Landlords prepare for new academic year

There has been a significant rise, in the prices landlords have been paying for their investments, say Paragon Mortgages. Paragon say the rise is largely due to a flurry of activity by large-scale landlords acquiring additional student lets in advance of the new academic year.

Property values increased by 2.8% or £4,265 over the month, according to the latest Buy-to-Let Index. Average property values are now £156,887, compared with £137,112 in May 2004, representing a 14.4% increase over the past 12 months.

John Heron, managing director of Paragon Mortgages, comments: "We've seen landlords buying properties in several of the UK's university towns, particularly in the northern half of the country. To meet the needs of student sharers, landlords typically buy larger properties with four or more bedrooms which, of course, tend to be more expensive than medium sized properties for occupation by families. This growth in buying activity among landlords specialising in the student market accounts for the significant rise in average property values recorded this month."
"A significant number of landlords concentrate on the student market, with many university towns and cities experiencing a shortage of decent accommodation for students. With four or five student sharers in a property, the return to the landlord can often be very attractive."

Problems ahead for Scottish homes

A lack of investment into the water and sewerage infrastructure may see Scotland face a housing crisis over the next ten years, according to a Scottish housing industry group.

The homes building umbrella group, Homes for Scotland who represents 95% of house building firms in Scotland, accused the Scottish Executive of overseeing decline and blamed the planning system, along with the lack of water infrastructure.

"The Executive states it wants 230,000 houses by 2016, but our studies show that only 11% will have sufficient drainage capacity to allow this to happen," said Homes for Scotland director David Sutherland.

Home for Scotland, believes that the country needs to build 35,000 homes a year to ensure availability and housing affordability.

But the Scottish Executive plans only 15,000 homes a year to 2014. Allan Lundmark of HFS said, "The executive doesn't seem to realise that building 15,000 homes will not put meet the demographic needs, never mind the market demand. If production does fail, house price inflation would escalate, problems of affordability would be exacerbated and more than 30,000 jobs would disappear at a stroke.

He adds: "We are facing a housing crisis in Scotland because of this problem. We cannot build new homes without the water and sewerage infrastructure."

Truro races ahead

The cathedral city of Truro in Cornwall has recorded the fastest house price rate of growth in England and Wales over the last 10 years.

Over the decade Truro house prices have risen 272.2%, from £62,797 to £233,730, an almost four fold increase in value.

Jonathan Haward, managing director of the County Homesearch Company, comments: " Sunny southern towns, such as Truro and Brighton, have been consistently popular both as attractive residential neighbourhoods steeped in rich history but also for holiday homes and lets."

At the other end of the scale, the towns and cities with the lowest house prices are predominantly from the North.

House prices in Middlesborough and Hull recorded the slowest rate of growth over the last 10 years.

Haward said: "Iron and steel, which made Middlesborough a thriving city a century ago has not been replaced and Hull's docks are a shadow of their former glory. There is really little to commend either of these cities and their poor house price performance reflects this."