Like every month, Rentila offers you an overview of the main real estate news of interest to landlords and tenants. This month, we focus on: Asking prices for UK homes hit record high; Will UK house prices fall?; 21% of new first-time buyers stretch mortgage terms for more than 35 years; Rents rise 9.1%, London and Scotland outperform rest of UK; What does cooling inflation mean for house prices and mortgage rates?; Tenants increasingly stay put while homeowners move more frequently… Happy reading and… renting!
UK rental market grows 28%
The UK rental market has grown by 28 per cent year-on-year despite the rate of increase slowing down.
A research found there were 28 per cent more rental homes in the 12 months to April 2024 when compared to the same time period in 2023.
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Asking prices for UK homes hit record high
Prices of homes being put up for sale in Britain have hit record highs despite still expensive mortgage costs, but the pace of gains has slowed, according to data from a property website.
The average asking price for residential properties touched 375,131 pounds…
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Rural UK properties have had strongest house price growth
Property values in areas classed as predominantly rural have risen by 22% over the past five years, compared with a 17% increase in urban areas…
In local authorities classed as “predominantly rural”, more than half of the population live either in rural settlements or market towns.
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London’s rental market shows signs of revival
London’s rental market appears to be picking up as tenant demand rises after data shows there was a 12% rise in applicants in April…
Tenant demand is down 10% year-on-year, but it appears that renters are taking advantage of less competition to move home.
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What impact will the general election have on house prices?
The political uncertainty hanging over the UK property market has come into sharper focus since Rishi Sunak announced a general election last week. In particular, the reform of non dom rules had been causing a degree of hesitation in prime markets since they were proposed in March…
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UK housing market strains grow as mortgage rates creep higher
The average rate on a two-year mortgage deal across the range of loan-to-value ratios rose on Friday to 5.82%, compared with 5.30% a month ago.
House prices edge higher despite base rate effect
The number of home appraisals fell 7% month-on-month as gross mortgage advances and new lender commitments fell.
Stubbornly high British inflation data last month sparked a big jump in market interest rates as investors scrambled to price in more increases in borrowing costs from the Bank of England in coming months.
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Will UK house prices fall?
After hitting a record high in August 2022, they plummeted in the wake of Liz Truss’s disastrous mini-Budget. Prospective buyers abandoned the housing market as interest rates on mortgages shot up, competition between lenders temporarily collapsed, and the value of cash deposits was eroded by record inflation.
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Conservatives pledge to support first-time buyers and build 1.6m homes
The Conservatives have pledged to abolish stamp duty permanently for homes up to £425,000 for first-time buyers and to introduce a “new and improved” Help to Buy scheme.
Stamp duty applies in England and Northern Ireland, with different property taxes applying in Wales and Scotland.
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Amount you need to save for a mortgage deposit, according to experts
Ahead of buying a property, it’s important to get to grips with how mortgage deposits work, including how much you’ll need to save and the rules around gifted deposits.
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What is the current position of mortgage rates in the UK?
Inflation, bank rates, swap rates, and unexpected shocks to the economy are all factors in the rise and fall of UK mortgage rates.
Mortgage lenders HSBC UK and Barclays cut the cost of their fixed-rate mortgages in May, while other big bank names like Santander and NatWest have opted to increase their rates.
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Mortgage approvals dip despite increase in lending
Mortgage approvals dipped slightly last month but Britons still borrowed more cash to get on the housing ladder, according to new figures.
Savers also invested a record amount into ISAs for the month as households seek to benefit from 16-year-high interest rates.
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21% of new first-time buyers stretch mortgage terms for more than 35 years
Around one in five new first-time buyers took out mortgage terms stretching beyond 35 years in the first quarter of this year, according to a trade association.
Some 21% of people taking their first step on the property ladder had home loans lasting for more than 35 years, UK Finance said.
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Property demand dips as house buyers hold for interest rate cut
A net balance of 8% of property professionals saw home buyer demand fall in May, marking the weakest reading since November 2023, according to a survey by the Royal Institution of Chartered Surveyors (RICS). Buyer demand was weakest in the South East and South West of England.
