Posts with tag: tenants

Number of Tenants in Serious Rent Arrears Going Down

Published On: March 8, 2016 at 9:37 am

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The number of private tenants in serious rent arrears has gone down, according to the latest Tenant Arrears Tracker from estate agents Your Move and Reeds Rains.

In the fourth quarter of 2015 (Q4), 1,500 households renting from private landlords had moved out of serious rent arrears, compared to the previous quarter. This is a 1.5% quarterly improvement, reversing the worsening trend recorded throughout the early parts of 2015.

In Q4 last year, there were 82,900 households behind on more than two months’ rent, down from 84,200 in Q3 2015.

Number of Tenants in Serious Rent Arrears Going Down

Number of Tenants in Serious Rent Arrears Going Down

As a proportion of all households renting from private landlords, just 1.6% are in serious rent arrears, says the report.

Comparatively, 2.9% of tenancies were in serious rent arrears in Q1 2008 – a record high. The absolute number of tenants suffering serious rent arrears was also considerably higher in Q3 2012, at 116,600.

The Director of Your Move and Reeds Rains, Adrian Gill, comments on the findings: “Private renting is still absorbing thousands of extra households every month, housing millions more than just a few years ago. As this tenure of housing and this way of living grows, affordability is the issue that goes hand-in-hand with questions of capacity.

“An individual tenant is still extremely unlikely to fall into serious rent arrears. In fact, the proportion of renters getting seriously behind on payments has dropped considerably over the longer term. But absolute numbers are now going the right way too. With fewer people at risk from more serious consequences of struggling to pay the rent, this is great news.”1 

Additionally, cases of landlords falling behind on their buy-to-let mortgages are also falling. In Q4 2015, 5,500 landlords were in mortgage arrears, down by 3.5% from 5,700 in Q3.

Annually, landlord finances have progressed even further. The amount of buy-to-let mortgage arrears has dropped by 54% since it stood at 11,900 in Q4 2014.

However, it is still uncertain how the forthcoming changes to landlord taxes will affect investors. Positively, one finance expert has expressed his belief that buy-to-let is not dead, and recent research found that many landlords are still confident in the sector.

If your tenants are suffering from rent arrears, or you just want some peace of mind, the best thing to do is take out a rent guarantee insurance policy, which ensures that you still get paid even if your tenant defaults on the rent.

For more advice for dealing with and avoiding rent arrears, this guide for landlords should help: https://www.justlandlords.co.uk/news/protecting-your-lettings-business-from-rent-arrears/

1 https://www.landlordtoday.co.uk/breaking-news/2016/3/tenants-reverse-trend-to-serious-rent-arrears

 

Tenants staying in the PRS for longer

Published On: March 7, 2016 at 1:40 pm

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Landlords are being warned to prepare for longer tenancy agreements, following a new survey by the Association of Independent Inventory Clerks (AIIC).

Data from the report shows that the average length of a private tenancy is now four years, up from three and a half recorded in the previous survey.

As such, the organisation said that more thorough preparation must be conducted by landlords, including choosing furniture and interior design schemes.

Rises

The report also found that 46% of 25-24 year olds live in the Private Rented Sector during 2014-15, up from 24% in 2004-05.

Patricia Barber, Chair of the AIIC, noted, ‘despite numerous reports suggesting that the average tenant doesn’t want a long-term contract, the official statistics show that average tenancy lengths are increasing-particularly among families-as people rent for longer.’[1]

These figures should make landlords think more about what features could make their rental property feel more homely. In addition, they should consider how these changes might entice renters to stay in the property for longer.

Organisation

Barber also believes that a rise of longer-term renting underlines the importance of landlords being organised with their administration requirements. She said, ‘when tenants stick around for longer, often the chances of confusion and disagreement over certain issues are increased when the tenancy does eventually come to an end.’[1]

Tenants staying in the PRS for longer

Tenants staying in the PRS for longer

As a result, she said, ‘the longer time goes on, the more likely landlords and tenants are to forget details from the tenancy agreement or important information about the deposit and that’s why stringent administration- keeping copies of everything and organising it accordingly-is so important.’[1]

Important inventories

The AIIC is reminding landlords of their duties and the need for evidence and records, particularly for longer-term tenancies. A professionally prepared, thorough and detailed inventory is essential at the beginning of all tenancy agreements.

‘There are more grey areas over the condition of a property the longer a tenancy goes on,’ Barber continued. ‘A detailed inventory will help landlords and tenants to determine exactly how the property’s condition has changed over the course of the tenancy, what can be deemed fair wear and tear and what needs to be replaced and therefore deducted from the tenant’s deposit.’[1]

An inventory , which has been signed and agreed by the tenant, is the most important piece of evidence that a landlord or agent can possess, if a dispute should arise at the conclusion of a tenancy.

[1] http://www.propertyreporter.co.uk/landlords/landlords-warned-they-must-prepare-for-longer-tenancies.html

Universal Credit Now Enforced in More Areas

Published On: March 7, 2016 at 12:40 pm

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The Government’s new welfare system has been rolling out across the country since last year. Today, claimants in four different parts of the UK will be subject to the new payment method.

