Posts with tag: tenants

Supply of rental stock rises – as do rents

Published On: July 7, 2017 at 10:59 am

Tags: landlords,properties,rents,supply,tenants,UK rental market

New research from online property portal Rightmove suggests that there are more properties available on the market in the UK rental sector. However, rents are continuing to increase.

Figures from the report suggest that supply outside of London rose by 7% during the second quarter of 2017, in comparison to the same period last year. In the capital supply actually increased by 8%.

Rental Rises

Despite the increased choice for would-be tenants, asking rents are continuing to increase – rising by 2.8% outside of London in comparison to the opening quarter of the year. Now, rents amount to £790 per month on average.

Inside of London, asking rents fell by 0.2% quarter-on-quarter, averaging at £1,934 per month. Rental prices here are now 3.2% lower than the peak of £2,020 per month at the same period on 2016.

Choices

Rightmove’s data suggests that regions such as Ascot, Bath, Leeds and Birmingham offer some of the largest concentrations of available properties for tenants in Britain.

These findings were based upon regions with the highest number of available rental properties, as a proportion of total housing stock in these regions.

The figures can be seen in the table below:

Rightmove

Best choice for renters by region (source: Rightmove)

An increase in choice has come as a slight surprise, given the recent tax changes set at deterring landlords from the sector.

Supply of rental stock rises – as do rents

Investment

Sam Mitchell, Head of Lettings at Rightmove, observed: ‘Many thought that rental supply would constrict this year, as landlords sold up and looked to invest their money elsewhere, but clearly this isn’t happening yet. Perhaps landlords are re-mortgaging their buy to let properties instead, as they still feel it’s a better investment than looking to other industries.’[1]

‘It could spell good news for tenants coming to the end of their lease as they might find there is slightly more choice than last year. Anyone hoping for a drop in prices due to the extra choice will be disappointed though as rents are following a very similar trend to previous years,’ she concluded.[1]

[1] http://www.propertywire.com/news/uk/supply-rental-properties-rises-uk-rents-still-going/

RSPCA and Cats Protection Voice Concerns on Tenancy Deposit Cap

Published On: July 7, 2017 at 9:25 am

Author: Em Morley

Categories: Property News

Tags: pets,tenancy deposit cap,tenancy deposits,tenants

RSPCA and Cats Protection Voice Concerns on Tenancy Deposit Cap

Following the announcement in the Queen’s Speech that the new Government will introduce a tenancy deposit cap, landlords have raised concerns over whether it will restrict tenants with pets finding rental properties.

Now, the RSPCA and Cats Protection have also voiced fears that the cap will reduce tenants’ flexibility to provide a higher deposit to cover the likes of pet damage.

The Assistant Director of External Affairs at the RSPCA, David Bowles, says: “We have yet to see this bill and will be looking to work with the Government to ensure there are no unintended consequences for pets within the legislation designed to improve tenancy conditions.

“Pets are part of our families and, as well as being wonderful companions, also bring us many benefits for our health and general wellbeing. We encourage landlords to allow tenants to take pets into homes, as it causes a lot of distress and upset when families aren’t able to take their pet with them, and charities such as the RSPCA are left picking up the pieces.”

He adds: “We have produced booklets for housing agencies and landlords, giving them useful and practical advice.”

Cats Protection’s Advocacy and Government Relations Officer, Madison Rogers, also comments: “As more and more people are living in privately rented accommodation across the UK, some owners are being forced to give up their cats, and others who would like a cat are denied the opportunity. Cats Protection believes that people should not be deprived of having the companionship, love and affection that a cat can bring to a household, and we are currently conducting research to find out the extent of the issue.

“We would also encourage housing providers and landlords to have responsible and reasonable cat policies and tenancy clauses, which could include the requirement for cats in tenanted property to be neutered, microchipped and vaccinated, as well as limits on the number of cats that can be owned per household.”

Would the tenancy deposit cap affect your flexibility in accepting tenants with pets?

Avoiding the Growing Trend of Rent Arrears

Published On: July 7, 2017 at 8:11 am

Author: Em Morley

Categories: Landlord News

Tags: evictions,rent arrears,tenants

James Davis – Portfolio landlord and property expert

In today’s article, James Davis, CEO and Founder of online letting agent Upad, highlights the increasing importance of selecting tenants based on affordability given the growing cases of rent arrears.

Avoiding the Growing Trend of Rent Arrears

Avoiding the Growing Trend of Rent Arrears

Landlords and tenants are in a financial tug of war. While property owners struggle with growing rent arrears, renters are taking on too much expenditure. The worst possible eventuality is when this dynamic breaks beyond repair, leaving both sides with legal fees to pay and new relationships to build.

