Written By Em

Em Morley

What to do when Tenants Leave their Belongings at your Property

Published On: February 14, 2018 at 9:07 am

Although most tenants look after their rental homes, some have different ways of living that can cause issues when they move out, to say the least!

If the tenant has left a lot of their belongings at the property when they’ve moved out, the landlord will want to get it cleared as soon as possible to avoid a tenancy void period where rental income will be lost. Similarly, if the landlord wants to sell the property after this tenancy period, he or she may need a house clearance service to clear the property completely of old rental furniture, fixtures and fittings.

In extreme circumstances, the landlord may find that a tenant is a hoarder, in which case, once they have left or been evicted, action may need to be taken for hoarder house clearance, which is more specialist. Hoarders collect and save an excessive number of items, often things that most of us would consider junk, like old newspapers and magazines, broken electrical equipment, piles and piles of old clothes and even, in extreme cases, food and biohazardous bodily waste, which then constitutes a real health hazard and requires specialist clearance.

The good news is that Just Clear House Clearance can help in any of the above situations. Just Clear is a multi award-winning property clearance company working with landlords all over London and throughout the UK. They offer a great value, award-winning, reliable, friendly service. Moreover, the fundamental goal at Just Clear is zero-to-landfill, making sure that reuse (now 42% of their waste turnover) and recycling is prioritised in every job they undertake.

Just Clear can also help landlords with garden clearance for properties and also specialist clearance services in the case of flood damage, for example.

Whether you are in London or anywhere else in the UK, town or country, there will be a Just Clear team nearby, as they have locations all over the UK.

Read Just-Clear’s award-winning Environmental Best Practice 2017 paper. You can contact them at hello@just-clear.co.uk or call 0845 319 8000.

Annual House Price Growth at 5.2% in December, Reports ONS

Published On: February 13, 2018 at 10:51 am

Author: Em Morley

Categories: Property News

Five-year fixed rate mortgages could bring good news for buy-to-let investors

The latest House Price Index from the Office for National Statistics (ONS) and Land Registry shows that annual house price growth stood at an average of 5.2% in December, which is up from 5.0% in November last year.

The annual rate of growth has slowed since mid-2016, but remained broadly around 5% in 2017.

The average UK house price was £227,000 in December. This is £12,000 higher than in December 2016 and £1,000 higher than in the previous month.

The main contributor to the increase in UK house prices in December was England, where the average property value rose by 5.0%, to £244,000. Wales saw the average house price increase by 5.4% over the year, taking it to £154,000. In Scotland, the average rate of growth stood at 7.7% in December, bringing house prices to £149,000. The average house price in Northern Ireland stood at £130,000 in the fourth quarter (Q4) of 2017, following a 4.3% increase.

On a regional basis, London continued to host the highest average house price, at £484,000, followed by the South East and East of England, at £322,000 and £290,000 respectively. The lowest average house price was still seen in the North East, at £131,000.

The South West recorded the highest annual house price growth in December, with a 7.5% average increase. This was followed by the East Midlands and West Midlands (both at 6.3%). The lowest annual growth rate was seen in London, where prices rose by an average of 2.5% over the year, followed by Yorkshire and the Humber, at 2.8%.

The local authority showing the largest annual growth in the year to December 2017 was the Orkney Islands, where prices rose by 18.2%, to reach an average of £147,000. The lowest annual growth was recorded in Kensington and Chelsea, where prices dropped by 10.7%, taking the average value to £1,212,000.

Annual House Price Growth at 5.2% in December, Reports ONS

Low numbers of sales transactions in some local authorities and London boroughs, such as the Orkney Islands and City of London, can lead to volatility in the series. While efforts are made to account for this, the change in price in these local levels can be influenced by type and number of properties sold in any given period.

In December, the most expensive borough to purchase a property was Kensington and Chelsea, where the average house price was £1.2m. In contrast, the cheapest area to buy was Burnley, at just £78,000.

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Richard Snook, the Senior Economist at PwC, comments on the data: “Today’s figures complete the ONS and Land Registry figures for 2017, and show house price inflation edged up to 5.2% in the year to December, from 5.0% in November, taking the price of a typical UK house to £226,760.

