Posts with tag: tenants

Millennial Tenants want to Live in these Top Ten Cities

Published On: April 5, 2019 at 10:00 am

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If you’re looking to let to millennial tenants, then it’s essential that you know which areas they want to live in, in order to help you make sound investment decisions.

The slump in UK homeownership, from 73% a decade ago to just 63% today, reflects the fact that more households are now renting from private landlords, particularly among the millennial population. 

Homeownership rates among millennials have collapsed even more dramatically, owed largely to high house prices and weak wage growth since the financial crisis.

So, which cities are the best options for millennial tenants living in the private rental sector?

New research by credit expert TotallyMoney assessed 16 elements that are widely considered to be important to millennials, and used them to rank 63 cities in the UK, to reveal the best locations for millennial tenants.

These elements include: work factors, such as overtime hours, paid overtime, average weekly earnings, number of business start-ups, graduate hires, employment rates and the number of young people on benefits; property factors, such as the cost of a one-bedroom home to rent, as well as to buy; cost of living factors, such as the price of a cappuccino, gym membership and meal for two; and lifestyle factors, such as number of things to do, the population aged 0-17 and 18-29 and the percentage of Remain voters.

The study saw Scotland take two spots in the top three, led by Glasgow, owing to decent weekly wages, innumerable entertainment hotspots and house prices well below the national average – thought to be a huge contributor to its high performance.

Despite its reputation for extortionately high living costs and house prices, London still performs well, at second place. The capital isn’t shy of things for millennials to do, and also sees the highest weekly earnings, at an average of £727 per week, as well as the highest number of graduate hires across the whole of the UK.

In third place is Aberdeen. Its employment rates are the same as London’s and it has higher than average weekly earnings.

Top 10 cities for millennial tenants

  1. Glasgow
  2. London
  3. Aberdeen
  4. Liverpool
  5. Bristol
  6. Gloucester
  7. Southampton
  8. Cambridge
  9. Cardiff
  10. Middlesbrough

Basildon, Essex takes the bottom spot, owing to a paltry 2% of graduates finding work there, as well as extra curricular activities paling in comparison to the rest of the UK. It also had the second lowest Remain voters.

Yorkshire cities Doncaster (62nd), Wakefield (60th) and Huddersfield (59th) also performed badly. While one-bed home costs are low, so are wages, with graduate hires comprising just 6% across all three cities. 

James McCaffrey, the Spokesperson for TotallyMoney, says: “There are some things millennials have had to adjust to that haven’t been experienced by past generations, and, with this, comes an entirely different set of priorities.

“Rising house prices, stagnant wages, and Brexit are just some of the hurdles this generation have to get over. But that’s where our map could help, as it makes it much easier for millennials to find the places where those hurdles might be easier to jump.”

He continues: “Of course, the rankings should be taken with a small pinch of salt, as some factors will be more important to some than others. Nevertheless, if there’s a particular area young people have on the brain, our map certainly makes it easier for them to consider elements they might not have thought about before.”

Do you want to Let to Young People? This is where they’re Moving to!

Published On: April 4, 2019 at 9:22 am

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Categories: Landlord News

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If you want to let to young people, then it’s important that you understand where they want to live. In order to invest in property in the right locations, you should be looking at areas with increasing populations for the age range that you’d like to let to.

An increasing population of young people is a sign of a thriving city. And it’s good news for Coventry, which has just been named the top UK housing hotspot for 18-34-year-olds by Good Move.

The regulated property buyer used data from the Office for National Statistics (ONS), to reveal the locations that are experiencing the greatest influx of young people.

Coventry came out on top, with 18-34-year-olds representing 32% of the city’s population – a 3.65% increase from 2012, which is unrivalled across the UK. Such popularity can be attributed to its low house and rent prices, which are considerably lower than national averages. The Warwickshire hotspot also boasts excellent broadband speeds and 4G coverage, making it an attractive option for young people.

Bath and Somerset (2.72%), and Exeter (2.40%) followed in the rankings. The low unemployment rates in these regions (3.2% for Bath and Somerset, and 2.9% for Exeter) add to their appeal, with both lower than the national average (3.93%).

