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Em Morley

Discrimination Under Right to Rent Scheme is Unlawful, Minister Insists

Published On: March 7, 2019 at 10:36 am

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Categories: Law News

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It is unlawful to discriminate against any potential tenants under provisions of the Right to Rent scheme, the Minister for Immigration has insisted. 

Caroline Nokes MP spoke out after the High Court ruled the scheme in breach of the European Convention on Human Rights last week. 

The High Court ruled that Parliament’s decision to impose Right to Rent checks is outweighed by the potential for race discrimination by landlords and letting agents conducting these inspections, which Nokes described as “disappointing”.

“We disagree with this finding and the Home Office has been granted permission to appeal all aspects of the judgement,” she added.

However, Nokes insisted that the requirements under the Right to Rent scheme remain in force; there is no immediate change to the operation of the policy. 

“Landlords and letting agents are still obliged to conduct Right to Rent checks as required in legislation,” she explained. “They must not discriminate against anyone on the basis of their colour or where they come from.”

Nokes also pointed to comments made by the Home Secretary, Sajid Javid MP, regarding options for a further evaluation of the operation of the scheme. As part of this, the Government will “look to develop further mechanisms to monitor the operation of the scheme to provide ongoing assurance about its impact”.

The Home Secretary has written to the independent adviser on lessons learned from the Windrush scandal, Wendy Williams, to draw her attention to the High Court ruling.

“The Right to Rent Consultative Panel will meet again next month to look at the operation of the scheme, and the guidance provided to landlords and letting agents,” Nokes revealed.

She clarified: “The Government is committed to tackling discrimination in all its forms and to having an immigration system which provides control, but which is also fair, humane and fully complaint with the law. This includes ensuring illegal migrants, with no right to be in the UK, are not able to access work, benefits and public services.”

The Right to Rent scheme was first trialled in the West Midlands, before its national introduction in 2016. The trial was evaluated in full, with the results published in October 2015.

The Home Office assessment found no systematic discrimination on the basis of race.

Landlords and letting agents are reminded that the Right to Rent scheme is still a legal requirement, despite the High Court’s ruling last week. 

Inventories are as Important as Deposits, the AIIC Insists

Published On: March 7, 2019 at 9:58 am

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Categories: Lettings News

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Independent inventories are as important to landlords as tenancy deposits, the Association of Independent Inventory Clerks (AIIC) insists.

The organisation claims that independent inventories cost as little as £1.50 a week over the course of a 12-month tenancy, questioning why all landlords aren’t investing in this assurance to their investment.

For most responsible landlords and letting agents, the idea of letting a property without a deposit seems unfathomable; handing the keys to a new tenant without any money on account for damages leaves a landlord and their most valuable asset at risk and vulnerable.

Daniel Zane, the Chair of the AIIC, stresses that this is exactly what happens when a new tenancy is not supported by an independently compiled inventory report, which is carried out by a professional, impartial clerk.

He suggests that letting properties without independent inventories is no different to handing the keys to a stranger without any deposit in place. When inventory reports are not in place at the start of tenancies, if there is a need for deductions at the end, there will be absolutely no proof to back up the deductions required. 

Without independent inventories, landlords are out in the dark and have to rely on luck, Zane insists, with regards to the reliability of a tenant and their willingness to put right any damages. This leaves the landlord with little to no control over the condition of their property.

He is clear that an inventory report must be conducted by an independent, third party clerk, in order to carry any weight in a deposit dispute and, therefore, ensure the recovery of cost for a landlord.

Zane explains that many landlords are unaware that an independent, professionally compiled inventory report costs as little as £1.50 per week over a 12-month tenancy, which is a small cost when compared to the savings that it can ensure. 

With years of experience in the lettings industry, Zane is amazed by the number of landlords that still embark on new tenancies without such assurances in place, putting their finances and properties at risk.

If you do decide to compile your own inventories, we have a fantastic guide to help you make them as professional as possible: https://www.landlordnews.co.uk/guides/a-landlords-guide-to-inventories-and-avoiding-disputes/

West Midlands offers the Most Affordable Rents for Tenants

Published On: March 7, 2019 at 9:03 am

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Categories: Tenant News

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Why has Birmingham led UK House Price Growth Since the Brexit Vote?

