Reeds Rains Property Blog

Property News from Reeds Rains

First Time Buyer Tracker - August 2015

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First-time buyer sales hit post-recession record

  • July sees 29,700 first-time buyer sales – the highest number since 35,300 in August 2007 – as sales rise 4.9% month-on-month
  • Buyers rush to get on the ladder ahead of a base rate rise, and before the best deals are withdrawn 
  • Comes despite average deposit of £27,975 – up 10% annually – consuming 72% of average yearly income
  • First-time buyers are paying an average purchase price of £161,985 in July – up 8.9% year-on-year

Monthly first-time buyer sales have hit a post-recession record, according to the latest First Time Buyer Tracker from Reeds Rains.

July saw 29,700 first-time buyers complete property transactions, the highest since August 2007, before the financial crisis struck, when it stood at 35,300. This month’s figure also represents a 28% rise on April 2015’s number (23,200) – amounting to a 6,500 increase over the last three months – as well as a 4.9% month-on-month uptick on June’s figure of 28,300.

The news comes despite the rising immediate costs of buying a home. The average first-time buyer deposit in July totalled £27,975, marking a 10% increase on July 2014’s figure of £25,429. In cash terms, this equates to a rise of £2,546. The cost of a deposit as a proportion of a first-time buyer’s average income reached 71.6% in July, surging 3.1 2 percentage points in one month alone and rising 5.4 percentage points from 66.2% a year ago.

READ THE FULL REPORT HERE >

Rental Regional Review

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England

Continuing this year’s trend of rents increasing by more than the rate of inflation, our latest Buy to Let Index shows that June experienced the quickest rise since records began in 2009. 

The average rent in England and Wales has reached a high of £789, that’s up 1.4% on May’s figure and up 5.6% since last June, with nine of the ten regions in England seeing increased annual growth in the last month. The East is experiencing the strongest rises, with rents increasing by nearly 50% more than those in London. These rises are being driven by a lack of stock and an increase in people’s ability to pay higher rents as the economy recovers. 

Adrian Gill, Director of Reeds Rains, comments, “Growing wage packets and a strengthening economy mean that a greater number of tenants are able to afford higher rent but we mustn’t lose sight of the driving force behind rent increases – the mismatch of supply and demand. Expanding our housing stock needs to become a national priority.”

Perhaps giving weight to the argument that an increasing undersupply of housing stock is primarily responsible for current rent levels, our Index (Hyperlink) also shows that the proportion of rent in arrears is continuing to rise. In June it stood at 8.7%, up around one per cent on both May 2015 and June 2014. However, the overall trend across the past five years, despite peaks and troughs, is downward and therefore indicative of a slow and steady economic recovery.

Annual returns have fallen slightly for landlords, from 11.9% in the 12 months to June 2014, to 9.2% for the year to this June. Rental income made up more than half of the total, demonstrating the strength of the rental market and the importance of understanding which is most important to you as an investor, capital growth or income for your Buy to Let profits.

In the face of the latest Budget changes targeting landlords’ profits, it is important to remember that property can still offer consistently good returns. However, Adrian Gill states that if the industry is to continue to thrive in the long term, “there needs to be a greater emphasis on what can be done to help tenants and landlords alike. It’s one thing to slap landlords with a tax and call it a done deal, and quite another to address the issue of housing in a consistent and sustainable way. The cornerstone of progress, as ever, is housebuilding.”

Wales

The rental market in Wales remains steady, with an encouraging one-month increase in rents of 1.9% from May to June. Average rents stand at £567, holding their own against the Midlands and East Midlands, and higher than Yorkshire and the North East.

Unlike the majority of regions in England, yields in Wales have increased slightly in the 12 months to June, currently at 4.5%.

And a reminder that private landlord registration will become obligatory in Wales this Autumn, delivered by Rent Smart Wales. You must register both yourself and the addresses of your rental properties, and if you undertake the letting or management of your properties, you must also become licensed. See https://www.rentsmart.gov.wales/ for full information.

