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Em Morley

The Abolishment of Letting Agent Fees Could be a Month Away

Published On: April 27, 2015 at 11:31 am

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Categories: Landlord News,Tenant Fees Ban

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If Labour wins the general election next week, they will abolish letting agent fees and introduce longer tenancy agreements and rent caps within a month.

The planned regulations would be announced in the Queen’s Speech on 27th May.

Yesterday, Ed Miliband revealed Labour’s private rental sector policies and today he will uncover the withdrawal of Stamp Duty Land Tax for first time buyers purchasing homes worth up to £300,000.

Mr. Miliband explains that the immediate action is necessary to avoid “massive” rent increases. He would like to help the 4.5m privately renting households who are “struggling to meet the costs of putting a roof over their head” and stop them being “ripped off”.1

The Abolishment of Letting Agent Fees Could be a Month Away

The Abolishment of Letting Agent Fees Could be a Month Away

It is believed that by abolishing letting agent fees charged to tenants, renting households would save £625.

Under a Labour government, three-year tenancies would be common, in which rents could not increase over the CPI measure of inflation, which is 0% at present, however rents could decrease.

Rent caps would not apply to tenants who have agreed short-term tenancies, such as students.

Labour would give tenants the right to find out what the previous tenants paid. Mr. Miliband believes that this will give them more negotiating power.

Even in a three-year tenancy, landlords will still have to give tenants two months’ notice and have “good reason”1 to ask the tenant to leave.

Mr. Miliband has also revealed that landlords who do not adequately maintain their rental properties would lose tax relief, or wear and tear allowance, which allows them to offset 10% of their annual rental income.

He says: “This is a plan for a stable, decent, prosperous private rental market where landlords and tenants can succeed together.”1

Head of Policy at the Royal Institution of Chartered Surveyors (RICS), Jeremy Blackburn, says that rent controls could damage the private rental sector.

However, Director of SpareRoom, Matt Hutchinson, says that the policy will win votes. He believes tenants will “welcome anything that keeps rents down. But with rents having risen faster than sales over recent years, the real damage has been done.”

He adds: “Fixing rents for three years won’t be popular with landlords, but it’ll get a thumbs-up from renters.”1

Mr. Miliband will announce today: “It is simply too expensive for so many young people to buy a home today, saving up for the deposit, paying the fees and having enough left over for the Stamp Duty. So we’re going to act so we can transform the opportunities for young working people in our country.

“For the first three tears of the next Labour government, we will abolish Stamp Duty for all first time buyers of homes under £300,000.”1 

1 http://www.propertyindustryeye.com/legislation-to-outlaw-letting-agent-fees-could-be-just-one-month-away/

House Price Sentiment Not Affected by General Election

Published On: April 27, 2015 at 10:30 am

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Categories: Landlord News

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Households believe that the price of their home increased in April, despite the uncertainty caused by the general election, according to the latest sentiment index.

20.9% of the 1,500 households surveyed said that the value of their property had grown over the last month, and 4.5% reported a decrease, found the House Price Sentiment Index (HPSI) by Knight Frank and Markit Economics.1 

These figures gave a HPSI reading of 58.2, making April the 25th consecutive month that the reading is over 50. It is also a slight rise on March’s 57.5 reading. This means that house prices may still be increasing despite the unknown outcome of the election.1 

House Price Sentiment Not Affected by General Election

House Price Sentiment Not Affected by General Election

Head of UK Residential Research at Knight Frank, Grainne Gilmore, says: “The outcome of the election may be uncertain, but there are some key factors underpinning house prices at present. Confidence in the economy continues to grow while the cost of living has stopped rising.

