Posts with tag: tenants

Two-thirds of tenants saving for own property

Published On: February 12, 2016 at 11:28 am

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An interesting new report suggests that over two-thirds of tenants are saving for a deposit and are willing to move away from family and friends to get onto the property ladder.

A study conducted by PropertyLetByUs.com, one of the leading online letting agents, also shows that just under a third of tenants have given up on owning their own home.

Moving

46% of tenants said that they would only be able to afford a property if they were to move to a cheaper area. One in six said that they would consider a lodger to help them with their mortgage costs.

When asked how long they thought it would take to purchase a property, one third said within the next two years. Almost 20% said that they would be able to afford a home in the next three years, with 4% thinking it would take five years.

Over half of tenants aspire to move up the rental ladder before buying their own home, with 51% stating their intent to move to a nicer property when they can.

Two-thirds of tenants saving for own property

Two-thirds of tenants saving for own property

Saving

Jane Morris, Managing Director of PropertyLetByUs.com, noted, ‘despite the recent media attention on Generation Rent, our research shows that the majority of tenants are actively saving for a deposit and are looking to buy a property in the next five years.’[1]

‘Savvy tenants recognise that they may have to look further afield for properties they can afford. Many are prepared to move to areas that are some distance from their friends and families,’ Morris continued.[1]

Morris went on to point out, ‘the latest stats how that a growing number of young people are renting for longer. According to PwC, almost 60% of 20-39 year-olds in England will rent their homes by 2025, while just 26% will have got on the housing ladder. This younger age group will find it increasingly difficult to buy and are likely to be older than previous generations, before they can afford their own home.’[1]

Concluding, Morris said, ‘what is clear is that the majority of tenants still aspire to purchasing a property. But many tenants recognise that they will have to make sacrifices and compromise, so they can afford to buy a home of their own.’[1]

[1] http://www.propertyreporter.co.uk/landlords/majority-of-tenants-saving-for-first-home.html

First Time Buyers Spend £50k on Rent Before Buying a House

Published On: February 12, 2016 at 9:44 am

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The average first time buyer purchasing a home this year will have already spent £52,900 on rent by the time they get onto the property ladder, according to the Cost of Renting report from the Association of Residential Letting Agents (ARLA).

The report, compiled with the Centre for Economics and Business Research (Cebr), reveals that the average first time buyer in England in 2016 will have spent 16.4% of their total lifetime earnings on rent for all the years they were a private tenant. It is expected that future first time buyers will spend 22% more than those buying today.

First Time Buyers Spend £50k on Rent Before Buying a House

First Time Buyers Spend £50k on Rent Before Buying a House

First time buyers purchasing this year in the North East will have spent £31,000 on rent – the lowest in England. Contrastingly, those in London will have spent double that, at £68,300.

The South East is the only region other than London where the total spent on rent is above the average, at £55,900.

In 2015 alone, the average tenant in the UK spent 22% of their wages on rent, rising to 30% in the capital. Those in the East of England enjoyed the most affordable rents, due to relatively high earnings in the region. However, rent still ate up 18.9% of their disposable income.

Britons that move out of their family home at the age of 18 will typically rent for 13 years before they buy their own property.

ARLA’s Cost of Renting report revealed that those leaving home and starting to rent this year will spend an average of £64,400 on housing before they can buy their first home – one fifth (22%) higher than the current first time buyer.

Those leaving home and renting privately in London will continue to be worse off, spending an average of £91,500 on rent before they buy a property – £23,100 more than those buying in the capital this year.

The Managing Director of ARLA, David Cox, comments on the findings: “The rising cost of rent in this country is a huge issue, and is preventing tenants from being able to save to buy a home. Our Cost of Renting report reveals that tenants are already spending a significant proportion of their income on rent, and therefore struggling to save any money.

“However, as house price affordability worsens and interest rates start rising, more pressure will be put on renting, with weekly rent likely to rise, so homeownership will remain out of reach for many.”

He continues: “Rents are becoming alarmingly unaffordable due to the lack of available housing; the north-south divide we’re currently seeing in the UK is a clear illustration of this. The London rental market is competitive, with far more prospective tenants looking for properties than actual houses available. This is pushing up rents in the capital, which will continue to put pressure on surrounding areas, including the South East, as Londoners relocate to avoid high rent costs.”1

1 https://www.landlordtoday.co.uk/breaking-news/2016/2/lifetime-cost-of-rent-exceeds-50-000

Tenant evictions reach highest ever level in 2015

Published On: February 12, 2016 at 9:00 am

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An extremely alarming new survey shows that more than 250 tenants were evicted from their rental accommodation in England and Wales during 2015.

