Posts with tag: private rental sector

London Tenants Campaign Against No DSS Discrimination

Published On: February 25, 2016 at 9:51 am

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This Saturday, London tenants are set to campaign against landlords and letting agents discriminating against renters on housing benefit.

The Yes DSS campaign, led by private tenant group Digs, demands that landlords and agents end the No DSS policies that prevent renters from accessing private rental housing.

These policies, which are becoming increasingly common across London, indicate that the landlord will not accept tenants in receipt of housing benefit.

Digs contacted 50 letting agents in Hackney, finding that just one property – a one-bedroom studio flat in the north of the borough – was available to tenants who claim housing benefit.

The amount of working individuals claiming benefits to cover their rent has doubled in the past five years, according to data from the House of Commons.

When the coalition government introduced housing benefit caps, it justified the move by insisting that it would encourage landlords to bring down high rents. However, Digs has found that rent prices in the capital have spiralled way above inflation and median earnings.

London Tenants Campaign Against No DSS Discrimination

London Tenants Campaign Against No DSS Discrimination

On Saturday, tenants and campaigners will target a series of letting agents in Hackney who refuse to let to people on housing benefit. The demonstration will begin outside Hackney Town Hall.

They will publicly announce the agents that impose a standard No DSS policy.

The Yes DSS campaign calls for:

  • An end to No DSS discrimination against tenants on housing benefit.
  • A pledge from letting agents to only market rental properties that would accept tenants on housing benefit.

Heather Kennedy, of Digs, explains the cause for the campaign: “Where in the landlord rule book does it say that carers, disabled people, single parents or people on low incomes make bad tenants? These are just some of the groups of people discriminated against when agents, landlords and mortgage lenders say No DSS.

“Where are all these people expected to live? With homeownership far beyond the reach of normal people and no access to social housing, the private rented sector is the only housing option more and more of us have open to us. And yet people are being denied their last chance of finding a home, because landlords and agents, with increasing power to discriminate, unfairly tarnish everyone claiming benefits as undesirable.”

She insists: “We will no longer tolerate this kind of naked discrimination in our community from agents and landlords making huge amounts of money from people just desperate to find somewhere to live.”1

Eva, a mum of one and member of Digs, explains what the campaign means to her: “My son was 16-months-old when we moved into our rented flat. When we got our eviction notice, he was almost six. I was dreading the day the eviction notice came through the door.

“Even though I have been a model tenant, I have paid my rent without fail every month, I have maintained the property, I knew how rents in the area had shot up and I knew my landlord would be looking to make more money from the property than I could afford to pay.

“I started looking for another flat in walking distance of my son’s school. I work full-time and was able to find a couple of flats in my price range. But when I told the letting agent I claim a small amount of housing benefit each month because my wages don’t cover my rent, each and every one of them turned me away, saying they don’t take people on DSS.”1

If you are a landlord that accepts tenants on housing benefit, be aware that the new welfare system, Universal Credit, is being rolled out across the country. We are keeping you up to date with the latest areas subject to the change, to ensure that you stay informed about changes to your tenants’ financial circumstances. The most recent rollout areas can be found here: /yet-more-tenants-move-onto-universal-credit/

For a useful guide to letting to tenants on housing benefit, visit: https://justlandlords.co.uk/news/a-guide-to-letting-to-dss-tenants/

If you do decide to let your rental property to a tenant in receipt of housing benefit, remember to communicate often and effectively with them about their finances and consider rent guarantee insurance, which protects your rental income. 

1 https://www.landlordtoday.co.uk/breaking-news/2016/2/renters-demand-landlords-end-no-dss-discrimination

The Private Rental Sector Will Continue to Grow, Despite Clampdown on Landlords, Says Savills

Published On: February 24, 2016 at 3:54 pm

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Over the last few months, landlords have been subject to forthcoming changes to the buy-to-let market, which could dampen future investment. However, Savills believes that the private rental sector will continue to grow, despite the measures.

The Government has announced a series of policies designed to clamp down on buy-to-let investors and increase homeownership in the country. The changes to landlord law and finances are detailed here: /contrary-to-popular-belief-buy-to-let-is-not-dead-insists-finance-firm/

The Private Rental Sector Will Continue to Grow, Despite Clampdown on Landlords, Says Savills

The Private Rental Sector Will Continue to Grow, Despite Clampdown on Landlords, Says Savills

Despite the changes, demand for rental properties appears to be as high as ever, with the latest forecast from Savills suggesting that the sector will continue to grow for years to come.