Universal Credit Now Enforced in More Areas

Universal Credit Now Enforced in More Areas

Under Universal Credit, benefit recipients will receive one monthly payment instead of several payouts for different benefits. This includes housing benefit.

Additionally, any private tenants in receipt of housing benefit will be paid the allowance, rather than having the payment directly paid to their landlords.

If you are a landlord with tenants on housing benefit, be aware that they will now be responsible for paying their rent and their financial circumstances will be changing.

To avoid them falling into rent arrears, ensure that you communicate with your tenants about their finances and use rent guarantee insurance to make sure you still get paid.

As of today, the following areas will be moved onto Universal Credit:

  • FK20 in Falkirk.
  • G63 0, G82 5, G83 7, G83 8 and G84 in Glasgow.
  • NR13 3, NR29, NR30 and NR31 of Norwich.
  • PA20, PA21, PA22, PA23, PA24, PA25, PA26, PA27, PA28, PA29, PA30, PA31, PA32, PA33, PA34, PA35, PA36, PA37, PA38, PA41, PA42, PA43, PA44, PA45, PA46, PA47, PA48, PA49, PA60, PA61, PA62, PA63, PA64, PA65, PA66, PA67, PA68, PA69, PA70, PA71, PA72, PA73, PA74, PA75, PA76, PA77 and PA78 in Paisley.

We have been keeping you updated since the start of the year on where Universal Credit is rolling out to and will continue to offer this information for landlords.

For last week’s areas and the previous parts of the country subject to the change, visit: /new-welfare-system-introduced-for-more-housing-benefit-tenants/

Where are the top cities for buy-to-let investors?

Published On: March 5, 2016 at 11:45 am

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New research has indicated that many buy-to-let investors are leaving London behind in order to secure the best opportunities.

For years, the capital has represented the number one region for yields and soaring tenant demand. Now, with property prices in the city spiralling out of reach, investors are being forced to look further afield.

Best to invest

Data from a report by Savills assesses the top drivers of the rental market and identifies the best cities for buy-to-let investment.

The research discovered that Manchester, Reading and Bristol were the top-three areas in which landlords should invest. This is due to their strong economic growth and reputations as desirable locations to live in.

Though not an exhaustive list, Savills looked at invest prospects in areas where a substantial housing shortfall is expected. This was coupled with the economic potential of every city, including analysis of past and future growth sectors.

In addition, the report examined the investment potential of each city, taking into account the net income return, chances of rental and capital value growth and supply and demand. This included household projections, growth forecasts and local competition.

Eventually, the top ten cities for investment were found to be:

  • Manchester
  • Reading
  • Edinburgh
  • Bristol
  • Brighton
  • Leeds
  • Glasgow
  • Cardiff
  • York
  • Milton Keynes
Where are the top cities for buy-to-let investors?

Where are the top cities for buy-to-let investors?

Northern soul

‘House prices in London are about five times what they are in Manchester, but salaries re only 30% higher,’ noted Peter Armistead of Armistead Property. ‘Manchester is a very affordable place to live and demand for property is soaring in the city, thanks to the expansion of the MetroLink tram system, the trendy Northern Quarter and the BBC Media City.’[1]

‘Manchester has vibrant restaurants, bars, clubs plus a great music scene, galleries and museums,’ Armistead continued. ‘It also has an amazing student community and its universities, teaching and research facilities are truly wolrd class. It is home to nearly 100,000 students, making it one of the largest student cities in Europe. Despite all of its many advantages and attractions, Manchester is a very affordable place to live and many students chose to carry on living there after they graduate, as well as graduates from other areas moving to Manchester. Furthermore, wages relative to property costs are a very important factor in attracting these people.’[1]

Concluding, Mr Armistead said, ‘Manchester is a great place for BTL investment. An average residential property in Manchester is just £155,000, while a flat in a good area costs as little as £120,000. A property in the city can provide a 5% minimum cash rental yield and a typical 12% total cash yield, including 7% capital appreciation. Demand for rental accommodation is strong and by comparison with other regions, housing is cheaper. It’s not surprising that investors are turning away from London to more fruitful, regional cities like Manchester. If investors can purchase cheaper properties with better yields, they will have the opportunity to protect and boost their profits in the longer term.’[1]

[1] http://www.propertyreporter.co.uk/landlords/savills-research-reveals-top-ten-btl-cities.html

 

Average Tenant Has Spent £40,000 on Rent in the Last Five Years, Says Shelter

Published On: March 3, 2016 at 3:34 pm

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The average private tenant in England has spent more than £40,000 on rent over the last five years, according to a new report from homelessness charity Shelter.

The findings arrive as the Housing and Planning Bill continues making its way through the House of Lords today.

Shelter found that the average cost of renting a two-bedroom property is enough to put down a 20% deposit on a typical first time buyer home.

