Rents in Britain up by average of 5.75% year on year

Average rents in Britain increased by 5.75% year on year in the first quarter of 2017 to £770
although there is some regional variation, according to the latest index figures.

Some areas of the South East reported slight falls in rent and other areas, such as the East Midlands and Yorkshire saw increases of over 7% year on year in the first three months of the year compared with the same period in 2016.

The rental index from lettings agents Belvoir is based on average advertised monthly rents, which are obtained from property portal Rightmove and since it began in 2008 rents have moved broadly in line with wages and large movements over and above 5% rarely happen.

According to Belvoir chief operating officer Dorian Gonsalves there are several reasons for rental increases of over 7%. He said that they have been pushed up by a rise in HMOs and some Belvoir offices experienced an increase in premium properties, which can affect the data. For example, if the majority of an agent’s properties rent at £600 per month, and they take on a premium property at £2,200 per month, this impacts on the average.

‘Interestingly, a new, non-statistical trend has been observed. Belvoir offices are reporting a large rise in areas with low availability of properties, particularly in market towns. This is down to a lack of new landlords bringing new stock to the market, which we believe is directly related to recent tax increases such as the 3% stamp duty on buy to let homes and changes to the way mortgage interest tax relief is treated,’ Gonsalves explained.

‘As a result of this stock shortage, properties are often rented to the highest bidder, typically the wealthier tenant, which is raising rents beyond the traditional 4% to 5% plus or minus trend,’ he added.

Belvoir has found that the average number of offices seeing landlords add six to10 properties has fallen from 15% in the second quarter of 2016 to 10.9% an d the number of landlords selling property has also fallen. Gonsalves suggests that there has been a fall in new landlords entering the market but no big sell off by current landlords.

Belvoir offices reported that 43% of tenants are staying between 13 to 18 months, 29% are renting for 19 to 24 months and 18.2% are renting for over two years.

The report also shows that average void periods seem to currently be on the increase with more properties, some 60%, taking up to two weeks to let whereas less are being let within a week, suggesting a slight slowdown in tenant demand.

However, despite increases in rents in some regions, rent arrears are not increasing, and Gonsalves said this suggests that tenants are currently coping with landlord rent rises.

Looking ahead to the general election outcome, he pointed out that whilst some initiatives may help some tenants, the general view seems to be to ‘curb’ smaller buy to let investors in favour of large landlords.

‘This could cause a further decrease in stock levels, making it much tougher for tenants to secure a property, especially as demand is expected to continue to increase over the coming years,’ he explained.

‘All parties are promising an increase in the building of new homes, but the reality is that unless land is sold or developed at a discount, it will be quite difficult to provide rents at anything less than existing landlords are doing. This is already the case in London where large landlords, who are backed by the Government, or Housing Associations and are now entering into the private rented sector can make renting viable at existing market rents,’ he added.

http://www.propertywire.com/news/uk/rents-britain-average-5-75-year-year/

Landmark moment as average rents fall for first time in eight years

By Conor Shilling

Average UK rents fell in May, according to the latest HomeLet Rental Index.

The figures show that the average UK rent on a new tenancy last month was £901, 0.3% lower than the figure for May 2016.

HomeLet says the pace of rental inflation across the UK has been slowing in 2017, after peaking at 4.7% last summer.

Last month the firm reported that average London rents fell for the first time in almost eight years during April.

And the situation in the capital did not improve during May. The average rent on a new tenancy in London was £1,502, 3% lower than the same month last year and 1.1% lower than in April 2017.


Average rents on new tenancies also fell on an annual basis in the North East, Scotland, South East and Yorkshire and Humberside.

"Landlords are now facing a difficult balancing act between ensuring rents are affordable for tenants in a low real wage growth environment whilst covering their own rising costs," says HomeLet chief executive Martin Totty.

