Posts with tag: tenants

Retirees may be Better Off Renting than Taking Equity Release

Published On: May 21, 2019 at 10:01 am

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Categories: Tenant News

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Retirees may be financially better off renting than taking equity release, according to Girlings Retirement Rentals.

The Equity Release Council recently reported that almost £1 billion was withdrawn by over-55s through equity release in the first three months of 2019 – up by 8% on the same period of last year.

The industry body for the equity release sector found that 20,400 customers borrowed against their homes, with the average customer taking out a lump sum of £97,763 to fund everything from home extensions to helping grandchildren get onto the property ladder.

Jamie Turnbull, the Business Director of Girlings Retirement Rentals, says that, while equity release suits some people, there are alternatives, such as downsizing or renting, which could make retirees financially better off.

A recent study from Retirement Villages highlighted that 55% of over-55s would consider renting a home, while 48% would rent with a friend.

Turnbull says: “We have seen a year-on-year increase in the number of people choosing to sell their family home to downsize and rent, instead of buying. One of the main benefits is to have access to all their capital without paying interest, like many people have to do when taking out equity mortgages.”

According to advice website MoneySavingExpert, the typical interest rate for a lifetime mortgage – the most popular type of equity release – stands at 5.1%, which is significantly higher than that of most standard mortgages.

Turnbull believes: “By selling up and renting, people can choose to invest and earn money on their savings, as well as have a lump sum to spend on things like home improvements or helping family. Obviously, with renting, there are no Stamp Duty costs, either.

“Often, when people rent, they can plan their finances more carefully, as they know what their monthly outgoings will be, plus, there are no surprise bills, which can crop up for upkeep and maintenance when people own their home. The main barrier to renting, in our experience, is security of tenure. However, with most of our properties coming with assured or lifetime tenancies, this doesn’t need to be an issue.”

He adds: “Renting enables people to downsize to a more manageable sized property, release capital, save on bills and enjoy additional benefits, such as access to a ready-made community and services they may need when they are older. They can then just get on with enjoying their retirement.”

Welsh Tenant Fees Ban to come into Force on 1st September

Published On: May 20, 2019 at 8:55 am

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Categories: Law News,Tenant Fees Ban

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The Welsh tenant fees ban will come into force on 1st September 2019 for all private rental properties in the country, after it received royal assent last week. 

From 1st September, landlords and letting agents across Wales will no longer be able to charge tenants fees to set up, renew or continue a standard occupation contract, except those explicitly permitted by the Renting Homes (Fees etc.) Bill.

The Welsh tenant fees ban will prohibit landlords and agents charging for the following tasks, amongst others:

  • Accompanied viewings
  • Inventory charges
  • Signing contracts
  • Tenancy renewals

Many landlords may not yet be familiar with standard occupation contracts, but they will replace Assured Shorthold Tenancies (ASTs) in Wales when the Renting Homes (Wales) Act 2016 is introduced – possibly later this year.

The Welsh tenant fees ban means that it will be illegal for landlords and agents to charge tenants anything other than permitted payments, which are: rent, security deposits, holding deposits, utilities, communication services, Council Tax, Green Deal charges, and default fees.

Under the new law, holding deposits will be restricted to one week’s rent, with provisions to ensure their prompt repayment. 

The National Landlords Association (NLA) hopes that the Welsh Government looks closely at the impact of England’s planned five-week security deposit cap and the negative impact that this may have on vulnerable tenants.

The Welsh tenant fees ban will be introduced just three months after the similar Tenant Fees Act is implemented across all private tenancies in England, on 1st June 2019.

To keep up to date with both the English and Welsh tenant fees ban, make sure to regularly check the dedicated page on our site, where you will find the latest information on these legal changes: https://www.landlordnews.co.uk/category/tenant-fees-ban/

Landlords, what are your thoughts on the upcoming tenant fees bans across England and Wales? 

Notable Rise in Middle-Aged Renters Recorded

Published On: May 20, 2019 at 8:00 am

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Categories: Tenant News

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A notable rise in middle-aged renters has been recorded by property developers and letting agents alike. 

Rising UK house prices have left many middle-aged renters unable to afford to buy, or stuck in rental housing after a relationship breakdown. This means that significantly more middle-aged households are now renting from private landlords than they were a few years ago.

Given that there is such a focus on supporting young first time buyers into homeownership, many middle-aged renters now risk being ignored, which may partly explain why professional landlord Grainger has seen a notable rise in the number of people in their 30s and 40s embracing renting.

Helen Gordon, the Head of Grainger, says that her firm has noticed an increase in the amount of middle-aged renters aged between 35-44, especially in London.

“That is partly because our flats are seen as an attractive alternative to people priced off the housing ladder,” she believes. “But there has also been a mindset change in society: not everyone feels the need to own anymore.”

In addition, research commissioned by Intus Lettings earlier this year found that there had been a 15% rise in the number of people aged 35-54 renting their homes in the past three years, as middle-aged renters struggle to get a mortgage.

The study also revealed that less than a fifth of tenants aged 55+ believe that they will ever be able to afford to buy their own homes.

Reasons included general affordability and problems getting a mortgage, due to age.

Hope McKendrick, the Lettings Manager at Intus Lettings, commented: “With the cost of rent rising faster than wages, it’s no surprise that an increasing number of people find themselves unable to save up for a deposit to buy a home well into their 40s, 50s and beyond.

“The survey results revealing that a large proportion of older renters don’t believe they’ll ever be able to buy a home is a particularly worrying trend, as only around one-in-five middle-aged tenants feel renting actually suits their lifestyle.”

