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Rental reform plans risk damaging access to higher education, says NRLA

Published On: January 27, 2023 at 9:58 am

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Categories: Lettings News

Government plans to reform the private rented sector risk making it more difficult for students to enter higher education, warns the groups representing universities and student accommodation providers in a letter to ministers.

The Government’s plans, outlined in its White Paper on rental reform, propose that all student housing, with the exception of purpose-built blocks, would be subject to open-ended tenancies, says the National Residential Landlords Association (NRLA). This means landlords could be unable to guarantee that accommodation will be available for the start of each academic year, unless sitting tenants have handed in their notice to leave. As a result, students looking for housing will be unable to plan in advance where they want to live and with whom.

In a letter to the Minister for the Private Rented Sector and the Higher Education Minister, the organisations, which include the NRLA, Universities UK, and the British Property Federation, warn that without certainty about the availability of housing, ‘there is likely to be a significant reduction in available accommodation at a time when demand is growing.’

The groups go on to note: “A shortage of this accommodation has already led some academic institutions to call for a limit to be placed on student intakes for as long as the next five years.”

They warn: “The proposed introduction of open-ended tenancies and inevitable reduction in housing supply is therefore likely to further constrain the expansion of the education sector, to the detriment of prospective students and wider society.”

The organisations call on the Government to extend the exemption from open-ended tenancies granted to Purpose Built Student Accommodation (PBSA) to all student housing. They argue that where a landlord rents their property to a group of students a fixed term tenancy agreement should be permissible.

The groups go on to call for measures to allow student landlords to give two months’ notice to repossess a property when it is needed for incoming students. In order to provide protections for incoming students, they propose that such notice should only be given during the final two months of a tenancy agreement. 

The signatories to the letter are the National Residential Landlords’ Association, Universities UK, the British Property Federation, the University of Cambridge, the University of Leeds, the University of Southampton, Lancaster University, Manchester Student Homes, Unipol, College and University Business Officers, We are Kin and the Young Group. 

UK property values fell for first time in 13 months in November 2022

Published On: January 26, 2023 at 4:49 pm

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Categories: Property News

The latest HM Land Registry UK House Price Index shows that house prices fell by -0.3% between October and November, but remained 10.3% higher than the previous year.

The government report states that average price of a property in November 2022 was £294,910.

Jason Ferrando, CEO of easyMoney, comments: “Judging the overall health of the UK property market based on the short-term erratic measure of monthly house price growth is ill-advised, to say the least. 

“Despite November bringing the first actual monthly decline in house prices since October 2021, property values still remain extremely close to their highest point seen throughout the pandemic. 

“It’s also important to consider the lagged nature of reporting when it comes to house prices and so what this marginal realignment really represents is a housing market winding down as it approaches the end of the year, not one approaching a cliff edge.”

Iain Crawford, CEO of Alliance Fund, comments: “The current outlook for the housing market is far more positive than it was just a few short months ago and while we continue to tread with some degree of caution, the general consensus is that the year ahead will bring greater stability.

“With this in mind, the marginal monthly decline seen between October and November is likely to be short lived and is almost certainly being influenced by the seasonal slowdown approaching the festive season.”

James Forrester, Managing Director of Barrows and Forrester, comments: “The first monthly reduction in house prices in 13 months is sure to spur panic and predictions of a property market collapse, but to do so based on just one month is quite frankly ludicrous. 

“The reality is that the property market has well and truly weathered the storm caused by the incompetence of the UK government and remains in fine form despite a very marginal reduction in property values. 

“If we were going to see a notable dip, it would have materialised by now. This hasn’t been the case and while the heat of the pandemic market boom may have subsided, property prices remain considerably higher than they were this time last year.”

Marc von Grundherr, Director of Benham and Reeves, comments: “It’s been a swift start to the year and those of us with our ear to the ground will tell you that both buyer and seller enquiries are coming in thick and fast, particularly across the London market. 

“So while we may have seen a momentary period of respite towards the end of 2022, there is a renewed level of optimism enveloping the market so far this year. 

“We remain a nation driven by the aspiration of homeownership and it’s only a matter of time before this uplift in activity reverses the reduced rates of house price growth seen during the latter stages of last year.”

Chris Hodgkinson, Managing Director of House Buyer Bureau, comments: “The current cost of living crisis and the increased cost of borrowing, in particular, have somewhat dampened the enthusiasm of the nation’s homebuyers in recent months and we’re now starting to see this translate to a slight reduction in house prices.

“However, the property market landscape is a fragmented one and while many homeowners will have avoided a dip in the value of their property, there are plenty of areas where house prices have started to slide to a far greater extent. 

“While it’s generally expected that the market will remain resolute this year, sellers in areas where the market is coming off the boil are well advised to sell quickly in order to achieve the best price for their home.” 

