Written By Em

Em Morley

Private Student Landlords Left Behind as Private Halls Investment Grows

Published On: February 24, 2017 at 9:55 am

Tags: halls of residence,student accommodation,student landlords,student property,students

Private student landlords are being left behind as investment in private halls of residence continues to soar, according to lettings portal StudentTenant.com.

Private Student Landlords Left Behind as Private Halls Investment Grows

One of the UK’s largest student property developers has recently set out plans to invest more than £300m over the next three years to create an additional 7,500 student rooms across the UK.

This news follows shortly after the student property specialist revealed a strategy shake-up to target more towns and cities with high-performing universities.

This academic year, the group has opened five new properties, creating 3,000 beds, in addition to 4,800 in ongoing projects for 2017. In the next three years, a further 7,000 beds are set to be created in new private halls developments across the UK.

The Managing Director of StudentTenant, Danielle Cullen, warns: “We’re currently seeing a student rental crisis in many areas in the UK. As a growing imbalance between supply and demand develops, rental prices are increasing, making it a less affordable option to study away from home. The student rental market is desperate for investment and it’s great to see vast amounts of money being spent.”

With over 1.7m students in full-time education in the UK and almost 60% of those living away from home, demand for student housing is high.

As for supply, 53% (230,000 beds) of total purpose-built stock is university-owned, while 47% (200,000 beds) is privately owned by private hall investors and landlords. But as investment in private halls rises, there are growing concerns for private rental housing.

What is uncertain, though, is the impact that this will have on the residential shared housing market and private student landlords. In 2015, private halls only accounted fro 6% of the entire student property stock. In recent years and based on development plans, this is set to significantly increase.

Some cities have recently had new private halls of residence developed, causing a handful of private student landlords to be left with unlet properties at the end of the last academic year.

StudentTenant is worried that this trend of leaving private student landlords behind will stick.

Cullen continues: “Whilst investment into private halls is great for students and competition, it will have a huge impact on private landlords in the areas of investment. Traditionally, private halls were always the higher end of the market in terms of both quality and price. Now more developments are completing, however, creating more competition, the price points are lowering, leaving some private landlords in trouble.”

Fastest rental rises in January seen in the East

Published On: February 24, 2017 at 9:47 am

Author: Em Morley

Categories: Property News

Tags: average rents,rental market,rental yields,rents

Another new piece of research has underlined the fact that the rental market in England and Wales has seen a strong start to 2017.

The latest Your Move England and Wales Buy to Let Index shows that rents rose in all but one of the right regions analysed in the year to January.

Eastern Rises

Rents rose fastest over the year in the East of England, where average rents now stand at an average of £870pcm-a rise of 6.9%. Rental price growth in the region was also the quickest month-on-month, with rents up by 0.7% in January.

Other regions experiencing strong growth were Wales and the East Midlands, with rents rising here by 6.5% and 4.5% respectively.

In Wales, the average rent stands at £586pcm, while in the East Midlands, this figure is £634pcm.

On the other hand, London saw rents fall most quickly in January, down by 0.4% month-on-month. The North West was the only other area to see prices fall, albeit by an average of just 0.1%.

Fastest rental rises in January seen in the East

Rents

Taking England and Wales as a whole, average rents stood at £798 in January 2017, up from £790 in the same month last year. This represents a fall from the £811 recorded in December 2016.

Valerie Bannister, letting director at Your Move, noted: ‘Rents in nearly every region surveyed have increased compared to the same point last year.’[1]

It comes as little surprise to learn that London was the region with the lowest rental yields. Homes in the capital returned 3.2% on their investment in the last month, down from the 3.3% recorded in December 2016.

By contrast, investors in the North East are enjoying the strongest yields. In this region, the typical property returned 5.3% in January.

In England and Wales as a whole, the typical rental return was 4.6%, below the 5.1% seen in January 2016.

