Posts with tag: tenants

Rents continue to be driven by lack of supply

Published On: July 28, 2017 at 8:46 am

Tags: landlords,property supply,rental rises,rents,tenants

A severe shortage of properties available continues to push rental prices upwards across the UK, according to the Association of Residential Letting Agents (ARLA).

Over a quarter of letting agents saw rents rise during June, despite a rare increase in supply of rental stock. There was a 31% rise in agents reporting rental rises during the month – the highest level since April 2016.

Supply and Demand

During the past year, the supply of rental stock has increased by 8%, with letting agent managing 190 properties on average per branch in June. Demand slipped however, with an average of 61 new tenants registered per branch – a fall from 65 in April and May.

Landlords are facing more and more pressure, following a raft of recent alterations aimed at halting the rush of investors. These include the 3% stamp duty surcharge and the phasing out of mortgage interest tax relief.

Rents continue to be driven by lack of supply

David Cox, Chief Executive of ARLA, observed: ‘With the cost of living on the rise and inflationary pressures tightening, the last thing tenants need is for their rents to continue rising.’

‘However, the fact that supply looks to be rising, while demand has dropped slightly indicates a move in the right direction for the market. Ultimately, to stop rent prices from increasing too much, we need to find the balance between supply and demand,’ he added.[1]

[1] https://www.landlordtoday.co.uk/breaking-news/2017/7/housing-shortage-drives-up-rents

Rent Hikes have Hit a 14-Month High, Report Letting Agents

Published On: July 27, 2017 at 8:59 am

Author: Em Morley

Categories: Property News

Tags: letting agents,rent prices,rental market,tenants

Rent hikes across the UK hit a 14-month high in June, according to the latest Private Rented Sector Report from ARLA Propertymark (the Association of Residential Letting Agents).

Rent Hikes have Hit a 14-Month High, Report Letting Agents

Rent hikes

The number of member letting agents that saw landlords putting rent costs up for tenants rose to 31% in June – up from just 27% in May.

This is the highest level of agents reporting rent hikes since April 2016, when 31% saw increases.

Lettings law

Predominantly, letting agents would like the new Government to scrap the impending ban on letting agent fees (83%), while three quarters (73%) would also like the Government to focus on improving enforcement for rogue operators.

More than three in five (62%) want the new Government to regulate the sector, while a quarter (26%) think it should provide tax breaks to encourage longer-term tenancies.

Rental stock

The number of properties managed per letting agent branch increased marginally in June, to an average of 190 – up from 189 in May.

Year-on-year, this figure has risen by 8%. In June last year, letting agents managed just 176 properties on average.

Tenant demand

In June, demand from tenants dropped slightly, with an average of 61 new tenants registered per branch. In April and May, agents registered 65 on average.

The Chief Executive of ARLA Propertymark, David Cox, comments on the latest report: “With the cost of living on the rise and inflationary pressures tightening, the last thing tenants need is for their rents to continue rising. However, the fact that supply looks to be rising, while demand has dropped slightly, indicates a move in the right direction for the market.

“Ultimately, to stop rent prices from increasing too much, we need to find the balance between supply and demand. While there’s still a long way to go, if the supply of rental stock continues to increase and the number of tenants searching for new properties drops off, we’ll be making headway towards achieving this.”

Landlords and agents, have you witnessed rent hikes over the past month?

Catch up with what’s going on in the sales market with NAEA Propertymark’s latest report: /homebuyers-pushing-summer-transactions/

Tenancy deposit thefts over £700,000 already in 2017

Published On: July 27, 2017 at 8:48 am

Author: Em Morley

Categories: Property News

Tags: rogue agents,tenancies,tenancy deposits,tenants

Interesting new data has revealed that rogue letting agents were convicted of stealing nearly £700,000 worth of tenancy deposits during the opening half of 2017.

The average total for each theft totalled nearly an eye-watering £50,000, according to renting reformer, Ajay Jagota.

Deposit Thefts

Mr Jagota keeps a running total of the overall cash value of deposits that rogue letting agents have been found guilty of stealing. Jagota publishes these figures on a quarterly basis.

At the end of June 2017, overall thefts for 2017 amounted to £673, 273, with an average theft of £48,091 per conviction.

Now, subsequent convictions have taken this overall total close to £750,000.

15 rogue agents have been convicted of offences surrounding the theft of deposits during 2017, at nearly two per month.

Research from deposit-free renting solution Dlighted last year indicates that £1,018,100 worth of deposits were stolen during 2016. Worryingly, 2017’s figures are set to break past this figure.

