starting to clog up the mainstream mortgage market.”

July 25, 2014 at 11:28 AM Leave a comment

What can you rent in Britain for monthly average of £745?

The average price of renting a property is currently £745 a month. But there is a huge variation in different parts of the country, with London costing £1,124 a month, while average rents in the East Midlands being almost half that amount at £575. What can a tenant rent around the country for £745?

1. Unfurnished two double bedroom flat in Manchester’s Stretford, with secure parking.

17.07.14 Rent 5

2. Modern three bedroom detached house in Warwickshire’s Rugby.

17.07.14 Rent 4

3. Two bedroom flat with driveway parking and communal gardens in Stafford’s Weston.

17.07.14 Rent 7

4. Unfurnished studio in a Grade II listed Regency building in Hove’s Palmeira Square.

17.07.14 Rent 1

5. A newly decorated two bedroom semi-detached house in Bristol’s Bradley Stoke.

17.07.14 Rent 2

6. Detached bungalow in York’s Appletree Village, with two double bedrooms, a single garage and maintained gardens.

17.07.14 Rent 6

7. Unfurnished two bedroom terrace house with new kitchen and bathroom in Chatham.

17.07.14 Rent 8

 

 

July 17, 2014 at 2:48 PM Leave a comment

Landlords’ profits reach four-year high at £20K a year

The cost of renting a home increased by 0.6 per cent during May as the returns made by investment landlords hit a four-year high, figures showed today.

Renting 3

The typical property in England and Wales cost £745 a month to rent in May, the highest level since December last year.

But despite the jump, rents have only risen by 1.1 per cent during the past year, compared with inflation of 1.5 per cent, as measured by the consumer prices index, according to LSL Property Services.

The group, which owns the UK’s largest lettings agent network, said it was the twelfth consecutive month in which annual rent rises had been below the rate of inflation.

In absolute terms, the cost of renting a home has risen by just £8 during the 12 months to the end of May.

David Newnes, director of estate agents Reeds Rains and Your Move, part of LSL Property Services, said: “Private renting is becoming cheaper in real terms. May’s latest sub-inflation rent rises will help over nine million tenants.

“To put that in context, this is more than a hundred times as many households as have benefited from Help to Buy in its initial stages so far.”

Landlords continued to make gross yields on a property of 5.1 per cent on average during May, unchanged from April.

But when house price growth was taken into account, along with void periods between tenants, total annual returns on a buy-to-let property soared to a four-year high of 12.2 per cent.

The figure was more than double the total return of 5.3 per cent recorded in the 12 months to May 2013.

As a result, the average landlord has seen a return of £20,133 in the past 12 months, with £8,107 coming from rent and £12,026 from capital appreciation.

Tenant arrears also improved during the month, with arrears standing at 7 per cent of all rent due, compared with 8.2 per cent a year ago.

Rents in seven out of 10 regions of England and Wales are now higher than they were a year ago.

The South West saw the fastest annual increase, with the typical monthly rent 3.9 per cent higher than it was in May last year at £657.

It was followed by the East Midlands, where rents have risen by 3.8 per cent in the past year to £575, and the North West, where they are now 2.3 per cent higher at £584.

But the annual rate at which rents in London are increasing has slowed down to 1 per cent, compared with a peak of 7.9 per cent in early 2013.

Despite this, London still remains the most expensive place to rent a home at an average of £1,124 a month.

Three regions of the country recorded rent falls during the past 12 months, with the cost of letting a home dropping by 3.6 per cent in the North East and by 2.3 per cent and 0.4 per cent in the East of England and West Midlands respectively.

 

June 20, 2014 at 7:00 AM Leave a comment

Cost of renting rises 10% to average of £777 a month

The cost of renting has soared by 10 per cent during the past year as the supply of properties fails to keep pace with tenant demand, research showed today.

Renting_560

The cost of renting has soared by 10 per cent during the past year as the supply of properties fails to keep pace with tenant demand, research showed today.

The typical renter paid £777 a month in April, rising to £1,464 for those living in London, according to letting agency network Sequence.

