First time buyer numbers reached an eight month high in the UK in July

The supply of properties available to buy in the UK increased in July, while demand from buyers fell, according to estate agents.

However, first time buyers were able to take advantage of the trend with the number of sales made to the group rising to an eight month high, according to the latest monthly analysis report from the National Association of Estate Agents (NAEA).

In July, the number of properties available per estate agent branch increased for the third month in a row, rising from an average of 33 per branch in April, to 37 in May, 39 in June and 41 the previous month.

The report points out that year on year this is a 17% increase, as agents had just 35 properties available to market in July 2017.

Overall, the number of house hunters registered at estate agents fell for the second month running with 303 registered per branch in July, the lowest recorded since December 2017 when agents had 268 on their books.

But the NAEA pointed out that this is typical of July, as house hunters put their plans on hold while summer holiday season takes priority. For the last three years, demand has dipped in July compared to June.

Some 30% of all sales were to first time buyers in July, an increase of 1% from June and up 7% from July 2017 when just 23% of sales were made to the group.

‘What we saw in July was typical of the summer. House hunters put their plans on hold as the holiday season takes priority, and demand dips as a result,’ said Mark Hayward, NAEA chief executive.

‘We don’t usually see first time buyers taking advantage of this environment and pushing to agree sales while sellers are on the back foot. In September, buyers typically storm the market in a bid to complete sales in time for Christmas, so first time buyers should make the most of the slower market while they can,’ he added.

https://www.propertywire.com/news/uk/first-time-buyer-numbers-reached-eight-month-high-uk-july/

Buy to let investors in UK are younger than a decade ago

The average age of buy to let buyers in the UK has fallen by 10 years since 2014, according to a new piece of research.

The analysis of the demographics of its buyers over the last four years, yieldit found that the total average age of purchasers had dropped from 52.3 to 42, indicating a shift in the sector.

Whilst property investment has traditionally been viewed as a business for older generations who benefit from already having a foothold in the market, this new data shows that this might well be changing as younger people recognise the strength and rewards of investment in the sector.

Further analysis of the numbers shows that the drop in age is present across both residential and student buy to let, but is more pronounced in residential sales where the average age dropped from 57.5 to 40.9 compared to 52.3 to 44.2 in the student market over the same period.

‘Investing in bricks and mortar is as popular as ever and although a small number of our buyers are owner occupiers, the majority are property investors looking for tenanted buy to let,’ said head of sales at yieldit, Ryan Hughes.

‘Rising tenant demand and record house prices continue to attract a broadening number of people to the market, including a burgeoning number of first time investors. The figures just go to show that the classic portrait of a landlord is changing, something that we believe can only strengthen and revitalise the market,’ he added.

https://www.propertywire.com/news/uk/buy-let-investors-uk-younger-decade-ago/

BTL landlords selling up in droves, says Belvoir

There has been a significant increase in the number of buy-to-let landlords selling up, along with a notable reduction in the volume of people investing in the Private Rental Sector (PRS), according to Belvoir.

The letting agency reports in its Q2 rental index that landlords are exiting the market mainly due to punitive tax changes.

Belvoir’s findings compliment various reports that suggest landlords are leaving the market in large numbers.

According to the latest residential property forecast from the Royal Instituted of Chartered Surveyors (RICS), rents are forecast to see strong growth over the next five years as a consequence of the reduction in the number of new properties available for renting.

The trade body predicts that national rents could rise by as much as 15% between now and mid-2023.

RICS warns that many prospective tenants now face having to bid against each other, pushing rents up in the process, as a result of falling supply caused by a jump in the number of buy-to-let landlords exiting the PRS, due to the government’s draconian tax changes.

Belvoir CEO Dorian Gonsalves commented: “Although government policies such as a loss of mortgage tax relief, and increased stamp duty on second homes is hurting landlords, they still have a choice as to how to invest their money, whereas tenants have little or no choice of where to rent due to a reduction in supply.

“Belvoir’s Q2 rental index revealed just a slight increase in average rental inflation across the UK, with a similar number reporting static rents, but if landlords continue to sell up because their business model in the PRS is being continually attacked, it will undoubtedly result in a further shortage of properties, and inevitable increases in rents, as predicted in the latest RICS report, which stated that rents are likely to rise by 15% over the next five years.”

