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MP calls for clampdown on rogue landlords

Published On: November 30, 2016 at 2:52 pm

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A MP has expressed her desire to see more done in order to clampdown on rogue landlords.

Don Valley MP Caroline Flint has called for selective licensing to be extended across the whole borough. This call follows a visit from the MP to Newham in London, where the council already runs a borough-wide licensing scheme.

Licensing

The Labour MP wants to see her constituency in Doncaster follow Newham’s lead, by implementing fresh selective licensing in an attempt to tackle bad housing conditions, low demand and high deprivation.

Flint said, ‘Newham is a leader in tackling the problems of slum landlords, particularly those who would rent an unsafe property to tenants, or fill a property to the point of overcrowding.’[1]

After viewing what she called, ‘shameful’ private rental housing, Flint stated: ‘To tackle this appalling state of affairs, Newham has a borough-wide approach, with an enforcement team that works hand in hand with the police to support compliance with the scheme.’[1]

‘Many landlords in Newham are good, responsible landlords, but a minority of criminal landlords take advantage of residents and of poor quality accommodation,’ she added.[1]

MP calls for clampdown on rogue landlords

MP calls for clampdown on rogue landlords.

Praise

Flint, a former housing minister, moved to praise Newham Council, which has taken 890 prosecutions and banned 28 landlords, since their licensing scheme was introduced in 2013.

Concluding, she observed: ‘I see the rise of private landlords in our low rent areas, and with that the rise in criminal and irresponsible landlords. The Council has started a licensing scheme in Hexthorpe but the Mayor has promised to extend this to Edlington. I hope licensing will be rolled out much more widely.’[1]

[1] https://www.landlordtoday.co.uk/breaking-news/2016/11/mp-wants-to-see-more-done-to-clampdown-on-rogue-landlords

 

Renting couples in London priced out of starting a home

Published On: November 30, 2016 at 12:49 pm

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Concerning new research conducted by crowdfunding platform property partner Property Partner has revealed bad news for renters in London looking to start a family.

Data from the investigation shows that those wanting to start a family while renting in London must pay an average of 55.6% of their combined monthly wage to rent a typical three-bed property.

This means that in one year, a couple would have to pay £29,520 in rent, before they even consider childcare and other associated costs.

Monthly expenses

The research looks at average monthly costs for rental prices for one and two bed flats in London. It then looked at how much it would cost to progress to an average three-bed house in each of the capital’s 33 boroughs.

Using the total average net monthly of earnings of a couple in London, amounting to £4,417, the investigation looked at the proportion of salary required to make the step-up.

Worryingly, it indicates that tenants are facing a nigh-on impossible task to rent larger properties in London. In Kensington and Chelsea-the last affordable borough-an average one-bedroom flat would cost more than 59% of their combined income. This rises to 92% for a 2-bed flat and 168% for a three-bed house!

The table below shows that 10 least affordable boroughs in London:

Borough Average rent for 1 bed flat Rent as a % of combined salary for 1 bed flat Average rent for 2 bed flat Rent as a % of combined salary for 2 bed flat Average rent for 3 bed house Rent as a % of combined salary for 3 bed house
Kensington & Chelsea £2,634 59.63% £4,059 91.89% £7,434 168.29%
Westminster £2,602 58.90% £3,864 87.47% £5,978 135.33%
Camden £1,814 41.06% £2,738 61.98% £5,383 121.86%
Tower Hamlets £1,439 32.58% £2,399 54.31% £2,437 55.17%
Hammersmith & Fulham £1,695 38.37% £2,389 54.08% £2,887 65.35%
Islington £1,738 39.34% £2,355 53.31% £3,461 78.35%
Southwark £1,589 35.97% £2,194 49.67% £2,608 59.04%
Hackney £1,600 36.22% £2,167 49.06% £2,811 63.63%
Wandsworth £1,480 33.50% £2,152 48.72% £2,591 58.65%
Lambeth £1,485 33.62% £2,099 47.52% £2,325 52.63%
London average £1,311 29.68% £1,839 41.63% £2,460 55.69
Renting couples in London priced out of starting a home

