Posts with tag: tenants

Immigration Bill to get second reading

Published On: October 12, 2015 at 11:11 am

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Landlords are being reminded to carry out the relevant immigration status checks on their potential tenants, ahead of the second reading of the Immigration Bill in Parliament tomorrow.

Failure to conduct the necessary checks could see many buy-to-let investors facing a prison sentence.

Changes

Since December 1st 2014, the ‘right to rent’ check has been piloted in parts of the West Midlands. In August of this year, the Government announced that the new Immigration Bill would change further the rules on right to rent. Initially, breaches of the Bill were to see landlords face a civil penalty. This has now been altered to include criminal sanctions of up to five years behind bars.

Should the Bill pass its second reading, landlords will be charged with undertaking a more prominent role in the Government’s intentions of cutting down on illegal migrants.

However, a number of landlords and letting agents have raised concerns about the possibility of a prison sentence for property owners, many of whom could be unaware of the changes.

By shifting the responsibility of immigration checks from border guards onto often-inexperienced landlords, concerns are all mounting that some property owners will stay away from tenants who they feel could pose a risk. This in turn is highlighting the possibility of discrimination of some would-be tenants.

Unfair

Andrew Turner, Director at Commercial Trust Ltd, feels that, ‘the Immigration Bill wrongly pushes front line immigration checks onto landlords.’ He said, ‘many landlords will be unaware of the Bill and their new responsibilities and could inadvertently end up facing a prison sentence which is both unfair and unreasonable.’[1]

Immigration Bill to get second reading

Immigration Bill to get second reading

‘At the other end of the spectrum, landlords who become aware of the new Bill and become over cautious could instead open themselves up to challenges on the grounds of discrimination, leaving landlords between a rock and a hard place,’ Turner continued. ‘While the code of practice for avoiding discrimination is welcome, landlords are not trained immigration officials and, in conducting right to rent checks, could find themselves in the precarious position of potentially committing one of two separate offences if they put a foot wrong.  It is also incredibly difficult to disseminate information on new legislation to landlords. The Immigration Bill is just one of many recent and upcoming changes to the legislative environment in which landlords operate, and a concerted effort to advise landlords of their changing obligations and responsibilities is desperately needed in place of the piecemeal approach currently employed’.[1]

Concluding, Mr Tuner noted that, ‘landlords are, after all, running businesses that are vital to the housing infrastructure of the UK. It is the Government’s duty to ensure that landlords have all the knowledge and tools they need before any new laws take effect and that they are not putting unreasonable burdens on the landlord community that may impact their ability to continue to provide housing for so many in the UK.’[1]

[1] http://www.propertyreporter.co.uk/landlords/landlord-prison-sentence-warnings-as-immigration-bill-gets-second-reading.html

 

 

Rental growth soaring in East of England

Published On: October 9, 2015 at 12:27 pm

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The latest Rightmove Rental Trends Tracker shows that landlords in the East of England are seeing the rewards of substantial rental and house price growth in the region over the last year.

Regional rent returns

A total return on investment of over 25% was evident in Halstead, Borehamwood and Brentwood, which make up the top-three investor hotspots outside of the capital.

Regions in Essex and Hertfordshire made up seven out of the top 10 investor hotspots, with Cottingham in Yorkshire representing the only area from the North to make the list.

This strong return on investment has been driven by the East’s annual rental growth soaring ahead of the other UK regions. Rents have risen by 6.4% on last year, in comparison to 4.5% nationally outside of London.[1]

During the last quarter, the East of England has seen rent rises of 2.0%. This was only bettered by the East Midlands, which recorded an increase of 2.1%.[1]

Demand

Sam Mitchell, Head of Lettings at Rightmove, said, ‘we’ve been reporting high tenant demand for rental property in Essex for a while now, so it makes sense that it should feature strongly in our new total return on investment league table.’ He feels that, ‘investors and tenants who’ve been priced out of London and the South East have looked for better value areas in the East and it seems they’ve both found a winning formula.’[1]

‘For example, if you look at the top 10, six of the areas have average asking prices below the national average, making it affordable for buy-to-let investors. From a tenant affordability perspective in the East of England’s average rent for a two beds is less than £900 a month, compared to over £2,000 in London,’ Mitchell added.[1]

