The housing market as a whole has recovered well since the credit crunch, with the average house price now standing at just over £34,000 higher than the previous peak in February 2008, according to our own Reeds Rains property price indices. Although the average price growth in London has dropped, due to revised Stamp Duty Land Tax and the pre-election threat of ‘mansion tax’ affecting the top end of the market, the lower rungs of the property ladder are thriving, particularly in the east of the capital. Newham, Dagenham, Bexley and Waltham Forest have all seen rises of well in excess of 15% in the past 12 months, a stark contract to Kensington & Chelsea, where values have dropped by an average 7.4%.
Still in London, the Greater London Authority’s Rental Standard scheme has been a tremendous success, with over 14,000 private landlords and more than 300 letting and managing agent firms having signed up, as of mid-March. As early adopters of the scheme, our branches all display the LRS badge that reassures tenants they’re renting from a responsible agent. Find out more here.
Measures to improve standards in the PRS in the north of England have recently been implemented in two of its major cities. Firstly, Liverpool Council has introduced a mandatory Landlord Licensing Scheme, requiring all private landlords to apply for a five-year licence for each of their rented properties from 1st April. Landlords must satisfy the council that they are a ‘fit and proper’ person to manage their properties, as well as meet certain conditions relating to health and safety and handling complaints about anti-social behaviour by their tenants. The licence costs £400 for the first property and £350 for each additional property, with landlords who are already members of a council-approved accreditation or regulation scheme receiving a discount and paying just £200. Visit Liverpool City Council’s website for more information.
And in Manchester, the council has recently introduced a Renting Pledge as an alternative to licensing. It is a simple set of standards that landlords can sign up to, to demonstrate that they are responsible and provide a good standard of home for tenants. Tenants of these landlords will also be required to make a pledge to pay their rent on time, look after the property and be a good neighbour. All the key professional associations, including ARLA, RLA and NALS have already signed up and the scheme has been generally well received in a city where 27% of residents live within the PRS. Visit Manchester’s local authority website for more information.
The average rent across England and Wales is 3.1% higher than February last year, the biggest year on year increase seen in the last two years according to our latest Buy to Let Index from Reeds Rains. Average rents in Wales were £566 per month, which was one of the highest increases of 1.8% year on year. Average yields remained at 4.3%, which is just below the average of 5% yield for England and Wales.
Oliver Blake, Managing Director of Reeds Rains, comments: “The rental sector is carrying the weight of the housing crisis. More homes are needed to house an ever growing population. The supply simply isn’t there. The result is that landlords are catering to those who can’t afford to buy as well as those who choose renting for the flexibility it offers them workers moving into new jobs, or people wanting to get a feel for an area before committing to property ownership and setting down roots.”
According to the ‘Northern Ireland Quarterly House Price Index’ 2014 was a “journey back to a more normal housing market” with steady growth returning in both sales and prices – with the latter increasing by over 8%, suggesting 2013 was the year property prices bottomed out.
Price wise, the average price ended up at £143,675 at the end of the year, much higher than the £133,000 it was the previous year and showing a pick-up in prices versus the last quarter too. Semi-detached bungalows and apartments grew at highest levels, breaking double digit growth, while terraces and townhouses rose by less than 3%.
Belfast and areas such as Derry/Strabane saw the highest market rise at 14% year on year, while most other areas saw prices rise between 5 and 10%, with the exception of Antrim/Ballymena where prices actually fell just under 5%.
Rental income wise, we are seeing rents stable to rising over the last 12 months.
Ryan Andrews, Director of Reeds Rains Northern Ireland explains “We have noticed in recent months the return of chains to the marketplace which is due to more and more houses being sold at a higher level than previous years.” Ryan believes “this is a really positive sign which has been helped by the recent changes in stamp duty, with some excellent savings to be made especially in the £250,000-£300,000 bracket.”
From the Buy to Let investors perspective, “the market is strong and lots of investors want to purchase before house prices rise any further.”
For more information about the property market in Northern Ireland, please do visit one of our offices, call 0845 450 0865* or email Landlords@ReedsRains.co.uk. For the full property price update from Ulster University, read their Housing Index.