L&G set to be come biggest landlord yet

The lord of the land has arrived. Legal & General (L&G) plan is to invest a whopping £15bn into housing , education, energy and transport over the next ten years. Mr Wilson has made a strong point that while house prices rising for house owners today is a very positive move on what has been a struggling property market since 2008, the rise in prices will only hinder the first time buyers of 2013 by making it even harder to reach that all important deposit.

Nigel Wilson , head of Legal & General has stated to the BBC that there is  “intergenerational injustice” towards young people who simply can’t get jobs due to the recession and ridiculous  height of education fees.

Young people could feel their problems are exacerbated. Planning for more properties is hard and as Mr Wilson says "Planning in the UK is probably as difficult as it gets anywhere in the world,". Houses that are built are instead of a £120,000 house a year now scaled up to a £250,000 a year - a generous portion of which should be rented out to the FTB’s of society. Such an increase in supply will mean building on a green belt land - making it a positive move.

It is an excellent idea that before applauding ourselves when house prices increase, there should a system in place that allows a halt on value growth for a minimum of 3 years , encouraging supply on houses.

L&G have already made their first direct stamp within the housing sector, in March they purchased a 46.5% stake in the house builder Cala. Igniting their thirst for the rental market, as part of a strategy to target socially useful projects i.e. education. transport and energy sectors) to deliver high rates of return to Legal and General making them the next big thing - if not the biggest thing to come through into the land of landlords of since 2008 at the very least.

A tougher time to buy, a great time to invest

At last! The long awaited rise of property prices has arrived. For a healthy deposit , you can start to make some money or sit tight on some while it increases.

With house prices supposedly on the up! rumours are rife that Rightmove figures which are not seasonally updated have shown house prices have gone up a fantastic 5.5% from last years figures and a cracking 8.8% rise in the first 8 months of the year.

Huge support in the mortgage market has meant that government lending incentives and the rising optimism in our societies recovery from the almighty recession , has as a result ignited a market price pick up .

For the fortunate few who have a sizeable deposit and ability to buy - with the power and flexibility needed to negotiate a good profitable price - a good investment can now be made. House prices are at their best for London home-owners , being the most marked with a 10.2% ‘up’ on last year ( according to Rightmove).  The government is under pressure to make changes and retract plans to offer state-backed guarantees to riskier home-buyers.

Making the cash investor ever more popular to put their cash where it can return to them plus a bit more in a year or two. In contrast, the time to buy for first-time buyers has never been tougher. The new “Help to buy” initiative is to be announced by the government in their march budget and is due to take effect in January 2014.  Houses are rising at their fastest pace since 2006, meaning that as it’s harder to buy , people may rent and save. Making the investors property ladder a very appealing climb.

Settling disputes with your landlord doesn't have to be ugly or expensive

The first rule of tenancy is be factual and stay calm ,even if your landlord doesn't seem to be connecting with you on a business or personal level.

One of the main rental disputes reported is that of ‘deposit return’ the easiest way to deal with this predicament is to firstly find out if your landlord protected your deposit in the ‘tenancy deposit protection scheme’ which he or she is legally bound to do. This way, you can contact the scheme they used and see if you have a libel case on return of your deposit.

Think through these steps before taking drastic action that may cost you a small fortune by going to court. 

• First, speak to your landlord about your concerns and make sure you are clear and concise in your opinions - keep them factual.
• If talking doesn't work , then write a formal letter detailing the problems you have in a clear and factual way - using dates and times if needed.
• If problems continue and issues are not resolved that use a mediation service, this is a lot cheaper and quicker than going to court.

Going to court should be your last option and can be pricey and if your landlord decides its a good idea to take legal action , the case could go to a small claims court. Small claims are any case that is worth £5,000 or less. Remember to think hard about whether the issue can be resolved between you privately,  before entering into a heating discussion which could cost your thousands.

Free advice is always available to landlords and their tenants from citizens advice or  shelter, your living space is important . Make an informed decision , not a hasty one.

THE TOP 5 REASONS YOU SHOULD RENT NOT BUY

OK, so the time has come , you’re moving out and will you decide to rent or buy? to help you reach that all important decision we've collected your top five tips on what we feel is the best route for any first time buyer or re-locator in 2013.

1. Less responsibility – Forget fixing pipes or getting boilers serviced, if something breaks, your landlord will most probably fix it - a lovely luxury that a home-owner would have to face and pay for .

