Minister says, substantial changes ahead for letting industry

Huge growth and a gradual transformation in its structure lie ahead for the private rental sector, said housing minister Mark Prisk in an important speech.

He spoke at the Law Society, in London, highlighting just how alteration the new build-to-rent industry will be for the whole housing market.

He said, “For too long, our housing markets have been dysfunctional. For much of the past two decades, we have been consistently building half of what we needed, year on year.

“The result has been a serious imbalance between supply and demand, and while this has led to potential opportunities for investors, there are significant social consequences too.

“So as a government, we’ve had to step back and adopt a new, comprehensive approach to the problem. An approach which reaches across all tenures – owner-occupied, affordable, and private rented – understands the relationship between the three, and seeks to address the deep dysfunctionality in supply and demand.”

Prisk went on: “Over the last decade, the rented sector has become increasingly important in addressing people’s housing needs. The sector now houses 3.8 million households. Mobile patterns of work and reduced mortgage availability have made renting a more realistic choice for many more people, and the effect has been a strong rise in demand over the last decade.

“So far, this rising demand has been met principally by individual landlords, who have been responsible for adding approximately 1.5 million new homes to the sector over the past decade. But there is real potential to go further, and particularly to bring new players into the market.

“Put simply, we want a bigger and better private rented sector, a sector in which large scale and experienced institutional investors can help the market not simply grow, but also to mature.

“Small-scale individual landlords operate around the world, but in many countries, such as the US, Germany and Switzerland, institutional investment in the private rented sector is much stronger and more established than it is here. Evidence from those markets shows that where institutional investment is stronger, costs are driven down and the sector becomes more professional, with a longer-term perspective.

“That’s what we want to encourage here. It’s a change which has the potential to underpin sustained growth of the entire private rented sector, and offer beneficial changes to the market as a whole.”

In Prisk’ speech he also announced a new private rented sector taskforce. This will be commanded by Andrew Stanford, former head of Cluttons Residential. Other members include Julian D’Arcy, a former chairman of Knight Frank, chartered surveyor Joanna Embley, Tracey Hartley of Grainger, and Dominic Martin of EC Harris.

Prisk said, “The role of the taskforce will be to connect investors with opportunities for long-term investment in the sector and help to break down actual and perceived barriers to entry. They will work with the sector to kickstart the delivery of innovative, high-quality and large-scale rented projects.

“And they will bring developers, management bodies and institutional investors together to help you get the most from both the private rented sector Housing Guarantees and the Build to Rent Fund.”

Prisk concluded, “We believe that the private rented sector is a vital part of a functioning housing market, and we want it to get bigger and better.

“A sector in which supply keeps pace with demand, large investors play an increasing role, and government policy is set for the long term.

“Only in this way will private rented housing fully realise its potential alongside other tenures. It’s why we’ve introduced Build to Rent and our Housing Guarantees.

“Our interventions are radical and significant. And that’s because this is a long-term commitment, not a short-term fix.

“Success will not be easy or quick. There will be further obstacles along the way. After all, this is an untested market.

“But working together, I believe we can rebalance our housing markets, and so provide the right type and quality of homes for the next generation.”

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UK’s biggest agent says, now is the best time to buy-to-let

Countrywide has reported, that in the first quarter of this year rents increased and rent arrears declined and lettings times became quicker.

The biggest property chain says they supply the ideal recipe for buy-to-let investors. It places average UK rental yields at 6.2%.

The Countrywide results, based on over 50,000 properties, is believed to be the biggest index of its kind, covering the whole of the UK.

The data shows that rent increased the most in Wales and the East of England, to £616 and £814 per month. The average rents in Outer London went up by 5.4% year on year to £1,107 per month. Inner London had the highest rents at £2,387 per month in the first three months of this year, up 1,9% from the previous year.

Nevertheless, rents decreased in the South East, down 1.1% to £1,054 per month.

Average rents also fell in Scotland, down 2.6% to £580 per month. Scotland was also the only place in the UK with a rise in arrears, up 2.6% from the previous year to 6.6% of the rent roll.

The highest arrears of rents due was in Central London at 7.3%, regardless of the fall of 0.1% over the year.

The study indicated that increasing rents and stabilising house prices are making rental yields very attractive to investors, with the average yield 6.2%. The largest rental yield was in Wales at 6.7% closely followed by both the North and Midlands at 6.5%. The lowest rental yield was in Central London at 4.6%.

Based on the average yield and the QI 2013 average monthly rent of £835, the average investor could anticipate to make a total annual profit of roughly £10,000 over the next 12 months per property.

Countrywide uncovered that the average time it took to rent out a property in the first three months of 2013 was 14.5 days, down on last year when it was 15.1 days.

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Demand for cheaper room shares for tenants is on the rise

Welcome to The Anthony & Co. Blog! Here we will be providing you with the latest and most up-to-date news about the property industry.

The amount of people looking to rent rooms in house shares and flats seems to be increasing as more people are trying to save money on their living costs.

Research has shown, that numbers of applicants are rising and easily outweighs supply.

Last year, it was recorded that an average of 36,886 people searching for a room at a single time. Currently, it has been recorded that there are 37,468, but only 7,000 rooms, indicating a huge shortage. The majority of landlords are looking for a non-smoking professional female as a flatmate.

The greatest demand for flat shares is of that in London, 15,162 prospective flat-sharers are registered, with the second highest, Manchester with 1,578.

Before having to pay tax, live-in-landlords can earn up to £4,250 a year, under the Government’s Rent a Room scheme.

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