Reeds Rains Property Blog

Property News from Reeds Rains

First Time Buyer Tracker - February 2015

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Stamp duty changes push first-time buyer  deposits to 18 month high

  • January sees average first-time buyer deposit rise to £29,127, 15% higher than a year ago
  • Average first-time buyer house purchase price tops £160,000 for first time on record
  • First-time buyer completions fall 19% on a monthly basis, due to dip in applications over Christmas

First-time buyer deposits have climbed 15% in a year to average almost £30,000, driven by lower stamp duty bills for new buyers, according to the latest First Time Buyer Tracker from Reeds Rains.

The average first-time buyer deposit was £29,127 in January, up 7% compared to December 2014 and 15% higher than £25,314 in January 2014. First-time buyers are saving the largest amount for their deposit since July 2013, eighteen months ago, as savings from December’s stamp duty changes take effect.

This has also helped drive rising purchase prices for first-time buyer homes, which have climbed to a new record. New buyers paid an average of £160,304 in January, 12% more than £143,343 twelve months ago.

Revisions to the stamp duty slab system have reduced the upfront costs for many first-time buyers, allowing them to divert that cash into a deposit fund. First-time buyers paying the average purchase price would have been liable for stamp duty fees of around £1,600 before the graduated system was implemented, but this would now have been reduced to £700 – saving them roughly £900.

Simultaneously, as wages start to see a significant pick-up in real terms, growing purchasing power is reflected in the average first-time buyer LTV. Loan-to-value ratios have fallen 1.1 percentage points over the last three months, suggesting deflation and growing wages are allowing first-time buyers to put together slightly larger deposits.

Despite this, the average loan-to-income ratio for first-time buyers has risen on an annual basis. On average, deposits now represent 75.4% of a first-time buyer’s income, compared to 70.6% a year ago.

Adrian Gill, director of estate agent Reeds Rains, comments: “A fusion of economic factors is alleviating some of the financial burden of forming a deposit. Wages are starting to recover and inflation has fallen to a record low, meaning buyers have slightly more cash to play with day-to-day. And stamp duty fees were slashed for many new buyers when the government reformed the old slab system, freeing up further funds. It’s still difficult to save – with savings rates tied closely to the low base rate. But it’s easier to put cash aside than it was a year ago.

“However, property prices have pushed a new record for first-time buyers, meaning these extra funds are being diverted directly into larger deposits. Putting together a deposit to buy a property remains one of the most arduous tasks for prospective home-buyers, and schemes like Help to Buy are essential to allow the swathes of buyers reliant on higher LTV mortgages to get onto the housing ladder.”

More details about the First time buyer tracker can be found here

Buy-to-Let Index - January 2015

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Rents 16% higher than in 2010

  • Over last five years, rents have grown by an average 3.0% per year – but just 0.6% annually after inflation
  • In the last twelve months, rents across England & Wales increase by 2.8%, to stand at £763 in January 2015
  • Official measure of rents paid across Great Britain now revised more closely in line with this data
  • Tenant finances see healthy half-decade – 6.8% of rent now in arrears, down from 11.1% in January 2010
  • Landlords see total returns of 11.7% over last 12 months, down from 11.8% as property price rises cool

Rents are now 16.3% higher than five years ago, having most recently risen by 2.8% over the last twelve months, according to the latest Buy-to-Let Index from Your Move and Reeds Rains.

In absolute terms, the average residential rent across England & Wales has grown by £107 since January 2010, to reach £763 as of January 2015.

This amounts to an average annual rent rise of 3.0% over the last half decade. However, this represents a real terms increase of 0.6% per annum when adjusted for inflation over the same period.

Most recently, rents have fallen on a monthly basis, down 0.6% between December 2014 and January 2015. On an annual basis, rents are 2.8% higher than was seen last January.

Adrian Gill, director of estate agent Reeds Rains, comments: “The nature and affordability of UK housing is transforming before our eyes.  In the last five years the private rented sector has successfully absorbed an unprecedented influx of tenants, while rental prices have broadly tracked inflation.

“As ever, the devil is in the detail – but as this growth accelerates, even more investment will be necessary for the industry to keep up. So we need more buy-to-let landlords to help solve the crisis in demand for homes to rent."

More details about the Buy-to-Let Index can be found here

Why are ‘Geeks’ good for landlords?