The West Midlands offers the most affordable rents for private tenants in England and Wales, based on an average renter’s annual income divided by their yearly rent costs, according to the latest Rental Index from Goodlord.

The letting agent software platform found that landlords in the West Midlands offer the most affordable rents across the country, at an average of £689 per month. Based on a typical salary of £18,000 amongst tenants in the region, renters spend 24% of their annual income on rent, compared to 29% nationally. 

However, landlords in the Midlands – both the East and West – face the longest void periods in the country, at an average of 33 days. 

Overall, void periods were down in February for five out of the eight regions in England and Wales, to an average of 23.75 days, from 28.6 in January.

Landlords in London faced the shortest wait for new tenants, at just 13 days on average. 

Nevertheless, the least affordable rents in the country were found in the capital, at an average of £1,619 per month, which is a whopping 114% higher than the national average. Tenants in London, however, have the highest typical income, at £36,000 per year.

Despite offering the cheapest rents in the country (£635), rental properties in the North East eat up an average of 44.8% of a tenant’s income, due to their low average salary of £17,000. 

In terms of length of tenancy, London offers the longest average fixed term agreement, at 14 months, which is three months longer than the next region, which is the South East.

Landlords, how do these figures compare to your own experiences of rent prices, void periods and tenancy lengths? 

Perhaps the data may influence your decision when looking for a new investment property – will you focus on affordable rents or low void periods? 

Prime London Tenants may Buy their Own Homes in Near Future

Published On: March 6, 2019 at 9:59 am

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Categories: Tenant News

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Prime London tenants may be in a position to buy their own homes in the near future, according to analysis by estate agent Knight Frank.

In the firm’s latest Prime London Lettings Index, covering February 2019, it found that the number of prime London tenants entering tenancy agreements has plateaued since the middle of last year, indicating that some renters may be willing to buy soon.

In prime central London, the average rent price rose by 1.4% in the year to February, compared to just 0.2% in prime outer London. On a quarterly basis, rents dropped by an average of 0.4% in both prime central and prime outer London.

Knight Frank observes that this positive growth in prime outer London rents in the 12 months to February marked the first increase for the area in three years. It believes that the tax changes introduced for landlords in recent years have put downward pressure on supply levels across the prime markets of London.

However, the ratio of new prospective tenants versus new supply in prime central and prime outer London rose to 5.4 in January. This increase – largely due to seasonal growth in new potential renters – indicates continued upward pressure on rent prices.

As the number of new rental property listings has decreased, so has the amount of tenancies agreed in prime central London. 16.5% fewer tenancies were agreed in the year to January than the previous 12-month period, data from estate agent LonRes shows.

The number of new prospective prime London tenants paying over £5,000 per week for their rental properties has plateaued since the middle of 2018, suggesting that demand will shift towards the sales market in higher price brackets of the capital. 

Knight Frank has found that the year-on-year change in the total number of £10m+ sales applicants was broadly flat in the first two months of this year, after two years of declines. 

Which Parts of the UK have the Most Energy Efficient Homes?

Published On: March 6, 2019 at 9:03 am

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Categories: Property News

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Home improvement firm Everest has assessed which parts of the UK have the most energy efficient homes.

Investing in residential property can be a great way to earn extra income. However, before parting with your cash, you should develop an investment strategy. This should include the energy efficiency of your property, especially considering the Government’s new Minimum Energy Efficiency Standards (MEES) for rental properties.

The way that a residential building is constructed, insulated, heated, ventilated and the type of fuel used all contribute to its carbon emissions, which can seriously impact the cost of running a property, and even its value.

Homeowners and buy-to-let landlords could reap significant competitive advantages by shifting to a green model of potentially adding value to a property.

This model uses resources more efficiently and is creating an appetite for innovation in areas like renewable power in the home.

