LANDLORD NEWS
Home-owning still cheaper than renting but difference reduced
The cost of a mortgage on a first home is typically around £42 per month cheaper than renting, but the difference has reduced and in some parts of the UK renting may be the less expensive option, analysis suggests. First-time buyers could typically pay around £971 per month for a three-bedroom home, while renters would potentially be forking out around £1,013, according to calculations by Halifax. The difference of around £500 per year between buying and renting is down from a peak reached in 2016, when owners were saving £1,567 annually. The biggest gap was in Scotland, where those renting faced paying an average £918 per month, compared with £727 for home-owners – a saving of 21%. The East of England was found to be the only region where it was typically more expensive to buy a first home than rent one. Home-owners there faced paying £90 more each month, on average, than those renting, according to the findings.
The Daily Telegraph City A.M. Daily Mail Mirror.co.uk The Guardian The Independent UK
Rise in renters earning over £100,000
Analysis by the Hamptons estate agency for The Times reveals that about 221,000 households earning more than £100,000 a year rent privately in England and Wales – about 12% of the total in this earning bracket, while there are 42,486 households earning more than £150,000 who also rent – nearly 10% of this group. The agency’s analyst David Fell found that those earning between £100,000 and £150,000 typically pay £3,132 a month in rent, while those who have an income of £150,000 or more typically pay £4,462 a month. This is compared to the national average of £1,230 – a figure that has risen 10% in a year as rental demand outpaces supply. Figures show there has also been a rise in very rich renters – such as footballers, celebrities and business titans – who often pay £40,000 a week for some of the most luxurious mansions in exclusive London neighbourhoods and country piles in the Cotswolds and Cheshire. Trevor Abrahmsohn, the owner of the luxury estate agency Glentree in northwest London, said this was unheard of only a few years ago. “If you go back two decades, £10,000 per week was the highest long-term rent you would ever have to pay for a property, ” he says. “Now it’s absolutely routine for people to pay £35,000 per week in our sector – or £1.82m per year.”
The Times
Average salaries of tenants in London soar
New data has revealed that average salaries of tenants have increased by over 40% in just four years in some areas of London. Lettings technology provider Goodlord, which analysed information from more than 125,000 rental contracts, found that earnings were outstripping even fast-rising rents. Across London, average tenant income was £56,154 at the start of this year – nearly a third higher than in 2019, while in comparison, rents have risen by about a fifth. Goodlord chief operating officer Tom Mundy said the scarcity of properties to let in London, and the high cost of mortgages, was creating a tough battle for rental homes. He said: “Those with the biggest spending power are in the best position to secure them if competition is high. We are seeing higher earners capitalise on tenancies in the central areas of London while those whose salaries are being outpaced by the price of rent are more likely to be renting in the outer London boroughs or moving to commuter towns.” He added: “Overall, this is a clear signal that living in more central London areas is becoming tougher if you aren’t earning a higher-than-average salary. This is why we need to prioritise building more rental homes, and incentivise landlords not to sell up.”
London Evening Standard
BUY TO LET
Chester the brightest long-term prospect for holiday lets
New analysis reveals Chester holds the brightest long-term prospects for investing in holiday lets, with a potential future annual revenue capability of £46,000 a year for a four-bedroom property – the highest in the country. The report by the holiday home listings portal Sykes Holiday Cottages found bookings and income figures in Cheshire have gone “through the roof” since the pandemic staycation boom as tourists sought out new destinations, but that Cheshire still has room for tourism growth in the long-term compared with other already-saturated areas. Its average house price is £256,526. Anglesey in Wales was named the second most promising long-term prospect, with an average property price of £249,169 and healthy potential income for a four-bedroom house of £38,000 a year. Separate figures covering 2022 found that holiday lets in the Lake District produced the best returns, with revenue averaging £44,000 per year for a four-bedroom let and £28,000 for an average-sized property. This was followed by the Cotswolds (£36,000 for a four-bedroom let and £28,000 on average), the Peak District (£42,000 and £27,500), Cornwall (£36,000 and £27,000) and Dorset (£37,000 and £26,000).