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Research has revealed that 31% of university students would describe themselves as a ‘Geek’ following a personality survey conducted by UniPlaces. (*)

The indication is that Geek personality types work harder at their studies and put a greater focus on high achieving grades rather than the typical ‘party animal’ lifestyle which can usually be associated with university students. In the survey, only 16% said their personality type fitted a ‘party animal’.

Lettings Manager Kelly Williams for Reeds Rains in Rotherham says: “This should come as positive news for landlords because as more people are showing greater care and a focus on their studies it could mean there is more chance that people with the ‘Geek’ personality type will show care as tenants when looking after a property.

It is not just university students this needs to apply to. There are many other people who are not at university but maybe studying part time and landlords who take tenants with a keen interest in an academic study outside of work can also benefit from reliable tenants.

At Reeds Rains we have a database full of tenants who are looking for a property like yours to rent. We pride ourselves on always acting in the best interests of our tenants and landlords and we would encourage you to come and talk to us find out more details.”

If you would like to find out how Reeds Rains can help you as a tenant or landlord simply contact them at Reeds Rains Rotherham, 16-18 Moorgate Street, Rotherham, S60 2DG or call them on (01709) 363152 (**)

 

(*) http://www.digitalnewsroom.co.uk/uniplaces/2014-the-year-of-the-geek/

(**) Calls maybe recorded for monitoring Purposes

Is it ok to buy a household appliance as a Valentine's Day gift for a loved one?

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 3 Bedroom Detached House - Immingham

When thinking about Valentine’s Day it is often said that home is where the heart is and that love begins at home but, some may say, is it about how much we do, or how we put that love into action?

According to a survey by Atomik Research, almost a third of people who are in a relationship spend absolutely nothing on Valentine's Day gifts (*) but does that mean they love their partners any less and, if we were to buy a Valentine’s gift, would a household item, for example, be acceptable? According to a survey conducted by Reeds Rains, 67% of respondents thought not and, in response to the same question, Reeds Rains received some interesting comments: (**)

  •  “It's a great way to move things along if you want a divorce”
  • “Most definitely not” “Depends what the appliance is”
  •  “If they've asked for it or you know it's something they've always wanted, then yes.”

Interestingly, however, some people surveyed also came up with some thought-provoking alternative uses for any household gifts which they may receive which, perhaps, indicates some more romantic thinking, for example: 

  • “Maybe a drinks chiller filled with champers and truffles”
  • “Only if a dishwasher had another gift inside of course!”

Whatever approach is taken on Valentine’s Day it’s clear to see that everyone is individual and whether you’ve got a household gift in mind, or not, you’ll know what is acceptable to the one you love - remembering always, that it’s the thought that counts.


(*) Atomik Research surveyed 2,032 adults online for Give as you Live between January 28-29

(**) Reeds Rains Valentines survey – 201 responses

Buy-to-let index December 2013

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Rents rise 3% over course of 2014 

  • Annual rent rises of 3.0% over twelve months to December defy slowdown in general rate of inflation 
  • Rents fall between November and December, down 0.1% month-on-month across England and Wales 
  • East of England, Yorkshire & Humber, East Midlands and London see no seasonal fall and new records 
  • Tenants feel the festive squeeze – with 8.9% of rent in arrears, the highest since previous December 
  • Landlord total returns drop to 11.1% over twelve months to December, on back of cooling property prices

Rents have risen by 3.0% over the course of 2014, despite falling on a monthly basis between November and December, according to the latest Buy-to-Let Index from Your Move and Reeds Rains.

The average residential rent across England and Wales now stands at £767. This compares to £745 in December 2013.

Strong annual growth comes despite falls on a monthly basis, with average rents 0.1% lower than seen in November 2014.

Adrian Gill, director of estate agents Reeds Rains and Your Move, comments: “There appears to be a new fire in the rental market as we enter 2015. Demand for homes to let is hotter than we would normally expect at this time of year.

“Recent months have shown a divergence from usual seasonal norms. Historically, there is a tendency for rents to ease in the winter, particularly December. With fewer tenants willing to relocate in the festive period, landlords usually compete to fill empty properties and agreed rents tend to dip as a result. Last month that happened – and rents fell compared to November – but by much less than the usual extent.

“In particular a jobs boom across the eastern regions of England has seen a larger than usual number of people relocating in the winter months. This has pushed up rental prices in these regions even further.”

Read full details of the Buy-to-let index here

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