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Rent_or_Buy_Property

Number of tenants Renting Property Set To Overtake Number of Home Owners By 2025

 

Renting To Overtake Home Ownership By 2025

According to a new prediction from the professional services network – Price Waterhouse Cooper, (PwC), the number of tenants in rented properties will outnumber the overall number of property owners with mortgages in less than a decade.

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Bank Of England States That 2% Interest Rate Rise Would Put 480,000 Property Owners Into Mortgage Arrears

Bank Of England States That 2% Interest Rate Rise Would Put 480,000 Property Owners Into Mortgage Arrears

Bank Of England States That 2% Interest Rate Rise Would Put 480,000 Property Owners Into Mortgage Arrears

UK property buyers have an average mortgage debt of around £83,000 (GBP) plus many will have unsecured loans of up to £8,000 (GBP), however many are typically earning less than £43,000 (GBP) a year

The Bank of England has warned that up to half a million property owners could be at risk of falling into mortgage arrears once interest rates rise from their historic 0.5% low.

The BoE said the number of UK property owners expected to run into difficulties would increase by a third to approximately 480,000 in the event of a two-percentage-point increase in the cost of borrowing.

The BoE stressed the proportion of borrowers having trouble paying their mortgage loans should remain well below the record mortgage arrears levels of the early 1990’s, when the UK suffered its worst post-war property crash, provided that earnings incomes rose alongside interest rates.

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UK PRS Expanded By 1 Million Households In 5 Years

UK PRS Expanded By 1 Million Households In 5 Years

One Million More Rented Households In UK
Since 2009 With More To Come

It has been well documented over recent years that there has been a cultural and generational shift towards renting in the UK with “Generation Rent” emerging as the dominant force in the UK property market.

The shift towards the continental style of living in rented property has been largely influenced by the difficulty for people to raise the necessary deposit and finance for property ownership.

CBRE believe that significant activity by UK Buy-to-Let property investors and foreign nationals acquiring property in major towns and cities within the UK has also contributed significantly, and the influence of these interested parties is still growing.

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Government Seek Bids For Build-To-Rent Scheme

Government Seek Bids For Build-To-Rent Scheme

Build-To-Rent scheme seeking bids from property developers to help bring about the fastest rate of affordable residential property construction for two decades 

UK Government Housing Minister, Mark Prisk, last week announced a second round of funding for the construction of new rental properties and the government are seeking fresh bids for a share of at least £400 Million (GBP) to build new properties specifically for the private rental sector (PRS).

The funding is part of the flagship £1 Billion (GBP) Build-To-Rent fund, which offers support for property developers and property investors who want to get into the private rental sector for the first time.

Mr Prisk said the new Build-To-Rent scheme would encourage investment in the UK’s private rental market and offer prospective tenants a greater choice of rental property. The scheme is intended to run alongside up to £10 Billion (GBP) in government housing guarantees.

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More Home Owners Move To Private Rental Sector

More Home Owners Move To Private Rental Sector

Many new tenants in the private rental sector are former home-owners who have opted to become tenants due to the increasing financial pressures associated with home ownership.

In fact more people are quitting home ownership to become private tenants, than are leaving the private rental sector to become home-owners.

The “Generation Rent” trend was identified by the English Housing Survey, which estimated that there were 22 Million households in England in 2011/12.

The trend underlines the fact that home ownership levels in the UK have continued to fall over recent years as the number of households in private rental sector accommodation has increased.

  • 65% of property in the UK is owned by the occupiers
  • 17% are private rental sector properties
  • 17% are social housing

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North - South Divide Widens Again

North – South Divide Widens Again

A new study by the Office for National Statistics (ONS) has revealed that 20% of middle aged workers are property millionaires – on paper!

In the South East of England almost 30% of people in their 40s and 50s living in private residential properties can calculate their wealth to seven figures, when including savings, investments, the value of their homes and pension pots.

However, the study also revealed a sharp divide between North and South of England as well as between generations.

It claims that five times more children are growing up in households in the bottom top wealth bracket, North East, South East, wealth category as there are in the top wealth bracket.

While almost 60% of middle aged people in the South East have built up an impressive half a million pounds in savings, pension and property wealth, in the North East, 20% of the same age group have little or no assets that they can rely on.

The ONS study shows how wealth builds up through people’s working lives but begins to fall once they retire and begin using up their accumulated assets, in many cases on elderly care.

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Scotland Leads Way On PRS Regulation

Scotland Leads Way On PRS Regulation

Better Regulation Of Scottish Private rented Sector On Way

As we reported on Wednesday, the Scottish government reviewed its strategy on PRS regulation on the 30th May and more new legislation will definitely be on the way, however, landlords and letting agents will be an important part of the consultation

The Scottish Government said that it “does not have a monopoly on good ideas. In order to deliver on the vision for the sector, we will engage with all of our partners on their innovative ideas.”

The Scottish Government PRS regulation strategy intends to improve the quality of the private rented sector in Scotland, including redefining the landlord registration scheme in order to target the worst offenders.

In 2011 it was estimated that some 11% of all households were within the PRS and the Scottish Government predict that this number will increase as there are already 500+ letting agencies north of the border who are managing over 150,000 rental properties, estimated to be about half the actual number.

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UK Buy-to-Let Needs New Landlords

UK Buy-to-Let Needs New Landlords

The demand for rental property in the UK is such that many experts are predicting that as many as 1 in 5 households will be living in rental property as tenants by 2016.

In order for this estimate to be accurate there will need to be an additional 1.1 Million more rental properties made available in the UK private rented sector.

Experienced property investors are expanding their rental property portfolios and the demand for rental property is so strong that many new property investors are being encouraged purchase property for longer term rental yields and become landlords.

UK PRS landlords are reported to control as many as 4.8 Million PRS rental properties throughout the UK, up from the reported 2.5 Million in 2002.

PRS rental properties in London account for 27% of all residential properties while social renting now accounts for just 24%.

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A CHEAP mortgage bonanza could revive the housing market as lenders roll out exceptional deals.

Cheaper Mortgages On Way For UK

Cheaper Mortgages On Way For UK

The number of record-low mortgages have boomed since Christmas 2012, with several major  lenders launching fixed-rate products with an interest rate below two per cent.

Aaron Strutt, mortgage broker at Trinity Financial, said: “It’s been a great start to 2013 with lenders launching fantastically cheap rates. Many are once-in-a-lifetime deals.”

HSBC is the latest major lender to launch a fixed-rate deal below two per cent.

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Is Funding For Lending Working For First Time Buyers?

Is Funding For Lending Working For First Time Buyers?

FIRST-TIME buyer numbers are up by almost a quarter year-on-year, lenders said yesterday, amid signs that government efforts to encourage mortgage lending are finally percolating down to people with smaller deposits.

A total of 21,700 loans worth £2.7 Billion (GBP) were made available to first-time buyers in November 2012, one of the highest monthly totals in the last three years, the Council of Mortgage Lenders (CML) said.

These figures mean that first-time buyer numbers were up by 24% compared with a year earlier, and increased by 8% month on month.

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