Weekly News Round Up
A brief look at this weeks news
PRIVATE RENTAL MARKET REMAINS ‘ROBUST’ THROUGH THE RECESSION
An increase in overall demand in the rental market has allowed the lettings industry to remain healthy through the recession, according to an expert who also foresees further potential gains for prudent landlords.
Oliver Romain, managing director of the Landlord & Buy-to-Let Show, has stated that although certain landlords have made losses on expensive city centre properties, most have found that business has remained stable due to effective forward planning.
He said: “The majority of landlords who let their properties as part of a long-term investment are doing very well.”
Mr Romain’s optimism in the market may be reflected by FindaProperty’s May index, which demonstrated slight monthly rental growth in a number of regions including the south-east, Scotland and the West Midlands.
Furthermore, Mr Romain suggested that potential investment opportunities are available in the property market to landlords with sufficient capital, as lower average housing prices may mean that “yields are at an all-time high”.
GOOD RENTAL PROFITS ‘STILL AVAILABLE FOR LANDLORDS’
Negative public perceptions of the rental and lettings industry are disguising the continuing profits being made by many in the industry, according to a property expert.
Chris Horne, editor of property information website Property Hawk, stated that rental profits have increased in recent months due to low interest rates, despite the falling capital value of rental property.
Futhermore, recent figures from the FindaProperty Rental Index suggest that rental asking prices may also be stabilising.
The average prices in April 2009 remained constant from the previous month, the first time since August 2008 that they have not declined.
Mr Horne added that further profits can be made by landlords willing to invest in the property market while prices are low.
He said: “A lot of landlords who are cash rich have been able to pick up property bargains at auctions and in the long run they will have probably made quite good capital profits.”
HOMEBUYER SURGE
New homebuyer enquiries rose strongly in May, increasing for the seventh consecutive month.
Figures from the Royal Institution of Chartered Surveyors (RICS) revealed the biggest surge in new buyers since August 1999, boosting hopes of a recovery in the housing market and potentially the wider economy.
The number of homes sold by estate agents continued to increase, albeit from a very low level, to an average of 11.8 properties per month per agent over the three months to the end of May.
That compares to 10.6 properties per agent for the three months to the end of April.
The biggest surge in activity was recorded in London, followed by Scotland, the South East and the South West.
The RICS survey comes hard on the heels of positive data from both the Nationwide and Halifax House Price Indices, which showed prices rising by 1.2% and 2.6% respectively in May.
RICS pointed out that property prices are being buoyed up by the lack of supply, with the stock of property for sale currently extremely limited.
The average number of properties on a chartered surveyor estate agent’s books stood at 58.4n May, and has been falling every month for two years.
Spokesperson Ian Perry said:
“It is important to remember that the lack of supply has been as important in underpinning prices as the rise in demand.
“Moreover, with the economic backdrop still quite uncertain, unemployment is set to continue increasing sharply and finance for first-time buyers is still in short supply, there are a number of significant obstacles for the market to overcome over the coming months.”