Stealing

Ajay Jagota, founder of Dlighted, said: ‘Some are arguing that no reform of the deposit system is necessary. But in the current system agents have managed thefts of at least £700,000 in just six months.’

‘Within the next four years, almost £6billion will be held in tenancy deposit schemes, roughly £4billon of which will retained by letting agents and landlords. Not only is this money missing from the UK economy, it is far too easy for it to go missing altogether.’[1]

Tenancy deposit thefts over £700,000 already in 2017

Offering a solution, Mr Jagota noted: ‘It’s simple – if renting is deposit free, it isn’t possible for people to steal deposits. Not only does deposit replacement insurance better protect property investor’s assets and offer them compensation for legal fees and lost rent – as well as making it easier to find and keep good tenants – it also prevents crime.’

‘The worst part is the almost £2million which landlords and letting agents have been convicted of stealing, is in my opinion and many of those in the industry, nowhere near the true scale of money misappropriated from tenancy deposit accounts with an alarming number of operators apparently happy to use money from tenancy accounts for other business purposes.

Much of this money will be put back, but much of it won’t – and the fact money is missing will only ever be uncovered in the event of company collapse or criminal investigation. The legislation the government will be bringing forward to cap deposits is also the ideal opportunity to do something about this scandalous situation,’ he concluded.[1]

[1] http://www.propertyreporter.co.uk/landlords/tenancy-deposit-thefts-now-top-700000.html

Industry reacts to Government plans to ban leaseholds on new builds

Published On: July 26, 2017 at 11:11 am

Author: Em Morley

Categories: Property News

Tags: leasehold property,leaseholders,new builds,rents,tenants

Yesterday saw the Government outline plans to ban housebuilders from selling new build properties as leasehold in England, following outrage over contracts permitting property owners to pay fees for ordinary works.

Unsurprisingly, the move has been welcomed by a number of property investors and industry peers.

Leasehold Bans

Martin Bikhit, Managing Director of Kay & Co, observed: ‘We welcome the ban for leasehold fees on new build houses. High ground rents substantially increase the cost of a lease extension or the purchase of the freehold of a property, so this proposal will make things much fairer for buyers in the long run.’[1]

Despite the proposals being met with optimism by many, there is still confusion on the future of many existing leasehold homeowners.

It is expected that the Department for Communities and Local Government (DCLG) will consult on what measures it can take in order to support leaseholder facing onerous charges. These include spiralling ground rents.

A DCLG spokesperson said: ‘Under Government plans, ground rents could be reduced so that they relate to real costs incurred and are fair and transparent to the consumer.’[1]

Positive Step

Mark Farmer, Government advisor on construction CEO of property and construction consultancy Cast, said: ‘The government’s plan to ban leaseholds on new build houses in England is a step in the right direction for fixing our broken housing market.’

Industry reacts to Government plans to ban leaseholds on new builds

‘Leasehold agreements for houses and the subsequent ground rents that are charged, artificially distort a housing market that is already struggling with issues surrounding affordability. Banning developers from selling new-build houses on leasehold agreements to drive additional revenue may help recover some of the confidence that the public has lost in the sector.’

Mr Farmer went on to note: ‘Without action on this and the parallel housing quality debate there is a real risk of buyers starting to move away from new build stock which would be a disaster for housing supply.’[1]

Certainty

Camilla Dell, Managing Partner at Black Brick, feels that the planned ban will give both protection and more certainty to buyers of new builds in the future.

Dell stated: ‘When purchasing any property, new build or not, with a long lease, the ground rent should always be peppercorn, but it does come down to the conveyancing process and for the buyers solicitor to carefully check the sales contract and ensure buyers interests are protected.’ [1]

[1] https://www.propertyinvestortoday.co.uk/breaking-news/2017/7/plan-to-ban-leaseholds-on-new-build-houses-is-step-in-right-direction

BBC landlord show serving as eye-opener to industry

Published On: July 20, 2017 at 9:46 am

Author: Em Morley

Categories: Landlord News

Tags: landlords,lettings industry,private rental sector,tenants

A BBC One landlord programme should serve as an eye-opener for the entire lettings industry, according to the Association of Independent Inventory Clerks.

The Week the Landlords Moved In, airing at 9pm on Wednesday evenings, allows landlords the opportunity to spend a week in their tenants’ property, living on their weekly budget.

Serious Issues

The AIIC believes that the single largest issue uncovered by the documentary series is the lack of communication between landlords, their management companies and tenants.

