Written By Em

Em

Em Morley

Landlords Call for Change of Attitude to Rental Sector from Tory Candidates

Published On: July 1, 2019 at 9:14 am

Author:

Categories: Law News

Tags: ,

Michael Gove appointed as new Housing Secretary

Landlords are urging Prime Minister candidates to make changes to improve the private rented sector (PRS) in the UK.

As well as the recent call to scrap Right to Rent, a letter has now been sent, asking Jeremy Hunt and Boris Johnson to led the Conservative Party to adopt a more positive approach to the PRS.

The letter from the Residential Landlords Association (RLA) warns the interests of tenants are not being well-served by policies that are reducing the supply of homes to rent.

Government data has highlighted that 10% of landlords representing 18% of all tenancies in the sector are planning to reduce the number of properties they let. 5% of landlords representing 5% of tenancies plan to leave the sector completely. The RLA has its own research, suggesting that 46% of landlords are planning to sell some or all of their properties. 

This comes following Conservative policies aimed at dampening investment in the market. This includes imposing a tax on landlord investment in new homes to rent, meaning that landlords looking to invest in new rental housing are being hit by a 3% Stamp Duty levy.

The most recent government proposal has been to scrap Section 21, limiting the ability of landlords to repossess properties when they need to.

As a result of the reduction in investment, the Royal Institution of Chartered Surveyors has warned that expectations for increasing rents are now at their highest point for three years.

The RLA is calling on the Conservative candidates to back its 5 point plan for the sector. This includes:

–    Pro-growth taxation to ensure enough homes to rent to meet growing demand

–    A fair system for repossessing properties, protecting tenants from unfair evictions, whilst retaining the confidence of landlords to regain possession of their property where there is a legitimate need. This should be coupled with a dedicated housing court, to settle disputes swifter and easier

–    Supporting vulnerable tenants by ending the Local Housing Allowance cap.

–    Rooting out criminal landlords by providing councils with more resources to better use the powers they already have.

–    Rejecting any form of rent control that will only dry up the supply of homes to rent, therefore reducing choice for tenants and increasing overall rents

David Smith, Policy Director for the Residential Landlords Association, said:

“The new Conservative Prime Minister needs to reconsider the approach to the private rented sector. Otherwise, the situation for tenants will just get worse as they face less choice and higher rents because of a growing shortage of properties. 

“We need a raft of changes that will encourage more investment in high standard homes rather than efforts to scapegoat landlords for failures by successive governments to build enough homes.”

Retired Homeowners are Earning £1,000 from their Houses

Published On: July 1, 2019 at 8:40 am

Author:

Categories: Property News

Tags:

Retired homeowners are seeing their property wealth increase by over £1,000 in the past year, despite on-going housing market uncertainty. This information comes from an analysis from UK independent equity release adviser Key.

The total property wealth owned by those over the age of 65 who have paid off their mortgages is valued at an impressive £1.096 trillion. However, this is a fall from the £1,118 trillion recorded earlier in the year (February 2019). A market slowdown is being felt across the board.

Looking at an annual basis, retired homeowners still saw an increase of £5.445 billion during the period of June 2018 to June 2019, according to the Key Pensioner Property Equity Index.

Will Hale, CEO at Key said: “The ongoing uncertainty in the property market and the economy as a whole is having an impact on house prices but overall retired homeowners have still gained an average of more than £1,000 from their houses in the past year.”

Across Great Britain, the average gain of those over 65 in the past year is equivalent to £1,160 per person, but the national average apparently does not tell the whole story, Key says…

The biggest winners are in the West Midlands, who are nearly £7,500 better off than a year ago. Those in Wales and the North West have also recorded strong gains in the past 12 months, at £6,560 and £6,297 respectively.

However, in London retirees have lost more than £1,000 a month in the past year, while those in the South East and East Anglia have also seen property wealth drop. Those in Scotland also saw a slight dip.

London and the South East still account for 34% of all property wealth held by retired homeowners, despite these recent falls.

