Written By Em

Em Morley

Government Renames Department for Communities and Local Government

Published On: January 9, 2018 at 10:39 am

Categories: Law News

During Theresa May’s controversial cabinet reshuffle yesterday, the Government renamed the Department for Communities and Local Government to the Department for Housing, Communities and Local Government (DHCLG).

Sajid Javid, the Secretary of State for the Department, did not move in his position, but the term “housing” has been added to the title of his Department.

The Labour Party insists that May should focus on the pressures of the NHS, rather than what it says is a “desperate PR exercise”.

Grant Shapps, the Conservative Party chairman between 2012-15, says that the reshuffle has not been “brilliantly executed”, but praises plans for housing and health.

He believes that the addition of “housing” to the title of the communities department would give “a lot more focus” to Government plans to build more homes.

However, the Labour Leader, Jeremy Corbyn, claims: “The Government’s big plan for the New Year is to dodge the real issues and reshuffle the pack in a pointless and lacklustre PR exercise.

“It’s simply not good enough. You can’t make up for nearly eight years of failure by changing the name of a department.”

Commenting on the formation of the new DHCLG, the CEO of the National Landlords Association (NLA), Richard Lambert, says: “We welcome the Prime Minister’s announcement today. Housing strategy should be at the forefront of the Government’s thinking.

“However, we hope that this works out to be more than just a rebranding exercise, and that Mr. Javid and his Department will look to address the housing crisis by genuinely working across all tenures, not by fixating on building more homes.”

More details of the Government’s overall cabinet reshuffle, including the movement of a key figure in the roll out of Universal Credit, can be found on the BBC News site.

We will keep you updated on the Government’s latest housing measures.

The True Impact of Universal Credit on the Private Rental Sector

Published On: January 9, 2018 at 10:03 am

Author: Em Morley

Categories: Landlord News,Tenant News

As Members of Parliament prepare to debate the impact of Universal Credit on the private rental sector today, research shows that 73% of landlords still lack confidence in letting to tenants in receipt of benefits, due to uncertainty that they will be able to recover rent arrears.

The Residential Landlords Association (RLA) reveals the stories behind the statistics to take a look at the true impact of the Government’s new welfare policy on landlords and their tenants, highlighting the need for further reforms to the way that the system is delivered.

Case studies

Brandon Taylor of Lowestoft provides homes to let to around 130 Universal Credit claimants, of which 70% are struggling to pay their rent on time and in full. In one extreme case, a tenant who was on Universal Credit accrued £2,848 worth of rent arrears.

The True Impact of Universal Credit on the Private Rental Sector

Where tenants accrue two months or more of rent arrears, landlords can apply for payments to be made directly to them, known as Alternative Payment Arrangements (APAs).

When Taylor applied for this, he found requests to the Department for Work and Pensions (DWP) were ignored. Taylor warns that landlord confidence in Universal Credit has been damaged and that it will take years to regain that confidence back.

Linda Hazelwood, a landlord in the West Midlands, has told the RLA of a tenant in receipt of Universal Credit that she lets to in Halesown. The tenant is a young, single mother who has just had another baby. Having been a tenant for at least five years, she now owes her landlord over £1,000 in rent. Hazelwood says that the tenant does not want to be in arrears, but cannot afford to pay the rent on time.

Another tenant of Hazelwood’s in receipt of Universal Credit has accrued £900 in arrears. Expressing her frustrations about the system, she has warned that it is not doing enough to support those tenants, especially the vulnerable, who do not have access to computers in order to process and manage their payments.

Sue Thompson and her husband Phil let properties in the North East of England. 90% of their tenants are on benefits, many of whom receive Universal Credit. Thompson has noted that, although the Government has slightly reduced the time between applying and receiving Universal Credit, paying tenants in arrears means that many are forced to “beg, steal or borrow” to keep going. She warns that, in such cases, a tenant’s first payment is then swallowed up by repaying those debts, often with high levels of interest or late fees, with the vicious cycle of rent arrears starting all over again.

Universal Credit changes

These stories arrive as the Liberal Democrat’s Work and Pensions Spokesperson, Stephen Lloyd MP, today initiates a debate in Parliament on the impact of Universal Credit on the private rental sector.

The RLA is making a number of proposals that would improve the delivery of Universal Credit for landlords and their tenants.

