Over one in ten (10.5%) private tenancies ended 2018 in rent arrears of some kind, according to the latest report from Your Move.
The estate agent recorded an increase in rent arrears in December 2018, from the 8.1% seen in the previous month.
Although Your Move believes that the spike in rent arrears is to be expected in December, due to the festive period, the rate of 10.5% is still below the all-time high of 14.6% recorded in February 2010.
Rent prices also nudged up between November and December last year, the report shows. On a monthly basis, the average rent rose by 0.1% in England and Wales, to reach £865 per month. Year-on-year, prices grew by an average of 1.8%.
The strongest annual growth was recorded in the South West, where rents increased by an average of 4.1%, to hit £702 a month.
However, the average rent price did fall in two regions on an annual basis.
In the East of England, rents dropped by an average of 1.4% over the year, to £881 per month, while London experienced a decline of 0.8%, taking a typical rent price to £1,263. Nevertheless, the capital remains the most expensive region to rent a property.
Martyn Alderton, the National Lettings Director at Your Move, comments: “While the rental market tends to wind down as we reach the end of the year, there were still some positive advancements this year, with prices rising in all but two regions.
“While landlords in most areas saw their yields squeezed in 2018, there was good news, as returns held firm between November and December.”
He adds: “Tenant arrears have spiked compared to November, but this often occurs at this time of year.”
Landlords, how do your own figures compare to these national averages, for both rent prices and arrears?
Accessorising your property well is crucial for easy renting. It’s the last touch that completes the interiors, the first thing potential tenants notice, and it has the highest ratio of impact to investment.
With tips from Sonia Pash, the Co-Founder of Temza Interior Design Studio (www.temza.co.uk), you will have no trouble successfully styling your property.
Research your area
The first thing you
need to pin down is where the property is located and what your potential
tenant profiles are like. This needs to dictate the style of the interior (as
opposed to what’s on sale in IKEA at the moment). Area wise, just to give you a
few examples, you need to stay very classy and luxurious in somewhere like
Knightsbridge, while with a property in Shoreditch it’s more about creativity
and personality. Just look around on the market for some research and
inspiration, taking into particular consideration any show homes near your
property, as they have been designed by professional interiors designers who
already have a good knowledge of current trends, as well as the area and the
client profiles, and honed their design to cater for this particular market.
Talking to an estate agent is also a good idea.
Style and colour schemes
It’s always a good
start to consider the age, professional status and family background of your
potential tenants. For a corporate type of property, go stylish and elegant,
creating a hotel-inspired look with natural colours and a few dark or bright
accents. For families, one of the most important things will be practicality
and plenty of storage space. So, while easy-to-clean, durable and practical
materials are a must for a family house, bachelor pads can benefit more from
wow effect finishes and furniture, even if slightly harder to maintain, as that
won’t be their main consideration.
Quality is must
Getting quality
furniture and accessories is one of the things that many landlords get wrong.
Everyone tries to save money and go for the cheapest options, especially if you
already completed a full refurb on the property and don’t have much budget left
for styling. Cheap furniture can break and get scratched or damaged, even
before tenancy ends. Spending slightly more will ensure not only longer lasting
items, but also winning overall look of the property. If necessary, break up
the package and don’t buy all the items at once, but concentrate on the main
items first and purchase smaller items at a later date, so you can ensure the
quality.
Sonia Pash, the Co-Founder of Temza Interior Design Studio
Window dressing
Not everyone is
prepared to spend on window dressing, however, it is one important element
without which the interiors look incomplete. You can optimise the costs by
using curtains in the living areas and opting for a nice roman or roller blind
in the bedrooms, which can be a cheaper option than curtains. The bottom line
is, you don’t want your tenants starting to put up their own curtains poles
etc., which can lead to damage to the wall and costly repairs.
Accessories
You don’t need to go
full-on with accessorising the property – at the end of the day, it’s not a
show home and you do want to leave your tenants space to display their own
items, but a few touches can play a big role to create that special feeling to
the room and connect to potential tenant, as well as just making to property
look cared for and lived in. Think a couple of artworks, mirrors and a few vases
and plants. That’s all it takes to make space come alive!
