Posts with tag: tenants

Residential Rents In UK Rise By 2.5% in 2015

Published On: February 1, 2016 at 12:51 pm

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The latest data released by the Office of National Statistics indicates that private rental prices paid by tenants in the UK increased by 2.5% in the year to December 2015.

Prices increased by 2.7% in England, 0.7% in Wales and in 0.9% in Scotland. In London, prices increased by 3.9%.

English Increase

More detailed figures from the report show that since January 2011, rental prices in England have risen more than those in both Wales and Scotland. Indeed, the annual rate changes recorded in Wales continue to be less than the average for Great Britain.

Since the start of 2012, English rental prices have shown yearly increases of between 1.4% and 3%. In the 12 months to December 2015, rental prices rose in each of the nine regions of England. Unsurprisingly, the largest rises were in London, followed by the East and South East with 2.8%. Rental prices in the capital have been stronger than those recorded in the rest of England since 2010.

Overall, the rental market in the country showed signs of continued strength in the final quarter of 2015, with prices increasing 2.5% in the year to December. However, this was a slowdown of 0.2% in comparison to figures released at the end of quarter three.

Residential Rents In UK Rise By 2.5% in 2015

Residential Rents In UK Rise By 2.5% in 2015

Slows

This slowdown can be attributed in part to Scotland, where prices increased just 0.9% in the year to December 2015, a fall of 0.7% compared to the annual growth rate in September.

Additionally, conditions in the housing market in general may have had an effect on the rental market. House price growth has typically been greater than rental rises for a number of years.

Demand however remains high, with statistics released by RICS indicating that those interested in renting accommodation rose again in the three months to December. However, new landlord instructions fell.

Right To Rent rolls out nationally TODAY

Published On: February 1, 2016 at 10:14 am

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Today sees the Right To Rent scheme roll out across the whole of England.

Landlords are now required to check the immigration status of all new tenants before agreeing a tenancy, with fines of up to £3,000 for those who rent to someone without the right to live in the UK.

Criticism

The scheme has received plenty of criticism and has already seen problems during its trial period in some parts of the West Midlands.

As the scheme launches nationally, the Residential Landlords Association claims that 90% of landlords have not been given any information from the Government on their new obligations.

In its survey of more than 1,500 landlords, the RLA found that a lack of correspondence from the Government is leading to widespread confusion on how the checks are to be carried out.

Responsibilities

72% of respondents to the survey said they do not understand their responsibilities under the scheme. As a result, many are likely to refuse accommodation to those who cannot easily prove their right to live in Britain.

44% said that they would only rent to those who were in possession of documents familiar to them. This is likely to cause huge concerns to the estimated 17% of UK nationals without a passport.

The RLA is calling for a more thorough investigation of the pilot scheme, which noted that there was only, ‘limited evidence,’ that it was putting off illegal immigrants from attempting to access rental housing.

Dr David Smith, Policy Director for the RLA, observed, ‘the Government argues that its right to rent plans form part of a package to make the UK a more hostile environment for illegal immigrants. The evidence shows that it is creating a more hostile environment for good landlords and legitimate tenants.’[1]

Right To Rent rolls out nationally TODAY

Right To Rent rolls out nationally TODAY

Difficulties

Smith feels that, ‘landlords are damned if they do and damned if they don’t. Fearful of a fine they face two difficult ways forward. They can play it safe and take a restrictive view with prospective tenants, potentially causing difficulties for the 12 million UK citizens without a passport. Alternatively, they may target certain individuals to conduct the checks, opening themselves up to accusations of racism.’[1]

‘The Government’s own evaluation of its pilot scheme noted that there was only limited evidence that the policy is achieving its objectives. Given the considerable problems it will create for tenant-landlord relations it’s time for the Government to think again,’ Smith added.[1]

Penalties

Figures obtained from the Home Office by law firm Simpson Millar indicate that just nine civil penalties were served to landlords under the Right to Rent pilot scheme, between 1 December 2014 and 19 November 2015.

