Written By Em

Em

Em Morley

Could You Save Thousands by Switching Your Mortgage Deal?

Published On: June 21, 2018 at 8:00 am

Author:

Categories: Finance News

Tags:

According to research conducted by Countrywide and online mortgage adviser, Dynamo, 33% of those with mortgages were put on their lender’s Standard Variable Rate (SVR) in 2017, resulting in an average cost of £371.

As a consequence of failing to promptly renew their mortgages, re-mortgagers spent up to 42 days on their lender’s SVR. This amounted to an additional cost of £61.83 per week, research indicates from accumulating the cost of not re-mortgaging prior to when the existing mortgage product expires, by monitoring the proportion of people who were on their lender’s SVR last year and the number of days they remained on that rate.

The point has been raised by Head of Financial Services, D J Alexander, that landlords have unchecked insurance, in addition to inefficient management, financially, costing them huge sums of money, therefore, jeopardising the future feasibility of their investments.

Alan Kent, head of DJ Alexander Financial Services, stated: “We have estimated that one in three landlords are paying too much for their mortgage which is a simple fix and could save thousands of pounds.

“Being a landlord has become much more complicated in the last couple of years and many people may not realise just how stringent and problematic the impact of many of these changes will be on their investment.

“Income will be hit as rents remain relatively static or falling across the UK, while costs are rising, and the ability to offset expenses hits profitability.”

Kent further commented: “There are ways to reduce costs at every stage and at every level of business, but they don’t magically occur, and homeowners must examine all financial aspects of their investments to ensure they are maximising their income.”

Lifetime Tenants Could Spend £1m More on Housing than Homeowners

Published On: June 20, 2018 at 9:13 am

Author:

Categories: Tenant News

Tags: ,,

With so much rhetoric within the media and supporting studies suggesting that many young people today will become lifetime tenants, it’s no surprise that research is looking into how much owning a home compares with renting from a landlord.

The latest in these studies comes from new build property developer Strata, which found that lifetime tenants – those unfortunate youngsters who never manage to buy their own homes – could end up spending a whopping £1m more on housing over their lives than their homeowner counterparts.

The firm compared the average cost of owning a home in the UK to typical monthly rent payments over a 60-year period.

The research took a typical homeowner, who had rented from the age of 21 to 30 before purchasing a home, owning their property until the age of 81. It used the average first time buyer home value of £212,079, and assumed a 16% deposit and £4,800 in fees, including lender valuations, surveys, and mortgage and legal costs.

Estimating that the typical buyer would have rented for nine years before getting onto the property ladder themselves, at an average of £909 per month – adjusted for inflation over the period – Strata gave a total spend of £427,363 for the average homeowner over the period.

In contrast, lifetime tenants would spend the same £909 per month on average rents, which was again adjusted for inflation, to hit a huge total of £1,624,980 over 60 years.

This equates to a massive difference of £1,197,616, with lifetime tenants spending an average of 280% more than homebuyers.

Naturally, figures vary dramatically across the UK, with the typical difference reaching almost £2m in London. The North East had the smallest change, at £720,000.

Nevertheless, it appears from the data that Strata left out a significant chunk of homebuyers’ housing costs – monthly mortgage repayments. Therefore, while purchasing a property may be cheaper than renting is for lifetime tenants, the study fails to determine which option is most cost effective.

BTL Outshines Major Asset Classes with Best Yield in the North

Published On: June 20, 2018 at 9:03 am

Author:

Categories: Landlord News

Tags: ,

Latest figures reveal how buy-to-let returns remains an overperformer compared to many major asset classes. Property investors in the Northern areas are benefiting from higher yields, whereas, Southern regions have the lowest yields as a result of higher property prices.

Data provided by TotallyMoney has shown that buy-to-let returns have continued to develop in recent months, despite problems that have confronted the market. Manchester, Middlesbrough, Liverpool and Edinburgh have proven to be the highest achieving regions as a result of high demand for rental properties.