Extra step
If you are renting a
top-of-the-market property or one that is located in a well-off area, you are
probably facing tenants with higher expectations, thus, you need to take an
extra step to stay ahead of the competition. Try candles and scents to fill the
home with warmth and generate pleasant emotions from the viewing. We all know
that people buy with their eyes, but we can sometimes underestimate the importance
of other feelings, such as smell. If you have chance to, put a few flowers or
bowl of fresh fruits before the viewings for an extra special finishing touch.
Sonia Pash is the MD and Co-Founder of Temza, an interior
design studio with in-house construction team, based in Pimlico. Sonia has
a real estate background, and her team brings together diverse skillsets in
design, construction and project management, approaching projects from
different angles and delivering the best solutions for complex briefs. Temza
ensures all stages of projects can be handled in-house, from family homes,
compact apartments and grand houses with cinema and spa facilities, to
investment projects with strict budgets, and commercial spaces such as cafés,
restaurants and offices.
The UK housing market is still moving upwards, despite Brexit woes, according to the latest Housing Report from NAEA Propertymark (the National Association of Estate Agents).
The study, which covers the month of December 2018, uses
data from NAEA Propertymark member estate agents.
Property supply
As vendors continued to market their homes in December, the
supply of available properties increased by a fifth on a monthly basis, from an
average of 35 per branch in November to 42.
This is the highest level seen for the month of December
since 2014.
Housing demand
In December, the number of home hunters registered per
branch rose by 8%, from an average of 282 in November to 304.
Year-on-year, demand increased by 13%, from 268 in December
2017.
First time buyer
sales
The amount of homes sold to first time buyers in December
rose marginally, from 23% of all transactions in the previous month to 24%.
Annually, however, the number of sales made to this type of
buyer dropped from 32%.
Agreed sales
The amount of property sales agreed per branch fell from an
average of nine in September, eight in October, seven in November, to just five
in December.
This is in line with seasonal trends, however, as it is the
lowest figure recorded since December 2017, when it was also five.
Mark Hayward, the Chief Executive of NAEA Propertymark, says: “This month’s findings prove that, despite the
current political climate, people still want to move. There is movement in the
market, with demand from house hunters up 13% year-on-year, and the supply of
available properties also rising. Although the number of sales agreed hit a
12-month low, this is something we always see in December, with Christmas
festivities typically taking priority over any plans to buy or sell.
“While many are adopting a wait-and-see strategy,
until there’s further clarity over what Brexit might mean for the market, there
is choice for those who want to buy now, and there are people on the market
looking for new homes.”
Specialist lender Paragon Banking Group has reported a 41%
increase in new lending across all business lines in the first quarter (Q1) of
the year, to deliver £661m of new lending.
Within this total, Paragon’s mortgage lending grew by 22% to
£449m, with buy-to-let advances up by 24% to £425m.
Paragon increased its share of more specialist, professional
landlord business in Q1, with 88% of completions from complex landlords,
including those operating through incorporated structures.
At the end of December 2018, Paragon’s buy-to-let lending
pipeline stood at £729m. This marks an increase of 18% compared to the same
point last year.
Paragon also demonstrated strong progress in its commercial
lending division, to achieve a 105% increase in lending to £212m, compared with
£103m in Q1 2018.
John Heron,
the Managing Director of Mortgages at Paragon, comments on the latest report: “The Group has started the year well,
delivering strong growth across all our core business lines. Our buy-to-let
mortgage capability continues to go from strength to strength, as we expand our
specialist proposition to meet the needs of larger scale landlords with more
complex portfolios.”
Although Paragon’s figures don’t speak for the
whole of the lending market, it is positive to see some growth at the beginning
of this year, following more subdued levels of lending in recent months.
For landlords changing the structures of their
lettings businesses, due to tax and regulatory changes, it is also good news to
see the bank adapting its lending conditions to cater to this more specialist
sector of the market.
We’d love to hear from landlords regarding
their future borrowing plans – are you thinking of investing further in
buy-to-let? Have you changed the structure of your portfolio to reflect the
changing times? What type of mortgage will you be looking at in the future? Let
us know!