Top 10 hotspots for young people

These locations experienced the greatest relative increases in their populations of 18-34-year-olds since 2012:

  1. Coventry: 3.65%
  2. Bath and Somerset: 2.72%
  3. Exeter: 2.40%
  4. Canterbury: 2.24%
  5. West Lancashire: 2.04%
  6. Runnymede: 1.97%
  7. Guildford: 1.79%
  8. Newcastle-under-Lyme: 1.74%
  9. Bristol: 1.69%
  10. Welwyn Hatfield: 1.61%

The research also gives an indication of where these young people are moving from, by identifying the locations that have seen a decrease in their populations of 18-34-year-olds over the same period.

Surprisingly, it’s London that is losing its young people at the greatest rate. Out of the top ten local authorities that have seen their percentage of 18-34-year-olds decline the most, nine are London boroughs, while the other, Slough, is just 20 miles from the capital.

Hammersmith & Fulham experienced the highest rate of departures, with 18-34-year-olds now constituting just 31% of its population – a 5.39% drop since 2012. 

However, the trend extends across the whole of the capital, with just two of the 33 boroughs seeing increases – and even these were minor (0.55% in Havering and 0.34% in Islington).

On average, each London borough has 2,000 fewer young people than seven years ago – a decrease of 2.75%. The soaring house prices of the capital are an obvious explanation, as, at over an average of £540,000, they’re more than double the average for the rest of the country (£258,270).

Ross Counsell, the Director of Good Move, comments: “Young people bring money, innovation and life to a city, and our research has highlighted the places currently benefitting from their interest.”

Poll Highlights it’s a ‘Good Time to be a Landlord in London’

Published On: April 3, 2019 at 9:33 am

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Long-term renting is becoming the norm, as many tenants are favouring location preference over being homeowners.

The results from London estate agent Kinleigh Folkard & Hayward (KFH)’s Annual Tenant Barometer have been released, showing that tenants are expecting to rent for longer. 

The highlights of these results include:

  • Tenancy length is now a top 5 priority for London tenants
  • 59% of tenants feel they would never be able to buy in the Capital
  • Tenants now expect to be renting for 5 years, a 25% increase from a year ago

Lisa Campbell, a tenant who lives with her partner, has commented: “This was the first rental we had together, and the four years we have spent in our rental have suited us for this time in our lives. Buying a property outright was not affordable for us in the area we wanted to live given the current climate.”

Many feel that the prospect of purchasing a property in the capital city is one that is even more out of reach. This has led couples to make the decision to rent in a preferred area, over buying in a location that they don’t want to live in, purely due to affordability. Long-term renting provides them with more freedom of choice, when it comes to lifestyle, than being a homeowner in London would.

Carol Pawsey, Director of KFH Group Lettings, said: “The strength of the private rental sector has been well documented and debated, and there is no doubt that the demand for rented accommodation is set to continue. In fact, in the first 10 weeks of 2019, our online tenant enquiries were up by 57% on 2018 and tenant registrations across our 46 lettings offices were up by over 25%.

“It is a good time to be a landlord in London, albeit, with changes to legislation, it pays to be partnering with those who can guide you through.”

The Annual Tenant Barometer has concluded the top five tenant priorities, when looking to rent. These are respectively: 

  • Rental price
  • Location within London 
  • Size of the property
  • Proximity to transport links
  • Tenancy length

Younger renters (aged between 18 and 34) have also highlighted a preference for a fully furnished property and bills being included in the rent.

Brooke and Gordon Kenwright, who also rent through KFH, have said: “The main advantage of taking a longer tenancy is the feeling of security and knowing we won’t have to move again in 12 months – trying to minimise any disruption for our two sons, aged six and nine”.

Poor Housing Standards Cause Illness and Injury to Nearly Half of UK Tenants

Published On: April 2, 2019 at 8:55 am

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A new study into poor housing standards in the private rental sector (PRS) has revealed that almost half of tenants have suffered health problems or an injury due to the state of their rented homes.

