Posts with tag: tenants

London Tenants Spending 70% of Their Income on Rent and Bills

Published On: June 8, 2016 at 11:36 am

Author:

Categories: Property News

Tags: ,,,,

London tenants are now spending 70% of their average income on rent and essential bills, according to research by London estate agent Portico.

New data analysis by the firm shows that for three-and-a-half out of five working days, Londoners work solidly to pay their rent and other essential expenditure, such as taxes, housing costs and household bills.

The following table details how the typical London tenant’s working week is divided to pay for essential costs:

London Tenants Spending 70% of Their Income on Rent and Bills

London Tenants Spending 70% of Their Income on Rent and Bills

Portico claims that it is not until 1pm on a Thursday that the average Londoner has earned enough to cover all of their essential expenses for the week. They are then left with around £201 of disposable income to be spent or saved as they like – although the firm notes that bills do not include food.

From 10am on a Tuesday until 4pm on Wednesday, Londoners are working to pay their rent, whereas all day on Monday, they work to pay their Income Tax and National Insurance.

Portico has also analysed the data on a borough-by-borough basis, adjusting the cost of rent, Council Tax and travel to zone 1 accordingly, but using the average London salary of £34,320 a year.

The agent found huge variations between boroughs; London tenants living in Bexley will have the greatest amount of disposable income left over after rent and essential bills, at £287 a week, while City of London workers have the least amount of disposable income, at £32. If tenants are looking to live in zone 1, Lambeth offers the highest amount of weekly disposable income, at £209.

The Managing Director of Portico, Robert Nichols, comments: “Londoners have to work increasingly later into the week before they start to spend some of their hard-earned money. Working for five hours alone to pay Income Tax, plus almost two days on rent, clearly shows how private rents in the capital have skyrocketed.

“But while rents are increasing, public transport is also improving significantly, so we’re seeing a huge number of tenants move further out to boroughs like Bexley, Barking and Dagenham, and Ealing to benefit from affordable rents, a quick commute – which will become even better with the arrival of Crossrail – and a good sum of disposable income in their pockets at the end of each week.”

One in Five Landlords and Tenants Unprotected by Client Money Protection

Published On: June 6, 2016 at 9:25 am

Author:

Categories: Finance News

Tags: ,,,

One in Five Landlords and Tenants Unprotected by Client Money Protection

One in Five Landlords and Tenants Unprotected by Client Money Protection

At least one in five landlords and tenants are not protected by Client Money Protection (CMP), according to a new study.

Research by YouGov, conducted on behalf of SAFEagent, shows that hundreds of pounds of landlords’ and tenants’ money held by letting agents is at risk because the funds are not protected by CMP.

Letting agents in the UK currently hold over £2.7 billion of landlords’ and tenants’ money in the form of rent payments and tenancy deposits. However, at least 20% of landlords and tenants would be unable to recover their funds if an agent stole the cash or used it fraudulently, as their money is not protected under the CMP scheme.

With around 61% of tenants incorrectly believing that their money is protected by law, the SAFEagent Awareness Week kicks off today, highlighting the importance of CMP for landlords and tenants when letting through an agent.

Although compulsory CMP is now finally on the Government’s agenda, through amendments to the Housing and Planning Bill, many consumers are still at risk. Therefore, SAFEagent is campaigning for full and mandatory CMP.

The Chair of SAFEagent, John Midgley, explains: “If an agent were to steal landlord or tenant money without CMP in place, there’s little chance of getting their money back. Would you use a travel agency who isn’t ABTA protected? Consumers who use agents without CMP in place are taking a massive risk.

“While we are finally getting closer to mandatory CMP, we aren’t there yet. It is so important that tenants and landlords understand that the right to redress only goes so far, and they need to choose their agent wisely by asking if they are part of a CMP scheme before signing on the dotted line.”

Find out more about SAFEagent Awareness Week (6th-10th June) on the firm’s page: http://safeagents.co.uk/awareness-week/

A Guide to Letting to Benefit Tenants

Published On: June 5, 2016 at 8:22 am

Author:

Categories: Landlord News

Tags: ,,,

Over recent years, DSS (or benefit) tenants have been given a bad name, which has led to many landlords becoming wary of letting to them. The problem is that during the recession, landlords across the country saw more of their tenants struggling to afford their rent payments, and unfortunately DSS tenants seemed to suffer the most.

Universal Credit has also made the situation worse, with many claimants suffering long waiting times in the switchover from the old welfare system to the new. Additionally, a number of DSS tenants have had their benefit allowances cut, and those that live in private rental accommodation are now responsible for paying their housing benefit to their landlords. Even though recent events have made it sound like letting to DSS tenants is too risky, the fact of the matter is that it is necessary, and with careful planning it can even be financially viable. So here we look at everything landlords need to know about letting to DSS tenants:

What is a DSS Tenant?

