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Rental affordability ‘improving as more people make jump on to property ladder’

The cost of renting has become more affordable as a jump in people getting on the property ladder has helped to take some of the pressure off demand in the sector, an index suggests.

Zoopla, which has launched a new quarterly rental report, said average private rents are up 2% annually to £876 per month on average across the UK.

It said a typical single earner can now expect to spend 31.8% of their wages on rent, down from a 2016 peak of 33.3%.

The figures are based on gross earnings and someone renting a whole property – so someone sharing with others could potentially cut their costs.

Separate mortgage lending figures released by UK Finance this week showed there were more first-time buyers in August than in any other month since 2007.

Housing market experts have suggested that stamp duty relief for first-time buyers, low mortgage rates, and a sense of urgency fuelled by Brexit are among the factors driving people to make the move into home-ownership.

Zoopla said the affordability of renting has improved as wage growth has been increasing faster than rental prices.

Richard Donnell, director of research at Zoopla, said: “Renting is more affordable today than the 10-year average.

“This follows weak rental growth over the last three years, and an acceleration in the growth of average earnings.

“First-time buyers, 80% of whom exit the private renting sector to buy, has also moderated rental demand.

“Rental affordability varies widely across the country, reflecting the relative strength of local economies.

“High house prices increase the underlying demand for rented homes.

“Meanwhile, in markets where buying is more affordable, rental demand is limited, resulting in lower rental values.”

Across the UK, homes take 17 days to rent on average – down from 19 days a year ago.

But in some cities, the average home rents out much faster than this – including Brighton (13 days), Nottingham (12 days), Edinburgh (11.3 days), York (10 days), and Bristol (9 days).

Here are average monthly rental prices followed by the year-on-year increase and the affordability for a single earner, showing how much of their money would typically go on rent, according to Zoopla:

– England, £900, 2.0%, 32.1%
– Scotland, £625, 2.9%, 24.2%
– Wales, £592, 1.9%, 24.5%
– Northern Ireland, £587, 1.8%, 24.9%

English regions;
– East Midlands, £638, 3.2%, 25.8%
– Yorkshire and the Humber, £578, 2.8%, 23.3%
– South West, £787, 2.6%, 30.8%
– London, £1,622, 2.3%, 45.9%
– North West, £599, 1.8%, 24.2%
– Eastern, £876, 1.6%, 30.2%
– South East, £1,007, 1.4%, 32.9%
– West Midlands, £660, 0.8%, 26.6%
– North East, £503, 0.5%, 22.3%

By Vicky Shaw

Source: Yahoo Finance UK

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Renting More Affordable Than Buying Property

It looks like the buy to let rental market is here to stay, with renting more affordable than buying property across the UK.

Lettings platform, Bunk, looked at which was more affordable in the property market out of buying and renting, and how this differs across the UK.

They looked at the cost of a rental deposit and the cost of renting for a decade, then compared this cost to the financial barrier of a mortgage deposit, and the cost of monthly mortgage payments over a 10-year fixed term at a rate of 2.58 per cent.

Across the UK the average monthly rent is £676. With the newly introduced five-week cap, that means a rental deposit costs an average of £845 and renting at this average monthly rate over a 10-year period would cost a total £81,120 – a total cost of £81,965 when including the deposit.

The current average UK house price is £226,798 and so a 10 per cent deposit would set you back £22,680. This leaves a loan amount of £204,118 and at a 10-year fixed rate of 2.58 per cent would mean a total repayment of £231,798, a total of £254,478 including the deposit.

This means, that renting is certainly more affordable at £172,513 cheaper than owning a home over a 10-year period when it comes to the upfront and monthly costs, with the one big difference being the bricks and mortar investment secured at the end.

This most notable saving was found in Cambridge, with a difference of £341,090 over 10-years between renting and buying, with the saving in London also topping £316,247.

In Bournemouth, renting over 10-years is £183,376 cheaper than buying, with Bristol (£177,613), Edinburgh (£166,547), Cardiff (£143,984), Southampton (£138,617), Portsmouth (£137,240) and Plymouth (£128,480) all home to some of the biggest savings.