Rental growth soaring in East of England

Rental growth soaring in East of England

Rental hikes

Further data from the report shows that rents in England and Wales are up by 1.3% outside of London during the last quarter. In Greater London, rents were up by just 0.2% in the previous three months, in comparison to 1.6% in the same period last year, indicating the affordability ceiling has been reached. The more muted increase could be down to the fact that the numbers of new rental properties in the capital have risen slightly.[1]

Mitchell stated, ‘we know the majority of investors purchase their property portfolio as a long-term investment and as long as they buy wisely they can benefit from both growth in their property values as well as rental yield.’ He notes that, ‘those landlords who bought in the East of England are seeing much higher returns on investment as the region leads the way for rental growth. But with a combination of such high returns for buy-to-let landlords and affordable prices for first-time buyers, demand for property is high and results in a stock shortage problem, as agents in these areas note.’[1]

‘There’ve been concerns raised by the Bank of England about the impact of buy-to-let investors on the property market and the threat to the economy more broadly. This echoes the current government’s policy of increasing taxes, or lowering claimable allowances, for landlords. Yet it’s clear that if landlords exit the market in any great numbers we can expect rents to continue to increase further.  It remains to be seen how much of an impact the new policy will have, but our report demonstrates that in the right areas and with proper advice and management, property remains an attractive investment,’ Mitchell concluded.[1]

[1] http://www.propertyreporter.co.uk/landlords/east-of-englands-annual-rental-growth-races-ahead.html

 

 

Patterson-Bowe warns against sub-letting scams

Published On: October 2, 2015 at 10:47 am

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A leading Knightsbridge based estate agents is urging landlords to be on their guard against a surge of sub-letting scams.

Patterson Bowe has offered advice to letting agents and tenants alike, with the intention of helping them avoid such problems.

Illegal

Many landlords have recently approached Patterson Bowe’s lettings team in search of new tenants, having realised that their properties had been sub-letted illegally, without their knowledge or consent.

As such, the agent is calling on all landlords to carry out thorough diligence checks on all tenants, before signing any contracts.

‘An undersupply and increased demand in the current market has left room for certain tenants to bend the rules where they can,’ said Stuart Patterson, owner and managing director of Patterson Bowe. ‘We have been contacted by both landlords and tenants looking for advice because they have fallen victim to these scams, particularly illegally sub-letting property throughout Prime Central London. Often these are short term tenants who are here from overseas and searching online for temporary accommodation without appropriate knowledge or advice,’ he added.[1]

Patterson-Bowe warns against sub-letting scams

Patterson-Bowe warns against sub-letting scams

Alistair Bowe went on to add that, ‘a quality letting agent will not only have an awareness of these kind of practices, but will also be to provide sound advice to clients on how to avoid them.’ He said that,’ our years of experience have taught us that relying on computerised reference checks alone is not enough to ensure the quality and reliability of tenants. Once we have conducted the usual online checks we also meet each tenant in person to retain in depth background information from them and build a detailed and reliable profile for our clients.’[1]

[1] http://www.propertyreporter.co.uk/landlords/sub-letting-scams-on-the-rise.html

 

Late summer tenancies give London landlords a boost

Published On: September 29, 2015 at 4:05 pm

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Landlords in the capital have been provided with a late summer rental boost, according to a new report compiled by London estate agent Portico.

Research from the organisation suggests that landlords in the region whose tenancies begin in the back end of the summer achieve rents 11% higher than those starting in December.

Increases

The firm suggests that a reason for this surge in prices is down to a 10% reduction of available housing supply in September, combined with a 64% increase in tenant demand. This is primarily driven by the student and graduate markets.

Portico says that it gets double the amount of enquiries per property in September, in comparison to the national average. In addition, the firm said this figure was four times the number of enquiries per property than in December.

