Posts with tag: lettings market

Lettings Market Will be Unaffected in Short-Term by EU Referendum Result

Published On: June 23, 2016 at 8:27 am

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The lettings market will be unaffected in the short-term by the result of today’s EU referendum, regardless of the outcome, according to the Association of Residential Letting Agents (ARLA).

ARLA’s member letting agents believe that supply, demand and rent prices will stay at the same level for the near future, whatever the result of today’s crucial vote.

Lettings Market Will be Unaffected in Short-Term by EU Referendum Result

Lettings Market Will be Unaffected in Short-Term by EU Referendum Result

Although the private rental sector looks to be unfazed by the referendum result, Stamp Duty changes continue to be an issue for the lettings market.

ARLA’s May Private Rental Sector report found that two thirds of agents expect supply to stay the same if the UK votes to leave the EU, compared to just a fifth who predict it will decline, as international investors leave the market.

Almost one third (31%) believe that demand will drop as a result of a Brexit, while 55% think it will remain as high as it is currently.

However, two months on from the introduction of the 3% Stamp Duty surcharge for buy-to-let landlords, letting agents are starting to feel the effects.

A third (37%) of agents have reported a decrease in the supply of rental properties since the Stamp Duty changes came into force. The proportion rises significantly in Wales, where 80% witnessed a dip in supply, as well as in the East Midlands and Yorkshire and the Humber, where exactly half of ARLA member agents saw a decline.

Around half (48%) of agents predict that supply will continue to drop, as more landlords vacate the private rental sector as a result of the changes to mortgage interest tax relief, which come into force from next year.

The Managing Director of ARLA, David Cox, comments: “There is no avoiding the EU referendum at the moment, and whatever the outcome, we are likely to feel the impact of the fall-out of this debate in different ways.

“However, it’s important to put this into perspective and not get carried away. As outlined in our recent Brexit report, the lettings market hosts a large number of non-UK born citizens, and any change in migration policy is likely to have an impact down the line, especially in London.

“However, our monthly report clearly shows the sentiment among members is that the immediacy of this effect is likely to be minimal.”

Yesterday, we released the results of our own EU referendum poll, which found that over 60% of landlords and property professionals believe that we should stay in the EU.

Short-Term Let Horror Stories Highlight Importance of Lettings Market

Published On: June 17, 2016 at 11:33 am

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Horror stories from landlords and tenants using short-term lets websites highlight the security provided by the traditional lettings market, insists the Association of Independent Inventory Clerks (AIIC).

The organisation claims that landlords who let via traditional methods have more opportunities to reduce their chances of being hit with hefty repair bills when tenants leave.

In the past year, a number of high-profile stories have been reported regarding people who let through short-term lets websites, whose properties have been trashed by tenants.

One landlord, Nigel Broome, ended up with a damage bill of £12,000 after letting his southeast London flat through Airbnb. Broome claimed that his tenants held a New Year’s Eve party in his property, which led to holes in the walls, broken furniture and ruined floors.

The Chair of the AIIC, Patricia Barber, says: “No one can deny the success of outlets like Airbnb and there is clearly a strong demand for this type of accommodation. However, there seems to be an increasing number of rental horror stories surrounding this type of let being reported, and those who choose to offer their properties through these sites on a regular basis could be leaving

Short-Term Let Horror Stories Highlight Importance of Lettings Market

Short-Term Let Horror Stories Highlight Importance of Lettings Market

themselves open to hefty bills.”

Barber also knows of one tenant who rented a four-bedroom house for £3,000 per month through a short-term lets website.

The tenant was horrified to find that the oven and fridge were not working, the garden was overgrown, the conservatory had no glazing and the property was in a generally poor condition. Barber argues that the checks and procedures that those letting through these websites have to conduct are minimal, leading to some properties that are not fit for purpose being rented out.

Homeowners who let through sites like Airbnb are required to check their mortgage contract and ask permission from their lender before doing so.

Prospective short-term landlords must also check their insurance policy to ensure they are covered. Additionally, they are required to carry out a fire risk assessment and have gas safety checks every 12 months.

Most short-term lets websites offer terms, information and guidance for landlords, but they do make it clear that users must take it upon themselves to ensure they are not breaking any laws or regulations.

Barber explains: “When you compare the required checks, legislation and measures short-term landlords are required to adhere to with those carried out by someone letting through traditional channels, it’s clear there is a big difference. Tenants booking short-term lets through the internet may benefit from more flexible terms and potentially cheaper rents, but there’s no guarantee they’ll be as well protected.”

Those who let through short-term lets websites do not have to comply with mandatory deposit protection and tenancy agreement rules, and Barber believes they are highly unlikely to reference tenants before letting to them.

The AIIC states that it is measures like these that protect landlords and tenants when issues arise at the end of a tenancy.

Barber says: “It’s clear that the traditional lettings route offers more security and stability for landlords, although that’s not to say there are no risks of property damage when letting this way.”

The AIIC adds that the hefty bills received by landlords letting properties through short-term lets websites highlight the value of an inventory for anyone renting out property.

