Posts with tag: landlords

Flats see largest increase in pricing since 2009

Published On: May 22, 2017 at 11:33 am

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The most recent research from the Halifax has shown how different property types have increased in price during the last seven years.

Data from the report indicates that flats have seen the most prominent rise- increasing in value by 53% during the last seven years. This was in comparison to 39% for all property types.

Increases

Flats have typically increased in value by £1,008 per month, from the £159,292 recorded in the final quarter of 2009, to £243,936 in the last three months of 2016.

Terraced homes saw the next biggest rise over the period, increasing in value by 43% over the seven years. On the other hand, detached homes saw the smallest increase, of 19%.

Much of the rise in the price of flats since 2009 can be attributed to the major increase in flat prices in London, where values have risen by 65%. In addition, flats make up 48% of all sales of property in the capital, in comparison to the UK average of just 11%.

The average price of a flat in London currently stands at £398,038, with the price in the rest of the UK much lower at £167, 144. In fact, should London be excluded from the data, terraced homes saw the greatest increase over the period (41%), followed by flats (35%).

Regional Rises

By region, flats have been the best performing property type since 2009 in five of the eleven regions assessed. These were:

  • North- 31%
  • North West – 37%
  • South West – 33%
  • Yorkshire and the Humber – 30%
  • Scotland – 21%

Terraced houses rose quickest in:

  • London – 73%
  • East Anglia – 46%
  • East Midlands – 35%

Six in ten property transactions are for terraced or semi-detached properties. This said, semi-detached homes have risen in popularity with first-time buyers, making up 30% of purchases in 2016 – a rise from 28% in 2009.

Flats see largest increase in pricing since 2009

Flats see largest increase in pricing since 2009

Affordability

Averaging at £215,690, terraced properties are the most affordable property type in the UK. This was followed by semi-detached homes (£225,070) and flats (£243,936).

Outside of London, flats are most affordable (£167,144) followed by terraced housing (£185,116).

Martin Ellis, Halifax housing economist, said: ‘Nationally, terraced and semi-detached homes are the most affordable and popular homes with buyers accounting for 60% of sales during 2016. However average price growth for flats, helped by the London market, have outperformed all other property types since 2009.’[1]

‘There has been an increasing trend for first time buyers to choose semi-detached homes over the past seven years, whilst terraced homes have shown a decline in popularity. The rise in the age of a typical first time buyer may partly account for this change in preference towards the family-friendly semi,’ he added.[1]

[1] http://www.propertyreporter.co.uk/property/flat-prices-up-over-50-since-2009.html

 

Top tenant confessions are revealed

Published On: May 19, 2017 at 1:40 pm

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Categories: Landlord News

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New analysis from Lloyds Bank Business Insurance Services reveals some of the most common tenant confessions for misdemeanors in their rental property.

The research suggests that 25% of tenants have caused damage to their property accidentally, with another 25% causing blockages to toilets and sinks.

Damages

12% of those asked said they have failed to pay rent or bills on time, with a further 12% admitting to smoking in their property – running the risk of fire and smoke damage.

10% owned up to causing noise disturbance, while 9% said that damage had been caused by their pets. Amazingly, 6% admitted to leaving their property unsecured, while 5% said that there property has in fact been burgled during their tenancy.

The top five confessions were:

  • Causing accidental damage – 25%
  • Blocking sinks/toilets – 25%
  • Smoking inside the property -12%
  • Defaulting on bills/rents – 12%
  • Causing noise disturbance – 10%
Top tenant confessions are revealed

Top tenant confessions are revealed

Hiding the truth

In addition, the research highlights the lengths that some tenants have gone to in order to cover up their mishaps and avoid having deductions from their deposit.

31% cleaned carpets themselves, while 29% repainted walls. 5% said they actually hired a professional cleaner to rectify damage!