The country’s strengthening economy and improved employment figures, which have hit an all-time high recently, would usually push up the number of homebuyers. However, the continuing surge in house prices – the average is edging closer to £300,000 – means that many people are still priced out of the property market, leaving the private rental sector in a state of constant expansion.

Savills reports that the Government’s statistics reveal the private rental sector has grown by around 17,500 homes per month for the ten years to the end of 2014. The firm believes that this growth will continue over the next few years, with Government policies designed to dampen the market having only a minimal impact.

Despite continued demand, private tenants may start to feel the pinch, as landlords are forced to raise rents in response to changes to their finances.

At present, there are 4.6m households in the private rental sector, with 260,000 added each year, says Savills.

But even with the Government trying to push for increased homeownership, it is only expected to bring around 40,000 new homeowners per year from the private rental sector, meaning that rental market growth will still continue, rising by only 15% less than the current level, at 220,000 per year.

With constant high demand expected for the sector, institutional investors are seeking clarity from the Government regarding their exemption from certain policies.

Originally, it was stated that institutional investors (those purchasing 15 or more properties in one transaction) would be exempt from the Stamp Duty surcharge arriving in April, but this has not been confirmed.

Additionally, landlords that operate as limited companies will not be subject to the cut in mortgage interest tax relief, set to be implemented gradually from 2017. Over 40% of landlords are looking at forming a limited company to avoid the change.

If large-scale investors are not exempt from the Stamp Duty surcharge, there is a risk of a lack of money, and therefore shortage of supply, coming into the private rental sector.

Average Scottish rents up 2.3% year-on-year

Published On: February 24, 2016 at 1:00 pm

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Latest index figures reveal that average rents in Scotland rose by 2.3% in the year to January 2016. However, month-on-month rents stayed static at £548.

The buy-to-let index from lettings agent Your Move also shows that this figure is being driven by larger increases in regions such as Edinburgh and the Lothians. Here, rents were up by 6.4%.

On the other hand, rents in the East of Scotland were down 1.7% than one year ago and fell by 0.2% year on year in Glasgow.

Lesser returns

A reduction in house price growth north of the border is having an impact on landlords’ returns, which fell by 5.8% in the year to January. In better news, arrears have slipped to their lowest levels for six months, with 11.1% of tenants late paying rent in the last month. Previously, arrears had risen the Autumn to stand at a record high of 13.8% in October 2015.

Tenants’ finances though are down on twelve months ago. In January 2015, just 7.1% of all rent due was paid late.

On average, Scottish rents rose by 2.3% in the year to January 2016, equivalent to £12 in absolute terms. This represented only slight increase from the 2.2% recorded in the twelve months from December, though does show an increase in comparison to the 1.3% yearly rise seen in January 2015.

Rental patterns

Brian Moran, lettings director at Your Move Scotland, noted, ‘in different parts of Scotland, powerful interplays between supply and demand are shaping the regional rent patterns that are emerging. In popular cities like Edinburgh where the jobs market is hottest the competition to find homes means tenants have to act quickly. As a result, we’re seeing exceptional rent growth in some parts of the country while in others, lettings market activity is much calmer.’[1]

‘However, there’s also another ingredient added to the mix now,’ he continued. ‘The private rented sector is in a state of uncertainty, as landlords wait with baited breath while the Private Tenancies Bill progresses through the Scottish Parliament. Nervous landlords may be acting now before their hands are tied and they lose control of the rent they can charge. This could have prevented a seasonal dip between January and December instead of the steady picture we have seen.’[1]

Average Scottish rents up 2.3% year-on-year

Average Scottish rents up 2.3% year-on-year

Good news

Mr Moran believes that the rental increases are, ‘underpinned by good news.’ He went on to say, ‘we should also be looking at tenants’ bottom line. Arrears are falling which speaks volumes for affordability right now. With rents below their price peak, many tenants have been seizing the opportunity to move out of season, while good deals are available.’[1]

Regionally, three of the five regions of Scotland have seen rent rises in the year to January 2016. Rents in Edinburgh and the Lothians have now reached a record level of £642 per month. The 6.4% annual growth recorded in this region represents a steep increase, up by 4.8% in the year to December 2015.

This is not the only area to see record breaking year-on-year rent climbs. Rents in the South rose by 6% in the year to January and in the Highlands and Islands, rents increased by 3.7%.