"Any constraint to the supply of rental properties, because landlords are unable to achieve the reasonable returns they require, cannot be in the long term best interests of tenants, especially if, as we’ve now heard from all the main political parties, the UK’s population continues to grow.”

HomeLet's figures for May are reproduced in full below:

https://www.lettingagenttoday.co.uk/breaking-news/2017/6/landmark-moment-as-average-rents-fall-for-first-time-in-eight-years

House prices show longest sustained fall since 2009 crash

By Richard Dyson

Prices have fallen for three months in a row, Nationwide data shows

House prices fell for a third month in a row in May, registering the biggest sustained decline since the post-crisis slump of 2009.

The data, from Nationwide Building Society, saw prices across the country dropping by 0.2 percent month-on-month in May. This followed falls of 0.2pc and 0.3pc in April and March respectively..


House prices are still a narrow 2.1pc higher than at this time last year, but this figure is the smallest measure of growth in four years.

Nationwide said the data "provides further evidence that the housing market is losing momentum".

The lender's economist Robert Gardner said "Moreover, this may be indicative of a wider slowdown in the household sector, though data continues to send mixed signals in this regard."

It attributed the weakening in the market to uncertainty around Brexit and the election as well as a rise in living costs and an affordability squeeze caused by historically high prices relatives to incomes.

But "subdued" building would limit supply to the market and could provide support, Mr Gardner said. He cited high levels of employment as further support.

“While real incomes are again coming under pressure as inflation has overtaken wage growth, the number of people in work has continued to rise at a healthy pace. Indeed, the unemployment rate fell to a 42-year low in the three months to March.

The election was not likely to be a major factor in the market, he said.

“If history is any guide, the slowdown is unlikely to be linked to election-related uncertainty. Housing market trends have not traditionally been impacted around the time of general elections. Rightly or wrongly, for most home buyers, elections are not foremost in their minds while buying or selling their home.

Russell Quirk of online agency eMoov said: "Nationwide havs been quick to highlight that previous elections have had little impact on traditional house price trends.

"It’s fair to say, however, that previous years were more routine than a snap election called in the middle of negotiations to leave the EU.

"House prices, along with the gap when compared to earnings, have continued to increase and such a pattern is unsustainable in the long term."

http://www.telegraph.co.uk/property/house-prices/house-prices-show-longest-sustained-fall-since-2009-crash/

NALS wants 'rogues database' extended to include more agents

By Graham Norwood

The National Approved Lettings Scheme has called for the London Mayor’s new rogue agents’ database to be extended to include those agencies that do not display fees or do not belong to a mandatory redress scheme.

Yesterday Letting Agent Today reported on an initiative from Sadiq Khan to create a capital-wide database, published on the Mayor’s website, naming criminal landlords and letting agents who have been successfully prosecuted for housing offences.

Khan says it will give Londoners greater confidence when renting, allowing them to check a prospective landlord or agent before moving into a property, and acting as a deterrent to the minority of landlords and agents who behave dishonestly.

Now NALS chief executive Isobel Thomson wants this to go further.


“NALS fully supports any measures that improve the private rental sector” she says.

“The criminal landlords and agents database will place a spotlight on the inconsistent approach to housing regulation across London. About 80 per cent of housing prosecutions are taken by just five boroughs, while others take no prosecutions. Councils must up their game to tackle the rogue element of the market” she adds.

But she wants the Greater London Assembly and Khan to go further and to consider adding agents who do not display fees or fail to belong to a redress scheme to the database in order to protect consumers.

"It’s vital too that the GLA develop a more consistent approach to property licensing schemes. Every scheme in London has different terms and conditions, criteria and geographical coverage with no consistency in application process or fees. This has to change” Thomson says.

