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UK Property Rental Prices Reach New Record High

UK Property Rental Prices Reach New Record High

UK Property Rental Prices Reach New Record High

Latest figures show that the new national average property rental price being advertised has reached a whopping £1,006 (GBP) per calendar month (pcm).

This is the first time ever that the national average property rental price has broken the 4 figure ceiling barrier in the UK.

The increase in the national average property rental price has been attributed to continued growth of the London and South East property markets.

Property rental prices being advertised in central London have reached £2,300 (GBP) per month, the highest recorded rental average apart from during the Olympic’s in the summer of 2012.

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Portfolio Buy-To-Let Landlords Are A Minority

Portfolio Buy-To-Let Landlords Are A Minority

Only 6% Of UK Buy-To-Let Landlords Own More
Than One Rental Property

New data from the latest Countrywide Residential Lettings Index shows that portfolio landlords with multiple rental properties are the minority of the UK’s private rental sector.

According to the research data, the average the size of a UK landlords’ buy-to-let portfolio tends to be small, with only 6% owning more than a single rental unit, however in London this figure reduces to just 4%.

Countrywide also report that 56% of private rented sector landlords own at least 1 rental property within 10 miles of their own residential properties.

When the data is expanded to account for buy-to-let landlords who live within 25 miles of their rental properties, the North East recorded 83%, followed by 81% in the North West and 71% in East Midlands. Landlords who live within 25 miles of their rental properties in London average just 60%.

London has the highest proportion of landlords who live more than 100 miles away from their rental properties, with over 20% of UK PRS landlords doing so, twice the UK average.

Wales and the East of England are more rural than other regions of the UK with less dense population clusters, so many landlords purchase properties in busier areas and choose to live within a commutable distances in order to keep an eye on their rental assets. The proportion of landlords living between 10 and 25 miles away in Wales and the East of England is the largest in the UK.

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House Prices Officially Rising Across The UK

House Prices Officially Rising Across The UK

UK House Prices Rising Faster Than Inflation

The Office for National Statistics (ONS) has recorded year-on-year house price increases across the UK with property values increasing by:

  • 5.6% in England
  • 5.4% in Wales
  • 2.5% in Scotland
  • 3.3% in Northern Ireland

The increase in house prices and activity in the UK property market has been credited to an increase in first-time buyers (FTB) purchasing residential property using the Government’s Help-To-Buy scheme.

The ONS have revealed that annual house price growth outpaced the cost of living in November 2013, even after removing property market activity in London and the South East of England from the calculations, property prices were up by an average of 3.1%, compared with a 2.1% rate of inflation.

Property price increases in the UK are generally driven by market activity and price increases in London and its surrounding areas, although other regions have started to show accelerating property price increases.

Property prices in London were up by 11.6% in November 2013, compared with a year earlier, and property prices have also increased strongly across the whole of the UK according to official figures

Regional Property Price Increases

  • London: up 11.6%
  • South East: up 4.5%
  • West Midlands: up 4.4%
  • North East: up 4.2%
  • East: up 4.1%
  • Yorkshire and the Humber: up 3.2%
  • South West: up 3.1%
  • East Midlands: up 2%
  • North West: up 0.6%                           Source: ONS annual change, Nov 2013

UK regions are becoming far more buoyant and less reliant on activity in the London property market and the majority of buyers are having to look further afield than central locations to find affordable properties, creating a halo effect on property prices.

The annual increase in UK property prices in November follows on from the 5.5% rise observed in October 2013 and although the annual comparison did not show any acceleration, property prices were higher than the previous month increasing by 0.5% in November compared with October, with an average residential property valued at £248,000 (GBP).

The ONS house price index is based on mortgage completions, and is considered to be more comprehensive than House Price Indices (HPI) produced by mortgage lenders such as the Halifax and Nationwide whose figures are based on their own mortgage data.

 

Where Will Property Investors Get The Best Return From In 5 Years Time?

Where Will Property Investors Get The Best Return From In 5 Years Time?

Where Will Property Investors Get The Best Return From In 5 Years Time?

Savills have released their UK property price predictions for the next 5 years identifying what they think are the best UK regions to purchase properties in based on expected Capital Gains.

Residential properties in the South East region are predicted to increase in value by as much as 31.9%, whilst the East of England could see property prices rise by 30.4%.

In the South West region of the UK, Savills expect property prices to jump by 29.4% with increases in property values not increasing by as much in more Northern parts of the UK.

According to the 5 year forecast, East-Midlands property prices could increase by as much as 24.6%, however, London property prices are only expected to rise by 24.4%.

West-Midlands property prices are also expected to increase by up to 23.4% according to the forecast, but property prices in Wales are only predicted to increase by 21%

The city of York in the Yorkshire & Humber region could expect property price rises around 20.5% according to Savills and over the Pennines in the North West, property prices are estimated to increase by 19.3% in next 5 years, as is also the case in Scotland.

North East property price predictions are the worst of the company’s forecast only expected to grow by 17.6% over the next 5 years.

