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According to Zoopla, the average rent has risen by £115 per month since September last year, to £1,051 a month in September 2022.

 

The rise is substantially outpacing earnings growth across the country and boils down to a catastrophic imbalance between supply and demand.

 

The lack of supply has led to dwindling options on the market for renters, as rental stock levels sit at around half the number seen on the market in the past five years.

 

Many renters will find themselves in good financial stead, by choosing to stay put in their current rental homes to avoid future rent increases and growing competition elsewhere on the market.

 

Renters return to the city

Growing employment rates in the wake of the pandemic, and a growth in high-quality, purpose-built build-to-rent homes appearing around the UK, is drawing more renters into urban areas.

 

The appeal towards energy efficient new-build homes is proving to be a big pull towards renting in the city, as most new developments tend to be around city centres, and renters will seek out a low EPC rating to stay on top of energy bills.

 

Rents for tenants remaining in current homes rising at a much slower pace

The average renter will move every four years, according to Zoopla, so their data reflects rent prices on new lets for around 25% of the market.

 

However, the Office for National Statistics’ (ONS) rental index outlines rental increases across the board, for both movers and non-movers.

 

The data shows current rents across all rented homes have seen a 3.7% increase, compared to the average recorded in July 2021.

 

Those moving to a new rental property will find the cost of renting 12.3% higher, as rents for new lets are correlating to the decline of supply amid high demand across the country.

 

How much higher can rents go?

While rental affordability varies according to location and income, in the latest English Housing Survey from 2020 to 2021, three quarters of private renters agreed they found rental payments very or fairly easy to meet. The remaining 25% found them fairly or very difficult to pay.

 

The question of how much higher can rents go, will depend on how much headroom renters have, to pay more rent.

 

While competition and demand continue to skyrocket, landlords have no reason to believe there isn’t opportunities for above-average growth in the less expensive areas of the UK.

 

What to expect in the rest of 2022, going into 2023

There are no signs of significantly improved rental supply in the near term, as private landlords continue to sell off homes, and renters remain for longer terms.

 

The imbalance between supply and demand will also remain unwavering, and rents will continue to grow at above-average levels well into 2023.

 

There are clear signs of headroom for some renters to pay more. Especially in areas of the country where rent is already high.

 

There may be a cool-down period emerging further into 2023, but this will come at a slow pace.

 

As well as avoiding rising rental prices, tenants will look to find smaller rental properties to keep their energy bills low. However, the horizons for options on the market should broaden, as the economy begins to recover.

 

The climate of the rental market can only benefit from more homes appearing on the market, which will help to close the gap between supply and demand.

 

Do you have a property to let? Find out how we can help you manage your portfolio, by visiting our website today.

 

First-time buyers: What deposit will you need?

 

Whether you are thinking about saving for your first house or you have been saving for a while now, the deposit will most likely be the first hurdle on your journey. Here are some of the basics you’ll need to know to help you get a leg up.

 

What is a mortgage?

 

A mortgage is a loan taken out to buy a property or land. Most will run for 25 years, but the term can be shorter or longer depending on the property.

 

The loan is ‘secured’ against the value of your home until it is fully paid off. If you fail to keep up with your repayments, the lender can repossess the home and sell it to get the money back.

 

How much of a deposit do I need to buy a home?

 

Before you start looking at properties, it’s best to get your deposit saved first and foremost.

 

Generally, you will need to save at least 10% of the cost of the home you would like to buy. This figure depends on whether you’re buying alone, in which case you can split the deposit in half. It also depends on current market activity at the time of the purchase. For example, most sellers will ask for a higher minimum deposit during economic headwinds or overwhelming demand, as this ensures that they will achieve the right asking price.

 

Saving above 10% will give you more leverage for the home you want, expand your choices on the market, and secure you a lower monthly interest rate.

 

Help for first-time buyers

 

If you are in a situation where you can only save a small deposit, or you do not have the option to split the cost in half with a secondary resident, there are a range of government schemes available to give you a helping hand on the housing ladder. Options include:

• Lifetime Individual Savings Account (LISA) – You can use a LISA to buy your first home or save for later life. You must be aged between 18 and 39 to open a LISA. You can put away up to £4,000 each year and the government will add a 25% bonus to your savings. However, there is a penalty for taking money out of a LISA if you are not putting it towards a deposit, or withdrawing after age 60.
• Equity Loan – This scheme is only available to first-time buyers in England who want to buy a ‘new-build’ house within the relevant regional price cap. You can borrow up to 20% (40% in London) of the purchase as an interest-free equity loan. You do not pay interest on the equity loan for the first five years, but you will start to pay interest in year six. The equity loan payments are interest only, so you do not reduce the amount you owe.
• Shared ownership – Shared ownership offers first-time buyers the option to buy a share of the home from the landlord, who is usually the council or housing association, and pay a reduced rent on the remaining share. Later, you can choose to buy a bigger share in the property, and ‘staircase’ up to 100% of its value.

Some of these schemes are ending or unavailable in certain locations, so it is important to thoroughly research each one, save as much as possible and seek out bespoke advice about your savings options.

 

Other costs for buying a home

 

When saving for a deposit, it’s important to remember that there are other fees and costs you will need to save for, before you can take the plunge.

