Finance Matters

Posts Tagged ‘arrears’

LSL Property Services, which includes Your Move and Reeds Rains, announced a 0.4 per cent drop in rent for a ‘typical’ property to £717 in November.

Rents have been rising throughout the year, driven by increased demand from people unable to afford to buy a propert and November’s decline marked the first fall in rent for 10 months.

However, although this represents a fall compared with the previous month, it is still 3.5 per cent higher than a year earlier and rents are expected to start rising again in the New Year.

LSL recorded significant regional variations in November, with rents falling in some regions, particularly the East Midlands where they were 2.2 per cent lower, but continuing to increase in Wales; Yorkshire and the Humber; the West Midlands; and London.

LSL director David Newnes said: “Landlords are looking to avoid having properties vacant over the Christmas period, and can be less aggressive with pricing as tenant activity slows in the run-up to the New Year.”

LSL also announced a reduction in the number of tenants in arrears with their rents.

This was attributed to ‘a changed tenant mix’ with an increasing number of tenants only renting because they are unable to afford a deposit on a house.

Yesterday zoopla.co.uk revealed that it is now cheaper to buy a home than to rent one in 47 out of 50 of the UK’s largest towns.

Zoopla also highlighted soaring demand for rental properties from people who are unable to raise the deposit needed to buy their first property.

Combined with low interest rates, this has made renting a home around 15 per cent more expensive than owning one.

In comparison, at the end of 2010 it was 10 per cent more expensive to rent a property than to buy one in 40 out of 50 of the largest towns.

Although stores have been forced to start their sales early this year to persuade shoppers to part with their money, nearly a third of people in the UK will go into debt over Christmas.

Fifty-eight percent of this group will put more spending than usual on credit cards and thirty-nine per cent will go overdrawn to fund Christmas according to a survey carried out by YouGov on behalf of banking software company Intelligent Environments.

Others will take out personal loans or borrow money from friends and family.

The survey of 2,015 adults found that 11 per cent of people in the UK will lose track of spending over the festive period and people between the ages of 25 and 34 were found to struggle the most with money.

Sixty-four per cent of this group expect to incur debts or arrears of some kind as a result of Christmas expenses.

Jerry Mulle, sales and marketing director at Intelligent Environments, said: “Christmas is typically a cash-strapped time of the year but as harsher economic conditions start to bite the number of people falling into debt or behind on their payments looks set to rise.

Another YouGov survey, this time commissioned by housing charity Shelter, also highlighted people’s willingness to go into debt in order to buy Christmas food and gifts, to the extent of putting their homes at risk.

Out of 1,029 adults surveyed, one in twelve said they would miss paying their rent in order to pay for the cost of Christmas, and one in fourteen said they would miss a mortgage payment.

Shelter warns that cuts to jobs and housing benefits and the high cost of housing is creating the conditions in which homelessness is likely to rise.

Graeme Brown, the director of Shelter Scotland, said: “We urge people to think very carefully before delaying rent or mortgage payments. It can seem like a quick fix, but can have long lasting implications.”

A survey by LSL Property Services has revealed rents in England and Wales continue to surge, with the average rent hitting a further record high last month.

September represented the eighth consecutive month that the average rental cost rose.

Lenders’ deposit requirements, together with unaffordable house prices, has meant the rental sector has been in high demand and this has driven up prices.

According to LSL, the average rent stands at £718 – an all-time high – with rents rising by 4.3% in the last year alone.

Rents increased fastest in the South East and the East Midlands, up by 1.8% and 1.1% respectively on a monthly basis.

However, rents are on an upward trend across the country and it is unlikely that tenants will gain respite any time soon, explains David Newnes of LSL.

Research shows many tenants in rented properties would like to get a foot on the property ladder but are unable to do so unless they have a deposit of around 20% in order to secure a mortgage.

Mr Newnes comments: “In many cases, buying a home is now cheaper on a monthly basis – provided renters can get past the stumbling block of the substantial deposit requirements.

“For the majority, saving a £25,000 deposit is a Herculean task as inflation and rents climb – and most would-be buyers are biting the bullet and prolonging their stay in increasingly costly rental accommodation.”

In the meantime, tenant arrears improved, dropping to their lowest level in almost 18 months, with 8.6% of all UK rent unpaid or late by the end of September, down from 10.7% in August.

Despite the improvement, tenants will face mounting pressure over the medium term, particularly as inflation remains high and public sector job losses take effect.

In related news, housing charity Shelter recently said private rents had become unaffordable in 55% of council areas in England.

A survey by LSL Property Services has revealed rents in England and Wales continue to surge, with the average rent hitting a further record high last month.

August represented the seventh consecutive month that the average rental cost rose.

Lenders’ deposit requirements, together with unaffordable house prices has meant the rented sector has been in high demand and this has driven up prices.

According to LSL, the average rent stands at £713 – an all-time high – with tenants paying 1.2% more on average to rent a property in the UK in August than they did in July.

Rents increased fastest in Wales and the South East, up 2.1% in the month. However, the West and East Midlands both noted month-on-month falls, with average rents falling 0.4%.

London experienced the largest annual growth with rent up 6.6%, LSL said.

Commenting on its analysis, David Newnes of LSL said: “We are in the thick of the busiest time of year for the rental market, and red-hot demand for properties is driving rents up at their fastest monthly pace in the last 12 months.

According to Mr Newnes, average rents have risen by more than £50 a month in the last two years.

Rents are on an upward trend and LSL believe that it is unlikely that tenants will gain respite any time soon.

Research shows many tenants in rented properties would like to get a foot on the property ladder but are unable to do so unless they have a deposit of around 20% in order to secure a mortgage.

In the meantime, tenant arrears rose for the first time since April, with 10.7% of all UK rent unpaid or late by the end of August, up from 9% in July.

LSL cautions that tenants will face mounting pressure over the medium term, particularly as inflation remains high and public sector job losses take effect.

The Council of Mortgage Lenders (CML) has today reported a further fall in repossessions – the third consecutive quarter in which they have fallen. According to the Council, lenders seized 9,400 properties in the April to June period – 400 less than in January to March period. Experts argued, though, that many homeowners have been [...]