Posts with tag: landlords

Chancellor Hammond to put housing before deficit reduction

Published On: October 3, 2016 at 10:29 am

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New Chancellor Philip Hammond has pledged to spend on new homes during his term in office, going against predecessor George Osborne’s desire to balance the books.

Speaking to the BBC, Mr Hammond said that the Brexit vote had caused major uncertainty and that a pragmatic approach was needed in order to support housing growth.

‘Eye-watering’

Hammond went on to say that the deficit is still, ‘eye-wateringly large’ and would need to be addressed soon.

During his speech at the Conservative Party Conference later, Mr Hammond is to state that Osborne’s deficit reduction policies, ‘were the right ones for that time.’ However, he will then say that, ‘when times change, we must change with them.’

He believes that the Government will, ‘restore fiscal discipline in a pragmatic way that reflects the new circumstances we face.’[1]

Further details are slated to be provided in November’s Autumn Statement.

Chancellor Hammond to put housing before deficit reduction

Chancellor Hammond to put housing before deficit reduction

Building

Part of a new plan for Britain following Brexit, there is likely to be a greater scope for investment to boost the economy. This is to include extra borrowing of £2bn to hurry the construction of new properties.

‘As we go into a period where inevitably there will be more uncertainty in the economy, we need the space to be able to support the economy through that period,’ Hammond noted. ‘If we don’t do something, if we don’t intervene to counteract that effect, in time it would have an impact on jobs and growth.’[1]

At today’s conference, Mr Hammond, alongside Communities Secretary Sajid Javid, will set out new procedures to try and build 40,000 new homes by 2020.

Borrowing

The Government is set to borrow £2bn in order to support the ‘Accelerated Construction’ scheme. This is set to get houses built on publicly-owned brownfield land, for quick development.

In addition, there is set to be a £3bn Home Building Fund, in order to provide loans to stimulate projects. This, according to the Government, will assit in building 25,000 homes by 2020, with a long-term target of over 200,000.

[1] http://www.bbc.co.uk/news/uk-politics-37536943

Buy-to-let landlords to increase rents to offset charges

Published On: October 3, 2016 at 9:19 am

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New research has revealed that many tenants are likely to be hit with rental price hikes, following recent alterations to tax regimes.

A survey of nearly 3,000 private landlords from the Residential Landlords Association showed that 56% of buy-to-let investors plan to increase taxes in the short-term. This follows the changes to stamp duty and caps on tax relief, scheduled for next year.

Portfolios

In addition, the study found that nearly two-thirds of landlords do not plan on buying any more properties to add to their portfolio. Nearly one-third of landlords are thinking about leaving the market for good.

Following last year’s general election, then Chancellor George Osborne announced plans to cut the rate at which higher rate taxpayers can claim relief on their mortgage payments. These changes are to be phased on from next April and by 2021, all buy-to-let landlords will only receive relief of up to 20%.

54% of landlords said that they did not have full confidence in the future of the sector. 70% feel that the Government will outline new policies affecting landlords in the near future.

More pleasingly, 86% of landlords said they had a good relationship with their tenants. 82% of landlords questioned said that their tenants pay their rent on time.

Buy-to-let landlords to increase rents to offset charges

Buy-to-let landlords to increase rents to offset charges

Review

The Residential Landlords Association is now calling on the Chancellor Philip Hammond to review changes made by Mr Osborne. The firm believes that he should get behind the country’s landlords and encourage more homes to be developed for rent, to meet growing demand.

David Smith, policy director at the Residential Landlord Association, said: ‘these results show how perverse recent tax changes have been. By implementing policy that will increase rents and choke off the supply of homes to rent, the Government is making it more difficult for tenants to save for a home of their own.’[1]

‘We are calling on the Chancellor to use the Autumn Statement to hit the reset button,’ he added.[1]

[1] https://www.landlordtoday.co.uk/breaking-news/2016/10/buy-to-let-landlords-likely-to-increase-rents-to-offset-higher-costs

 

Demand for rental property remains high

Published On: September 29, 2016 at 11:18 am

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The latest report from the Association of Residential Letting Agents (ARLA) indicates that demand for would-be tenants increased during August.

