Archive for the ‘rising rentals’ Category

Like many Letting Agents this morning I want to scream out in frustration at the unhelpful and sensational news articles that the likes of the BBC are streaming.

Letting Agents fees have not been banned. Yet.

Letting Agents fees to tenants will continue until legislation is passed. There will be a consultation before this happens. This will take time.

The whole thing has come about in the first place because of greedy agents charging a fortune.

Once again the  unscrupulous actions of the few is having a disproportionate affect on the reputations of many.

I know locally a letting agent (no names mentioned but sounds like an unpopular scavenging animal at the start) who charged over £750 in upfront tenant fees for the agent and for the life of me I cant see how that is fair!  Yet most of us agents charge simply 50% of the cost of the tenancy agreement, the cost of the references and a small administration fee. Most reputable agency charge between £200 – £300 plus VAT to cover this.

It will hurt responsible letting agents to loose this fee. Why? Because the cost of referencing is a genuine cost, as is our time in drawing up tenancy agreements. The costs of running a company mean that this cost will have to be placed onto the Landlord and most landlords will put up the rental.

Phillip Hammond has confirmed plans (and note these are plans, not legislation implemented from today!) to ban letting agents’ fees to tenants in England. The details of this important announcement are still very unclear but the Department for Communities and Local Government (DCLG) will consult with ARLA and other associations ahead of bringing forward legislation.

This industry does not need a BAN – it needs a regulatory cap. 

“So now is the time to speak out” 

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rent-increaseAccording to ARLA  (Association of Residential Letting Agents) The supply of rental homes has risen “astronomically”, from the lows seen earlier this year.  The jump in availability is likely to have contributed to average private sector rents remaining unchanged in September, ending a near six year run of rising prices, according to the Office for National Statistics (ONS).

But despite rents being flat month-on-month, they were still 2.3% higher than they had been a year earlier, meaning they are rising at nearly four times the rate of inflation.

Across Surrey, the fact that rents have been holding steady in September is likely to be due to the increase in supply, giving landlords less scope to hike their rents.Its a known fact that if a landlord keeps rentals the same then tenants will stay but they more than often leave when the landlord puts the rental up.

 

All areas of the UK saw rental increases during the 12 months, with the South East leading the way with a hike of 3.5%. Sally Asling, Lettings Director at online letting agency  SurreyLets comments  “At SurreyLets we are aware of continual rental increases year on year for tenants, however most investor Landlords look at the cost of replacing a tenant which can often offset and rental increases should the tenant leave due to a rental increase. Therefore our rental increases whilst modest are still within, if not more than,  the average increases seen in the South East.”

However despite more stock being available than earlier in the year, there is still an overall shortage of properties available,  therefore potential tenants are likely to face an increase in competition for properties and more rental increases.

Whilst across Surrey,  agents have seen who had been Landlords have been holding off committing to further Buy-To-Let investment following a multitude of tax disadvantages coupled with Brexit  continue to invest. Additionally the fears that  landlords would exit the sector in the face of a wave of tax hikes had not yet come to pass.

Landlords are facing a raft of tax changes including the higher Stamp Duty rate introduced in April, a reshuffle of mortgage interest tax relief next year and an end to the 10% annual ‘wear and tear’ allowance for those letting furnished properties.These tax rises have prompted concerns that the UK could face a significant shortage of rental homes.

The Royal Institution of Chartered Surveyors (RICS) recently warned that 1.8m new rental properties were needed just to keep pace with growing demand. SurreyLets director, Sally Asling concurs.

“Whilst ARLA have reported an increase in stock, there is still a shortfall in stock given the demand. In the key areas we cover which is predominately the affluent commuter belt areas in East and West Horsley, Effingham, Bookham and villages in the Guildford to Leatherhead corridor, we are seeing an increase in rental demand as families looking to secure a home in the areas, to benefit from the  outstanding schooling, are finding themselves priced out of the sales market. In these areas property prices have gone up a further 7% in the last year despite the market being quite stagnant following Brexit. There is no sign of the housing market dropping in value in these sought after villages, and families are struggling to get on the housing ladder. These families often seek employment in the city and need the quick commuter links, but like to live in these affluent villages. Rental is a viable solution but it has put an overwhelming strain on the private rented sector where there is a shortage of property available”

If you are thinking of letting your property in any of the areas above and would like a free, no obligation market appraisal of your property, we would be delighted to assist you. Our experienced staff can discuss all the options available to you and offer as much support as you need to guide you through the lettings process. Please contact Sally Asling, Lettings Director, SurreyLets on 01483 282470 or by email info@surreyletsonline.co.uk

 

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Despite it being a turbulent political year not to mention Brexit (oops I just did)  according
to Zoopla, house prices in Bookham and Effingham have increased in the last 12 months. Sally Asling, director of SurreyLets looks at the sales data.