Barber concludes: “Some level of damage or wear and tear is always likely to occur during a tenancy, but a professionally-compiled inventory helps to cover landlords against damage caused by tenants. An inventory can also help to provide landlords with peace of mind throughout the duration of the tenancy.”

Sharp Decline in Rental Property Levels Recorded

Published On: June 16, 2016 at 11:00 am

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Following a robust lettings market in April, a sharp decline in rental property levels has been recorded for May.

The Agency Express Property Activity Index reveals that new listings dropped by 11.9% and let properties fell by 11.1% last month, marking the greatest monthly decrease for May since the firm’s records began in 2012.

Recent figures from the Council of Mortgage Lenders (CML) have also confirmed that buy-to-let borrowing dropped hugely in April after a rush of landlords flooded the market to beat the 1st April Stamp Duty deadline.

Sharp Decline in Rental Property Levels Recorded

Sharp Decline in Rental Property Levels Recorded

Therefore, while May’s figures appear dramatic, they do remain somewhat distorted by the Stamp Duty changes.

The Director General of the CML, Paul Smee, comments: “There is a sense of calm after the storm this month, as lending eased back, following the significant rises in activity in March, as borrowers looked to beat the second property Stamp Duty deadline. We expect the market to take several months to return to its previous levels after the lending surge.”

Agency Express’ index recorded that all 12 UK regions saw decreases in new listings, while ten regions experienced a fall in let properties in May.

Some of May’s better performing regions include:

Number of properties to let 

  • Scotland: -4.1%
  • West Midlands: -4.2%
  • Wales: -5.2%
  • Central England: -6.7%
  • North West: -8.6%

Amount of let properties 

  • South East: +10.1%
  • Scotland: +4.1%
  • East Anglia: -3.7%
  • East Midlands: -10.5%
  • North East: -10.6%

The top performing region for May was the South East, where the number of let properties rose by 10.1%, marking a record best for May.

Strong figures were also recorded in Scotland, where let properties increased for a fifth consecutive month, by 4.1%.

The largest decrease was seen in the East Midlands, with the amount of properties to let falling by a record of 29.9%.

The Managing Director of Agency Express, Stephen Watson, says: “The Property Activity Index historically shows us a drop in figures throughout May. However, this month we have seen a much greater fall than in years previous. An unseasonal rush in activity throughout March, followed by a reactive dip in April and reduced lending has certainly blurred May’s figures. Now, with the impending EU referendum, it may be some time before we see a more balanced view of the UK lettings market.”

Annual Scottish rent rises in 3-year low

Published On: May 25, 2016 at 9:03 am

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Latest figures suggest that annual Scottish rent rises are currently at a three-year low.

The most recent Scotland Buy-to-Let Index from Your Move shows that rental increases over the course of the last year were at just 0.6%.

Scottish rent rises

This rise was the slowest seen since April 2016 and shows a substantial downturn from the 1.1% recorded in March and the 2.1% seen in February.

In absolute terms, an annual increase of just 3% means that the average rent north of the border stands at £542 per month. This is the lowest since the £539 recorded in April 2015.

Month-on-month, typical Scottish rents have slipped by 0.4% since March. Average rents in England and Wales however has risen by 0.3% over the same period.

Bargains

Brian Moran, lettings director at Your Move Scotland, notes, ‘tenants looking to rent a property now may find themselves able to bag a bargain, after a slight spring slump in rent growth. Rents haven’t risen at such a leisurely place for three years. However, this year-on-year snapshot hides the many price fluctuations we’ve seen in between this April and last and also isn’t uniform across the country.’[1]

‘The lettings market is always at the mercy of local supply and demand and in Edinburgh and the surrounding areas we’re seeing extraordinarily fast rent rises as tenant competition shines brightest around the glow of the jobs market,’ he continued.[1]

Moran also feels that, ‘supply and demand need to strike a lasting equilibrium to prevent rent growth taking off and leaving tenants by the wayside-and that’s a tall order in today’s regulatory environment. Landlords are up against a considerable cocktail of hurdles, including a higher rate of stamp duty on property purchases, reductions in tax relief and the Private Tenancies Bill. While levied at landlords, these measures could soon hurt thousands of tenants too, if buy-to-let investment retreats as a result and there are less houses and flats to rent.’[1]

Annual Scottish rent rises in 3-year low

Annual Scottish rent rises in 3-year low

Arrears rising

A slower rise in annual rents, coupled with a fall in monthly charges, would, one would think, ease the pressure of Scottish renters.

Not so, as the number of tenants in arrears has risen for the second successive month. The proportion of late paid rent has risen to 11.6% of all rent due during April, in comparison to just 11.3% in March.

Annually, tenant arrears have also got worse. At the same time in 2015, late rents stood at 9.2%.