The Association of Residential Letting Agents and the National Landlords Association backs the Mayor’s scheme, but the Residential Landlords Association has criticised the proposal for duplicating pledges made by the Theresa May government.

https://www.lettingagenttoday.co.uk/breaking-news/2017/4/nals-wants-rogues-database-extended-to-include-more-agents

Buy-to-let lending ‘unlikely to recover in the near future’

By Marc Da Silva

The UK property market continued to rally last month, with gross mortgage lending surging by 19% compared with February, but it is becoming more ‘complicated’ for buy-to-let landlords to access the finance they need to add to their property portfolios, according to the latest data from the Council of Mortgage Lenders (CML).

Various tax changes have had an adverse impact on the buy-to-let market, as reflected by the fall in transactions in the sector, and the signs are that the market is not likely to pick-up any time soon.

“Buy-to-let lending is unlikely to recover in the near future,” said Paul Smith, CEO of haart estate agents. “The tax changes brought about in April heaped more strain on Britain’s landlord population.”

“We need see the government incentivising home movers, and not just penalising investors,” he added.

Also reflecting on the latest mortgage lending data, John Goodall, CEO and co-founder of buy-to-let specialist Landbay, commented: “Following the recent changes to buy-to-let tax relief and the introduction of tighter underwriting criteria, it is becoming even more complicated for aspiring homeowners and landlords to access the finance they need.”

Goodall believes that some firm commitments from the government are needed to tackle the housing crisis.


“Positive measures aimed at encouraging the development of high quality rented properties will target the lack of supply across both sales and lettings in the housing market,” he added.

https://www.landlordtoday.co.uk/breaking-news/2017/4/buy-to-let-lending-unlikely-to-recover-in-the-near-future

Momentum improves but outlook for the letting market remains unpredictable

By Marc Da Silva

There was a significant increase in both the number of new listings and properties let last month, but the rental market still remains extremely volatile, according to Agency Express.

Following a slowdown throughout the UK letting market in February, the latest Agency Express Property Activity Index shows that national figures for properties ‘let’ saw a 16.4
% month-on-month rise while new listings ‘to let’ rose 12.2%.

Looking at performance across the UK, all 12 regions recorded by the Property Activity Index reported increases in new listings ‘to let’ as well as homes ‘let’.

March’s top performing region was London, with homes to let increasing by 28.2% month-on-month, marking the capital’s largest rise for the month of March since the index’s first records in 2012.

Various other regions also performed well last month, including the West Midlands, which is actually the only region to record consistent increases since the start of the year, with properties ‘let’ sat at 18.3% and new listings ‘to let’ sat at 8%.

Properties ‘To Let’

+ London +28.2%

+ South East +22.9%

+ Yorkshire & Humberside +19.5%

+ South West +17%

+ Wales +17%

Properties ‘Let By’

+ East Midlands +32.2%

+ East Anglia +31.1%

+ Central England +19.8%

+ London +19.6%

+ North East +18.6%

+ West Midlands +18.3%


Stephen Watson, managing director of Agency Express, said: “Throughout March we typically see an increase in activity across the UK lettings market, and this month figures did surpass those recorded in 2016. However, between the demand for buy-to-let loans seemingly decreasing since the stamp duty hike, and the recent tax relief changes it is difficult to say what the forthcoming months may hold. We may see some landlords selling off their properties as a result of the changes.”

https://www.landlordtoday.co.uk/breaking-news/2017/4/momentum-improves-but-outlook-for-the-letting-market-remains-unpredictable

No way out of the renting gap

By Kate Hughes

Renters will remain the poor cousin to homeowners until politicians change their attitudes, experts warn

Renters will be worse off than owners by at least £400,000 over the course of their lifetime, as the latest report warns of growing barriers to social mobility PA

If there’s one thing that’s sure to stretch the intergenerational chasm just that little bit further, it’s property ownership stats.

The latest figures points to what we already know – that home ownership among the UK’s youngest adults is plummeting.

Data and analysis from a triumvirate of august institutions reckons that back in 1990 more than 60 per cent of 25-29 year olds – the very last of the fabled baby boomers - were homeowners. Today it’s just 31 per cent.

