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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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PRS Tenants Could Be Hit With Rent Increases Despite Falling Inflation

PRS Tenants Could Be Hit With Rent Increases Despite Falling Inflation

PRS Tenants Could Be Hit With Rent Increases
Despite Falling Inflation

The increase in demand for rental properties in the UK’s private rental sector (PRS) from would-be tenants could drive local rental prices through the roof in some parts of the country according to a new report published by the Association of Residential Letting Agents (ARLA).

According to data published in the latest ARLA monthly Private Rented Sector report 31% of letting agent members recorded an increase in the cost of monthly rent for rental properties in UK regions between January and February this year.

41% of letting agents in the South East of England reported landlords increasing rental prices for their properties. However, in Wales only 13% of letting agents reported landlords increasing rental asking prices.

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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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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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Survey Shows UK Public Think Property Investment Is Best Way Forward

Survey Shows UK Public Think Property Investment Is Best Way Forward

Survey Shows UK Public Think
Property Investment Provides Best Returns

A new survey has discovered that 40% of UK residents would rather choose property investment over all other investment types.

The YouGov survey commissioned by InterTrader found that 40% of UK residents reckon that property investment is the best vehicle for generating a good Return On Investment (ROI).

In addition, over half of UK residents would consider a more active role in managing their own investment opportunities, with 38% of respondents saying they would not trust financial professionals to generate high enough positive returns with their hard earned savings.

The findings of the YouGov survey were published amid the concern that parts of the UK, especially London and the South East, are experiencing a localised and unsustainable property bubble.

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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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Treasury Watchdog Sounds Alarm Over Runaway Property Market

Treasury Watchdog Sounds Alarm Over Runaway Property Market

Treasury Watchdog Sounds Alarm Over Runaway Property Market

  • Office for Budget Responsibility (OBR) says speculators are inflating property prices
  • Average price of a London home is expected to jump from £458,000 (GBP) to £650,000 (GBP) by the year 2020
  • Average price of a UK residential property reached £254,000 (GBP) in January

Following on from last Friday’s post about the Government’s independent watchdog the Office for Budget Responsibility (OBR), the Treasury’s chief watchdog, Robert Chote has spoken out.

Soaring UK property prices are being inflated by speculators banking on further gains, causing Robert Chote, head of the Office for Budget Responsibility (OBR), to issue a warning that the UK is on the verge of a dangerous housing bubble.

Mr Chote told Treasury Select Committee MP’s: “With very rapid house price increases in some parts of the country you might see bubbly activity where people are willing to buy stuff off plan or not intend to live in it. The surge in prices is partly down to soaring demand, driven by rising confidence, increased lending, and government schemes such as Help-To-Buy combined with a general lack of supply. You can explain the increase in house prices by fundamentals without having to resort to saying there is a bubble going on. That doesn’t mean to say there may not be some bubbly components to what is going on in the housing market in particular parts of the country.

Treasury Watchdog Sounds Alarm Over Runaway Property Market as average price of a typical residential property climbed to £254,000 (GBP) in January 2014 – an increase of 6.8% in a year

Treasury Watchdog Sounds Alarm Over Runaway Property Market as average price of a typical residential property climbed to £254,000 (GBP) in January 2014 – an increase of 6.8% in a year

Official figures show the average price of a typical residential property climbed to £254,000 (GBP) in January 2014 – an increase of 6.8% in a year.

Residential property prices were up:

  • 13.2% in London
  • 7.1% in the South East
  • 6.9% in Wales.

As already reported on Spotlight, the OBR expects house prices to rise by more than 30% in the next five years, meaning that the average price of a typical residential property in London is expected to jump from £458,000 (GBP) to £650,000 (GBP) over the next six years.

Mr Chote insisted that the OBR was not “taking a view that house prices are over or undervalued, house price inflation should cool from 8.5% this year to 3.7% in 2017 and 2018.

Steve Nickell, an economist who sits on the OBR with Mr Chote, said: “A bubble arises when demand is being driven by people wanting to get in because of expectations of price growth rather than for somewhere to live. The house price to income ratio has been growing for the last 40 years but that cannot go on forever because everything you consume would become housing and there would be nothing else left.’

But David Ruffley, a Tory MP on the Treasury committee, said forecasters always expect a ‘benign return to equilibrium’ and fail to predict the cycle of boom and bust.

Mystery Of Missing £400,000 Housing Benefit Payments

Mystery Of Missing £400,000 Housing Benefit Payments

R2R Company Owes Landlords £400,000 Housing Benefit Payments

Around £400,000 (GBP) in housing benefit payments have mysteriously disappeared after being paid to London Housing Solutions one of London’s biggest property agents, who specialise in letting property to tenants claiming benefits, Channel 4 News have revealed.

Channel 4 News attempted to trace both the present and former directors of the company, who admitted that the money had gone astray, but neither would accept responsibility for its disappearance.

Local Housing Solutions, an offshoot of London Housing Solutions, who until recently shared offices and staff in Catford also denied benefiting from the missing payments.

Channel 4 News understands at least 100 private rented sector landlords are owed rent by London Housing Solutions and the tenants spoken to by Channel 4, fear eviction as a result of the non payments.

The two rent 2 rent companies were originally set up by Keith MacGregor, who failed to respond to Channel 4 News’ accusations.