There were 37 prospective tenants registered per ARLA branch during August, the highest number since June.

Ups and downs

Data from the report shows that in the first half of 2016, there were signs that demand was dropping, with month-on-month figures down on the same periods in 2015.

However, the last three months has seen a rise in annual demand.

In August, the number of rental properties available by member branch stood at 183. This was one lower than in July. Year-on-year, supply increased by 3%, with August 2015 seeing an average of 178 properties per branch.

Rising rents

Tenants negotiating rent reductions actually increased during August to the highest levels seen since records began at the beginning of last year. Members of ARLA said that around 3% of tenants got a rent reduction last month, in comparison to 2.1% in July.

Last month, 51% of ARLA members reported some signs of uncertainty from those looking to rent, or looking to let, following the Brexit vote.

This however seems to have had little impact on the rental market. During the last month, there were no reported changes in rent prices, supply of properties or demand.

Demand for rental property remains high

Demand for rental property remains high

Good shape

David Cox, Managing Director at the Association of Residential Letting Agents, noted: ‘Although Brexit painted a temporary picture of uncertainty for tenants and landlords, our findings show that the market remains in good shape. We’re not seeing anything across supply or demand that is out of the ordinary, and while demand is at high levels, this is being matched with a decent volume of properties on the rental market.’[1]

‘What’s good is that more tenants are managing to successfully negotiate rent reductions, and that agents and landlords seem to be responding well to this. The rising cost of renting, especially in major cities such as London, is an ongoing issue in both the buying and lettings market so it’s promising to see small steps towards better affordability for renters,’ Cox added.[1]

[1] http://www.propertyreporter.co.uk/landlords/rental-demand-remains-high-according-to-arla.html

Landlords react angrily to Corbyn’s comments on housing benefit

Published On: September 29, 2016 at 9:38 am

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Private landlords have responded angrily to accusations made by leader of the opposition Jeremy Corbyn, over comments he made over housing benefit.

In his Labour conference speech, Mr Corbyn commented that landlords in the UK are being subsidised by £9bn of this benefit.

Figures

Official budget figures for 2014/15 show that total housing benefit spending for social rented tenants totalled £15.2bn, significantly greater than the £9.1bn for those in the private rental sector.

This is despite the private rental sector actually being larger than the social.

The English Housing Survey for 2014/15 indicates that 19% of households are in the private rental sector, in comparison to 17% in the social sector.

Figures on benefit spending by tenure were also published alongside the Budget earlier in 2016. This data shows that the total housing benefit expenditure for the year 2014/15 was:

  • £5,989,000,000 for local authority tenants
  • £9,222,000,000 for housing association tenants [1]
Landlords react angrily to Corbyn's comments on housing benefit

Landlords react angrily to Corbyn’s comments on housing benefit

Spending

Commenting on Mr Corbyn’s speech, David Smith, Policy Director for the Residential Landlords Associaiton, said: ‘Millions of tenants rely on housing benefit in both the private and the social housing sectors, but proportionately far more is spent on social housing tenants than those in private accommodation.’[1]

‘With the private rental market having doubled in size since 2002, it is inevitable that more housing benefit claimants will be living in the sector,’ he added.

[1] https://www.gov.uk/government/publications/benefit-expenditure-and-caseload-tables-2016

[2] Residential Landlords Association Press Release, 28.09.16

Deposit disputes are at highest level since 2007

Published On: September 28, 2016 at 10:38 am

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Concerning new figures released from the Tenancy Deposit Scheme reveal that tenant deposit disputes are presently at their highest level since 2007.

Data from the report reveals that at the end of March 2016, there were almost 173,000 tenancy deposit disputes in the nine years since the legislation was first introduced.

