Day: 14 July 2016

The rental market remains resilient in the face of the various economic and political headwinds the sector has faced recently

The index, the most comprehensive data available on the UK’s private rental market, shows that rents agreed on new tenancies across the UK (excluding London) over the three months to the end of June were up by 3.5%, compared to the same period in 2015. In the capital, meanwhile, rents were 3.9% higher.

By contrast, the UK-wide figure for May was 4.4% (6.2% in London). The more modest rental increases seen in June are a continuation of a trend that has developed throughout the first half of the year, with rents rising across much of the UK each month, but at a slower pace than was the case throughout most of 2015; last June, rents were rising at an annual rate of 7.8% (10.1% in London).

The data suggests the private rental sector has responded to the needs and concerns of landlords and tenants alike during the first half of the year. Landlords were hit by higher stamp duty charges on purchases of new property in April, which led to a rush to complete transactions before then – and a spike in the supply of rental property thereafter.

Meanwhile, tenant demand for property has remained strong, particularly given rising house prices and squeezed mortgage availability, and projected growth in the UK’s population suggests this will continue; official projections suggesting this growth will come from both the British-born population and net migration. Nevertheless, the slowing in the pace of rental increases may reflect landlords’ recognition that an affordability ceiling is approaching.

The outlook for the sector will depend in part on the fall-out from the UK’s decision to leave the European Union in June’s referendum. Some economists expect the referendum result to act as a brake on construction in the housing sector, which could exacerbate the current imbalance between demand and supply in the rental market. It is also possible that demand may increase as would-be house buyers opt to wait and see how house prices are affected over the next 12 months and beyond.

HomeLet’s data also suggests that the average length of a tenancy – as measured by how long tenants had occupied their previous rental property – has begun to come down over the past three months. The figures underline the important role that the private rental sector plays in providing a wide range of housing options to those who have not purchased a property.

The June 2016 HomeLet Rental Index reveals that rents continue to rise in almost every area of the country, with 10 out of the 12 regions surveyed seeing an increase over the three months to the end of May.

New research from first direct finds our homes may no longer be our castles, but they must come with a large kitchen, a private garden, and easy access to a supermarket.

So, how old will you be before you buy your forever home? According to new research by first direct, the most commonly stated age is 40.

With the average age of first-time buyers now 30, this means once they’ve put the first step on the housing ladder people are giving themselves just ten years to find their forever home. The implications of this are highlighted by the fact 60% of homeowners expect to own more than one home before buying their forever home, whereas just 19% of tenants agree.

What’s in a (forever) home?

The first direct research pinpoints what our view of the modern forever home looks like and finds the top two features people demand in their dream home are a large kitchen (52%) and a private garden (47%), ahead of an ensuite bathroom (28%), an actual bath (24%) and a conservatory (19%).

A ‘forever’ home doesn’t need to come with all these features though, as 98% of those who are now living in their forever home have spent a further £20,000 on average on perfecting their home.

When it comes to essential amenities practicality is the name of the game, and the top three are: a supermarket (32%), good transport links (27%) and friends and family (26%). While men and women agree on the most important amenities, lower down the list there are some stereotypical differences. Women are nearly twice as likely to consider local schools when selecting their perfect home, and men sneak a good local pub onto their list of priorities.

Tracy Garrad, chief executive of first direct, explains: “The saying used to be life begins at 40, but with more people buying homes later and also working and living longer we need to reset the dial. There’s an obvious impact on mortgages, but also on savings and loans too. The research highlights a need for more innovation in products and services as millennials demand solutions tailored to fit in with lifestyles which are very different to that of their parents.”

Almost a quarter (24%) of homeowners report having to ‘work more’ in order to purchase their first home, with 13% saying they took out a loan. And despite headlines over the ‘boomerang generation’, just 8% said they’d moved back in with their mum and dad in order to buy (this rises to 15% for 25-34 year olds).

Among those currently renting just 6% would move back in with their parents – with 22% preferring to rent a really cheap property, and 38% planning to work more. Among renters, saving for a deposit is the biggest concern for both women (34%) and men (23%), just ahead of getting a mortgage (women 30%, men 21%).

While 71% say they bought with a spouse or partner, men were more likely to have taken out a loan to help them buy their first home (15% vs 12%) with women more likely to have given something up such as hobbies or habits (16% vs 11%).