Subsequent to analysis of over 580,000 properties, a stark geographical divide between the northern and southern areas of the country with the northern regions performing better and coming out on top and the South East predominantly performing unsatisfactorily.

Landlords in London have witnessed the lowest rental yields. However, excluding the capital, landlords in possession of properties in areas such as Bournemouth and Crewe are expected to receive minimal returns, in accordance with TotallyMoney’s data.

Joe Gardiner, head of brand and content at TotallyMoney, commented: “With students flocking to university cities year after year and looking for a place to live, it’s no surprise the student market is a dependable one for landlords.

“Since so many students are looking for accommodation, landlords may use this as an opportunity to drum up competition between them.

“But, due to the tenant fee ban, changes in mortgage tax relief, and tighter buy-to-let lending criteria, rental profits are now being squeezed more than ever. To maximise their returns landlords, need to be savvier and that’s where our map and mortgage comparison tool can help.”

New Discoveries Reveal Benefits of Letting to Families

Published On: June 20, 2018 at 8:04 am

Author:

Categories: Landlord News

Tags: ,

Rental demand shows slight decline in Q2

Letting to families has been proven to take up the least amount of property management time in comparison to alternative types of tenants.

Findings have surfaced from over 1,000 responses to the latest quarterly landlord research from the National Landlords Association (NLA), which asked them to consider how much time they spent on property management. This included dealings with tenant queries, property maintenance requests and general business administration.

From the findings, research has revealed that landlords who let properties to families and young couples spend, on average, eight hours on property management per week. Contrastingly, landlords who let their properties to migrant workers, recipients of benefits, or who have executive lets, can expect to spend up to 12 hours per week on property management.

In regards to regional landlords, in the North West of England, it is estimated that they spend ten hours on management a week. This is almost twice as much time per week, compared to landlords with properties in the South East, who spend just five and a half hours per week.

Additionally, finding have shown that landlords with mortgages spend, on average, three and a half extra hours per week on property management compared to those who do not have mortgages. Those landlords with energy efficient properties will be spending two hours less each week on property management.

Richard Lambert, CEO of the NLA, commented: “This data reinforces the fact that families make good, reliable, and long-term tenants, but some landlords can be put off by the perceived risk of more damage or wear and tear to the property or its contents.

“However, if you’re properly maintaining the property then tenants will be more likely to stay for longer anyway, particularly families who typically seek more stability. This is just one more argument for establishing a proper maintenance schedule in the first place.

“Landlords who rent to migrant workers or provide executive lets may find it takes up more management time because there’s a greater churn of tenants which means re-marketing the property, drawing up tenancy agreements, and conducting property viewings more regularly”.

The NLA also says that another big cause for concern is that those in receipt of benefits take up more management time for landlords. Mr Lambert continued: “The combination of welfare cuts and the introduction of Universal Credit make it difficult for some benefit recipients to keep up with rental payments and that often means taking more time for the landlord to manage. It’s frustrating for everyone because the issues can be outside the control of both tenants and landlords”.

Are You a Private Landlord or Unoccupied Property Owner? You Can Now Get Guaranteed Rent From Council

Published On: June 19, 2018 at 9:32 am

Author:

Categories: Landlord News

Tags:

Peterborough City Council is now providing unoccupied property owners and private landlords with the opportunity to get hassle-free, guaranteed rent.

The option is being offered for private properties to be leased to the authority for five years. The council will then be held responsible for the monitoring and maintenance of the property. In addition, they will also be actively seeking to move tenants in from its housing register.

The new scheme will be beneficial for landlords and unoccupied property owners, whilst assisting the council with its long-term objective to reduce the number of unoccupied properties in the city area. Most importantly, this scheme will enable those who are of highest priority to be moved into accommodation.

Significant progress has been made to ensure that unoccupied properties regain their purpose.  Of the 574 privately-owned properties that have been unoccupied, exceeding the six-month mark, 31% regained their use. This is approximately 179 unoccupied properties.

Councillor Peter Hiller, Peterborough City Council’s Cabinet Member for Housing, has commented: “Empty homes are a national problem and locally we are making great progress. I am proud of the work we have already done, but we are always looking to do more.