“This reveals a full year house price increase of 4.8% across the UK, marginally above our projection of around 4%, released at the beginning of the year.

“It also shows that house price growth has outpaced average earnings growth for the fifth consecutive year, further ratcheting up the affordability challenge. Cumulatively, house prices have increased by 22% more than earnings between 2012 and 2017.

“In terms of regional trends, London prices showed a slight recovery from the sharp fall in November, so the picture is one of a market that has plateaued since the summer. London prices are just 2.5% above their level a year ago. This effect appears to be spreading to the next most expensive regions, the South East and the East, where prices have been flat since July.”

The CEO and Founder of online mortgage broker Trussle, Ishaan Malhi, also says: “By the end of 2017, the average house cost £12,000 more than it did in December 2016. The shortage of homes for sale has kept the property market competitive.

“If you’re looking to buy in the coming months, it’s worth keeping an eye on the mortgage market. The cost of borrowing is expected to rise, as certain bank subsidies fade away and interest rates climb. In such an environment, locking in a competitive five-year fixed deal will keep your repayments stable for the next few years, while the country comes to terms with an increasingly uncertain economic future.”

Russell Quirk, the Founder and CEO of online estate agent Emoov.co.uk, gives his thoughts on the figures: “Another marginal drop in buyer enquiries, coupled with a continued shortage of new properties coming onto the market, has seen transaction levels continue to dwindle. However, it highlights the severe shortage of stock to satisfy even the most paltry of buyer interest, as prices remain stimulated by the imbalance of supply and demand levels in the market.

“While London continues to see annual house prices growth slump, there are a wealth of areas that have enjoyed double-digit growth, with the Orkney Islands not only leading the UK, but Scotland, as the region with highest annual price growth.

“Despite sitting at the more unaffordable end of the market, Cambridge has seen the second strongest annual price growth in the UK.

“The diversity of the fabric that constructs our overall market is clear to see, with areas across the nation from Eden to Edinburgh, West Dunbartonshire to West Dorset, Manchester to Chichester, and much more all enjoying double-digit price growth over the last year.”

The Managing Director of buy-to-let specialist Sequre Property Investment, Graham Davidson, offers his opinion: “Ending the year on a high, the increase of 5.2% only further cements why people should still be pouring into buy-to-let in 2018. A volatile stock market will push even more people to invest in property and, despite changes to the tax law, buy-to-let is still producing high income. This simply reinforces its position as the number one investment choice.

“Location is an important consideration for investors looking to maximise their profit, and the likes of Manchester and Liverpool are still the key cities for investment. A 5.9% growth in the North West is an impressive amount of capital growth and, with strong tenant demand and high rental yields, it has long remained the place to be for buy-to-let. London’s downfall has only boosted the profile of the North West, something which we predict will continue for the long term.”

John Eastgate, the Sales and Marketing Director of OneSavings Bank, continues: “Today’s surprisingly robust figures will not be welcomed by those looking to get a foothold on the housing ladder. The absence of wage inflation means that affordability continues to get tougher and, with many forecasting an interest rate increase in May, the resultant increase in mortgage rates will be a further barrier. It would be fair to expect house price inflation to soften through the year.”

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Government must Think Strategically on Private Rental Sector, RLA Insists

Published On: February 13, 2018 at 9:14 am

Author: Em Morley

Categories: Lettings News

The Government must think strategically in its approach to the private rental sector, the Residential Landlords Association (RLA) has insisted.

The call was made during a meeting held with the RLA last week with the new Minister for the Private Rented Sector, Heather Wheeler MP, alongside other industry groups.

The RLA outlined the importance of joined up working across Whitehall given the changes being introduced from a number of Government departments.

It also pressed hard on the need for a dedicated housing court to give landlords and tenants much greater confidence that, when things go wrong, access to justice can be much swifter and less expensive.

This is crucial for landlords who might be prepared to offer longer tenancies to those who want them, but are worried of being locked into a tenancy and unable to swiftly regain possession of their property if tenants are failing to pay their rent or are committing anti-social behaviour.

David Smith, the Policy Director of the RLA, who attended the meeting, says: “We welcome the Minister’s early engagement with the sector and her positive attitude towards supporting the majority of landlords who provide good housing and abide by all their responsibilities.