Even among those lucky few, the report – from Cambridge and Anglia Ruskin universities in partnership with the Social Mobility Commission – suggests, the bank of Mum and Dad is playing a key role, with 34 per cent of first time buyers now receiving a pot of cash to help secure a home (up from 2 per cent just 7 years ago).

“Owning a home is becoming a distant dream for millions of young people on low incomes who do not have the luxury of relying on the bank of mum and dad to give them a foot up on the housing ladder,” says Alan Milburn, chair of the Social Mobility Commission, who adds: “The way the housing market is operating is exacerbating inequality and impeding social mobility.”

In fact, those with help can typically afford to buy just two years earlier than those without help – albeit rising to more than 4.5 years for Londoners. But those few years can make all the difference.

A recent study by homelessness charity Shelter, which divided people into those who had been able to buy their first home before 30, those who bought after 30 and those who remained in rented accommodation after age 35 found, predictably, that there was a long-term financial divergence between those who own and those who don’t.

But the numbers are far greater than we might expect.

For a family with a child, for example, those who bought before 30 will be £146,300 better off over their lifetime than families who have to save and buy later, when parents were 30-plus.

Compared with families who never manage to buy, early buying families will be £561,200 better off. This was thanks not just to rising property prices, but also ownership related life decisions including the impact of taking career breaks to start families at different times to renters and pursuing higher paid jobs to cover the mortgage, as well as renters spending an average of £44,000 more over a lifetime on lost housing costs.

Nor are the benefits of owning purely financial. A separate study by digital mortgage broker Habito, points to a clear psychological link between owning and social status.

“We’ve seen repeatedly in our customer focus groups that for first time buyers, acquiring a mortgage is seen as a step up that reinforces a sense of belonging to their social group, catching up with their friends and being “in the club” of homeowners,” says CEO Daniel Hegarty.

“Home ownership can be an integral part of supporting social mobility, not least due to the fact that home owners are more likely to remain in a property longer than the average renter,” adds Mitesh Patel, CEO of property technology firm Engage.

“For renters this creates a feeling of disconnect with their neighbours and local community.

“Millennials, who have been confirmed as the generation destined to rent for longer, are feeling the impact stronger than any other group. Our own research recently revealed over a third (36 per cent) of millennial tenants feel disconnected from their communities – more than another age group.”

“The UK’s housing crisis, which has priced millions out of owning a home of their own, will continue to fuel the UK’s social and economic divide unless we start to provide renters with the same sense of ‘belonging’ as home owners. If this issue is not addressed by landlords, it could leave more people feeling disconnected simply because they don’t own their home.

None of this means there aren’t benefits to renting of course.

They aren’t obliged to put all their savings into what we often forget remains a relatively high risk financial basket for example, nor are they restricted in terms of mobility as they develop careers, says Michael Ball, Professor of Urban and Property Economics at Henley Business School, who points to examples of very positive attitudes towards renting in countries like the USA and Germany.

“But we have two very British issues,” he warns. “Entering home ownership is much cheaper than renting and because renters tend to only stay in one place for 18 months, landlords have high administrative costs that are passed on to their tenants along with the taxes they pay.

“There are huge tax breaks for homeowners, who don’t pay anything against the equity in their home or the rise in prices. They’re the biggest tax breaks anyone will receive over the course of their life.

And with no changes to the tax system or a significant increase in house building on the cards, this is only going one way, he suggests.

“If income rises, demand for housing goes up. But with no houses being built, real house prices rise by around 3 per cent a year over time. Homeowners – resisting suburban expansion despite the fact that just 1 per cent of England is covered in housing excluding gardens – are locked into that [expectation].

“That means the growing number of renters will continue to pay progressively higher rents.


“The financial divergence will continue unless politicians change their attitudes towards both house building and the tax system.”

http://www.independent.co.uk/money/no-way-out-of-the-renting-gap-a7656001.html

Landlords optimistic about future of buy to let in the UK

Buy to let is still regarded as an attractive long term investment in the UK with new research showing that landlords are more optimistic about the outlook for the private rented sector than a year ago.

