Rents steady, homeowners optimistic
Rent levels were steady in June, according to LSL Property Services whose figures suggest that the average rent in England and Wales remains the same as in May at £737 per month. This means rents are 2.6% higher than in the same month last year. Across England and Wales there were 0.8% fewer new tenancies in June than in May.
Five out of ten regions saw rents increase in June with the sharpest monthly increase in the East Midlands (0.7%). Second fastest were the North West and South West (0.5%). In Wales, average rents were down 1.9%.
David Newnes, director of LSL Property Services, said: “The proportion of households in the private rented sector is still growing strongly, a trend that’s set to continue for the foreseeable future. Yet with better access to finance in the first half of this year, the immediate picture has become far brighter for tens of thousands of first-time buyers. And now these green shoots are starting to bear fruit for those still renting too, as milder competition for tenancies has kept a lid on the cost of renting.
“In the longer-term, the number who can afford to buy a first home will be limited by some fundamental constraints – earnings, and the building of new homes. That’s why we expect average rents to at least match wider inflation in the coming years.”
The LSL report says the total amount of rent late or unpaid increased slightly in June, rising by £4 million compared to May. Total arrears in June were £280m, compared to £276m in May.
Meanwhile, Knight Frank report that the proportion of 1,500 homeowners surveyed across the UK who said that the value of their home had risen over the last month has hit a new high of 19.8%. Although there is some scepticism about the use of what are described as “sentiment indexes”, they are often good predictors of future changes in the property market. The biggest jump in optimism is in Wales while Londoners continue to be the most confident that prices will rise over the next 12 months.
Gráinne Gilmore, head of UK residential research at Knight Frank, said: “There is no doubt that confidence has returned to the UK housing market in some measure. This can be attributed not only to the “Help to Buy” effect as well as signs of a strengthening economy coupled with expectations that interest rates will remain at record-low levels for several years yet.
“Mortgage borrowers are the most confident that prices will rise this year, and this optimism will no doubt be underpinned by expectations of even more affordable borrowing as mortgage lenders continue to cut their rates. Average UK house prices are still more than 10% lower than the market peak in 2007. After their lacklustre price performance in recent years, values in many areas will need to make significant headway to outstrip inflation and show growth in real terms. But the upbeat sentiment index suggests that the ‘green shoots’ of recovery may be emerging in the housing market.”
Pictured is a three bedroom detached house in Holyhead Road, Wellington, Telford, Shropshire, on with DB Roberts for £140,000Tagged in: renting
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