This week has seen a number of reports on the property market, all showing increases both in property prices and the number of sales – and also ongoing increases in rental demand and rents.
In this article, I’m going to look mainly at the rental side.
New ONS Index
The Office for National Statistics has just published an index showing the changes in private rental prices in Great Britain for the first time.
This shows that between May 2012 and May 2013 private rental prices rose by 1.3%, across the country.
Between May 2012 to May 2013 private rental prices increased in eight of the nine English regions, including ours, here in Bristol. As usual the largest ental price increases were in London and the South East – and they actually decreased slightly in the North East.
Since May 2005 private rental prices have increased by 8.4% overall, in England. They have increased the most in London (11.0%) and the least in the North East and East Midlands. As usual, Bristol and the South West are consistent and stable – which is why we think it’s a great place to invest.
Here are some comments on the latest news:
Stephen Smith, Director, Legal & General Network –
“This inaugural report from the ONS shows that there continues to be an increasingly strong demand for rental properties. Whilst landlords are enjoying strong yields from property lets, the younger generation are struggling to keep up.
“Something urgently needs to be done to improve the supply of new housing across the UK to help alleviate this situation. Renting is already expensive, and if supply can’t keep up with demand, the problem for young people won’t be getting onto the property ladder, but simply moving out of their parents’ house at all!”
Ben Madden, West London lettings agents, Thorgills:
“Average rents continue to rise, but the pace of the rises has certainly slowed over the past year.
The comparison with eight years ago underlines exactly how much the market has changed. Structural changes have made it infinitely more robust than a decade ago.
The London rental market is certainly the most competitive in the UK and this is reflected in its average price rises over the past year…
… The new wave of landlords who have entered the sector are much more focused on the long term, and this is good news for tenants, who are also committing to longer term rentals.
“Over the past year or so we have seen a lot of corporations returning to the rentals market. This in itself has contributed to the upward pressure on prices, especially in the capital.
“While rents have been steadily increasing, we have not seen any noticeable rise in tenant arrears.”
Matt Hutchinson – of flatshare website SpareRoom.co.uk:
“The economy may be growing, but few of us are feeling it. With stubbornly high inflation and galloping rent rises consistently outpacing paltry wage rises, Britons are getting poorer.
Landlords looking to cash in on demand and turn a fast profit need to realise that tenants have an affordability ceiling. Rents can only go so high before people are priced out of an area altogether.
This is especially true in London, which will become unaffordable for everyone but the wealthiest if current trends continue.
Many people face being long-term renters and landlords know this. While banks are starting to lend at higher LTVs again, saving for even a 10% deposit is impossible for those facing rent rises above the rate of inflation, and struggling to cope with soaring living costs.
Britain, whether it likes it or not, is becoming a nation of renters. We can’t let rental prices spiral out of reach of the average British wage earner or we really will have a housing crisis on our hands.”
It’s interesting to see the long term issues for high London rentals being highlighted again in all these comments.
Which is why we love Bristol!
Discover more about today’s property investment opportunities at our next PIM on 25 July 2013 – 6-9 pm Holiday Inn Bristol
If you want to find out more about property investment, or are looking to expand your contacts or knowledge, then do make sure you come along to our next Property Investment Meeting – PIM – on 25 July 2013 at Holiday Inn Bristol City Centre – we have a great headline speaker, to be announced very soon.
Plus it’s a great networking environment and there’s plenty of time to chat to property professionals and get all the latest inside info!
We have a great 2 for 1 offer too – so you can bring a friend or partner free.
To Your Property Success
Del Brown, Property Options