The lowest saving was in Glasgow where renting for 10-years is just £43,145 cheaper than buying in the city, though still certainly more affordable.

Co-founder of Bunk, Tom Woolard, commented: ‘Of course the big difference between renting and buying is that one leaves you with a sizable financial asset as a reward for your years of hard work making mortgage payments.

‘However, more and more of us are opting to rent long-term and what we wanted to highlight is that while the rental market is generally viewed in a negative light due to high rental costs, it is actually a considerably cheaper option when compared to home ownership, even with almost record low-interest rates.’

Source: Residential Landlord

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Brexit calls for landlord flexibility

Brexit is having an impact in the rental as well as the for-sale market. Concerns are growing over changes to regulation; dips in property value; possible interest rate hikes meaning rents will have to increase, affecting affordability for tenants; and the ambiguity around having EU nationals as tenants.

But amidst this turbulence is an opportunity for landlords to bring some stability to the rental sector and move forward with the evolving tenant. While the waiting game on Brexit continues, we can look at how to be more effective and responsible as landlords overall.

PPP Capital has been developing and renting property for over 15 years, but in the past few years we have had to think more creatively in the face of Brexit uncertainty about our approach to the evolving tenant. Below is a list of suggestions we have found effective in attracting and retaining good tenants and we are confident this approach will help our portfolio weather whatever Brexit brings.

Move forward with tenants’ changing profile: For example, many tenants are now pet owners. Landlords are often reluctant to accept pets, but we give applying tenants the chance to describe their pet before we decide whether to accept. We also suggest putting a clause in the contract about having pets in the property. In our experience, if we show flexibility and care as a landlord, we receive the same respect in return.

Engage in efficient two-way conversations with tenants: One way to do this is to use property maintenance software that updates tenants in real time. Making them feel connected to their landlord eliminates rounds of calls or emails and speeds up simple maintenance requests, but also builds trust between both parties.

Enabling your company, tenants, contractors and tradespeople to access it separately and simultaneously makes things easier for all involved. A digital maintenance log also helps you to see if properties are costing more than was forecasted.

Be open to installing high quality finishes and extras: More tenants than ever envisage themselves as long-term tenants rather than homeowners. For a landlord, this means tenants will give extra care to the property, treat it more like their own home and stay for years. So it is often worth investing in some ‘extras’ such as smart home systems, underfloor heating or safety features such as alarm systems and great outdoor lighting.

Give back to the community: One way to do this is sponsor a local community initiative or help to create an outdoor communal area or park nearby. This is an idea we have started exploring but not yet implemented. We have donated to national charities but also want to identify projects in communities where we have developments.

Our priority is to identify opportunities that support a greener, brighter future for the communities we are present in.

Renters’ needs are evolving. Property selection and the decision to stay for the long-term are not only determined by the basics but by a landlords’ attitude to diverse tenants and how responsible they are as a landlord. There are ambiguous times ahead, but private and corporate landlords with mid-to long-term buy-to-let and build-to-rent properties should remain very optimistic about the future.

Let’s focus on the long-term yield while doing our best to be responsible landlords with solid portfolios occupied by respectful tenants.

By Sanjeev Patel

Source: Property Week

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Not all gloom for rental market

It has been widely reported in the media how Brexit uncertainty has slowed down both the buy-to-let and residential housing market.

However, closer examination suggests other factors may have as much or more influence on current market activity.

Undeniably there has been a slowdown in both residential and buy-to-let markets over the past 12 months.

UK Finance recently reported that while buy-to-let remortgage activity has soared, the total number of buy-to-let purchase completions in 2018 was 11.2 per cent less than in 2017.

Meanwhile, their figures for January 2019 showed a 1.5 per cent reduction in the volume of residential lending, compared to the start of 2018. Put simply, people were choosing to sit tight and rely on the private rental sector rather than buy their own homes.

Key Points

  • There has been a slowdown in the buy-to-let sector
  • There has been intervention by the government in the buy-to-let market
  • The number of buy-to-let products shows lenders are positive about the outlook

For many who are renting, the prospect of saving for a deposit remains an almighty challenge.