Moran commented: ‘it appears that paying the rent on time is becoming slightly harder for Scotland’s tenants. When coupled with the fact of slowing rent growth recently, this certainly rings alarm bells for the state of tenant finances across the country. A few months ago it felt like there was some real headway being made and levels of late rent were dropping-but there’s been an unfortunate rebound.’[1]

‘With unemployment in Scotland on the rise, tenants can’t afford for the current housing shortage to continue. More homes to let are needed in the places where the jobs market has something to offer, and a better balance of supply and demand is vital to iron out these lasting obstacles in rental arrears. Ironically, Scotland needs landlords to keep investing and expanding the supply of rental homes on the market – at the very time when the Government is targeting them with regulatory weapons,’ Moran concluded.[1]

[1] http://www.propertyreporter.co.uk/landlords/scotland-sees-eent-rises-fall-to-three-year-low.html

Tenants Looking to Move Into New Home by Christmas

Published On: November 27, 2015 at 1:03 pm

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Tenants Looking to Move Into New Home by Christmas

Tenants Looking to Move Into New Home by Christmas

Whether you’re a landlord with hundreds of properties in your portfolio, or a homeowner who has a spare room, now is the perfect time to get your home on the rental market. According to letting agent Leaders, many tenants are hoping to move into a new property by Christmas.

This means that you have a great chance of your house being let very soon!

Lettings Director at Leaders, Jane Wilkinson, explains: “The run up to Christmas might not seem like the obvious time to put your property on the lettings market, but demand from tenants is extremely high at the moment, with many people keen to move and get settled in their new home before Christmas, so it is actually an excellent opportunity.”

Stay one step ahead of your fellow landlords at this time by making your property available to rent now – many wait until the new year to put their homes up to let.

Wilkinson continues: “Everybody knows January is a busy time for lettings, but by putting your property on the market now, you can get a head start on the competition to secure motivated and quality tenants. In the unlikely event your property is not let before Christmas, you will be in pole position to reach out to applicants looking to move in the new year.”1

If you are currently going through a void period, now is the perfect time to prepare your property for the winter and any prospective tenants that may be moving in in the very near future.

And if you’re considering selling your rental property at this time, it is good to know that millions of people start their search for a new home during the festive season. A huge 15.7m visits were recorded on Rightmove between Christmas Day and New Year’s Day last year. Therefore, it is a good idea to get your property listed during this time, while fewer homes are available.

Whether you’re looking to rent your property or put a house up for sale, remember to find all of the latest residential landlord information on Landlord News over the festive period!

1 http://www.propertyflock.co.uk/f/18FD948E8

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Vendors Can’t Find Homes So Aren’t Selling

Published On: August 13, 2015 at 1:57 pm

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A shortage of homes on the market is causing would-be vendors to avoid selling their house, as they cannot find a new property to move to, claims the latest report by the Royal Institution of Chartered Surveyors (RICS).

New vendor instructions fell for the sixth consecutive month, with 22% of RICS residential market survey contributors reporting a drop.

Nine of the 12 parts of the country that the RICS monitors experienced a decrease, with a particularly sharp fall in East Anglia. Northern Ireland and the North East of England were the only areas to report a rise in vendor listings.

Vendors Can't Find Homes So Aren't Selling

Vendors Can’t Find Homes So Aren’t Selling

The lettings market is similar to the property market, states RICS, as tenant demand is continuing to rise, but landlord instructions are not keeping pace.

The RICS believes that this will cause an increase in rent prices around the UK, with members in the West Midlands, South East, East Anglia and London expecting the highest rent rises over the next year.

The report states: “Respondents in all areas agree that the lack of property for sale is causing somewhat of a vicious cycle, as the limited choice on offer at present is deterring would-be movers, and therefore further restricting new instructions.

“Meanwhile, new buyer enquiries rose for the fourth month in succession at the national level. The vast majority of areas reported some degree of growth, with the South East region the sole exception.”

Partner and joint head of residential at Halls in Worcester, Alan Metcalfe, says: “A lack of stock is allowing agents to push appraisal values up, with some achieving unrealistically high figures and some sticking.”1

Jan Hytch, of Arnolds in Norwich, adds: “Prices are still strong. However, demand is outstripping supply. Any recent properties are going within hours.”1

The study also found that respondents expect prices to increase during the next 12 months. It predicts that in a year, all parts of the UK will see “sizeable house price growth.”1

Chief Economist at RICS, Simon Rubinsohn, explains the findings: “A renewed acceleration in house price inflation allied to a fairly flat trend in sales activity highlights the very real challenge being presented by the housing market.

“More worrying still is the suspicion that the imbalance between supply and demand will lead to even stronger price gains over the next 12 months.

“This is also visible in the firmer pattern in the buyer enquiries series, which has now risen for four months in succession, reflecting, in part, a further modest easing in credit conditions.

“This trend could be brought to a halt when base rates do eventually begin to rise, but the dovish tone to the latest Bank of England inflation report suggests the first move will come a little later than previously thought likely, and that subsequent increases will be very gradual indeed.”1 

Research by property search engine Home also indicates that the amount of homes for sale in England and Wales is 11% lower than this time last year and 39% lower than in August 2007.

It reports that in the southern regions, buyers only have half the choice that was available to them eight years ago.

Home reveals that prices have risen by 0.6% in England and Wales in the past month, and by 1.5% in London.

1 http://www.propertyindustryeye.com/vicious-cycle-vendors-cant-find-anywhere-to-live-so-will-not-sell-says-rics/