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Em Morley

Number of Landlords Purchasing Properties Continues to Drop

Published On: May 17, 2019 at 8:59 am

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Categories: Landlord News

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The number of landlords purchasing properties using mortgages continued to drop in March 2019, according to the latest Mortgages Trend report from UK Finance.

In March, 5,000 new buy-to-let property purchase mortgages completed, which is down by 9.1% on the same month of last year. 

However, 14,400 remortgages in the buy-to-let sector were recorded in the same month – 3.9% more than in March 2018. While buy-to-let property purchase activity continues to contract, due to tax and regulatory changes, remortgaging has increased year-on-year in the sector for the second consecutive month.

Meanwhile, 28,800 new first time buyer mortgages completed in March – down by 2.4% on the same month of 2018. This is the first annual decline in first time buyers since September last year. 

25,280 home mover mortgages completed in March, which is down by 6% year-on-year.

There were 16,810 new remortgages with additional borrowing in March 2019 – up by 9.1% on the same month of last year. For these remortgages, the average amount taken out was £55,700. Additionally, 15,030 were simple pound-for-pound remortgages (with no additional borrowing), which was down by 1.1% year-on-year.

In total, 4.1% more residential remortgages were recorded in March than in the same month of 2018. This is the 12th consecutive month of annual growth in remortgaging, as a number of fixed rate deals come to an end and borrowers continue to lock into attractive rates.

Keith Haggart, the Managing Director of lifetime mortgage provider Responsible Lending, comments on the data: “March was meant to be the month when the Brexit trigger was pulled, and it may have been a significant deterrent for first time buyers, who tiptoed away from the housing market for the first time in six months, despite low interest rates and other incentives.

“The jump in remortgaging chimes with a market that is languishing on low supply of homes for sale. Transactions levels are also near historic lows and sellers appear to have been holding their breath for a while, wondering what the Brexit gods will deliver.”

He adds: “If these are early signs that even first time buyers, with bumper Government incentives, are starting to look the other way, then prices may cool more rapidly nationally, even without an EU exit.”

Number of Respondents to RLA Survey on Possession Breaks Record

Published On: May 17, 2019 at 8:00 am

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The number of respondents to a Residential Landlords Association (RLA) survey on property possession has broken the organisation’s previous record.

More than 6,000 landlords responded to the RLA’s survey on what a post-Section 21 private rental sector should look like – a record response.

The survey went live just days after the Government announced plans to abolish Section 21 notices – so-called no fault evictions – last month.

The RLA is inviting landlords to share their experiences of regaining possession of their properties, and asking what assurances they need to continue to stay in the sector and provide the homes to rent that tenants desperately need.

The RLA will use the responses to form the basis of its reply to the Government’s formal consultation on the Section 21 ban, when it is launched.

The RLA argues that it is vital that landlords are confident that they can swiftly and easily repossess their properties for legitimate reasons, such as rent arrears, anti-social behaviour and selling the property.

The number of landlords responding to the survey, which closes next week, has already broken the organisation’s previous record.

David Smith, the Policy Director of the RLA, comments: “The scale of responses to this important survey shows the strength of feeling in the sector.

“The survey closes next Monday, and we would encourage all those who want the opportunity to have their say and shape the future of the sector to take the time to respond.”

You can find and respond to the survey yourself by clicking the following link: https://rla.onlinesurveys.ac.uk/possession-reform-ensuring-landlord-confidence-apr-may

We will continue to keep you updated on the Government’s plans to ban landlords serving Section 21 notices.

Recently, the Housing and Homelessness Minister, Heather Wheeler MP, pledged to reform the court system, so that landlords can gain possession of their properties more easily in legitimate circumstances. 

HMO Landlord Drop-In Events Hosted by Manchester City Council

Published On: May 16, 2019 at 9:35 am

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What do you know about the rules regarding houses in multiple occupation (HMOs) and the licensing systems in place across England? Whether you’re new to that part of the property sector or you want to keep update on the latest changes, you may be interested in an upcoming event in Manchester.

The Manchester City Council has planned a couple of HMO drop-in events for private landlords and letting agents, due to take place over the next few days. 

One of the events will be held at Moss Side Powerhouse Library on Thursday 16th May between 3PM–7PM. The other will be held at Abraham Moss Library on Wednesday 22nd May between 2PM–7PM. These sessions have been planned in order to help HMO landlords and letting agents understand new rules and changes that have been introduced to HMO licensing.

It was 1st October last year that HMO rules were changed, so that properties let to five or more individuals from different families who are sharing amenities must have a licence. This is necessary for them to continue operating and to comply with legislation.