The Ministry of Housing, Communities and Local Government’s recently-released English Housing Survey for 2017-18, indicated that the private rental sector has remained unchanged for the past five years at 4.5m households, which equates to 19 per cent of the total.

The latest survey revealed that 58 per cent of renters expected to buy a property eventually, with 26 per cent anticipating this will happen within the next two years, while 41 per cent suggested it will take five years or more to accomplish this goal.

Those timescales suggest that Brexit is not a major consideration.

Meanwhile, landlords have been dealing with more immediate and tangible concerns.

The past three years have seen substantial government intervention in the buy-to-let market, with the introduction of stamp duty on additional properties and the reduction and gradual replacement of mortgage interest tax relief perhaps the biggest financial changes.

But factor in the new house in multiple occupation licensing laws and crackdowns on living standards, plus the imponderable consequences of the imminent tenant fees ban and it is easy to see why some landlords have decided to sell up or not invest.

In particular, it has been the smaller landlord, perhaps with less time to keep abreast of the changes or adapt their strategy, that has struggled with the changes.

Many landlords with larger portfolios may already operate with more organised strategies in place, particularly in light of the Prudential Regulation Authority changes that came into effect in October 2017.

These required a more rigorous approach to the underwriting of portfolio borrowing and resulted in such investors having to provide more detail at the application stage.

It is too simplistic to simply lay current property investment levels purely at the feet of Brexit. There are too many other elements at play.

Adopting a pragmatic approach to investment

There are still plenty of reasons why buy-to-let investments can offer opportunities to those looking for solid financial returns.

Firstly, depending largely on property location and type, many landlords continue to turn a profit, which currently outweighs those available from other types of investment.

Here are a few positive factors to consider if your clients are contemplating a buy-to-let investment:

• At the moment, there is a general sense of stagnation within the property market. This means that property prices are, in many areas, no longer accelerating at previous rates.

Consequently, there may be opportunities available on the market. If you come across a property that has historically been rented out, this might mean there is less work to do upon purchase to have it ready to let.

• Market sentiment, as highlighted by the government’s survey, suggests no reduction in demand for rental homes, as thousands put on hold their dreams of home ownership in favour of renting for the foreseeable future.

In February, London estate agent Foxtons reported that in 2018 there was an 8 per cent increase in renter registrations in London, compared to 2017.

• There are big regional disparities in buy-to-let performance – and landlords are not bound geographically by where they own property. Buy-to-let yields and capital growth prospects vary across the UK, with the North West and the Midlands figuring prominently in recent data.

Since June 2016, when the Brexit vote took place, 10 UK cities have achieved double-digit house price growth, with seven located in the north of England.

• While Brexit has arguably had a negative effect on London and the South East, so too has the price of property for would-be buyers and, likewise, rent for would-be tenants.

With government investment in infrastructure, in particular the Northern Powerhouse, businesses have relocated to other parts of the UK and workers have followed suit. That has helped to create vibrant micro-economies for buy-to-let.

• Historically, house prices have recovered from any short-term economic or political unrest and proved resilient in the face of the financial crisis of a decade ago. Investment in bricks and mortar should always be regarded as a long-term strategy, in this context, well beyond Brexit.

• The sheer volume of buy-to-let products in the market place (1,162 in late February 2019, according to Moneyfacts), reflects a positive buy-to-let outlook from lenders. But the choice also comes with all sorts of incentives and competitive mortgage rates.

The Bank of England base rate remains historically low and rates for five-year fixed rate buy-to-let mortgages, for example, are more than 2 per cent less than in 2010.

The big question is how long lenders can sustain these low mortgage rates? By delaying investment in buy-to-let, some borrowers could run the risk of missing out on the lowest deals, should rates rise in the future.

We live in extraordinary times and Brexit presents its own unique set of challenges, but should not be confused with wider property market issues.

Perhaps never before has there been as much need for a buoyant private rental sector that serves the country’s escalating needs.

With low interest rates, infrastructure investment and growing tenant demand, Brexit may not present as big a challenge as recent tax and legislative changes. But, with a sound and responsive investment plan in place, buy-to-let landlords can prosper and Brexit offers no reason why that should not continue.