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Flooding Spells Trouble For PRS Landlords

Flooding Spells Trouble For PRS Landlords

Post Flood Checks for PRS Landlords
Of Properties Affected By Flooding

The recent flooding observed in the South of England this winter have seen a large number of landlords and home owners properties damaged by flood water with around 6,500 properties damaged by flood water since December 2013.

This has meant that both landlords and tenants have had to put in a great deal of time and effort to put things right, with landlords spending a substantial amount of time contacting their landlord insurance providers to inform them of the situation and trying to arrange repairs.

However, there are some landlords who remain unsure of where to start when it comes to flood damage, so we take a look at what landlords can do if property has been affected by flooding:

  • Wear waterproof clothing, boots and a face mask
  • Get a qualified person to switch off electricity at mains – don’t touch sources of electricity while standing in water
  • Remove water using pump and generator – position generator outside as it produces carbon monoxide fumes which can kill
  • Only pump out water when flood levels outside house start to be lower than inside – this reduces the risk of structural damage
  • Houses can be cleaned and disinfected using ordinary household products
  • If drying property naturally, keep doors and windows open, if using dehumidifiers, close external doors and windows

Severe Flood Damage

Unfortunately, if you own property in the South of England there is a good chance they have been severely affected by flooding, especially if they are located near the Somerset levels or by the River Severn or River Thames.

The Environment Agency (EA) issued 16 severe flood warnings (meaning severe flooding with a danger to life) and 76 flood warnings (meaning immediate action should be taken) in January 2014 for the South West and South East of England.

If your rental properties have been affected by severe flooding then there is the likelihood that the tenants will have already been evacuated.

UK PRS landlords may find that they have to foot the bill to re-house tenants while their property is unfit to live in, and even after the flood waters have receded and it could still take months for damage to be repaired.

It is important for landlords to keep in constant contact with their landlord insurance provider and their tenants in order to make sure the restoration process runs as smoothly as possible.

Traditional brick or concrete walls will generally dry out well so long as they are clear for ventilation.

Wall cavities need to be inspected by an expert to ensure walls are secure and any damaged wall-cavity insulation will also need to be removed.

Internal walls, damaged plaster, plasterboard and wallpaper will have to go. Holes might also need to be drilled through plasterboards or dry linings to drain trapped water and aid ventilation, and timber partitions may rot if not dried properly and property owners are advised not to redecorate for at least three months after walls have dried and repairs have been done.

Modern wiring can withstand a short period of flooding, but if a property has been flooded for more than a few hours, it will probably need rewiring – downstairs at least. An electrician will also need to give junction boxes, socket outlets, light switches and ceiling connections a thorough check to ensure there is no water trapped inside them.

Moderate Flood Damage

Properties have been affected across the whole of the UK, even though properties worst affected by flooding are mainly in the South West and South East of England. Many of these properties are still habitable, however there are a number of other issues that landlords have to deal with.

Flooding can destroy the fabric and structure of property if left and it’s hard to be sure how solid a property’s foundations are after flooding, as some problems may take years to materialise.

There can be subsidence – which causes foundations to “sink”, and heave – which forces foundations upwards. Subsidence occurs when the ground under a building “shrinks” through lack of water, whereas heave occurs when the ground expands because of excess water. There is also the possibility of sinkholes and signs to watch out for are cracks and general movement in the building, but both can often remain undetected for some time.

Other indicators of structural damage include buckling of walls, bulging or dislodged sections of property and new cracks above windows or doors

Tenants will often get in contact immediately if they feel that their property is affected by flood water, and landlords should try to get as much information as possible about the amount of damaged caused.

Small amounts of water in rooms such as kitchens and bathrooms are less disastrous than in carpeted areas such as bedrooms or living rooms, and if it is safe to do so you can advise your tenants on how to contain flood water.

Landlords should keep in regular contact with tenants in the worst hit areas to monitor the situation and make preparations to re-home them if necessary.

Minimal Flood Damage

Rental properties built on high ground, away from lakes and rivers, will probably be unaffected by flooding. However, with the high winds and increased rainfall over the past few months there is still a danger of damage, so landlords need to make sure that basic checks are carried out to assess the damage when they are able to.

Roof tiles, chimney stacks, gutters soffits, and window frames can be adversely affected by strong winds and continuous heavy rainfall. If left in unchecked these minor issues can become major problems in the future.

Tenants may have noticed small leaks in garages and lofts during heavy rainfall, which should be treated as warning signs.

Unfortunately, nearly every landlord across the UK right now needs to have some sort of plan in place in case their properties are affected by flooding; otherwise they could find themselves in a difficult situation.

The Environment Agency website is updated on a regular basis with information concerning flood warnings and what to do in an emergency.

The new “Flood Re” proposals intended to replace the current statutes of the Water Bill will leave landlords high and dry as insurance companies withdraw insurance for rental properties in areas prone to flooding.

UK Rental Market Remains Healthy Despite PRS Rent Falls

UK Rental Market Remains Healthy Despite PRS Rent Falls

UK Rental Market Remains Healthy Despite PRS Rent Falls

Rental price increases in many UK regions have slowed according to the latest data gathered by the latest Buy-To-Let Index conducted by LSL Property Services group.

The data showed that UK PRS rents increased by 1.5% in the 12 months to December 2013, less than half the 3.2% growth observed in 2012 and on the whole, UK PRS rents fell by 1% in December 2013, (around £8), reducing the average private rental sector rent to £745 (GBP) per calendar month.

The largest drop in PRS rental prices was observed in the South East, with rents down 2% since November 2013, rents also fell 1.9% in both London and Wales.

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