Industry News


Mixed news on private sector rents C


onflicting news on the direction of travel for private rents is emerging with different bodies reporting either above-inflation


increases, or small falls as worries over the impact of Brexit continues to dominate. Data from the property website Rightmove


showed rent levels continuing to rise. They report average asking rents in London hit an all-time high of £2,034 in the fourth quarter of 2018 as the number of available properties dwindled. Compared with a year earlier, the number of properties available to rent is down 22 per cent. Rightmove is predicting that rents will rise four


per cent in London this year and by three per cent outside the capital. Away from London, places in the north-west have had the biggest demand from tenants, with Bootle, Runcorn and Birkenhead all proving popular. But according to figures from the Deposit Protection Scheme, rents across Britain fell in


2018 for the first time in a decade, offering relief for tenants after years of inflation-busting rises. The DPS is a Government-backed group that supervises tenancy deposits and it showed the average monthly rent fell by £9 (down 1.17 per cent) from £774 in 2017 to £765 last year, while the typical UK tenant spent 31 per cent of their income on rent in 2018, a fall of 0.5 per cent from the year before.


TAX CHANGES IMPACT The biggest percentage fall was in Yorkshire and the Humber, where the average monthly rent dropped by £21 (3.63 per cent) to £546. London recorded the biggest fall in cash terms, with the typical property rented at £1,294 a month, down £30 from a year ago. Despite the drop, Londoners spend the biggest


proportion of their pay on rent, with the typical tenant losing 41 per cent of their monthly wage.


The fall in rents confounds forecasts from landlord groups, which said they would have to rise in 2018 to reflect higher taxes on mortgaged buy-to-let properties. The sting in the tail for tenants is that while


the DPS recorded rent falls nationally over the first nine months of 2018, it began to see a small uptick in the final three months of the year. Landlords said demand from EU nationals had slowed, but insisted rents would have to rise in 2019 to claw back money lost through buy-to-let tax changes and the letting fees ban, which comes into force in June. RICS has warned that with demand outstripping


the supply of rental properties, rents could increase in 2019 by an average of two per cent. To counterbalance this, uncertainties around the impact of Brexit and their impact on house prices, could encourage longer tenancies and fewer rent increases.


Councils in the capital spending millions renting and buying back RTB homes


London’s local authorities are spending more than £22m a year renting back former council homes previously sold to their tenants under the Right to Buy, as Ministers are urged to drop the policy in the capital. Figures obtained under the Freedom of


Information Act by Tom Copley, Labour’s London Assembly housing spokesman, shows that at least 2,333 ex-council homes are being used to house homeless families with London councils picking up


the tab for their rent from private landlords. Newham are the biggest known renter of such properties with 808. Figures supplied to Copley by 18 of the 33


councils across London showed the combined rent paid out on these properties was £22.3m. Copley wants the London Mayor to lobby the Government to have the RTB abolished in the capital, or at the very least to have newly built council homes exempt from it.


London’s local authorities are also buying back


ex-council properties either for re-letting or to help deliver regeneration schemes. Ealing Council has bought back 516 homes mainly for regeneration projects, at a cost of £107m. This is more than six times the £16.2m the council received from the original sales. Copley says that since 1998/99 some 102,480


council homes have been sold in London and only 3,000 new ones built in their place. At least 54,000 ex-council homes have been sold by the original purchasers and are now being rented out by private landlords across the capital. In Westminster, Harrow and Enfield more than 50 per cent of ex-RTB properties are now owned by private landlords.


Growth in build-to-rent housing market


Research published by the British Property Federation shows that the total number of build-to- rent homes under construction across the UK has increased by nearly 40 per cent to hit more than 43,000. The number of completed build-to-rent


(BTR) homes has also risen significantly, up 29


per cent to reach 29,416 nationally, while the number of BTR homes in planning is up ten per cent to 66,718. For the first time, the total number of completed


build-to-rent homes across the UK regions has caught up with the total in London as 14,615 homes were completed in the regions compared to 14,801


in the capital. But new developments in the regions are now


being given the greenlight at a faster rate, with 24,010 homes under construction in the regions and 19,304 in London. As build-to-rent has grown, it is also changing


shape with 15 per cent of schemes in the pipeline now including houses, rather than just consisting of high-rise apartments, making it more suitable for family accommodation.


Wates wins £90m fire safety contract in Camden


A £90m contract to replace cladding on the Chalcots Estate in Camden, has been awarded to Wates. Work is expected to start on the estate in the summer and last until the summer of 2021.


As well as replacing cladding across the


estate, the contract will also see new windows, curtain walls, roof parapets and the replacement of brickwork on the bottom floors


of the five tower blocks. The north London estate consists of 717-homes


and it hit national headlines when it was evacuated in the wake of the Grenfell Tower fire in the summer of 2017. The work is being funded from the Government’s


£400m remediation fund for social housing blocks with aluminium composite material cladding, as well as £26.5m of the council’s funds.


www.housingmmonline.co.uk | HMM February/March 2019 | 21


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