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Em Morley

Rate of UK rental growth slows during 2016

Published On: December 16, 2016 at 11:20 am

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Categories: Property News

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New data released by buy-to-let lender Landbay has revealed that the average rent paid for a property in Britain increased by 1.12% in 2016.

This represented a slowdown from the 2.34% in 2015, with falling rents in the capital dragging down the resilience in rental growth evident in the rest of the UK.

National rents

According to the report, the typical UK rent rose to hit a record £1,188 per month during this year, up from £1,177 at the end of 2015. These figures are inflated by London, where rents rose to a peak of £1,894 during April, before falling in every month since then to hit £1,883 by the end of November.

The negative growth in the capital (-0.31%) was different to the 2.46% increase seen in 2015. Taking London out of the equation, rents in Britain increased by 1.91% to hit £749 by the end of November.

The East Midlands (2.6%), North West (2.03%) and Yorkshire and Humberside (1.67%) have all seen rental growth rise at their quickest pace for five years.

John Goodall, CEO and co-founder of Landbay, noted: ‘When you look at the raft of regulatory, political and economic challenges coming to bear on the buy to let sector in 2016, it’s clear to see why rental growth has slowed this year, but the nation has not been equally affected. London has been something of a millstone for the rest of the UK, and tenants will no doubt be relieved that rental pressure has eased since the referendum, but the fall in rents is unlikely to last, and we expect the tide will turn in 2017.’[1]

‘A new stamp duty levy, tighter affordability controls from the PRA, and the removal of mortgage interest tax relief all look likely to restrict the supply of rental housing in 2017, and tenants will have little choice but to compete for what properties are on offer. As a result we expect rents to rise faster than the pace of inflation next year, with growth tripling to 3% by the end of 2017,’ he continued.[1]

Rate of UK rental growth slows during 2016

Rate of UK rental growth slows during 2016

Infrastructure Rises

Both the HS2 and Crossrail 2 projects have been announced in recent years, with Landbay’s report uncovering tenants close to the proposed routes are already seeing rental pressures.

All key stations on the HS2 routes north of London have seen rental growth above the national average of 8.8% during the last five years. Birmingham Curzon Street (23.7%), Birmingham (22.4%) and Leeds (15.3%) have seen significant rental growth over the period.

Mr Goodall concluded by saying: ‘Infrastructural investment featured highly in the Chancellor’s Autumn Statement, and it’s clear that the government is counting on HS2 and Crossrail 2 to deliver significant economic benefits to people living in the areas they connect. This may well be so, but it will all be for naught if a shortage of housing makes the areas unattractive to live in. Rapidly rising rents may offset some additional costs for landlords, but if the situation becomes unsustainable this is not good for the housing market as a whole. Housebuilding along the route needs to be spread across all tenures, so those in the rental market aren’t squeezed out by the impacts of the sudden arrival of new transport infrastructure.’[1]

[1] http://www.propertyreporter.co.uk/landlords/pace-of-uk-rental-growth-halves-in-2016.html

10 Christmas Gift Ideas for Home Movers

Published On: December 16, 2016 at 10:19 am

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Moving home at Christmas can be an extremely stressful experience; the buying process slows down more than usual and many businesses are closed over the festive period. If you know some home movers this year, treat them to one of these Christmas gift ideas to brighten the process!

It’s probably the last time of year that most of us would choose to move home, but many buyers and renters will be packing up and moving on this Christmas. Whether it’s a family member, friend or former tenant that you got on with particularly well, spread some of the festive cheer with these gift ideas from Rightmove (which coincidentally double-up as housewarming presents)…

  1. A doormat

One of the easiest and most effective ways to bring some personality and style to a new property is with an inviting doormat. It’s also one of the first things that visitors will notice, so your home movers will appreciate it instantly.

  1. House plants 

House plants are essential when it comes to adding softness and nature to a new home. Treat them to something attractive and easy to maintain.

  1. A new coffee pot
10 Christmas Gift Ideas for Home Movers

10 Christmas Gift Ideas for Home Movers

One of the first things a home mover will look for when they get all their boxes into a new property is a cup of coffee! Prevent them rummaging through unmarked boxes by picking up a new coffee pot and a nice bag of freshly ground coffee.

  1. Spices 

It’s all too common to spend your first week in a new home eating dodgy-looking takeaways and microwave meals. Help them feel homely and healthy with a new spice rack and spices, which they’ll be able to make use of instantly.

  1. Gardening must-haves 

If your home movers’ new property has a garden, it’s likely that they’ll want to do some work to it to create their dream space. Put together a starter pack of gardening tools to inspire them.

  1. A bunch of flowers 

No home mover will be disappointed if you take round a bunch of flowers to brighten up their new property. It’s also a good idea to buy them a vase too, as theirs will likely be packed deep into a jungle of boxes.

  1. Essential DIY tools 

If you like going for practical gifts, then a nice box of essential DIY tools will go down a treat with your recipients – they’ll probably have lots of small jobs to do as soon as they move in, so make sure they have everything they need.

  1. Scented candles

New homes lack that familiar smell that we all have in our properties. Help to create a homely and comfortable feel with your buyer’s or renter’s favourite scented candles.

