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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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Pension Freedom Fuels Increase In UK Property InvestmentPension Freedom Fuels Increase
In UK Property Investment

Since UK pensioners were granted full control of their retirement savings in April 2015, an estimated 60,000 (70%) pensioners have taken advantage of their ability to take some or all of their accumulated pension in a lump sum, with many opting to put their cash into property instead as an alternative to annuities, shares and bonds.

According to the latest Global Real Estate Outlook report published by property investment company IP Global, property remains a far more predictable and stable longer term option compared to alternative investments in the stock market.

In the UK, property prices in London and Manchester are leading the way, with prices in Greater London increasing by 12% in the last year alone.

New properties in Manchester may appear to be valued at less than half the average of London properties, however, residential property prices are expected to continue rising to close this gap, with new projections putting Manchester’s property price growth at a staggering 26.4% by 2019.

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UK Private Rental Sector Landlords Fear Upcoming General Election

UK Private Rental Sector Landlords Fear Upcoming General Election

UK Private Rental Sector Landlords Fear Upcoming General Election

With The UK’s next General Election less than 80 days away it is feared by some economists that many UK private rental sector (PRS) landlords will choose not to expand rental property portfolios this year.

Fluctuations in regional property prices and housing legislation changes have already hit the UK property market, and now the electioneering hype being spouted by MP’s from all political parties is doing very little to encourage landlords to increase their rental property portfolios.

Already there is a great deal of talk and speculation about the possible introduction of rent controls and the threat of increased taxes for landlords as the current Government and opposition MP’s attempt to leverage the strength of the UK’s buy to let property market.

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UK Property Market Predictions For 2015

UK Property Market Predictions For 2015

What Will Happen To
The UK Property Market In 2015?

Happy New Year to all our readers, and welcome to the usual confusion over what the year ahead will bring for the UK property market.

Property prices are still predicted to rise in 2015, albeit at a much slower pace than in 2014, with economists and property experts providing forecasts ranging from 3% to 5% property price growth.

However, there are a few events that might affect the UK property market in 2015, namely the general election that will be held in May and the growing probability of Bank of England (BoE) raising the base interest rate.

Regarding the general election, it all could depend which party wins or what coalition combination is named to form the Government, after Labour recently confirmed that they would introduce a mansion tax if they come to power. Meaning that the changes to Stamp Duty that were announced in the 2014 Autumn budget would be negated if Labour win.

Less clear is what will happen with Bank of England interest rates. It had been predicted that a small rise, either by a quarter to half of a percent, was going to be introduced before the end of 2014, but that didn’t happen. Then it was going to be early 2015 but that is now also looking very unlikely.

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Does House Price Index Data Provide A Clearer Picture Than The Newspaper Headlines Suggest?

Does House Price Index Data Provide A Clearer Picture Than The Newspaper Headlines Suggest?

Does House Price Index Data Provide A Clearer Picture Than The Newspaper Headlines Suggest?

There can be a great deal of contradiction with the rising number of published House Price Indices, (HPI), that attempt to show the general public what is happening in the UK residential property sales market.

Many Spotlight subscribers are already aware that some of the published House Price Index data provided by mortgage lenders only relate to residential property sales, whilst others relate only to property asking prices.

However, property purchasers are often told to use the official published Land Registry data as a true guide to property prices rather than rely on any house price index data, but Land Registry data is a few months out of date because the Land Registry only record actual completed residential property sales.

Consumers need to know if all the HPI data is anywhere near accurate before they decide to part with cash to purchase a property, and with some degree of disparity between different indices the information provided can be confusing.

However, one thing is becoming very clear – UK property price growth is slowing!

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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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HMRC Tax To Deter Foreign Investment In UK

HMRC Tax To Deter Foreign Investment In UK

Estate Agents Warn That New
HMRC Tax Announcement

Will Put Off Willing Overseas Property Buyers

 

The announcement made by HMRC about altering the Government position on taxation of using foreign capital as collateral for borrowings could have a significant impact on the residential market in UK cities, especially London, according one estate agent.

Cluttons’ Head of Residential Development, Julian Briant, reckons that the new rules over the use of foreign capital in order to be able to obtain a loan in the UK will now result in a taxable remittance, making mortgages less attractive for investors hoping to use money held abroad as security.

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UK Cities With Best and Worst Property Investment Yields

UK Cities With Best and Worst Property Investment Yields

Best And Worst UK Property Investment Hotspots

Rental returns on buy to let properties are best in cities like Southampton, Manchester and Nottingham, where as many as one in four properties are owned by landlords in the private rented sector.

Portfolio landlords and property investors are looking beyond London to identify regions where rental yields are almost three times as high as in the capital.

Rental yield is calculated by measuring the rental income against the properties cost

The latest data on buy-to-let yields provided by the HSBC bank, also shows the proportion of properties in each area that are already owned by landlords, with landlords already owning more than one in four properties in many of the top-yielding areas.