Latest Ministry of Justice figures reveal that 42,728 households in rented property were evicted by bailiffs last year. This was the highest number since records began in 2000.

Housing activists point to welfare cuts and the lack of affordable homes for the 2% increase in repossessions in 2015. Over half of these evictions are said to have been by private landlords.

Evictions

Despite the yearly rise, the data also shows that the number of rental properties repossessed actually fell in the final quarter of 2015. 9,775 households lost their home in the three months to December, in comparison to 11,269 in the previous quarter.

In addition, the figures show that the number of evictions rose by 53% in the five years from 2010.

19,093 evictions in England were by social landlords, with 5,919 made by private landlords. A further 16,440 were carried out through the accelerated procedure, which can be utlised by both private and social landlords to evict tenants on assured shorthold tenancies.

Tenant evictions reach highest ever level in 2015

Tenant evictions reach highest ever level in 2015

Repossessions

The borough of Newham in London had the largest rate of repossessions, equivalent to 191 per 100,000 in the region. What’s more, Londoners were most likely to lose their homes, with 16 out of the 20 boroughs with the largest proportion of landlord repossessions located in the capital.

However, the number of repossession claims fell during 2015, to 148,043. Of these, 90,317 were made by social landlords, 20,063 by private landlords and 37,663 were accelerated claims.

‘Today’s figures are clear proof of the devastating impact that welfare cuts and the chronic shortage of affordable homes are having on hundreds of renters every day,’ commented Campbell Robb, chief executive of the housing charity Shelter.[1]

‘Successive Governments have failed to build enough genuinely affordable homes and short-sighted welfare cuts are only making things tougher. The only way to fix this crisis for good is for the Government to commit to building homes that people on ordinary incomes can actually afford to rent or buy,’ Robb added.[1]

Falls

Different figures from the Council of Mortgage Lenders show that repossessions of mortgaged homes were down by nearly half in 2015, to the lowest levels since 2002.

10,200 homes were repossessed during 2015, of which 3,000 were buy-to-let homes. These properties were twice as likely to be repossessed by lenders in the final quarter of the year, at a rate of one repossession per 2,500 mortgages. This was in comparison to one in 5,000 in the homeowners market.

A CML spokesman said that when a homeowner fell into mortgage arrears, the lender would look at a number of options to try and keep the occupant in their home. He said that seeking a repossession, ‘will be the last option,’ for the lender.

Continuing, the lender said, ‘a buy-to-let is taken out by a landlord to invest in property and so is fundamentally different. The borrowers may not have the same range of options. For example, many landlords only borrow on an interest-only basis at the outset, so switching them to cheaper repayments may not be an option.’[1]

‘Lenders must also consider the position of tenants, who may be paying rent to a landlord who is not paying the mortgage. In this case, an option may be to appoint a receiver of rent to fulfil the role of the landlord and ensure that tenants can remain in the property as long as they continue to pay the rent,’ the spokesman concluded.[1]

[1] http://www.theguardian.com/money/2016/feb/11/tenant-evictions-highest-level-england-wales-ministry-of-justice?CMP=share_btn_tw

ARLA receives clarification on extra occupants

Published On: February 11, 2016 at 2:18 pm

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ARLA has finally received clarification from the Government relating to specific features of the Right To Rent scheme.

The firm has obtained guidance on existing tenancies where an additional occupier joins a longer-standing and named tenant.

Statement

In a statement on ARLA’s website, it says that the point of beginning in determining agents’ or landlords’ responsibilities is the Immigration Act 2014 and the official Code of Practice.

Here, it reads that a landlord is not permitted to take any action relating to residential tenancy agreements entered into before 1st February 2016. Also, a landlord is also not required to take action should the tenancy agreement be renewed following that date if the agreement will be between the same parties and there has been no break in their right to live in the premises.

ARLA has questioned the Government over what happens when a renewal has one new occupier in addition to a longer-standing tenant. The firm queried whether an agent has to conduct checks on all existing occupiers or just the new tenant.

ARLA receives clarification on extra occupants

ARLA receives clarification on extra occupants

Response

Communicating the response, ARLA said, ‘The Home Office response to this is that if a different occupier is named on the tenancy agreement then it is a new tenancy in terms of the scheme and a Right To Rent check should be made of all occupiers subject to the scheme.’[1]

The association also says that there is new ID Guidance, provided by the Home Office. ARLA advises agents who have copies of the ID Guidance printed before the 2nd February 2015 to check against the guidance currently on the site.

