UK prime country house market sees prices rise in first quarter of 2011

Prices of UK prime country houses rose in the first quarter of 2011 by 0.5%, partially reversing some of the prices falls in the second half of 2010, the figures published today (Tuesday March 29) show.


With prices of prime London property having risen by 30% since March 2009, buyers coming out of the capital are beginning to have an effect on the prices of the best country properties, according to the Knight Frank Prime Country House Index covering the first three months of 2011.
It also shows that price growth in the country is still not evenly spread, with slight falls recorded in the North and Scotland, and the strongest growth, 1% and 1.2% respectively, recorded in the South East and the South West of England.
With low stock volumes and ongoing strong interest from London based buyers, further price growth in the counties around London should be expected over the spring and summer.
‘The UK housing market has been experiencing difficult conditions since the middle of last year, and the prime country house market did not escape this trend. Prices fell in the second half of 2010 across most regions,’ said Liam Bailey, head of residential research at Knight Frank.
‘However, the revival in the London market since the autumn has begun to filter through to the country house market. With foreign buyers happily buying over 50% of central London £2 million plus properties, some of these vendors are now looking to move into the country house market,’ he explained.
‘For London buyers, moving to the country at the current time makes a lot of sense. Prices in London are 30% higher then they were in March 2009; in the country prices are up only 7% over the same period. In short, this means that someone selling in London and moving to the country has more than 20% additional spending power now compared to two years ago,’ he added.
He believes that while we ought not to expect rapid price growth from this point, it would seem fair to assume that the best country house properties will see further rises over the next few months.
According to Rupert Sweeting, head of the country department at Knight Frank, there is an imbalance of supply and demand in the prime country property market and a shortage of supply is becoming quite acute in some areas such as the Cotswolds and Oxfordshire.
‘We are confident that prime houses that are sensibly priced will attract considerable interest. Price rises for the best of the best are likely to occur and those vendors who go to the market now will be well rewarded,’ he said.
  ‘The ripple effect from London is spreading, albeit very slowly. Prices within a two hour radius of London are creeping up, however, more than two hours away from the capital it is not so straightforward. Buyers from London will get more bang for their buck the further they go from London,’ he added.

UK residential property rents edged higher in the first three months of the year

Nearly a third of British landlords increased their rental income across their portfolios in the first quarter of 2011, research from buy to let mortgage specialist Paragon has revealed.

It found that 32% of landlords have raised rents across their portfolios during the period and one in 10 landlords said that rental income across their portfolio rose by up to 2%.

A further 10% said that their income rose by between 2% and 4%. However, nearly 5% of respondents said that rental income had risen by more than 8%.

‘Supply and demand dictates rental pricing and landlords are experiencing significant tenant demand for their properties at present. Obviously landlords do not want to make rented accommodation unaffordable, but a considerable proportion of them have been able to make small increases to their overall rental income during the first quarter,’ said Nigel Terrington, Paragon Group chief executive.

‘Government figures show that nearly 300,000 extra households moved into privately rented accommodation in England alone last year and that is placing increasing strain on stock in the sector. It is encouraging that buy to let lending increased by 22% during 2010, but more needs to be done to ensure that the private rented sector can expand to sufficiently meet tenant demand,’ he added.

Meanwhile, Landlord Action, an organisation specialising in tenant eviction, has been approached my Mike Weatherley MP, to support an Early Day Motion which calls for squatting to be criminalised. The Early Day Motion has already been backed by 19 additional MPs from both sides of the House.

Landlord Action is calling on home owners to support the campaign in two ways.  Firstly, by signing a petition which will be presented on 04th April at Downing Street, and secondly, by writing to their local MP encouraging them to back the campaign.

Essentially, squatters consume services that they have not paid for. Many would feel that it is wrong. We have been advocates of homeowner rights for over ten years, and we have seen the situation getting worse. It is reassuring to see that MPs such as Mike Weatherley are taking action to help the situation,’ said spokesman Yogesh Chandarana.

A spate of high profile, well publicised cases have brought squatting to the forefront of the National press recently, highlighting the growing injustice being done to homeowners by squatters, many of whom travel thousands of miles to engage in squatting knowing they will be protected by the law.

