From average rental prices rising across Britain, to first-time buyers hitting a 10-year high, there’s been plenty of ‘food for thought’ escalating within the property market in February.
To make some sense of the biggest news hitting the property headlines in recent weeks, Agent Wow spoke a several leading figures in the industry to get their thoughts on some of the most pressing issues.
Average rental prices rise in Britain
According to the HomeLet Rental Index, in January this year, 11 of 12 UK regions demonstrated a growth in rents, with the average rent in Britain now £909 per month.
Elliot Castle, Founder & CEO of homebuying company We Buy Any Home, told Agent Wow his thoughts about rising rent in the private rental sector.
“In the short term, it’s good news for landlords but looking at the situation from a long-term perspective, there is only so much the rents can rise before it will become unsustainable for tenants, given the lack of increase in wages and the fact that people are struggling to save up for a deposit and actually get on the property ladder,” Elliot Castle commented.
Leon Ifayemi, CEO and co-founder of SPCE heeded caution about rising rental costs and believes technology could be a viable solution.
“Increasing rents across the UK continue to be a major issue in need of addressing. Standing at an average of £909, this is a huge financial burden on private tenants – not only does it restrict the lifestyles people lead, but it also makes it extremely difficult for those who want to buy a house to save the money to do so.
“But we cannot simply point the finger of blame at landlords or Estate Agents; their rents will naturally be dictated by market conditions. No, to make a meaningful impact on rental prices the Government must intervene in one of two ways – introduce caps on rent that are dependent on the type, size and location of a property; or dramatically increase its efforts to increase housing supply across the country, in turn relieving demand and helping to control rents.
“Technology can also play a role. By improving efficiency and helping to cut down on administrative tasks carried out by middlemen, new apps and online platforms can help landlords drive down rents without impacting their bottom line. These tools also provide greater transparency and empower tenants to find better deals on rental properties, preventing them for paying above the market rate for a house or flat,” Leon Ifayemi told Agent Wow:
Paresh Raja, CEO of Market Financial Solutions (MFS), spoke of how the rising cost of privately rented accommodation highlights the need for the Government to do more to encourage affordable housing.
“Recent statistics from the Office for National Statistics (ONS) showed that house prices rose by 5.2% in 2017. With demand for property clearly strong, it’s no surprise that this is also having an impact on rents. For buy-to-let investors, although rent rises may seem like good news, it is occurring in line with increasing house prices. Take into account the current rate of inflation, it is unlikely that this news will trigger an influx of investors to the buy-to-let market.
“Moreover, this figure when viewed within the context of the housing market more generally, demonstrates the need for the Government to put into place measures that encourage the number of affordable houses on the market. This will only serve the interests of both prospective buy-to-let landlords and current renters,” Paresh Raja commented.
First-time buyers hit 10-year high
News also emerged this month that sales of first homes increased by 7.4% in 2017.
Elliot Castle, provided his thoughts on what is contributing to more first-time buyers getting their foot on the property ladder.
“It’s fantastic to see more first-time buyers being able to get a foot on the property ladder. It’s definitely been a combination of the Help to Buy scheme, removal of stamp duty for first-time buyers and less competition from buy to let investors that have contributed towards this positive news. However, for this continue well into the future the government must ensure they are increasing the housing supply, otherwise the market will get extremely competitive,” said the Founder & CEO of We Buy Any Home.
MFS’s Paresh Raja, welcomes the news that the sales of first homes are increasing but says more attention needs to be placed on second-steppers who can’t afford to move up the property ladder.
“At the moment, the Government has focused its attention on making house prices more affordable by increasing the number of properties available to buy. This is bringing some relief, and it’s promising to see the number of first-time buyers hitting a ten-year high. Hopefully, with recent proposals to reform house planning laws coupled with a commitment to add 100,000 new homes to the market each year, this number will rise further.
“However, equally attention needs to be placed on those who have already bought their home and cannot move up the property ladder due to a lack of affordable options – without doing so the market will stagnate. This is particularly relevant for young couples and families who need a larger home to support their growing household.
“If this is not addressed, there is a risk of a bubble being formed at the lower end on the property ladder, reducing the amount of affordable homes that are actually being listed for sale. In light of this, it is important for the Government to provide support across all areas of the property market, including homeowners as well as first-time homebuyers,” Paresh Raja commented.
Watch this space for the biggest property news hitting the headlines in March when we’ll ask more leading figures from the world of property their thoughts on the most pressing housing news.