Concerns about the possibility of mandatory three-year tenancies may also deter people from investing in the BTL sector, and this could genuinely lead to an increase in homelessness, according to Gonsalves.

Although many landlords are not actively against three-year tenancies, Gonsalves pointed out landlords do understandably need reassurance that they can gain possession of their property when needed, and will be “protected against tenants who do not pay their rent, or abuse a property or indulge in anti-social behaviour”.

Belvoir is urging the government to do more in the Autumn Budget to address stock shortages in the UK, by incentivising the new build sector with low maintenance homes through more Help to Buy and Buy to Rent schemes to provide more homes to own.

Gonsalves continued: “Landlords also need rewards and incentives to encourage them to remain in the PRS, such as reversing current tax increases and introducing tax breaks, as well as initiatives such as tax incentives for landlords who buy large properties and turn them into several affordable and low maintenance flats suitable for the rental sector.

“It is anticipated that more landlords will make a decision about whether to retain their portfolio in 2019, when tax bills have been calculated and the true extent of any further erosion to their profits is seen.

“The Autumn Budget is the perfect time for the government to introduce the incentives that landlords who offer good quality properties at a reasonable rent really need.”

https://www.landlordtoday.co.uk/breaking-news/2018/8/btl-landlords-selling-up-in-droves-says-belvoir

Halls and university accommodation:how much it costs to rent a room at the UK's top 30 universities

The study shows students living near Imperial College London pay nearly £700 a month more than those studying at Durham University.

Students up and down the country received their A-level results this week, with those who got the grades now busy planning their university lives.

The sky-high cost of tuition fees is well-known but living costs, especially accommodation, also sets students and their parents back thousands, affecting where they choose to study.

Flatshare site SpareRoom researched the average monthly rent of a room in a shared house at the UK’s top 30 universities and found that students living near Imperial College London pay nearly £700 a month more than those studying at Durham University.

Over the course of a three-year degree, this totals a massive £24,000.

Dundee is the most affordable university town, with average monthly rents of just £345 for students choosing University of Dundee.

Those studying at the highly-regarded University of St Andrews in Fife also get one of the best-value deals, paying £349 a month, as do students at Durham and Newcastle (£370 and £371 respectively).

Unsurprisingly, London students face the most eye-watering rents.

Prices near the aforementioned Imperial College London in South Kensington average at £1,056 a month - the highest of the top-ranked unis - while students at King’s College London and the London School of Economics and Political Science must fork out £1,039 to live on the doorstep of their central London lecture halls. 

Students heading to the University of Surrey in Guildford, 30-minutes from London by train, pay the highest rents outside the capital at £599 a month on average.

Those who survived Oxford and Cambridge’s rigorous interview process will also need to battle high rents in their university towns - £568 and £576 respectively.

Matt Hutchinson, director of SpareRoom, got into the University of Leeds through clearing and “had the time of his life”, largely thanks to low average rents (currently at £391 a month) leaving him with more cash to spend on having fun. 

He said: “Choosing where to go to uni is a big decision, a decision that doesn’t just affect the quality of your degree but can also have a huge impact on the size of your graduate debt."

“By weighing up your options based on rents as well as rankings you could save yourself thousands of pounds over the course of your degree," says Hutchinson.

https://www.homesandproperty.co.uk/property-news/renting/halls-and-university-accommodation-how-much-it-costs-to-rent-a-room-at-the-uks-top-30-universities-a123181.html

Average asking prices in Britain down 2.3% month on month in August

Average asking prices in Britain fell by 2.3% or £7,218 this month, and are down by 0.1% compared to August last year at £301,973, the latest index shows.

Sales are also down, with a fall of 0.8%, according to the Rightmove house price index which suggests that it is a seasonal downturn and the market is likely to pick up again in the autumn.

It explains that the fall in new seller asking prices maintains the historical trend of sellers coming to market in the peak summer holiday month pricing aggressively to try and secure quicker sales.