In one example, squatters in Brighton made a freedom of information request to see which council homes were empty. An obvious strategy to target homes, it clearly demonstrates the level of organisation that squatters are now achieving, added Chandarana.

‘The problem is that squatting is not a criminal act so they get evicted from one home and simply move on to another, to then be evicted and evicted and evicted. Brighton and Hove has been plagued by a number of repeat squatting cases and in at least the last seven years, police have made no squatting prosecutions due to the difficulties in obtaining evidence where technical criminal infringements have been made,’ said Weatherley.

‘We need to criminalise this act so these people can be held to account for their actions and we hope that the recent media attention around this topic will drum up enough support for the EDM to be submitted for debate in the House of Commons,’ he added.

Wait and see property investors to capitalise on discounted overseas property

Thousands of people delayed buying property during the recession and may now benefit from discounted  overseas real estate prices which have dropped by up to n40% in popular destinations, it is claimed.

Lloyds TSB International suggests that many investors who delayed buying property overseas during the recession may now enter the market again due to a significant fall in prices and a renewed confidence in property markets.

Research reveals that prices in many parts of Spain, and other key overseas property locations have plunged by up to 40% in the last three years and that British investors have been adopting a ‘wait and see’ approach with mortgage sales remaining sluggish in some parts.

But new data from the National Federation of Estate Agents in France shows house prices increased in France in 2010 for the first time since 2007 and recent research by Germany real estate group, IVG2, suggests house prices in Spain may recover sooner than expected and faster than the rest of the economy.

'Key markets that were over heated in 2007, like parts of Spain and the US, are now buyer’s markets with many heavily discounted deals available,’ said Barry Luhmann, head of lending at Lloyds TSB International.

‘Many people preferred to wait and see how the markets and their finances would be affected by the recession, but after this recent lull in activity we expect interest in overseas property to return, possibly quite strongly, as the economy improves. Indeed, there are already signs that interest is picking up,’ he explained.

'To draw a comparison, sales of luxury cars fell heavily during the downturn as confidence drained from the economy. But many of the people who delayed their purchases by a year or two contributed to a strong year of sales in 2010.

We predict a similar phenomenon in overseas property to at least some extent. All of our market research points to the fact that many people in Britain still aspire to buying an overseas property, but a lack of confidence in personal finances and property market stability is holding them back for the time being,’ added Luhmann.

Average prices in Spain have dropped by 23% since their peak in 2007, while in key tourist destinations such as Ibiza and Costa Blanca, prices have fallen as much as 40%, which has spurred the Spanish government to appeal to British buyers to return. Similarly in Italy and New Zealand, prices have dropped by as much as 25% since 2007.

In recent years it has become more difficult to obtain an international mortgage deal with interest rates and customer service varying quite considerably across the market. This underlines the importance of obtaining the best deal and service, and Lloyds TSB International has now been voted the Best Overseas Mortgage Lender by consumers for four consecutive years.

The bank has been lending to customers for international property purchases for over 30 years, longer than any other major UK bank. It also lends in more countries than any other major bank.

Not much hope of recovery in the bottom sector of UK property market

The history of the UK property market is repeating itself as the traditional market leaders once again outpace the historic laggers, both in terms of house price growth and transactions, new analysis from Savills reveals.

Lucian Cook, director of research at the property adviser, has analysed fifteen years of Land Registry data and identified the locations which lead and those which lag over the course of a cycle of price growth, including the period when they emerge from a downturn, to see if history can tell us what to expect next in this recovery phase.

‘There is now a certain inevitability built into the market. The schism between the best and the rest is expected to continue to grow as the recovery progresses.  Ironically, it is the least affordable but most affluent areas that are leading, and will continue to lead the market both in terms of price growth and activity levels,’ said Cook.

‘For a long time we have known that certain areas of the country, typically located in London and the South East, lead the recovery before the laggers, often the northern metropolitan areas, catch up. Our analysis shows us that the recovery ripple usually takes between five and ten years to spread across the country as a whole,’ he added.

Values in the leading 10% of the country grew by 7.5% over the past year and are now just a fraction off peak levels, while the bottom 10% of areas saw prices fall by 3% and are almost 20% off peak.