“Mortgage rates have dipped to a new low, making owning a home for those who can clinch a mortgage deal cheaper than at any time before. The cost of buying a home for the majority of purchasers has also fallen after the reform of Stamp Duty in December last year. A lack of supply of homes for sale in recent months has also boosted prices.”1 

The future HPSI determines what households think will happen to the price of their home in the next year. This also rose to 70.2 in April, up from 69.6 in March. It is the highest reading of 2015 so far.1

Senior Economist at Markit, Tim Moore, says that the property market has shown strength approaching the general election, with April’s data emphasizing the first back-to-back monthly increase in house price sentiment for almost a year.

Moore explains: “Reduced pressure on household finances, improving labour market conditions and low mortgage rates continued to support house price sentiment in April. However, stretched affordability and tighter lending conditions are keeping a lid on house price momentum.”1

Regionally, people in the East of England are the most likely to expect property price rises in the next year, followed by households in the South East. The gap between national house price growth predictions and London price expectations dropped to the joint lowest level since the start of 2011.1

It has also been revealed that 6.5% of households plan to buy a home in the next 12 months, up from 5.7% in March. Around the UK, one in ten households in Wales plan to buy in the next year, followed by 9.5% in the East of England.1

Those aged between 25-34 and more likely to hope to buy a house in the near future, with 9.3% of individuals in this age range planning to buy a property in the next year. Just 3.1% of respondents aged 55 and over plan to purchase.1

1 http://www.propertywire.com/news/europe/uk-home-owners-sentiment-2015042710435.html

 

 

Buy-to-let market remains attractive

Published On: April 27, 2015 at 9:58 am

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Categories: Property News

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New research has indicated that Buy-to-Let is still a highly attractive proposition for would-be landlords. Low savings rates and the volatility of the stock market remain two of the main reasons why investors are flocking into the buy-to-let environment, as is a great opportunity for them to become less reliant on their day-to-day employment.

Incomes

A study, conducted by PropertyLetByUs.com indicated that 40% of buy-to-let gain a substantial income from their property portfolio, with half saying that this is their main source of income. The study also revealed that just over a third of buy-to-let landlords have full-time jobs, with 5% stating that they worked part-time.[1]

Of those questioned, 50% of landlords said that they had a LTV of 20%, while 36% of landlords said that their LTV was 40%. One in five landlords said that they had rental yields of between 15-30% per year, while one in four said that their yields were between 5-10%.[2]

Managing Director of Property Let By Us Jane Morris, remains certain that the buy-to-let market is going from strength to strength. Morris said, ‘buy-to-let continues to provide an excellent return on investment, with many landlords able to take an income, as well as enjoying the capital growth of the property.’[3]

Buy-to-let market remains attractive

Buy-to-let market remains attractive

Rise

Research from the HomeLet Rental Index has shown that rents across the United Kingdom are 10.2% higher than this time last year. The average rent for a tenancy agreement in the UK so far is £902. This is in comparison to £819 during the same period twelve months ago. Similarly, rents are up in every region of the UK from 12 months ago, with the exception of Wales.[4]

 

With this said, mortgage rates are still at record lows levels, which in turn is assisting buy-to-let landlords to achieve more substantial returns.

 

[1-4] http://www.propertyreporter.co.uk/landlords/nearly-50-of-landlords-rely-on-btl-as-their-main-source-of-income.html

 

 

Is Poldark Creating a Property Boom?

Published On: April 27, 2015 at 9:50 am

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Categories: Landlord News

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Is Poldark Creating a Property Boom?

Is Poldark Creating a Property Boom?

The BBC hit Poldark ended on a dramatic note last night, after millions tuned in for their weekly instalments of the series.

It appears that fans are not only enjoying the TV show, but are looking to experience the Cornish setting for themselves. Rightmove has revealed that house-hunting inquiries have more than doubled since the programme began last month.

However, aspiring buyers will need big budgets to move to the show’s location. A five-bedroom home with a three-bedroom cottage in the cliff-top setting of Gunwalloe, where Poldark’s beach scenes are shot, boasts a £1.75m asking price. A five-bedroom farmhouse will also cost a huge £550,000.