In London, up to 60% of young professionals’ take home pay is being spent on rent. While this doesn’t necessarily represent the rest of the UK, it is a trend that we do not want to emulate.

If you think about the modern tenant lifestyle, there are many new and incremental outgoings that most tenants forget to account for. Whether it’s a Spotify subscription or increasing student loan repayments, renters are now committing to more standing orders than ever before. In fact, the growth in unsecured debt such as loans, credit cards and overdrafts is nearly £10,000 per household.

As a result, I’d recommend that rent should be no more than 30% of a tenant’s net pay. This will allow a financial buffer for any unforeseen monthly payments.

Fail Without the Detail

Evictions are expensive. To rise above this worst case scenario isn’t easy, but it is necessary, especially if you are one of many landlords who owns multiple properties. Multiple evictions are really expensive and time consuming.

From the beginning of a tenant search, landlords must ask the right questions about income and help their tenants to understand the impact of local bills and taxes on their monthly living costs. It is also important to revaluate risk throughout a tenancy, continuing to communicate with tenants about their situation and employment.

Most importantly, you need to nip problems in the bud. When a tenant doesn’t pay or you notice that they have stopped responding to calls, take a soft but direct approach to understanding more about their situation. Do this yourself, as tenants are less likely to respond to impersonal, automated agency emails. A tenant will be much more likely to work with you to resolve a short-term cash flow problem if you approach them with an open mind, rather than an assumption that they’ve just stopped paying rent.

Is Deposit-Free Renting on the Horizon? One Campaigner Thinks So

Published On: July 5, 2017 at 9:21 am

Author: Em Morley

Categories: Landlord News

Tags: deposit-free renting,tenancy deposit cap,tenancy deposits,tenants

Deposit-free renting could be on the horizon, according to deposit reform campaigner Ajay Jagota, of Dlighted.

Is Deposit-Free Renting on the Horizon? One Campaigner Thinks So

With almost 5.8m households expected to be living in the private rental sector within four years, the amount of cash sitting in tenancy deposits is set to surge by around 40% – and that’s despite Government plans to cap security deposits to just one month’s rent, as announced in the recent Queen’s Speech.

Jagota believes that with the average UK tenant currently needing £967 for a deposit, around £5.8 billion worth of funds will be held as tenancy deposits by 2021, reflecting predicted growth of around 24% in the number of households renting privately.

Jagota described the figure as “the absolute scandal of wasting money to fill the funding gap on social care on literally nothing”.

The figures, from a survey conducted by Knight Frank, also show that 37% of tenants now rent out of choice rather than necessity, with renters naming the flexibility and fewer responsibilities of renting as primary reasons for not purchasing properties of their own.

The study also found that 68% of tenants still expect to be living in the private rental sector in three years’ time.

Jagota insists: “Tenancy deposits are a blatant economic inefficiency in serious need of Government intervention – an intervention which could save almost six million renters an average of £1,000 by the time of the next election.

“The £3.5 billion already is an eye-watering figure enough, but the £5.8 billion it could rise to within five years is monstrous. With 97% of deposits unnecessary, this is an absolute scandal.”

He believes: “I’m not convinced a deposit cap goes anywhere far enough, but I believe the industry has to accept that this is just the first step.

“I predicted pre-election that tenancy deposit reform is now irrevocably on the agenda and, even just this week, deposit-free renting was proposed in an influential blog by leading property academic Professor Brian Sturgess.

“The tide is turning in favour of deposit-free renting, and those of us who have worked so hard to put reform on the agenda – even when it has not been a very popular attitude in our industry – are entitled to feel a little vindicated.”

Jagota claims: “There are an infinite number of better ways all that money could be spent, and by abolishing outdated tenancy deposit schemes with deposit-free renting and landlord insurance, we can save renters a fortune while giving landlords better protection and boosting our economy, or facilitating generation rent onto the housing ladder via transfer of funds into Help To Buy ISAs.”

Do you agree that deposit-free renting is on the horizon? And is this a good thing?

Rise in the number of retiree tenants recorded

Published On: July 4, 2017 at 8:47 am

Author: Em Morley

Categories: Property News

Tags: property,renters,retiree renters,tenants

A new report from letting agency Countrywide has revealed that there has been a substantial rise in the number of retiree renters.

Data from the analysis shows that retirees have paid a total of £3.7bn in rent during the last year – a rise of 200% in comparison to the £1.2bn paid in 2007.

In addition, the research highlights that retired people now make up 8% of all private tenants, a rise of 5.2% in comparison to ten years ago.

Older Tenants

Households aged over 65 presently account for nearly 12% of all those living in the private rental sector, with this figure set to increase.

Girlings Retirement Rentals believe that this increase can be attributed to changing attitudes and perceptions to renting by the older generation. The firm has seen a steady growth in the number of enquiries received since 2002, with figures seen in 2015 and 2016 the highest on record.