2. No Loan – Purchasing a home will almost certainly include a loan to buy it , mortgages are tricky things and can make for some complicated reading , making sure you secure the right rate, not to mention the re-payment options and being tied in for a number of years. Not appealing. Renting will let you have freedom, pay your bills and get out when you choose - no ties , no payback and no risk of losing money in the uncertain housing market of today.

3. More freedom and more choice – How long your rent for is up to you , yes there is a minimum of a 6 month let on most rentals, however in the grand scheme of things , that’s not long and you are free to move on when or if you fancy a new location. When you rent, the world really is your oyster, embrace it and go rent hoping!unless you fancy being tied down to loan repayments for the next 30-40 years that is?!

4. A little bit of luxury - In this rental market , you could quite possibly get lucky and secure a something with a bit of style . Something that you simply couldn't afford on the housing market but could easily split between friends in a house share. Letting you live the high life till you really are ready to get tied down to a property permanently.

5. A quick fix – Renting is a fantastic option for those of you who are looking to move on and in quickly. Rentals can take just a week to settle searches,  paperwork and references. Buying a house can take an average of  12-16 weeks - from offer acceptance to completion - not forgetting lack of security on your purchase with risks of falling through and money being lost of solicitors/conveyancers before you've even moved in.

Now it’s time to make that all important decision , look at what your life requires at this moment in time, renting is a great option for those who don’t know just yet and want to explore their options, giving you a sense of freedom that you simply won’t get with a house purchase. bite the bullet, make your move and add a bit of variety to your living - rent.

Latest data shows, residential rents are up by 8.4% in England in the last eight years

In England, private rental prices have risen by 8.4% over the past eight years between May 2005 and May 2013, according to the latest statistics released by the Office for National Statistics.

During this period private rental prices risen the most in London, up by 11% and the East of England with the increase of 8.3%. The North East and East Midlands saw the smallest increase of 5.2% and 5.3%

In the past 12 months alone average private rental prices have risen in eight of the nine English regions. The biggest private rental price rises were in London at 2.2% and the South East at 1.2% while they declined by 0.1% in the North East.

Amidst May 2012 and May 2013 private rental prices in Britain increased by 1.3%. If London is ruled out then the increase is 0.8%. In England the increase is 1.3%, in Scotland 1%, and in Wales 1.5%.

This means that a property that was rented in May of last year at £500 a month, which saw its rents rise by the average rate would be rented in May of this year for £506.50.

The big weight that London has in the overall index shows its high average rental prices and its large volume of private rented property. All the countries that represent Britain have seen increases in their private rental prices since 2011, which is the first year for a Britain index.

These movements are shown in rises in the rental price levels, with England’s rental prices rising more than those of Scotland and Wales. Between May 2011 and May 2013 rental prices have risen by 2.7% in Britain.

For the same time frame, rental prices rose by 2.8% in England, 2.2% in Scotland and 2.3% in Wales. With the exception of April and May 2013, the annual rate of change in the IPHRP has been higher in England than in Scotland or Wales.

Nevertheless, the annual rate of change has been rising in Wales and Scotland since late 2012. May 2013 is the following period since January 2012 in which the annual rate of change in Wales was higher than in England. The IPHRP series for England starts in 2005. Private rental prices in England show three separate periods. Rental price rises from January 2006 until November 2009, rental price drops from December 2009 to November 2010, and rising rental prices from December 2010 onwards. Of these three periods, 2008 experienced the biggest rental price rises.

When London isn’t included, England represents a similar pattern yet with slower rental price rises.

Since the beginning of 2012 English rental price rises have been secure at around 1.5% year on year. Rental price rises have been stronger in London and the South East than the rest of England since January 2011.

For more information please feel free to contact us at:

http://www.lettingvision.co.uk/

Latest rental index shows that residential property rents are increasing more steadily

Residential tenant arrears have declined by £6 million in England and Wales as rents increase more steadily, according to new research.

Rents increased by 0.1% between April and May, in comparison with the recent average of 0.3% per month yet the average rent in England and Wales stands 3.5% higher than in May 2012.

Rents in London have been rising the most and are 7.2% higher higher than in May last year, while the South West has seen no annual change, according to the latest Buy to Let Index from LSL Property Services which owns the UK’s biggest lettings agent network, including national chains Your Move and Reeds Rains.

The average rent in England and Wales increased by 0.1% since April, to £737 per month. This is slower than the average monthly rise of 0.3% over the past 12 months but the recent rise still leaves rents up by 3.5% up on last year and brings rents in May to the third highest level on record.

The number of new lettings in May gained from better tenant finances and slower rent increases, contributing to a 3% rise in the number of new tenants, in comparison with April. On an annual basis, there were 5% more new tenants than in May 2012.