“This latest initiative will provide landlords with a guaranteed rental income for the lease period and a professional property management service. So, in short, we take care of several of the hassles associated with being a landlord.

“There are several reasons why homes become empty and stay that way. What is certain is that they can become eyesores, are susceptible to vandalism, and if brought back into use can provide additional temporary homes for households in need. This is why we are fully committed to tackling the issues associated with long-term empty homes.”

Renters at Risk of Revenge Eviction Due to Council Inaction

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

Author:

Categories: Law News

Tags: ,

Retaliatory or revenge eviction, refers to a landlord attempting to evict a tenant living in their property who has requested repairs or made complaints regarding the condition of their property. However, after 1st October 2015, a landlord is required to prove that the tenant is at fault prior to evicting them. For example, a tenant not paying their rent would be a valid reason to enforce eviction.

 

As revealed by Generation Rent analysis of Freedom of Information, only one in six private tenants is receiving council protection from revenge eviction.

Despite their obligation to protect tenants from eviction, only a select few councils are enforcing actions, compulsory to prevent evictions. In addition, only some are choosing to record cases where the tenant is at risk of facing eviction.

According to Section 21 of the Housing Act 1988, a landlord is permitted to claim back possession of their property, without providing a reason for this claim. Due to this, it is possible that a tenant could lose their home without being at fault. As a result of this rule, some landlords decide to abuse this power by evicting tenants who simply complain.

However, the Deregulation Act 2015 renders a Section 21 notice invalid for six months, providing that the council serves the landlord with a notice to make necessary improvements to the property in question. This action should be taken by the council if there is a discovery of a severe hazard in a private rented property. It is estimated that 17% of private rented properties have one of these hazards.

A lot of hazards can be missed, due to councils not monitoring each individual property that is complained about. From the 58,586 requests made to the council regarding complaints and inspections, only 39,148 inspections were carried out.

Extracted from analysis of data provided by Generation rent, Freedom of Information, of the 100 councils, only 72 recorded 12,962 “category 1” hazards in 2016-17. In only 18% of these cases, councils issued improvement notices. 28 of 100 councils who were contacted, failed to record the number of hazards discovered.

Despite their new responsibilities, councils took 23% less formal action in the first full year that the Deregulation Act was in force than the year before. The total of improvement notices was down from 2959 in 2015-16. Complaints about private landlords also fell in that period, but only by 6%.

most councils are failing to record their interactions with tenants who are facing a revenge eviction – only 4 of the 97 councils that responded on this question had logged the number of Section 21 eviction cases they dealt with in 2016-17:

• Bournemouth (2)
• Plymouth (18)
• Cheshire West & Chester (11)
• Wigan (0).

Eight councils managed to serve as many improvement notices as there were hazards, including, Barking and Dagenham, Barnsley, Bournemouth, Calderdale, Cambridge, Dudley, Merton and Tower Hamlets. This provides an indication that the tenants involved enjoyed protection from revenge eviction.
Dan Wilson Craw, Director of Generation Rent, commented:
“Right now, tenants only get security over their home when their landlord is breaking the law and their council takes sufficient action. This evidence shows that too much can go wrong in a council’s processes – from not responding to complaints to failing to issue formal notices – to reliably provide even this basic protection.
“Instead of this flaky, fiddly and temporary system of protection, tenants need a stronger fundamental right over their home. The government should restrict the ludicrous ability of landlords to evict tenants who have done nothing wrong by abolishing Section 21.”
Wera Hobhouse MP, Liberal Democrat Spokesperson for Communities and Local Government, said:
“No one should be forced to live in substandard conditions as a result of their landlord’s failure to resolve problems in the property, nor should they be afraid to report problems due to the fear of being evicted.
“If the government are serious about standing up for renters’ rights, they must provide overstretched councils with the resources required to hold rogue landlords to account.
“The national database of rogue landlords must be made publicly available, allowing tenants to make informed decisions and avoid revenge evictions.”