Posts with tag: landlords

Evictions up by 5% in Q1 of 2016

Published On: June 29, 2016 at 10:54 am

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Seasonally adjusted figures released from the Ministry of Justice indicate that the number of households evicted from rental properties in England and wales during Q1 of 2016 rose by 5%.

Pleasingly, repossession rates for homeowners have fallen to record lows.

Repossession rates

The figures show that there were 10,732 repossessions of rented homes between January and March 2016. This was a rise from the 10,253 recorded in the final three months of 2015.

During 2015, a record number of tenants were removed from their rental properties by bailiffs. 42,728 households were forcibly evicted in the year.

Welfare cuts and a lack of affordable homes have been cited as reasons for the rise. More than half of the evictions are thought to have been conducted by private landlords.

A separate survey from online letting agent PropertyLetByUs shows that one-quarter of buy-to-let landlords served an eviction notice to tenants during the past twelve months. 5% of these landlords pursued an eviction through the courts.

Evictions up by 5% in Q1 of 2016

Evictions up by 5% in Q1 of 2016

Increasing arrears

Jane Morris, Managing Director of PropertyLetByUs, noted, ‘landlords are increasingly facing rent arrears, as rent escalation continues to outstrip gross income. According to HomeLet, rents on new tenancies signed on UK rental property outside London over the three months to April 2016 were on average 5.1% higher than a year earlier.’[1]

‘Landlords are also facing a financial squeeze due to restrictions on their tax breaks and some may be raising rents to supplement their income. Pushing up rent rises further will put huge pressure on those tenants who are already struggling to pay their rent.  We may well see evictions continuing to rise over the next few months. These uncomfortable statistics highlight the need for landlords to protect their rental income and ensure they carry out thorough references with all new tenants. Times are very tough for many tenants and demand for rental accommodation is soaring in many parts of the UK,’ she continued.[1]

Concluding, Morris said, ‘landlords need to be extra vigilant when they take on a new tenant. But a few simple checks will help identify if a tenant is in a good financial position or not.’[1]

[1] http://www.propertyreporter.co.uk/landlords/eviction-numbers-up-5.html

TDS responds to claims of transparency issues

Published On: June 29, 2016 at 9:39 am

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The Tenancy Deposit Scheme has moved to clarify its position in response to comments made by property expert Ajay Jagota.

Mr Jagota, founder of sales and lettings firm KIS, has called for more transparency over the whereabouts of £1.4bn being held in the Tenancy Deposit Scheme.

Transparency

Jagota stated that, ‘organisations not being 100% transparent about where this money goes, what it is being used for and who is benefitting does nothing to improve the reputation of our industry, which ultimately can only be improved with greater transparency, particularly when it comes to tenants’ money.’[1]

Responding to this comment, Mr Steve Harriott , CEO of the Tenancy Deposit Scheme, told Landlord News:

‘The Tenancy Deposit Scheme would like to make it clear that £1.4billion worth of deposits we protect is of course retained in the client accounts of letting agents and landlords. We operate an insurance backed scheme, so we protect deposits to this value, but the money is held directly by the agents and landlords. The headline used in the article is misleading and mischievous. 

Tenancy Deposit Scheme responds to claims of 'missing' monies

Tenancy Deposit Scheme responds to claims of ‘missing’ monies

Since April 2016 we also operate TDS Custodial where agents and landlords transfer the deposits to us for safekeeping.’

[1] /1-4bn-held-tenancy-deposit-scheme/

 

 

Northern Powerhouse scheme in danger after Brexit

Published On: June 28, 2016 at 9:11 am

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Fears are growing that the Northern Powerhouse scheme could be in danger following the momentous EU referendum result.

The scheme, designed to rival London and the South East as the main economic growth driver, is in doubt following the resignation of David Cameron and uncertainty over George Osborne’s future. Chancellor Osborne, the main thinktank behind the Northern Powerhouse, could soon be on his way out of office.

Shift in (Northern) Powerhouse

However, according to one onlooker, the outcome of the referendum makes the case for the Northern Powerhouse more compelling than before. Martin Venning, director at UK Northern Powerhouse, runs the UK Northern Powerhouse Conference, which took place at Manchester earlier in 2016.

Mr Venning noted, ‘the result of the EU referendum makes the case for the UK Northern Powerhouse more compelling. Our stakeholders will continue to contribute to the process of building a stronger, more productive and stable Northern economy. The challenges of growth post Brexit will require innovation and new forms of collaboration which can create new opportunities for all. We expect to play our part in shaping that agenda.’[1]

Interest

The scheme has already attracted much potential investment, in particular from China. This has served to assist in pushing up property prices and rents across the North West.