Rising

In 2015-16, the three tenancy deposit schemes in England and Wales resolved 28,100, which in itself was the highest ever annual amount recorded. This represents a miniscule total of just 0.82% of all deposits protected in March 2016, a figure staying fairly constant for the last six years.

Cleaning amounted for the majority of reasons for disputes, showing that a growing number of buy-to-let landlords are facing increasingly dirty properties at the conclusion of agreements.

In fact, cleaning was mentioned in 57% of dispute claims handled by the TDS. Next came damage to fixtures and fittings at 51%, redecoration at 32% and rent arrears at 19%. Gardening issues made up 16% of tenancy deposit disputes.

Deposit disputes are at highest level since 2007

Deposit disputes are at highest level since 2007

Average fees

Further figures from the report indicate that the average disputed deposit handled by the Tenancy Deposit Scheme in 2015-16 was £863.40.

Of this money, 45.5% was returned to tenants and 54.5% to landlords and/or agents.

Landlords are reminded of their obligations regarding tenancy deposits. Any deposits taken on assured shorthold tenancies in England and Wales must be protected within 30 days in one of the three-Government approved schemes.

These insurance based or custodial deposit protection schemes are operated by:

  • MyDeposits
  • Deposit Protection Service (DPS)
  • Tenancy Deposit Scheme (TDS)

There are separate tenancy deposit protection schemes in Scotland and Northern Ireland.

London has almost £2bn in ‘useless’ deposits

Published On: September 27, 2016 at 10:36 am

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New research into tenancy deposits indicates that the 960,000 rental properties in London generated in excess of an eye-watering £1.9bn in deposits to landlord and agents.

The investigation from deposit-free renting solution Dlighted suggests that 97% of these will be returned at the conclusion of the tenancy agreement.

Rental Bills

These figures are obtained by taking the number of privately rented properties in the capital’s 33 boroughs. These are then multiplied by the average monthly cost of renting a property in the region-the typical cost of a deposit.

However, many landlords and letting agents asking for deposits are looking for these equivalent to six weeks rent. This means that the overall cost of the capital rental deposits could hit £3bn.

In Westminster, almost half of residents in the region privately rent. This area is worst hit, with a deposit bill of over £250m.

Kensington and Chelsea comes next, with 33% of residents renting in the borough paying a combined £136m.

Other boroughs with a high rental bill include Camden (£124m), Lambeth (£111m) and Wandsworth (£100m).

The ten London boroughs with the greatest overall estimated value of tenancy deposits were found to be:

  1. Westminster – £250m (43% of households privately rented)
    2.   Kensington and Chelsea  – £136m (33%)
    3.   Camden – £124m (31%)
    4.   Lambeth – £111m (34%)
    5.   Wandsworth – £100m (31%)
    6.    Barnet – £95m (31%)
    7.    Ealing – £90m (35%)
    8.    Brent – £82m (35%)
    9.   Tower Hamlets – £74m (32%)
    10.  Newham – £73m (43%)

[1]

London has almost £2bn in 'useless' deposits

London has almost £2bn in ‘useless’ deposits

Better spent

Long-time opponent of tenancy deposits, Ajay Jagota, of Dlighted, noted: ‘the irony is, it’s unlikely these deposits will even solve the problems they’re supposed to. Statistics show that 97% of deposits are handed back untouched at the end of their tenancies. And whether you’re renting out a property in Kensington or in Brent, it’s either unlikely you’ll go through the process of using a deposit to pay for minor damage, or that the deposit will cover the costs of major damage.’[1]

‘In the meantime that money isn’t just gathering dust, its gaining interest in the bank accounts of people it doesn’t legally belong to. The industry needs to take a good hard look at itself and consider moving to an insurance-based system like every other industry on Earth. It would mean a better deal for landlords, a better deal for renters and more money in our economy,’ he added.[1]

[1] http://www.propertyreporter.co.uk/landlords/londons-useless-2bn-rental-deposits.html