“It provides a good starting point as the RLA works with the Government to ensure the rental sector is fit for its changing role and works for tenants and landlords.”

A spokesperson for the Ministry of Housing, Communities and Local Government, told the RLA: “We are committed to delivering a fairer, good quality and more affordable private rented sector, and want to support good landlords and agents to comply with their responsibilities.

“We will be introducing banning orders in April to make it easier for local authorities to act against rogue landlords and agents, we will be requiring all letting agents to meet minimum standards and are consulting with the judiciary on the case for a housing court.”

They continued: “We are grateful to private rented sector organisations for their constructive input to date and are committed to working with them as this important agenda continues. The Minister looks forward to engaging further with the sector and welcomed the constructive dialogue.”

New App Improves Communication between Landlords and Tenants

Published On: February 12, 2018 at 9:10 am

Author: Em Morley

Categories: Landlord News,Tenant News

It’s the month of love, which means that relationships come to the fore. Even if you’re a landlord with tenants, your rapport is still important. To help improve communication between landlords and tenants, a new app has been created…

Arthur, a property management software firm, has launched a new app designed to improve the communication between landlords and tenants, following feedback from its customers.

The app will give tenants access to documentation, financial information, and other important details about the property. Furthermore, tenants can raise and track all issues through the app, giving them the comfort and transparency that they may not have experienced before.

The app pushes important information to the tenant, helping the property manager direct their journey. A late rent, expiring tenancy or an update to the tenant’s issue can all be communicated effectively and efficiently.

Recent research shows that many tenants want the process of moving into a new rental property sped up. One in three UK tenants expect a swift move-in schedule for their new rental property – within two weeks of their first inquiry to a landlord or letting agent. Almost two thirds of tenants surveyed have a slightly more relaxed timescale, aiming to move in within a month.

The desire for such a tight move-in schedule suggests a lack of understanding of the lengthy amount of work that is required of landlords and agents.

Marc Trup, the Managing Director of Arthur, says: “Clearly, tenants want to move into a new property as quickly as possible and with the least amount of hassle. We also know that when tenants have issues or problems during the tenancy, they want them resolved quickly and efficiently.

“We have designed the new tenant app to improve communication and speed up everything from signing tenancy forms, to notifying a landlord or letting agent of a problem with the property. Via the app, tenants can access aspects of their tenancy, including documentation and rental statements, and they can track the progress of a raised issue.”

He continues: “Tenants don’t want to be bombarded with paperwork – they want to be able to sign all contracts digitally, which means it can be accessed anywhere, at any time. It means important documents can’t be lost or misplaced and improves the speed of the whole process, which can take a long time.”

An Interest Rate Hike is Coming, Bank of England Warns

Published On: February 9, 2018 at 9:53 am

Author: Em Morley

Categories: Finance News

Although the Bank of England (BoE) voted to keep its base rate at 0.5% yesterday, it warned that an interest rate hike is coming from as early as May and that there are more to come, as the economy accelerates with help from booming global growth.

The Bank said that it would need to raise rates to tackle stubbornly high inflation “somewhat earlier and by a somewhat greater extent” than it had anticipated towards the end of last year.

While the BoE’s rate-setting Monetary Policy Committee (MPC) voted unanimously to leave the base rate at 0.5% this month, the tone of its discussion suggests that the cost of borrowing will not remain this low for much longer.

The Governor of the BoE, Mark Carney, had previously suggested that there could be two further rate hikes to curb inflation over the next three years, but speculation will now mount over the chance of additional rate increases.

Ishaan Malhi, the CEO and Founder of online mortgage broker Trussle, responds to the news: “We may not see another interest rate rise for a few months, but it’s looking like it won’t be long before mortgage rates begin to climb. Low interest rates and Government subsidies have encouraged banks to lend, but the days of cheap credit could be numbered. The Term Funding Scheme, which has propped up lending to the tune of £100 billion in the last 18 months, comes to an end this February and may well have a knock-on effect on mortgage rates.

“For hopeful first time buyers and existing homeowners looking to switch mortgage, using this window of time to lock in a low fixed rate deal could prove a wise move which could save thousands of pounds in the long-term.

“It’s important to remember though that headline rates are not the be-all-and-end-all. They can often be a red herring, which distract people from the true cost of the mortgage, once all charges and incentives are considered.”