Despite the rising cost, demand for rental properties remained strong, jumping by 14 per cent during the past year.

But the supply of new properties to let coming on to the market failed to match the growing number of would-be renters, rising by just 1 per cent during the same period.

As a result, there were an average of five people looking to rent every property letting agents had on their books.

The situation was most acute in London, where demand for rental properties rocketed by 40 per cent in the year to the end of April, but the availability of rental homes actually dipped by 2 per cent.

Despite the mismatch between supply and demand, the number of new tenancies agreed rose by 20 per cent across the UK during the 12 months.

In London, the number of agreed tenancies surged by 41 per cent year-on-year, the biggest increase ever recorded.

Stephen NationStephen Nation, head of lettings for Sequence, said: “Activity in the rental market is at full throttle with annual growth across all key indicators.

“But whilst demand from tenants is up 14 per cent annually, the supply of property has crept up only marginally on April 2013, a trend which is driving up average national rents.”

He added that the strong figures showed that the rental market could boom at the same time as the property sales market.

The number of viewings made by tenants rose by 15 per cent year-on-year, but dropped by 5 per cent in April compared with the previous month.

The group said the monthly fall in viewings did not reflect a slowdown in the pace of the market, but rather the fact that prospective tenants realised they had to move fast if they were going to secure a property to rent.

Meanwhile there was a drop in the number of buy-to-let mortgage applications made during April, which the group claimed was a short-term consequence of the introduction of the Mortgage Market Review.

Mortgage applications were 1 per cent lower than in the previous month and 7 per cent down on April 2013.

The Government recently announced that letting agents will have to publish their fees in full in a bid to promote greater transparency.

But Deputy Prime Minister Nick Clegg said banning agents from charging fees to tenants, as Labour has called for, could lead to higher rents.

 

May 23, 2014 at 9:00 AM 1 comment

Letting agents will have to publish fees on their websites, says Nick Clegg

Letting agents will have to publish their fees in full in a bid to promote greater transparency, the Deputy Prime Minister said today.

Nick Clegg

Nick Clegg said agents would have to set out their fees both on their websites and in their offices as greater disclosure should keep costs down for tenants.

But he warned that banning agents from charging fees to tenants could lead to higher rents.

His comments come as MPs are set to vote on a Labour amendment to the Consumer Rights Bill, calling for letting agents to be banned from charging fees for renting out properties, in addition to requiring a deposit and the first month’s rent upfront from tenants.

Speaking ahead of the vote, Emma Reynolds, Labour’s Shadow Housing Minister, said: “Homebuyers rightly don’t have to pay the estate agent who is working on behalf of the seller of the property.

“However, in contrast, renters have to pay to get the keys to their rental property.

“The average upfront fees are £350 but in high demand areas, these fees can be much more expensive.”

She added that around nine million people in the UK currently rent a property through a private sector landlord, a third of whom are families with children.

But letting agents have responded angrily to the proposal.

Paul SmithPaul Smith, chief executive at estate agent haart, branded the amendment an “empty political PR stunt”.

He said: “Tenants receive a very good service, mostly to protect them and their interests, both physical and financial, and to ensure they have security of tenancy.

“That service comes at a real cost to agents and if we are unable to charge as an industry, there is a real danger agents will cut corners and reduce the quality of administration.”

He added that the fees covered the cost of obtaining references for tenants to ensure they were who they said they were and that they could afford to rent the property, as well as drafting the tenancy agreement.

David NewnesDavid Newnes, director of the largest network of letting agents in the UK including Your Move and Reeds Rains, owned by LSL Property Services, said:“It may seem that tenants would be better off if there were no up-front fees attached to arranging a proper legal tenancy.

“But unfortunately no Act of Parliament can magic this cost away – and in reality tenants could be far worse off.”

He pointed out that following a ban on tenancy fees in Scotland in November 2012, rents rose by 4 per cent in the space of just six months – 10 times the rate of rent rises in England and Wales over the same period.

The Consumer Rights Bill will have a third reading and be considered by the House of Lords before it becomes law.

May 13, 2014 at 4:41 PM 1 comment

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