Concluding, Bannister said: ‘Yields continue to be squeezed in most areas of England and Wales, with all regions recording lower returns than at the same point a year ago.’[1]

[1] https://www.landlordtoday.co.uk/breaking-news/2017/2/rents-are-increasing-fastest-in-the-east-of-england

High Level of Remortgaging Driven by Record Low Interest Rates

Published On: February 24, 2017 at 9:25 am

Author: Em Morley

Categories: Finance News

Tags: finance,house purchase loans,loans,mortgages,remortgaging

The high level of remortgaging recorded in January was driven by record low interest rates, believes the British Bankers’ Association (BBA), following its release of the latest High Street Lending Data.

The figures show that consumer borrowing through overdrafts, loans and credit cards rose at an annual rate of 6.7% in January.

High Level of Remortgaging Driven by Record Low Interest Rates

Gross mortgage borrowing totalled £13.8 billion in January – up by 6.3% on the same period last year.

Remortgaging approvals in January were up by 15.7% on January 2016, an increase that was driven by historically low interest rates.

Net mortgage borrowing rose by 2.4% on an annual basis.

Household borrowing

Gross mortgage borrowing of £13.8 billion in the month of January was 6.3% higher than in January 2016. Net mortgage borrowing was 2.4% higher in January than a year ago, while consumer credit annual growth increased to 6.7% in January, despite weaker retail sales.

Growth continues to be primarily driven by personal loans, as credit card growth slowed for the third consecutive month, reports the BBA.

Mortgage approvals

House purchase approvals, at 44,657, were 2.5% lower than in January last year, but 2.5% higher than in December and above the 2016 monthly average of 41,320.

Remortgaging approvals of 28,862 in January were 1.57% higher than those recorded in January 2016 and, although lower than December’s approval numbers, are still above the 2016 average of 25,987.

Other advances were 15% higher than a year ago and the highest recorded since January 2014.

Deposits

Annual growth in personal deposits slowed slightly in January, to 4%. Non-financial company deposits rose at an average annual rate of over 8% in 2015, but fell back in 2016 to an average annual rate of 5%. They are currently growing at an annual rate of 3%.

The Managing Director of Retail Banking at the BBA, Eric Leenders, says: “The New Year saw homeowners make the most of historically low interest rates, by taking advantage of competitive remortgage offers. Nearly 29,000 of these deals were approved last month – 16% higher than January last year.”

Brace of rogue agents and landlords fined

Published On: February 23, 2017 at 2:35 pm

Author: Em Morley

Categories: Landlord News

Tags: landlords,letting agents,rogue landlords,tenants

A brace of cases involving rogue letting agents and landlords have led to hefty fines for those culpable.

Two unscrupulous landlords in Reading have been fined nearly £9,000 for poor housing standards and a disregard for the welfare of their tenants.

Hazards

Broken toilets and inaccessible fire escapes were amongst the hazards found by council officers when they visited the property in Oxford Road last summer.

More health and safety hazards identified in the rental property included:

faulty fire alarms
damaged plug sockets
dangerous windows

The managers of the property, Abdullah Yaqubi and Said Kamel Hashemi, both admitted 14 offences at Reading Magistrates Court and were told to pay £8,800 in fines.

Councillor Richard Davies, Reading’s lead member for housing, noted: ‘HMOs are an important part of the housing market in Reading but they are subject to certain regulations for the safety and comfort of tenants.’[1]

‘Most landlords abide by these rules but those who do not and fail to respond to contact by the Council’s officers can expect to face the consequences. This is a good result for Reading’s Private Sector Housing and Legal teams and I hope it makes other property managers and landlords who are tempted to flout the rules sit up and take note,’ he added.[1]

Brace of rogue agents and landlords fined

Debts

Meanwhile, a convicted letting agent in Surrey who used his client’s cash to cover his business debts has been told to pay £25,000 in compensation to his victims.

Mr Chandra Patel, who was sentenced to 10 months imprisonment in April 2016, took rent and deposit payments which were held in a trust, while operating as Giraffe Properties Limited. Patel took £28,000 from this fund.

Over a dozen landlords were owed money by Mr Patel when the firm ceased trading. Some landlords were left to reimburse their tenants using their own funds.

