Written By Em

Em Morley

Landlords Should be Cautious of Using Family Members as Rent Guarantors

Published On: July 3, 2017 at 9:29 am

Tags: Brexit,guarantors,rent arrears,tenants

Landlords should be cautious of using family members as rent guarantors post-Brexit, urges Housing Hand, the UK’s only secured and reliably insured guarantor service for students and working professionals.

The latest figures on unsecured debt and average wages in the UK shows that, post-Brexit, the economy is stalling and household debt is impeding.

Landlords Should be Cautious of Using Family Members as Rent Guarantors

Data from the Trades Union Congress (TUC) reveals that unsecured debt is set to reach a record high of £13,900 per household in 2017 – a huge sum. Average annual wages stand at less than £28,000, despite low interest rates.

People have been borrowing to spend on credit cards, store cards and personal loans. So, even if you are a homeowner, they may not be reliable rent guarantors.

According to Housing Hand, landlords run the risk of using a family member as a UK guarantor, as there is no guarantee that the rent will be paid in the event of a tenant defaulting.

The Managing Director of Housing Hand, Jeremy Robinson, says: “We are currently working with landlords and agents across the UK to stand as guarantor for tenants, many of whom are international students, professionals from overseas, and young working singles and couples.

“We provide a service for tenants who may have a poor to zero credit rating, supported by a guarantor liability insurance policy. This ensures that the rent payments are paid in the event of the tenant defaulting on the rent.”

He continues: “We offer landlords and tenants reduced financial risk and, for both, a widening of what is available on the market. For landlords, this is access to a wider range of tenants that wouldn’t otherwise be able to meet the standard criteria. This includes the huge potential market of international tenants and the previously too risky market of tenants with poor credit history.

“Both landlords and letting agents who are partnered with Housing Hand have been able to increase occupancy, due to a larger pool of creditworthy applicants and have been able to eliminate the risk of rent loss, due to tenant default, at no cost to them. We also provide a complimentary house-finder service, which connects accommodation providers to tenants and vice versa. This means live tenant leads are sent to accommodation providers directly.”

Robinson explains: “One of the biggest problems tenants face when renting a property is not having a UK guarantor. This is a huge worry for tenants who are not able to pay six to 12 months in advance to secure their rental property. Tenants who are unable to provide a quality UK guarantor can, provided they pass the Housing Hand application process, purchase our guarantor service.

“Now landlords have an alternative to personal guarantors, with guaranteed income for the length of the tenancy. They also don’t need to turn away potential tenants who can’t pay considerable amounts of rent up front, as we can become their guarantor. We have a seen a significant rise in the number of tenants that are using our service, particularly in London and the South East. More and more landlords are using us as a guarantor instead of a family member, which they have traditionally done.”

Sherard James, the Acting Head of Corporate Services at Kinleigh Folkard & Hayward, also comments: “We have many international students and overseas professionals applying for our properties. However, a large proportion of these applicants are unable to supply a UK rent guarantor. Usually, if a student is unable to provide a UK guarantor, an advance of an additional six months’ rent is usually required to secure the property. This can be problematic, as many tenants cannot afford such a large upfront sum.

“Thanks to our partnership with Housing Hand, we have been able to offer a solution with Housing Hand acting as their UK rent guarantor. Our landlords are happy, as we now have a larger selection of tenants to offer them and the tenants are happy, as they can afford to rent. It costs the tenants a minimal fee and landlords benefit from guaranteed monthly rent for the duration of the tenancy. It’s a win-win.”

Landlords, be wary of using family members as rent guarantors and look into possible alternatives.

More than a Quarter of Letting Agents Seeing Rents Rise

Published On: July 3, 2017 at 9:07 am

Author: Em Morley

Categories: Property News

Tags: letting agents,private rental sector,rent prices,rent rises,tenants

More than a Quarter of Letting Agents Seeing Rents Rise

Over a quarter of letting agents saw rents rise in May – the highest level since last July, according to ARLA Propertymark (the Association of Residential Letting Agents).

