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New LHA Rates for 2014 -2015 Published

New LHA Rates for 2014 -2015 Published

Local Housing Allowance (LHA) Rates Change In April

Every year the Government publish Local Housing Allowance (LHA) rates that are periodically reviewed and payment levels in some UK regions may change without notice.

The April 2014 – March 2015 LHA rates have now been published and the revised list makes interesting reading for landlords and letting agents who are willing to accept tenants claiming benefits.

UK private rental sector landlords are able to ensure rental property profits by allowing their properties to be let to tenants claiming housing benefit (HB), with local authority rental payments exceeding buy-to-let mortgage payments.

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Overseas Property Investors Targeting UK Property Bargains

Overseas Property Investors Targeting UK Property Bargains

Overseas Property Investors Know A Bargain When They See  One!

There has been a great deal of debate about the impact of overseas property investors and foreign nationals purchasing property within the city of London, driving up property prices and giving the UK housing market a boost.

Foreign property investors purchased up 75% of new residential property developments within the central London area during the last 12 months, although many developers argue that many of these residential properties would not have been built without the up-front cash from overseas property investors.

According to data from Knight Frank, foreign property investors also purchased 49% of all properties valued over £1 Million (GBP) in central London during the same timeframe, and new residential properties accounted for just 20% of these property transactions.

The 10 most expensive post codes in central London are SW1, SW3, SW5, SW7, SW10, W1, W8, W11, WC2 and NW1 had 3,477 residential properties for sale.
70% of these properties were valued over £1 Million (GBP)

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Smaller Buy-To-Let Properties Provide The Best Rental Yields

Smaller Buy-To-Let Properties Provide The Best Rental Yields

Smaller Buy-To-Let Properties Provide

 The Best Rental Yields

A one-bedroomed rental property in Wales may not sound like the most glamourous of property investments but it could deliver the best rental returns for landlords according to a new in-depth buy-to-let report by the UK’s largest lettings agency Countrywide.

A survey of more than 50,000 Private rented sector property owners has revealed Buy-to-let landlords are getting excellent rental yields in Wales, the North of England and the Midlands from 1 and 2 bedroom rental properties.

Landlords in many parts of Wales are achieving an average 6.7% rental yield (rent measured as a percentage of the property price), beating the North of England and the Midlands, which both average a 6.5% rental yield.

These figures are substantially higher than the average 4.6% rental yield observed in parts of Central London, regarded as the red hot heart of the UK’s property market.

One and two-bedroom rental properties have seen the greatest increase in average monthly rental prices in April 2013, with a 1.4% and 1.3% month-on-month increase to £679 (GBP) and £766 (GBP), respectively.

The detailed report into buy-to-let rental returns was conducted by Countrywide, who found that average monthly rental prices in England, Scotland and Wales have continued to increase for six consecutive months to reach an average of £842 (GBP) in April 2013.

But rent increases remain below the increased cost of living, with an annual average increase of just 0.8% measured against Consumer Price Index inflation of 2.8%.

However, average monthly rents have fallen within Central London, the South East, Wales and parts of Greater London.

The biggest rental price drop of 6.3% was seen in Central London, where average monthly PRS rental prices average £2,371 (GBP), more than double the £1,106 (GBP) recorded in parts of Greater London.

Rental returns by location

 

Rental returns by location - Source: Countrywide

Rental returns by location – Source: Countrywide

 

Nick Dunning, from Countrywide, said: “With renting for longer now the norm for many people as they save for a deposit to buy their first home, we are seeing more young families looking to rent cheaper accommodation, hence the increase in demand for smaller rental properties. While prime Central London has seen the greatest fall at 6.3%, this is simply reflecting the fact that in April stock levels in prime Central London were very high compared to last year which benefited from the Olympics. As a result this April, tenants tended to view multiple properties putting in lower offers, which some landlords accepted. However, as demand picks up into the summer, and supply and demand becomes more balanced, the same property could easily rent for more in August than in April.”

Returns by property type

 

Rental returns by property type - Source: Countrywide

Rental returns by property type – Source: Countrywide

 

Source: Countrywide

Tenants Prepared To Pay More Rent For London Property

Rental prices in the UK have been rising steadily for some time and rents in London have risen by 12% over the last year and look set to continue rising for years to come.

Rents Reach Record High and Continue to Rise

UK Rents Reach Record High and Continue to Rise

Central London residential rents rose 3% during the third quarter of 2012 and rental prices are predicted to rise even more over the next ten years as the supply of housing in the capital fails to meet the needs of people working in the city.

The Government forecasts a rise in residential household numbers in London of between 34,000 and 38,000 annually up to 2028, however this estimate is over ambitious according to some forecasts.

The author of a new report claims that based on development levels over the last ten years, an optimistic estimate of the number of homes which will actually be delivered each year is just 21,000.

The Government estimates were exposed in a new independent research paper, commissioned by Cluttons, called ‘Renting in London: The Coming Boom’, written by Professor Michael Ball.

Professor Ball says that the supply deficit offers attractive opportunities for residential property investors to provide long-term rented accommodation for those living and working in London. Although market cycles may affect yearly returns, income yields are expected to rise along with significant capital growth. He also forecasts average rent increases of 5% annually over the next ten years, exceeding house price growth of around 4% per year.

The research paper’s conclusion predicts a significant housing shortage, with people either paying more, crowding into existing homes or being priced out of the city.

Currently almost two-thirds of households rent in inner London and 40% in outer areas, roughly equally divided between private and social housing.

The lettings market in London continues to strengthen, as demand is still far outstripping supply. Transaction levels in terms of rental deals done rose by 31% compared to the second quarter and 8% more than the same period in 2011.

The average rent increase of renewing tenants in London during the 3rd quarter of 2012 was 4%.

Residential lettings partner at Cluttons, Lynn Hilton, said: “The private rented sector feels the strong pressures of a growing population and workforce, being both the first point of contact and the safety option for many people searching for housing. New jobs being created in London are increasingly for well-paid and highly qualified staff. Those tenants in the higher income groups, including families, will be a growing component of the rental market, seeking good-quality accommodation over longer periods. The pressure of demand from tenants wanting to live in the city will underpin rental growth at a level ahead of the historic long-term trend.”

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