The Sales market in Bookhamhousing-market

Property in the Bookham area has seen a growth of 7.47% in the last year  (Oct 2015 – Oct 2016)  which for the average Bookham property is an increase of  around £46,571
This is Great News for Bookham homeowners

The current average value is 668K whilst the average sold price is 615K . The average detached property in Bookham in October 2016 is 833K with the average Semi standing at 526K, Terraced homes at 430K and Flats averaging 294K

The Sales market in Effingham

Across the whole market there has been an increase though out the year. However over in Effingham, property prices have performed just a smidgen higher in pounds and pence, but the increase is is the same at 7.47%

Over the past year 24 sales have been agreed in this data catchment. The average value was 815K and the average sold price was £674K.  The average detached property has an average sold price of 981K, with the average Semi standing at 536K, Terraced homes at 525K and Flats at 437K

Rentals in Bookham and Effingham

Sally Asling – Letting Director at  SurreyLets states:  “The  average price for a 4 bedroom rental property in both Bookham and Effingham is in the region of £2500 – 3000pcm with 5 bedrooms reaching up to £3500pcm on average, however there is a severe shortage of stock in the Bookham and Effingham rental markets across all price categories which are effectively pushing rentals up.  Whilst the corporate market has slowed down, the slack is being picked up by the sheer number of people renting as they are self building or extensively renovating their own homes. If you are thinking of renting your property, SurreyLets are confident we can get you the maximum rental for your property in any price range.”

Forecast

Many people are concerned that the prices may dip following Brexit. However there are absolutely no signs of this in this areas of Surrey at the moment.

A trio of data from the NAEA suggests the UK is shrugging off the impact of Brexit with the housing market rebounding to pre-referendum levels.

There was a 16% jump in potential buyers in September, pushing numbers back up to levels not seen since June, while sales agreed rose by 12.5%, according to the National Association of Estate Agents (NAEA).Meanwhile, government figures showed the UK’s economy grew by a stronger than expected 0.5% between July and September, providing further support for the housing market.

Buyers and sellers appeared to have adopted a ‘wait and see’ approach immediately following the vote to leave the EU. The interest rate cut in August is thought to have helped boost confidence, as people expect mortgage rates to remain low for longer than previously thought.

Read more here

Data taken from the Zoopla Plus Website current as of 1st November 2016

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According to a recent report from the Association of Residential Letting Agents (ARLA), residential rental prices are higher in London and the South East than elsewhere, as shown in the graph below. While the UK average weekly rent in 2014 stood at £134, the figures  the South East were £144

ARLA average weekly rental

However, when we look at the commuter areas of The Horsleys, Effingham and Guildford, we see average weekly rentals more in line with the London rentals/ SurreyLets statistics would suggest an average rental for this area to be higher than the averages listed here.

The latest data from the Office for National Statistics (ONS) show a clear North-South divide in rents, with price growth much stronger in the South than in the North of England. Furthermore, price growth has accelerated strongly in London, the East and South East of England compared with a year ago. This may reflect the difficulty of getting on the property ladder in these regions, with high house prices and deposit requirements for purchasing property. This is pushing individuals into the private rental sector.

Arla Year on year rising rentals.

 

In 2015 people living in the South East spent  a fifth of their income on rental. However when we look at areas in definitive commuter belts  such as Cobham, The Horsley’s, Effingham and Guildford where rentals are much higher, this is believed to be closer to 25% eating into a quarter of disposable income.

Sally Asling, Lettings director of SurreyLets Ltd said

“These figures released from ARLA really do highlight the predicament that young people are facing regarding housing. In a recent blog I wrote about generation rent and the fact that people are just not going to get on the housing ladder until later in life.”

“This research clearly demonstrates the huge amount of rental being spent prior to purchasing which clearly puts a dent into what they need to be saving to raise a deposit for their home.

A person buying their first home in the South East  has spent an average of £57,000 on rent*

Its staggering to think that the average person in the South East will have spent an average of 57K renting before buying, even more staggering is this figure is closer to 90K if renting in London.

This is a massive amount of money when you think how much that could be worth if it were saved for a deposit on a home instead.

ARLA av spent on rent buying first home

 

*Assumes most people move out of their family home at the age of 18 and takes into account the average first time buyer age of 31.

 

The ARLA research, which is based on someone moving out of their family home at 18 and renting for 13 years, shows that in the north-east a typical tenant will have spent £31,300 on rent before they can buy, while in London the figure is £68,300. The figures, which were compiled with the Centre for Economics and Business Research, suggest that someone moving into rented accommodation in London today will spend an average of £91,500 on rent before buying their first home. A fifth of those renting now told ARLA they did not expect to ever be able to afford to buy a home.

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