The organisation’s May Private Rented Sector Report found that 27% of letting agents saw rents rise for tenants in May, which is the highest level recorded since July 2016, when 28% experienced growth in rents.

For the second consecutive month, just 2.8% of tenants successfully negotiated a rent reduction. This figure had increased to 3.6% in March, but it appears that their bargaining power is now decreasing.

Meanwhile, the supply of rental stock increased to an average of 189 per member branch in May – up by 11% on last year, when this figure stood at 171.

The increase in rental stock is owed in part to the drop in the number of landlords selling up in May, with agents reporting three sales per branch, down from four in April.

The Chief Executive of ARLA Propertymark, David Cox, comments on the latest report: “Private rents rose by 1.8% in the 12 months to May 2017, and the last thing tenants need is for them to get even higher.

“With the new Government confirming a Tenants’ Fee Bill in the Queen’s Speech, we can expect them to rise by up to £103 a year, hitting loyal tenants looking for long-term agreements hardest. This is on top of any natural organic rent growth as well.”

He adds: “The only thing which could offset this would be to significantly increase rental stock, but, until this happens and supply and demand meet in the middle, rents will only become more and more unaffordable.”

A cap of one month’s rent on tenants’ security deposits was also announced in last month’s Queen’s Speech, which followed the controversial General Election result.

The Front Door Colours Most Likely to get your Property Sold/Let

Published On: July 3, 2017 at 8:08 am

Author: Em Morley

Categories: Property News

Tags: decor,front door,kerb appeal,letting a property,property maintenance

Something as simple as painting your front door can have a huge impact on how easy it is to sell/let your property. So which front door colours should you choose?

Landlords looking to get their property let quickly and for a good rent price can also use the tricks used by estate agents to sell a house, which will boost rental yields.

The Front Door Colours Most Likely to get your Property Sold/Let

Aside from figuring out your finances, de-cluttering the home and being competitive with rents, there’s one thing that could help you shift your property more quickly and get you a higher offer from tenants.

Most homebuyers/tenants form their first impression of a property within seconds, so kerb appeal is vital when trying to get your property let. According to a band of estate agents, the right front door colours could make all the difference.

Property expert Sarah Beeny explains: “Front doors are the first thing potential buyers see and first impressions really do count, so I’m a huge advocate of making them look brilliant when preparing a home for sale.

“In terms of on-trend colours, there’s two routes – bright or muted. Bright yellow, pink and turquoise are all huge at the moment, and can really transform a property from drab to fab, giving it the wow factor buyers look for.”

She adds: “Then there’s the more traditional, muted colours which are really popular, including deep blue, dark grey and sage green. These colours are timeless and create an impression of grandeur, which buyers love.”

However, some of the nation’s most respected agents believe there’s more to it than just picking a colour.

Country Life reports that the shade that will sell/let your property is completely dependent on where it’s located.

For those that live in country villages, they advise avoiding paint altogether. Instead, the experts suggest a slick of varnish on bare wood, to complement the natural environment.

Or, if your home is by the sea, choosing a colour that matches the ocean will fare best.

Likewise, those who live in the chilly north or inner city Victorian terraces can be bolder with their choices, as creating a cheery entrance is key.

“Extreme colours only work for the few; orange, lime green and pink are all out there, but are not likely to have a broad appeal,” says the Head of Savills’ Country Department, Lindsay Cuthill.

That being said, whatever shade you decide on, revamping your front door colours can make your properties irresistible to potential tenants.

Cuthill adds: “If you want to get the maximum price for your home, it’s time to get the paintbrushes out and make your front door a real centerpiece that buyers will love.”

Homebuyers Need to Save for 10 Years to Afford a Deposit in 34 Local Authorities

Published On: June 30, 2017 at 9:25 am

Author: Em Morley

Categories: Property News

Tags: first time buyers,homebuyers,house prices,tenants

Prospective homebuyers will need to save for ten years to be able to afford a deposit for their own home in 34 local authorities across the UK, according to a study by MoneySuperMarket.