Damien McGarrigle, Head of Business Insurance for Lloyds Banking Group, said: ‘The results highlight just how important it is for private landlords to have adequate landlord insurance which will protect them from a range of common problems, from break-ins and accidental damage to loss of rental income and plumbing issues.’[1]

‘We know many small scale private landlords with just one or two properties rely on regular home insurance to protect them, but this often falls short of covering the specific problems they could face,’ he added.[1]

[1] http://www.propertyreporter.co.uk/landlords/what-are-the-top-5-tenant-confessions.html

 

Ban on agent fees looks unavoidable

Published On: May 19, 2017 at 9:50 am

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A leading property campaigner has warned the property sector to brace themselves for the proposed ban on letting agent fees to come into force.

Ajay Jagota wants the sector to, ‘stop living in complete and utter denial’ about the forthcoming proposals,’ noting that the ban has been promised by all three major political parties in their election manifestos.

Ban on Fees

The three main parties talk about the ban as follows:

Conservatives: The Tories confirm that they will press ahead with plans for the letting agent fee ban and promise commitment to, ‘improve protections for those who rent, including by looking at how we increase security for good tenants and encouraging landlords to offer longer tenancies as standard.’

Labour: The opposition party want to see a Department of Housing, which will oversee the standards and affordability of homes in the sector. It also calls for three-year tenancies to become the norm and for rent rises to be capped with inflation.

Lib Dems: Called for mandatory licensing of landlords, three-year tenancies and a cap on upfront tenancy deposits.Mr Jagota, founder of sales and lettings firm KIS, observed: ‘The Letting Agent fee ban is the latest in a long line of things the industry believed would never happen until they did. If it wasn’t obvious enough, the manifestos we’ve seen this week make it clear those people need to stop living in complete and utter denial.’[1]

‘It is not a case of whether Letting Agent fees are going to be banned but how the ban will be implemented. It’s not even a case of when the ban comes as legislating for it is likely to be low hanging fruit compared to other pledges on housing so I’d expect to see it in the first Queen’s Speech of whatever government we have after June 8,’ he continued.[1]

Ban on agent fees looks unavoidable

Ban on agent fees looks unavoidable

Details

Moving on, Jagota noted: ‘All three manifestos are, however, very light on detail when it comes to the form the ban will take. Do they mean an outright ban of any kind of fee being charged to tenants or will things like referencing fees be exempt? It’s over these issues that the industry now needs to mobilise.’[1]

‘The most significant pledge on renting of any of the parties is the Liberal Democrats deposit cap. It’s not a policy I agree with, but its very existence means that deposit reform is now unavoidably on the agenda.’

‘I can already hear some people saying ‘it’ll never happen’, to which I say this: Two years ago Labour plans to ban letting agent fees were roundly mocked by the Conservatives. Today it’s unthinkable that the Conservatives will go back on banning them. Like it or not, deposit reform has arrived,’ he concluded.[1]

[1] http://www.propertyreporter.co.uk/landlords/tenancy-deposit-reform-unavoidably-on-the-agenda.html

 

Letting agents urged to ensure eviction notices are correct

Published On: May 19, 2017 at 8:57 am

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Letting agents are being urged to ensure that they serve eviction notices in the correct manner, as the so-called ‘peak eviction’ period looms.

Specialist tenant referencing service Rent4sure suggests that particular attention should be paid to both Section 8 and Section 21 notices, which are two of the most complex.

Eviction Notices

A section 8 notice can be served should a tenant be in breach of an Assured Shorthold Tenancy (AST) agreement and is the most common way to combat rent arrears.

Luke Burton, Sales and Marketing Director at Rent4sure, noted: ‘A landlord or their agent should serve a Section 8 notice under grounds 8, 10 and 11 as soon as the tenant defaults on two months of rent arrears.’[1]

‘This differs slightly when the rent is paid weekly, or quarterly and in some instances, you may have to wait for a further period before serving a Section 8 notice under the mandatory ground 8,’ he continued.[1]

Mr Burton noted that if rent is paid weekly or fortnightly, eight weeks’ rent must be overdue before a Section 8 notice can be served.

For quarterly rent payments, there must be at least one quarter’s worth of rent outstanding- ie a tenant must be at least three months in arrears.