Some 37% of landlords anticipate growing rents over the next six months, a year in year increase of 36%, and 44% of landlords had good or very good expectations for their own letting portfolio over the next three months.

However, the research from independent property consultancy Allsop also shows that the percentage of landlords intending to purchase one or more property in the next 12 months fell to 16%, the lowest level in just over four years.

And the Rent Check Rent report on the rental market in England and Wales published with BDRC Continental, reveals that the majority, some 83% of landlords, reported that obtaining buy to let finance had become more difficult in the last six months.

The report calculates the estimated annual return for three, five and 10 year periods after tax for basic rate 20% tax payers and 40% tax payers, and analyses rental yields, house price growth and running, finance and legal costs.

Using Office for Budget Responsibility national forecasts for wage growth and house prices, the top performing regions for indicative returns are the East Midlands and Yorkshire, with returns of 11.25% per annum over a five year period for a 20% tax payer, and 9% per annum for a 40% tax payer.

Using the same national analysis, London was the worst performing region at a still respectable 5.75% per annum for 20% tax payer and 4.75% per annum for a 40% tax payer over the same period. Of the landlords polled, 45% were higher rate income tax payers.

‘For those with equity to invest, buy TO let returns still have the potential to outstrip savings accounts over the long term. Whilst tax changes and toughening lending criteria is challenging landlords, most are in it for the long term and we still only expect a small minority to exit as the tax changes feed through,’ said Paul Winstanley, partner at Allsop.

‘With no quick solutions to the housing crisis, long term private landlords providing decent accommodation will continue to play an important role in housing our population. As long as there are no new tax rises targeting landlords, buy to let will remain a stable and attractive sector for the long term,’ he added.

http://www.propertywire.com/news/uk/landlords-optimistic-future-buy-let-uk/

Landlords at risk of non-compliance due to buy-to-let tax changes

By Marc Da Silva

Landlords are under mounting pressure which is making them vulnerable to non-compliance in their accounting following a raft of changes, including tax measures, in the buy-to-let sector, according to Visionbase Software.

The change to mortgage interest relief, which was first announced in the 2015 emergency Budget, will be introduced gradually from 6 April, restricting relief for finance costs on residential properties to the basic rate of income tax.

However, with recent research from the Council of Mortgage Lenders showing that a third of buy-to-let landlords in the UK do not understand that their ability to offset mortgage interest payments against tax is being scaled back, Paul Oxley, managing director of Visionbase Software, has expressed his concern that many landlords could soon find themselves falling foul of the rules.

He said: “Most landlords will be looking at ways to minimise the tax changes to protect their profits. While the most obvious plan is to raise rents, other options open to landlords include transferring property ownership into a corporate structure, or to a partner who pays a lower income tax rate.

“All these new tax measures, combined with mounting legislation, is putting landlords under huge pressure. It can be overwhelming to keep up and failure to do so, can lead to fines and loss of licence.”


Oxley advises buy-to-let landlords to take advantage of the various advanced property management software products available on the market, including unsurprisingly his firm’s own Decorus for Sage system which offers landlords the ability to easily generate financial reports, forecast future income and expenditure accurately and budgeting for maintenance work, to help them manage the raft of changes for their property portfolio.

https://www.landlordtoday.co.uk/breaking-news/2017/3/landlords-at-risk-of-non-compliance-due-to-buy-to-let-tax-changes

MPs call for greater powers to ‘clamp down’ on illegal lets in London

By Marc Da Silva

With a growing number of buy-to-let landlords in London now using short-term letting platforms like Airbnb to breach the rules for letting properties, MPs are calling for greater powers to crackdown on abuses of existing legislation that permit homes to be rented out short-term for up to 90 days a year.