By Andrew Turner, interim chief executive of Commercial Trust

Source: FT Adviser

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London landlords urged to buy as rents reach all-time high

A property expert has advised investors to start buying property to let as average rents in London reached an all time high and the number of available homes continued to fall.

Rightmove found that average asking rents in London rose to £2,091 a month in the first quarter of the year, with further growth predicted this year.

After a few years of slowing and dropping rents in the capital, asking rents in London are now up 8.2 per cent on Q1 last year.

Average rents increased as available rental stock in the capital dropped 33 per cent in just two years, the figures from the property website show.

Housing supply in the PRS outside London is down 13 per cent over the corresponding period.

Rightmove’s commercial director and housing market analyst, Miles Shipside, said: “What we really need now is more fresh stock for the rental market so that rents don’t continue to rise at the current rate we’re seeing, so perhaps it’s a good time for some investors to consider buying up properties to let out as the tenant demand is definitely there.

“There was a temporary slowing and drop in rents in London when the second home stamp duty tax came in back in 2016 as so many investors bought properties before this came in, leading to a huge increase in rental choice.

“But the lack of new stock since that time has led to rents increasing again, and London renters are now faced with rents that are over 8 per cent higher than this time last year.

“Outside London, the pattern is not as extreme, but there is still a significant drop in fresh choice.”

Outside London, the North East is the only region to have seen a drop in rents over the past 12 months, down 0.3 per cent.

Away from the capital, Scotland has witnessed the biggest rise in asking rents, which are up 6.7 per cent year-on-year.

But it is the South East which has the highest average asking rents outside of London, with the average rental home being £1,054 per month.

Mr Shipside added: “Suffice to say the government’s introduction of higher stamp duty on second homes purchases back in 2016 combined with other tax increases has resulted in an ongoing trend of decreasing activity from investors in the buy-to-let market.

“Consequently, we’re seeing the initial price drops being replaced by rapid price growth in some areas.”

The ban on tenant fees comes into force in England on June 1 this year, with the Tenant Fees Act 2019 summarising the government’s mandate on banning letting fees paid by tenants in the private rental sector and capping tenancy deposits.

Based on a five-week deposit cap, Rightmove has calculated that the cheapest deposits outside of London will be in the North East, at £630 per property on average. The most expensive will be in London at £2,415 per property. In London the cheapest deposit will be in Rainham (£1,216), with the most expensive in Kensington (£4,065).

Mr Shipside said: “The upcoming tenant fee ban should spell some good news for tenants and it may lead to more people being able to move more often if they want to, thanks to the reduction in the cost of moving.

“It remains to be seen if the ban will be passed on in other ways such as increasing rents and tenants will still need to find a pretty hefty rental deposit in many areas.”

Source: Simple Landlords Insurance

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Buy-to-let investors! Why London is a rental market that could still make you rich

The three words ‘London housing market’ have been enough to send a chill down the spines of many a property owner over the past 12 months or so.

We all know the stresses that Brexit, and its current (and future) consequences, have had on home values since the EU referendum. The stratospheric home price growth of yesteryear has seemingly been consigned to history, and in the case of the capital, has been replaced by stagnating, if not receding, prices.

Latest figures from Hometrack UK indicated that home prices in the capital had risen just 0.2% in January on an annual basis. And Foxtons warned just this week that a range of factors, including political ones, mean that low transaction levels were likely to persist “in the short-to-medium term.”

Capital gains for landlords

You can come out from behind the sofa, though, because things aren’t all bad. Well certainly not if you’re a prospective or existing landlord. According to Foxtons, “there is momentum in the lettings business” and the estate agency consequently saw revenues rise here in 2018.

Indeed, a recent report from ideal flatmate showed one sub-sector of the rental market that is performing particularly well: the market for tenants seeking single rooms.

According to the online property website, the average price of a room advertised on its boards sailed 13% higher in 2018, to £855 from £781 in the prior year, thanks to “a continued lack of suitable stock and a reduction in buy-to-let investors.” And prices have continued to rise in 2019, ideal flatmate said. The average price currently sits at a whopping £902, with the most expensive average in London sitting at £1,045 for a room in Westminster.

