Posts with tag: expensive rents

Generation Rent Urges Vendors to Sell for Less

Published On: July 20, 2015 at 12:17 pm


Categories: Landlord News

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Generation Rent Urges Vendors to Sell for Less

Generation Rent Urges Vendors to Sell for Less

Tenant group Generation Rent is urging vendors to sell their homes for less than they are worth, in a bid to solve the housing crisis.

Additionally, the organisation believes that landlords letting a flat should charge less than the market rate.

In a post on its website, Generation Rent says that ordinary people have a personal responsibility for the housing crisis.

Zeph Auerbach, who wrote the post, says that homeowners with a mortgage will make a huge profit from their asset, meaning that they are not as affected as the tenants who pay “extortionate rents.”

Auerbach writes: “Let’s put it plain: some of us are winners, some of us are losers.

“And if you are winning by selling or letting at a ludicrously high price, yes, you are continuing to the dire situation for your friends and strangers alike.”

The blog says that when it comes to housing, most people behave like “little caricature capitalists.”

It concludes: “If you are profiting obscenely from the rising housing market, you are contributing to it.”1


Shelter Warns Against Rent Caps

Published On: July 8, 2015 at 2:52 pm


Categories: Landlord News

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Britain is currently suffering a housing crisis, which has prominently been caused by a lack of new affordable homes. This has caused to record levels of private renters, as homeownership and social renting declines.

Private renting was once a “stepping-stone” for students and young professionals, but is now the only option for one in four households.

Renting can be positive for some. However, many must deal with high rents, short-term tenancies and unexpected fees or rent rises. Families are the worst affected, as regular moves and increasing rents causes problems for children and finances. For every £10 the average tenant earns, £4 goes on rent.

This is why, says homelessness charity Shelter’s Campbell Robb, more renters are joining Shelter’s campaign to demand improvements in the sector. Find out more here:

Shelter Warns Against Rent Caps

Shelter Warns Against Rent Caps

Robb asks: “Why don’t we just cap rents?”

This seems like a simple way to make renting cheaper for Britain’s 11m renters. But the issue is often debated.

Some believe that any intervention in the market, however small, will cause landlords to leave. Others argue that rent caps will bring rents down immediately.

Shelter has decided to find out for itself if rent caps would work, and if not, what would?

“We just want what’s best for tenants – and it was clear they needed some evidence on this issue – so we commissioned Cambridge University to look at various forms of rent regulation and model their potential effects,” says Robb.

The University’s study delivered a clear conclusion. Rent caps may be an easy solution, but they could cause more issues for tenants.

Robb explains: “The researchers predict that driving down the cost of rents in this way will cause evictions to rise, conditions to get worse and make it a lot tougher for anyone on a low income – especially those on housing benefit – to find somewhere to live.”

However, the research also revealed that the market could cope with being more supportive of families. The University’s economic model shows that it would be safe to introduce longer-term tenancies, in which rents could only increase by inflation.

Shelter has proposed five-year tenancies, which are successfully used internationally, which would provide stability for families. Households could also plan their finances more easily under these terms.

Although, Robb warns, this would not solve the problem of high rents.

He says: “And here, sadly, there is no short cut. If we’re serious about wanting house prices and rents to be more affordable, then we have to be building more genuinely affordable homes.”

In the last five years, the budget for building affordable homes was reduced by over 60%.

“There is no way out of this affordability crisis without more homes,” urges Robb.

He continues: “As the charity for people experiencing bad housing or homelessness, our focus has always been on what delivers for tenants. We’re proud to continue that tradition of standing up for renters today.

“In this case, what works best for them isn’t rent caps. Caps could end up making the lives of tenants on low incomes much more difficult, not easier. But that doesn’t mean we don’t need change. Renting families deserve the stability to raise their children that others have and this research shows that the market can offer that, and continue to strive.”1

Housing is extremely expensive in the UK, but this needs to change. Longer-term tenancies will not put first time buyers on the property ladder. However, building more homes will help households buy and benefit those that rent.


First Time Buyers £742 a Year Better Off than Renters

Published On: April 1, 2015 at 12:35 pm


Categories: Finance News

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Figures from the Halifax have indicated that first time buyers in the UK are £742, 9%, a year better off than those who rent.1

First Time Buyers £742 a Year Better Off than Renters

First Time Buyers £742 a Year Better Off than Renters

For a first time buyer purchasing a three-bedroom home, the average monthly buying cost, including mortgage payments, was £682 in December 2014. This is £62 less than a tenant will pay in rent, at £720 per month on the same property type.1

Craig McKinlay, Mortgage Director at Halifax, comments on the research: “Average home buying costs are significantly lower than average rental costs, providing first time buyers with a large financial saving if they can get on the housing ladder.