‘Given that the pilot covered an area with more than 2 million people it is hard to see how the scheme has had any significant financial impact at all, ‘said Sumita Gupta, head of immigration at Simpson Millar in Manchester. ‘Rather, it has the potential to create a culture of fear and discrimination.’[1]

Concluding, Millar said, ‘there will be rogue landlords who won’t care about undertaking the required document checks; they could view this new scheme as an opportunity to exploit a very vulnerable group of people who might otherwise find it difficult to secure accommodation and end up homeless

[1] https://www.landlordtoday.co.uk/breaking-news/2016/2/right-to-rent-goes-live

One-third of tenants frustrated by home buying barriers

Published On: January 31, 2016 at 9:42 am

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33% of private tenants in Britain have been thwarted in their attempts to purchase their own property and have stayed in rented accommodation longer than they had originally planned, according to new research.

Frustration

Experian’s latest analysis of 1,500 renters in the UK suggests that many are frustrated first-time buyers.

18% of private tenants said they believed they wouldn’t be accepted for a mortgage with 10% saying they faced struggles in raising a deposit, thus delaying their plans to purchase. A further 5% said they had been held up with a mortgage agreement, prolonging their time in the private rented sector.

In spite of making regular payments as part of their tenancy agreement, many renters do not see this reflected on their credit score in the same way as mortgage holders.

‘Many would-be first time buyers face the challenge of saving for a deposit on a home while paying rent each month,’ observed Jonathan Westley from Experian. ‘While our research also shows that a significant amount of people are happy to rent in the long-term, whether it’s because they enjoy a good relationship with their landlord or the flexibility of rented accommodation.’[1]

One-third of tenants frustrated by home buying barriers

One-third of tenants frustrated by home buying barriers

 

Plans

25% of tenants surveyed intend to purchase a place of their own in the near future. 9% said that they were currently saving for a deposit, believing that this will be achievable within 18 months. 16% said they would need between two and five years to gain the necessary deposit.

On the other hand, one-third of renters said that they were content in the sector and had no plans to own a home of their own.

Would-be first time buyers that have been thwarted in their attempts to get a foot on the housing ladder are most-likely to be single parents or couples with young children. Three-quarters of this group said they would like be see rental payments contribute to their credit report.

Those who are happy to rent or live alone or with other adults are less likely to see rent as ‘dead money.’ 26% of happy renters disagree when asked if renting is a waste of money, in comparison to 16% of private renters.

[1] http://www.propertyreporter.co.uk/property/17m-tenants-frustrated-by-home-buying-hurdles.html

 

 

Evicted tenants should be compensated-Generation Rent

Published On: January 28, 2016 at 11:47 am

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Generation Rent, the campaign group, has called for another controversial legislation to be added to the sector.

The group is asking for tenants who have been served notice to leave a property to be fully compensated by their landlord or letting agent.

Faultless

A lack of stability in privately rented housing means that more than one quarter of tenants could expect to lose their homes, through no fault of their own.

An investigation by BMG research found that 27% of current and previous tenants had been evicted by a landlord who wanted to either sell, refurbish or change the usage of a property. Another reason for eviction was found to be an unaffordable rent increase.

The most common reason for tenants losing a home was the landlord deciding to sell up (14%.) This was followed by 7% who said that soaring rents had forced them out.

However, 51% of respondents said that they were not aware that private landlords can evict tenants without giving a reason. 63% of people questioned said that private tenants, who had not broken the terms of their agreement, should be allowed to stay in their property.

Evicted tenants should be compensated-Generation Rent

Evicted tenants should be compensated-Generation Rent

Compensation

66% feel that abiding tenants forced out of their home should be compensated for the cost of moving to their new property, including 80% of private renters. 75% believe private landlords should be banned from raising their rents by more than the rate of inflation.

With the Housing Bill slowly passing through Parliament, Generation Rent has called on the Government to adapt the eviction law in order to prevent honest tenants who face losing their property a right to compensation. This, the group feels, will also deter landlords from evicting tenants in the first place.