The 2.3% drop is slightly bigger than the 2.1% fall in August 2017, with the major drag on the national average being the more subdued market in London and the commuter belt region of the South East. If those two regions are excluded then the rest of the country has a monthly drop of 1.5%.

‘Sellers who come to market in the peak holiday month often have a pressing need to sell and price down accordingly, and are offering summer sale prices to entice holiday distracted buyers,’ said Miles Shipside, Rightmove director and housing market analyst.

‘The market started its most recent cyclical price upturn in 2010, and since then the average price of property coming to market has gone up by 32%, stretching buyer affordability. More substantial discounts are therefore required to tempt warier buyers, with higher house prices also tightening the purse strings of lenders,’ he pointed out.

‘With lacklustre average wage growth, more buyers are bumping up against the tighter lending criteria brought in four years ago following the mortgage market review, which were intended to prevent another boom and bust cycle,’ he added.

A breakdown of the figures shows that asking prices fell month on month by 3.8% in Scotland to £152,899 but are still 3.8% above a year ago while they fell by just 0.1% on a monthly basis in Wales to £196,278 and are 4.9% up year on year.

The biggest monthly fall in England was in London where asking prices were down by 3.1% to £609,205 and they are 1.2% down year on year. They also fell considerably in the South East, down 2.3% month on month to £402,562 and they are up just 0.6% year on year.

Overall, year on year new seller asking prices are muted at 1.1% higher than a year ago, which Rightmove says helps buyer affordability. Sales agreed numbers are broadly flat, down by 0.8% compared to this time last year, and as 2018 progresses they are improving compared to their position earlier in the year.

Shipside believes that the bad weather in March and April was a factor in sales agreed numbers being down by 5.4% year to date but they are on an upward trajectory and are now 3.5% down year to date.

‘Overall in spite of political uncertainty sales agreed are holding pretty steady and it is usual for there to be an upturn in prices and buyer activity as we head into the Autumn season, especially if sellers maintain their cheaper pricing to attract buyers,’ he explained.

https://www.propertywire.com/news/uk/average-asking-prices-britain-2-3-month-month-august/

Summer slowdown hits lettings market says Agency Express

The lettings sector is in the midst of a summer slowdown with no pick up in activity expected until next month, Agency Express says.

The board company’s Property Activity Index has revealed a slowdown with national month on month figures for properties ‘To Let’ dropping 2.7 per cent compared to June, while properties ‘Let’ are 1.4 per cent lower. 

However, the index’s historical data shows the decline in ‘To Let’ properties to be less than figures recorded this time last year. 

Of the 12 regions recorded by index, four reported increases in new listings ‘To Let’ and five reported increases in properties ‘Let’.

The North East sat at the top of this month’s leader board. Following a slowdown in June the region bounced back with new listings up 15.2 per cent and properties ‘Let’ rising by a remarkable 34.2 per cent - this is the largest increase for July since 2015.

The largest declines in this month’s index were made in Yorkshire and Humberside. Figures for properties ‘To Let’ fell 11.8 per cent and properties ‘Let’ by 19.8 per cent. 

London followed suit with a 13.3 per cent drop in properties coming to the lettings market. 

“This month we have seen slower movement throughout UK lettings market but declines are expected during the summer holiday period. While we do expect to see some increases in August we don’t envisage a real pickup in activity until September” according to Stephen Watson, managing director of Agency Express.

https://www.lettingagenttoday.co.uk/breaking-news/2018/8/summer-slowdown-hits-lettings-market-says-agency-express

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Lettings deposit system in the UK is described as broken and in need of urgent reform

The lettings deposit system in the UK is broken, placing financial pressure on tenants in the private rented sector and needing urgent reform, according to a new report.

Some tenants face waiting weeks to get their money returned or having to challenge charges that they feel are unreasonable, according to the study from consumer group Which?

It found that 43% of renters that faced moving costs used a credit card, loan or overdraft, or borrowed money from family and friends, to cover the cost of moving into a property.

Among tenants who had moved out of a rented property in the last two years, 16% who received their deposit back said it took more than four weeks to do so, with 31% of tenants having to pay a new security deposit when they didn’t have their previous one back.

The report also highlights issues tenants face with deposit deductions. Over half of tenants, some 55%, who didn’t get their money back in full challenged the decision.

