What are the advantages of renting a property?

Due to the notable increase in the sales market and the sudden surge in property prices, a lot of people has turned to the cheaper alternative, renting.

For many people, renting is the only option they are looking to in housing as the prices of homes look to be increasing and increasing. This has reportedly had a major effect on the lettings market as up to a third of the population are renting or are being housed in urban centers and are compact in the inner cities.

So we have listed some reasons why renting is of great advantage to a multitude of people:

1. Short Term/Long Term Stays

You are not solely confined to one space, as a long-term tenancy can start from as little as 6 months and then after you have the choice on whether you would like to stay or move, and it all depends on your preference.

2. Flexible Housing

Due to the high costs of living, a lot of people are changing jobs and are also changing their locations. So renting allows for working professionals to frequently move to locations that offer excellent transportation links and are generally closer to their new job.

3. Less Maintenance

As a lot of Landlords rely on property management companies to manage the homes and also take care of maintenance, this means you can worry less about resolving issues within the property you are staying. As the property management company will be the ones to look for contractors and oversee any works.

4. Getting on the Property Ladder

A majority of people only dream of getting onto the property ladder, and that’s the sales property ladder. But the rental property ladder is significantly cheaper than purchasing a property.

5. Exploring different ideas

If there is a specific area you would like to reside in, property sharing decreases the cost per person and also allows you to stay in locations that would normally be out of your budget.

6. Your safety

All rental properties must abide by the law on health and safety, and are only given approval as rentals if the property passes the safety standards and checks.

7. Landlords pay

Any continuous maintenance, building works and any additional costs for the property are covered by the landlord. So you will have less to pay/worry about.

Also, you are most likely to find one bed or two-bed apartments in a city center that will most likely be already furnished and are cheaper than you buying and decorating the place. Landlords used to be able to claim tax relief against furnished properties.  This tax break has now been removed and so there is no financial benefit to a landlord in providing a furnished property other than it making the property more desirable in certain circumstances.

 

First-time buyers are priced out as number of flats sold in London tumbles

London’s flats have decreased in sales as the prices are out of reach for ordinary first-time buyers, according to new research.

According to figures from Home.co.uk, which analyses data from the Office for National Statistics and property portals, which the number of apartments sold in the capital fell by 47pc in July compared to 12 months previously.

The number of detached properties sold in London fell 5pc in 12 months to July this year, with sales of terraced houses down 8pc. This comes amid a general slowdown in the level of transactions across the country, and particularly in London.

According to the Land Registry, the average price of a flat in London increased by 3.9pc in the 12 months to July to £434,587. The price growth of flats is outstripping all other property types across the country, partly due to a lack of supply, being led by the rises in the capital.

With the slowdown in sales signals that affordability has been crunched and many first-time buyers, who would typically purchase these properties, are sitting on their hands and waiting for a correction in prices. 

While the Government’s Help to buy scheme has allowed many first-time buyers across the country to get on the property ladder with a 5pc deposit, the take-up in London has been far lower. The threshold of £600,000 means that many newbuild properties are too expensive to qualify and analysis by the BBC earlier in the year found that while Help to Buy is used to buy one in three new-build homes outside London, in the capital it is just one in 10.

Other natural buyers of these properties, buy-to-let landlords, have also been squeezed by changes to the tax regime and many are sitting out buying opportunities or selling up their portfolios.

Lucy Pendleton, the founder of estate agency James Pendleton, said: “Solid numbers of people are showing some reluctance at current prices and signaling to all the other market participants they can’t transact unless they come back down to earth.” 

A correction could soon be coming: data from Acadata and LSL property services found that prices in London have fallen the most since the financial crisis. Average property values have fallen 2.7pc in the year to September, the most since 2009.

 

How property investment ‘alternative’ became ‘core’ in

The Royal Institute of Chartered Surveyors (Rics), has warned investors not to forget the hard lessons of the financial crisis with the ultra-loose monetary policy and the near zero interest rates have had a ‘profound’ effect on commercial property investment.