At the other end of the scale, the East of Scotland saw rents decline by 1.7% over the same period.

Monthly dips

The majority of regions in Scotland saw rents slide between December and January. The sharpest drop was in Glasgow and Clyde, where rents were down 0.7%. Rents in the East of the country fell by 0.5% in January, with the Highlands and Islands recorded a decline of 0.2%.

Taking into account property price growth and void periods, the average landlord in Scotland saw a total annual return of 5.8% in the year to January 2016, before deducting costs such as mortgage repayments.

Moran concluded by saying, ‘we’re not on the home straight just yet. The Scottish unemployment rate is still above UK levels and parts of Scotland are also on the frontline of the current oil price slump. Wider economic factors will be decisive in determining whether tenant arrears continue in this downward direction.’[2]

[1] http://www.propertywire.com/news/europe/scotland-residential-rents-index-2016022411594.html

[2]http://www.propertyreporter.co.uk/landlords/scotland%C3%A3%C2%A2%C3%A2%E2%80%9E%C2%A2s-tenants-move-back-into-the-black.html

 

 

More information on energy efficiency needed, MP’s claim

Published On: February 24, 2016 at 10:04 am

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Members of the House of Lords and MP’s have called for private rented sector tenants to be given better information on energy efficiency and utility bill charges, before signing a tenancy agreement.

In addition, information on their right to change energy suppliers should also be provided, according to these peers.

Complex

The All Party Parliamentary Group for the private rented sector feel that schemes intended to improve energy efficiency of rental accommodation are too complex. As a result, the Group claims a large number of properties will be unlikely to meet energy efficiency standards required by 2018.

From April 2018, all privately rented homes will be legally required to have a minimum energy performance rating of E on its Energy Performance Certificate (EPC). These changes are causing concern, as they are likely to bring about significant challenges to landlords, with privately rented homes generally being older and harder to maintain.

A report from the Group concludes that landlords, energy companies and local authorities must work harder to identify vulnerable tenants who will benefit most from energy efficiency alterations.

More information on energy efficiency needed, MP's claim

More information on energy efficiency needed, MP’s claim

Solving the problem

To solve these issues, the Group is calling for further incentives to be offered to landlords for them to carry out improvements through being able to offset their fees against rental yields.

Additionally, the report from the Group says tenants should be given more transparent information on the likely cost of their bills before a tenancy begins. Energy companies have also been told to look at bringing in lower-rate tariffs aimed at less-wealthy consumers.

Group chair, Conservative MP Oliver Colvile, said, ‘the Government has set ambitious targets for improvements to the energy efficiency of private rented housing and rightly so. To meet these it is clear that much clearer information is needed for both landlords and tenants to understand their rights and responsibilities and the help available to improve the energy efficiency of the rental housing stock.’[1]

‘Tenants especially need much clearer information on their rights to change energy suppliers whilst energy companies, local authorities and landlords need to do more together to identify vulnerable tenants in need of most help to keep the cost of their Bills down,’ he concluded.[1]

[1] https://www.lettingagenttoday.co.uk/breaking-news/2016/2/mps-want-more-energy-info-given-to-renters-before-tenancies-are-signed

17% of tenants have sub-let their rental property

Published On: February 23, 2016 at 12:53 pm

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A concerning new survey shows that 17% of private rental sector tenants in Britain have sub-let part or all of their property to persons not named on lease agreements.

Additionally, 25% of tenants who said they sub-let did not check the terms of their lease to see if this activity was permitted. 34% said that they did not inform their landlord of the decision.

Of these renters who did not inform their landlord, one-fifth got found out. In 11% of cases, the tenants named on these leave were evicted, with 6% losing their deposit. Other punishments for these tenants included increased rental charges, fines and formal warnings.

Tempting

The survey, conducted by Direct Line for Business, also shows 15% of current tenants are thinking about sub-letting either some or all of their property.

A spokesperson for Direct Line for Business said, ‘the average monthly rent across the UK currently stands at £739. This means on average, approximately a third of people’s income goes towards accommodation. With the market having seen a five per cent increase in average rents in the last year, it seems that a larger number of renters are tempted to offset this expense by sub-letting their properties.’[1]

17% of tenants have sub-let their rental property

17% of tenants have sub-let their rental property

 

Sub-let Increases

In the last two years, Landlord Action has seen a rise of 18% in the number of landlords with sub-letting cases. This is making it a more substantial reason for eviction, alongside rent arrears and Section 21 for possession only.