This pattern is expected to translate into a significant outperformance by the top tiers in the short to mid term.  The Savills forecasts anticipate that the top areas will see prices rise by a third over the next five years, while the bottom end of the market will struggle to see any price growth.

During the period from 2000 to 2005 the bottom tiers of the market rebounded strongly and outperformed the traditional market leaders, with 123 per cent price growth compared to just 43 per cent for the top slice of the market. ‘However, they started from a low base and factors such as low levels of equity, mortgage scarcity and poor economic indicators mean that growth ultimately proved unsustainable,’ said Cook.

‘There is a real question mark over whether the bottom end of the market has the capacity to outperform in the second part of this cycle, particularly if we have an ongoing mortgage constrained environment with greater regulation and different lending criteria applying to equity rich and equity poor borrowers,’ he explained.

Average prices in the top 10% exceed £410,000, more than eleven times the average household income, while average prices in the bottom 10% have slumped below the £100,000 mark, under five times the average household income.

Even at this apparently affordable level the bottom tiers of market do not have the potential to bounce in line with the top end. Its recovery may only be possible if and when mortgage lending frees up, or as investors start to see potential in the local private rental sector,’ he added.

The list of top performers from 1995 to 2010 is totally dominated by London boroughs, while the laggers tend to be northern locations with low levels of affluence and a traditional industrial heritage.

Yet there are distinct variations within regions. For example, Windsor and Maidenhead leads the market much in the same way as a prime area of London, whilst Brighton acts like a London borough. Through the South East, the ripple effect flows quickly into Surrey and Berkshire but with less speed into East Kent or Essex.

The study also highlights areas of the country which perform more like the capital and its commuter hinterland than their own region. Locations like Bath and North East Somerset and Cambridgeshire and the Cheshire belt from Altrincham to Alderley Edge are clear leaders as if they were located in the South East.

It is also clear that there are regional market leaders such as Solihull in the Midlands, York in the North and the Cotswolds and City of Bristol in the South West.

Public split over future of UK property

The general public in the UK are split regarding the direction of property prices over the coming 12 months, according to new research from the Worldwide Property Group.

The results of the company's monthly confidence tracker survey reveals that 37% of respondents believe that house prices will rise over the course of the year whilst 35% are of the opinion that prices will remain static. Some 28% indicated that they are expecting prices to fall during this time.

The survey, which was conducted throughout February, also revealed some interesting figures on the subject of interest rates, a subject which has begun to receive a great deal of media attention in recent months.

A huge 77% of those who took the survey believe that rates will increase during the next 12 months, although two thirds of these are not expecting any more than a half percent increase in total. This lends weight to the market expectation that rates are set to rise relatively soon. Interestingly, 5% indicated that they anticipate a further reduction in interest rates during this time.

Overall, confidence in both domestic and overseas property continues to ride high with 72% of the opinion that right now is a great time to buy a property in the UK. 77% feel that this is also a good time to make a foreign property acquisition and this represents the first time since the survey began in August 2009 that overseas property has received a higher confidence rating that the UK. 69% indicated that they are currently considering an overseas purchase with the United States still firmly in the number one spot.

Some 69% of those who responded to the survey placed property as their first investment choice, some way ahead of gold in second place with 22% of the vote.

‘The results of this survey show that, in general, people are expecting house prices in the UK to further consolidate during the course of the year,’ said Kevin Wilkes, managing director of the Worldwide Property Group.

‘The UK market has fared pretty well during the recent economic storm with minor declines compared to the likes of some other countries, the USA and Spain being obvious examples. The continuing stability of UK house prices is good news and I don't foresee this being impacted in anyway by minor rises in interest rates,’ he explained.

‘Affordability for first time buyers has improved substantially in the last few years, whilst for second home buyers there has not been a better time for many years to make that purchase. For property investors there is currently a whole world of unbelievable opportunity,’ he added.

Meanwhile, the decision by the Bank of England's Monetary Policy Committee (MPC) to keep the base rate on hold at 0.5% for a full two years should not lull borrowers into a false sense of security as rates will rise soon, according to Simon Gammon, head of Knight Frank Finance.