 

These include:

• Survey costs
• Initial furnishing and decorating costs
• Buildings insurance
• Solicitor or conveyancer fees
• Removal and moving costs
• Stamp Duty

 

If you are struggling to save for a deposit

 

If you are struggling to save up a large enough deposit to move out within a certain timeframe, there are options available to help you.

 

Family assistance mortgages allow whoever is supporting you to put in a percentage of the money you are looking to borrow into a specific savings account, or they can secure the mortgage against a percentage of their own property.

 

 

Looking for advice on your property circumstances? Get in touch today.

 

Stricter smoke alarm laws are here – Are you ready?

 

Since October 1st, 2022, the laws around the requirement for smoke and carbon monoxide alarms in rental properties have changed. If you haven’t already made sure you’re meeting all the necessary requirements, we have prepared a comprehensive guide for landlords, so you can get caught up with the new changes.

 

Where do the rules apply?

 

According to GOV.uk, the new regulations apply to all homes rented by private landlords, or registered providers of social housing, unless excluded.

 

Tenancies exempt from the regulations include:

• Shared accommodation with a landlord or landlord’s family
• Long leases
• Student halls of residence
• Hotels and refuges
• Care homes
• Hospitals and hospices
• Low-cost ownership homes
• Other accommodation relating to health care provision

Smoke alarms

 

Since 2015, all private rental homes are required to have at least one working smoke alarm on each storey where there is a room used as living accommodation. The only change to this area of the legislation is that it will now also apply to all social rented homes.

 

Carbon monoxide alarms

 

Carbon monoxide alarms are required to be installed in all rooms of a private rented property where there are any fixed combustion appliances such as gas or oil-fired boilers, except for gas cookers. The smoke alarm must be fitted and in working order at the start of each new tenancy.

 

How to test if your alarms are in proper working order

 

You will need to make sure your alarms have been tested and are in working order at the start of each new tenancy. It is as simple as pressing the test button until the alarm sounds, and you should also advise your tenants to do the same regularly. If a tenant reports an alarm is not working during the tenancy and it is found not to be, their agent or landlord is then legally obliged to repair or replace it as soon as reasonably possible. As for battery-operated alarms, it is the tenant’s responsibility to check and, where possible, replace the batteries themselves. If tenants are unable to do so, they should then report this to their landlord.

 

If the alarm is not working

 

As stated above, a faulty or broken alarm must be attended to by the landlord as soon as reasonably possible. If action is not taken, the local authority may issue a remedial notice to enforce the repayment or repair, and the agent or landlord must take specified action within 21 days. If the landlord or agent disagrees to the terms, they may make written representations which will suspend the notice for one week. The local authority will need to respond with their final decision in writing within those seven days, or the notice will be automatically withdrawn.

 

Enforcement for incompliance

 

Although local authority landlords cannot take enforcement action against themselves in respect of their own stock, they will be expected to ensure their housing is safe and they will be subject to these legislative requirements. Like public authorities, local authorities can be challenged by way of judicial review.

 

Local authority landlords are obliged to comply with the regulatory regime overseen by the Regulator of Social Housing.

 

How you can prove you tested your alarms at the start of a tenancy

 

Make sure you keep a record of when alarms are tested, as the landlord is obligated to do so. The local housing authority must decide whether the evidence provided, proves that the landlord has met the requirements of the regulations.

 

The most straight-forward procedure, while going through inventory on the first day of the tenancy, is to have the tenant sign the inventory to record that the required alarms have been tested by the landlord and the tenant is satisfied that they are in working order.

 

We can help you remain compliant. Get in touch to discuss our management packages today.

 

Things to consider when relocating

 

It may be really thrilling to contemplate relocating. Daily life might seem like an adventure when you first relocate. There will be fresh places to eat, nearby marketplaces to visit, and friends to make.

 

However, deciding whether to relocate to a new place is a significant choice, so think carefully before making the leap.

 

We will offer our advice on the key factors to take into account before relocating to a new area and purchasing a new home.

 

Do the transportation options meet your needs?

You undoubtedly travel about your community regularly, perhaps even every day. An area's suitability as a place to live can be greatly influenced by its transportation options. Consult the area recommendations on the website of your local estate agents to see whether the location fits your lifestyle.

 

Are the amenities in the area suitable?

Some people like to live close to a lot of facilities, including parks, shopping centres, colleges, and supermarkets. Others, however, might not consider these factors to be as significant. The facilities you desire in a location ultimately depend largely on your lifestyle. Researching the area and speaking with a knowledgeable estate agent are the greatest ways to learn about the surrounding benefits.

 

What are crime rates like?

It's a good idea to look into the local crime statistics if you have children, elderly relatives, or any other reason to be particularly worried about the crime rates in a certain area. This is possible online. Just keep in mind that the numbers might not be as alarming as they first appear, so it's a good idea to compare them to your current location before making a choice.

 

Can you afford it?

First, you need to establish whether you can afford to live in your chosen new area – and which type of property is best for your budget. The best way to do this is to get in touch with a local estate agent. With their help, you can understand what types of properties are available to suit your budget.

 

Have you been considering relocating? Get in touch to discuss selling and finding your next property today.