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UK | Research &. Forecast Report. RESIDENTIAL DATA SHOT. February 2018. In November last year, the Government passed
UK | Research & Forecast Report

RESIDENTIAL DATA SHOT February 2018

MARKET COMMENTARY In November last year, the Government passed a Draft Bill on

Buy-to-Let Index from December 2017, the average rent in

the banning of Tenant’s Fees. The Draft Bill proposes to ban

England and Wales was £850 pcm, an increase of 2.3% in the

upfront landlord and agents’ fees. According to the proposals,

last year. The LSL Buy-to-Let Index apportions this increase

tenants will only be responsible for paying the following:

to the rebalancing of the rental market across the country,

• The rent

which is a positive effect on the market as demand has spread

• A refundable tenancy deposit of no more than six weeks’ rent

the most popular and expensive places to rent with average

• A refundable holding deposit of no more than one week’s rent and • Tenant contractual default payments The Draft Bill offers some welcome protection to private renters in the UK who are often faced with astronomical upfront fees on top of high rents. The Government is also considering making it mandatory for letting agents to join a money protection scheme, which will protect rent payments, repair and maintenance payments. The consultation period ended in December last year and the Draft Bill was discussed in Parliament on the 26th February. Should this Bill be passed into law, many experts believe that landlords will pass these fees onto tenants in the form of rental increases. The same criticisms were made against the extra stamp duty charges for buy-to-let landlords owning more than one property. Many believed that buy-to-let landlords would have to increase rents to cover high mortgage costs; however, this concern has not been realised, as some markets have seen a decrease in rents. According to the LSL

to areas outside of London. London; however, remains one of rents at £1,274 pcm. Despite criticism that such legislation will create higher rents, it would appear that legislating against unlawful landlord and agents’ fees will help to regulate the private rented sector and rebalance rental charges across the UK.

INDICATOR

LATEST DATA NOV

DEC

JAN

TREND

COLLIERS INTERNATIONAL COMMENT

0.6%

0.6%

Nationwide house price growth increased to 0.6% in January. Annual house price growth increased to 3.2% in January, up from 2.6% at the end of 2017. According to Nationwide, the lack of supply is supporting the growth in house prices.

0.3%

-0.8%

-0.6%

House price growth fell by 0.6% in January, the second consecutive fall since December 2017. Average house prices at the start of 2018 were 1.9% higher than a year ago.

Rightmove Asking Price Growth

-0.6%

-2.3%

0.7%

Rightmove saw asking prices increase in January by 0.7%, indicating that demand in the housing market is robust.

Bank of England Mortgage Approval Rate

64,712

61,039

N/A

The Bank of England mortgage approval rate decreased by 6% q-o-q and 11% y-o-y.

Nationwide House Price Growth

Halifax House Price Growth

0.1%

Bank of England Base Rate

0.50%

0.50%

0.50%

Whilst interest rates have remained stable since increasing in November last year, Mark Carney has indicated that interest rates may have to rise more quickly and further than markets think to keep inflation under control. Pundits believe that there will be another rate rise in May or August followed by another two over the next three years.

Bank of England Average Rate on Two Year Fix (75% LTV)

1.61%

1.57%

1.53%

The Bank of England average rate on a two-year fixed mortgage have remained largely unchanged since November last year. January’s mortgage rate of 1.53% is 6% higher than in January 2017.

RICS Price Expectations Survey

-4%

-5%

-1%

The price expectations survey for the next three months has increased to -1%, from -5% in December, and has been negative in each of the last three months.

RICS Sales-to-Stock Ratio

35%

35%

37%

The sales-to-stock ratio is largely unchanged.

102,220

101,250

HMRC Property Transactions

102,610

The number of residential property transactions increased by 1.3% between December 2017 and January 2018.

FOR MORE INFORMATION Ashley Osborne | Head of Residential +44 20 7344 6762 | [email protected]

Lisa Dean | Research and Forecasting +44 20 7487 1961 | [email protected]

This report gives information based primarily on Colliers International data, which may be helpful in anticipating trends in the property sector. However, no warranty is given as to the accuracy of, and no liability for negligence is accepted in relation to, the forecasts, figures or conclusions contained in this report and they must not be relied on for investment or any other purposes. This report does not constitute and must not be treated as investment or valuation advice or an offer to buy or sell property.

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