‘In February three members of the committee voted to raise rates, and I would not be surprised if that number had increased further when we get the minutes of this month's meeting. The MPC has nine members so it would only take a small swing in sentiment for those voting for a rise to be in the majority,’ he said.

‘Although there is a feeling that lenders have already factored an increase in the base rate into their own rates, I would not take that for granted. As soon as rates do rise there will be a rush to lock into longer-term fixed rates before any further increases. This will inevitably lead to the best deals disappearing quickly and, from a purely commercial view, will allow lenders to increase their margins,’ he explained.

'The average five year fix has already edged up to about 5.5%, almost 200 basis points higher than the markets low point of around 3.7%. Now is absolutely the time to take expert advice and review your borrowing arrangements, I think this is just the start. There is likely to be a rush for longer term, fixed products and the best deals will not be around for long. The lenders offering the most favourable rates will be deluged with applications meaning service levels could also slip and customers may not get the rate they were hoping for,’ he added.

UK residential property market diverges as London outperforms rest of country

Widening regional variation in the UK’s residential property market became increasingly noticeable during February, led by an improvement in London, while large parts of the North, East and Midlands continued to experience a more downbeat picture, according to a new report.
The Royal Institution of Chartered Surveyors February Housing Market Survey shows that London was the only region to record a positive reading for house prices with 14% more chartered surveyors reporting prices rose rather than fell. This is in direct contrast to the national picture where 26% more saw prices fall rather than rise.
However, although negative, the headline net price balance has now improved for four months in succession and stands at its best level since July last year. Significantly, 12% of respondents, nationally, reported rising prices in February compared with 7% in January, the highest proportion since June last year.
Newly agreed sales, a good indicator of market activity, were most positive in London, the South West, Yorkshire and Humberside and Scotland. Elsewhere, the East of England, East Midlands and Wales experienced particularly negative readings, suggesting a more downbeat picture in those regions. Surveyors continue to report a lack of buyer confidence is affecting the market.
Overall demand for property remains at historically low levels, with a net balance of -1% reporting falls in demand. Buyer interest continues to be affected by high deposits required by lenders and fears over rising interest rates, the report also shows.
Despite this, some areas of the UK saw demand grow during February. In Scotland new buyer enquiries rose sharply to +31%, while London and the North East also saw increases in demand, +29% and +13% respectively.
'Across the UK, sales expectations look slightly stronger for the next three months, with 12 per cent more surveyors predicting rises not falls in activity; that said, transaction levels are still unusually flat. However, highlighting the wide regional variation, the West Midlands, North West and Yorkshire and Humberside recorded negative forecasts for future sales,’ said RICS spokesman Jeremy Leaf.
'Nationally, price expectations remain more downbeat, remaining in negative territory for the ninth consecutive month, at -28%. Only London surveyors predicted prices would rise over the coming months,’ he explained.
‘Despite the more positive picture for some parts of the UK, the general mood is still a little flat. Broad trends in the survey indicate an increasing variation in the housing market across the UK with London and to a lesser extent the South East operating in a very different orbit. Rather ominously, we have probably yet to feel the full impact of the public spending cuts which are likely to lead to further divergence in the regional property market,’ he added.

Property experts upbeat about London residential real estate market

London is expected to continue to be a mandatory location for super rich property buyers, partly due to its reputation as a global financial hub and also because of its outstanding schools and universities, it is claimed.

Such attributes act as a magnet to wealthy oversees investors, many of whom purchase apartments/investments in London for offspring to reside in whilst studying in the capital, according to Mark Pollack, director of Aston Chase, and a member of fabricproperty.com that has done a survey to find out what experts predict for the UK Spring real estate market.

‘With the bonus season upon us, St John's Wood represents a perfect location for Canary Wharf based buyers due to the fast Jubilee line underground link not to mention the ASL (American School in London) and the presence of the American Ambassadors residence in Regent's Park surrounded by the largest outdoor sports area in London,’ he pointed out.

‘This is likely to be further compounded by recent events in the Middle East, which will inevitably result in an increased demand for homes in cosmopolitan safe and stable locations such as London,’ he added.

Marylebone is likely to be popular, according to Graham Harris, director of Harris Latner. ‘More and more buyers and renters are finding their way to the area and the result is a fast depleting stock availability of all shapes and sizes. If this continues at the same pace, we predict a rise in Marylebone property values during March to May 2011 of between 3 and 5% and possibly much more for certain types of property,’ he explained.