  1. Homemade treats

If you’re a dab hand in the kitchen, whip up some festive homemade treats – such as a walnut and cinnamon loaf, or some cute gingerbread biscuits – for your movers to enjoy as they settle into their new home.

  1. A food hamper

We all know that one of the best things about Christmas is the food. Impress your loved ones with a hamper full of their favourite festive treats for them to tuck into while they unpack boxes (they’ll also have something to offer visitors!).

If you’re moving home this festive period, we hope you have a stress-free and relaxing Christmas in your new property.

Is it getting harder to evict rogue tenants?

Published On: December 16, 2016 at 10:00 am

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Categories: Landlord News

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A property boss had warned that small administrative errors could see landlords stuck with nightmare tenants.

The majority of landlords and letting agents use Section 21 of the Housing Act 1998 to end tenancies in the event of damage to a property or other grounds.

Powerless

However, Ajay Jagota, director of sales and lettings firm KIS, feels that changes in the law-amended in the Deregulation Act 2015, could see property owners powerless to evict rogue tenants.

It is feared that possession claims are unlikely to fall should agents not put tenants’ deposits in authorised deposit schemes, within 30 days.

In addition, Jagota notes the importance of providing tenants with the prescribed information relating to their deposit within this allotted time-frame.

Mr Jagota noted: ‘I know people tend to start playing the world’s smallest violin when they hear about problems being faced by landlords, but these rules could see someone’s much-loved family home or pension jeopardised by tiny administrative errors.’[1]

‘Changes in the legal and taxation system mean that if you have any sort of investment in property, protecting that assets is a priority-not something you can do on the hoof,’ he continued.[1]

Is it getting harder to evict rogue tenants?

Is it getting harder to evict rogue tenants?

Reputable

Jagota went on to say: ‘Usually the answer is a reputable letting agent, but they aren’t necessarily legal experts and the rising number of failed Section 21 applications implies that what landlords really need to invest in is good insurance. That way when the worst happens they can get the experts in rapidly and affordably.’[1]

‘It’s clear at the moment that both agents and landlords are getting it wrong. If you’re a landlord and you don’t have the sophisticated insurance you need, you’re leaving yourself wide open. There’s also the matter of the impact on the wider community. It only takes one family to ruin a street or village, and most landlords want to be able to take action, not just to protect their investment but on the community’s behalf. This situation could leave them powerless to help because they forgot to give those tenants a leaflet they probably wouldn’t have read anyway.’[1]

Concluding, Mr Jagota observed: ‘The saddest thing is that deposits are a relic of a bygone age. There is absolutely no need for landlords or letting agents to be using them at all when there are significantly more effective insurance-based solutions available.’[1]

[1] http://www.propertyreporter.co.uk/landlords/why-is-it-getting-harder-to-get-rid-of-nightmare-tenants.html

 

Landlords, Check Your Properties for Illegal Subletting

Published On: December 16, 2016 at 9:24 am

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Categories: Landlord News

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Airbnb is Backing Sadiq Khan’s Call for Short-Term Lets Register

Imfuna, the digital inventories and inspections specialist, is urging all landlords and letting agents to check their properties for illegal subletting, as Airbnb continues to expand rapidly in the UK.

Landlords, Check Your Properties for Illegal Subletting

Landlords, Check Your Properties for Illegal Subletting

Established in 2008 in San Francisco, Airbnb now has over two million homes and rooms available to rent around the world. It is estimated that 80,000 British property owners are earning income from Airbnb – and the number is doubling by the year. More than 33,000 of these homes are in London.

While it is not known how many Airbnb hosts take part in illegal subletting, landlords and agents are reminded that it’s a growing problem. Many tenants do not seek approval from their landlord or agent before subletting, and therefore breach the terms of their lease.

If you find that your tenants are subletting illegally online, here is what you can do: /property-sublet-online/

The Founder and CEO of Imfuna, Jax Kneppers, says: “When there is multiple occupancy in a property, wear and tear is dramatically accelerated. The most common damages we see in rental properties are iron burns on carpets, cigarette burns, soiled marks on baths and UPVC windowsills and frames, heat damage to polished wooden furniture, and stiletto heel imprints on wooden floors and vinyl.

“It is vital that landlords and agents make regular inspections of their properties to check that the tenants who are listed on the tenancy agreement are the only residents. At the end of the tenancy, landlords should always change the locks if the property has been sublet. Landlords can also do regular checks on Airbnb’s website to see if their property has been listed there.”

Howard Lester, the Director of Balgores Property Group, also comments: “Over the last 12 months, we have seen a growth of illegal subletting and this is causing a host of problems for landlords. Many of these subletting tenants are not known to the landlord and have not undergone the rigorous reference checks. Inevitably, the property gets damaged with more occupants and there is the major issue of excessive wear and tear.

“We conduct regular inspections on our properties and are able to assess quite quickly if there is illegal subletting. The tell tale signs are excessive rubbish in the bins, extra clothes and bags, and additional toothbrushes and bedding.”

How has Christmas Present Inflation Compared to House Price Growth?