Ged McPartlin, sales director at Manchester-based dales firm Ascend Properties, observes that, ‘while the initial shock might be hard to swallow for some, the reality is that Manchester’s economy has never been stronger-and will only continue to grow.’[1]

‘The level of internal investment pouring into the city has reached many millions of pounds, spanning new homes, commercial ventures, offices and infrastructure. Manchester will also be seeing investment from China which will be going into Airport City, testament to the strength of the Northern Powerhouse. We are confident for the future,’ he added.[1]

Northern Powerhouse scheme in danger after Brexit

Northern Powerhouse scheme in danger after Brexit

Life-changing

Mr Graham Davidson, managing director of Manchester-based Square Property Investment, offers a more optimistic view of the referendum result.

Davidson noted, ‘The decision to leave is truly a once-in-a-lifetime decision and should now be embraced. The UK economy is going from strength to strength and the people of the UK have decided that now is the time for us to break away from the rest of Europe and gain back more control on our own future. Our economy continues to develop, particularly outside of London in light of the Northern Powerhouse agenda which is key to growth.’[1]

‘Investment in Manchester over the past 12 months for example has been unprecedented and this month it was announced that MediaCityUK is set to double in size, with investment from UK companies creating thousands of new homes and job opportunities – a show of confidence in what we can achieve on our own. It’s safe to say The Northern Powerhouse agenda is well underway, and the referendum results being announced in Manchester’s town hall was testament to this.’[1]

Concluding, Mr Davidson noted, ‘The reasons for investing in UK property won’t change, with returns still outperforming all other forms of investment. Our own business is testament to this – enquiry levels have not declined despite what much of the media has portrayed; people understand that property investment can be highly rewarding, whether you are topping up your pension, saving for your children’s future or looking for additional regular income.’[1]

[1] https://www.landlordtoday.co.uk/breaking-news/2016/6/does-brexit-mean-the-end-of-the-northern-powerhouse

Where is £1.4bn being held in the Tenancy Deposit Scheme?

Published On: June 27, 2016 at 10:50 am

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Has anyone seen a missing £1.4bn?

Leading property expert Ajay Jagota of sales and lettings firm KIS, is looking for the whereabouts of this money, which is held in Tenancy Deposit Schemes.

Tenancy Deposit monies

£3.2bn of deposits paid by British renters are currently sat in one of the three tenancy deposit schemes. Much of this money is being held by a landlord or letting agent.

At present, landlords and letting agents are legally permitted to secure tenancy deposits in one of three government licensed schemes:

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

Tenants’ deposits are then held either in a Custodial or Insurance Scheme, where the money is retained by landlords and agents.

Mr Jagota is attempting to ascertain where the missing money has gone and has asked the TDS-the biggest of the schemes, to say what organisations are holding most of the cash in insurance schemes.

Commercial sensitivity

TDS has admitted to £1.4bn worth of deposits being held in these schemes, but is refusing to reveal what companies are holding them due to, ‘commercial sensitivity.’

Jagota observed that, ‘this is a significant amount of money-it doesn’t seem unreasonable to ask where it has gone and what the people who have it are doing with it. It’s not that I’m suggesting any wrongdoing whatsoever, I just think the money could be better spent elsewhere.’[1]

‘Instead of just gathering interest for agents and landlords it could be helping renters save for a home of their own, or being channelled into the wilder economy where it could easily end up as tax revenue which could go towards the NHS?’[1]

Where is £1.4bn being held in the Tenancy Deposit Scheme?

Where is £1.4bn being held in the Tenancy Deposit Scheme?

Information

‘I cannot for the life of me see what is commercially sensitive about this information. What is commercially sensitive about it being known that landlords and letting agents have deposits held in Tenancy Deposit schemes like they legally have to? If they are large, listed companies as I suspect many of them are, this information will in all likelihood be contained in their published accounts. In which case, it’s not that commercially sensitive!’ he continued.[1]

Concluding, Jagota said, ‘organisations not being 100% transparent about where this money goes, what it is being used form and who is benefitting does nothing to improve the reputation of our industry, which ultimately can only be improved with greater transparency, particularly when it comes to tenants’ money.’[1]

[1] http://www.propertyreporter.co.uk/landlords/where-are-the-missing-deposit-billions.html

 

Could Brexit be beneficial for landlords?

Published On: June 27, 2016 at 9:04 am

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As Britain continues to come to terms with the shock EU referendum result, one property expert has suggested that the sense of doom and gloom could well be premature.