“While the timescales associated with raising a sufficient deposit to buy a home present a hurdle to many potential first time buyers, the significant difference in costs between buying and renting, combined with still low mortgage rates, increased consumer confidence and the Help to Buy scheme, have all been factors driving the substantial rise in first time buyers over the past two years.”1

However, in 2014, the average monthly buying cost rose by £46, whereas the average monthly rent increase was just £28.1

326,500 first time buyers stepped onto the property ladder in 2014, a 22% rise from the previous year.1

Within London, the average monthly cost for first time buyers stood at £1,275, but tenants were paying £1,387 per month in rent.1

The highest cost differences were found in the North West at 17%, Scotland at 11%, and Wales with 8%.1

The lowest cost differences were seen at 1% in the East Midlands, 2% in the South East, and 4% in Yorkshire.1

Around the country, the figures are as follows1:


Monthly savings by buying

Scotland £65, 11%
North £35, 7%
Northern Ireland £28, 7%
Yorkshire and Humberside £19, 4%
North West £109, 17%
East Midlands £6, 1%
West Midlands £30, 5%
Wales £42, 8%
East Anglia £37, 5%
London £112, 8%
South East £15, 2%
South West £54, 7%

The average monthly saving by buying in the UK is £62, 9%.1


Highest Eviction Rate in Rented Homes in 2014

Published On: February 12, 2015 at 10:40 am


Categories: Landlord News

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Properties in England and Wales are being repossessed at a rate of 115 per day, says the Ministry of Justice (MoJ).

The amount of people evicted from their rental homes reached record highs in 2014, as increasing rents and changes to benefits are affecting tenants’ finances.

MoJ data found that landlords in England and Wales repossessed 42,000 homes over the year; equating to 115 a day.1 This is the highest number since records began in 2000, and arrived as the amount of mortgage borrowers having their properties repossessed dropped to the lowest level in eight years.

The MoJ research does not indicate which types of landlords were behind the evictions, which are 11% higher than the previous year, although data for repossession claims reveal that social landlords made more attempts to recover properties than private landlords.1

Highest Eviction Rate in Rented Homes in 2014

Highest Eviction Rate in Rented Homes in 2014

These landlords are generally for housing associations, and provide houses at lower rents than the market rate, typically to tenants on housing benefits.

In the last three months of the year, numbers indicate that social landlords made 62% of possession claims, the first stage of the legal process. Additional to these 21,576 court actions, private landlords made 4,564 claims, and there were 8,555 accelerated claims, which could have been made by social or private landlords. The MoJ expects that 21% of these claims could end in an eviction.1

Bedroom Tax was thought to be causing issues for social landlords, revealed the National Housing Federation, after the threat of eviction by landlords was the highest for a decade in May 2014.1

Benefit sanctions are also believed to be causing problems.

Housing charity Shelter thinks that these numbers “paint a grim picture”1 of the influence the shortage of affordable housing is having on tenants.

Chief Executive of Shelter, Campbell Robb, says: “With the cost of housing sky-high, we are hearing from increasing numbers of families who are terrified that just one thing, like a sudden illness or job loss, will leave them homeless.

“The failure of successive governments to build anywhere near enough affordable homes, combined with a wave of welfare changes, is making it harder and harder for people to stay in their homes.”1

Figures released this week by Countrywide estate agents revealed that tenants across the UK have faced above-inflation rent increases in the last year.

The price of rent on a one-bedroom property has grown by 2.7% in the last 12 months, to an average of £688 a month. A three-bedroom family home is now 2.2% higher, at an average of £875 per month. Greater London rents have also risen by 4.4%, to an average of £1,137 a month.1

Comparatively, mortgage costs have dropped, and lenders have continued being tolerant of borrowers who struggle with repayments.

The amount of people falling behind with their mortgage repayments, or having their home repossessed last year fell to the lowest level in eight years.

There were 26% less repossessions last year, at 21,000, than the 28,900 in 2013, and the lowest amount since 2006, revealed the Council of Mortgage Lenders (CML).1