Addressing Parliament yesterday, Westminster North Labour MP Karen Buck, supported by nine other MPs, said that landlords should have to notify councils of the dates that their property is being used for short-letting.

According to Buck, Westminster council, alone, is currently investigating more than 1,100 properties which are believed to have been in breach of the 90-night limit.

She said that she welcomed the “freedom for homeowners to let their properties”, but insisted that “without excessive bureaucratic interference” it is hard for “cash-strapped councils to police the rules”.

“Alongside the responsible owner-occupiers are irresponsible ones, illegal sub-letters and an increasingly significant commercial operation, seeking to take advantage of potentially higher yields,” she added.

Earlier this month, the Mayor of London urged short-term agents operating in London, including Veeve, One Fine Stay, Wimdu, Booking.com, HomeAway and Airsorted, to block hosts from renting out homes in the capital for more than 90 days.

But until there is a change in the existing rules to monitor activity levels in the market, Field insisted that “a free-for-all in short-term lets” will keep “causing misery for thousands of our constituents”.


“We want the local council to have effective powers to clamp down on this,” she added.

https://www.landlordtoday.co.uk/breaking-news/2017/3/mps-call-for-greater-powers-to-clamp-down-on-illegal-lets-in-london

Short Lets - government to review Rent A Room tax relief

By Graham Norwood

The Residential Landlords Association has spotted small print from the Budget that may suggest the government is about to review Rent A Room tax relief in the light of the spread of Airbnb short lets.

Currently the Rent A Room scheme allows people letting out rooms in their homes to lodgers can currently earn £7,500 tax free; this also applies to those letting rooms through Airbnb and similar sites.

RLA research shows there are more than 23,000 rooms listed on Airbnb in London alone.


The association says that as Rent A Room was introduced to increase the supply of affordable long term lodgings it would appear the government review is taking place in direct response to the popularity of short term letting sites.

"Promising a consultation on redesigning the relief in the Budget Red Book the government says it will be looking at the way Rent A Room operates to ensure it is better targeted to support longer term lettings, reflecting its original purpose" says a statement from the RLA

The Budget small print does not reveal a timescale for the review.

https://www.lettingagenttoday.co.uk/breaking-news/2017/3/short-lets--government-to-review-rent-a-room-tax-relief

Website claims thousands of London lets defy licensing rules

By Graham Norwood

An advice website claims that more than half of the privately rented properties in the selective licensing area imposed by a London council have not got the appropriate licence - four months after the scheme came into effect.

Research by London Property Licensing has found the problem in Tower Hamlets.

On October 1 last year the council introduced a selective licensing scheme in three wards in the west of the borough. The regime applies to all private rented homes within the boundaries whether they are houses or flats and are let to an individual, single family or are in multiple occupation. “There are very few exemptions” says the website.


The application fee is £520 to £660 per property and - in common with similar schemes across the country - until an application is submitted, the landlord and letting agent are committing an offence if they let a property in the selective licensing area, which covers an estimated 6,000 private rental units.

In response to a Freedom of Information request, Tower Hamlets council has told the website that by last month, only 2,100 applications had been received by the council of which 1,000 licences had already been approved.

“Based on the council’s own estimates, there could be around 3,900 private rented homes in the west of the borough where no selective licence application has yet been submitted – accounting for almost two thirds of all private rented homes in the area” says London Property Licensing.

The website says there are now 23 different property licensing schemes currently operating in London.

“The myriad of schemes operating across London is becoming a major headache for landlords and letting agents as they struggle to understand what rules apply where” says Richard Tacagni, London Property Licensing’s managing director.

https://www.lettingagenttoday.co.uk/breaking-news/2017/3/website-claims-thousands-of-london-lets-defy-licensing-rules

Sub-let 'agency' markets rental homes on portals and Airbnb

By Graham Norwood

A new form of agency which wants to blend traditional letting with Airbnb-style short lets has launched in London.