An estimated 160,000 let properties have been affected by the introduction of these new rules put in place to govern HMOs. The rules have also set a specification for room sizes in the properties. Bedrooms in HMOs are now required to be at least 4.64sqm for children aged ten or younger. For a single adult the bedroom must be a minimum of 6.51sqm, and for two adults sharing it must be 10.22sqm.

The minimum room size rule will not affect most landlords. Its main aim is to clamp down on rogue landlords who are overcrowding their properties, forcing tenants to live in unsuitable conditions. Housing too many people in one room or not providing a big enough space is a big issue in the private rental sector (PRS) and a breach of health and safety standards.

If you are unsure whether you require an HMO licence for your property, get in touch with your local authority for clarification.  

Manchester City Council HMO drop-in events:

Thursday 16th May, 3PM–7PM, Moss Side Powerhouse Library, 140 Raby Street, Moss Side M14 4SL

Wednesday 22ndMay, 2PM–7PM, Abraham Moss Library, Crescent Road, Crumpsall, M8 5UF

Increase in Tenant Activity Expected in June for England

Published On: May 16, 2019 at 8:54 am

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Categories: Tenant Fees Ban,Tenant News

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With the Tenant Fees Act coming into force on 1st June in England, letting agents and landlords are being warned to prepare for an increase in tenant activity.

No Letting Go, provider of inventory services in the UK, says that many tenants are waiting to move homes after 1st June, in order to avoid paying any upfront fees and to benefit from capped security and holding deposits.

This warning follows recent research from The Deposit Protection Service (DPS) suggesting that tenants could be delaying their move until the Tenant Fees Act officially becomes law in a couple of weeks’ time.

According to the study, rents dropped during the first quarter of 2019, which meant that the average rent across the country during the first three months of the year had fallen to £757. This is a drop of £5 (0.64%) from the last quarter of 2018 and £14 (1.87%) from the first quarter of if 2018.

The DPS has said that this drop-off is down to a range of economic factors, as well as a period of ‘tenant inactivity’ leading up to the fees ban.

Nick Lyons, CEO and Founder of No Letting Go, says: “It’s no surprise to see shrewd tenants delaying moves until after the fees ban and deposit caps are introduced on 1stJune.

“The upfront cost of moving between rental homes can be high – particularly in London and the South East – so renters will do anything they can to keep costs down, even if that means putting their move on hold for a few months.

Lyons has said that although this recent dip in activity may have allowed extra time for agents and landlords to prepare for the new system, they should expect a significant increase in tenant activity from June onwards.

Lyons also commented: “Tenants are likely to have continued searching for properties over the last few months and will be keen to push their moves through as quickly as possible so they can be settled in their new property for the majority of the summer months.”

No Letting Go also wants to remind landlords that once the five-week deposit cap is enforced, an independently compiled inventory will be even more valuable towards protecting their investment. 

Lyons said: “Inventory reports confirm the condition of a rental property at the beginning and end of a tenancy. The presence of this document provides landlords with the evidence to make fair deductions for damage and lost items.

“With the fees ban likely to reduce average deposits in some areas, it’s vital that landlords have peace of mind that their property is protected by an inventory that can support them in the event they need to make deposit deductions.” 

Scottish Homes Selling 28% Faster than Properties in England and Wales

Published On: May 16, 2019 at 8:01 am

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Scottish homes are selling much faster than those in England and Wales, according to new information that has been labelled as the largest capture of house sale data of its kind.

The local house market insights tool from Property Solvers works to track the moment a property has been listed on Rightmove up to the point at which it is marked as officially ‘sold’ at the HM Land Registry.

It took an average of 12.57 weeks to sell residential estates across Scotland, compared to 16.11 weeks in England and Wales. This is an overall difference of 28.16%.

Looking specifically at Paisley in Scotland, it took an average of eight weeks for 251 properties to sell during the 12 months to May 2019. Those selling in Glasgow and Edinburgh waited an average of 13 and 14 weeks respectively from when they began marketing their properties to the point of completion. 

Motherwell and Kirkcaldy set the slowest pace, with 732 sellers waiting an average of 15 weeks.

Moving over to England, the research highlighted a relatively small number of sales in Central London taking between 10 and 11 weeks. However, it also pointed out that the majority took at least five weeks longer. In Southend-on-Sea, Torquay, North London, Watford and Southall, 2,054 sellers had to wait an average of 18 weeks for completion.

Co-founder of Property Solvers Ruban Selvanayagam has commented: “Although the sample size is lower and the system is far from perfect, it’s evident that the English and Welsh conveyancing process could learn some key lessons from Scotland.”

