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Em Morley

Property Firm says Letting Agent Fees are Excessive

Published On: September 18, 2012 at 4:24 pm

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Charity group Shelter has recently condemned what they called rip-off letting agent fees being charged to both landlords and tenants. After winning their campaign to have the charges abolished in Scotland, they are presently calling for similar measures to be taken in England.

Minimum fees

Property Firm says Letting Agent Fees are Excessive

Property Firm says Letting Agent Fees are Excessive

However, Shelter is not alone in advocating for change. The Happy Tenant Company, who will recently have completed their first year as an operational property management firm, claim that they have achieved a multi-million pound rent roll by charging minimal fees. In addition, the firm claim not to be a letting agent, but instead an alternative choice.

Management service

The Happy Tenant Company offer a management service to landlords for a fixed fee, which is frozen for two years. Additionally, the firm charges no renewal fees and there are no mark-ups.

With clarity essential, the Happy Tenant Company ensure that tenants have no registration or administration fees to pay. Furthermore, the firm offers no increase in services such as cleaning or maintenance issues, which are given to their tenants at standard trade cost.

CEO of the Happy Tenant Company, Jonathan Monjack, said that the practise of charging extortionate fees to landlords and tenants is unacceptable. Monjack said that his management team “includes landlords and tenants,” and they “realised some time ago that the exorbitant fees letting agents charge today is simply not acceptable, nor is the level of service tenants say they receive.”[1]

Monjack says that the Happy Tenant Company’s business model “includes using our size to secure our landlords and tenants the best possible deals on maintenance and third party services.”[1]

Additionally, he said that the firm pride themselves “on not being a letting agent,” and instead challenge the payments that have been “enjoyed by these agents for the past three decades.”[1]

Unjustified

The Happy Tenant Company are, like Shelter, unhappy that the charges are still allowed to hit tenants and landlords in the pocket. Monjack said: “We believe paying a letting agent more than 20% of the annual rental income year after year is unjustified, while paying administration fees on top of this, which according to Shelter can be as high as 600%, is scandalous, and despite this, many landlords and tenants receive a substandard service. We formed the Happy Tenant Company as a direct challenge to change this.”[1]

With a growing number of would-be buyers being priced out of the housing market, Monjack believes: “The excessive fees that agents charge today is now being highlighted due to the vast number of people having no other option but to rent.”[1]

Concluding, Monjack stated: “Both landlords and tenants have been paying too much for basic management and maintenance services and it’s time that this was changed.”[1]

[1] http://old.lettingagenttoday.co.uk/news_features/Property-management-firm-says-agents-fees-are-excessive

 

 

 

Student Rents Fall as Admissions Drop

Published On: September 18, 2012 at 3:14 pm

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Rising tuition fees have seen university admissions fall by 7% in comparison to last year. The drop in student admissions has also had a knock-on negative effect on the growth of student rents.

Value

With this said, figures suggest that students renting in the private sector still gain better value than those staying in halls of residence. A student flat share room has risen 3.9% in cost in the previous 12 months. This is in comparison to a rise of 5.5% for students living in halls of residence, where average costs are nearly £1,200 greater per year.[1]

Research from website EasyRoommate suggests that the average cost of a student flat share room has risen by 3% in the previous annum. Students across Britain’s most popular university cities now pay around £345 per month, up from £332 last year.[1]

In comparison, average rent prices for non-student flat share properties have risen from £409 to £440, a growth of 7.6%.[1]

Student Rents Fall as Admissions Drop

Student Rents Fall as Admissions Drop

 

 

Rising fees, less degrees

The dip in applications for higher education places comes as tuition fees of up to £9,000 move into effect for the 2012/13 academic year. On average, tuition fees across the biggest university towns and cities stands at £8,305, so it is little wonder that applications have fallen.

EasyRoommate director Jonathan Moore, said that the astronomical fees were the final straw for undecided students. Moore said: “The rise in tuition fees and the prospect of a debt mountain on leaving university was the final nail in the coffin for many would-be students.