In London, the average rent on a two-bed home is much higher, at £89,000, according to the charity’s calculations.

The Chief Executive of Shelter, Campbell Robb, says: “Our drastic shortage of affordable homes is leaving millions of people stuck in their childhood bedrooms in a bid to save money, or in expensive and unstable private renting, with little hope of ever saving for a home to put down roots in.”1 

The Housing and Planning Bill seeks to introduce a series of changes that David Cameron believes will turn generation rent into generation buy.

It includes extending the Right to Buy scheme to housing association tenants, which Shelter says will aggravate the housing shortage.

Councils would be forced to fund the policy by selling off their most high-value assets. However, peers are warning that the policy could lead to a decline in the supply of affordable homes.

Average Tenant Has Spent £40,000 on Rent Over the Last Five Years, Says Shelter

Average Tenant Has Spent £40,000 on Rent in the Last Five Years, Says Shelter

Cross-bench peer Lord Kerslake, the former head of the Government’s Homes and Communities Agency, warns: “It’s very hard to make the numbers work and it’s very hard to find the land.”

Lord Kerslake has jointly tabled an amendment to the Housing and Planning Bill, which would force councils to replace the properties sold off with similar homes in their own area.

Peers are also expressing their concerns over the Government’s Starter Homes scheme.

These new build homes would be sold at a 20% discount to first time buyers under 40. The properties can be worth up to £450,000 in London and £250,000 elsewhere.

However, by urging housebuilders to prioritise Starter Homes, there are concerns that local authorities will throw out genuine affordable housing.

Kerslake comments that the policy would be a “cash bonanza” for homebuyers, many of whom could have bought their own home without the scheme.

“It’s a hell of an offer for people who have to be reasonably well-heeled to afford it,”1 he states.

A study by the Town and Country Planning Association has revealed that four out of five councils do not believe that Starter Homes are affordable.

Dame Kate Barker, who conducted a review of housing supply for Gordon Brown, told the House of Lords Economic Affairs Committee in December: “I do feel uncomfortable about a set of policies that are designed to be supportive of people who are just on the cusp of being able to buy and need nudging over the edge.”1

And the Shadow Housing Minister, John Healey, has said: “The forced sale of council homes will lead to a huge, irreversible loss of genuinely affordable homes to buy and rent.

“At a time when more affordable homes are desperately needed, the Government is forcing the sale of many of those that are left – not to tenants, but to buy-to-let landlords and overseas speculators.

“This will make finding an affordable home even harder for young people and families on ordinary incomes. But it’s also bad news for taxpayers, because it means more people renting privately and housing benefit rising to cover the cost.”1

However, a spokesperson for the Department for Communities and Local Government insists: “The Government is also supporting the boldest plan for housing by any government since the 1970s and is creating a bigger, better private rented sector that will increase choice for tenants.”1

Recent research found that the private rental sector is expected to grow to 30% of all households in the next 30 years.

1 http://www.theguardian.com/society/2016/mar/03/tenant-paid-40000-rent-five-years-shelter

Welsh Tenants are the Most Satisfied with Their Landlords

Published On: March 2, 2016 at 12:12 pm

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Welsh Tenants are the Most Satisfied with Their Landlords

Welsh Tenants are the Most Satisfied with Their Landlords

Tenants in Wales are the most satisfied with their landlords than in any other part of the UK, says new research from the National Landlords Association (NLA).

A huge 92% of renters in Wales say that they are satisfied with their landlord. Tenants in the East Midlands were second on the list, with 83% saying they are satisfied – the highest figure for England.

Those in the North West and South West followed, with 82% satisfaction.

However, a stark regional variation in satisfaction was exposed on either side of the Pennines. While 82% of tenants in the North West are satisfied with their landlord, just 67% of renters in the North East said the same – the lowest satisfaction level in the whole of the UK.

On average, eight out of ten tenants (79%) in the UK are satisfied with their landlords.

Position

 Region

No. of tenants satisfied with their landlord
1 Wales 92%
2 East Midlands 83%
3 North West 82%
4 South West 82%
5 South East 80%
6 Scotland 79%
7 West Midlands 79%
8 Yorkshire and the Humber 73%
9 London 72%
10 East of England 71%
11 North East 67%

The CEO of the NLA, Richard Lambert, comments on the findings: “Good landlords make up the majority of the market, so it’s not surprising that the majority of tenants are satisfied.

“Private renting is far from the insecure, uncertain and unhappy picture that it is often made out to be, and these findings will help to reassure existing renters and those looking to make their home in the private sector.”

He continues: “The NLA provides a range of training and accreditation opportunities for landlords in order to help them develop and improve standards, which is good news for the minority of tenants who are dissatisfied.

“However, this is only part of the solution, and both central and local government must also commit more resources to tackling poor standards and weeding out bad landlords.”1 

The NLA’s results arrive as the latest English Housing Survey reveals that the average private rental sector tenancy now lasts four years.

1 http://www.landlords.org.uk/news-campaigns/news/landlord-satisfaction-across-uk-highest-in-wales