Renting couples in London priced out of starting a home


Shocking

Dan Gandesha, CEO of Property Partner, said: ‘Our research will come as a shock to tenants in the capital. With London house prices now so high, the ranks of Generation Rent are rapidly expanding. And, as demand for larger rental properties has grown, finding affordable accommodation is increasingly difficult.’[1]

Those unable to buy but hoping to start a family and move up the rental ladder may just be able to make ends meet in outer London boroughs. But the harsh reality is that they’ll be forced to bring up their children in a flat rather than a house. Although everyone knows Kensington and Chelsea, and Westminster, are totally out of reach on an average London salary, the surprise comes with Camden and Islington too.[1]

Sobering

Continuing, Mr Gandesha noted: ‘Another sobering thought is that our research assumes both partners are in full time employment and earning the average London salary. The figures do not take into account that if a couple have one or two children, the costs of childcare and household bills would make meeting the monthly rent unachievable.’[1]

‘It’s welcome news that the new Chancellor announced £1.4 billion for affordable homes in last week’s Autumn Statement, and that this is across a ‘wider range of housing’. This sounds like a sage commitment to increase the supply of affordable rental stock which will also help control rental prices.’[1]

Concluding, Gandesha said: ‘Traditional landlords though are suffering from recent tax changes including cuts in mortgage interest relief due to kick in next April. With increasing constraints on making a profit or even balancing the books, buy-to-let investors could be forced to either sell up or increase rents. We must ensure more rental homes are built to balance this out.’[1]

[1] http://www.propertyreporter.co.uk/property/renting-couples-priced-out-of-starting-a-family-in-london.html

 

Which regions have seen the highest property price rises in 2016?

Published On: November 30, 2016 at 10:08 am

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With the end of the year on the horizon, home services marketplace Plentific has released it’s 2016 Property Price Index. This gives an overview of how Britain’s house prices have performed during the last 12 months and has revealed some surprising results.

Property price rises

The study has indicated the top ten best and worst performing regions in terms of property price fluctuations.

Aylesbury led the way, with the average price of a home rising by an eye-watering 21.5% over the course of the year.

It appears that prices in new commuters hotspots have risen substantially, with Aylesbury thriving as a result. In fact, the top-ten is dominated by regions in London and the South East.

Greenwich (+19.91%), Hammersmith (+17.46%) and Chelsea (+18%) all represented the top-ten in London. Meanwhile, St Albans (+17.28), Sutton (+17.39%), Reading (+16.9%) and Brentwood (+19.43%) are other commuter regions that saw a surge in values.

The full top ten list is:

Town Dec 2015 Average Sold Price Current average value (2016) Change % Change £
Aylesbury £314,236 £381,787 21.50% £67,551
Greenwich £509,710 £611,169 19.91% £101,459
Ipswich £221,805 £265,267 19.59% £43,462
Brentwood £447,220 £534,094 19.43% £86,874
Chelsea £1,836,338 £2,166,805 18.00% £330,467
Hammersmith £875,132 £1,027,929 17.46% £152,797
Sutton £396,757 £465,750 17.39% £68,993
St Albans £511,418 £599,772 17.28% £88,354
Reading £380,989 £445,375 16.90% £64,386
Wirral £197,244 £229,950 16.58% £32,706

[1]

Which regions have seen the highest property price rises in 2016?

Which regions have seen the highest property price rises in 2016?

North/South divide

The Index reveals a distinct North/South divide, with only the Wirral representing the North in the top-ten locations for house price growth.

However, there are a number of northern regions among the worst performers, including Rotherham (+3.48%), Salford (+3.08%) and Bradford (+2.99%).

Bottom of the list though is Westminster, with values actually falling by 3.67% over the period. Demand in prime central London has seen substantial falls, with Westminster taking the brunt of the lower interest.