Six out of ten regions saw experienced increases in rents in May. The quickest rises were in the East Midlands, where rents are up 0.4%, followed by the North West with a 0.3% monthly increase. London, the South East, and the East of England all saw rents 0.2% higher than the month before. Nevertheless, rents in Wales dropped by 0.7%, followed by a 0.4% fall in the West Midlands, while rents in Yorkshire and the Humber are down by 0.3% in comparison with April.

On a yearly basis, there remains significant variation in the rate of rent increases. Once again, London towered above, with rents 7.2% higher than last year. Second quickest was Wales, where rents are up by 5.2% since May 2012, followed by the North East with annual rent increases of 4%. In nine out of ten regions rents are higher than a year ago, with only the South West seeing no change since May last year.

‘Despite a strong increase in new tenants, rents rose more slowly than other household costs.  But that demand would have been even stronger had it not been for a recent spurt in the number of first time buyers,’ said David Newnes, director of LSL Property Services.

He said that looking further ahead, maintaining the rise in new buyers will depend on how many tenants are able to build big enough deposits to get a mortgage.  ‘With wage growth so weak compared to inflation and house price growth, it looks like deposits will become less affordable which will keep demand for rented accommodation high,’ he explained.

He pointed out that the rental market has shown its flexibility in May, but will need to continue to adapt to deal with the long term change towards levels of demand unprecedented in recent decades. ‘May’s figures are consistent with our longer term predictions that private renting will become a more and more vital aspect of the economy,’ said Newnes.

The data also indicates that due to slower capital accumulation, the total annual return on a rental property dropped to 5.3% in May. This constitutes an average return of £8,747 with rental income of £7,797 and a capital gain of £950. The average yield on a rental property was constant on a monthly basis, at 5.3% in May, in comparison with 5.2% in May of last year.

If rental property prices continue the same trend as the past three months, the average investor in England and Wales could foresee to make a total annual return of 6.2% per property over the next 12 months, equivalent to £10,316 per property.

‘With the real heat of the summer market just around the corner, a slightly cooler market in late spring is likely only to be a mild interlude. But despite the very temporary reasons, last month will have been very welcome for tenants and landlords alike, with more lettings activity going hand in hand with more affordable rent rises. A slower monthly increase has had no significant effect on landlords’ annual returns, bolstered further by the better financial position of tenants,’ Newnes added.

The total amount of rent late or unpaid has improved by £6 million  in one month. Total arrears in May were £276 million, in comparison to £282 million in April. This is equal to 8.2% of all rent across England and Wales, in comparison to 8.4% of all rent in April.

Newnes said that tenants are steadily paying down rental arrears and this is part of a broader shift where consumers are focusing on decreasing their financial leverage and shedding their bad debts. ‘It’s a clear long term trend, despite the occasional more difficult month. Landlords will be equally happy that tenants facing financial trouble have found an opportunity to pay down arrears,’ he pointed out.

‘But while this month will come as a relief for everyone, in the longer run it’s still unemployment levels and wage growth which matter the most to the affordability of rent. Those factors will depend on the wider economic recovery, and the latest jump in inflation will make that long term struggle all the more gradual,’ he concluded.

For more information please feel free to contact us at:

http://www.lettingvision.co.uk/

Tenants’ retire from central London to get away from high rents

Tenants are continuing to vote with their feet in the most expensive parts of London, by moving out to cheaper areas.

Agents are reporting the ongoing departure, amid an oversupply of properties, with landlords having to freeze or cut rents.

Douglas & Gordon says there are currently 30% more properties available than a year ago.

Lettings director Virginia Skilbeck said: “One of the biggest changes we are seeing is the reduced demand in prime central London as tenants are forced to move further out to save money.

“Traditionally, corporate tenants have housed themselves in the best and most expensive parts of central London. However, we are seeing much greater demand from corporate tenants in the peripheral areas as many companies have reduced accommodation allowances.”

Chesterton Humberts says their supply of rental properties is 12% ahead of this time last year, and that tenant demand has ‘softened’ due to cuts in corporate budgets, City redundancies and cheap mortgage deals which are prompting people in rented accommodation to buy.

Landlords have become keener to renew existing tenancy agreements, and the firm said: “Many landlords are responding by offering to free rents for tenants and sometimes reduce them altogether.”

Chesterton Humberts’ and Douglas & Gordon’s reports follow on from a virtually identical study from Cluttons.

All three companies have been upfront about market forces driving rents down, at a time when London Mayor Boris Johnson has come under pressure to impose rent controls across London.