The top reason for a deduction concerned issues over cleaning which affected 50% while damage to the property affected 32%. However, 81% of tenants who faced a deduction for cleaning, and 75% of those who faced a deduction for property damage thought this was unreasonable.

Some 9% of tenants said that the landlord or agent gave no reason for why deductions were made and Which? says that the results highlight a lack of clarity about what deposit money can be used for.

For example, 62% of landlords incorrectly believed it could be used for unpaid utility bills. As a result, Which? believes tenants and landlords need clearer guidance on what reasonable deductions can be made.

The organisations suggests that clarity and transparency should also help to improve trust in the deposit adjudication system, as currently just 33% of tenants who raised a dispute said that they were satisfied with their deposit scheme.

Which? believes the Government must review the deposit adjudication schemes to ensure they are working in the best interests of tenants, and must provide renters with an effective route to escalate issues with the deposit adjudication service if they do not feel their complaint has been adequately dealt with in house.

It calls for a review pf the current cash based deposit system, and suggests that the Government should consider possible alternatives to avoid tenants having to cover two deposits when moving between properties. These include new insurance-style options and direct transfer of deposits between properties.

The report suggests that all landlords should be required to register with local authorities, with information logged on a publicly available database and linked to the existing register of rogue landlords and agents established in April 2018.

It also suggests the creation of an independent regulator for lettings and management agents with a mandatory, legally binding code of practice and strong penalties for rogue operators and a review of tenancy agreements used by letting agents to establish how widespread use of unfair, inaccurate or misleading terms and conditions is and if further action, for example an investigation by the Competition and Markets Authority, is required.

‘The number of people going into debt to cover the cost of a new deposit is concerning, particularly when you consider that many are forced to wait a significant time to get their previous one back, and could then face deductions that they don’t think are reasonable,’ said Alex Neill, Which? managing director of home products and services.

‘The findings highlight how the deposit system is crying out for reform so that it is fit for purpose for the record numbers of people who are living in rented accommodation. We believe that the Government must tackle the issues that we have identified in our report head on to ensure that the rental market delivers for consumers,’ he added.

https://www.propertywire.com/news/uk/half-uk-landlords-optimistic-outlook-buy-let/

Average rents edged up 0.2% year on year in Britain in 12 months to July

The average cost of a new let in Britain increased to £964 per calendar month in July but the pace of rental growth continued to slow to 0.2%, the latest lettings index shows.

Wales recorded the highest rental growth with rents up 4.9% year on year to 680, followed by the Midlands up 2.4% to £684 while the South West and the North both saw a rise of 0.9% to £1,042 and £638.

The index from Hamptons International also shows that rents increased on an annual basis by 0.7% in the East of England to an average of £950 per calendar month and by just 0.2% year on year on Scotland to an average of £649.

But in London rents were down by 1.6% year on year to £1,682, the second month in a row that they have fallen. Within Greater London rents fell by 1.7% in inner London to £2,582 and were down by 1.5% in outer London to £1,511.

‘Rental growth slowed to 0.2% across Britain in July. Falls in London were offset by higher growth in the rest of the country. Inner London experienced the greatest fall, with rents decreasing for the third consecutive month,’ said Aneisha Beveridge, analyst at Hamptons International.

This month’s report also looked at the number of overseas landlords in the lettings market and found that in the first half of 2018 the proportion of international based landlords in Britain fell to 6%, a record low.

Overall, the proportion of rental homes let by a landlord based overseas has halved since the first half of 2010 when the firm’s records began. In the first six months of 2010 some 13% of homes let in Britain were owned by an overseas landlord, more than double the proportion in the same period of 2018.

Over the last year the proportion of homes let by an international landlord has fallen a further 2%, a record low across Britain. But London has seen a pickup in international based landlords this year.

Indeed, the proportion of London homes let by an overseas landlord peaked at 20% in the second half of 2011, but fell back to 7% in the second half of 2017, the lowest point on record. However, unlike the British average, London saw a 5% rise in the proportion of homes let by an overseas landlord between the second half of 2017 and the first half of 2018.

