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Rent Price Growth Continues the Slowdown Seen since 2015

Published On: September 20, 2018 at 9:01 am

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Rent price growth across Great Britain continued on the slowdown that has been seen since 2015 in August this year, according to the latest Index of Private Housing Rental Prices (IPHRP) from the Office for National Statistics (ONS).

The average price paid by a private tenant in Great Britain rose by just 0.9% in the year to August, which is unchanged from July 2018. This slowdown in the growth of private rent prices has been driven mainly by the downward trend seen in London.

Excluding London, the average rent price increased by 1.5% annually in August, which is also unchanged on the previous month.

London rent prices dropped by an average of 0.3% in the year to August, again unchanged from the rate recorded in July.

Supply and demand

The Royal Institution of Chartered Surveyors (RICS) reported in its August 2018 Residential Market Survey a continuing decline in new landlord instructions for the 23rd consecutive month. The organisation notes that the implication of this feedback is that the supply of new rental stock to the market is increasingly constrained, with demand remaining resilient.

Similarly, ARLA Propertymark’s (the Association of Residential Letting Agents) July 2018 report found that the supply of rental properties has decreased, while tenant demand was at its highest level for the year so far. These supply and demand pressures can take time to feed through to the IPHRP, which reflects price changes for all private rental properties, rather than just those newly advertised on the market.

Rent Price Growth Continues the Slowdown Seen since 2015

Rent Price Growth Continues the Slowdown Seen since 2015

By country 

The annual rate of growth for Wales in August 2018, 1.0%, is still marginally higher than the annual rate of change for England (0.9%) and Great Britain (0.9%). Wales showed a broad increase in its annual growth rate between July 2016 and the end of 2017, but has fallen back during 2018.

This slightly stronger growth in Wales may be a response to higher levels of tenant demand in the country, as reported by ARLA Propertymark.

In England, private rent prices grew by an average of 0.9% in the 12 months to August, which is unchanged from July 2018. When London is excluded from England, prices were up by 1.6% on average.

Rent price growth in Scotland stood at an average of 0.5% in the year to August, unchanged from July. The historic weaker growth since mid-2016 may be due to stronger supply and weaker demand north of the border.

The annual rate of change for Northern Ireland (1.7%) in June 2018 was higher than the other countries of the UK. Northern Ireland has seen an increase in its annual growth rate between the end of 2016 and the end of 2017, but has fallen back slightly in 2018.

Region-by-region

In London, rent prices were down by 0.3% in the 12 months to August, which is unchanged from July. However, the RICS reports that expectations are now positive in the capital for the first time since August 2016. This may feed through to the IPHRP over time.

The largest annual rent price growth of English regions was seen in the East Midlands in August (2.8%), up from 2.7% in July. The South West followed (2.1%), with the East of England in third place (1.9%).

The lowest annual rent price growth was in London, followed by the North East (0.2%).

Comments 

Kate Davies, the Executive Director of the Intermediary Mortgage Lenders Association (IMLA), responds to the index: “While rent increases are subdued over the last 12 months, it is likely that this will only be a temporary respite. The cumulative impact of successive government regulation implemented two years ago, namely the 3% Stamp Duty surcharge and the removal of mortgage interest tax relief, means we may soon start to witness a more pronounced impact on the sector. Reduced landlord investment could ultimately result in supply shortfall and upward pressure on rents.

“Regulatory demands have already led to an 80% fall in new buy-to-let investment from 2015 to 2017.  Our latest research has found that 35% of intermediary mortgage lenders have restricted lending to buy-to-let investors, as more landlords are failing to meet current eligibility criteria.

“The full impact of the changes has yet to work through – so now is not the time for the Government to introduce further change for the sector.”

Right to Rent: Panel to Reconvene After Pressure From RLA

Published On: September 20, 2018 at 7:56 am

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The Home Office is to reconvene its Private Rented Sector (PRS) stakeholder panel on Right to Rent, following pressure from the Residential Landlords Association (RLA).

The RLA has welcomed the news the Government is willing to re-engage with the sector, and that a new meeting of the panel has been scheduled for October.

Right to Rent is a flagship part of the ‘compliant environment’ strategy for illegal immigrants introduced by the Prime Minister whilst she was at the Home Office.

Under the scheme, landlords are responsible for checking the immigration status of their tenants, with the prospect of prosecution if they know or have “reasonable cause to believe” that the property they are letting is occupied by someone who does not have the right to rent in the UK.

It has been controversial from the start and the RLA has serious concerns that the policy could lead to indirect discrimination, with landlords – forced to act as ‘border police’ – likely to play it safe when it comes to renting out their homes.

Indeed, a study by the RLA’s research arm PEARL found 42 per cent of landlords are now less likely to rent to someone without a British passport for fear of prosecution for getting things wrong.