‘Demand is being generated from the UK and abroad, in particular we are recording an unusually high number of overseas enquiries specifically from investors looking to secure a central London base for use in the future by themselves or their children that can be let in the meanwhile. Typical Marylebone residential rental yields are currently running at between 4% to 5% gross. The rental market in Marylebone is very strong at all levels and in many respects it could be argued that the demand from renters is even higher than from buyers,’ he added.

Trevor Abrahamsohn, managing director of Glentree International believes that investors will return to the market this Spring. ‘Despite the gloomy economic outlook it is my prediction that residential property, the old favourite, is going to be one of the most cherished investments of the year in London, with prices rising by about 5%,’ he said.

‘It looks like interest rates will remain within half a percent of present levels until the end of the year.  New developments are few and far between as obtaining funding for them is still very difficult and the planning process is still as strangulated as ever. Buy-to-let investors are choosing residential investment over pensions and, at the same time, rents are rising by at least 10% in London,’ he explained.

'There are fewer and fewer properties available in any price range and that is having an upward effect on prices. There is still time to lock in a long-term fixed rate mortgage and although interest rates will undoubtedly rise over the next few years, if you are in secured employment, there is no better time to invest in your own property and build up a tax free asset that one day could be your pension,’ he added.

Other properties expected to do well include those with access to communal gardens and with parking. Also attributes like a balcony or terrace could be good selling points.

Halifax says UK property prices fell last month

UK residential property prices fell 0.9% last month and fell at their fastest annual rate for 16 months as faltering demand continues to put downward pressure on the real estate market, according to the latest index, published today (Friday March 04).

The Halifax index shows that prices were 0.4% lower in the three months to February and on an annual basis have fallen 2.8%m making the average house price now £162,867.

But the index flies in the face of two other reports from earlier this week showing that property prices in the UK have edged upward in both January and February.

The January data from the Land Registry’s flagship House Price Index shows that prices increased 0.2% from December and the February index from the Nationwide Building Society shows that prices in the UK increased by 0.3% and are now just 0.1% lower than a year ago.

Halifax said that with prices 2.8% lower than a year ago as measured by the average for the three months to February against the same period a year earlier, this is the biggest annual decline since October 2009 and sales remain low.

Also the number of mortgages approved to finance house purchase, a leading indicator of completed house sales, increased by 7% between December and January on a seasonally adjusted basis, according to Bank of England industry wide figures. Despite this increase, approvals remain historically low with the total number in the three months to January being 4% lower than in the preceding three months.

The decline in properties coming onto the market continues. The latest Royal Institution of Chartered Surveyors survey showed a reduction in new seller instructions for the fourth successive month in January. This trend, if sustained, should improve the balance between demand and supply and help to prevent a more significant fall in house prices.

'There has, however, been little change in house prices over the first two months of 2011 as a whole.  February's monthly decline of 0.9% offset January’s 0.8% gain. Overall, we expect a modest 2% decrease in house prices in 2011. Uncertainty over the economic outlook is likely to weigh down on housing demand this year,’ said Martin Ellis, housing economist at the Halifax.

‘Fewer properties have been coming onto the market in recent months. This trend, if sustained, should improve the balance between demand and supply and help to prevent a more significant fall in house prices,’ he added.

Most economists reckon house prices will fall this year as tight credit conditions and a weak economic recovery deter homebuyers. Howard Archer, economist at IHS Global Insight expects house prices to fall by around 5% in 2011 and ultimately decline by around 10% from their 2010 levels.

'It is clear that critical to the development of house prices over the coming months will be the amount of houses coming on to the market, mortgage availability, how well the economy and jobs hold up as the fiscal squeeze increasingly kicks in, and what happens with interest rates,’ he said.

Paul Hunt, managing director of Phoebus Software said that although these figures show house price growth has been flat since the beginning of the year, given that the Halifax index is compiled through the number of approvals it makes, the sample size may be partly to blame for this volatility.

