Reeds Rains Property Blog

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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

Tenant Arrears Tracker January

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Tenant finances see short-term setback

  • In Q4 2014 there were 7.2% more tenants severely behind on rental payments compared to Q4 2013 – the first annual rise since 2012 
  • Despite setback, 48,500 fewer tenants face severe rent arrears compared to worst of 2012 record peak 
  • Evictions fall in the face of recent rent arrears, with latest evictions orders down 6% on a quarterly basis 
  • Landlords pay off buy-to-let mortgage arrears to the healthiest levels seen since the start of 2008  

Tenants have felt a financial setback, with the number falling into serious rental arrears rising on an annual basis for the first time since 2012, according to the latest Tenant Arrears Tracker by estate agency chains Your Move and Reeds Rains, part of LSL Property Services PLC.

In Q4 2014 there were 68,100 tenants in severe rent arrears of more than two months. This represents an increase of 4,600 such tenancies compared to the same quarter one year ago, or a 7.2% annual increase. On a quarterly basis the setback is less severe, with 1,700 more cases of severe arrears in Q4 2014 than in Q3, or a quarterly increase of 2.6%.

Despite this recent deterioration, the longer term trend for tenant arrears remains positive, as improvements seen in 2013 and at the start of 2014 remain overwhelmingly large in comparison. As a result, since reaching a peak of 116,600 tenancies in Q3 2012 the number in severe arrears has dropped by 48,500 as of Q4 2014, an improvement of 42%.

In terms of the proportion of all tenants now in severe arrears, there was no significant setback in the last quarter. As a percentage of all tenants, 1.4% owed rent arrears of more than two months in Q4 2014, the same as in Q3 2014 and in Q4 2013. This leaves a remaining 98.6% of tenants who have consistently avoided serious rental arrears.

A slight deterioration in the most serious rental arrears is consistent with figures for overall levels of late rent including shorter lapses on payments. According to the latest Buy-to-Let Index from Your Move and Reeds Rains, overall tenant arrears of any duration stand at 7.5% as of November, up from 6.6% of rent late in November 2013. However, as with severe arrears, even after November’s slight deterioration, rent arrears remain considerably lower than in previous years, since peaking at 14.6% in February 2010.

Adrian Gill, director of estate agents Your Move and Reeds Rains, comments: “Escaping the worst deprivations of the financial crisis has taken half a decade. And even now, for so many households every month is still a difficult month.

“Stretching to include even a little festivity often makes December particularly hard. But just as the occasional setback is inevitable, the long-term trend is increasingly clear. Since the sharpest pinnacle of tenant difficulties in 2010 the number in serious rent arrears has practically halved.

“As rising wages start to combine with much lower levels of unemployment, the fundamentals of the economy have started to turn in favour of tenants. If that can continue, then so can the trend away from arrears, as renting becomes more affordable.”

Read the full Tenant Arrears Tracker here

 

It’s a double win for Reeds Rains

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From the left: Entrepreneur Michelle Mone, Reeds Rains Managing Director Oliver Blake, and Zoopla Commercial Director Jon Notley

Reeds Rains  have been successful at the Estate Agency of the Year Awards 2014 where it won the Silver award for Best Estate Agency National  and the Bronze award for their Financial Services despite tough competition from some of the leading names in the market. The awards, sponsored by The Sunday Times and The Times, are some of the most sought after in the estate agency industry and to be acknowledged as a winner is seen as a major triumph and reflects the professional services available for customers from Reeds Rains.

Now in its twelfth year as a dedicated competition, these awards have become widely recognised as the most prestigious and difficult to win. With more entrants than ever before, over 5,000 offices were represented this year, but only the very best of the best were crowned as winners.

The awards were presented by Michelle Mone, one of the UKs leading entrepreneurs who is the co-owner of Ultimo Brands International and founder of Ultimo, one of the UKs leading lingerie brands.

 Left to right: Entrepreneur Michelle Mone, Reeds Rains Financial Services Director John Hargreaves, and Mid West Displays Michelle Farnsworth

The Judges report on Best Large Estate Agency recognised Reeds Rains’ long history of trust and reliability along with their culture of continuous development and acknowledged that the entire team are property industry experts. They highlighted the great passion within Financial Services and their dedication within the organisation to ensure that transactions are progressed as professionally and ethically as possible for each client. They acknowledged Reeds Rains’ high level of customer service which has resulted in a satisfaction ratio of 97% of clients serviced and a feedback score of 98% who would recommend the services across the board.

