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PRS Rental Price Growth Stalls

PRS Rental Price Growth Stalls

UK PRS Rental Price Growth Stalls

It was widely expected that UK private rented sector (PRS) rental prices would increase during the course of 2015, due to the lack of available rental properties on the market and continued strong demand from prospective tenants.

However, research by HomeLet found that the pace of rent rises had begun to slow in the three months prior to August 2015. Average PRS rental prices being charged to new tenants were only 1.6% higher than they were at the start of the year compared to the 2.2% rise that had been observed during the three months to August 2015.

PRS rents remain considerably higher than they were when figures are viewed on an annual basis, with average rental prices reaching £992 (GBP) in the three months to August, 10.5% higher than August 2014. 

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How Landlords Are Affected By 2015 Pre-Election Budget

How Landlords Are Affected By 2015 Pre-Election Budget

How Landlords Are Affected By 2015 Pre-Election Budget

During the pre-election budget last week, Chancellor of the Exchequer, George Osborne MP announced some significant changes that could have a detrimental impact on landlords the UK’s private rental sector (PRS) and residential property owners.

Below are the highlights of the pre-election budget that are of relevance to landlords and property owners:

  • £13 Billion (GBP) sale announced of the mortgages of UKAR – Northern Rock and Bradford and Bingley (Mortgage Express) to reduce national debt which followed the bailing out of the banks.
  • Introduction of 20 new housing zones.
  • The economy of the North grew faster than the South during 2014.
  • The UK has the highest rate of employment in its history!
    Employment is growing fastest in the North West, Yorkshire having the biggest employment.
  • Living standards are higher in 2015 than 2010.
  • Inflation forecast downgraded to 0.2%.
  • Low interest rates to be “locked in”.
  • Original target of debt reduction set in 2010 budget has been met.
  • 13 years of rising national debt has now been stopped.
  • UK achieved the largest and most sustained debt reduction of any major economy according to the IMF.
  • Government borrowing is falling.
  • The wealthy are making the biggest contributions to reduce debt.
  • End of austerity in 2019.
  • The annual tax return is to be abolished. New digital tax accounts to be created.
  • The personal tax free allowance has been raised to £10,600 (GBP) and will be raised to £11,000 (GBP) in 2017.
  • The higher rate tax threshold will rise to £43,300 (GBP) by 2018.
  • Class 2 national insurance contributions abolished for self-employed.
  • Stronger measures against tax avoidance and tax evasion.
  • Review of avoidance of inheritance tax through deeds of variation.
  • New penalties for tax evasion and those professionals who assist them.
  • Crime down 20%.

There was some good news contained in the 2015 pre-election budget too:

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UK Private Sector Rent Still Rising

UK Private Sector Rent Still Rising, Albeit Slowly

Private Sector Rents Rise By 1% Over Last 12 Months

New data published by the Office for National Statistics (ONS) suggest that private sector rents are rising below the level of average earnings for first time in many years, bringing some good news for tenants.

According to the ONS, in the 12 months to September 2014, private rental sector rental prices increased by:

  • 1% in England
  • 4% in Scotland
  • 2% in Wales

The ONS say that the UK’s underlying annual earnings growth increased by 1.2% in the year to August, up from 0.5% recorded in April 2014.

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Are Property Price Rises Slowing?

Are Property Price Rises Slowing?

Is The UK Property Market Just Experiencing
A Seasonal Slowdown Or Is It Something Worse?

There are a lot of reports in the media attempting to suggest that the UK property market is doomed to failure, with the latest House Price Indices (HPI) published by mortgage lenders suggesting that the UK property market is slowing, however there are fears that it might be in more serious trouble.

Halifax latest figures show that property prices in the three months prior to September 2014 were 2.7% higher than in the preceding quarter but there was an average 0.6% property price rise across the UK during September, resulting in an average property price of £187,188 (GBP).

Halifax say that this is the second successive decline in the quarterly rate and predict that the annual house price growth rate has already peaked at 10% and future growth will be at a considerably slower pace. 

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Landlords Warned To Get Ready For Universal Credit

Landlords Warned To Get Ready For Universal Credit  Chaos!

National Universal Credit Roll-Out
Starts February 2015 

Department of Work and Pensions (DWP) Secretary, Iain Duncan Smith surprised commentators with an announcement that Universal Credit (UC) will be rolled out to all Jobcentres and local authorities in the UK by February 2015 following the apparent success of the pilot scheme that was originally trialled in the North West.

Many Universal Credit detractors predicted that nothing significant would happen, before next year’s General Election, however, Iain Duncan Smith stunned everyone by announcing that Universal Credit will be rolled out to all Jobcentres and local authorities across the country, starting February 2015.

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2014 UK Property Prices To Increase Further

2014 UK Property Prices To Increase Further

UK Property Prices Extend Best Run Since 2007

There was some good news for property investors looking for capital appreciation this week as it was reported that UK property prices have continued to rise, increasing for the 14th consecutive month in March 2014, the longest run of price growth for nearly 7 years.

Residential property values across the UK increased by an average of 0.6% in March, with the South West and East Anglia regions recording the largest property price increases of 0.8%, according to data supplied by Hometrack Ltd.

Yorkshire & Humberside and the North West regions registered the smallest gains, with property values increasing by just 0.2% in March 2014.

Even independent surveyors are forecasting property prices to increase by a further 6% this year and are including this information on property condition reports for prospective purchasers.

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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.

Manchester Leads UK Property Boom

Manchester Leads UK Property Boom

Manchester Leads UK Property Boom

Increasing property prices are not just a phenomenon belonging to London and the South-East of England, as new data from Nationwide shows that all UK regions are now enjoying increasing property prices as the property boom continues to gather pace.

Every region across the UK saw property prices increase year-on-year, ranging from a 14.9% annual increase in London to a 1.9% uplift in the North.

Nationwide reported that property values increased by an average of 8.4% across the whole of the UK in 2013, as the market revival became increasingly broad-based, but Manchester emerged as the property boom city, with property prices up by 21% over the last year, to reach an average value of £209,627 (GBP).

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Will Your Property Be Affected By Fracking?

Will Your Property Be Affected By Fracking?

Fracking Concerns Ignored By Local Authorities And Government

There is a great deal of speculation and controversy surrounding the latest methods for extracting natural gas from under our feet, a process known as “Fracking” where a toxic mixture of chemicals are pumped into well heads to release gases trapped in the underlying bedrock.

The process is designed to fracture the rock strata, allowing gas to escape and rise to the surface and the controversial method is already being exploited widely in some states in the USA, with alarming results. Minor earth tremors are being caused and ground water is becoming saturated with methane and other flammable gases and some residents living near the remote drilling sites have to rely on bottled supplies to be able to drink and water cattle, however the companies controlling the drilling are happy to pay people off and ignore what they are being told.

Here in the UK, gas companies have identified potential sites that they reckon hold enough natural gas reserves to last for the next 30-40 years, unfortunately these areas are also heavily populated, not like in the USA.

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