This study, conducted on behalf of London property maintenance experts Aspect, was based on 1,000 responses from existing and previous renters.

The results show that 44% of respondents have experienced illness or injury as a result of poor housing standards. This information comes as The Homes (Fitness for Human Habitation) Act has been put into force, which makes amendments to existing laws, allowing tenants to more easily take their landlord to court, if the accommodation they provide does not meet legal standards.

In particular, these results show that 8% of tenants have sustained cuts and scrapes from sharp edges and poorly fitted fixtures. The same number also experiences an injury from tripping or falling, caused by maintenance issues such as loose-fitting carpet or loose steps.

In relation to health problems, 19.4% of respondents said that they have experienced stress and anxiety due to the poor housing standards that they have experienced.

Percentage of those who have experienced an illness or injury due to the condition of their rented home, split into age categories: 

Age%
18-24 year-olds58
25-34 year-olds56
35-44 year-olds54
45-54 year-olds39
55+27

Nick Bizley, commercial director at Aspect, has commented: “It’s alarming but not surprising that so many UK tenants are reporting health problems directly related to the condition of their home.

“From first-hand experience, the age imbalance of those suffering ill-health and injury due to the condition of their home can be directly related to the younger age group not being confident enough to bring maintenance issues up with their landlord.

“Our tradespeople regularly see and report examples of corner-cutting on maintenance, especially where properties have been converted into homes of multiple occupancy, such as a large houses converted into flats, but also at the higher end of the property market, too.”

Cities with the most property-related injuries and illnesses reported, shown as a percentage:

Area%
Birmingham57.58
Swansea57.14
Plymouth56.52
Leeds55.00
London52.87

Cities with the fewest property-related injuries and illnesses reported, shown as a percentage:

Area%
Chelmsford14.29
Oxford30.43
Liverpool31.43
Manchester31.46
Aberdeen33.33

Nick Bizley also said: “Our people also regularly see poorly ventilated homes as a direct result of landlords converting large properties into flats without allowing for sufficient ventilation in each subsequent property – this leads to damp, which causes mould, which is proven to have a detrimental impact on health.

“I think landlords can be ignorant of their obligations, so we hope this new legislation will clarify those obligations to ensure homes are fit for habitation and lead to a general improvement for living conditions across the rental sector.”

Half of all Babies Now Born into Rental Accommodation

Published On: March 29, 2019 at 10:51 am

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Around half of all babies born in Britain – approximately 365,000 per year – are now born into rental accommodation, new analysis from Royal London reveals. More than half of these – around 200,000 a year – are born into private rental housing.

For the first time in living memory, a child is at least as likely to be born into a rental property as a home owned by its parents, which is up from around one in three babies in 2003/04.

The analysis, using data from the Family Resources Survey, suggests that parents are renting from private landlords for longer, with worrying financial, practical and emotional implications. There are now over 1.5m families in England with dependent children living in private rental housing.

Across the United Kingdom as a whole, the number of families with dependent children living in private rental accommodation has increased by 94% in the past decade, from 940,000 in 2006/07 to 1.8m in 2016/17. The greatest regional increases in England over this period were in in the North East, and Yorkshire and the Humber, with 138% and 120% growth in the amount of families renting privately, respectively.

Becky O’Connor, a Personal Finance Specialist at Royal London, says: “Renting is no longer something carefree young people do for a few years while they save up a deposit to buy and settle down. Renting is an increasingly long-term tenure and it’s increasingly impossible to escape from.

“For people in their late 20s and 30s, half of whom are starting families in insecure accommodation, not having a home of their own is fraught with practical and emotional issues. The main risk is eviction, which hangs threateningly in the background of normal family life.”