Lavanda claims it can increase net rental yields for landlords by up to 10 per cent “by embracing the sharing economy”.

Lavanda says short-let ‘homesharing’ via platforms like Airbnb is one of the capital’s fastest growing industries but it claims that to date this is an activity that has largely been conducted in breach of planning permission and rules governing leases, mortgages and insurance policies.

“Although a segment of the market with huge disruptive potential, it has until now simply been evolving too quickly to entice landlords to engage more meaningfully” says a statement from Lavanda. So the company is offering a service which it defines as a new product called ‘The Service Let’.

The firm enters into a contract with the landlord, allowing Lavanda to manage the property and permitting sub-letting by the tenant.

“In the context of a Service Let, a long-term tenant is entitled to sub-let the property up to a maximum number of 90 days in a calendar year - at the landlord’s discretion but always compliant with local London planning restrictions” says the firm.


Lavanda will offer to manage this, claiming “a hassle-free, luxury hospitality service guaranteeing a boutique hotel-style guest experience worthy of ‘superhost’ status” - maximising sub-letting revenue for the tenant.

Lavanda offers tenants additional hospitality-style services such as laundry, a conceirge service and an on-call repairs service. “A percentage of revenues generated by these services are also shared transparently with the landlord” says the firm.

The business is aiming high, claiming it wants to capture 10 per cent of the London lettings market within the next five years. Amongst its 30-strong staff is James Robotham, a former senior negotiator at Knight Frank now employed by this new agency as a 'Growth Manager.'

https://www.lettingagenttoday.co.uk/breaking-news/2017/2/sub-let-agency-markets-rental-homes-on-airbnb-and-main-portals

Britain’s highest yields: the best areas for buy-to-let returns revealed

By Marc Da Silva

Despite the recent tax crackdown, buy-to-let continues to look an attractive income investment at a time of low interest rates and volatile stock markets, but where in the country can the best yields be achieved?

Property peer-to-peer lender Kuflink has examined the average rental yield in 50 major towns and cities across the UK and found that properties in Manchester and Salford lead the way, providing average rental yields of 6.7% and 6.6% respectively, while Hull, Luton and Rotherham were among the areas that experienced the biggest increase in average rental yield over Q4 2016.

Despite the high rents achievable in southern England, especially in London, yields in the north are typically higher, reflecting the fact that properties cost significantly more in the south, meaning that buy-to-let landlords are left with relatively low returns.

The historic city of Cambridge – a popular commuter hotspot – provides the lowest average rental yield, just 2.7%.

The research also revealed that there are now less than 41,000 homes under £250,000 available in the UK, down from 58,000 available in October - a drop of 29%.

In London, somewhat worrying for first-time buyers and some buy-to-let investors, there are now fewer than 2,000 properties under £250,000 on the market as prices continue to soar.

Birmingham saw the biggest drop in properties available for under £250,000, with a decrease of 1,373 between October and December 2016, followed by Bristol, with a decrease of 1,017 properties.

Tarlochan Garcha, CEO at Kuflink, commented: “The rift between north and south continues, but this time the attention is turning north. Buy-to-let properties in the North can be a steady investment, attracting renters who cannot afford to step onto the property ladder and therefore choose to rent in good locations, which are well-suited to their lifestyle.

“Manchester and Leeds are both bustling cities, popular with young professionals and families, and can offer solid returns for landlords. While Birmingham, which has a growing business district and is soon to benefit from HS2, cutting journey time to London to just 49 minutes, is also firmly on the map as a strong buy-to-let spot.

“It could be time for landlords to turn their attention away from pricey London and look to the UK’s regional cities.”

The below table shows the ten towns and cities that provide the highest average rental yields:

https://www.landlordtoday.co.uk/breaking-news/2017/2/britains-highest-yields-the-best-areas-for-buy-to-let

Brexit vote creating lethargy in prime central London property market

There are signs of lethargy in the prime property market in central London ahead of the vote on the future of the UK in the European Union, according to a new research report.