In the first two episodes of the series, problems ranged from mould and damp, to broken windows and leftover rubbish.

Living their tenants’ daily life has proven to be an eye-opening experience for all landlords taking part in the series. The AIIC says that the documentary should serve as a wakeup call for the entire industry.

Communication

Danny Zane, Joint Chair of the AIIC, noted: ‘It’s been interesting to watch this series and see that arguably the most significant problem for tenants, landlords or those managing rental properties is a lack of communication.’

‘Tenants failing to report maintenance issues or their landlords or managers failing to deal with requests resulted in some fairly serious problems in these properties which could have been avoided with better communication.’

‘One landlord taking part in the show noted that he would no longer be going on the ‘happy assumption’ that tenants would call him if there was a problem.’

‘Alongside a lack of communication, another issue raised by the series is a lack of site visits and inspections. When the landlords taking part in the programme actually visited their properties, the true extent of some of the problems became instantly apparent.’[1]

BBC landlord show serving as eye-opener to industry

Inspections

The programme highlights the paramount importance of mid-term inspections. These are crucial in helping landlords assess how the condition of their property has altered in comparison to the inventory conducted at the start of the agreement. In turn, this will lower the chance of any disputes at the conclusion of the tenancy.

Emma Glencross, Joint Chair AIIC, stated: ‘Mid-term inspections and regular site visits to rental properties are essential. If landlords and property managers can attend to problems quickly, this is better for the tenant and the long-term condition of the property. It’s well-known that small maintenance issues left to get worse over a long period of time could end up costing a landlord a significant amount of money at the end of a tenancy.’[1]

Danny Zane concluded by saying: ‘It’s positive that this series has been given a primetime slot on BBC One as it will hopefully act as a reminder to both tenants and landlords that communication is all-important and maintenance issues should be reported and dealt with as swiftly as possible.’[1]

[1] http://www.propertyreporter.co.uk/landlords/aiic-bbc-landlord-show-is-an-eye-opener-for-the-industry.html

Developers call for professional approach to drive up BTL sector standards

Published On: July 20, 2017 at 8:54 am

Author: Em Morley

Categories: Landlord News

Tags: build to rent,Buy-to-Let,landlords,private rental sector,tenants

The most recent English Housing Survey published by The Department for Communities and Local Government has underlined the need for improved standards in the market.

More than one-quarter of homes in the private rented sector were found to have failed to meet the Government’s Decent Homes standards. This has led to calls for a more professional approach in order to improve conditions, from many developers of Build to Rent housing.

Substandard

28% of properties in the sector are currently considered to be in a substandard condition – taking into account electrical safety, disrepair, damp and other factors. However, there is a marked improvement from a decade ago, when this figure stood at 47%.

Worryingly, the survey revealed that nearly one in five of those living in the private rental sector lacked basic fire protection, such as smoke alarms. This is alarming considering that the number of private renters has nearly doubled during the last ten years.

In addition, the survey indicates that a number of people renting from a private landlord suffer from a lack of security. This is highlighted by the fact that nearly two-thirds of tenants evicted from their property were pushed out as their landlord wanted to use or sell the accommodation.

Security

As Jean Marc-Vandevivere, Chief Executive of PLATFORM, notes: ‘The issues across the private rented sector are often ones of security, from tenancy length to fire protection.’[1]

‘Those in the build to rent sector have a vested interest in keeping hold of their tenants and ensuring that the homes we provide are to the highest possible standard. The continual growth of the private rented sector demands a change in approach, we need to see a shift towards professionally managed homes that provide what renters are really looking for, a secure place to live and grow.’[1]

Developers call for professional approach to drive up BTL sector standards

Dissatisfaction

Johnny Caddick, managing director at Moda Living, observed that the results of the survey found that dissatisfaction rates of those living in the private rented sector was the greatest of any tenure group.

With over 20% of tenants unhappy with their accommodation, this is a greater rate than 10% for social housing a 1% of owner occupiers.

Mr Caddick said: ‘The many real concerns people have around renting are totally justified, but our aim is to address all of these with purpose-built developments that are managed 24/7 and which engender a real sense of community.’

‘We have a commercial imperative to do things properly, whereas traditional buy to let landlords have little incentive to maintain and upgrade knackered old properties. Renters in Britain deserve a better deal – as they receive in the U.S. and Europe.’[1]

[1] https://www.propertyinvestortoday.co.uk/breaking-news/2017/7/–professional-approach-needed-to-drive-up-standards-in-prs-claim-btl-developers