“The drop in applications has eased the pressure on student accommodation and this has caused rent rises to slow compared to the wider market. Something that will be very welcome to cash conscious students and parents.”

Halls

Many students prefer the security of halls of residence, particularly in their first year as an undergraduate. However, prices of halls have risen by 5.5% across many large university cities, from £3,827 to £4,035 last year.[1] Moore suggests that the rise in prices of halls is a major factor for some students deciding against further education.

Moore states: “Halls of residence have many advantages and can be a great social hub when first starting out at university. But as the cost of studying climbs ever higher, more and more students will be considering their options in order to save a few pounds.

“Demand for amenities such as wi-fi, en-suite bathrooms and double beds has caused halls of residence costs to grow faster than average student flat share rents.

“While flat sharers don’t tend to get bills and cleaning costs included in their rent, the more people you share with the wider you can spread these expenses. And with the cost of university rising higher each year many students will be exploring every avenue they can to try and save money.”[1]

[1] http://www.landlordtoday.co.uk/news_features/Growth-in-student-rents-slows-as-admissions-fall

 

 

Landlords Finding Mortgage Market Difficult

Published On: September 14, 2012 at 3:56 pm

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Categories: Landlord News

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New findings from the Residential Landlords Association suggest landlords are having difficulty in the buy-to-let mortgage market.

Difficulty

Of 141 members of the Residential Landlords Association questioned,  A further 24% said they found it very difficult, with 22% saying they had to look around for a better deal.[1]

A combined 31% said that they were comfortable with the amount of time it took them to find a mortgage, with 14% describing it as easy and 17% saying it was fairly straightforward.[1]

Landlords Finding Mortgage Market Difficult

Landlords Finding Mortgage Market Difficult

 

Challenge

A major challenge facing newly appointed housing minister Mark Prisk is to negotiate a deal with banks to provide financial support to private landlords. This is crucial to stimulate the private rented sector in a period where more homes are required.

Residential Landlords Association Chairman Alan Ward welcomed the support of the Government but says the challenge of finance must be overcome quickly. Ward said: “We welcome the Government’s renewed commitment and interest in the opportunities that the private rented sector can play in meeting the country’s housing needs. However, this will not happen without financing from the banks.”[1]

He went on to appeal for and end “the difficulties in accessing finance between Government and the banks came to the end for the sake of those desperate for a roof over their heads.”[1]

[1] http://www.landlordtoday.co.uk/news_features/Half-of-landlords-finding-mortgage-market-difficult

 

 

 

 

 

Overseas Students Boost London Lets

Published On: September 14, 2012 at 2:15 pm

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Overseas Students Boost London Lets

Overseas Students Boost London Lets

Wealthy international students prepared to pay rents as costly as £1,000 a week, are enhancing the London lettings market.

Their parents, who desire their children to study at one of London’s respected universities, often pay their rent.

Head of Lettings at central London agency W A Ellis, Lucy Morton, says: “We’ve had two properties where three students were bidding against each other. We do not believe that we will have any studio or one bedroom flats left for letting if this frenzy continues.”1

Parents who are trying to avoid the higher cost of buying a high-end property are propelling the increase in demand for expensive rental properties, experts believe. Stamp Duty on properties worth over £2m has been raised to 7%, and the Government now charges 15% on the cost of properties worth more than £2m purchased by companies.

These actions are intended to prevent tax avoidance, however, they are leaving parents who would have previously bought a house for their children, looking to rent. Lots of students from Russia, Asia and the Middle East come to London to study, and expect high quality accommodation with modern décor, contemporary fixtures and fittings, and inbuilt technology.

Generally, the student lettings sector provides landlords with strong returns, and those with property within prime areas of London, such as Knightsbridge or Belgravia, could see even higher yields.