Hale also said: “Some parts of the country have experienced even bigger gains with the West Midlands, North West and Wales continuing to perform strongly.  The basic fact is that no matter what happens month to month to house prices millions of over-65s will continue to hold considerable property wealth, which can transform their standard of living in retirement and enable them to address a wide range of financial issues. 

“Increasingly equity release customers are able to help their adult children or even grandchildren to pay for house deposits while also being able to sort out their own finances whether it is clearing debts or even paying off mortgages.  Equity release is not right for everyone but it is clear that if your home is your largest asset you should take some time to assess what role property wealth can play in retirement planning. Speaking to a specialist adviser is key to making smart choices.”

Buoyant Buyer Demands Resulting in London Property Market Recovery

Published On: June 28, 2019 at 9:35 am

Author:

Categories: Property News

Tags: ,

London Property Market Recovery

Properties in London are seeing a slowdown in price reductions, according to research from estate and letting agency Chestertons.

This increase in confidence in the Central London market has lead to data finding that property price reductions were 35% fewer in the first five months of 2019, compared with the same period last year.

Buyer registrations since the beginning of the year have been up 19% on 2018 across the capital, thanks to this buoyant buyer demand.

Central London has seen the biggest rise in demand, with areas such as Chelsea, Westminster, Mayfair and Knightsbridge. There has been a 32% increase in the number of people registering for property to buy, year-on-year.

With activity across the London market picking up, exchanges in May have jumped 23% year-on-year across the capital.

However, property supply coming onto the market for sale is lagging significantly behind last year. It’s down 15% over the first five months of 2019, compared to 2018. In Central London, instruction levels in May were 20% lower than last year.

Guy Gittins, Managing Director at Chestertons, comments: “With confidence comes an acceleration in activity – and that’s what we’re seeing as buyers shrug off the current political uncertainty and the London housing market starts moving again. This has been the most encouraging start to the year we’ve witnessed since the EU referendum result, and the change in buyer appetite is palpable.  The brakes may have been on at the end of last year, but motivated buyers have been quick to recognise the opportunity presented to them by property prices now offering genuine value for money, and demand for properties is consequently overwhelming the current levels of supply. That it’s Central London which is spearheading this recovery is particularly encouraging for London’s long-term outlook, in a sign that overseas buyers are returning to capitalise on the attractive investment opportunities on offer.  

“The direction of travel is clear – the recent upswing in buyer demand means it’s much more likely that a property will sell for its asking price compared to a year ago, as competition for available homes ramps up. And this is only the start. We know there’s a huge amount of pent-up demand in the market, and once there is greater clarity over Brexit, more buyers are going to be getting off the fence and flooding into the marketplace.”

Tenancy Deposit Passporting Plans Announced by Government

Published On: June 28, 2019 at 8:41 am

Author:

Categories: Tenant News

Tags: ,

It was announced yesterday that the Government is willing to consider plans for a deposit passporting scheme.

This scheme would allow tenants to transfer rental deposits from one letting agent or landlord to another if they decide to move homes.

The Ministry of Housing, Communities and Local Government has made a call for evidence, inviting those in the property sector to leave feedback and suggestions. 

In the forward of the document, Housing Secretary James Brokenshire says: “I am committed to making the process for tenants getting their deposit back much smoother. I want to understand whether there should be a deadline for landlords returning deposits. 

“I also want to look at whether existing initiatives are meeting tenants’ needs and whether the market can offer improved products. Alongside this, I want to look more widely at whether innovative approaches to helping tenants move more easily, including allowing tenants to passport their deposit between tenancies.

“It is important that good landlords have the confidence to let out their properties safe in the knowledge that a deposit will provide them with reasonable protection from damages to their property. Any improvements to the way deposits are returned at the end of a tenancy will need to ensure that deposits still serve this purpose and that deposit protection continues to work well for both tenants and landlords.”

Em Morley, Editor of Landlord News and the blog of our sister company, Just Landlords, comments: “The Government’s announcement to consider the passporting of deposits between tenancies is welcome news.

