What are YOU going to do when mortgage interest rates have reduced your rental profits to zero?

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There seems to be little doubt that interest rates will only be heading upward in the next few years. If you disagree with this please share your thoughts with me.

So, I’ve been running some numbers and scared myself half to death.

View Full Article: What are YOU going to do when mortgage interest rates have reduced your rental profits to zero?

London rents rise faster than inflation to £1,499 a month as tenants fight over flats

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Continued demand for detached properties and a post-Covid resurgence in rent for flats has pushed annual increases in London above inflation.

Average rents have accelerated by 4% to £1,499 during Q3 – more than double the previous quarter’s rise – and up 11% (£160) higher than 12 months ago, says The Deposit Protection Service (DPS), which found that the average rent for detached homes in the capital is up 12% to £2,098 while flats rose 13% to £1,513.

Its latest DPS rent index reveals that UK rents increased by more than 2% for the second quarter in a row to reach £889, an increase of 8% (£71) in the last year.

Although the pace of rental growth slowed slightly in most regions outside London in the last quarter, rents have continued to hit new heights, growing by more than 7% since Q3 2021.

Scotland is up 8% to £721 while the North West is also up 8% to £692, both outpacing the national percentage rise. Rising by a comparatively modest 5% to £705, the West Midlands has seen the lowest growth over the last 12 months.

Shortages

Across the UK, flats saw the greatest annual percentage rent increase, up 9% from £830 to £909, while terraced properties and detached properties both increased by 8% to £860 and £1,213 respectively. Semi-detached properties saw the smallest percentage increase (7%) to £962.

MD Matt Trevett (pictured) says rent increases continued due to shortages in rental stock and general increases in the cost of living. He adds: “Ongoing demand for larger properties in London, as well as flats during the past 12 months, is driving the significant rent increases we’re seeing in the capital. In order to secure a property, tenants are still willing to pay historically high rents.”

Read advice about increasing rents.

View Full Article: London rents rise faster than inflation to £1,499 a month as tenants fight over flats

Are letting agents playing fair with their fees?

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Hello. Our lettings agents found us tenants who stayed a year and then asked to renew for another year. Their contract was renewed for a further year and our agent charged us 8% of ‘incoming rent ‘ for the following year

View Full Article: Are letting agents playing fair with their fees?

Q4 Property Market Insight

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Exorbitant energy bills continue to fuel the ongoing cost-of-living crisis, and continued rate hikes put downward pressure on the property market. But is it all doom and gloom, and what does Q4 have in store for the UK property market?

Property growth is slowing

As the cost-of-living crisis endures, the Bank of England’s seven rate rises since December 2021 are certainly having the desired effect on reducing inflation when it comes to the property market.

While house prices decreased by a marginal 0.1% for the month of September (compared to a 0.3% rise in August), the annual rate of growth dipped further from 11.4% to 9.9%. This is the first time that the annual house price inflation figure has entered single figures since January 2022. According to Halifax’s latest report, this brings the average cost of a UK property back down to £293,835 from the record high of £293,992 seen in August. 

The current Bank rate sits at 2.25%, and experts expect another marginal increase, further impacting mortgage costs. That said, current Rightmove data shows buyer demand is still up 27% compared to 2019, and average new seller asking prices are up 1% compared to one month ago. 

Rental prices and demand continue to rise

Rents have surged across most UK regions since the beginning of the year, particularly in London, the North West, Wales and Scotland. 

Demand for rental properties is also at an all time high, with Rightmove data showing that unique rental enquiries across the UK stood at 567,000 in September 2022, a huge 43.6% increase from five years ago. 

With such an increased demand for renting, this is pushing up rental prices, making for attractive yields for many investors.

1 & 2-bedroom apartments are back in demand

The cost-of-living crisis appears to be pushing renters into smaller flats. The demand for one-bedroom flats rose to 31% (as a percentage of applications of all property types) in August 2022, while applications for two bedrooms also increased to 35% for the same period. Conversely, demand for two and three-bedroom houses dropped to 11% and 12% respectively. 

In addition to cheaper rents, tenants are attracted to one and two-bedroom apartments given their cheaper/more efficient running costs when compared to a house. As we approach the winter months, renters are making moves to reduce their outgoings – it costs approximately 40% less to keep a purpose-built apartment compared to a three-bedroom terraced property, while flat conversions are also estimated to be 25% cheaper to heat.

Eco-friendly properties are more desirable

A new study from Knight Frank compares the Energy Performance Certificates (EPC) ratings of 30,000 properties in relation to their home’s value. The results demonstrated that improving the energy efficiency of a property can improve its value above and beyond any local average growth; the homes which had an improved rating of C from D were seen to achieve an extra 3% in value growth in addition to any average local price growth. This additional growth was found to equate to the equivalent of around £9,000 (based upon average local resale values). 

