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PRS Rental Prices Keep Going Up

PRS Rental Prices Keep Going Up

PRS Rents Increase 2.5% In The Past Year

According to the Office for National Statistics (ONS) latest Index of Private Housing Rental Prices, tenants in the UK’s private rental sector (PRS) have seen rents increase by an average of 2.5% in the 12 months up to June 2015,.

Private rental prices increased across the whole of the British isles with rents increasing by:

  • 5% in England
  • 1% in Scotland
  • 8% in Wales

PRS rents increased across all English regions during the year with rental prices increasing by 3.8% in London, while the overall Consumer Price Index (CPI) inflation stood at 0% over the same period.

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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.”

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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New Warnings Over Using Property For Pensions

New Warnings Over Using Property For Pensions

Relying On Property To Fund Pension Is Not A Good Idea Warn Experts

3.5 million property owners plan to rent out, downsize or sell properties to get enough money in the bank to pay for their retirement according to a survey by an asset management specialist.

However, pension experts are warning that people could be risking poverty in retirement because of the volatile nature of the property market, especially if they were forced to sell properties as values fell.

The research, by Barings Asset Management, discovered that 16% of the UK workforce would be relying on property sales to provide them with all or some of their pension pots, an increase of 13% from 2013 and the highest reported figure since 2009.

Soaring residential property prices are the reason behind the trend. Last week the Office for National Statistics (ONS) said average UK residential property prices were up 11.7% in the year to the end of July to £272,000 (GBP).

The biggest rise was 19.1% observed in London.

The hard hitting story was first published by the Express newspaper earlier this week, with warnings from financial advisors that property investment was a dangerous game to play.

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Red Ed Calls For Rent Controls As Part Of Election Campaign

Red Ed Calls For Rent Controls As Part Of Election Campaign

Red Ed Calls For Rent Controls As Part Of Election Campaign

Labour leader Ed Milliband has called for a European style rent indexation to be introduced as part of the political party’s election rhetoric.

The re-introduction of rent controls under the new guise of a newly titled Rental Price Index, designed to stem excessive rent increases, is intended to be one of Labour’s biggest vote magnets

The current coalition Government decided late last year that they wanted private rental sector landlords to act as unpaid members of the UK Border Agency, controlling and reporting on the immigration status of tenants, in order to avoid excessive financial penalties. This legislation is due to come into effect later this year after passing through Parliament and the House of Lords without too much fuss from MP’s, despite lobbying from landlord associations and heated debates with lettings industry professionals. 

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UK Rental Prices Have Not Grown As Much As The Media Hype Suggests

UK Rental Prices Have Not Grown As Much As The Media Hype Suggests

UK Rental Price Growth Has Slowed Down
Everywhere Except London

The hype suggesting spiralling rental prices in the UK’s private rental sector (PRS) are out of control, has been previously used by tenants and even some agents to brow beat private sector landlords into lowering the expected monthly rental prices has been exposed as a myth by the Office for National Statistics (ONS).

Apart from the ridiculous rental situation in London, where rental prices for single dwellings are getting beyond affordable, landlords across the rest of the UK are lucky if property rental prices just about keep pace with inflation.

Private rental sector rental prices are flat in monetary terms when viewed year on year even if there has been some seasonal adjustment for the Spring & Summer lettings market.

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CML Say Help To Buy Is Not Creating Another Property Bubble

CML Say Help To Buy Is Not Creating Another Property Bubble

Help To Buy Only Accounts For 4% Of Annual Mortgage Approvals 

New analysis of the UK residential mortgage market by the Council of Mortgage Lenders (CML) has revealed that the impact of the government’s Help To Buy scheme on the UK property market has been fairly limited.

Property pessimists have tried to claim that the Help To Buy initiative is responsible for creating another property bubble, however, official figures show that HTB has had little impact on UK property sales.

The Help To Buy scheme accounts for just 1% of all residential mortgages taken out in the six month period to March 2014.

According figures from the CML, only 4% of all UK mortgage approvals between April 2013 and March 2014 were part of the Help To Buy scheme, but 85% of those taking part in the scheme were first-time buyers.

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Governor of the Bank of England thinks Northern Ireland's House Prices Are Not Keeping Pace With Rest Of UK

Governor of the Bank of England thinks Northern Ireland’s House Prices Are Not Keeping Pace With Rest Of UK

Northern Ireland House Prices Not Keeping Pace With Rest Of UK

Mr Carney told the Andrew Marr programme that “if you look at the UK as a whole, everywhere bar Northern Ireland – we are now seeing house prices begin to recover”

On Sunday 16th February, the Governor of the Bank of England, Mark Carney said in a BBC interview with Andrew Marr said that Northern Ireland is the only part of the UK where house prices are not recovering, stating: “If you look at the UK as a whole, everywhere bar Northern Ireland – we are now seeing house prices begin to recover, so it is a more generalised phenomenon”.

However, Mr Carney’s comments provoked a backlash from Northern Ireland’s finance minister Simon Hamilton who reckons that Mr Carney’s remarks were at odds with analysis carried out by Stormont’s Department of Finance and Personnel (DFP).

Mr Hamilton posted on his Twitter account, “Doesn’t tally with DFP analysis. Never thought I’d have to correct a governor of BoE!”

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Published UK Property Data For 2014 Suggests A Record Start To The Year

Published UK Property Data For 2014 Suggests A Record Start To The Year

Published UK Property Data For 2014 Suggests
A Record Start To The Year 

Confirmation that the UK’s residential property market has returned to health is the first data from Rightmove covering 2014 which suggests that the year ahead looks good for property!

The Rightmove House Price Index (HPI) of 2014 shows that property asking prices increased by 1% in January.

Property prices are traditionally subdued in the first month of the year, prices increased just 0.2% in January 2013 and have usually fallen by an average of 0.2% in the month of January over the last decade.

The number of properties coming to market and activity is also up as both estate agents and property vendors look to cash in on the increased confidence in the UK property market.

Year on year property asking prices are up 6.3%, the highest annual rate of increase since November 2007, before the onset of the UK’s credit crunch. 

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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.

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