N.Ireland


If you are looking to make energy performance improvements to your rental property, you could cut the amount of tax you pay by claiming the Landlord’s Energy Saving Allowance (LESA), which allows you to deduct various insulation and draught-proofing costs.

At the same time, provided you have a valid energy performance certificate (EPC) for your rental property, you can apply for a grant to install renewable heating systems, via the Northern Ireland domestic Renewable Heat Incentive. If your application is successful, you will receive an upfront sum and a payment every year for seven years. To be eligible for the scheme, the system must be biomass, air or ground source heat pumps or solar thermal panels. See http://www.nidirect.gov.uk/domestic-rhi-introduction for more information.

Why buy a new build?

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Have you thought about buying a new build home? Buying a new build home can present many opportunities such as picking your own décor, access to incentives and more.

There are many advantages to buying a new build home such as:

  • There shouldn’t be any big repairs or redecorating to do as everything will be brand new
  • Most new builds come with a warranty and protection scheme
  • Incentives can be available such as free carpets, help with legal fees and stamp duty, part exchange etc.
  • New homes tend to be more energy efficient
  • A blank canvas for you to make your own stamp on
  • There’s no owners which reduces the chain
  • Safety and security, new homes often have alarms, fire doors etc.
  • Location, new homes are often built where there’s high demand meaning a great and convenient location
  • Depending on the stage of the plot you may be able to choose some of the décor.

Things to consider:

  • You may have to wait for the property to be built and finished
  • Take into consideration hidden costs
  • Check what’s included in the sale
  • Do your research
  • Go along to any open days and visit the show home and always make sure you walk around the whole development

If you’re looking to buy a new build, start your search here or take a look at the below.

‘Brave the shave’ for Macmillan Cancer Support

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Kim Bailes

Kim Bailes from local estate agents Reeds Rains Blyth is ‘braving the shave’ for Macmillan Cancer and will be standing proudly alongside men and women with cancer as she has her head shaved on Sunday 30th August 2015 to raise money for this worthy cause.

Kim will be braving the shave at Olivers Wine Bar, 60 Bridge St, Blyth, Northumberland, NE24 2AP at 4.00pm

‘Brave the shave’ is an event which has been set up by Macmillan Cancer Support to help men and women who face cancer.

Men and women with cancer go through hair loss and changes to their appearance that can affect everything from the way they look, to how they feel. Macmillan is available from the moment of diagnosis, through treatment and beyond, providing people the energy and inspiration to take back control of their life.

Kim Bailes says: “I will be joining the thousands of people courageous enough to ‘Brave the Shave’ and help change the lives of people with cancer. It’s fun, it’s bold, and it’s for a really important cause.

I want to help raise as much money as I can to make sure that everyone with cancer and their loved ones get the support they need.”

If you would like to donate to Kim’s Brave the Shave fund before the big day on Sunday 30th August 2015 visit her fundraising website at https://bravetheshave.org.uk/shavers/kim-bailes/    

Buy-to-Let Index - July 2015

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Rents rise above £800 for first time on record

  • Record surge in month-on-month increases takes average rent to new peak across England and Wales
  • Rents hit highest levels since 2009 in Yorkshire & the Humber, East and West Midlands, and London
  • Proportion of rent in arrears improves to 8.4% in July, down from 8.6% in June and 7.3% in July last year
  • Landlord gross yields have improved to 5.2%, the first substantial increase seen since March this year

Rents across England and Wales hit yet another record high in July, driven to £804 on the back of the fastest month-on month price increase seen since 2009, according to the latest Buy-to-Let Index from Reeds Rains.

On a monthly basis, rents across England and Wales rose by 1.9% in July, up from £789 the previous month in the fastest monthly rise seen since records began in 2009.

Compared to July 2014, when the average rent in England and Wales stood at £753, tenants in July 2015 are paying 6.8% more – also the largest annual rise on record.

This record-breaking increase has been driven by higher rents in Yorkshire & the Humber as well consistently strong rises across southern regions.

READ THE FULL REPORT HERE >

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