Moving to the village of Charlestown, used for its harbour scenery, will cost between £300,000 and £500,000 for a three-bedroom terraced house.

Estate agents say that the programme has brought hopeful buyers into the area using the “Poldark effect”1.

Linden Homes’ Brian Deacon says: “Reservations, viewings and sales have certainly increased since the TV series highlighted the beautiful wild scenery in the part of the West Country.

“It’s not really surprising that it is having such a positive impact on sales; this is such a stunning part of the world.”1

1 http://www.dailymail.co.uk/tvshowbiz/article-3056736/Poldark-sparks-property-boom-House-hunting-inquiries-Cornwall-doubled-historical-drama-aired.html

 

 

 

 

The Private Tenant Tackling the Housing Market

Heather Kennedy, a private tenants’ rights campaigner, says that politicians do not listen. She is taking a stand against the system with direct action.

Heather, 31, is a charity worker who moved from Leeds to London in 2011. When she tried to find somewhere to live, she was faced with a problem.

“I’ve been renting all my adult life, since I was 17, but I was struck by how much more difficult it was in London because the imbalance of power between landlords and tenants was so much more stark,” she explains.

Heather and her friends felt that the market was against them, so they started researching their legal rights. They wanted to know what they could do about their situation and help others who were also struggling with housing.

She says: “There were three or four of us and we all had some sort of housing problem at the time. I had a completely hopeless landlord who not only didn’t do any repairs, but didn’t reply to any of our phone calls. We just felt completely powerless.”

Heather was shocked at what she discovered: “Not only have you got a legal system that totally weights in favour of landlords, but you haven’t even got power as a consumer. We realised that our housing rights were so few that actually this was going to have to be about calling for change to the system.”

In 2012, Heather established the private tenants’ rights campaign organisation, Digs. Currently, the group has over 250 members in Hackney, East London, where Heather and her friends live. Other groups fighting for renters’ rights around the UK are Liverpool Generation Rent and Oxford Tenants Union.

“I got really sick of this idea you’d hear from politicians and from the media and charities, that private renting was all for students or comfortable young professionals,” Heather says. “And yet I was seeing people around me having a really difficult time.”

She continues: “Maybe some people are doing it because it’s flexible and it suits their lifestyle, but the things they have to endure as renters are completely unacceptable.

“I started volunteering at a local soup kitchen and realised that about a third of the people there were in private rented [housing]. It really struck me that the imbalance of power is much worse the lower down you get in the market, so if you are living really at the bottom end of the market, that’s where you’ve got the most exploitive conditions, you’ve got landlords that really have absolutely no respect for the wellbeing of their tenants and it’s all happening completely under the radar.”

When Digs began, it used traditional methods to try and influence housing policy. It wrote to local MPs, responded to policy consultations and organised meetings. However, nothing came of it. Activists from the group were excluded from conferences and events.

Heather says there was a moment when she realised that things needed to change. She had just put together a well-documented response to the Communities and Local Government select committee inquiry into private renting, but Digs was not asked to give evidence.

“We thought either they haven’t read it at all, or they have read it and it’s made absolutely no impact on their thinking,” says Heather.

Digs stopped lobbying after this, and decided direct action was a better approach. They were right. Before local elections last year, 60 people from Hackney shared their “galling experiences of renting” with Digs. The activists put together a set of demands from these stories and organised a protest outside the town hall to ask hopeful councillors to discuss the issues.

Heather explains how she felt: “It was like we were calling the shots. They basically had to listen to us. That spelled a shift in the power dynamic between us and the council. Since then, the way they relate to us is completely different. They actively seek our views and demands. We have regular meetings with them rather than having to badger them.”

The council listened when Digs wrote to it last year asking it to boycott the international property fair in Cannes, where councils allegedly sell British cities off to investors.

Heather would like Digs to build a local community, something she says private tenants do not have: “You’re moving around all the time, you’re not necessarily getting support from your community and your neighbours. You haven’t got the same kind of stake in your community.