1 http://www.justlandlords.co.uk/news/Overseas-Students-Boost-London-Lettings-1413.html

Rent Paid to Tenants When Universal Credit Comes In

Published On: September 14, 2012 at 12:33 pm

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Despite concern from some Members of Parliament, it has been confirmed that housing benefit will be paid directly to claimants living in rental accommodation as part of the new Universal Credit scheme.

Opponents have argued that this move will create more rental arrears, with private landlords losing their guaranteed monthly payments.

Local Housing Allowance

The Residential Landlords Association (RLA), along with charity organisation Shelter, has fruitlessly campaigned for more choice regarding payment of Local Housing Allowance. This benefit is currently paid to benefit-receiving tenants residing in private rented accommodation.

Both the RLA and Shelter believe that tenants should be afforded a choice concerning whether or not Local Housing Allowance is paid to them or their landlords. In addition, they believe that this choice should include Universal Credit.

Concerns

Stockon North’s Labour MP Alex Cunningham raised these concerns in Parliament. However, benefits minister Iain Duncan-Smith believes that tenants on benefits deserved more respect and suggested that by paying benefit payments directly to them, they would become more financially aware.

Rent Paid to Tenants When Universal Credit Comes In

Rent Paid to Tenants When Universal Credit Comes In

 

 

The Parliamentary exchange between Cunningham and Duncan-Smith is outlined below:

Alex Cunningham MP: “As other hon. Members have mentioned, the introduction of Universal Credit will mean that housing benefit will be paid not directly to landlords but to tenants, and that it will be paid monthly rather than fortnightly, causing tenants to go into substantial arrears.

“Does the Secretary of State agree that, when assessing whether a claimant is vulnerable enough to be exempted from monthly payments and receiving their housing element directly, it should be standard practice to consider the feedback of third parties such as social services and voluntary sector services as well as claimants?”

Iain Duncan-Smith MP: “I do, yes. We want to pay people directly, and we already pay local housing allowance to such tenants directly, which the hon. Gentleman and all hon. Members should remember. The vast majority cope with that payment, they are very similar.

“The point is this: we do not intend to cause problems, but the more we continue to treat people in receipt of benefits like children, the less likely they will be able to cope when they go to work.

“Those who can, absolutely must get on to that payment schedule, but we will obviously talk to all the bodies to which he referred to ensure that we identify those who cannot. If people cannot get on to that schedule, we want to surround them with help and support to find out why they cannot manage their payments, and to rectify that rather than just throw money at them.”[1]

[1] http://www.landlordtoday.co.uk/news_features/Rental-money-to-be-paid-to-tenants-after-Universal-Credit-comes-in

 

 

House Prices Delay Starting a Family

Published On: September 13, 2012 at 2:26 pm

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Categories: Property News

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The cost of housing in the UK is forcing couples to delay starting a family, says housing charity Shelter.

House Prices Delay Starting a Family

House Prices Delay Starting a Family

Shelter conducted a study on people aged 31-44, finding that one in five is postponing having children because they are finding it difficult to locate affordable housing. Of those delaying, a quarter has already waited at least five years.1

Renters and aspiring buyers alike are struggling with house prices. Lots of people of this age are living in small flats that they do not consider appropriate for raising children in. However, they cannot save for a deposit or afford rising rents on a better property.

One in three first time buyers is older than 35, therefore at the latter stage of their fertile years.1

It will now cost £50,000 for the average deposit, while the average monthly rent is £700. Despite house prices being rather steady at present, mortgage providers are not relaxing their lending criteria.1

It is also thought that rents will continue growing at above-inflation rates, with about 40% of landlords expecting to raise their rents by an average of 4.5% in the next year.

Social housing is also not a viable alternative for most renters, as entry to this sector is limited. Shelter is calling for the Government to build affordable houses for families who are currently priced out of the market.

1 http://www.justlandlords.co.uk/news/Housing-Costs-Delay-Parenthood-1411.html