In the first six months of 2018 some 12% of homes let in the capital were owned by an overseas based landlord, the highest proportion in the country. While at 3%, the East Midlands has the lowest.

Nearly half of international landlords are based in Western Europe at 44%, with 16% in Australasia, 14% in North America, 12% in Asia and 9% in the Middle East. But in London, 30% of international landlords are based in Western Europe followed by 20% from Asia.

According to Beveridge higher stamp duty and annual tax on enveloped dwellings (ATED) combined with a steady increase in foreign investors’ tax bills has led to a decline in foreign investment in buy to let. Overseas investors have also seen the removal of capital gains tax exemptions since 2015.

‘However over the last year, London has bucked the trend with a pickup in international landlords. Sterling’s depreciation, effectively offering international buyers a discount, combined with a softening London market, has helped offset the additional higher costs of owning a buy to let property in the capital for foreign investors,’ she said.

https://www.propertywire.com/news/uk/average-rents-edged-0-2-year-year-britain-12-months-july/

Short lets - look before you leap, top agent advises landlords

One of the country’s largest independent property management firms says it’s seeing a clear shift within the rental sector from traditional long-term lettings to short lets via Airbnb and similar platforms.

DJ Alexander Ltd, which manages over 5,000 properties, says the shift has been prompted by the raft of new taxes and regulations on individual landlords.

David Alexander, the firm’s managing director, says Airbnb has made short lets a viable alternative to traditional buy to let rentals, with the bonus of higher daily income. 

“But you need to realise that your lender must be told if you are making this change; your insurers needs to be informed; there may be considerable dead periods when you aren’t earning; the maintenance costs will be higher as you have beds to change and properties to clean; and Airbnb, although in the ascendant at the moment, is coming under considerable pressure from numerous local authorities around the UK and abroad” he cautions.

Alexander’s comments come after research by the Residential Landlords Association which shows seven per cent of landlords moving from long term to short term lets, and data from Airbnb suggesting the platform now boasts 168,000 listings across the UK.

“You may find that you make more money from [short lets] April to September but that the winter is completely dead in which case your earnings may balance out. The problem is that there is more work involved in dealing with 50 guests a year than in two permanent clients staying for a year. It is a balance and will depend on your expectations, your current experience of where your property income is going, and your location” Alexander warns.

“The issue for any wavering landlord contemplating the move from long to short term letting is the level of return, the guarantee of occupancy, the limiting of regulatory and financial restrictions, and the impact on the long-term value of the property investment. I would urge landlords thinking of this step to think long and hard before making a leap into the unknown. It will work for some but could be a mistake for others.”

https://www.lettingagenttoday.co.uk/breaking-news/2018/8/short-lets--look-before-you-leap-top-agent-advises-landlords

Average residential rents reach a new monthly high in London

The average rent in the UK increased by 1.3% in the 12 months to July while in London alone they were up by 3.3%, surpassing £1,600 a month for the first time, the latest index shows.

UK wide the average rent is now £937 but when London is excluded it is £777, up by 1% on last year, according to the index data from tenant referencing firm HomeLet. At £3,615, the average London rent has set a new record.

The region with the largest year on year increase in rent was Northern Ireland with a 4.5% increase in average rental prices while month on month the biggest increase was 2.6% in the South East.

Whilst nine of the regions identified by the HomeLet Rental Index saw rents rise this month, Scotland, the North East and the East of England saw rents fall from June to July 2018.

Rents were down month on month by 0.3% in Scotland to an average of £651 but are still 3.3% higher than July 2017. In the North East they fell by 0.8% on a monthly basis to £525 and are 0.2% down year on year while in the East of England they fell 0.7% month on month to £909 and are down 1.1% on an annual basis.

Rents in Wales and the South West also fell year on year by 0.3% to £611 and by 0.6% to £818. But in Wales they increased 1.3% month on month and were up by 1.5% month on month in the South West.

The highest rent in London is now £2,307 in the borough of Westminster, followed by £2,213 in Camden and the City, while the lowest rent is £1,078 in Croydon, followed by £1,209 in Barking, Dagenham and Havering.

https://www.propertywire.com/news/uk/average-residential-rents-reach-new-monthly-high-london/

Revealed - how interest rate rise led to immediate £50 pcm rent hike

Controversial landlord Fergus Wilson has increased rents on all new tenancies in his property portfolio by £50 a week because of the base rate change announced by the Bank of England.