‘The valuable message from this index is that sustained growth is unlikely to return to the wider market until mortgage lending picks up. While most house price indexes showed small price increases last month, this will not become sustained growth until doubts about rising inflation and unemployment are lifted from lenders’ minds,’ he explained.

‘While I am sceptical that prices have been moving as much as Halifax suggest, it’s worth remembering that market activity remains subdued and this will keep a check on prices as the year goes on,’ he added.

Investors in London 'will see rising prices'

Investors in high end property sales and rentals in London are likely to note an upward fluctuation in house prices this year.

According to Naomi Heaton, chief executive at London Central Portfolio, homebuyers could benefit from investing the capital.

"Whilst prices in London central have increased by around ten per cent in 2010, they are not far ahead of where they were pre-credit crunch. Over the last 40 years, the average growth rate has been 8.5 per cent per annum. As such, there are two years of lost growth to make up on top of the annual average," she noted.

"London central is also continuing to attract investors due to the continued weakness of sterling and the enduring appeal of the capital," Ms Heaton explained.

Her comments come after the latest figures from Knight Frank show prime London property prices rose by one per cent in February 2011, which helped drive annual growth to eight per cent.

House prices edge upwards in February

New research suggests that average UK house prices increased slightly last month, which may be encouraging to some of Britain's homeowners.

According to the latest House Price Index from mortgage lender Nationwide, residential property values typically rose by 0.3 per cent in February.

Despite the modest improvement, average UK house prices remain approximately 0.1 per cent lower than at the same time in 2010.

Robert Gardner, Nationwide's chief economist, said that the overall picture was still one of a market "treading water".

He commented: "This shouldn't come as too much of a surprise. Housing market trends are closely linked to wider economic prospects.

"Given that the recovery hit a soft patch at the turn of the year and looks set to remain sluggish in the year ahead, the property market is likely to follow suit, with relatively low transaction levels and prices moving sideways or modestly lower through 2011," he added.

The expert went on to say that demand for homes had "levelled out", supported by historically-low interest rates and stabilisation in Britain's jobs market.

He warned that prolonged economic uncertainty was likely to keep many potential buyers "on the sidelines" for some time to come.

"Nevertheless, there are few signs of a glut of unsold homes building up on the market. Sellers remain reluctant to accept lower prices to secure a sale.

"In fact there are tentative signs that the volume of homes coming onto the market is slowing," said Gardner.

Call for rating websites with online feedback for UK’s private property sector

A ratings website for private renters with online feedback could help show bad landlords the door, according to proposals from a consumer watchdog.

In the UK private rented sector generates more complaints than almost any other and according to a new report from Consumer Focus, one of the biggest issues is that private renters often know very little about their landlords before signing a tenancy agreement.

Now the watchdog has written to some of the largest letting agents and deposit schemes in England calling on them to explore how online feedback could empower tenants by giving them a better insight into their potential landlords.

The new report, Opening the door, outlines the information imbalance which works against consumers in the private rented sector. Just 15% of tenants surveyed were able to find all of the information they wanted about a prospective landlord or letting agency. Over a quarter could find very little or even no information and a third who had found information obtained it from the landlord themselves.

By contrast, says the report, landlords or letting agencies can ask tenants for references, deposits, guarantors or other personal and financial information.

Almost nine in ten renters agree that a website to share experiences of landlords would help them to make better decisions before signing a tenancy agreement. Renting is one of the biggest financial commitments consumers make, with private sector renters paying an average of £816 a month for a one bedroom home and this rises to £1,406 in London.

Yet, Consumer Focus research shows that over a quarter of renters had cause to complain in the past two years, making the private rented sector the second most complained about market.  Many of the 1.1 million households who sign up for a new tenancy experience problems with their landlord which only become apparent after signing a legally binding agreement.

Reputational regulation has worked well in other sectors with commercial sites, such as EBay or Amazon, displaying consumer reviews and feedback to people have access to a range of information before they make a decision on what to buy. Consumer Focus believes that a similar site based on constructive feedback could help solve the information imbalance and help people seek out more reputable landlords and avoid the bad ones.

Research by the consumer champion has found that websites where consumers share experiences are influential and that, perhaps surprisingly, most people leave positive not negative feedback. The site would also reward and incentivise the better landlords in what is a rapidly growing market.