“We’re currently seeing the price of room rentals in London increase at a rate of at least one per cent a month on average,” co-founder of ideal flatmate Tom Gatzen said, who also attributed the jump to “a reduction in the number of landlords and letting agents with rooms to rent as a result of the stamp duty shake-up, changes to tax thresholds and the impending ban on letting fees.”

The Top 10 Most Expensive London Boroughs

Borough Average Room Rent (Per Month)
Westminster £1,045
Camden £999
Kensington and Chelsea £997
Hammersmith and Fulham £959
Islington £910
City of London £900
Hackney £898
Wandsworth £810
Tower Hamlets £809
Southwark £807

Source: ideal flatmate

Alive and kicking

Talk of the demise of the buy-to-let market is clearly overdone. The London market still provides plenty of scope for landlords to make huge returns.

And while home prices are currently under some pressure, this isn’t something that long-term proprietors need to worry over, in my opinion. The capital remains one of the world’s most popular cities for both native and foreign homebuyers and it always will, meaning that property values are bound to make a comeback.

Would I invest in the rentals market myself, though? No. The sea of tax changes in recent years means that buy-to-let isn’t the lucrative investment opportunity that it was just five years ago, whilst increasing regulation makes it a much more complicated endeavour. There are much better ways to make your money work for you, in my opinion, and for this reason I’m using my cash elsewhere (like investment in the stock market) to help me make my fortune.

Source: Yahoo Finance UK

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Buy-to-let products hit 12-year high! Is it time to plough into the rental market?

If you’re looking to get into the rental market, you may well find yourself spoilt for choice when shopping for a mortgage. According to price comparison expert Moneyfacts, there are some 2,162 buy-to-let products to choose from right now, the highest number since October 2007 when 3,305 mortgages were available.

Lenders are falling over themselves to grab a slice of buy-to-let despite the uncertainties created by the Brexit saga and the possible consequences of it on the British housing market. “It is encouraging that buy-to-let landlords have more mortgage choice than they have had at any time in almost 12 years,” Moneyfacts finance expert Darren Cook commented, noting that product numbers have jumped by 397 over the past year and by 706 since the same point in 2017.

Costs are rising Whilst competition might be on the up, the fight amongst the UK’s banks and building societies has not made investment in the rental market any more cost-effective for landlords. As Cook commented: “It is also evident from our research that heightened competition to try and attract buy-to-let business has not resulted in a fall in interest rates, as has recently happened in the residential mortgage sector.”

The average rate for a two-year fixed-rate mortgage has edged both higher and lower over the past two years, but the current level of 3.12% stands at a premium to the 2.92% average seen around six months ago and the 2.96% witnessed in March 2018.

Meanwhile, the average rate on a five-year fixed-rate mortgage currently sits at 3.61%, up from 3.46% in September and 3.43% a year ago.

Dive in or stay away? Rising mortgage rates are the last thing that proprietors need right now because of the stream of tax changes in recent years that have pushed up the cost of owning and letting out property, from an increase on stamp duty to 3%, to axing tax relief which allowed mortgage interest to be subtracted from rental income before tax was calculated.

Bigger payments to HMRC aren’t the only problem, though. There’s a galaxy of certificates and therefore additional charges that proprietors need covering everything from maintenance to safety, to the listing and management of their properties, extra costs that all add up.

The government now has a huge appetite for restricting the activity of landlords through extra costs and tighter renting rules. It’s been identified as a critical vote winner given the ocean of Britons struggling to get onto the housing ladder as a result of the country’s huge property shortage. So if you grab a slice of buy-to-let, you’ll to be braced for investment here to get a lot more expensive, as well as restrictive, in the years ahead as government policy evolves.

What’s more, you’ll need to be prepared for Bank of England interest rate hikes, possibly as soon as later this year, and a subsequent increase in mortgage costs. A possible house price dip as we have seen in London over the past year or so could be on the horizon as well to smack the value of your investment portfolio. All things considered, I think buy-to-let is far too complicated and costly to participate in today, and I for one would rather use my money to invest elsewhere.