The change was announced by the BoE’s monetary policy committee last Thursday at noon and, within an hour, Wilson issued a statement saying that new tenancies would be increased £50 per month.

“It is for all new tenancies. Any existing tenants do not get an increase until the renewal date - any tenant that has already signed is immune for six months. All new tenancies will be offered at a greater rent by £50 a month” he says.

Wilson adds that he signed a new tenancy at 10.30am on Thursday - 90 minutes before the base rate announcement - and this will stick at the figure. “It will then go up by £50 after six months” he says.

He describes the increase as “merely passing on to the tenant the additional mortgage charge.”

The Bank of England’s decision to increase interest rates by 0.25 per cent is another blow to buy to let investors already hit by recent fiscal changes and new regulations, according to accountancy and tax advice consultancy Blick Rothenberg.

“For many people who were getting no return on their capital due to long term low interest rates and decided to invest in buy-to-let properties this will be another blow. They wanted to get better returns and for many it was also part of their retirement plans” explains one of the consultancy’s managers, Paul Haywood-Schiefer.


https://www.lettingagenttoday.co.uk/breaking-news/2018/8/revealed--how-the-interest-rate-rise-led-to-an-immediate-50-a-month-rent-hike

House prices gain momentum in July

House prices gained a bit of momentum in July after rising at their slowest annual rate in five years in June, mortgage lender Nationwide said on Wednesday.

Nationwide said the annual increase remained in the narrow 2-3pc range of the past 12 months and the lender still expected prices to rise by only 1pc in 2018.

Britain's housing market has slowed since the 2016 referendum decision to take the country out of the European Union. Eight months before Brexit is due to happen, Prime Minister Theresa May has still to agree with the EU about Britain's future trading relationship with the bloc.

House prices across the United Kingdom were on average 2.5pc higher than in July last year, faster than growth of 2.0pc in June and above a forecast for a 1.9pc rise in a Reuters poll of economists.

In monthly terms, prices rose by 0.6pc in July from June, faster than a forecast of 0.2pc.

Nationwide economist Robert Gardner said an expected interest rate hike by the Bank of England on Thursday was likely to have only a modest impact on the housing market because most mortgages issued in recent years were on fixed interest rates.

However, around 12pc of homeowners already spend more than 30pc of their gross income on their mortgage and "for those, some of whom will be on variable rates, any rate rise will be a struggle, even though the impact on the wider economy and most households is likely to be modest", Mr Gardner said.

https://www.telegraph.co.uk/property/house-prices/british-house-prices-gain-momentum-july/

Landlords could save more than £1,300 a year on letting agent fees – claim

Buy-to-let landlords could save hundreds, if not thousands of pounds every year by not instructing a letting agent to let their property.

The latest data from HomeLet shows that the average UK monthly rent in June was £924, and so based on a typical high street letting agency management fee of around 12%, the average landlord could be spending in excess of £1,300 each year on letting agent fees, according to HomeRenter.

The company is keen to deter landlords from using high street letting agents as it wants to encourage more people to sign up to its online rental platform, which aims to cut out the middle man, and is available from £49.99.

HomeRenter is currently offering a six-month free trial which includes 30 days of free advertising on Rightmove and Zoopla, a viewings service, tenant enquiry management and referencing tools, access to digital lease contracts and a To Let board.

“Our offer is open to the full spectrum of rental homes from buy-to-let investments, second homes, through to rooms to let in house-shares by live-in landlords and HMOs,” said Will Handley, CEO and co-founder of HomeRenter.

He added: “Thanks to Section 24 and a raft of tax measures penalising the buy-to-let sector, private landlords are having an incredibly tough time of it in 2018 so we like to think our summer free trial promotion could be a real fillip for landlords looking to take a break from sky-high letting fees.”

https://www.landlordtoday.co.uk/breaking-news/2018/7/landlords-could-save-more-than-1-300-a-year-on-letting-agent-fees--claim