The Joint Council for the Welfare of Immigrants (JCWI) , supported by the RLA, was granted permission by the High Court to proceed with their legal challenge against the policy.

Both the RLA and the JCWI argue that the Right to Rent policy discriminates against foreign nationals, as well those such as the Windrush generation, who cannot easily prove their right to remain in the UK. It also creates ‘document discrimination’ with many vulnerable tenants not holding the most common identity documents. The challenge is due to be heard in December.

David Smith, RLA Policy Director said: “It appears the Government is reforming the PRS stakeholder panel – which has been defunct for some time now.

“While we welcome the news the Home Office is keen to re-engage with the sector, we want to see them take bold action.

“Would-be tenants who are legally entitled to live in the UK, but struggle to prove it, are being denied homes and we believe the time has come to suspend thisunfair scheme.”

Gas Safety Week Reminder

Published On: September 19, 2018 at 10:23 am

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Gas Safety Week: what to do and why it is important 

For the eighth annual Gas Safety Week (17th – 23rd September) we wanted to emphasise the importance of regularly checking gas appliances and raise awareness to encourage more landlords and tenants to remain compliant with safety standards.

New research provided by Gas Safe Register has revealed that 33% of adults in the UK are uncertain when it comes to identifying signs of unsafe gas appliances.

Of those who were interviewed during the research process, 33% claimed that the way they identified if a gas appliance was unsafe was if it has a lazy yellow flame. In addition, 32% believed if the pilot light persisted to extinguish, this was a definite sign.

Lastly, 29% of people believed that black marks or stains on or around the appliance indicated that the appliance was dangerous and 12% were adamant that if increased condensation appeared inside windows, this was a sign that the appliance was definitely unsafe.

Moreover, 17% also admitted that they aren’t active in taking any steps to ensure that their home’s gas appliances are safe.

 

 

So, what should you do to keep your home safe?

  • Only use a Gas Safe registered engineer to fit, fix and service your appliances. You can find and check an engineer at GasSafeRegister.co.uk (check out our graphic below) or call 0800 408 5500.
  • Check both sides of your engineer’s Gas Safe Register ID card. Make sure they are qualified for the work you need doing. You can find this information on the back of the card.
  • Have all your gas appliances regularly serviced and safety checked every year. If you rent your home ask for a copy of the landlord’s current Gas Safety Record.
  • Know the six signs of carbon monoxide (CO) poisoning – headaches, dizziness, breathlessness, nausea, collapse and loss of consciousness. Unsafe gas appliances can put you at risk of CO poisoning, gas leaks, fires and explosions.
  • Check gas appliances for warning signs that they are not working properly e.g. lazy yellow flames instead of crisp blue ones, black marks or stains on or around the appliance and too much condensation in the room.
  • Fit an audible carbon monoxide alarm. This will alert you if there is carbon monoxide in your home.

 

Follow @JustLandlords on Twitter for daily articles about Gas Safety.

 

Please visit this link: https://www.gassaferegister.co.uk/gassafetyweek/stay-safe/jades-story/ to read some of the personal stories from tenants who have experienced an unsafe situation involving gas.

 

Council Intends to Clampdown on Rogue Landlords

Published On: September 19, 2018 at 9:26 am

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Unscrupulous and rogue landlords are undoubtedly a hotly debated topic. From landlords who allow their tenants to live in poor conditions, to landlords who invade the privacy of their tenants, filming them and their most intimate moments, it is seemingly an unresolved issue.

However, there is hope, as Great Yarmouth Council has proposed that they will clampdown on these rogues who allow their tenants to fester in such unsatisfactory housing standards, by introducing a selective Licensing Scheme for private landlords in the local area.

Subsequent to a consultation period, which closed last month, the council’s intentions to introduce the scheme covering parts of the Nelson Ward, with a view of improving the housing and social conditions for private sector tenants in this location, while tackling unethical landlords.

A recommendation report on Selective Licensing has recently been published by the council, announcing that the scheme will be coming into effect at the beginning on the next year and will continue to run for five years.

Under the proposed scheme, landlord of private rental properties within the local area would be legally obliged to apply for a licence requiring them to meet particular conditions around health and safety and standards.

A standard application fee will be £90, with a reduction to £70 for either an ‘Early application reduced fee’ (an application made within the first three months of designation), or Selective Licensing applicants who are accredited by the National Landlords Association (NLA).

There will be financial penalties for landlords who fail to comply with conditions or simply fail to apply for a licence.

Policy Director for the Residential Landlords Association (RLA) David Smith, commented: “Criminal landlords who fail to provide secure and safe accommodation to their tenants will not come forward,” he says. “Councils need a much smarter system to find and root out those who will never willingly make themselves known.”