DSS stands for Department of Social Security, which is now a defunct Government agency that has been replaced by the Department for Work and Pensions (DWP). The DWP is the sector of the Government that is in charge of welfare and pensions, therefore a DSS tenant is one that receives welfare.

Generally, DSS tenants are those that receive housing benefit, with the amount they receive depending on their circumstances and income. When looking for a property to rent, a tenant will usually tell you if they receive benefits up front, as if you agree to let to them, they will have to fill in certain forms that notify their housing officer.

A Guide to Letting to Benefit Tenants

A Guide to Letting to Benefit Tenants

What are the Risks?

One of the main reasons landlords are uninclined to let to DSS tenants is because they have a bad reputation. There are those that believe that someone must have done something wrong or be irresponsible with money if they require benefits, and news stories featuring DSS tenants who have destroyed private rental properties have done little to help matters.

Furthermore, some DSS tenants’ rent is higher than the amount they receive in housing benefits, meaning they have to make up the shortfall each month. This often concerns landlords as it means there is a higher risk of their tenants falling into rent arrears, which they will then have to chase up, or even start the eviction process if it happens on a regular basis.

Why Let to DSS Tenants?

The fact of the matter is that, even though DSS tenants have a bad reputation, it is unfair to tar them all with the same brush. Regardless of whether your tenants receive housing benefits or not, there is always the risk that they could fall into rent arrears, which is why all landlords should have an extensive landlord insurance policy complete with rent guarantee insurance in place.

With the right protection and contingency plans, letting to DSS tenants isn’t too much of a risk, and you may even find it beneficial to your business. Furthermore, those on housing benefits are practically guaranteed to receive a set amount of money each month from the Government, while tenants that solely rely on their salary to pay their rent could find themselves struggling if they are made redundant. In a way, if you negate certain risks, letting to DSS tenants can be more stable than letting to those who do not receive benefits.

How to Protect Your Business

There are a number of ways to protect your business against the risks associated with DSS tenants, including:

  • Creating a detailed tenancy agreement, including information on late payments and rent arrears.
  • Meeting your tenants in person to gain an idea of what they’re like and whether they seem trustworthy.
  • Performing thorough background checks on each tenant, including whether they have ever missed rent payments before.
  • Asking your tenant to arrange having their housing benefit paid directly to you, especially if you are worried about their budgeting skills.
  • Having a contingency plan in place should your tenant fall into rent arrears or you come across any other issues.

Tenants Satisfied with Rental Homes as Landlords Go the Extra Mile

Published On: June 2, 2016 at 10:21 am

Author:

Categories: Landlord News

Tags: ,,,

Most tenants are satisfied with their rental homes, as landlords continue to go the extra mile to ensure renters are happy, according to a new study.

With growing competition to attract good tenants, more landlords are now going out of their way to provide renters with good quality homes and a better renting experience.

Greater demands and expectations of prospective tenants have pushed up standards in the private rental sector, with savvy landlords attempting to stay ahead of the competition by offering better accommodation.

Tenants Satisfied with Rental Homes as Landlords Go the Extra Mile

Tenants Satisfied with Rental Homes as Landlords Go the Extra Mile

A study of 500 landlords and over 1,000 tenants on behalf of insurance provider Endsleigh found that 90% of landlords have gone above and beyond what is expected to make their tenants welcome, while two-fifths (41%) say they would unreservedly go the extra mile to keep their tenants happy.

While private renters now expect good quality fixtures and fittings, modern kitchens and bathrooms, and double-glazing as standard, many landlords are now doing more to ensure that tenants’ requirements are met, from good energy efficiency to high quality maintenance and repairs. As a result, a huge 83% of tenants are happy with their current landlord.

Hoping to keep their tenants happy, around a third (28%) of landlords say they will cover the cost of rent rises to keep reliable tenants in their property for longer, while two in five (40%) would redecorate at their tenant’s request.

Landlords looking to attract a trustworthy, long-term tenant may be interested to learn that, after a realistic rent price for the area, tenants consider the installation of reliable Wi-Fi as the most important thing before moving into a property.

However, the study also found that many landlords feel hard done by the Government, with almost half (47%) claiming that the Government is not doing enough to protect landlords, insisting that it favours tenants.

Despite this, over three quarters (78%) of tenants do not feel protected by the Government, especially from rogue landlords that may put them in danger.

Poor tenants and damages has been ranked as the biggest concern for landlords (20%), ahead of having their property vacant for too long (19%) and the rising cost of maintenance (15%).

Despite these worries, over two thirds (67%) of landlords believe that the benefits of being a landlord outweigh the time and hassle involved in renting out property, with 12% of landlords using rent as a main source of income, and over a third (36%) using their lettings business as a way to fund their retirement.

