Search Results For: buy to rent sector

Buy-to-let expert calls for sector reforms

Published On: May 10, 2017 at 9:20 am

Tags: landlords,private rental sector,rental market,rents,tenants

A leading buy-to-let property expert has called for better enforcement and streamlining of legislation within the private rental sector.

Kate Faulkner wants to see the abolishment of what she calls a ‘two-tier’ rental market, where thousands of renters are forced to settle for, ‘sub-standard, illegal or even dangerous homes.’

Reforms

Faulkner, founder of PropertyChecklists.co.uk, is urging major reforms in the sector, in a report commissioned by the TDS Charitable Foundation.

In this report, Faulkner argues that there are a number of rules and regulations in the sector that are serving only to create confusion among landlords, agents, tenants and enforcement bodies alike.

It is suggested that a typical private landlord in England now has to comply with around 150 rules and regulations. This figure increases should the landlord wish to rent out their property to someone on benefits.

‘There are 4.4 million rental properties in England alone so reforming the market would help millions of people. Legislation should be streamlined and funding should be put in place to support enforcement,’[1] Faulkner noted.

‘Legislation varies dramatically across the UK, with different rules for England, Scotland, Wales and Northern Ireland. Landlords are typically over 55, and employed full-time, so often struggle to keep up with what constantly changing legislation they need to be aware of, and what bodies are responsible for enforcing them. Trading Standards, the Home Office, the Competition and Markets Authority, and local councils all enforce elements of private rental policy, and there is no single point of guidance for landlords and agencies to make sense of where jurisdictions begin and end,’ she continued.[1]

Buy-to-let expert calls for sector reforms

Geographical Disparities

In addition, Faulkner highlights the fact that there are substantial geographical differences from county to county.

London sees a massive difference in the number of rogue landlord prosecutions. The most recent figures indicate that Newham prosecuted 359 rogues, whereas Lambeth and Hammersmith had only 9 each.

However, Faulkner claims that local councils are not always to blame:

‘The issue needs to be tackled on a national level to ensure uniformity in enforcing laws designed to protect both tenants and landlords. Law-abiding agents and landlords are jumping through not inconsiderable hoops, and forking out to meet regulations, while the cowboys know enforcement is lax, and are cutting corners and costs.’[1]

Concluding, Faulkner said: ‘We need a coordinated national strategy on weeding out unenforceable, unclear, and confusing rules, and creating national standards, and enforcement policy. Whoever forms the next government must commit to backing an education campaign for those letting out property to inform them of the law, and how to raise complaints or issues.’[1]

‘By tightening up on implementing legislation, tenants will know what to expect, and how to bring rogue landlords to heel. By tackling the causes of the current two-tiered rental market, the quality of the UK’s rental stock will increase, providing better homes for tenants, and better standards for landlords and agents.’[1]

[1] https://www.landlordtoday.co.uk/breaking-news/2017/5/reform-the-private-rented-sector-so-that-it-is-fit-for-purpose-says-expert

Millennials spending over one-third of their take home pay on rent

Published On: May 5, 2017 at 10:32 am

Author: Em Morley

Categories: Property News

Tags: rental growth,rents,tenants,young tenants

According to the most recent Rental Index from Landbay, young tenants are spending one-third of their monthly take home pay on rent.

Those residing in a three-bed property spend 30% of their pay on rent, while those in a two bed spend 39% on average. For those living alone, rental payments hit them hard in the pocket, with them spending an average of 69% of their take home pay on rents!

Rents

For tenants aged between 18-39 renting alone, 69% of their monthly post tax-income of £1,447 is spent on £1,012 worth of rent.

For two people sharing a house, overall rent of £1,152 amounts to 39% of each tenant’s income.

Rents have continued to spiral in the last five years, rising by 9% across Britain since April 2012. London has seen rental growth of 8% over the same period. This of course is impacting on those struggling to save for a deposit, despite the pace of rental growth slowing from August 2015, from 2.66% and 0.82%.

Despite rents beginning to show signs of stabilising for young people, spending such a high percentage of their take home pay on rent leaves them little to play with for essentials, never mind for savings.