An application made under the Proceeds of Crime Act 2002 for Confiscation and Compensation, saw Mr Patel appear before Kingston Crown Court earlier this month. Here, he was determined to compensate his victims and was told to do so within three months.

A council spokesperson said: ‘We have begun the process of contacting the landlords affected by Mr Patel’s illegal activities so that they can duly compensated.’[1]

[1] https://www.landlordtoday.co.uk/breaking-news/2017/2/rogue-landlords-handed-a-hefty-fine

South West Landlords Recognising the Value of Accreditation

Published On: February 23, 2017 at 11:36 am

Author: Em Morley

Categories: Landlord News

Tags: accreditation,landlord licensing,lettings law,rogue landlords

More South West landlords are recognising the value of accreditation, with 41 investors completing a vigorous training and accreditation scheme over the last five months.

South West Landlords Recognising the Value of Accreditation

The South West landlords believe that they can protect good tenants and enable their local authorities to effectively target rogue landlords across the region.

Since the first National Landlords Code of Excellence (NLCE UK) training day took place in November last year, over 50 South West landlords and letting agents have joined the scheme, with 11 more becoming accredited last week, taking the total to 41.

The scheme also allows tenants to report property maintenance/repair issues as well as anti-social behaviour problems within their communities. Primarily, this ensures that the criteria of the Deregulation Act 2015 is met, as well as stopping bogus claims from tenants, for example, that they have reported a repair and the landlord has not responded.

Those that attended the one-day course on 15^th February 2017 were able to learn more about housing tenants and complying with legislation in the private rental sector.

Rob Crawford, the Chair of the Association of Local Landlords Wessex (All Wessex), attended the training day in January. He says: “The accreditation course covers all aspects of letting private residential properties, everything a landlord needs to know! Presented by Don Robbie, all attending were encouraged to share their experiences. Don is very experienced within the private rented sector and was able to communicate all aspects of letting and property management, and the many recent legislation changes in a clear and concise way.

“Either as a refresher for experienced landlords or a good grounding for new landlords, the course will without doubt prove to be an invaluable confidence builder to landlords wishing to be recognised as responsible and competent in delivering a good and legally compliant service to their tenants.”

The next NLCE training day for South West landlords will take place at The Imperial in South Parade, Weston-super-Mare on Wednesday 26th April 2017.

Remember that our comprehensive guides on lettings law are available for FREE here: www.34.207.192.121/guides/

Demand for rental property surges in January

Published On: February 23, 2017 at 10:48 am

Author: Em Morley

Categories: Property News

Tags: ARLA,rental accommodation,rental demand,tenants

There was a surge in demand for rental accommodation during January, according to the latest report from ARLA Propertymark.

Data from the investigation shows that there were 34 would-be tenants per ARLA membership branch last month, in comparison to the 26 seen in December. This represented a rise a 31% month-on-month.

Year-on-year, demand has risen by 10%.

Supply Increases

In addition, the number of rental properties being managed by letting agents also rose in January. Last month, there were 193 properties managed per branch, as opposed to 188 in December.

What’s more, there has been a 12% year-on-year rise.

23% of agents saw their tenants experiencing rental rises during January. However, this is less than the 30% seen in January 2016.

Demand for rental property surges in January

David Cox, Chief Executive of ARLA Propertymark, said: ‘As expected, the New Year brought with it a flurry of activity in the rental market. While supply of rental stock rose slightly, the number of prospective tenants increased by a much bigger margin. When supply and demand are out of kilter, as they have been for so long now, the market isn’t balanced and fair for tenants and rent prices will just continue to rise.’[1]

‘Worse still, should the Government decide to implement an out-right ban on letting agent fees when the consultation takes place, the situation will likely get worse for tenants. The costs of the vital services letting agent fees cover will need to be recouped, and this will get passed on to renters in inflated rental prices. This, combined with new landlords’ tax, particularly the upcoming changes to mortgage interest release, means the rental market is far from reaching equilibrium,’ Mr Cox added.[1]

[1] http://www.propertyreporter.co.uk/landlords/demand-for-rental-accommodation-sees-january-spike.html