She added: “Given that nearly half of renters aged between 35-54 live with their children, the pressures can mean added stress for parents and families.”

Proportion of EU Nationals Renting in the UK Plummets by a Fifth

Published On: May 17, 2019 at 9:26 am

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Categories: Tenant News

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The proportion of EU nationals looking for homes to rent in the UK has plummeted by a fifth, according to data from Goodlord.

The study, based on analysis of the 150,000 tenancies processed through Goodlord’s lettings platform, found that the proportion of EU nationals renting property in the UK dropped from 18.5% of all tenancies in March 2018 to just 14.9% in March this year.

Goodlord found that there has been a net reduction in the number of EU nationals signing tenancy agreements each month since March 2018, with the greatest declines coming from citizens of Ireland, Poland and France.

In contrast, the amount of new tenants from non-EU countries has remained fairly steady, with only a small decline of 1.5% year-on-year. The proportion of tenants from China dipped, although those from the USA increased.

It comes after analysis by reallymoving.com identified a drop in EU nationals buying homes in the UK.

William Reeve, the Chief Executive of Goodlord, says: “The referencing checks Goodlord has been doing on the hundreds of thousands of tenants going through our technology platform paint a very clear picture of the impact that Brexit is having on the UK property market.

“Over the past year, there has been a 20% decline in the number of EU nationals taking up rental tenancies in England.”

He continues: “The figures clearly show a much steeper decline in EU nationals compared to those coming from further afield, where the numbers have held almost steady. This represents a real worry, not just for landlords, but for the wider economy. The talent and spending power of Europeans is being taken elsewhere.”

Landlords, have you seen a decline in EU nationals looking to rent your properties? If so, how does this compare to the number of tenants from elsewhere in the world? 

Increase in Tenant Activity Expected in June for England

Published On: May 16, 2019 at 8:54 am

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Categories: Tenant Fees Ban,Tenant News

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With the Tenant Fees Act coming into force on 1st June in England, letting agents and landlords are being warned to prepare for an increase in tenant activity.

No Letting Go, provider of inventory services in the UK, says that many tenants are waiting to move homes after 1st June, in order to avoid paying any upfront fees and to benefit from capped security and holding deposits.

This warning follows recent research from The Deposit Protection Service (DPS) suggesting that tenants could be delaying their move until the Tenant Fees Act officially becomes law in a couple of weeks’ time.

According to the study, rents dropped during the first quarter of 2019, which meant that the average rent across the country during the first three months of the year had fallen to £757. This is a drop of £5 (0.64%) from the last quarter of 2018 and £14 (1.87%) from the first quarter of if 2018.

The DPS has said that this drop-off is down to a range of economic factors, as well as a period of ‘tenant inactivity’ leading up to the fees ban.

Nick Lyons, CEO and Founder of No Letting Go, says: “It’s no surprise to see shrewd tenants delaying moves until after the fees ban and deposit caps are introduced on 1stJune.

“The upfront cost of moving between rental homes can be high – particularly in London and the South East – so renters will do anything they can to keep costs down, even if that means putting their move on hold for a few months.

Lyons has said that although this recent dip in activity may have allowed extra time for agents and landlords to prepare for the new system, they should expect a significant increase in tenant activity from June onwards.

Lyons also commented: “Tenants are likely to have continued searching for properties over the last few months and will be keen to push their moves through as quickly as possible so they can be settled in their new property for the majority of the summer months.”

No Letting Go also wants to remind landlords that once the five-week deposit cap is enforced, an independently compiled inventory will be even more valuable towards protecting their investment. 

Lyons said: “Inventory reports confirm the condition of a rental property at the beginning and end of a tenancy. The presence of this document provides landlords with the evidence to make fair deductions for damage and lost items.

“With the fees ban likely to reduce average deposits in some areas, it’s vital that landlords have peace of mind that their property is protected by an inventory that can support them in the event they need to make deposit deductions.” 

A Third of Scottish Tenants have No Plans of Buying a Home

Published On: May 8, 2019 at 8:58 am

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Categories: Tenant News

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Almost one in three Scottish tenants have no plans to ever buy their own homes, mainly because they are happy living in private rental housing, a new study has found.

The Tenant Research Survey, conducted by SafeDeposits Scotland, found that around 30% of Scottish tenants do not plan to ever own a property.

The research asked tenants about their experiences in the private rental sector and their expectations for the future.

Responses showed that, as well as many not aiming to buy their own homes, 71% said that they see themselves renting for the foreseeable future.

Victoria Smith, the Chief Operating Officer of SafeDeposits Scotland, says: “What this survey makes clear is that tenants cannot be characterised as a single group of people of a certain age, background or other profile.

“People of all ages and from all walks of life rent for a number of reasons. The responses the survey received revealed that some tenants rent because it works for their educational and professional needs, and is flexible – not just because they can’t afford to buy, as is a common generalisation.”

She continues: “Of course, for some people that is the case, but by no means for all.

“Whether tenancy is an active choice, a long-term or short-term necessity on the way to owning a property, it’s important that tenants understand their rights and responsibilities. The private rented sector in Scotland is diverse and growing. We want to help all parties in the sector to raise standards and ensure that it works for everyone.”

Smith adds: “These survey responses and the interest shown in our Tenant Conference indicate that tenants are becoming increasingly engaged in the private rented sector.”

Are you a Scottish tenant? If so, let us know what you like about living in the private rental sector and whether you think the new rules work for both parties.