‘Every time a renter moves home they spin the roulette wheel,’ notes Betsy Dillner, director of Generation Rent. ‘They might well get a good landlord who values long-term tenants, but this poll suggests that one in four of us will end up with a bad one sooner or later.’[1]

‘With increasing numbers of us facing a lifetime of renting, we need to be able to call the place we live a home and we can’t until the Government ends unfair evictions,’ she added.[1]

[1] https://www.landlordtoday.co.uk/breaking-news/2016/1/generation-rent-calling-for-compensation-for-evicted-tenants

 

Scottish rents rise in December

Published On: January 27, 2016 at 10:08 am

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The most recent Scotland Buy-to-Let Index from Your Move indicates that there was a surprising end of year increase in Scottish rental growth.

Data from the report shows average residential rents north of the border rose by 0.4% in December-the highest monthly rent rise recorded since June. In addition, this was a more substantial rise than the 0.1% in November.

Rises

This increase brought the average monthly rent in Scotland to £548.

Annually, rental growth is also starting to show considerable rises. Year-on-year rental growth had been on the decline since June 2015, where they stood at 3.1%. December however marked an upturn in annual growth, with Scottish rents now on average 2.2% greater than one year ago, up from 1.4% in the twelve months to November.

‘On average, Scottish rents closed the year £12 higher per month than where they started,’ observed Brian Moran, lettings director at Your Move Scotland. He said, ‘that could stack up to a not inconsiderable £144 extra for some tenants over a twelve month contract. As we enter 2016, it’s encouraging news that the majority of Scottish tenants can afford higher rents-and that arrears have dropped for the second month in a row in December.’[1]

Scottish rents rise in December

Scottish rents rise in December

Reignited

Moran feels that, ‘Scottish rent rises have been ignited again recently by the improvement in wages and the gains made in the jobs market, while the supply shortage continues to fan the flames. Outside of the summer months, the New Year often sees the second biggest cycle of new tenancies and ushers in a busy time for the lettings market.’[1]

‘It’s the period where people typically take up fresh career opportunities and implement new life changes-and this wave is already evident in the uptick of rents over November and December, as savvy tenants act quickly to beat the January rush,’ he continued.[1]

Concluding, Moran noted that, ‘as the year progresses, other artificial factors will come into play. The Scottish Government decision to agree with George Osborne’s extra 3% of duty on the purchase of second homes is likely to distort the natural flow of the market, with any further buy-to-let investment likely to be front-loaded into the early months of the year. Once that deadline passes and if investment into the private rented sector becomes more hesitant, tenants’ rents may become much more exposed to the problem of supply.’[1]

[1] http://www.propertyreporter.co.uk/landlords/scottish-rents-see-end-of-year-surge.html

 

Right to Buy scheme, ‘will erode housing associations’

Published On: January 26, 2016 at 1:58 pm

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Yesterday saw the Government announce that a pilot for the new Right to Buy scheme was to be trialled in five housing association areas.

As part of the pilot, the first housing association tenants can apply for the Right to Buy scheme, which comes ahead of a nationwide rollout later on in 2016. This follows a voluntary understanding between the Government and National Housing Federation to enlarge the Right to Buy scheme to 1.3 million housing association tenants.

Right to Buy scheme, 'will erode housing associations'

Right to Buy scheme, ‘will erode housing associations’

‘Unfortunate’

However, Stephen Smith, Director of Legal & General Housing Partnerships, described the extension as, ‘unfortunate,’ and believes the scheme will reduce the availability of affordable homes.

Smith also noted on that the scheme, ‘will ultimately erode housing associations’ ability to build homes.’ He believes, ‘this will reduce the number of affordable properties available in the UK when we need a greater supply of housing, not less.’[1]

‘Forcing the sale of homes at a reduced market value will ultimately disrupt a well functioning sector, making it harder for housing associations to allocate resources to housebuilding and more difficult for investors to lend to them. We hope that the Government reconsiders this decision before fully implementing it and instead look to other ways in which to produce affordable housing by focusing on the root cause of the housing crisis and tackling supply side issues,’ he concluded.[1]

[1] http://www.propertyreporter.co.uk/property/government-urged-to-reconsider-right-to-buy-scheme.html