Landlords adapt properties for older tenants

Published On: January 25, 2023 at 1:16 pm

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Categories: Landlord News,Lettings News,Tenant News

Half of landlords are prepared to make changes to their property to accommodate the needs of older tenants, Paragon Bank research has found. 

Paragon’s analysis of Government data showed that the number of households in the PRS aged between 45 and 64 increased by 70% over the past 10 years, with those aged 65 or over increasing by 38%. Many of this cohort are expected to remain in rented accommodation, according to the bank’s report – The middle-aged tenant surge

Paragon’s research, conducted on behalf of the bank by BVA BDRC, showed that 46% of landlords would be happy to fund property alterations to cater for older tenants. The survey of nearly 800 landlords revealed that the average amount they would invest is £985. 

The research showed that 21% of landlords would invest up to £1,000, with 11% investing up to £3,000 to adapt the property. Meanwhile, 5% would invest £5,000 or more. 

Landlords view older tenants as advantageous due to the fact they tend to prefer to have longer tenancies (65%), are more respectful of neighbours and the community (63%) and are reliable (58%).

Richard Rowntree, Paragon Bank Managing Director of Mortgages, comments: “The idea that the private rented sector is the tenure of the young is outdated. Over half of tenants today are over the age of 35 and, if current trends continue, the average age of tenants living in the sector will only rise.

“As with other distinct tenant groups – young couples and students to name but two – older tenants have their specific requirements. Over 65s are more likely to live alone and in smaller homes, for example, and the sector will need to adapt and evolve to cater for this ageing tenant population. Landlords will need to target smaller homes and be prepared for their tenant to adapt the home to suit their needs.

“The good news is that landlords have a strong track record of meeting the needs of their tenants and I’m confident that they will be ready to respond to meet this changing demographic.”

18 to 24-year-old tenants feel the most valued by landlords

Published On: January 24, 2023 at 10:09 am

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Categories: Tenant News

A new survey of Brits has revealed how satisfied tenants really are with their landlords, with 18 to 24-year-olds receiving the quickest repairs.

The mortgage experts at money.co.uk have surveyed 2,000 tenants to reveal how satisfied they are with their landlords, from slow repair times to lost deposit returns. 

How satisfied are tenants with their landlords?


Overall
Very satisfied29%
Satisfied52%
Neither satisfied nor unsatisfied10%
Unsatisfied7%
Very unsatisfied1%

Over 80% of surveyed tenants said they were either satisfied (52%) or very satisfied with their landlords (29%). Only 8% actually said they were unsatisfied (7%) or very unsatisfied (1%) with theirs.

Those representing the average (median) UK salary, Brits earning between £30,000 – £49,999, were least likely to be very satisfied with their landlords (23%), while 58% of those earning over £200,000 were. Money.co.uk says the highest earners will most likely be paying the most for rent, which could mean that the more expensive the property, the better the service from landlords.

How long do landlords take to make repairs?


Overall18-2425-3435-4445-5455 and over
Within a week26%21%25%28%32%31%
1-2 weeks37%38%38%33%37%40%
3-4 weeks19%22%18%19%17%16%
1-2 months9%10%10%8%6%5%
3-4 months5%5%3%6%4%6%
5-6 months1%1%1%1%1%0%
Over 6 months3%3%4%3%3%2%

The majority of people said their landlord usually takes between one and two weeks to carry out household repairs on their rental properties. However, a considerable amount of tenants (18%) surveyed said that they have to wait at least a month on average. 18-24 year olds were the most likely age group to receive the quickest repairs from their landlords, closely followed by 25-34 year olds. 

Do people feel that their landlords listen to them?


Overall18-2425-3435-4445-5455 and over
Yes79%82%80%77%80%80%
No21%18%20%23%20%20%

Under £15,000£15,000 – £29,999£30,000 – £44,999£45,000 – £74,999£75,000 – £124,999£125,000 – £199,999£200,000 or more
Yes79%78%77%83%86%77%95%
No21%22%23%17%14%23%5%

When asked if they believe that their landlord listens to their concerns and acts on them, one in five tenants said no. 18 to 24-year-old tenants felt the most valued by landlords, with 82% answering yes. The highest earners showed the best landlord relationships, with 95% of those earning £200,000 or more saying their landlord listened to them.

How much deposit do people lose?


Overall18-2425-3435-4445-5455 and over
Nothing37%26%35%40%46%62%
£1 to £10012%18%11%11%8%9%
£101 to £20013%18%15%9%11%6%
£201 to £30011%13%11%9%8%6%
£301 to £4007%11%7%6%4%2%
£401 to £5005%6%5%5%6%5%
Over £50015%8%15%19%17%10%

Of those surveyed, 63% of people said that they have lost at least some money to deposits during their time renting. While many said they had lost less, 15% of people said that they had lost more than £500 while renting.

