How is buy-to-let faring?

The latest RICS survey of chartered surveyors in the residential market offered some solace to committed landlords: data points to a modest improvement in tenant demand during the three months to October. Landlord instructions continued to fall – with many surveyors blaming tax and regulatory changes for prompting landlords to sell up. This means rents are expected to rise slightly over the next three months, while respondents now project a little under 2% rental growth for the year ahead. Similarly, property data website Hometrack anticipates rental growth in the most affordable regional markets. Richard Donnell, research and insight director at Hometrack, says rental growth over the past decade has varied widely. “Rents in London are 32% higher than in 2007, but rental affordability levels are stretched and over the past three years average rents in London have remained unchanged,” he says. By contrast, rental growth in regional housing markets has tracked closer to the growth in earnings since 2010. “Rental growth has accelerated over the past three years on employment and incomes growth, which have boosted tenant demand – the West Midlands has seen some of the strongest growth in recent years,” Donnell says. While London rents have not changed over the past three years, they have increased by as much as 15% in many regions. “Rental growth in London is set to remain weak but there is further room for rental growth in the most affordable regional markets,” he adds. UK house price growth slows to lowest rate since March 2013 – Halifax Prices in the three months to October were 1.5% higher than in the same three months a year earlier – slowing from the 2.5% annual growth recorded in September, and recording the lowest rate of growth since March 2013 House prices in the latest quarter (August-October) were 0.2% higher than in the preceding three months (May-July) On a monthly basis, house prices rose marginally by 0.7% in October, following two consecutive monthly falls The average house price is now £227,869 Russell Galley, managing director, Halifax, said the annual rate of house price growth “remains within our forecast annual growth range of 0-3% for 2018”. He added: “House prices are supported by the fact that supply of new homes and existing properties for sale remains low. Further support comes from an already high and improving employment rate and low mortgage rates, which create higher rates of relative affordability. We see this continuing over the coming months and remain supportive of our 0-3% forecast range.” The October RICS survey reported that sales remain subdued, with the third consecutive monthly decline in transactions. Click here to see larger version of map