As property buying perceptions change, fresh analysis of 15,623,536 Energy Performance Certificates (EPCs) across the country has been undertaken by Everest, to reveal the best and worst rated locations for energy efficiency.

The study found that, despite being the most expensive place to buy and rent property, London has the most energy efficient homes in the country, meaning that residents pay the least on bills.

Tower Hamlets, Greenwich and the City of London were identified as the three most energy efficient areas in England and Wales, with the most A and B-rated EPCs. Over three years, energy bills cost an average of just £1,650.

Which Parts of the UK have the Most Energy Efficient Homes?

There has been significant investment in London and Tower Hamlets, specifically from local governments.

Despite being one of the most economically disadvantaged areas of the UK, Tower Hamlets has been part of The London Plan and London Climate Change Action Plan, striving to ensure that the area has the highest standards of energy efficiency for new build development of any city in the UK. Due to this, Tower Hamlets and its surrounding areas have the highest EPC ratings.

When looking outside of London, Dartford in Kent, Uttlesford in Essex, and Basingstoke and Deane in Hampshire are amongst the top ten locations with the best EPC ratings in the UK.

Homes with an A or B-rated EPC spend an average of £1,104 on their energy bills over three years – and those that are benefitting from cheaper bills are situated within or near the capital. However, the data shows that just 19,832 dwellings have an A or B-rated EPC.

The majority of homes have a D rating that have energy costs of an average of £3,228 over three years. There are more than 6.1m dwellings in England and Wales with a D-rated EPC. 

However, the problem lies among the lowest rated homes. Just over one million dwellings have an F or G-rated EPC, making them the least energy efficient homes in England and Wales.

Occupiers of these homes pay an average of £5,743.50 for their energy bills over three years, which is 3.5 times more than those with A or B-rated properties.

The Isles of Scilly, Gwynedd and Ceredigion are the three worst areas. Some 35% of properties within the Isles of Scilly received an F or G-rated EPC.

Most homes across the west fringes of the country are not suitable for cavity wall insulation, due to the fact that they are highly exposed to wind and driven rain. This can cause problems with damp and mould in the walls, affecting the health of occupiers living in the property.

Everest gathered seven example EPCs across the different performance ratings, to estimate the energy costs of a home for three years. The analysis shows a drastic cost difference between those with a C or D-rated EPC (52%), and those with F or G (35%).

Landlords looking to invest should consider EPCs when viewing a property. 

Ten-Year Anniversary of Bank of England Base Rate Cut

Published On: March 5, 2019 at 10:32 am

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Categories: Finance News

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Bank of England

Today (5th March 2019) marks the ten-year anniversary of the Bank of England (BoE) cutting the base rate to 0.5%.

Last month, the Bank held the base rate at 0.75%, after it was raised from 0.5% in August 2018.

During the past ten years, savers have collectively missed out on at least £188 billion – the equivalent of £7,101 per household. 

However, the mortgage market has stayed afloat over this period, with lenders increasing competition to secure business. 

Positively, the climate for first time buyers has improved, with trade body UK Finance finding that the number of buyers getting onto the property ladder hit a 12-year high last year. 

Mortgage borrowers are being advised to lock into these record low interest rates while they last, as the Bank is expected to raise the base rate again this year.

Kevin Roberts, the Director of Legal & General Mortgage Club, comments on the ten-year anniversary: “Ten years ago, the BoE cut the base rate to the then record low level of 0.5%. Yet, despite the upheaval and uncertainty we’ve seen since then, the mortgage market has shown just how resilient it can be when faced with change. Amidst increased regulation, referendums and general elections, there is still so much support for buyers, and the number of mortgages continues to grow. 

“Though base rates have risen since November 2017, we need to remember that we are still living in an era of near all-time low interest rates, where competition from lenders for mortgages is fierce. First time buyers are clearly using this to their advantage, with their numbers at a 12-year high. However, even with political uncertainty still reigning, the low rate environment won’t last forever. Borrowers should use this opportunity to get in touch with a mortgage broker now to discuss their long-term financial plans and lock into one of the great rates out there on the mortgage market.”