Director of Balogores Property Group, Howard Leicester, has given his reaction to the Brexit vote.

Brexit shock

Mr Leicester noted that, ‘Brexit is certainly a shock to the system and one that will no doubt have far reaching ramifications for our industry moving forward. But the more I think about it, the more I actually think the next few months could be a real boom for our sector.’[1]

Leicester urges Britain to look at the short-term benefits of the result. He feels there could be an immigration boom from Europe, before any exit deal is finalised, which could:

  • lead to more people needing rental property
  • attract more landlords to the market
  • produce a further rise in rental prices

In times of economic uncertainty, people could look to rent for longer. In recent times, a shrinking of the economy has seen the rental market stay strong.

Could Brexit be beneficial for landlords?

Could Brexit be beneficial for landlords?

Short-term pain, long-term gain?

Continuing, Leicester observed, ‘Britain has a very strong trading history and whilst there seems no doubt we will suffer some short term turmoil and a possible recession, or at least much reduced growth. However, there seems very little doubt that we will come out the other side. History tells us we always return much stronger and leaner.’[1]

Summing up, Leicester said, ‘so is it all bad? I don’t think so when you look at our industry and the way it has grown and matured over the last 10-15 years. In actual fact, this should be seen as another opportunity for landlords to expand their portfolios and for the best agents to make sure they are at hand to help clients though, with balanced and professional support and the advice.’[1]

‘In other words, those of us who are experienced, knowledgeable and experts in our fields, will be the ones that actually see the opportunity and grab it,’ he concluded.[1]

[1] http://www.propertyreporter.co.uk/landlords/how-will-the-lettings-industry-be-affected-by-brexit.html

UK votes for Brexit-the industry reacts

Published On: June 24, 2016 at 9:37 am

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Letting agents have moved to express their reaction to the historic referendum result-with comments ranging from pessimistic to downright resigned.

The market has been plunged into further uncertainty with the shock news that Prime Minister David Cameron is to resign.

Brexit-the reaction

Key figures gave their reaction:

Property market analyst Henry Pryor: ‘House sales expected to fall 20%. House prices expected to fall 15%. Sterling crash makes UK prices 10% lower for foreign buyers already.’

Frank Webster, director of Finders Keepers letting agency: ‘UK voters opt to jump off a big cliff with long fall ahead. All of us asked to vote for something none of us understand.’

Hometrack research director Richard Donnell: ‘The decision to leave the EU will be most keenly felt in the London housing market which is fully valued and already facing headwinds. History shows that external shocks can reduce sales volumes by as much as 20%.’

Adam Challis of JLL: ‘We expect an immediate slowdown in housing market transactions, in the order of 10% to 15%, resulting in downward pressure on prices for at least a couple of years. We anticipate current activity levels will return but this is unlikely before late in 2018.’

Andy Martin, senior partner at Strutt & Parker: ‘it is going to cause a huge amount of disruption to the markets while everybody takes stock of what it actually means and the government starts giving us clear policy direction. Before then we are going to have volatility, which is a risky thing to have in these markets because economic performance is still not something that is a given.’

UK votes for Brexit-the industry reacts

UK votes for Brexit-the industry reacts

Immediate falls

Member of London agency Kay & Co, Martin Bikhit, observed: ‘A vote for Brexit will immediately see the value of Sterling fall. This will in turn create a spike in demand as London property will be more attractive to opportunistic investors who will take advantage of the bigger spending power, but it is the wrong sort of demand that will ebb away as prices fall. Normally, the falling prices should spur the market into action, however, I can see that both domestic and foreign buyers will continue to wait and see how far prices can or do fall, to make the most of their money.’

Charles Curran, principal of Maskells estate agency in the capital , said: ‘We expect the domestic buyers to remain subdued, perhaps opting for rental accommodation (rents being low for the time being due to oversupply and high cost of acquisition), but we do we expect more interest and volumes from overseas buyers. An unwanted consequence of leaving the EU is that our currency will depreciate, making property cheaper in net terms compensating for the high stamp duty in prime and prime central London.’

Looking to the future, Alex Newall, managing director of prime market agency Hanover Private Office, noted: ‘We can no longer use past data accurately to help predict the future. Over the next two years, until Brexit actually happens, gradually the rule book will be re-written on asset prices in the UK. Yield hunters, e.g. pension funds, will have to be careful to protect their underlying asset value over the next two years and pre-planned exit strategies will need to be considered.’[1]

[1] https://www.lettingagenttoday.co.uk/breaking-news/2016/6/its-over–agents-have-their-say-on-the-eu-referendum-result