News from the Residential Property Investor, the bi-monthly magazine for RLA members other artilces from the April / May 2003 issue RPI news archive

Property prospects better in the north - April / May 2003

Residential property investments in the north of England look set to yield better rental yields and capital gains over the next year than those in the south.

Both Halifax and Nationwide reported continuing house price rises in the first quarter of 2003 ­ not as strong as last year but still averaging between 1 and 2 per cent in March alone.

On the basis of the figures Halifax put the current rate of house price increases at 19 per cent per annum. Nationwide, meanwhile, suggested house prices will go up this year by 5 per cent this year in London, 10 per cent in the Midlands, and 15 per cent in the North.

'There has been much speculation about the housing market slowdown in recent months, but our index suggests that house price growth remains buoyant although the trend over the last few months has moderated', said Nationwide group economist Alex Banner.

The Royal Institute of Chartered Surveyors also pointed to a north/south split in the housing and rental markets.

Some homeowners in London and the South East are selling their properties to move into rented accommodation so as to crystallise the gains they have made, it claimed. This has helped keep up demand for flats and houses in the areas affected but, because of a surge of buy to let property onto the market last year, has not prevented rents from falling. The average monthly rent for a one bedroomed flat is now £1,029 in London and £550 in the South East, said the RICS.

'Rents elsewhere held up slightly better, with slight rises in the northern regions and the West Midlands. Typical rents for a one bedroom flat are £350 in the North East, £385 in the West Midlands, and £403 in the East'.

Overall surveyors were optimistic about rent levels, expecting them to stabilise in London and the South East and to increase in other areas ­ one reason being a slowdown in the number of new properties coming onto the residential letting market.

'We have certainly noticed a change in the lettings market over the past quarter. There has been renewed tenant interest in smaller properties in particular, as would-be buyers are renting temporarily, waiting to see if sale prices fall', said RICS residential lettings spokesman Jeremy Leaf.
 

other artilces from the April / May 2003 issue

• Competent regulation
• Private landlords set for 'selective licensing'
• Local crackdowns on HMO landlords
• Property prospects better in the north
• Landlords shop for best mortgages
• DTI acts against property investment companies
• Letting returns put at over 20 per cent
• Average house tops £145,00
• London landlord given life sentence
• Government admits to wider anti-social problems
• In brief