But beyond the distraction of the EU referendum there are signs that demand is strengthening, according to the research from international real estate firm Knight Frank.

Overall annual growth in the prime central London property market slowed to 0.1% in May, the lowest since October 2009 and the Brexit effect means demand is subdued even where asking prices have fallen 10% or more.

On top of this the number of active buyers to available properties has halved over the last year and Tom Bill, head of London residential research at Knight Frank, described it as a price sensitive market.

‘Demand remains relatively subdued but in a change from recent months, the primary cause in May was the Brexit vote rather than new rates of stamp duty. Indeed, there are overlapping layers of uncertainty affecting supply and demand that are difficult to differentiate but which produce a cumulative impact,’ Bill explained.

‘There has been a discernible Brexit effect on the UK economy as decisions are delayed and the London property market is no exception. Buyers and sellers are postponing decisions because of the prospect of entering unchartered economic and political territory,’ he said.

‘The market has become price-sensitive due to higher levels of stamp duty, but an indication of the Brexit effect is that demand in May has remained subdued even for properties where asking prices have fallen by 10% or more,’ he pointed out.

He also pointed out that demand was already more restrained as a result of the impact of two stamp duty increases in the space of 18 months and the ratio of active buyers per available property in prime central London has fallen to 4.8 from 10 over the last year.

However, despite the looming referendum, there are signs underlying demand is strengthening, according to Bill as buyers drop asking prices to reflect higher transaction costs.

The number of transactions between January and the middle of May was flat this year compared to 2015. Meanwhile, viewings increased 31% between January and April versus last year, suggesting a degree of pent-up demand.

Overall, prices have grown 2.4% over the last two years and it has been three and a half years since annual growth was last above 10% in October 2012.

A breakdown of the figures show that in the 12 months to May 2016 prices have increased 7.4% in Islington, by 6.3% in the City, by 1.9% in Mayfair, by 1,7% in Kensington, by 1.3% in Tower Bridge and by 0.3% in Riverside.

Prices remained unchanged in St John’s Wood and Marylebone but fell by 7.5% in Knightsbridge, by 4.8% in Hyde Park, by 4.6% in South Kensington, by 3.5% in Chelsea, by 1.7% in Kensington, by 1.5% in Notting Hill, and by 0.2% in Belgravia.

The report also points out that housing was the key political battleground ahead of May’s London Mayoral election, with both candidates pledging to build more homes to address affordability concerns.

Sadiq Khan, the winning candidate, said he wants to double the amount of houses built to 50,000 a year by 2020. He also plans to increase the number of affordable homes and has talked about tighter restrictions on overseas buyers and controlling rents.

Full details have not emerged but the high level of political scrutiny on housing means the new Mayor is likely to adopt an approach that is economically viable for developers in order to ensure his target is met, according to Professor Tony Travers, a local government expert at the London School of Economics.

‘All the evidence so far is that pragmatism is triumphing over ideology. The last thing he will want to do is emit signals that undermine the capacity to deliver at least as many homes as last year. What is essential is that the number of new homes built doesn’t fall,’ he said.

‘What was unusual about the 2016 Mayoral election was that enough numbers were traded by the candidates to create a measurable benchmark, which his opponents in 2020 will point to if he falls short. With that in mind he needs to keep developers broadly onside,’ he added.

He explained that the relatively slow pace of announcements regarding policies and appointments since Khan won the election, was also a sign of a pragmatic approach. ‘If this is an indication of what is to come, the lack of rash promises suggests the cautious approach of a professional politician,’ he said.

However, the backdrop of the EU referendum has dominated Khan’s early days in office. ‘If the UK voted to leave and London voted to stay in, the Mayor would be well within his rights to argue for greater autonomy from the rest of the UK to ensure the city’s economy is protected,’ added Travers.

http://www.propertywire.com/news/europe/central-london-prime-property-2016060211988.html