The worst performing regions were found to be:

Town Dec 2015 Average Sold Price Current average value (2016) Change % Change £
Highland £166,542 £174,898 5.02% £8,356
Stoke-on-Trent £137,048 £143,924 5.02% £6,876
Newquay £252,426 £262,010 3.80% £9,584
Rotherham £142,032 £146,975 3.48% £4,943
Hackney £580,438 £599,139 3.22% £18,701
Salford £150,820 £155,462 3.08% £4,642
Bradford £124,921 £128,655 2.99% £3,734
St Ives £333,669 £334,376 0.21% £707
Middlesbrough £145,812 £143,448 -1.62% -£2,364
Westminster £1,247,719 £1,201,932 -3.67% -£45,78

Stephen Jury, spokesperson for Plentific, noted: ‘Our report shows the winners and losers in property this year. More importantly, it gives valuable insight to those wanting to get onto the property ladder or invest in property in areas with good potential for price increases.’[1]

‘We have found a fifth of homeowners carry out home improvements to increase the value of their property. Buying a renovating a fixer-upper in the right area will increase the value significantly, so this is worth considering when hunting for property,’ he added.’[1]

[1] http://www.propertyreporter.co.uk/property/2016-property-price-index-reveals-whats-hot-and-whats-not.html

 

Scottish letting agent offers his view on agent fees ban

Published On: November 29, 2016 at 12:27 pm

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It is still less than a week since the Chancellor announced that letting agent fees are to be banned, but the debate on the overall impact on the sector continues to rumble on.

Now, the managing director of one of the leading letting agencies in Edinburgh and Glasgow has aired his opinion on how Scotland has adapted to the changes. Letting agent fees have been banned north of the border since 2012.

Ban on fees

The ban of agent fees in England is still subject to further clarification, with a consultation process expected early in 2017.

David Alexander, of Alexander Lettings, noted: ‘As is the case in England just now, established Scottish agents were initially strongly opposed to the change. Most took the view that fees were fair and reasonable and that the problem lay with a relatively small minority within the industry who charged tenants more than was necessary.’[1]

He noted that many reputable agencies simply got on with it and complied with the new law.

‘Individual agencies, of course, adapted in different ways. In our own case, with circa 5,000 properties under management in Edinburgh and Glasgow and with a substantial number of tenants coming from the corporate sector, we were able to pursue various alternative revenue options. Indeed, the need for change opened a number of new doors and led to an overall increase in the efficiency of the company,’ he continued.[1]

Scottish letting agent offers his view on agent fees ban

Scottish letting agent offers his view on agent fees ban

Buoyant

Concluding, Mr Alexander said: ‘Four years on, the markets in Scotland’s two biggest cities are buoyant but with supply and demand reasonably balanced, to the general benefit of both landlords and tenants. And established bona fide letting agents, who learned to live with the legislation, are continuing to thrive.’[1]

[1] https://www.lettingagenttoday.co.uk/breaking-news/2016/11/advice-from-a-letting-agent-where-fees-are-already-banned

 

Rents to Rise if Letting Agent Fees are Passed to Landlords

Published On: November 29, 2016 at 11:39 am

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Categories: Landlord News,Tenant Fees Ban

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Rents would rise by 2-3% next year across the UK if letting agent fees currently charged to tenants are passed on to landlords, according to a forecast from a City analyst.

James Fletcher, of Cenkos Securities, yesterday gave a buy rating to The Property Franchise Company – formerly Martin & Co.

Rents to Rise if Letting Agent Fees are Passed to Landlords

Rents to Rise if Letting Agent Fees are Passed to Landlords

He says: “Should landlords decide not to pass these costs back to tenants through higher rents, we do not believe this change would materially affect a landlord’s decision to let a new property or renew an existing tenancy.

“However, combined with upcoming changes to mortgage interest offset and the already imposed buy-to-let Stamp Duty this year, political interferences are making life as a landlord increasingly a less attractive proposition.”

Fletcher reports that, for franchisees, tenant fees account for 16-18% of annual lettings income, and 11% of total income.