While commercial property transaction volumes were subdued in the years following the credit crunch, the turnaround was so great that by 2015 the global level of activity had climbed back to ‘within a whisker of its pre-global financial crisis high’, said Rics chief economist Simon Rubinsohn.

With investors understandably being attracted by the property recovery and rental income in a low-yield world with demand outstripping supply in prime locations.‘Property in many major markets is now trading at yields well below historical averages and in some cases, close to all-time lows,’ said Rubinsohn.

Rics said in a report of real estate investment managers, investors placing more money into international real estate markets and domestic markets have become global, As the confidence in the property market grows, As a result, there has been a shift in what are considered to be ‘core’ property investments. ‘Beyond returns, property use classes are also changing, and with it the definitions of what is ‘core’,’ it said. One interviewee noted that student housing used to be seen as an ‘alternative’ investment a few years ago but is now being treated as a traditional property investment. Global investment in student housing has more than doubled from $3 billion in 2007 to $7 billion in 2015. ‘Investment managers are seeing stronger demand from their investors to move into these alternative assets,’ said the report.

While new alternative property investments, such as data centers and hotels, provide new opportunities for investors the fast pace of change in the global real estate market is also presenting risks.Of most concern to investment managers were changing occupier habits, with the introduction of co-working, flexible spaces, and the rise of Airbnb-style models. ‘As a result, leases are becoming shorter and more flexible, with covenant strength being tested in new ways,’ said the report. ‘For investors, the opportunity to acquire assets with long-term tenants in place is becoming less prevalent.’ It is not only the types of the lease that are changing but also where businesses are renting office space. Corporate occupiers are increasingly moving outside of central business districts in order to lease space that offers more flexibility and local amenities and leisure facilities for staff.

This is having an impact on the risk profile of some older, built-up central business districts,’ said the report.

While there are a number of new challenges for property investors, there is also the long-standing one of getting accurate valuations of properties both in rising and in falling markets, because of the time lag between transactions being agreed and completed.‘This can be particularly challenging for investors looking for exits during times of volatility,’ said the report.

The Rics report encourages a great focus on risk management, including benchmarking data, consistent bases for property market data, and sharing of best practice within the industry and with younger employees to ensure the mistakes of the past do not happen again.

The real estate investment management business has been accused in the past of making long-term investments with short-term memories. The increased focus on risk management…will hopefully be the start of addressing this criticism,’ commented Philip Barrett, global chief investment risk officer at PGIM Real Estate, in the report.

 

HOW TO ACCURATELY THEME/COLOUR MATCH YOUR HOME

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The task of decorating your new home can be quite daunting. If you’re like me and don’t have one specific theme or idea that you are going for then consider these points when decorating your space.

Group Inspirations/Ideas

The internet is a great tool when curating mood boards and also sourcing inspirations. Websites and applications such as Pinterest, We Heart It and Hometalk is great places for you to get ideas on how you want to decorate your living room to your bathroom.

List What You Like

Make a list of things you like. For instance, if you’re heavily into plants, then make a list of the different plants you like and the colours associated with them, that way you can select your colour scheme based on your likes.

Your Personal Style

In the times we live in, we currently have minimal restrictions on how we dress or what our personal styles are; so why not implement that into your home. If you’re into floral prints in your cardigans, skirts, tote bags or whatever, then you’ll more likely be drawn into having floral prints in your home.

Customise each room

Sometimes we really can’t choose one theme or one colour scheme for our home. But who said you have to stick to one theme? You don’t!

It may be an unconventional idea, but why not have various themes in your home, and they can all vary from room to room. After all, it is your home, so you have all the control on making it your comfortable place, and if it means having contrasting colours/themes on the top floor, then go for it.

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Also if you have any tips that you could recommend to us, share them in the comments and we’ll be highlighting them in our upcoming articles in the ‘First Time Buyers’ series.

[Opening image sourced from Knight Partnership Cambridgeshire listing, check out the property now http://bit.ly/2jVWUjR]