Royston Wild has no position in any of the shares mentioned. The Motley Fool UK has no position in any of the shares mentioned. Views expressed on the companies mentioned in this article are those of the writer and therefore may differ from the official recommendations we make in our subscription services such as Share Advisor, Hidden Winners and Pro. Here at The Motley Fool we believe that considering a diverse range of insights makes us better investors.

Source: Investing

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Rents in the regions grow faster than UK average

Rents in the UK’s regional hubs are growing significantly faster than both London and the UK average, as workers continue to relocate from London, buy-to-let lender Landbay has found.

Rents rose by 0.03% in November 2018 which, although the lowest monthly rise since the start of the study, feeds into growth of 0.97% in the year; 0.04% higher than the same point in 2017. This is mostly down to London’s improved performance, recording growth of 0.58% this year.

John Goodall, chief executive and co-founder of Landbay said: “It’s hard to escape the fact that we’ve seen a slowdown in the property market due to Brexit uncertainty and recent tax and regulatory changes for landlords.

“In that context, these growth figures show just how resilient property continues to be as an asset class. As with all investments, it is prudent to have a diversified portfolio – backed up in the case of buy-to-let by London’s recent fall and revival alongside strong performances from cities including Leeds and Manchester.

“London’s green shoots paint a positive picture for landlords ahead of what will likely be testing economic times with Brexit and further interest rate rises expected.”

The average monthly UK rent currently sits at £1,212, a rise of £10 since the start of the year. When London is removed, rents sit at £769, up from £761 since the beginning of 2018.

Rents are rising in 27 of the 33 London boroughs, a very different picture from this time in 2017 when rents were falling in 26 of the capital’s boroughs. While every region in the UK has seen rents rising, the speed of growth has not been consistent – with all areas other than London experiencing a slowdown.

The East Midlands (2.25%), Yorkshire & Humber (1.50%) and West Midlands (1.48%) have all experienced the most substantial growth in the past year and are expected to climb further as we head into 2019.

Growth in the North East peaked to its highest point in two years in November 2017 but since then growth has depreciated to 0.05% on an annual basis – it’s lowest growth rate since August 2013.

While London’s rental growth stands at 0.58% year-on-year, it is now cities like Leeds (2.54%), Birmingham (2.05%) and Manchester (1.91%) which are experiencing accelerated annual growth.

This could be attributed to internal migration as millennials leave the capital at the highest rate in almost a decade. Since the start of 2012 London has seen a net loss of nearly half a million residents as people vote with their feet amid the growing living and housing costs.

However, some will also be moving due to work commitments.

MediaCityUK now employs more than 3,000 people at its base in Salford, after welcoming 2,300 BBC employees back in 2010. Salford has seen rents rise by 2.62% year-on-year and 22.76% cumulatively since January 2012, more than double London’s pace (9%).

HSBC has announced it will move 1,000 jobs to Birmingham, whilst Leeds has seen jobs created by companies including Burberry.

Goodall added: “The truth is there is now a twin speed rental market as London’s rent growth is dwarfed by cities such as Leeds and Manchester.

“This is being fuelled by the capital’s millennial exodus as countless young professionals realise there is more to life than London. This same message carries weight with landlords, who are increasingly seeing the value of investing in these regional hubs.

“In many ways it could be argued that the ‘Northern Powerhouse’ is beginning to take effect amid stretched affordability and a harsher tax regime.”

Source: Mortgage Introducer

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Fix the housing crisis and save the high street at the same time

Two “crises” have dominated the headlines in the last year. The first is the pressure on housing, the challenges of the rental market, and the soaring cost of living, especially in big cities. The second is the so-called “death of the high street”, as shopping habits change and the retail sector struggles to keep up.

Let’s start with the latter. At the end of 2017, the UK’s retail market saw occupier demand drop for the third consecutive quarter, with a reported fall in demand from prospective tenants of 22 per cent to the lowest level since 2011. As a result, the retail sector was the only area of the UK market to see an increase in availability of leasable space.

In 2018, nearly 1,000 retailers in the UK – from big names like House of Fraser and Poundworld to small independent traders – went into administration between January and September alone. In these nine months, rents have dropped, vacant commercial spaces have increased, and investor interest has massively wavered.