Millennials spending over one-third of their take home pay on rent

Tough

John Goodall, CEO and founder of Landbay noted: ‘For intermediaries, this generation is the future of their client base, a generation who will face a tough financial journey.’[1]

‘Whether these millennial tenants are renting as a stepping stone on the way to home ownership – or in some cases choosing to rent for life – this generation are relying on a well-served buy-to-let market to ensure rental growth doesn’t become unbearable. What is now needed is some firm Government commitment to improving standards, affordability and supply of rental properties,’ he continued.[1]

Concluding, ‘Institutional investment and the subsequent growth and professionalism of the private rental sector are already helping control rental growth and improve living standards for renters, so we hope to see some clear plans outlined in this month’s party manifestos ahead of the General Election in June.’[1]

[1] http://www.propertyreporter.co.uk/finance/millennials-spend-over-a-third-of-take-home-pay-on-rent.html

Lender Targets High Net Worth Buy-to-Let Investors with New Range

Published On: May 4, 2017 at 10:03 am

Author: Em Morley

Categories: Finance News

Tags: buy to let mortgages,buy-to-let finance,high net worth,mortgages

Lender Targets High Net Worth Buy-to-Let Investors with New Range

Specialist mortgage lender Investec Private Banking is hoping to attract more high net worth buy-to-let investors with a new range of buy-to-let mortgages.

The selection of two, three, four and five-year fixed rate buy-to-let mortgage products on offer have been linked to Investec bank’s base rate, rather than the three-month LIBOR.

The fixed rate deals, available to individual landlords and those investing through a limited company structure, feature rates starting from 2.69% at 50% loan-to-value (LTV), and are available up to 70% LTV.

The buy-to-let base rate tracker product currently has rates starting from 2.25% over Investec bank’s base rate of 0.25% at 50% LTV, with rates also available up to 70% LTV.

A Business Development Manager at Investec Private Banking, Peter Izard, comments on the new range aimed at high net worth landlords: “We’re delighted to be expanding our buy-to-let range by offering brokers and their clients a choice of competitive fixed rates or trackers linked to Investec bank base rate.

“Our proposition is designed to appeal to high net worth borrowers, particularly those looking to acquire rental property in the higher value prime central London and South East property markets.”

The high net worth range follows an announcement from Paragon Mortgages yesterday, which included details of its updated buy-to-let range, with longer term planning in mind.

Landlords – including high net worth individuals – thinking of investing in the buy-to-let sector must be aware of the Government’s reduction in tax relief on mortgage interest and other finance costs, which is currently being gradually introduced.

Some basic rate taxpayers may be forced into the higher tax bracket as a result of the changes.

Labour propose minimum standards for sector

Published On: May 2, 2017 at 8:44 am

Author: Em Morley

Categories: Landlord News

Tags: general election,landlords,rental market,tenants

The General Election campaigns are beginning to gather pace, ahead of the big vote on the 8^th June.

Labour has now moved to pledge a ‘consumer rights revolution’ that will introduce legal minimum standards for all rental homes.

Proposals

These proposals, which will be introduced should Labour win the election, include a raft of new standards that would see electrical safety, sanitation and cooking facilities. This is to ensure that homes are, ‘fit for human habitation’ according to shadow housing secretary John Healey.

Landlords who fail to meet this tougher standards could face fines of up to £100,000.

Healey feels that these new measures will allow tenants to, ‘call time on bad landlords.’

In response, the Conservatives said that these standards added up to a tenants tax, that will only serve to push up rents. This has been met with scorn from Labour, given the fact that the Tories have introduced increased Stamp Duty surcharges and phased out mortgage interest tax relief.

Labour propose minimum standards for sector

Renter’s Rights

Mr Healey commented: ‘Our homes are at the centre of our lives, but at the moment renters too often don’t have basic consumer rights that we take for granted in other areas. In practice, you have fewer rights renting a family home than you do buying a fridge-freezer. As a result, too many are forced to put up with unacceptable, unfit and downright dangerous housing.’[1]

‘Most landlords provide decent homes that tenants are happy with, but these rogue landlords are ripping off both renters and the taxpayer by making billions from rent and housing benefit letting out sub-standard homes. After seven years of failure the Conservatives have no plan to fix the housing crisis,’ he added.[1]

[1] https://www.landlordtoday.co.uk/breaking-news/2017/5/labour-unveil-plans-to-call-time-on-bad-landlords

Tenants Securing Lower Rents Ahead of Lettings Fee Ban

Published On: April 26, 2017 at 9:22 am

Author: Em Morley

Categories: Landlord News

Tags: landlord taxes,letting agent fee ban,rent prices,tax changes,tenants

Tenants are getting savvier, by securing lower rents ahead of the lettings fee ban, according to a study of letting agents by ARLA Propertymark.