Rob Clifford, the Commercial Director at property specialist SDL Group, also comments: “I think it’s likely that a hike in rates will happen a shade sooner than first anticipated, but I question if that is going to have the negative impact many fear.

“With inflation currently at 3%, well above the MPC’s 2% target, it’s inevitable that the BoE will consider a further rise in rates to try to curtail the pace of inflation. It’s something that’s going to happen and, arguably, all of the signs suggest that it’s a move consumers are anticipating.

“You only need to consider the rise in the number of remortgages we’re seeing compared to purchase mortgages. One buy-to-let mortgage lender shared with us recently that, whereas the historic split had been closer to 50/50, it’s business mix at the moment is over 85% remortgage. This is just one barometer of how consumers are feeling about the likelihood of rates rising – they dive into a better rate and often a fixed rate deal. Many in the market predicted a growth in remortgage volumes, but not quite as stark as we’re seeing.

“It doesn’t matter whether you are considering the residential or the buy-to-let market, the fact remains the same that consumers want interest rate certainty and the best deal they can get. Consumers are preparing for a rise and they’re quite literally getting their financial house in order.

“Notwithstanding many consumers taking sensible action ahead of the potential rise, my opinion is that this isn’t going to have a major impact on the mortgage and property market as whole, because it isn’t mortgage rates and the consequent monthly affordability that’s causing a bottle-neck. The major barriers are the capital required for the initial deposit and availability of housing stock. A further rise in interest rates isn’t going to change those key constraints and I therefore can’t see it having a material impact on housing transactions.”

Number of Landlords in Serious Arrears Soars by 20%

Published On: February 9, 2018 at 9:37 am

Author: Em Morley

Categories: Landlord News

The number of buy-to-let landlords in serious mortgage arrears (defined as 10% or more of the outstanding balance) soared by 20% over the year to the fourth quarter (Q4) of 2017, according to UK Finance’s latest Mortgage Arrears and Possessions Update.

However, the finances of homeowners seem to have improved, with 82,800 homeowner mortgages in arrears of 2.5% or more in Q4 2017 – 7% fewer than in Q4 2016.

Within the total, there were 24,700 homeowner mortgages with more serious arrears (10% or more). This was down by 1% on the same quarter of the previous year.

In Q4 last year, there were 5,100 buy-to-let mortgages in arrears of 2.5% of more, which is 2% greater than in Q4 2016.

Within this total, there were 1,200 buy-to-let mortgages with more serious arrears – up by a significant 20% on the same quarter of the previous year.

1,100 homeowner mortgaged properties were taken into possession in Q4 2017 – 8% fewer than in Q4 2016.

600 buy-to-let mortgaged properties were taken into possession in Q4 last year, which is unchanged from the same quarter of the previous year.

Paul Smee, the Head of Mortgages at UK Finance, comments on the data: “Annual homeowner possessions currently stand at a 36-year low, with overall arrears and possessions continuing to decline. This reflects the mortgage industry’s continued commitment to appropriate and prudent lending.

“All potential borrowers are carefully assessed against their ability to pay back their loans, and lenders work closely with their customers to ensure that any payment issues are dealt with at an early stage. Anyone experiencing difficulty with their mortgage should contact their provider immediately.”

Alastair McKee, the Managing Director of independent mortgage broker One 77 Mortgages, also responds: “It’s the divergence in the fortunes of landlords and homeowners that comes through in this data.

“While it’s fantastic news that homeowner arrears are at such deep historic lows, those in the industry are well aware this decline has probably bottomed out and has only fallen as far as it has because lending is so cheap.”

He explains: “A 7% drop in just a year is evidence of this. Homeowners have been able to buy themselves time by remortgaging, so it’s vital, even if wage growth picks up, that people are sensible about what they can afford to borrow.

“Landlords, meanwhile, have faced tightening criteria, worsening tax treatment and typically have tighter margins.

He continues: “Landlord loan-to-values are normally close to their maximum anyway. That’s why you’ve seen arrears in this sector rise while arrears for homeowners have fallen.

“Those with buy-to-let mortgages don’t have the same wriggle room, because low interest rates don’t afford them the same opportunity to create extra head room in tricky times.”