Landlords, what are your thoughts on the scheme and what meassures do you think should be taken to crackdown on rogues?

To Furnish or Not to Furnish? … That is The Question

Published On: September 19, 2018 at 8:52 am

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When intending to let your property, it is important to consider whether or not you will be furnishing it or leaving it unfurnished. Renee Wells, from Landlord News, has provided some key tips to consider when it comes to figuring out your options:

Advantages of furnished properties

The obvious benefit from choosing to furnish your rental property is the potential to obtain a higher rent price. Generally, though, furnished properties are far more appealing to corporate lets, rather than residential. However, there are some key reasons why a furnished property could be beneficial to you.

• Your tenants can move in straight away, which will save both time and money whilst keeping your tenant(s) comfortable and content with their new furnished home.
• When a tenancy is expired, or you should find yourself in the unfortunate situation where you have to issue a Section 21, you can still use the furniture in the property because you own it.
• You are able to deduct a percentage of the cost of the goods from your tax liability. Deductible expenses include both the cost of the replacement item and costs of disposal of these items.
• Having a furnished property is what many tenants are searching for due to convenience, meaning that you are far likelier to let your property, quickly.

Disadvantages of furnished properties

You will be responsible for the maintenance of both the property and the furniture if it is becoming worn or need repairing.

Although letting a furnished property comes with its advantages, there are also some disadvantages to be wary of.

• One of which is the lack of flexibility in terms of making the most of the space in each room. Having furniture in a room may limit the amount of space you have to work with in order to make the room more appealing to increase demands for viewings.
• You would be responsible for any costs as a result of wear and tear to furniture or appliances.
• You would be responsible for the content insurance, as these possessions are your own.

Advantages of unfurnished properties

• Tenants may be far happier with their providing their own furniture, meaning that this would be less problematic for you

• There is no reason why you should be concerned about wear and tear to the furniture as you did not supply the furniture

• Tenants who invest in their own furniture are more likely to stay for a longer period of time since they have gone to the effort of making such an investment. In addition, moving house is both a complex and expensive process which they will likely want to avoid.

Do I have any alternative options?

There is another option available if you’re still struggling to come to a definite decision. This decision would be to let your property out part-furnished. If you wanted to go ahead with this option, here are the following things you can do:

• You could put in everything except beds, since tenants are more likely to have a bed than other furnishings or you could show the property to potential tenants, offering them the choice of whether to have additional furniture or not.

This method is favoured by many letting agents, as it provides the tenant with far more flexibility and makes it far easier to source tenants.

• Provide a sufficient amount of furniture, or make it appear as though there is far more than is actually available so that the tenant is able to see that the property is functional and looks ‘lived in’.

Insurance

Legally, it is not compulsory for you to take out contents insurance on furniture and other items in a tenanted property, however, it is strongly advised that you do in case of any serious damages or thefts. Just Landlords, the specialist Landlord Insurance provider offer 5-star Defaqto rated please visit their website for further information on Contents Insurance.

Are More Landlords Scrolling on their Screens to Find Reliable Tenants?

Published On: September 19, 2018 at 7:58 am

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An increase in the number of landlords choosing social media as a method to get the low down on their prospective tenants has been reported, according to the most recent sentiment research provided by Foundation Home Loans.

With regards to these prospective tenants, landlords are delving deep, gathering information on past tenancies. Though this may be interpreted as perhaps, an invasion of privacy, it is paramount that as a landlord, you prioritise research of potential tenants.

Research undertaken revealed that 11% of landlords now check Facebook and other social media platforms to screen their tenants as a way of assisting them to make an educated choice on whether to definitely rent their property to them.

Depending on the accounts that are available, information that could be gathered from social media could include everything from occupational history, right through to personal details such as friends and lifestyle.

Moreover, this research discovered that almost a third of landlords make the decision to interview potential tenants to assist them in their decision as to whether a specific tenant is right for the property being offered, as part of the screening process.

Personal references are selected by 34%, allowing them to understand personalities whilst maintaining a reasonable distance. In addition, employer references and previous landlord references are also requested by a number of landlords.

When considering preferences for tenant types, the report from Foundation Home Loans shows that it is middle-aged couples who are far more favoured by landlords, with the perspective that they are less likely to cause damage to a property for the long-term, and young singles for this exact reason.

Marketing Director at Foundation Home Loans: “Buy-to-let is a business, so it’s only natural that landlords would want to vet their potential tenants just as an employer would a potential employee.

“While Facebook and social media accounts may not be the best source of information if used in isolation, they can offer valuable insight when set against other checks such as personal references and credit checks.

“After all, maintaining a good rental income is a priority and void periods can be particularly damaging, so it’s important to ensure this is not a risk when new tenants move in.”