April | 2018 | CityLets YorkCityLets York

25 April 2018

Recent Report Estimates Average Person Needs 126% Pay Rise to Buy in York

Once, buying and owning a property was deemed the ‘holy grail’ of living. Today, though, it’s fair to say it has become a less popular option. With house prices soaring and many people stuck in negative equity, it’s no wonder a rising number of young professionals are choosing the flexibility that comes with renting a home.

The reason for this is due to the cold, hard truth of the housing matter – and a fact reported by York Press recently: the average person would need a 126% pay rise to buy in York. In a recent blog, the InvestorsForum York states that the rental market is enjoying significant growth.

According to the site, “Despite landlords selling more homes than they bought, the private rented sector in England continued to grow in the 12 months after the introduction of the higher stamp duty charge.” The article went on to report that, between April 2016 and 2017, the number of households renting increased by 164,000, 3% more than 2016. This is forecast to rise further, given that the average house price has also risen by 9% since 2015 (Rightmove).

Plans for Development

York Central’s Labour MP Rachael Maskell confirms ‘homes are now unaffordable for too many’ in the York Press article and states ‘the council’s failure to build the volume and tenure of houses that local people need further causes housing to be out of reach for too many families across the city.’

She is concerned that the council’s revised local plan, still does not address York’s housing crisis. But with more and more professionals choosing not to be ‘locked into a mortgage’, it’s got to be the ideal time for investors to put their money into rental properties.

Thanks to York’s consistent development plans, including developments such as the Castle Gateway redevelopment, Phase 3 of Hungate city centre living now launched and new homes set for the Terry’s Factory, investors are swooping in to put their money into rental accommodation, which in turn can provide an achievable and more manageable way of living.

So, while some will say getting on the housing ladder is the way forward, others will admit that they’re more than happy with renting. As a highly sought-after location to live and visit, it’s reassuring for landlords that there will never be a shortage in the number of tenants wanting to live in York.

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17 April 2018

Countrywide Rental Index – March 2018

Landlords holiding on to properties to maximise gains

Numbers triple since 2016

  • In the last 12 months 9,523 landlords who re-mortgaged their buy-to-let withdrew money for home improvements – over three times more than in 2016 (2,967)
  • 5.6% of landlords who re-mortgaged in the last 12 months released cash to spend on their property, up from 1.9% in 2016
  • The average cost of a new let reached £951 pcm in Great Britain in March 2018, 1.7% up on the same period last year

The number of landlords re-mortgaging to release money for home improvements has reached a record high. In the last 12 months, out of the 171,421 landlords who re-mortgaged their buy-to-let property, 9,523 did so to take money out to spend on their investment. This is up from 8,459 in 2017 and three times more than in 2016 (2,967). In the last 12 months 5.6% of landlords who re-mortgaged released cash to spend on their property, up from 1.9% in 2016. (Table 1)

Table 1 – Landlords re-mortgaging to raise money for home improvements

March 18 (1) remortgage for home impr by yr

The greatest increase was in the East of England where, in the last 12 months, one in ten landlords (10.4%) who re-mortgaged released money to spend on home improvements, up 6.8% in the last two years. The same number had increased from 3.7% to 6.8% in Yorkshire and Humber, with every region across the UK showing a rise, but regions in the South have seen the biggest growth in landlords releasing cash. (Table 2)

Table 2 – Proportion of landlords re-mortgaging for home improvements by region

March 18 (2) LL remortgage home impr by region

Landlords in London are seeing the most expense for buy-to-let home improvements, spending on average £35,470 over the last 12 months. This is over three times the amount an average landlord in Yorkshire & the Humber withdrew (£11,150). Across Great Britain as a whole, the average landlord re-mortgaging to make improvements took out £22,850. (Table 3)

Table 3 – Average amount withdrawn by a re-mortgaging landlord for home improvements

March 18 (3) Amounth withdrawn by region for home impr

The average cost of a new let reached £951 pcm in Great Britain in March 2018, 1.7% up on the same period last year. The Midlands saw the fastest rental growth, up 2.8% year-on-year, followed by Wales (2.1%) and Greater London (2.1%). Scotland was the only region to see rents fall. This was the second month in a row, although the rate of decline slowed in March.

Table 4 – New Lets (pcm)

March 18 (4) new lets pcm

Commenting Johnny Morris, Research Director at Countrywide, said:

“A record number of landlords are re-mortgaging to release money to spend on their properties instead of trading up. The additional transaction costs incurred from the stamp duty changes for second-homeowners means more landlords are choosing to invest in their properties, refurbishing and improving them and holding on to them for longer to maximise gains.

“Average rents grew in seven out of eight regions across Great Britain, with Scotland being the only region to see falls. Rental growth during the first quarter of this year stands at 2.1%, 0.5% faster than the same period in 2017, as low stock levels continue to drive growth.”

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