Published On: December 15, 2016 at 11:47 am

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While we all know that house price growth has spiralled over the last few decades, how have Christmas present prices compared?

Online estate agent eMoov.co.uk has analysed the average house prices of the last 30-odd years against the cost of the must-have Christmas presents over each period.

1980: The Rubik’s Cube

In 1980, the average house price in the UK was just £23,497. Since then, it has increased by an alarming 778%. The most popular gift of the year was the Rubik’s Cube, which cost just £2 at the time. Today, however, the game sells for as much as £13 – that’s a 713% rise, which only marginally trails house price growth.

1990: Nintendo

In the early 90s, Nintendo burst onto the scene with its Gameboy, one of the first handheld videogame devices. At £71, they weren’t the cheapest Christmas present, but the latest DS 3D today comes in at over £100 more (£175), up by 146%.

Unsurprisingly, house prices have managed to beat this growth, up by 276% from the average value at the time, of £54,919.

How has Christmas Present Inflation Compared to House Price Growth?

How has Christmas Present Inflation Compared to House Price Growth?

1998: Furby

The Furby craze swept the nation back in 1998. The average house price of the time, £66,313, has now risen by 211%, but how has the Furby fared? Originally costing just under £25, the latest edition sells for £76 – a 206% increase.

2010: The iPad

As technology started to advance like never before, more traditional toys were put on the back shelf. In 2010, Apple flooded the market with its iPad – the perfect gift for someone needing something bigger than a phone, but not as big as a computer.

The original price of £400 has now gone up to a huge £729 – an 82% hike in just six years. Shockingly, this is well ahead of house prices, which have risen by just 27% over the same period.

2013: The Xbox 

When the original Xbox was released in 2001, the average house price was £92,533, while the must-have games console cost £240. 12 years later, the price of playing an Xbox had increased by 67%, with the Xbox One costing £400. Over the same period, house prices rose by 89%.

Unfortunately for those that bought the Xbox One on release, the product hasn’t retained the upward price trend – in the last three years, the price of an Xbox One has fallen by half, now costing around £200. For homeowners, prices haven’t followed suit, and are up by a further 18%.

2016: Nerf 

One of the hottest Christmas gifts this year is the latest Nerf gun. They first became popular in 2012, when the average house price was £162,924 and a Nerf would cost around £30.

In the last four years, house prices have continued to rise, up by 27%, while the Nerf gun has increased by 47% to over £40.

The Founder and CEO of eMoov, Russell Quirk, comments on the findings: “It’s a well-known fact that Christmas is probably the most expensive time of year, with many stretching beyond their means to provide the latest gifts and gadgets for their families.

“Therefore, it is hardly surprising that the cost of the must-have items during the holidays have seen similar, if not larger, price hikes than the UK property market itself.

“When people talk about the struggles of obtaining homeownership, they rarely consider the many underlying factors that come with it and the affordability issues of modern day life itself.”

He adds: “If you would have told me back in the 80s to invest into Rubik’s Cubes, I would have thought you were mad, but this research shows it probably wasn’t such a bad idea after all.”

Rental growth slows again in London

Published On: December 15, 2016 at 11:42 am

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The most recent report from HomeLet has revealed that rents in London increased by only 1.6% in the year to November. This was more slowly than all other regions of the country.

In fact, rental price inflation in the capital is now barely half the rate seen in the rest of the United Kingdom.

Rent increases

While landlords in the capital are still seeing rental increases in cash terms, they are unable to increase prices as much as in the first half of the year, with inflation at 6%.

November was only the second month in which rental increases in London did not keep up with the rest of the country. In fact, the gap is now more marked than at any time since the HomeLet index started.

During the last month, rents increased by an annual average of 3%-the fifth consecutive month in which inflation has either been flat or has fallen. A typical tenant signing up for a new tenancy during November agreed an average monthly rent of £898, in comparison to the £872 during November 2015.

Martin Totty, HomeLet’s Chief Executive Officer, noted: ‘November’s figures reflect a continuation of trends which the HomeLet Rental Index has been tracking for several months. While landlords have been able to edge rents up, the amount of the increase been slowing for a number of months, which suggests landlords understand that tenants have, or are, reaching an affordability ceiling, particularly given the uncertain economic climate.’[1]

Rental growth slows again in London

Rental growth slows again in London

Two halves

The Rental Index from HomeLet has confirmed a year of two halves. During the opening half of 2016, UK rents rose at rates above 4%, with those in London hitting a peak of 6.2% during March.

However, since the summer, rental price inflation has slowed massively.

This year has seen a massive raft of changes for buy-to-let landlords. Increased stamp duty coming into effect in April saw landlords rushing to complete before the deadline. In addition, there have been changes in the Right to Rent guidelines and alterations to mortgage interest tax relief, to name but two alterations.

Mr Totty added: ‘It is difficult to think of a period when there have been so many external interventions in the private rental sector as yet seen during 2016: the impact of many of the changes are yet to be worked through and it’s unclear yet who will emerge as the winners and the losers.’[1]

 

[1] http://www.propertyreporter.co.uk/landlords/rent-rises-slow-down-in-london.html