In the March Private Rented Sector report from the organisation, 3.6% of letting agents had seen rents drop, compared with 2.2% in February. There were still increases, however, with 25% of agents reporting that landlords had put their rents up, down from 32% last year.

Tenants Securing Lower Rents Ahead of Lettings Fee Ban

Worryingly, however, letting agents also reported an increasing number of landlords selling their rental properties during March. An average of four landlords per letting agent branch had announced plans to sell up last month.

No reason was given for the decision, but it does coincide with the reduction in mortgage interest tax relief and forthcoming letting agent fee ban.

The last time the number of landlords selling their properties rose above three per branch was in November last year, when the fee ban was announced.

David Cox, the Chief Executive of ARLA Propertymark, believes that this shows that tenants are already being affected by the Government’s buy-to-let tax changes.

It is believed that rent prices will go up following the lettings fee ban, as landlords will instead be forced to foot the charges.

Meanwhile, the supply of rental stock remained flat, at an average of 183, but was 8% higher than March 2016.

Letting agents also had a higher number of tenants registered, at 36 per branch, up from 34 in February.

Cox comments on the report: “It’s concerning that, despite supply increasing over last year, stock failed to return to the market after dipping in February.

“When we also consider that this is coupled with a rise in the number of landlords selling their properties, this is bad news for those searching for a rental property.

“The introduction of mortgage interest relief means the market is becoming less and less attractive to investors, and it appears some landlords are, as we predicted, choosing to exit the market rather than pay the higher taxes.”

He continues: “What’s more, two thirds of our members are concerned the Government will introduce even more landlord taxes in 2017, which will only further dampen supply.

“Following the announcement of the ban on letting agent fees, we expect the situation to only get worse for tenants when, inevitably, the costs are passed on to tenants through higher rents.

“However, it’s positive that more tenants are taking action and negotiating rent reductions before the consultation ends and they see their rents increase.”

Have your tenants been requesting lower rents recently?

Rents Rising Significantly Below the Rate of Inflation

Published On: April 24, 2017 at 9:14 am

Author: Em Morley

Categories: Property News

Tags: average rent price,rent price growth,rent prices,rents

Rents Rising Significantly Below the Rate of Inflation

Growth in rent prices in the UK remains sluggish, sitting significantly below the rate of inflation, according to the latest HomeLet Rental Index.

The annual rate of rent price growth reached 1.1% in March – much lower than the UK consumer price index (CPI) of 2.3% recorded last month, which is putting continuing pressure on incomes.

The average UK rent on a new tenancy in March was £904 per month, which is up on last year’s average of £894 and £9 more than the previous month.

Annual rent price growth has dropped from a high of 4.7% in June 2016, with the decrease in rents most marked in areas of the country where prices were previously increasing fastest.

Rents in March rose in every area of the country except two when compared to February, with Yorkshire and the Humber and the North West as the only decliners.

Annually, rents were higher in March than a year previously in 11 out of the 12 regions covered in the Index, with the South East recording a marginal decrease.

The Chief Executive of Barbon Insurance Group – HomeLet’s parent company – Martin Totty, comments on the data: “In the current housing market, where demand for homes continues to outstrip supply and house prices are out of reach for many buyers, the long-term trend in the private rental sector is likely to be for rental price inflation to continue; however, the HomeLet Rental Index continues to reflect landlords’ focus on offering tenants affordable rents, with rents now increasing at a rate significantly below the general rate of inflation in the UK economy.”

The following table looks at rent price changes recorded in March:

Region	Average rent – March 2017	Average rent – February 2017	Average rent – March 2016	Monthly variation	Annual variation
Wales	£616	£602	£598	+2.3%	+3.1%
Yorkshire and the Humber	£619	£621	£607	-0.3%	+2.1%
North East	£522	£522	£512	+0.0%	+1.9%
North West	£675	£680	£664	-0.7%	+1.7%
East Midlands	£602	£595	£593	+1.1%	+1.6%
Northern Ireland	£614	£604	£605	+1.6%	+1.5%
West Midlands	£663	£659	£654	+0.6%	+1.4%
Scotland	£610	£597	£602	+2.1%	+1.2%
Greater London	£1,546	£1,520	£1,527	+1.7%	+1.2%
East of England	£902	£896	£892	+0.7%	1.1%
South West	£798	£791	£791	+0.9%	+0.0%
South East	£997	£992	£1,000	+0.5%	-0.3%
UK	£904	£895	£894	+1.1%	+1.1%
UK excluding Greater London	£751	£746	£744	+0.7%	+1.0%