The analysis, published as part of Royal London’s latest policy paper, The Parent Rent Trap, also highlights:

  • A short-term rise in the risk of eviction for tenants, as landlords are dissuaded from the market by Government policy that makes buy-to-let less attractive

  • The 20% premium paid by private tenants, compared with those repaying a mortgage (an average of £844 per month, compared with £678 in typical mortgage repayments), and the impact of this on the ability to save for a deposit. Renting itself is becoming unaffordable, leaving renting families at particular risk of financial difficulty and even less able to save up a deposit

  • The gap between fairly static rent payments over a lifetime, compared with falling mortgage repayments. Owner-occupiers can, generally speaking, look forward to lower mortgage repayments as their house price rises and the loan-to-value limit they are eligible for comes down, bringing down their interest rate and, therefore, their repayments

  • The increased difficulty in obtaining a big enough mortgage once parents are paying for childcare

The growth of the private rental sector, coupled with the rising cost of renting, has put homeownership further out of reach for people aged 25-34, Royal London reports. The age at which most couples have their first child is 29 (mother) and 33 (father). The average age of a first time buyer is 34, which is up from 26 in 1997, according to the English Housing Survey.

The policy paper recommends measures to improve security of tenure for the increasing number of parents who are starting and continuing to grow their families in properties owned by private landlords:

  • Examine the impact of Section 21 of the Housing Act 1988. This piece of legislation enables landlords to evict tenants without giving a reason with two months’ notice, once their original tenancy agreement has come to an end. It has been abolished in Scotland and replaced with open-ended tenancies, as part of the Private Housing (Tenancies) (Scotland) Act 2016

  • Encourage lenders to give greater weight to the ability of tenants to meet rent payments which may be higher than the monthly repayments for the mortgage that they are applying for, when assessing their affordability

  • Assess the impact of current policy towards buy-to-let landlords on the tenants who rent from them and whether reduced incentives have created short-term instability for renters

  • Open up planning for institutional landlords to build, own and manage affordable rental accommodation that is suitable for families

  • Housebuilding that prioritises affordable family homes to buy 

David Smith, the Policy Director of the Residential Landlords Association (RLA), responds to the report: “Tenants are on average living in their private rented properties for over four years. However, the RLA recognises that the growing number of families living in the sector is increasing calls for greater security for tenants.

“The Government has argued that financial incentives could be quicker to implement than legislation to encourage the development of long-term tenancies. We agree. These should be matched by establishing a dedicated housing court, to ensure that landlords and tenants can get swift access to justice when something goes wrong in a longer tenancy agreement. This would provide the confidence needed to provide them.”

Rent Rises Near Record Highs, as Landlords Continue to Exit the Market

Published On: March 28, 2019 at 10:00 am

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Tenants experiencing rent rises neared record highs in February, as landlords continued to exit the market, reports ARLA Propertymark (the Association of Residential Letting Agents).

The organisation has issued its Private Rented Sector Report for February.

Rent rises

The number of tenants experiencing rent rises increased in February, with 34% of ARLA Propertymark member letting agents witnessing landlords putting prices up, compared to 26% in January.

This is the highest figure seen since August, when 40% of tenants experienced rent rises – the highest on record.

Annually, this is up by 14 percentage points, from just 20% in February last year.

In line with this, the amount of tenants successfully negotiating rent reductions fell to 2.3% in February, from 2.5% in the previous month.

Landlords selling

Last month, the number of landlords exiting the buy-to-let market rose to an average of four per letting agent branch, after falling to three in January. This has also risen on an annual basis, from three in February 2018.

Supply and demand

Demand from prospective tenants dropped in February, as the amount of home hunters registered per branch fell to an average of 65, compared to 73 in January.

The number of properties managed per branch remained at an average of 197 in February, with no new rental homes coming onto the lettings market.

David Cox, the Chief Executive of ARLA Propertymark, says: “According to data from the Office for National Statistics, private rent costs rose by 1% in the year to February, and our data shows that the number of tenants successfully negotiating rent reductions fell. We warned this would happen, as landlords continue exiting the market and increasing legislation deters new ones from entering. 

“The Chancellor’s Spring Statementincluded a number of initiatives aimed at growing housing stock for buyers, but it didn’t offer any solutions to increase the supply of properties in the private rented sector. Unless the Government commits to making the prospect of investing in the private rented sector more attractive, and introduces measures to increase supply, tenants will only continue to feel the burn.”