Private renters in England are expected to spend a total of
£154m on tenant fees before the ban comes into
force on 1st June 2019, according to analysis by lobby group
Generation Rent, on behalf of The Sun.
However, renters must be aware that tenant fees vary hugely
across the country, with some letting agencies charging significantly higher
prices for their services than others.
Letting agents can currently charge tenants for services
such as referencing, viewing a property and processing fees, but, under the new
rules, they will only be able to charge for tenant damages, if the tenant loses
their keys and for late rent payment.
Following its passage
through the House of Commons last week, the start date of the tenant fees
ban has been set for 1st June 2019. This means that any private
tenants who sign contracts after this date in England won’t have to pay any upfront
fees.
However, up until that date, tenants are still liable to pay
fees. Generation Rent, on behalf of The
Sun, has calculated that renters will spend roughly £154m on fees before
the ban comes into force.
This was based on the average household of two adults paying
£404 in lettings fees when moving home. Renewals typically cost £117, while
check-out fees average £121.
There are currently around 4.7m private renter households in the UK, with 25% of these moving home in 2016/17, according to the latest English Housing Survey.
Tenants in the UK face a lottery when it comes to the fees
that they’ll be charged once they choose a property that they like, with
Kinleigh Folkard & Hayward found to be the most expensive – the smallest of
the 20 biggest agencies in the country.
Included in its fees are charges of £360 to set up a
tenancy, another £300 if tenants need to move out early and change the name on
the contract, or another £300 if they’d like to renew their tenancy.
Meanwhile, other agencies charge £90 to renew a contract.
Foxtons, which used to be among the four most expensive
agencies, has dropped to eighth place, after reducing its tenancy set-up fees
from £420 to £250 per person.
The Sun looked
into the 20 biggest agencies in the UK, based on the number of available properties
to let in October last year.
Online agent Purplebricks had the most – 21,000 properties –
but was also the cheapest.
At present, all letting agents are legally required to
publish their fees both online and in their offices.
Late last year, our sister company, Just Landlords,
uncovered a worrying lack of knowledge surrounding tenancy deposit laws and
renters’ rights. Now that the Tenant Fees Bill has passed through Parliament, one
tenant is urging others to understand their deposit rights.
Sally approached Just Landlords when she realised that her
tenancy deposit was not lawfully protected.
She had used a letting agent to find the right apartment in
an ideal location, and had secured the property by placing a deposit with the
company. After researching online, Sally was concerned that her deposit wasn’t
held in one of the three Government-approved protection schemes.
After detailing her rights to her contact at the letting agency,
Sally was eventually awarded the full compensation that she was owed – three
times the deposit amount, plus the original deposit. Luckily, this dispute was
settled between the letting agent and herself, which avoided Sally having to
take the case to court.
Without taking the initiative to research her rights as a
tenant, Sally could have missed out on a significant sum of money that she was
owed. Reflecting on her experience, she advises all tenants to extensively
research their rights.
Sally also suggests looking at the company you’re letting
through, not just the perfect property, when choosing where to rent.
Having surveyed over 1,000 people involved in the UK private
rental sector, Just Landlords found that a huge 98%
do not know how much a tenant could be owed if the landlord/letting
agent does not adequately protect their deposit.
Under the Housing Act 2004, landlords in England and Wales
are legally required to protect tenancy deposits in a Government-approved scheme.
If they don’t, they could be liable to pay the tenant up to three times the
deposit amount, plus the original deposit.
We have compiled a comprehensive guide to help tenants,
letting agents and landlords understand their deposit rights and
responsibilities. Click here
to read it for free.
Cases such as Sally’s highlight the need for greater
knowledge and understanding of tenancy deposit rights – don’t get caught out,
whether you’re a landlord or a tenant!
Last week, the Tenant
Fees Bill completed its passage through the House of Commons. The
next step for the new law is to receive royal assent, before it comes into
force on 1st June 2019. The Bill will cap the amount that tenants
can pay as a security deposit to five weeks’ rent.