[1] https://www.lettingagenttoday.co.uk/breaking-news/2016/2/right-to-rent-arla-gets-clarification-on-extra-occupiers-and-id-guidance

Landlord Insurance Company Seeks Payment from Tenant

Published On: February 9, 2016 at 1:56 pm

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A landlord insurance company is seeking payment from a tenant over damages to a rental property.

The outcome of the case could prove worrisome for generation rent.

Landlord Insurance Company Seeks Payment from Tenant

Landlord Insurance Company Seeks Payment from Tenant

Galina Govina, a scientist, rented a £1m cottage in Wiltshire for £2,800 per month. In 2010, she went away over the Christmas period. While she was away from the property, a pipe burst and flooded the cottage.

Govina later received a bill for £128,000 to cover the damage from her landlord’s insurance company, NFU Mutual.

The case is resting on whether Govina left the heating on to prevent pipes freezing when she was away, as is required by her tenancy agreement. She claims that she did keep the heating on and blames the damage on a “mechanical failure”1.

However, NFU Mutual says Govina turned the heating off, therefore breaching her tenancy agreement. Although the firm has paid the landlord for the damage, it is still pursuing Govina.

Govina is refusing to pay, insisting that the landlord’s insurance policy was in place to protect her from any financial consequences of accidental damage to the property too.

Her barrister, Andrew Butler, warns that victory for NFU Mutual could prove dangerous for many tenants in a similar position in the future.

He says the case is unique, but that it will be “a concern” to anyone living in private rental housing.

He adds: “This was not an uncommon form of tenancy agreement. There hasn’t really been a case like this before in a residential context.

“If the judge finds that the insurance policy didn’t apply for both the landlord and the tenant, that would certainly be a point of concern for tenants.”1

The outcome of the case is yet to be announced. 

1 http://www.telegraph.co.uk/news/uknews/law-and-order/12140902/Physicist-renting-1m-cottage-in-High-Court-test-case-over-128k-bill-for-damage-from-burst-pipes.html

More Housing Benefit Tenants Subject to Universal Credit

Published On: February 8, 2016 at 9:52 am

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Do you have tenants on housing benefit? If so, you must be aware of Universal Credit, the Government’s new welfare system.

More Housing Benefit Tenants Subject to Universal Credit

More Housing Benefit Tenants Subject to Universal Credit

Universal Credit sees six benefit payments, including housing benefit, rolled into one monthly payout. This means that housing benefit will be paid directly to tenants for the first time. Landlords, it is important that you communicate with your tenants about any financial changes.

It is believed that Universal Credit is leading to a rise in rent arrears. Protect your investment with rent guarantee insurance to minimise damage to your lettings business.

Since the New Year, Universal Credit has been rolling out across the country. See the areas it is already in operation here, here, here and here. Remember that we will keep you up-to-date with all of the new areas where benefit claimants will soon be receiving the new payments.

If you have rental properties in any of the following areas, your benefit tenants will now be on Universal Credit:

  • BR1 4, BR1 5 and BR3 1 in Bromley.
  • CR4 1 in Croydon.
  • DA1 3, DA1 4, DA1 5, DA5, DA6, DA7, DA8, DA14, DA15, DA16, DA17 and DA18 in Dartford.
  • DY3 1 in Dudley.
  • GU11, GU12 4, GU14, GU30, GU31, GU32, GU33, GU34 1, GU34 2, GU34 3, GU34 9, GU35, GU51 and GU52 in Guildford.
  • RG7 1 in Reading.
  • SE2, SE3, SE4, SE5, SE6, SE8 3, SE8 4, SE8 9, SE9 2, SE9 3, SE9 4, SE10 8, SE11, SE12 0, SE12 8, SE12 9, SE13, SE14, SE15, SE16 3, SE16 9, SE17, SE19, SE21, SE22, SE23, SE24, SE26, SE27 and SE28 in southeast London.
  • SO24 0 in Southampton.
  • SW2, SW3, SW4, SW8, SW9, SW11 1, SW11 3, SW11 4, SW11 5, SW11 6, SW12, SW16, SW17 8 and SW17 9 in southwest London and Battersea.
  • TS1, TS2, TS3, TS4, TS5, TS7 8, TS8, TS9 7, TS17 7 and TS17 9 in Cleveland/Teesside.
  • WS10 8 in Walsall.
  • WV1, WV2, WV3, WV4, WV5, WV6, WV7, WV8, WV9, WV10, WV11, WV12, WV13 and WV14 in Wolverhampton.