Private Residential Rental Prices Up Across the UK

This article by the Property Wire on September 26th, 2013 shows that according to the new index from the Office of National Statistics private residential rental prices paid by tenants in the UK rose by 1.2% in the 12 months to August 2013.


Excluding London, were rents are higher than the rest of the country, rental prices were up by 0.8% during the same period, the data also shows.

There were also regional variations with rental prices up by 1.3% in Scotland and Wales and by 1.1% in England. But within England rental prices were up 1.9% in London and 1.1% in the South East of England.

The Index of Private Housing Rental Prices (IPHRP) is a new experimental index that measures the change in price of renting residential property from private landlords and calculates changes in the prices paid by tenants for renting private housing instead of calculating changes in the latest agreed rental prices.

The index examines how much tenants in privately rented accommodation pay in a month compared to the same month in the previous year. ‘This is a new official statistic undergoing evaluation and therefore it is recommended that caution is exercised when drawing conclusions from the published data as the index is likely to be further developed,’ said an ONS spokesman.

The index report says that the large weight that London has in the overall data reflects its high average rental prices and its large volume of private rented property.

All the regions in the UK have experienced rises in their private rental prices since 2011 and since January 2011 England rental prices have increased more than those of Scotland and Wales.

Until April 2013, the annual rate of change in the IPHRP had been higher in England than in Scotland or Wales. However, the annual rate of change has been increasing in Wales and Scotland since late 2012 and is, in August 2013, higher in these countries than in England.

The IPHRP series for England starts in 2005. Private rental prices in England show three distinct periods: rental price increases from January 2006 until November 2009, rental price decreases from December 2009 to November 2010, and increasing rental prices from December 2010 onwards. Of these three periods, 2008 showed the largest rental price increases.

Excluding London, England showed an increase of 0.7% for the same period. From August 2012 to August 2013 private rental prices increased in the nine English regions.
The data also shows that rental price increases have been stronger in London and the South East than the rest of England since January 2011.

The figures highlight the heat building in the London market, according to Jonathan Hopper, managing director of property finders, Garrington. ‘During the Autumn we are expecting to see increasing pressure from those wanting to rent as supply tightens leading to a further firming of rental prices,’ he said.

Article Source: http://www.propertywire.com/news/europe/uk-residential-private-rents-201309268283.html

Buy to Let Lending in UK Rises Due to Strong Rental Demand

This recent article by the Property Wire on August 8, 2013 shows the continuing recovery of buy to let lending investors because of the ongoing rental demand according to CML.

Lenders in the UK advanced 40,000 mortgages, worth £5.1 billion, to buy to let property investors in the second quarter of 2013, according to the latest data published today (Thursday 08 August) by the Council of Mortgage Lenders. Both the number of buy to let loans, and the value of lending, were the highest since the third quarter of 2008, the data also shows. Buy to let lending is continuing to recover strongly, but from a low base. The number of loans advanced in the second quarter was 19% higher by volume and 21% higher by value than in preceding three months when lenders advanced 33,500 mortgages, worth £4.2 billion. Year on year, buy to let lending was 19% higher by volume and 31% higher by value compared to 33,600 loans in the second quarter of 2012, worth £3.9 billion. Lending for house purchase accounted for around half the loans advanced, and increased by 15% by volume and 19% by value over the preceding quarter. But the growth in remortgaging was stronger, with an increase over the same period of 24% by volume and 29% by value. The CML said that this growth in remortaging partly reflects improved conditions in funding markets and more widespread availability of mortgage credit. By the end of June, buy to let mortgages accounted for 13.3% of outstanding lending in the UK, up from 13.1% in the preceding quarter and 12.9% a year earlier. The number of outstanding mortgages totalled 1.48 million, worth £168.5 billion. Buy to let mortgages in arrears of over three months accounted for 8.4% of the total, up slightly from 8.3% in the preceding quarter but down from 9.7% a year earlier. The possession rate, at 0.09%, was higher than the 0.07% in the wider mortgage market, but fell from 0.11% in the previous quarter. ‘Strong rental demand is contributing to the continuing expansion of the buy to let sector, but growth is also being helped by improved conditions in funding markets and more widespread availability of mortgages,’ said the CML's head of policy Jackie Bennett. ‘These conditions are creating more opportunities for landlords to remortgage, as well as helping to fund increased activity in the mortgage market more generally. This spring, we have seen the highest levels of lending to first time buyers since 2007, alongside the continuing recovery in the buy to let market,’ she added. The figures highlight that the buy to let sector continues to boom, according to Stuart Law, chief executive officer of Assetz. ‘We are seeing more people approaching pensionable age investing in order to bolster their retirement income at a time when the Bank of England indicates base rates, and therefore savings rates, will stay low for at least three more years,’ he said. ‘While the growth of the sector in London is clear to see, the house price ripple effect is only just beginning now in the North where there are excellent opportunities for investment, particularly in key cities like Manchester, Liverpool, Birmingham and their suburbs. Many Southern investors are broadly unaware of the lucrative yields available in northern market, at prices that represent the beginning of the next cycle,’ he added. Article Source: http://www.propertywire.com/news/europe/uk-buy-let-lending-201308088098.html