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UK PRS Rents Highest In EuropePRS Rents Still Increasing

Rent paid by tenants in the UK’s private rental sector, (PRS), increased by 2.1% in the 12 months up to and including March 2015, according to the latest published figures released by the Office for National Statistics (ONS), drawing claims from the National Housing Federation (NHF), that the UK is the most expensive country to rent property in within the European union.

In the 12 months to March 2015 UK PRS rents increased by:

  • 2.1% in England
  • 2.1% in Scotland
  • 0.8% in Wales

UK PRS rents are the highest in Europe, taking up 40% of tenant income despite having the shortest length of secure tenancies. In comparison our European counterparts only pay an average of 28% of their income on rent.

The NHF analysed the ONS data and found that on average UK PRS rents of approximately £750 per month for properties were almost double the rental costs of dwellings in countries like Germany and Holland, where average earnings are similar. However, it is worse for tenants in shared UK properties, who typically spent around 55% of their income on rent.

Across Europe, 43% of tenants had moved property in the last five years while in the UK this figure was more like 77%.

When the figures are analysed more closely it works out that approximately 23 minutes of every hour worked by UK PRS tenants is spent on rent; elsewhere in Europe, it is more like only 17 minutes.

The NHF also showed that the UK has repeatedly failed to invest in its own housing stock when compared to European standards, between 1996 and 2011 only 3% of the national Gross Domestic Product (GDP) was invested in UK housing, compared to 6% in Germany and 5% in France.

Other findings from the analysis include the fact that 72% of tenants renting in the UK private rental sector are employed compared to 62% of residential owner-occupiers.

NHF chief executive David Orr commented on the findings, stating: “UK tenants get a raw deal in comparison to their continental counterparts. High rents are just one symptom of the UK’s housing crisis, as a nation, we are simply not building enough houses due to under investment and problems with the land market.”

Hype surrounds 2013 Mortgage Figures

Hype surrounds 2013 Mortgage Figures

2013 started with claims that the UK had recorded the best lending on mortgage figures in five years, but these claims by the UK Council of Mortgage Lenders (CML) are being disputed.

According to the CML, a total of 38,300 loans were advanced for residential property purchases in January, the highest for the month since 2008 when 47,800 loans were advanced. The January performance came despite a marked drop from December 2012 when 45,900 mortgage loans were advanced.

Now critics have suggested that the CML’s mortgage figures were pure hype and speculation as mortgage approvals, and not actual monetary advances, were actually down in January this year, and no figures were released for the UK Buy To Let mortgage market for the same time frame.

Mortgage figures for approvals on residential property purchases appeared to be up 11% compared with January 2012 when there were 34,600 mortgage loans approved for residential property purchases and activity by first-time buyers and home movers both increased.

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There are always a number of property related studies, research and data gathering exercises going on within the UK property industry and the latest research carried out by Online bank – First Direct, (a division of HSBC bank and member of the HSBC Group), has shown that some adults in the UK regret the fact that they have not yet purchased property.

The study revealed 12% of those questioned in 2011 believe they have been living in their rented property for too long.

The same proportion of individuals stated they should have attempted to purchase a property of their own during the last 12 months, while just 4% of respondents said they wished they had not bought a residential dwelling in this time.

Bruno Genovese, Head of savings at the organisation noted January can be a great time for people to start getting their money matters in order for the coming year. “The earlier people start to plan their finances and look to the future, the better their long term financial position will be.”

However you look at the data it seems clear that the largest barrier to many people wishing to purchase property is that of available finance. First Time Buyers (FTBs) need a substantial deposit to be able to afford the purchase of a home and property investors are becoming increasingly limited in their options for finance as the banks are still edgy about lending and continue to limit the number of mortgage products property investors can have at any one time.

Savvy and educated property investors who have already negotiated a BMV purchase may have structured their property purchase by borrowing the necessary funds from a Bridging Finance specialist.

If you are looking for Bridging Finance to enable a property purchase or would like to find a mortgage broker then please follow the links

The UK’s Council of Mortgage Lenders have warned that the UK property market could be plunged further into turmoil if the Government starts making first-time buyers pay stamp duty again.

At present, first-time buyers are exempt from paying tax on legal documents, such as the deeds to a house, if they pay less than £250,000 for the property.

However, this concession is due to expire next March, prompting concern from the Council of Mortgage Lenders (CML), who revealed that sales of homes that would have been exempted slumped when a similar concession ended in December 2009.

The body feels that a similar fall in house price purchase could occur if the Government does not extend the exemption, further adversely affecting already teetering confidence in the housing market.

CML Director General, Paul Smee, said: “The CML believes it would be a mistake to pull the plug on the concession – at least until the housing market returns to a firmer footing.”

Its stance is seemingly reinforced by the fact that 87% of revenue generated by stamp duty comes from homes which cost more than £250,000

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