18 to 24s are the group most likely to have lost a deposit, with 74% having lost some or all of their deposit, compared to just 38% of those 55 and over. But 35 to 44-year-olds are most likely to have lost big money, with just under one in five saying that they’ve lost more than £500.

Further insights from money.co.uk

  • Copeland in the North West is the most affordable place to rent, with rent costing 18% of a monthly salary on average. 
  • Kensington and Chelsea is the least affordable area to rent in the UK, costing 67% of the average renters income. 

Landlords want Government to reverse capital gains tax changes

Published On: January 18, 2023 at 9:24 am

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Categories: Landlord News

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The latest insight from specialist property lending experts Octane Capital reveals 41% of landlords would like to see recent changes to capital gains tax allowances reversed.

The Government’s changes to the sector are the biggest concern, along with the increasing day to day cost of buy-to-let investment driven by the cost of living crisis.

The survey of almost 2,000 UK landlords commissioned by Octane Capital found that confidence in the sector remains robust. Just 8% of those surveyed stated that they had reduced the size of their buy-to-let portfolio over the last year.

However, government interventions by way of legislative changes remained the biggest concern for the year ahead, followed by the increasing running costs of buy-to-let investment such as maintenance and energy bills.

The day to day management also ranked as one of the biggest challenges facing the nation’s landlords, as did the increased cost of borrowing as a result of increasing mortgage rates.

The majority of those surveyed (60%) also don’t believe that we’ve hit a peak where interest rate hikes are concerned and don’t believe the market will be more settled during 2023.

As a result, just 16% of those surveyed stated that they intend to increase the size of their buy-to-let portfolio over the coming year.

When asked which government legislative change they would most like to see reversed, the recent changes to capital gains tax allowance ranked top.

The Government plans to reduce the CGT tax-free allowance from £12,300 to £6,000 in April of this year, implementing a further reduction to just £3,000 by 2024.

The ban on Section 21 evictions and required improvements to EPC ratings also ranked as some of the changes landlords would most like to see reversed.

Jonathan Samuels, CEO of Octane Capital, comments: “It appears as though the exodus of landlords from the rental sector has been somewhat over exaggerated with just a small proportion opting to reduce the size of their portfolio in 2022. 

“That said, while we’ve seen a degree of stability return following a shambolic mini budget last September, many buy-to-let investors remain cautious about the year ahead. 

“This caution is likely to prevent them from investing further until a greater degree of certainty returns, although we must also tip our hats to the government in this respect, as their consistent attack on the sector remains the number one concern.”

Government energy efficiency plans ‘dead in the water’ warn landlords

Published On: January 17, 2023 at 1:46 pm

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Categories: Landlord News,Property News

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Plans to improve the energy efficiency of private rented housing have no hope of being met, following the Government’s failure to respond to a consultation, which closed two years ago. 

The Government proposed a target that all new tenancies in the private rented sector should be in a property with an energy performance rating of at least a ‘C’ by 2025. It proposed that this be extended to cover all tenancies in the sector by 2028.

Despite the consultation closing in January 2021, the Government has so far failed to provide any response to it, leading to uncertainty about what will be expected of the sector.

In view of the failure to provide any concrete steps forward the National Residential Landlords Association (NRLA) is calling on the Government to make clear that the dates envisaged in the consultation are now unrealistic. In addition, to provide certainty for the market, it is calling for a definitive timetable for publication of a response to the consultation and any required legislation thereafter. 

The Government also proposed that all landlords should be expected to pay up to £10,000 to make the necessary improvements to meet the proposed targets.

The NRLA is calling instead for the amount that landlords should be expected to contribute to be linked to average market rents in any given area. Under the NRLA’s proposals this would mean the amount a landlord would need to pay would taper from £5,000 to £10,000, taking into account different rental values (and by implication, property values) across the country.

Alongside this, the NRLA is calling for a package of fiscal measures to support investment. This should include the development of a new tax allowance for landlords who are undertaking works towards reaching Net Zero. 

Ben Beadle, Chief Executive of the National Residential Landlords Association, said: “We all want to see properties as energy efficient as possible. However, the Government’s delay in responding to its consultation on energy standards in the private rented sector means its plans are dead in the water. The lack of clarity is playing a major part in holding back investment in the homes to rent tenants desperately need. 

“In the interests of certainty, the Government needs to admit what we all know, namely that it has no hope of meeting its proposed energy targets for the rental market. 

“The plans as they currently stand, rely on a misguided assumption that landlords have unlimited sums of money. The proposals fail to accept the realities of different property and rental values across the country, and that the private rented sector contains some of the most difficult to retrofit homes.

“Ministers need a smarter approach with a proper financial package if we want to ensure improvements to the rental housing stock.”