In addition to the potential for increasing a property’s value, carrying out eco-friendly improvements can make it more desirable to tenants too. Especially given the current cost-of-living crisis and soaring energy bills, energy-efficient homes are in increasingly high demand.

If you are considering renting a property, get in touch with our friendly team of property experts at Leaders and see how we can help.

View Full Article: Q4 Property Market Insight

Man on a Mission?

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I was somewhat surprised by Rishi Sunak’s re-appointment of Michael Gove as Housing Secretary late yesterday. After all, it’s just three months ago that he was fired by Boris Johnson and he announced plans to quit politics. But I’m pleased he’s back

View Full Article: Man on a Mission?

Landlords urge Gove to ‘get weaving’ on key issues as he returns to Cabinet

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Landlords have warned Michael Gove, the new Secretary of State for Levelling Up, Housing and Communities, that he has a full in-tray of ‘to do’ tasks for the private rented sector as he returns to run the department.

Gove (main picture, on the right) met with his Cabinet colleagues yesterday to kick off the PM’s tenure in office, which will now last two years until another General Election must be called.

Ben Beadle (pictured), who is Chief Executive of the National Residential Landlords Association, says that although his organisation wants to congratulate Gove on his return to housing, there are many issues that require remedy, and already-announced initiatives that need progressing.

Top of his in tray will be progressing with the plans he previously worked on to reform the private rented sector, including ending Section 21 repossessions,” says Beadle.

“Our survey data shows that most [landlords] can envisage operating without Section 21 provided other proposals, such as on court reform and reformed grounds for possession, have their confidence.

“We will work constructively with the new Secretary of State to ensure the final reform package has the confidence of responsible landlords and tenants alike.

“This includes the need for action to tackle anti-social tenants, scrapping plans that would decimate the student housing market, and reforming the courts to ensure legitimate possession cases are dealt with more swiftly.”

Section 21 anxiety

As our joint LandlordZONE/Landlord Action webinar yesterday proved after just shy of 2,000 signed up to watch it, anxiety among landlords and the wider PRS is running high over Section 21 evictions being banned.

As Paul Shamplina explained during the 45-minute webinar, landlords are still waiting to hear from the Government how they will evict tenants who build up significant rent arrears without good reason without having to wait months and spending thousands on court and bailiff action.

Hopefully Gove will be able to reveal his department’s plans for the Renters Reform Act soon.

Watch Shamplina’s view on what will happen when S21 is gone

View Full Article: Landlords urge Gove to ‘get weaving’ on key issues as he returns to Cabinet

Landlords urge Gove to ‘get weaving’ on issues affecting sector as returns to Cabinet

admin    Uncategorized     agents

Landlords have warned Michael Gove, the new Secretary of State for Levelling Up, Housing and Communities, that he has a full in-tray of ‘to do’ tasks for the private rented sector as he returns to run the department.

Gove (main picture, on the right) met with his Cabinet colleagues yesterday to kick off the PM’s tenure in office, which will now last two years until another General Election must be called.

Ben Beadle (pictured), who is Chief Executive of the National Residential Landlords Association, says that although his organisation wants to congratulate Gove on his return to housing, there are many issues that require remedy, and already-announced initiatives that need progressing.

Top of his in tray will be progressing with the plans he previously worked on to reform the private rented sector, including ending Section 21 repossessions,” says Beadle.

“Our survey data shows that most [landlords] can envisage operating without Section 21 provided other proposals, such as on court reform and reformed grounds for possession, have their confidence.

“We will work constructively with the new Secretary of State to ensure the final reform package has the confidence of responsible landlords and tenants alike.

“This includes the need for action to tackle anti-social tenants, scrapping plans that would decimate the student housing market, and reforming the courts to ensure legitimate possession cases are dealt with more swiftly.”

Section 21 anxiety

As our joint LandlordZONE/Landlord Action webinar yesterday proved after just shy of 2,000 signed up to watch it, anxiety among landlords and the wider PRS is running high over Section 21 evictions being banned.

As Paul Shamplina explained during the 45-minute webinar, landlords are still waiting to hear from the Government how they will evict tenants who build up significant rent arrears without good reason without having to wait months and spending thousands on court and bailiff action.

Hopefully Gove will be able to reveal his department’s plans for the Renters Reform Act soon.

Watch Shamplina’s view on what will happen when S21 is gone

View Full Article: Landlords urge Gove to ‘get weaving’ on issues affecting sector as returns to Cabinet

Rent growth exceeds 2% for the second quarter in a row

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The average UK rent rose by more than 2% for the second quarter in a row during Q3, says The Deposit Protection Service (The DPS).

The country’s largest protector of deposits said that average rents increased by 2.18% (£19) to reach £889

View Full Article: Rent growth exceeds 2% for the second quarter in a row