“Tenants can find themselves in a difficult position financially when looking to move from one home to another. Now that the Tenant Fees Act is in place, renters in England are experiencing a more straightforward process, due to the ban on additional fees by letting agents and landlords. However, having to put forward the sum of five weeks’ rent, plus a holding deposit, when your previous deposit is still locked in a protection scheme has its financial strains.

“As long as a practical system is put in place to support this idea, it could really make a difference. A more automated process such as passporting will not only make moving a simpler task for tenants but will hopefully also result in less admin work for landlords and letting agents.”

Landlords Remain Optimistic about Property Investment, Despite Brexit Worries

Published On: June 27, 2019 at 9:09 am

Author:

Categories: Landlord News

Tags: ,

Around two-thirds of landlords in the UK are feeling optimistic about the residential buy-to-let sector over the next three years, despite Brexit worries.

Cambridge & Counties Bank has commissioned research into the number of landlords in the market, which shows that 19% are looking to grow their portfolios by a third. 11% stated that they want to double it over the next three years.

Only 19% are looking to sell, according to this study.

Despite this high level of optimism, Brexit remains a key uncertainty for property professionals, with 40% of landlords conceding that it is top of their list of concerns.

Brexit is also seen as a bigger risk than rising interest rates, a lack of confidence in the stability of lenders, and rising levels of tax, each by 32% of respondents.

While the buy-to-let sector is currently viewed most positively, 61% of landlords are equally optimistic about student accommodation in terms of growth. 

As well as looking to grow their portfolios, many landlords also want to refurbish their let properties, with plans to spend an average of £10,000. 11% said that they would spend more than £20,000 and 4% forecast an expenditure of more than £50,000.

Simon Lindley, Chief Commercial Director, Cambridge & Counties Bank, said: “In spite of Brexit worries, it is great to see that the overall outlook for the commercial property sector is one of optimism. At Cambridge & Counties Bank, we remain very much focused on supporting our clients with our comprehensive product suite and in doing so maintain our market leading level of customer satisfaction.”

One of the shocking results of the research was the growing concern among landlords with regards to the financial stability and strength of their banking partners.

Just one in five (20%) said they were very confident of their lender’s stability, with 18% of landlords saying they are “not confident” in their lender‘s stability given recent announcements of funders going into administration or closing their books to new business.

Simon Lindley adds: “Cambridge & Counties Bank has seen a steady stream of borrowers switching from other lenders, often recommended by the intermediaries and brokers we work closely with on a daily basis. We are actively focused on becoming the bank of choice for professional property investors and landlords, and will capitalise on the record set of results we posted for FY2018 and the momentum we have across the UK to grow our market share further.”

Renting in Retirement is Becoming an Increasingly Popular Option

Published On: June 27, 2019 at 8:38 am

Author:

Categories: Tenant News

Tags:

There has been a 61% increase in the number of older renters since 2012, according to new research by Hamptons International.

In the last twelve months this has amounted to an 8% increase, with around a third of these renters being retirees.

The estate and letting agent says that retirees are making the decision to swap homeownership for the following reasons:

–      In order to beat high levels of Stamp Duty

–      To free up savings to help family members get onto the property ladder

–      To turn their home into a source of income

Jamie Turnbull, Business Director of Girlings Retirement Rentals, has commented on this research, responding that they have also witnessed a growing trend towards renting in retirement. They expect this will continue as people recognise it can be a good financial option.

Mr Turnbull says: “Selling up and renting can be great way to free up capital in a property which can then be invested to fund retirement or help family out. Renting also saves on stamp duty. Often people are downsizing, but even smaller homes can command high stamp duty costs.

“Renting avoids this and gives people access to all the capital in their house, rather than spending some of it buying a new home. Many baby boomers are sitting on a lot of equity because of rising property prices over the past twenty years and want access to it now so they can really make the most out of their retirement.

“Most of our properties come with assured or ‘lifetime’ tenancies, so people have the same security of tenure they would have if they owned their own home. This can be a big factor when deciding to rent and is why many of our residents have chosen to rent through us in a specialist retirement development.”