The entire Property Franchise Company network is expected to earn £57.1m in lettings revenue this year, with tenant fees accounting for £9.1m-£10.3m of this.

In Scotland, the letting agent fee ban has had a positive effect on the firm’s franchisees, claims Fletcher.

He explains that overall, the ban led to higher income returns for landlords and higher landlord fees for agents. The latter more than offset the removal of tenant fees, which were almost completely offset in the first year following the ban.

Scottish franchisees saw their total lettings income rise by 4% overall in the year following the ban. While this growth was attributed to higher instruction numbers (a 5% increase), the ban only affected underlying fee income by 1% in the first year.

Set up fees for landlords rose from around £200 at the start of the ban to £400 currently, reports Fletcher.

Most startling, he notes, was that franchisees’ monthly management commissions increased by 11% of total lettings income in the first year after the ban. Over half of this growth was attributed to higher rents, which resulted from passed-on tenant charges. The remaining growth was from franchisees winning more instructions.

Fletcher insists that the ban in England and Wales will not write-off letting agents’ income stream, but will simply change who pays the fees.

Will the ban on letting agent fees force you to put your rents up?

How to get the most from your student property investment

Published On: November 29, 2016 at 11:15 am

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Landlord News spoke to Benjamin Hodds, the Managing Director of YourNest to share some of his top tips for investors, specifically in the student property market. This particular sector is known for high yields and high risks and here, Mr Hodds shares his experience of how to be successful in this market:

‘The property market is bouncing back, however we are seeing more and more barriers with taxes taking its toll on the buy to let market. With an increase in stamp duty, property prices back on the up and the ever-increasing costs of owning a buy to let property we must be creative to make our investments more profitable.

YourNest properties are on the forefront of these changes, working with landlords to manage their properties with many landlords requiring support to adapt their nest eggs in order to remain profitable in today’s market.

Improvements

Student properties are often at risk from long void periods and in today’s market students are becoming more demanding expecting more from their home and with the standard of properties improving the weaker properties are left until the very end of letting season, risking a lengthy void period.

In our opinion we are happy to see landlords improving their homes for students, there are far too many properties unsuitable for tenants and ultimately getting the most from your student property investment really boils down to how much you put into your property.

Investors often fail at the first hurdle and kit out their houses with low quality furnishings as we are as an industry in the mind-set that our properties will need a full over haul at the end of term. Our first piece of advice is to ditch the bargain shopping spree and invest in good quality furniture to limit having to replace this every year. It may seem an expense to start with, but throwing in a £300 faux leather sofa for the year is asking for trouble, invest in quality for those key pieces and save money down the line.

We’re fed up of seeing head to toe IKEA but if carefully selected teaming up some IKEA accessories with a luxury kitchen and finishing touches often does the job.

The cost of living is increasing, however if we take care and improve our ‘product’ we can offer our homes at an increased price resulting in an even higher yield.

How to get the most from your student property investment?

How to get the most from your student property investment?

Competition

There is tough competition out there with some fantastic properties on the market and you really must stay one step ahead. Students are looking for houses with TV’s, en-suites and trendy furnishings and if yours doesn’t fit the bill there are plenty that will. We really advise our landlords to invest the extra cash and limit the need for a re-haul every year. In our experience tenants respect their surroundings if they are given pleasant surroundings.

We visit a number of properties which just don’t make the cut and in today’s market we advise our landlords to implement specific changes or we kindly decline management. Keeping your tenants happy really is the key to getting the most out of an investment and if tenants are expected to live in anything below standard this is often the reason why our hard earned income is shrinking.

Once your house is up to scratch and we would advise making sure you or your managing agent is visiting every 6 months and inspecting the property, keeping you in the loop with any issues and pre-empting any large costs and protecting your income at the end of their tenancy.

Lastly, our ultimate tip would be to keep your student investment for some time and generate a healthy monthly income as well as that nest egg to release cash and build up your property portfolio.’