The price comparison website analysed average house prices and typical salaries, in combination with data from its mortgage affordability calculator, to work out the average deposit needed to buy a house in the UK’s 441 local authorities.

In 20% of local authority areas, the average minimum deposit is greater than £50,000.

In Camden, the average deposit figure is 56.5% of the property’s value, which equates to homebuyers saving for 27 years – the longest of any area in the UK.

Unsurprisingly, London dominates 16 of the top 20 UK boroughs with the highest average deposit requirements.

While many prospective homebuyers will want to buy a house in the area that they currently live, many will find that affording a home in their own area could well be an impossible dream.

Using Land Registry and Office for National Statistics (ONS) house price data, MoneySuperMarket worked out the average minimum deposit for all local authorities across the UK. This is the minimum deposit that an average salaried couple would need to put down to buy a typical home in their own area. The size of the deposit is determined by how much the couple could borrow on a mortgage, given what they earn.

The results show just how difficult it can be to buy locally, with deposits reaching as much as £688,772 in Kensington and Chelsea and £490,737 in Camden.

The graphic below highlights the highest average minimum deposit in every region, along with the top 50 across the UK.

Landlords can use these figures to determine where they should be investing in private rental homes; areas with high deposit requirements will mean that many prospective buyers are priced out of purchasing a home, so will be forced to rent instead. You will likely find high tenant demand in these locations.

If you do decide to invest, remember to target the right tenants and provide safe, secure and comfortable homes to those renting from you.

Homebuyers Need to Save for 10 Years to Afford a Deposit in 34 Local Authorities

London’s Greenest Boroughs for Properties Costing Under £500,000

Published On: June 30, 2017 at 8:13 am

Author: Em Morley

Categories: Property News

Tags: gardens,Homes,London,outdoor space,property investors,tenants

Although it may appear that summer has come and gone already, sun seekers will always be looking to catch the rays whenever possible. For that reason, gardens and public green space are essential to some house hunters. Landlords looking to target this market should check out London’s greenest boroughs for properties costing less than £500,000…

In a major city like London, properties near outdoor space, not to mention with a private garden, can come at a premium price. But having these on offer can really make your property stand out in a competitive market.

That’s why online estate agent eMoov.co.uk has found London’s greenest boroughs where the average house price is under £500,000.

Using data on the land use of each London borough, eMoov looked at the locations across the capital that are cheapest for investors, but boast gardens and outdoor space.

The London Datastore provides data on the land use of every borough. This includes the percentage of the borough covered by domestic buildings, domestic gardens, non-domestic buildings, roads, railways, pathways, green space, water, and other areas of land use or unclassified land. For this research, the figures for domestic gardens and green space were used.

eMoov used the latest Land Registry house price figures for average property values in each borough.

Gardens

London’s Greenest Boroughs for Properties Costing Under £500,000

A private garden in London is a very sought-after feature, especially if you’re marketing your property during summer.

Topping the list with the highest percentage of land use allocated to domestic gardens is Harrow, with 34.7%. The northwest London borough not only has the largest percentage of boroughs with homes costing less than £500,000, but also the highest across the whole of the capital. Although this abundance of garden space comes at the upper end of the £500,000 bracket, at £473,019, it still offers a typical house price below the London average.

Sutton, where garden space stands at 34.5%, closely follows Harrow. This is the second highest of the capital as a whole, but with a more appealing average house price of £371,383.

Staying in southwest London, the borough of Croydon has 32.8% of land use allocated to domestic gardens – the third highest in the capital – with an average property value of £367,160.

Green space

Unfortunately, not every London home comes with a garden, so being near outdoor public spaces is the next best option for many Londoners wanting to get out of the house and escape the city life.

When it comes to the largest percentage of land use where green space is concerned, Havering takes the lead, with 59.4% and an affordable average house price of £362,983.

