Private Rents Edge Up Slightly

This August 16, 2013 article by Express & Star reveals that private rents has only lifted a slight pace.

Private rents have edged up by just £1 on average over the last couple of months as more people find it easier to get on the property ladder, according to a major lettings network.

Rents saw a small 0.2% increase in July to reach £738 a month typically, following a flat month in June, according to LSL Property Services, which owns chains Your Move and Reeds Rains.

The findings mean that rents across England and Wales have risen by just £1 typically since May, LSL said.

Its report comes in the same week that the Council of Mortgage Lenders (CML) said that first-time buyer numbers have soared to their highest levels since 2007.

A range of Government schemes have made it easier for people with smaller deposits who may have found themselves previously "trapped" in the rental sector to get access to a mortgage.

London is the only area where rents have lifted at a faster pace than inflation over the last 12 months, with an annual increase of 5.7%. Rents in London rose by 0.3% month-on-month to reach a new high for the study of £1,118 typically.

Wales and the South East saw the strongest month-on-month increases in rents, both recording rises of 0.8%. By contrast, rents in the South West fell by 1.1% and the North East saw rents drop by 0.8% on a monthly basis.

Across England and Wales, rents are around 1.8% higher than they were a year ago, which is well below consumer price index (CPI) rate of inflation of 2.8% in July.

The easing pressure on rents led to an improvement in tenants' finances. Some 8.1% of rent across England and Wales was late or unpaid in July, edging down from 8.3% in June.

LSL said that in the medium-term it still expects rents to at least keep up with wider inflation as demand in the sector is still strong, despite the softening in demand due to people getting on the housing ladder.

David Newnes, director of LSL Property Services, said: "This summer, the house purchase market has jerked into motion. And everyone is feeling the impact of that sudden change of gear.

"Buying a first home might only be possible for those with a big enough deposit and sufficient earnings, but the effects are reverberating through the rental market too."

He added: "It's unlikely July will be typical after the initial change of pace in the purchase market, but a few months of more affordable rents are win-win for everyone."

The findings are based on rents achieved on 19,000 properties.

Article Source: http://www.expressandstar.com/business/uk-money/2013/08/15/private-rents-edge-up-slightly/

Investors Looking Beyond Property

This latest article by James Weir posted in stuff.co.nz on July 31, 2013 reveals how rental property lost its ranking being an asset to give best returns.

For the first time in nine months, rental property has lost its ranking as the asset that investors say is most likely to give the best returns. It now shares honours with term deposits, according to an ASB Bank survey.

"Rental property or nothing" used to be the catchcry of many investors, but they are now more open to other forms of investment, such as shares, according to ASB head of wealth advisory Jonathan Beale.

Overall, investor confidence went south for the winter, the June quarter survey showed. The confidence index fell 7 points from a net 18 per cent positive in the March quarter to a net 11 per cent in the three months to June.

That reflected a fall in confidence in April, when investors were worried about events in Cyprus.

The ASB Bank survey shows that, nationwide, rental property dipped two points, to be favoured by 17 per cent as the asset giving the best returns.

Term deposits jumped two points to 17 per cent of those surveyed, to share the top spot.
Beale said that change was a reflection of house-price concerns.

"Optimism for returns on rental property may have been affected by talk of an overheated house market and the Reserve Bank reaching for its macro-prudential tools."

The prospect of rising interest rates next year was also likely to lower confidence in property, he said.

The survey results reflected investors' views of what would give the best returns, rather than actual returns from investments.

At best, term deposits would return 4 per cent to 4.5 per cent, Beale said.

Property Investors' Federation president Andrew King said this week that returns on property had been rising in recent years, and were now about 7.7 per cent on average across the country, up from 6.5 per cent in 2007.

Yields peaked at 10.2 per cent in 2002.

But Beale said rental returns might be good if people had bought a few years ago, paid a good price and the rent was high.

If investors were buying now, when prices were high, the returns might not be so good.
Some people were also moving out of investment property because of "hassle factors", such as difficult tenants, he said.

In the past two years there had been a definite shift in investors willing to look at putting money into New Zealand and Australian shares.

People were now much more open to talking about shares and managed funds, Beale said.

Article Source: http://www.stuff.co.nz/business/money/8983238/Investors-looking-beyond-property

Confidence Growing in the UK Housing Market?

This interesting article by the propertysecrets reveals the tremendous improvement of house prices in the UK housing market.

Investor Today suggests that more confidence has returned to the housing market with the Halifax Housing Market Confidence tracker revealing that the headline House Price Outlook balance (i.e. the difference between the proportion of people across Britain that expect the average house price to rise rather than fall) stood at +40 in June. This was an increase of 7 percentage points compared with last quarter (+33) and was the highest score on this measure since the tracker began in April 2011.

Martin Ellis, housing economist at Halifax, said: "Sentiment regarding the outlook for house prices has improved markedly over the past quarter, continuing the trend seen since late 2012.

This increase in optimism is partly due to house prices being stronger than expected in the first half of the year. We continue to see a clear north / south divide with significantly higher proportions of people expecting prices to rise in the south than elsewhere in the UK.

Nonetheless, the market still faces substantial headwinds with, for example, house prices remaining above the historical average in relation to earnings. Such factors are likely to prevent a sharp acceleration in house prices."

Meanwhile Stephanie Butcher, European Equities Fund Manager at Invesco Perpetual tells investors not to write off Europe as an option to put their money into stating "At current levels valuations are so cheap on a cyclically adjusted basis that I believe the environment simply needs to be 'less bad' for Europe to be an attractive case. We could point out that Europe is chock-full of world class companies, which have international exposure, and are (thankfully) run by first-class managers not politicians, but that has been the case for a while and it hasn't persuaded investors thus far.

As investors we have one role - that is, to find under-valued assets, whatever those assets might be. Most appear to be persuaded that bonds are intrinsically over-valued. Equally, many seem persuaded that equities are, at this point, a cheap asset class.

What fewer seem to accept is the fact that Europe today is the global value play, and within Europe itself, there are areas of the market which sit at generationally low valuation levels."

Finally Knight Frank's Prime Global Rental Index states that Prime rents in key cities worldwide rose by just 0.2% in the first quarter of 2013 - The Index's lowest rate of quarterly growth since 2009.

Knight Frank's Kate Everett-Allen said: "Prime rents are rising strongly in many emerging markets, but this growth is being overshadowed by weakening rents in some of the world's more established financial centres such as Hong Kong, New York and London.

Luxury property for rent in Dubai, Nairobi and Beijing rose by 18.3%, 13.9% and 12.3% respectively in the year to March.

By comparison, Hong Kong, New York and London saw prime rents fall by 2.3%, 2.6% and 3.1% over the same period. In this second group of cities, the rental markets have suffered as relocation budgets for executives have been trimmed during a period of weaker financial sector performance."

Article by: propertysecrets

Article Source: http://www.propertysecrets.net/article/confidence_growing_in_the_uk_housing_market/3096.html

"There is no great love in investors' minds for Europe. However, we believe Europe will prove itself to investors again. - See more at: http://www.investortoday.co.uk/news_features/investors-told3A-dont-write-off-europe#sthash.uI3SAeUO.dpuf

"There is no great love in investors' minds for Europe. However, we believe Europe will prove itself to investors again. - See more at: http://www.investortoday.co.uk/news_features/investors-told3A-dont-write-off-europe#sthash.uI3SAeUO.dpuf