‘Currently the landlord is firmly in the driving seat despite rent being a massive outgoing for many of us. People often sign up with little more than a gut feeling after a cursory tour of the property, if they are lucky, they might have a word of mouth recommendation. The best way to help private renters is to ensure they have the information to know what they are getting into,’ said Claire McAnulty, policy expert at Consumer Focus.

‘There is huge potential for a feedback website to give tenants a better idea of whom they're renting from. Getting behind a feedback website could also help the industry establish a better reputation and build up much needed trust with renters,’ she added.

In 2008, the last Government published a review of the Private Rental Sector in England. The Rugg Review concluded that there is a supply and demand imbalance, particularly for properties affordable for tenants on low incomes. As a result, there will be a continuous demand for properties even if they are owned by landlords with a bad reputation.

Consumer Focus' report argues that for this reason market forces alone cannot be relied upon to ‘regulate the sector.
To help address consumer protection issues in the private rental market, Consumer Focus said it would like to see the introduction of a pilot tenant feedback website, ideally in conjunction with one of the tenancy deposit management schemes. With input from tenant and landlord bodies a successful pilot would ensure that a robust, balanced and large scale scheme could be taken forward in the long term. Initial support would be needed from a third party to fund and independently evaluate the pilot website.

It would also like to see a minimum common standard and quality mark to be introduced for all private landlord accreditation schemes. There are at least 80 different types of voluntary schemes operating in England, meaning the standards that landlords must meet vary considerably. A common quality mark would act as a benchmark to reward good landlords and offer assurance to their tenants.

Private property rented sector increasing in the UK, new figures show

Almost one in six residential properties now rent privately, making the private renting sector a growing and vital component of the UK housing market, according to a new report.

The Communities and Local Government’s English Housing Report, shows that the number of households renting privately has risen by one million since 2005/06, from 2.4 million to 3.4 million in 2009/10.

It means that the Private Rented Sector now accounts for 15.6% of all households in England, up from 14.2% in 2008/09 and 11.7% in 2005/06. The figures also show that there has been a decrease in the number of owner occupied households from a peak of 14.8 million in 2005/06 to 14.5 million in 2009/10.

The proportion of households in owner occupation has been in decline since 2003, falling from 70.9% to 67.4% during the period. And the proportion of social renting households is also in decline, falling from 19.5% in 2001 to 17.0% in 2009/10.

Overall, social sector homes were in better condition than private sector homes. In percentage terms, the number of non-decent homes in the private rented sector has fallen from 46.8% in 2006 to 40.8%.

Some 60% of all private rented households are living in decent homes, up from 56% in 2008, whilst the energy efficiency of homes in the private rented sector has improved more over the period than the owner occupied sector
  Couples with no dependent children are the most common type of household in the PRS at 26%, with one person households under 60 being the second largest household type at 23%.

Lone parent households are more common in the private rented sector at 12% of private renters compared with 3% of owner occupiers. While half of all private renters are aged under 35 with half a million, some 15%, aged16 to 24 and 1.2 million, some 35%, aged 25 to 34, the report also shows.

The PRS encompasses a wide range of economic status with 60% of households being in full time employment, 9% in part time work, 7% unemployed, 8% retired and 11% classed as ‘other inactive’.

Some 24% of private renters receive housing benefit compared with 62% of social renters. There are 3.4 million properties in the PRS, 60% of which are located in suburban residential areas compared with just 4% in the city centre.

Nigel Terrington, chief executive of Paragon, the buy to let specialist, says that the new Government data backs up Paragon's long held view that the sector is of growing importance in the UK property market. ‘The CLG's figures highlight the growing number of people relying on the private rented sector to provide their housing needs. The sector's importance to UK housing continues to grow as increasing numbers of people opting to rent privately rather than step on the housing ladder,’ he explained.

‘Demand for privately rented property is at an unprecedented level and far outweighs supply. The resulting rental inflation is leading to people, including the most vulnerable households, being priced out of the sector at a time when the supply of social housing is in decline,’ he said.

‘With Capital Economics estimating that the private rented sector will be home to nearly one in five households by 2015, it is crucial that adequate levels of buy to let mortgage finance are available to enable landlords to expand the number of properties in the PRS,’ he added.