It is no secret that footfall on our high streets is decreasing as the e-commerce boom takes over. So instead of resisting change and trying to cling to a dying high street, we should see this as an opportunity to move forward and transform how we use empty commercial space for the benefit of the UK economy.

Which brings us back to the other major challenge facing the UK. The country needs high-quality housing now more than ever, at rents that don’t swallow two thirds of the average Londoner’s salary each month.

Research estimates that the government needs to be building 340,000 homes per year – rather than its current target of 300,000 – until 2031, to meet rising demand. Given planning restrictions on new builds and the low availability of land, if politicians actually want to make this happen they need to think outside the box.

And that means taking the opportunity to kill two birds with one stone, to reimagine our high streets and tackle the housing crisis at the same time.

It’s time for the government to be bold and collaborate with private firms that are willing to take risks, challenge outdated manufacturing methods, and build innovative homes in available spaces. From pre-fabricated, shared living spaces created off-site in the UK and built in unused commercial spaces, to simpler existing co-living models, there are feasible options out there that can enable the UK to rapidly fill empty spaces at low cost and at higher capacity than traditional developments.

This isn’t to say that every high street needs to be transformed into a residential asset. But the e-commerce trend isn’t going to be reversed, and it makes sense to use the space that we have.

Unlike previous attempts at collaborating with private firms, there can’t be lengthy multi-year gaps between scaling developments because the government can’t afford to take on partnerships that don’t offer quick turnarounds. That’s why empty retail units might be the most resourceful option for distributor developers at this stage.

And that’s just the start – retail is of course not the only sector suffering from an increase in vacant spaces. Hospitality and commercial offices are also seeing an upsurge with the popularity of platforms like Airbnb, flexible working, and the rise of shared workspaces.

By harnessing opportunities and innovations like these and taking the chance to challenge the status quo with clever commercial transformations, the public sector can work with private property firms to bring a higher volume of homes to our ever-growing cities – and save our high streets at the same time.

Source: City A.M.

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Rental growth showing signs of a sustained recovery

The average rent has risen by 0.13%, the highest monthly increase since April 2016, Landbay’s Rental Index has found.

The increase pushes the average rent paid for a property up to £1,209 per month, dropping to £767 if London is excluded. Rental growth on an annual basis also showed signs of a sustained recovery, with rents across the UK increasing to 0.97%, the highest level seen since May 2017.

John Goodall, chief executive and co-founder of Landbay said: “The figures point to a possible start of sustained rental rises in the UK. Following a slowdown in rental growth the changes are likely influenced by a number of regulatory and tax changes introduced over the past two years.

“As landlords begin to feel the pinch from these changes, combined with a reduction in the supply of new homes, the inevitable consequence is an upward pressure on prices.

“The government must start to see landlords as a vital part of the UK housing market, rather than an easy target for raising the coffers. Any further changes to regulation or taxation will only end up on the tenant’s door.

“For brokers, this provides them with the opportunity to give expert advice to their clients about changing elements of the housing market and which areas have the most potential in the coming months.”

Annual rental growth in London, which had been in negative territory for more than a year before the first positive movement in April 2018, also showed a marked uplift.

Rents in the capital increased at the fastest pace in almost two years, rising to 0.44% in the year up to August 2018. However, it is still some way off the average annual growth rate of 1.36%.

At a London borough level, rents have risen in 27 of the 33 boroughs over the course of the last 12 months. Four of the London boroughs exceeded the average annual rental growth rate, including the City of London (2.25%), Bexley (1.48%), Southwark (1.48%) and Lambeth (1.44%)

Further signals of a strengthening rental market have begun to emerge. The East Midlands posted the highest monthly rise (0.32%) for an English region in 40 months, and the third highest monthly regional rise since the index began.

Additionally, eight of the 30 bottom performing areas experienced positive movements on an annual basis.

These include Slough (0.26%), Kingston upon Thames, Surrey (0.22%) Kingston upon Thames (0.21%), Surrey (0.14%), County Durham (0.12%), Haringey (0.09%), Hammersmith and Fulham (0.08%) and Blackpool (0.03%).

Source: Mortgage Introducer