The Sunday Times
COMMERCIAL
UK lab space demand to increase after Budget
The UK BioIndustry Association is predicting higher demand for lab space this year, after Jeremy Hunt unveiled measures that will put “extra firepower” behind the life sciences industry to expand. The Chancellor said in his Spring Budget that boosting the supply of commercial development, in particular lab space, “is key to supporting R&D (research and development) needs and driving investment into high value industries across England”. He revealed that small and medium-sized businesses that are investing over 40% of their total operating costs in R&D, and not yet making a profit, will receive a cash payment of 27p for each £1 they have invested. Steve Bates who leads the association said: “Our sector is growing at a rapid pace and the Spring Budget will put extra firepower behind start-ups. From Canary Wharf to White City, we are seeing the creation of really exciting new jobs in the capital and fantastic investment opportunities.” Ian Fletcher, the British Property Federation’s director of policy said: “There is a very clear interest in the sector in providing more lab and other life science space, and we can only see that increasing.”
London EVening Standard
Company converting empty high street properties into ‘work near home’ offices
Patch, a business which converts empty high street properties into “work near home” offices, has raised nearly £3m in funding. Those to have invested in Patch include JamJar Investments, the investment vehicle of the Innocent founders; Peter Roberts, the PureGym founder; and Jeremy Sanders, who cofounded Coco di Mama. Founder Freddie Fforde said that increasingly people will want to work nearer to home in order to spend more time with friends and family, rather than commuting into a central office every day. Fforde said: “People throw things around about the future of the high street and its current state. We want to be the good news. We want to be a reason to believe in local communities.” The company will use this latest round of funding to open two new offices this summer – one in an old library in High Wycombe and the other in a former council building in Twickenham.
The Times
British Land announces major life sciences plans for Canada Water
British Land has unveiled plans for a huge new life science hub at its Canada Water scheme in Docklands. Details of the 300,000 sq ft property comes as British Land nears completion in May of its Paper Yard building, comprising 30,000 sq ft of modular lab space at the same site. British Land and fund manager AustralianSuper, its joint venture partner on the Canada Water masterplan, have appointed architect Stanton Williams to draw up the latest proposals. It is hoped the scheme would be submitted for approval in spring next year and would sit within a 53-acre regeneration site where offices, shops and 3000 homes are set to be developed.
London Evening Standard The Guardian
Sainsbury’s spends £431m to buy freeholds of 21 stores
Sainsbury’s has secured a £430.9m deal to buy the freeholds of 21 supermarkets. The grocery chain has acquired the remaining 51% stake it did not already own in the Highbury and Dragon investment from real estate investment trust Supermarket Income REIT. Sainsbury’s has held a 49% stake in the Highbury and Dragon sites since they were set up in 2000. The investment vehicle holds the freeholds of 26 Sainsbury’s stores, which are leased to the supermarket. Sainsbury’s will buy the freeholds of 21 of the premises it previously rented, which will continue to be run as Sainsbury’s stores. The remaining five will be sold, four of which it will lease back.
City A.M. Daily Mail London Evening Standard
AUCTION NEWS
Pattinson Auction opens Spanish base
A Spanish office has been opened by Pattinson Auction. After expanding to nearly 3,000 partner agents in the UK, it will be officially opened at a special event on April 5 at the Don Pepe Hotel in Marbella, Spain. Spanish estate agents can now take advantage of having their very own auction facility that charges 0% sales commission to clients. UK residents who own properties in Spain can also benefit from a secure sale option through its British auction service, while agents can offer clients a more substantial service in both countries.