Late summer tenancies give London landlords a boost

Late summer tenancies give London landlords a boost

Fluctuation

‘We are advising landlords to take advantage of these seasonal fluctuations which can see rental income boosted,’ said Robert Nichols, director of Portico. ‘With much smaller void periods and higher rents, landlords should seriously consider inserting a break clause at the next renewal point in their tenancies to re-synchronise tenancy dates. A tenancy starting in September is just good business.’[1]

Just last week, a report from the Association of Residential Letting Agents indicated that the supply of rental property fell in August, from an average of 189 properties per agency in July to 178. In addition, the report confirmed that fewer letting agents reported rent increases during the last month.

[1] https://www.landlordtoday.co.uk/breaking-news/2015/9/late-summer-tenancies-provide-london-landlords-with-11-rent-boost

 

 

8 out of 10 tenants satisfied with landlord

Published On: September 29, 2015 at 3:03 pm

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Fresh research commissioned by Paragon Mortgages has revealed positive news for landlords and tenant relations.

The Q2 tenant market analysis, carried out by BDRC Continental suggests that 80% of tenants are currently satisfied with their current landlord. 87% said they felt their rented property was their home, as opposed to a short-term living arrangement. 800 people that are currently privately renting a property in the UK took part in the research.

Homely

Data from the report also shows that the average duration of tenants living in their current rental home is seven years. Their total typical stay in the private rented sector is 12 years.

When quizzed on their long-term housing plans, 35% of respondents said they intend to stay within the private rented sector. 24% said they intend to buy a house in the future. However, the proportion of tenants who citied unaffordability as their main reason for continuing to rent rose from 74%, from 69% in the previous survey.[1]

In addition, the research shows that 65% of tenants believe their rental payment to be either good or very good, in terms of value.

8 out of 10 tenants satisfied with landlord

8 out of 10 tenants satisfied with landlord

Satisfaction

‘This research provides a valuable insight into the sector,’ said John Heron, Managing Director of Paragon Mortgages. ‘There are many surveys of landlords and many academic reports on the Private Rented Sector. There are, however, too few surveys that poll tenants directly on their experience of renting privately.’[1]

Heron believes that, ‘this survey has identified high levels of tenant satisfaction and an appreciation of the good value that rented accommodation can offer across the country.’ He feels however that it is disappointing, ‘to see that affordability constraints are impacting negatively on future choices in housing with less than a quarter of tenants expecting to buy their own home in due course.’[1]

[1] http://www.propertyreporter.co.uk/landlords/8-out-of-10-tenants-like-their-landlord.html

 

 

Rental market showing sustained stability

Published On: September 21, 2015 at 4:46 pm

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Encouraging signs for the rental market have come with the latest Private Rented Sector trends report from Paragon Mortgages.

The latest trend report for Q3 of 2015 suggests that the rental market remains healthy, taking in key indicators such as rental yields, void periods and tenant demand.

Growth

Data from the report indicates that average rental yields have risen slightly over the last three months from 6.3% to 6.4%. This slight increase is in line with the growth seen throughout 2015. When asked to forecast what would happen over the next 12 months, landlords were confident over sustained stability.[1]

There was also good news in terms of void periods, with the report pointing out that the average period of time that privately rented properties stood unoccupied was a historically low 2.6 weeks. Tenant demand is healthy, with more than 50% of landlords describing this as stable, while 40% said it was booming.[1]

Over half of landlords think that demand will increase over the next 12 months, in comparison to 42% who believe that it will remain stable.

In addition, the report shows that there is an increase in families with children moving into the private rental sector, with a decrease in the number of young couples and professionals. Demand for long-term rental agreements however remains fairly low.[1]

Rental market showing sustained stability

Rental market showing sustained stability

Sustainability

‘Our latest PRS Trends Survey data is indicative of a market growing steadily and sustainably over the long-term,’ said John Heron, Director of Paragon Mortgages. ‘With low void periods and steady demand, which is expected to continue growing, yields remain on a gradual upward trend and landlords are confident they will continue to do so,’ he continued.[1]

Heron also said that the data, ‘reveals the changing demographic of those choosing to live in the PRS.’ He feels this is, ‘reflected in the buying intentions of landlords which seems to be shifting away from investing in multi-occupancy blocks, towards terraced housing-often more suited to young families.’[1]

 

[1] http://www.propertyreporter.co.uk/landlords/rental-market-remains-healthy-says-latest-report.html