The Scottish Conveyancing Process

Selvanayagam said: “It’s the solicitors that typically take responsibility for marketing Scottish homes up for sale (as opposed to estate agents in England and Wales).

“Prior to getting homes on the market, by and large, Scottish sellers are required to deliver a Home Report. In addition to an energy performance certificate, a property questionnaire must also be forwarded.

“The seller will also supply a ‘single survey’ which the buyer can present to the lender for mortgage approval. Provided the surveying firm is on the lenders approved panel, there are usually no obstacles. This minimises an increasingly frequent issue in England and Wales of down-valuations that result in sellers pulling out or attempting to renegotiate the final purchase price.

“Although the Home Information Packs had limited success in England and Wales, there is a strong argument that sellers should be presenting their homes in a more transparent way.

“In a competitive market, to avoid the silly games that can often occur in the bidding process, buyers interested in properties above the asking price are invited to make sealed bids within a set timeframe.

“Once a legitimate bid is won, similar to England and Wales, the mortgage offer is confirmed and the conveyancing process starts. However, in Scotland, although a number of conditions are often applied, the exchange of documentation (known as ‘missives’) earlier in the process facilitates a much smoother transaction. In England, there is no legal commitment to the sale until contracts have been signed and exchanged.

“Also, if sellers in Scotland decide to accept a higher offer from another prospective buyer (i.e. the original buyer has been gazumped), they must instruct a different solicitor.”

90% of Councils Warn Housing Benefit Freeze will Push more People into Homelessness

Published On: May 15, 2019 at 10:25 am

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Risk of increase in people forced to sleep rough, as cost of living and rent prices rise

Nine out of ten councils warn that more and more people in their areas on the lowest incomes will become homeless, as the freeze on Local Housing Allowance (LHA) and other benefits means that they cannot afford to pay their rents, according to a new report.

With cuts to LHA over the past eight years, and a freeze to the benefit from 2016, those who need it the most simply aren’t able to cover their housing costs, leaving them on a knife-edge.

Councils are finding themselves under increasing pressure, with seven out of ten reporting a rise in demand for their homelessness services in the last year alone. More than three-quarters of councils in the north and Midlands reported an increase in the need for their services, as well as 80% across London.

Homelessness charity Crisis and the Joseph Rowntree Foundation are calling for the Government to urgently address the issues underpinning homelessness by restoring LHA rates in Universal Credit, to ensure that they truly cover the cost of rent.

In the long-term, this needs to be followed by a major investment in social housing. Almost 90% of local authorities surveyed for the report said that there is not enough in their areas for those who need it, including for those on the brink of homelessness.

The Homelessness Monitor: England is commissioned by Crisis and the Joseph Rowntree Foundation, and led by Heriot-Watt University. Published every year since 2011, it includes a national survey of councils, statistical analysis, and in-depth interviews with council and national Government representatives and charities working with homeless people.

Jon Sparkes, the Chief Executive of Crisis, says: “Everybody deserves a safe and stable home to build their lives in, but it’s clear from councils that the growing gap between private rents and LHA is leaving far too many people at risk of becoming homeless, and keeping those already experiencing it trapped in a cycle of destitution.

“This can’t go on. No one should have to face impossible choices like buying food and essentials or paying their rent, or, worse still, live in fear that they might never escape the devastation of homelessness.”

He continues: “The good news is, this can be fixed. In the long-term, the Government must build the social housing our country needs, but, in the short-term, it must urgently invest in LHA, so that people who rely on it can actually afford their rents and have the stability of a place to call home.”

Campbell Robb, the Chief Executive of the Joseph Rowntree Foundation, also comments: “A home should be the anchor that keeps you from being swept into homelessness, poverty and destitution in hard times. For too many people, the prospect of such a stable home is a distant dream, due to high rents, unstable tenancies and an income that doesn’t allow you to build a better life.

“We know there is action we can take to fix the problem, starting by ensuring housing, social security and work offer reliable routes out of poverty. LHA need urgent investment, but the Government must also take action for the long-term, by investing in the low cost rented homes the country badly needs.”

The report’s lead author, Professor Suzanne Fitzpatrick, of Heriot-Watt University, shares her thoughts on the findings: “This year’s Homelessness Monitor provides encouraging evidence that the Homelessness Reduction Act is enabling councils to help more people facing a housing crisis.

“However, the combination of cumulative welfare reforms and increasing housing market pressures are making it even harder for low income households to find a place to live. The research shows that councils are seeing more demand for their services, yet are faced with an ever diminishing social housing supply and very few options in the private rented sector.”