Oliver Blake, Managing Director at Reeds Rains says: “It is a great achievement to win both awards and they are a real testament to all the hard work and dedication from the staff at Reeds Rains. Well done everyone!”

Christmas starts early for Acomb Primary School

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Left to right - Anna Townsend, Samuel Townsend and Ruth Betts from Acomb Primary School

Acomb Primary School based in York have hosted their Christmas fair which brought together families and the Acomb community to start the festive period which included games, mince pies, tombola, cake sale and a visit from Santa.

Local estate and lettings agent Reeds Rains supported the event and hosted a game at the fair which involved guessing which door Santa was hiding behind.

Andy Jacques Branch Manager for Reeds Rains in Acomb says: “We asked Acomb Primary school to help us by decorating the game and they did a great job. The board of houses looked fantastic and we provided prizes for the lucky winners.

The event was hugely successful and it was great to see the Acomb community come together to support it. There are always fun activities taking place in Acomb and supporting the local community is something we are passionate about.”

Elsewhere in Acomb, Reeds Rains also work closely with the Acomb Cricket Club by officially sponsoring their kit and their ‘Player of the Month awards’ which is also part of their drive to build greater links with the Acomb community.

First Captain Andy Tute from Acomb Cricket Club adds: “We value the support Reeds Rains provides and it is great to have them alongside us. We have been promoted from Division 1 of the York & District Senior League into the Premier Division and with Reeds Rains support we will continue to be successful.”

If you would like to find out how Reeds Rains can help you buy or sell your property then visit the Acomb branch at 1 Carr Lane, York, North Yorkshire, YO26 5HT or call 01904 782621(*) for more information.

 

 (*)Calls maybe recorded for training and/or monitoring purposes.

Buy-to-Let Index - October 2014

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 Tenant finances absorb record rents

  • Rents across England & Wales reach new record of £770 per month, up 1.5% over the last twelve months
  • Tenant finances improve despite higher rents – with levels of late rent now just 0.3% above all-time lows
  • Landlords’ gross returns reach 13.3% over last year, due to shorter void periods and rising house prices

Tenants have paid down rent arrears despite a new record for monthly rents in October, according to the latest Buy-to-Let Index.

Residential rents across England and Wales now average £770 per month, or £12 more than October last year.

Annual rent rises were 1.5% in the twelve months to October 2014. This follows faster average rent rises of 1.9% in the previous twelve months ending October 2013, and rental growth of as much as 3.4% over the preceding year.

On a monthly basis, rents in October 2014 rose 0.3%, or just £2 compared to the previous month of September 2014.

Slower rent rises have coincided with healthier tenant finances, with rent arrears approaching all-time lows. 

David Newnes, director of estate agents Reeds Rains, comments: “Rents have edged to a new record and the rental market is pulsing with new demand. Yet at the same time, tenants are getting on top of their finances – helped by a cooling pace of such rent rises.

“Better affordability is good for tenants in the longer run too – and for landlords who can rely on steady revenue to pay the bills. That helps to support a virtuous cycle of only gradual rent rises. Alongside slower overall inflation, a material boost to the supply of properties available to let has helped keep rents from rising as quickly as in previous years.”

In absolute terms this means the average landlord in England and Wales has seen a return, before deductions such as mortgage payments and maintenance, of £22,434 in the last twelve months. This is made up of rental income of £8,404 and an average capital gain of £14,030.

Looking ahead, if rental property prices continue to rise at the same pace as over the last three months, the average buy-to-let investor in England and Wales could expect to make a total annual return of 11.2% over the next year, equivalent to £20,520 per property.

David Newnes concludes: “Landlords have benefitted from a spurt of rapid house price growth.  But as price rises steady a little, landlords can rely on newly stable rental yields.  Gross yields on a typical property dipped over the last six months as purchase prices grew faster than rents, and now yields have steadied again, just above the long-run average of five per cent.

“Stable yields aren’t the only good news for landlords.  Letting a property now involves even less risk of not getting the rent on time, and tenant arrears could reach a new record low in the coming months.  That should boost demand from tenants, investment from landlords and perhaps even good deals from lenders.  Good news on the affordability of renting is good news for the whole industry.”

 Read more details on the Buy-to-Let Index

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