HSBC’s report draws on official data from the Office for National Statistics (ONS) and the UK Land Registry with rental data provided by Home.co.uk.

Top Property Investment Hotspots Revealed

Top Property Investment Hotspots Revealed

  • Southampton, currently tops the list for rental returns with rental yields of 8.73% Manchester has rental yields of around 7.98%
  • Nottingham has rental yields of around 7.67%
  • Blackpool has rental yields of around 7.63%
  • Hull has rental yields of around 7.47%

In all of these areas, except Hull, private rental sector (PRS) landlords already own more than one in five properties.

These areas offer relatively low property prices and have strong demand for rental property from large student and young professional populations – the characteristics that the experts say make for excellent buy-to-let investments.

Top 10 Property Investment Hot Spots By Rental Yields

Rank

Location

Housing privately rented (%)

Average house price

Average monthly rent

Gross rental yield (%)

1 Southampton 23.42 £143,011 £1,040 8.73
2 Manchester 26.85 £104,244 £693 7.98
3 Nottingham 21.64 £86,000 £550 7.67
4 Blackpool 24.16 £77,899 £495 7.63
5 Kingston upon Hull 19.02 £68,243 £425 7.47
6 Coventry 19.02 £110,029 £650 7.09
7 Oxford 26.11 £254,514 £1,489 7.02
8 Portsmouth 22.28 £146,709 £795 6.50
9 Liverpool 21.75 £91,175 £494 6.50
10 Cambridge 23.91 £185,414 £1,001 6.48

The lowest rental yields were registered in areas such as London where recent property price rises have outpaced the growth in rental yields and in some areas like Westminster 38% of property is privately rented.

Worst 10 Property Investment Areas By Rental Yield

Location

Housing privately rented (%)

Average house price


Average monthly rent

Gross rental yield (%)

Kensington and Chelsea 33.97 £1,236,605 £2,968 2.88
Thanet 21.96 £189,362 £524 3.32
Hastings 27.19 £184,787 £520 3.38
Haringey 30.33 £425,541 £1,200 3.38
Westminster 37.56 £890,272 £2,578 3.47
Hammersmith and Fulham 30.05 £685,797 £2,004 3.51
Richmond upon Thames 20.55 £540,379 £1,699 3.77
Camden 30.46 £715,831 £2,383 3.99
Ipswich 18.75 £158,925 £546 4.12
Lincoln 19.36 £124,789 £433 4.16

Head Of Mortgages at HSBC Peter Dockar, said: “House prices in the top-yielding locations – while still out of reach among many first time buyers – are relatively affordable for landlords investing in property and the demand from young professionals has pushed up rents and driven up the returns. London is often seen as the haven of property investment with many believing the streets are paved with gold. However, while the highest rents in the country are an attractive draw for landlords, high house prices in the capital squeeze yields and limit the returns available. As a result, returns can often be far more attractive in other areas so it certainly pays for landlords to do their research.”

UK Residential Property Prices Only Increased By 0.5% Last Month

UK Residential Property Prices Only Increased By 0.5% Last Month

Residential Property Prices Only Increased By 0.5% Last Month 

New data released by Hometrack shows that residential property prices only increased by 0.5% during May 2014, less than previous price rises recorded in the three previous months, suggesting a slowdown in property sales and price growth.

The data shows that the proportion of UK regions recording property price increases during May had fallen to just 42%, down from the 50% recorded in March and April 2014.

While property prices may have continued to rise in London, there has been an overall slowing in the rate of growth, with property prices only increasing by 0.6% in May, compared to the 0.8% average increase over each of the previous six months.

The main growth in London is in lower priced areas of the capital that are perceived as offering better value for money, however, central London prices only increased by 0.2% in May. 

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UK Property Market Bubble Warning

UK Property Market Bubble Warning

OECD Warn About Sustainability Of UK Property Market

The Organisation for Economic Cooperation and Development (OECD) has warned about the sustainability of the UK property market as residential property prices gain more upward momentum across the UK, and continue surging phenomenally in London, prompting growing fear of another property market bubble, as the UK economy continues to recover from the financial crisis in 2008.

A property market bubble occurs when property prices become so over inflated that they become unsustainable and the market collapses

The Confederation of British Industry (CBI) also aired concern saying that they are on high alert about the property market in London and the South East of England as house prices surge.

The Bank of England are said to be monitoring the situation, however BOE policy maker, Ben Broadbent reckons there’s no need for alarm over the UK property market as they have already curtailed incentives for home loans through the Funding for Lending Scheme.

Rising property prices are a good thing, they are a good indicator of the overall health of a nation’s economy, and the current government are confident that prices will continue to rise, hence the introduction of financial incentives such as the Help To Buy scheme, encouraging property buyers with loans or guaranteed underwritten mortgages, allowing them to gain a stake in the UK property market.

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There Will Never Be A Better Time To Invest In Property

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