Founder of Landlord Action Paul Shamplina said, ‘organised sub-letting scams are also becoming more prevalent, where tenants, or sometimes even fake tenants, advertise properties and rooms on holiday/accommodation websites in order to cream a profit without the landlords’ consent.’[1]

Further data from the report shows that sub-letting is most common in the North West and West Midlands. In these regions, more than 25% of tenants said that they have sub-let their accommodation. London came in third.

[1] https://www.lettingagenttoday.co.uk/breaking-news/2016/2/one-in-six-tenants-has-already-sub-let–and-more-may-do-so-via-airbnb

 

More Tenants than Homeowners in London by 2025, Claims PwC

Published On: February 16, 2016 at 2:56 pm

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The majority of Londoners will be living in rental accommodation by 2025, with just 40% owning their own home, according to a new study by PwC.

This prediction is a reversal of 2000’s property market, when 60% of Londoners owned a home either outright or with a mortgage.

The expected continuation of generation rent will be bad news to many, including the Government, which has been attempting to fuel homeownership through schemes such as Help to Buy.

Additionally, Chancellor George Osborne is clamping down on the buy-to-let sector by imposing tax and financial changes on landlords.

However, it is young people that will be the hardest hit by changes to the housing market. Priced out by high house prices and impossible deposits and mortgages, only 26% of those currently aged 20-39 will own their own home by 2025.

Comparatively, 64% of those born in 1960 and 1970 owned a home by the time they were 35.

Affordability issues will hit Londoners the hardest, with a predicted 24.4% rise in the amount of people renting privately in the capital between 2000 and 2025. In the UK as a whole, it will increase by 14.5%.

A senior economist at PwC, Richard Snook, comments on the firm’s predictions: “This analysis shows that people are increasingly being locked out of owning a home in London, demonstrated by the sharp rise in private rental levels and sharp fall in homeownership.

“High prices are making homes in the capital unaffordable to most and could undo a century-long trend towards rising homeownership rates. In just 25 years, the city has been transformed to one where rental is becoming the norm – especially for younger people.”1

Thanks to low interest rates, those with mortgages are seeing their housing costs fall in comparison to tenants, particularly in London.

The Resolution Foundation reports: “Measured before housing costs, median incomes in London appear to have grown by 2.9% post-crisis; measured after housing costs, they remain 3.7% below pre-crisis levels.”1

The number of people renting is expected to grow in every region of the UK. Northern Ireland will experience the next highest increase in renters, at 24.4%, fuelled by low levels of house building and a younger population. The slowest rise will be seen in the South West, at 6.1%.

Homeownership in Britain hit a high in 2003, at 71% of households. It has been in decline ever since, according to Savills’ Neal Hudson. The Right to Buy scheme of the 1980s is thought to have boosted the peak in homeownership.

David Snell, a partner at PwC, explains how the country must adapt to these forthcoming changes: “With around 60% of Londoners predicted to be renting by 2025 – 40% private sector and 20% social housing – policy will need to adapt. This could include encouraging a better quality of private rented accommodation, including longer tenure periods and more rental properties designed for families.”

He continues: “Demand for housing in the UK has outstripped supply for more than two decades. Changing the outlook for generation rent will require us to build more houses than needed, just to match population growth in order to make up the past shortfall between housing supply and growth in demand.”1 

Recently, we reported that the average buyer who purchases a home this year will have already spent a huge £52,900 on rent.

However, it was also revealed in HomeLet’s rental index that rent price growth in Greater London is at its lowest rate for two years. Despite this, the average new rent in the capital is £1,510 per month. The average across the UK, excluding London, is £740 a month.

The Chief Executive of housing charity Shelter, Campbell Robb, says: “Faced with sky-high housing costs and instability, and forced to wave goodbye to their dreams of securing a home of their own, the shortage of affordable homes in the capital is putting huge pressure on London’s renters.

“But it doesn’t have to be this way; many renters in Europe enjoy greater stability, and there’s no reason London’s tenants can’t as well. To turn around this crisis, the next Mayor of London must prioritise longer, more stable tenancies in the capital and finally commit to building the genuinely affordable homes that Londoners are crying out for.”1

1 http://www.telegraph.co.uk/finance/property/property-market/12157946/Generation-Rent-London-to-become-a-city-of-renters-by-2025.html