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Landlords see a surge in demand as less choice pushes up rents
Landlords have seen a surge in tenant demand with tenants chasing fewer properties in the private rented sector…
Tenant demand is outstripping supply and landlords with two-bed rental properties are on the market for 10 days less than they were pre-pandemic when the average was 25 days.
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Rishi Sunak accused of letting renters down after no-fault eviction bill dropped before election
Rishi Sunak’s government has been accused of letting renters down after it emerged that legislation banning no-fault evictions will not be passed before the election.
The Conservative pledge to end section 21 – or no-fault evictions – will now not be met, as it will not return to the Commons before parliament is prorogued on Friday.
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Rental crisis: 1-bed flat is now unaffordable for the average person in almost 1 in 5 UK cities
Perhaps unsurprisingly, the London rental market is by far the worst offender when it comes to affordability. The average yearly salary in London is £43,629 but you’d need over £20,000 more to comfortably rent a 1-bedroom flat and meet daily living costs – a salary of £64,930 a year.
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Rents rise 9.1%, London and Scotland outperform rest of UK
In the capital, rents jumped 11.2%, while north of the border they rose 10.5% over the period.
By contrast, rents have climbed by just 6.1% across the North East over the last 12 months.
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Rents hit new high in May as renters fork out £1,183
Rents in England have hit a new high with the average cost of renting a property now £1,183 – a rise of 1.4% compared to April’s figure of £1,166.
The rise in rents is down to several factors, including increased demand from tenants and a shortage of properties.
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UK rent growth slows to lowest rate in 30 months
According to Zoopla’s latest Rental Market report, despite the fall in growth, competition for rented homes remains high and rent growth for this year will drop to 5%.
There are still 15 potential tenants for every rental property, more than double the pre-pandemic average.
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Rent price increases across England and Wales mapped
In Scotland, the average rent is £952 a month, which is 10.0% more than at the same time last year. Meanwhile, in Wales the average is £730, which is 8.2% higher than last year.
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Is buy to let dead? Expert reveals why landlords can still thrive
A recent article in The Times, using research from Savills, argued that renting out property in the last 10 years has become less profitable for landlords.
Among the reasons given was the price of property increasing from £161,404 to £236,311 – and the average deposit size nearly doubling.
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What does cooling inflation mean for house prices and mortgage rates?
Inflation cooled to the lowest level in nearly three years in April, but what exactly does it mean for Britain’s housing and mortgage market?
The Office for National Statistics (ONS) said on Wednesday that consumer price index inflation slowed to 2.3 per cent during the month of April, down from 3.2 per cent in March.
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Landlords call for tenant credit checks and faster evictions
Landlords want to see stricter measures to ensure tenants meet their financial obligations as 70% support linking rent arrears to credit ratings to deter late payments, a survey reveals.
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Over 80% of UK landlords report strong tenant demand
Paragon Bank’s latest PRS Trends report revealed that landlords are still experiencing high tenant demand for private rental homes during the first quarter of this year.
The report includes a survey conducted on nearly 800 landlords; 43% of respondents said that tenant demand is ‘very strong’, and 40% replied that it is ‘quite strong’.
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Small landlords generate £45 billion for the economy
Small landlords – that’s those with fewer than 15 properties – also support 390,000 full- and part-time jobs.
Researchers found there are around 129,000 jobs directly linked to the sector, with a further 260,000 jobs supported by the supply chain and additional spending generated by landlords and tenants.
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Tenants increasingly stay put while homeowners move more frequently
Homeowners are moving more frequently, while tenants in the private rented sector (PRS) are staying put for longer, research reveals.
Renters are staying in their home for an average of 4.3 years, which is 12% longer than 10 years ago.
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Reform UK says it will abolish section 24 for landlords
Section 24 was introduced in the Finance Act 2015 by the then Chancellor George Osbourne which removed a landlord’s ability to offset all of their mortgage interest, from rental income before they calculated the tax liability and allow a 20% basic rate deduction.
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