‘If the rent is paid yearly, at least three months’ rent must be three months in arrears,’ Burton added.[1]

Letting agents urged to ensure eviction notices are correct

Letting agents urged to ensure eviction notices are correct

Section 21

Meanwhile, a Section 21 notice should only be served at the conclusion of a fixed term, or as per an agreed break clause within the tenancy agreement. This type of notice should be served giving the tenant two month’s worth of notice.

However, if the tenancy agreement commenced before October 1st 2015, notice can be served at any time.

Burton explains that should a tenancy have commenced post 1st October 2015 agents are not permitted to serve a Section 21 until the first four months of the tenancy have passed.

Government Form 6A-only valid for six months from date of issue- should be used for all tenancies starting after this date. This includes renewals.

Letting agents and landlords can source more information in our Eviction Notice Guide for Landlords.

[1] https://www.lettingagenttoday.co.uk/breaking-news/2017/5/agents-told-ensure-eviction-notices-are-correctly-served

 

Lib Dems make housing pledges in manifesto

Published On: May 18, 2017 at 11:44 am

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Categories: Property News

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Election fever is now in full swing, with all of the key political parties unveiling their manifestos for the coming years.

Yesterday saw the Liberal Democrats unveil their plans, which centered around calling another EU Referendum, in the unlikely event that they get voted into office.

Housing and Landlords

Like the Labour party, the Lib Dem’s back the controversial ban on letting agents’ fees levied on tenants throughout England.

What’s more, the Liberal Democrat’s called for:

  • Tenants to be given first refusal to buy the property they are renting from their landlord, should they decide to sell up during the tenancy
  • Increased tenancies, of three years or greater, with inflation-linked annual rent increases to give tenants more security
  • More protection against rogue landlords through mandatory licensing, with full access for tenants to a database of rogue landlords and agents
  • A ban on letting agent fees, with the addition of capping upfront deposits and increasing standards
  • Assistance for helping young people into the rental market by introducing a Help to Rent scheme. This would provide tenancy deposit loans for all first-time tenants under 30
Lib Dems make housing pledges in manifesto

Lib Dems make housing pledges in manifesto

For wider housing issues, the party’s manifestos calls for a new ban on new homes being advertised overseas, before they are marketed to UK residents.

Under the Liberal Democrats, there would also be at least 10 new garden cities and an end to some housing association Right to Buy pilot schemes.

 

Industry expert suggests buy-to-let lending will fall

Published On: May 18, 2017 at 9:13 am

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A leading industry peer has revealed that he believes gross buy-to-let mortgage lending is likely to fall in the next two years.

However, David Whittaker, of Mortgages for Business, feels the share of lending through limited companies should increase.

Reduction

Speaking at yesterday’s FSE Manchester event, Mr Whittaker said that 2017 would see a reduction in the £40bn worth of buy-to-let lending completed during 2016.

He predicted that this would also slip further in 2018.

In addition, he forecasted that 8/9% of this lending would be for limited company buy-to-let in 2017- with this anticipated to rise to 20% during 2018.

Mr Whittaker highlighted data from two lenders- Keystone and Paragon- which both indicate an increase in buy-to-let purchase applications from limited companies. In fact, Keystone’s data indicates that during Q4 of 2016, 3 in 4 applications were through a limited company.

Industry expert suggests buy-to-let lending will fall

Industry expert suggests buy-to-let lending will fall

Underwriting Changes

Whittaker has urged both advisers and clients to be ready for the second part of the PRA buy-to-let underwriting changes, which lenders must introduce by the start of October.

‘We will all have to be prepared for much more paperwork,’ Whittaker noted.[1]

There was also a call for an industry debate regarding the appropriate level of reward for advisers, taking into account the increase in work required for buy-to-let transactions.

Mr Whittaker feels that 15% of all vanilla buy-to-let businesses will have moved into the specialist portfolio and complex sectors, where procuration fees are greater.

‘A seismic change is going on and we need a propert debate on this. If they (the lenders) pay us property, they’ll get the work as they want it,’ he stated.[1]

[1] http://www.propertyreporter.co.uk/finance/btl-lending-predicted-to-fall.html