Estate Agent Today
Chesterfield business park up for auction
A guide price of £1.1m has been set for the First Stage Business Park in Chesterfield, which is home to numerous light industrial companies. The business park will be offered in the upcoming online real estate auction on April 4 by Sheffield company Mark Jenkinson, which is now a subsidiary of Eddisons. The multi-let 3.3 acre site, which consists of 17 light industrial units, generates an annual rental revenue of approximately £109,000 and is home to several regional businesses.
B Daily
PROPERTY FINANCE
Average house prices have risen by nearly £3,000 this month
New research reveals that the average price of a property coming on to the market increased by £2,906 in March. Analysis by Rightmove found the average price of properties listed rose by 0.8% this month, driven by a 1.2% rise in the price of the most expensive homes. The increase is below the typical March rise of 1% over the past 20 years but still reflects a market “on a much more stable footing than many anticipated”. Tim Bannister, Rightmove’s director of property science, said the housing market reached an unsustainable level in the past two years and was on track to slow to a more normal level, but the speed of the slowdown was accelerated by the Truss-Kwarteng mini-budget in September. He said: “The beginning of the spring season sees stability and confidence continuing to return to the market as it recovers from the turbulence at the end of 2022.” He added: “While higher mortgage rates and economic headwinds raise challenges, many potential home-movers who were effectively sidelined in the frenetic bidding wars of the last two years will find that a slower-paced market gives them time to plan and secure their next move as we enter the traditionally busy spring buying season.”
The Times The Guardian The Independent
LENDING CONDITIONS
Value of new mortgage lending falls by quarter in a year
Total values of new mortgage lending fell by a third (33.5%) in the final three months of last year, compared with the previous three months, Bank of England data show. The £58.4bn of lending agreed was 24.5% less than a year earlier, according to Bank figures. The share of mortgages advanced in the fourth quarter of 2022 with LTV (loan-to-value) ratios above 75% decreased by 1.4 percentage points compared with the previous quarter, to 37.0%, but remained slightly higher than a year earlier. The value of outstanding balances with arrears increased for the first time since the first quarter of 2021, by 4.6% to £13.6bn. Around 72,000 homeowners are now behind on payments. The share of mortgages in arrears rose from 0.78% to 0.81% of total outstanding.
Daily Mail The Independent UK
Bank of Mum and Dad busiest in over a decade
Three out of five first-time buyers this year are expected to get help from their parents to buy a home – the highest level since 2011. Higher mortgage rates and the end of the Help to Buy scheme will increase first-time buyers’ reliance on their parents to get on to the property ladder, according to Savills. Last year, 170,000 first-time buyers had family assistance in getting their mortgage, accounting for about 46% of all first-time buyers with mortgages. Parents spent £8.8bn to help their children last year, an increase of almost £4bn since the start of the pandemic. Over the next three years, their contributions are expected to reach £26bn, Savills predicted.
The Daily Telegraph
ECONOMY
OECD: UK only G7 country in recession this year
Forecasts from the OECD suggest the UK is set to be the only member of the G7 in recession this year, while across G20 nations, only Russia will perform worse. The report says GDP will fall by 0.2% over 2023, with this is an improvement on the 0.4% the OECD predicted in November. Germany, the second-worst performer in the G7, is forecast to see its economy grow by 0.3%. Among the G20, the UK only avoids coming bottom of the ranking by the fact Russia’s economy is predicted to shrink by 2.5%. The OECD says the 0.2% decline in GDP this year will be followed by 0.9% growth next year. In its November report it predicted growth of 0.2% over 2024. Data shows that the UK was the best-performing G7 economy last year, recording GDP growth of 4%. Chancellor Jeremy Hunt said: “The British economy has proven more resilient than many expected, outperforming many forecasts to be the fastest growing economy in the G7 last year, and is on track to avoid recession.” The OECD expects global GDP to grow by 2.6% this year and 2.9% in 2024. China and India are set to see the biggest gains this year, at 5.3% and 5%, respectively.
The Daily Telegraph City A.M.