Heading south of the river, Bromley offers 57.8% of green space, but the average property value jumps to £433,008. Both Havering and Bromley are also the boroughs with the largest areas of public outdoor land use across the whole of London.

Although Richmond upon Thames has the third largest amount of green space in the capital, at 50.8%, its average house price of £675,435 means it doesn’t quite make the cut.

Instead, it’s west London’s Hillingdon, with the fourth largest percentage of green space, at 49.2%, and with a more affordable average house price of £415,716.

Overall

The list remains similar when it comes to combining both the amount of domestic garden area and green space in a borough, with Bromley and Havering swapping places, at 81.1% and 78.8% respectively.

Again, Richmond is home to the third largest percentage of both garden and outdoor space, but Croydon takes third place, with 69.9% of combined land use and an average property value of just £367,160.

Alternatively, if price is the deciding factor for you, the capital’s two most affordable boroughs are still an attractive proposition for outdoor living.

Both Bexley and Barking and Dagenham have an average house price below £335,000, and both sit mid-table for overall green space, at 56.8% and 56.3% respectively.

The average property in Barking and Dagenham goes for £277,508, with 22.8% garden area and 33.6% green space, while Bexley’s average house price is £334,053, with 25.1% of the borough covered by domestic gardens and 31.7% by green space.

The Founder and CEO of eMoov, Russell Quirk, comments: “Having accessibility to outdoor areas in your community can be equally as important as other amenities, such as good schools, transport links and supermarkets. Often these amenities will come at a cost, particularly in central London, which is helping drive the trend of London homebuyers moving further outward to be able to have more space, outdoor living and the important conveniences that make for a better quality of life.

“It is often those second and third rung buyers who will place a larger importance on a garden or nearby outdoor space, as they invest in a home for a growing family or to support a particular lifestyle. This research shows that although green space can be costly, there are many boroughs where it comes in abundance, without having to pay above the odds.”

Landlords, head to London’s greenest boroughs to offer your tenants plenty of green space at an affordable price for you.

Rents in Scotland “Ticked Down” in May, Reports Your Move

Published On: June 29, 2017 at 9:39 am

Author: Em Morley

Categories: Property News

Tags: private rental sector,rent prices,rental market,Scotland

The rental market north of the border slowed in the run-up to this month’s General Election, with rents in Scotland dropping across many areas in May compared with the previous month, show new figures from Your Move Scotland.

Rents in Scotland “Ticked Down” in May, Reports Your Move

The average rent price in Scotland is now £561 per month, which is down by 2.3% on a monthly basis, but still up by 2.2% on the £549 recorded in May 2016.

It was a mixed picture across the country in May, with prices in major city centres continuing to perform strongly along with rural areas, such as the Highlands and south of Scotland, despite the overall downturn in rents.

Four of the five regions included in the research saw rents rise in the past year, led by the south of Scotland, where rents increased by 8.8% since May 2016.

The other regions to experience growth in rents over the past 12 months were the east of Scotland, up by 3.3%, the Highlands and Islands, up by 3.2%, and the Edinburgh and Lothians region, up by 2.6%.

The Glasgow and Clyde area was the only region to record a decline in rents year-on-year, dropping by 0.3% when compared to May 2016.

On a monthly basis, the same pattern was repeated, as only Glasgow and Clyde saw a decrease in the average rent price. Rents here fell by 1% between April and May, to stand at an average of £564 per month.

The Lettings Director of Your Move Scotland, Brian Moran, comments on the data: “With the General Election taking centre stage throughout May, it should come as no surprise that rents ticked down from their previous level.

“Prices in most areas remain above where they were a year ago, with growth coming across a number of areas.

“Tenants are drifting towards city centre living or completely rural life, as it was these areas which saw the most interest during May.

“The Highlands and Islands saw prices rise sharply compared to last month, while in the South, rents are 8.8% more than a year ago.”