The survey from Countrywide suggests that there are several reasons that the over 65s wish to downsize in their retirement. 34% of respondents said that they would move should they come to need more support, while 33% wanted lower property maintenance.

26% cited wanting fewer stairs for their reasons. Others highlighted wanting to live in a smaller house, reducing their outgoings and having a smaller garden to keep on top of.

Rise in the number of retiree tenants recorded

Pipe Dream

However, moving is but a pipe dream for many, with 42% believing there is a lack of suitable properties in the UK in which to move into.

Peter Girling, Chairman of Girlings Retirement Rentals, noted: ‘As people get older they want different things from a home and the option to downsize is something many would consider. Renting in a specialist retirement development is becoming a popular lifestyle choice. We offer properties on assured tenancies, so people have security of tenure which is very important for older people.’[1]

‘Renting enables people to step off the property ladder, sell their homes and release capital to help fund retirement. They can downsize to a more manageable sized property, with added support services included in the rent – and be free from the burden of property maintenance or upkeep,’ he added.[1]

[1] https://www.landlordtoday.co.uk/breaking-news/2017/2/sharp-rise-in-number-of-older-tenants

Landlords Should be Cautious of Using Family Members as Rent Guarantors

Published On: July 3, 2017 at 9:29 am

Author: Em Morley

Categories: Landlord News

Tags: Brexit,guarantors,rent arrears,tenants

Landlords should be cautious of using family members as rent guarantors post-Brexit, urges Housing Hand, the UK’s only secured and reliably insured guarantor service for students and working professionals.

The latest figures on unsecured debt and average wages in the UK shows that, post-Brexit, the economy is stalling and household debt is impeding.

Landlords Should be Cautious of Using Family Members as Rent Guarantors

Data from the Trades Union Congress (TUC) reveals that unsecured debt is set to reach a record high of £13,900 per household in 2017 – a huge sum. Average annual wages stand at less than £28,000, despite low interest rates.

People have been borrowing to spend on credit cards, store cards and personal loans. So, even if you are a homeowner, they may not be reliable rent guarantors.

According to Housing Hand, landlords run the risk of using a family member as a UK guarantor, as there is no guarantee that the rent will be paid in the event of a tenant defaulting.

The Managing Director of Housing Hand, Jeremy Robinson, says: “We are currently working with landlords and agents across the UK to stand as guarantor for tenants, many of whom are international students, professionals from overseas, and young working singles and couples.

“We provide a service for tenants who may have a poor to zero credit rating, supported by a guarantor liability insurance policy. This ensures that the rent payments are paid in the event of the tenant defaulting on the rent.”

He continues: “We offer landlords and tenants reduced financial risk and, for both, a widening of what is available on the market. For landlords, this is access to a wider range of tenants that wouldn’t otherwise be able to meet the standard criteria. This includes the huge potential market of international tenants and the previously too risky market of tenants with poor credit history.

“Both landlords and letting agents who are partnered with Housing Hand have been able to increase occupancy, due to a larger pool of creditworthy applicants and have been able to eliminate the risk of rent loss, due to tenant default, at no cost to them. We also provide a complimentary house-finder service, which connects accommodation providers to tenants and vice versa. This means live tenant leads are sent to accommodation providers directly.”

Robinson explains: “One of the biggest problems tenants face when renting a property is not having a UK guarantor. This is a huge worry for tenants who are not able to pay six to 12 months in advance to secure their rental property. Tenants who are unable to provide a quality UK guarantor can, provided they pass the Housing Hand application process, purchase our guarantor service.

“Now landlords have an alternative to personal guarantors, with guaranteed income for the length of the tenancy. They also don’t need to turn away potential tenants who can’t pay considerable amounts of rent up front, as we can become their guarantor. We have a seen a significant rise in the number of tenants that are using our service, particularly in London and the South East. More and more landlords are using us as a guarantor instead of a family member, which they have traditionally done.”

Sherard James, the Acting Head of Corporate Services at Kinleigh Folkard & Hayward, also comments: “We have many international students and overseas professionals applying for our properties. However, a large proportion of these applicants are unable to supply a UK rent guarantor. Usually, if a student is unable to provide a UK guarantor, an advance of an additional six months’ rent is usually required to secure the property. This can be problematic, as many tenants cannot afford such a large upfront sum.

“Thanks to our partnership with Housing Hand, we have been able to offer a solution with Housing Hand acting as their UK rent guarantor. Our landlords are happy, as we now have a larger selection of tenants to offer them and the tenants are happy, as they can afford to rent. It costs the tenants a minimal fee and landlords benefit from guaranteed monthly rent for the duration of the tenancy. It’s a win-win.”

Landlords, be wary of using family members as rent guarantors and look into possible alternatives.