“It’s very difficult to build connections and solidarity with your neighbours. I think that’s one of the reasons why politicians don’t like estates and prefer people living in the private rented sector, because it is very difficult to collectivise around any problems you’re having.”

Digs is also helping other London housing problems, such as the campaign against mass evictions and tripled rents on the New Era estate in Hoxton, and the group of single mothers, Focus E15, fighting for their homes in Stratford.

Heather says that these battles mark a turning point: “The genie is out of the bottle now. The awareness of groups like Focus E15 and New Era and the broader movement is such that people have an analysis for what’s happening now; it’s no longer just this incredibly unpleasant, very individualised situation.

“Seeing the way that the mums who have been affected have gone from people who were in individual housing crisis to people who are some of the most articulate activists about what is going wrong with housing in our society, is absolutely incredible.”

The growing number of housing campaigners today is well networked and poses a real threat to the system. The political parties’ housing policies in their election manifestos has not suppressed the anger over such issues.

Heather is opposed to the Conservatives’ right to buy policy, which you can read about here: /how-would-the-conservatives-right-to-buy-work/.

She says: “It’s very disappointing that Labour hasn’t unequivocally come out and condemned right to buy, as they should. It’s that kind of lack of courage and populism that is part of the reason why I think we’re going to have a low voter turnout, why I and a lot of other people have lost faith in those traditional routes of influencing policy, and why we are going to see many more occupations, eviction resistance and angry demonstrations.”

Heather also believes that Labour’s pledge of longer tenancies with stable rents will do nothing to tackle the affordability crisis. She says that the political parties are “still completely sold on the idea that the market will solve housing need”, but do not realise the importance of housing tenure.

Heather explains: “What’s absolutely crucial is an expansion not just of social housing, but specifically, of council housing.

“There was a real sense that people had a right to that housing, that it was theirs, which I came across as someone in my 30s and thought, that’s staggering; we’ve been completely robbed of the idea that we have any right to any form of housing.”1

1 http://www.theguardian.com/society/2015/apr/22/heather-kennedy-digs-private-renters-rights-campaign-group

Landlords Slammed for Failing on Repairs

Published On: April 26, 2015 at 10:24 am

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Categories: Landlord News

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A leading trade body has claimed that an alarmingly high number of 250,000 tenants are withholding rent from their landlords, in retaliation for them not making urgent and necessary repairs to their property.

The Association of Independent Inventory Clerks state that their research indicates 34% of private rental tenants have had a home emergency during the past year. Of those, just a third were resolved on the same day, with a quarter taking over a week.

Landlords Slammed for Failing on Repairs

Landlords Slammed for Failing on Repairs

Hours, not days

Chair of the Association of Independent Inventory Clerks, Pat Barber, feels that landlords should be responding quicker to emergency situations. Barber said: “Landlords have a duty of care with tenants and should be responding in hours, not days. We had a case where a boiler stopped working for seven weeks during the coldest part of the winter, so no heating or hot water was available.”[1]

Founder of the tenant repair reporting specialists FixFlo, Rajeev Nayyer, worryingly stated that this initial report could just be the beginning of more problems coming to light. Nayyer said: “The speed and quality of assessing and responding to tenants’ repairs will take centre stage in the next few months. We’re in an age of the Tenants’ Charter and mandatory redress schemes, so repairs have to be taken seriously by landlords and letting agents.”[1]

Advice

The Association of Independent Inventory Clerks has offered advice to landlords regarding the length of time taken to resolve problems. According to the organisation, landlords should:

  • Attend to any electric, gas or water leak within 24 hours.
  • Solve any cooker problems within 48 hours.
  • Repair any other white goods, washing machine, tumble dryers, dish washers etc., in 72 hours.

[1] http://old.lettingagenttoday.co.uk/news_features/Landlords-Slammed-For-Failing-On-Repairs