The property price predictions do not appear to take into account the effect of the Help-To-Buy scheme on the UK property market, nor do they allow for the prospect of another property price bubble or even another huge property crash.

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Rightmove Think London Property Prices Are Unsustainable

Rightmove Think London Property Prices Are Unsustainable

London Property Prices Increase
More Than 10% In October

Average UK property prices increased by 2.8% across the country in October, however property price rises in London are going through the roof and are unsustainable, according to property portal Rightmove

London property prices increased by £50,484 (GBP) equivalent to a 10.2% increase in October, after two consecutive monthly falls in the price of properties marketed.

Property prices in the Capital had fallen by -2.8% and -1.5% in August and September respectively, and the double digit price increases reported in October has analysts worried about the volatility and sustainability of the London property market.

The huge rise in London property prices has been attributed to corresponding factors;

  • Lack of supply of residential properties coming to market
  • Overseas investment in new build properties by foreign property investors

October’s strong recovery means London property prices are now 5.6% or £28,852(GBP) up on July’s all-time high of £515,379 (GBP), pushing the year-on-year increase in London to +13.8% or £66,161(GBP).

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Average PRS Rents Hit New High

Average PRS Rents Hit New High

Buy-To-Let Property Investors Benefit
From PRS Rent Increases

The average rent in the UK’s private rented sector has increased to approximately £757 (GBP) per month, the highest level ever recorded, as rental prices increase by 1.8% on the previous month.

The data is from the latest Buy-To-Let Index, published by LSL property services.

PRS rents are 2.1% higher than they were in September 2012 and tenant demand is still strong with lettings activity growing by 9.2% over the last 12 months.

Average PRS rents are now £13 (GBP) per month higher than the previous all time record set in October 2012, when monthly PRS rents averaged £744 (GBP) per month.

Nine out of 10 UK regions saw rents rise between August and September 2013 with the fastest monthly rise observed in the South East, where PRS rents are 3.3% higher than they were a month ago.

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Best Places For UK Property Investment

Best Places For UK Property Investment

UK Property Investment Hot Spots
Identified By Journalist

The post-recession boom in house prices has prompted Christopher Middleton to write about the best property investment hot spots in the press this week and he put forward some of the best areas of the UK that can provide property investors with decent returns.

According to the Office for National Statistics, UK house prices are officially on the up. Property values rose by 3.1% in the 12 months to June 2013, compared to 2.9% in the year to May 2013.

The Royal Institution of Chartered Surveyors (RICS), say that property prices are rising at their fastest rate since the pre-crash days of 2006.

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Help-To-Buy Heralded As UK Property Market Saviour

Help-To-Buy Heralded As UK Property Market Saviour

RICS Claim Help-To-Buy Is Reason
For UK Property Market Recovery

The Royal Institute of Chartered Surveyors (RICS) have stated that the Government’s Help-To-Buy scheme and other financial initiatives have seen the UK property market turn the corner after the post recession slump.

In its monthly report RICS said property prices are up for a fourth consecutive month as the largest number of property buyers in 4 years return to the market.

The RICS report particularly picked out the West Midlands and the North East, as two areas which had suffered more than most in the UK property market crash, but these areas experienced the biggest increase in property buyer activity during July.

The widespread pick-up in the UK property market has seen residential property prices rise at their fastest rate since the peak of the property market in November 2006.

There is a growing chorus that the Government’s Help-To-Buy scheme, which was introduced in April to provide equity loans for first time buyers of up to 20% towards the cost of a new build property worth up to £600,000 (GBP) is creating a new property bubble.

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March 2013 Sees PRS Rents up by 0.5%

UK PRS Rents Increase Again

UK PRS Rents Increase Again

UK private rented sector (PRS) rents increased for the first time in five months in March 2013, led by busy regions such as London, according to LSL Property Services. 

The latest figures reveal that average monthly PRS rents rose by 0.5% in March compared with February to reach an average of £735 (GBP). 

London private sector rents surged to a new average high of £1,106 (GBP) per month, following a 1.3% month-on-month increase.

The study, which has been running for five years, is based on rents achieved on 18,000 UK PRS rental properties, show that average rents in the capital are now £81 (GBP) higher year-on-year.

However, the increase in rents has left a greater number of tenants struggling to keep up.

Tenants’ finances worsened to levels not seen since before Christmas 2012, with 8.5% of all rent late or unpaid in March, compared with 7.4% in February.

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New landlords are using rental income to provide for their retirement

New landlords are using rental income to provide for their retirement

A high proportion of struggling residential property owners are copying the practices of successful portfolio landlords and choosing to offer their properties for rental purposes in the UK private rental sector (PRS) in order to provide adequate finances for their retirement.

Of the struggling property owners choosing to offer property to rent for the first time and existing portfolio landlords who responded to the BM Solutions/ BDRC Continental survey:

  • 84% view their rental property as a supplementary income to their pension
  • 60%of landlords actively plan to live off the rental income either before or at retirement.
  • 40% agree that their property is their pension and intend to make a decision dependent on the state of the property market once they reach retirement age.
  • Very few landlords plan to sell all properties in their portfolio when they reach retirement

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