The Head of Property at Endsleigh Insurance, David Hadden, comments on the findings: “Despite their ongoing differences about who is treated more fairly, it’s clear that generation rent has made a big impact on landlord decisions. Tenants are showing more authority than they previously did and expecting more too. It’s obvious that landlords are doing what they can to create the best accommodation possible.

“What’s most important is open communication, a clear understanding of who holds which responsibilities and a level of appreciation between each party so everyone can get along.”

Rental property shortage heightened by tax changes

Published On: June 1, 2016 at 10:50 am

Author:

Categories: Property News

Tags: ,,,,

Concerning new figures have suggested that tenants are looking at higher rents as the supply of rental property continues to drop.

The Association of Residential Letting Agents (ARLA) has reported that the total number of properties registered per letting agent has slipped by 5% year-on-year to April. This in turn means that renters are staring at harsher times, following on from the Stamp Duty increases, with landlords looking to recoup losses through increased rents.

Rental property problems

Consecutive years of failing to deliver sufficient rental property to match demand has pushed up rents. Now, Chancellor Osborne’s latest housing policy changes are serving to drive the problem further.

A further decline in the number of rental properties is expected on the back of increased Stamp Duty charges and lower mortgage tax relief for buy-to-let landlords. Many landlords are expected to look to sell their property as a result of the changes, exacerbating the problem and driving rental values up in the future.

Rental property shortage heightened by tax changes

Rental property shortage heightened by tax changes

Rise and fall

Further data from the ARLA report indicates that despite an 8% month-on-month rise in the volume of properties per branch, the number of homes managed on average is down from 193 to 183 year-on-year. The surge to beat the Stamp Duty reforms was a key contributor in the rise recorded in the first quarter of 2016.

David Cox, managing director of ARLA, said, ‘it’s likely that this increase in supply is only temporary. At the end of April we saw a flurry of landlords seizing the last few moments before the Stamp Duty rise to complete sales, triggering an increase in the supply of empty rental homes to be filled this month.’[1]

‘However, we expect that fewer investors will be taking on buy-to-let properties over the next six months, following the price hikes, meaning that once these properties are filled we’ll see supply nose-dive once again,’ Cox added.[2]

[1] https://www.landlordtoday.co.uk/breaking-news/2016/5/tenants-face-rent-rises-as-supply-of-rental-properties-falls

Rents rise by 2.6% in year to April

Published On: May 27, 2016 at 10:57 am

Author:

Categories: Property News

Tags: ,,,,,

Rents paid by private sector tenants in Britain rose by 2.6% in the year to April 2016, according to data released by the Office of National Statistics.

This was unchanged when compared to year-on-year results to March.

Rental rises

Since January 2011, rental prices in England have risen more than those in Wales and Scotland. This particular trend continued into the last month, with data from the private housing rental index from the ONS showing that rents rose by:

  • 8% in England
  • 2% in Wales
  • 5% in Scotland

In the year to March, rental prices rose in all regions of England. Unsurprisingly, London saw the greatest increase, of 3.7%.

As a whole, rental prices in England can be grouped in three periods. Prices increased markedly from January 2005 until February 2009, then dipped between July 2009 and February 2010. Since then, prices have spiralled.

Taking London out of the results, rental prices in England have followed a similar pattern, albeit with reduced rental rises from the end of 2010.

Rents rise by 2.6% in year to April

Rents rise by 2.6% in year to April

Regional growth

Year-on-year to April 2016, private rental prices have increased in all nine regions of England. London led the way, followed by the East and South East, with rises of 3% and 2.9% respectively. However, annual price rises have been greater in London than the rest of England since November 2010.

On the other hand, the North East, North West and Yorkshire and the Humber have continued to record the smallest annual rent rises.

Paul Smith, CEO of haart estate agents, believes rental accommodation will soon decline, as investors withdraw from the market in the wake of tax changes implemented by the Chancellor. He fears that this could lead to upward pressure on rental prices in the future.

Affordability issues

Smith said: ‘today’s data shows UK private housing rental prices increased 2.6% on the year as affordability issues in the sales market push up demand and therefore prices in the rental sector.’[1]

‘While the number of properties available to rent surged following a rush from buy-to-let investors in advance of the stamp duty changes on the 1st April, we are now seeing a decline in stock as investors withdraw from the market,’ Smith continued.[1]

Concluding, Mr Smith said, ‘ironicallym the government’s efforts to help first-time buyers by penalising investors, could end up hindering them as a shortage of rental properties will drive up rents in the long term, making it more difficult to save up for a deposit.’[1]

[1] https://www.landlordtoday.co.uk/breaking-news/2016/5/uk-private-sector-rents-up-2-6-year-on-year