These include ensuring that private landlords are routinely informed when a tenant moves from the older benefits system to Universal Credit, to help them establish suitable rent payment schedules with tenants.

The organisation also insists that mechanisms need to be put in place to give landlords confidence that rent arrears can be reclaimed after a Universal Credit tenant leaves a property.

It adds that tenants should be given the option to choose to have the housing element of Universal Credit paid directly to their landlord, if they wish.

The DWP has confirmed that landlords will no longer need their tenants’ consent when applying for APAs.

Chris Town, the Vice Chair of the RLA, comments: “We welcome today’s debate, and hope that MPs from all parties will agree that a few pragmatic changes to the way Universal Credit is delivered will lead to considerable improvements for both tenants and landlords.

“The RLA will continue to work with all sides to secure the benefit system we all want – one that is easy to understand, fair to all, supports the vulnerable and ensures the security of a home for all claimants.”

10 Easy Ways to Refresh your Rental Property for the New Year

Published On: January 9, 2018 at 9:14 am

Author: Em Morley

Categories: Landlord News

Landlords took a bit of a beating at the hands of the Government and Bank of England (BoE) last year, so the New Year is bringing with it fresh opportunities to refresh your rental property. If you’re looking to make positive changes to your property’s interiors in 2018, we have ten top tips…

Transforming the interior of your rental property can not only make it stand out on the lettings market, but will also attract modern, savvy tenants that are more likely to look after their home if you’ve provided them with somewhere smart and stylish to live.

The fascinating environmental psychology theorem of place attachment demonstrates how strong the bond is between a person and their environment, meaning that the way a home is presented can have a subconscious, positive influence on its occupants. For landlords, this could mean that your tenants are more likely to stick around longer or give more care and attention to your property if they find the interior appealing.

With this in mind, the experts at Alexander James Interior Design – one of the world’s leading designers – have put together their ten easy ways to refresh your rental property for the New Year, which don’t require extensive funds or efforts.

Landlords, have some fun this year and enjoy revitalising your property with these top tips:

Declutter and de-stress

If your tenants have recently moved out, or your existing tenants have taken their Christmas decorations down over the past week, you could dive straight into throwing out all of the home accessories and furniture pieces that are holding your property back from looking fresh and stylish.

Decluttering de-stresses and simplifies a home, allowing for a space in which every item has a considered, rightful place and creating a sense of harmony throughout your property. It’s the perfect way to create a blank canvas for new tenants, too.

Try Using Pantone’s Colour of the Year: Ultra Violet

TOP TIP: If you do want to get rid of some furniture or appliances in your property, remember to use the environmentally friendly and ethical way – such as using the Gone for Good app.

Use the Colour of the Year

If you’re looking to bring colour into your rental property (alongside the recommended neutral colour scheme), Pantone’s newly announced Colour of the Year 2018 is the best place to start – Ultra Violet.

The Vice President of the Pantone Colour Institute, Laurie Pressman, says: “The Pantone Colour of the Year has come to mean so much more than what’s trending in the world of design; it’s truly a reflection of what’s needed in our world today.”

Inject this stunning shade into your interiors by using it as an accent colour, punctuating throughout the living space with new cushion fabrics, artwork and homewares.

Pantone describes the colour as “a dramatically provocative and thoughtful purple shade, PANTONE 18-3838 Ultra Violet communicates originality, ingenuity and visionary thinking that points us toward the future”.

Re-position and reset

Rearranging your property’s furniture is the greener, cheaper and simpler way to refresh each room. In just a few simple movements, you can transform the ambience of a room and make a huge impact.

Place furniture in an entirely new location in the room, rotate it in a different direction, or even swap pieces from different rooms.

Impact with artwork

Replacing artwork with new pieces is an extremely effective way of creating a fresh visual impact in your property’s interior.

It can change the key focal point of a room, completely shifting the style or tone of the space in a different direction, or it can be a powerful means of punctuating with your new scheme’s accent colour. If your purses are feeling a little stretched after Christmas, moving artwork into different rooms can have the desired effect.

Luxuriate with cushion fabrics

An affordable and indulgent way to refresh your property and make it stand out on the lettings market is to replace your cushion fabrics. This allows you to introduce a new accent colour to a room, or rich, tactile textures, which will instantly transform the property into somewhere stylish that tenants will want to move into.

Restyle the master bedroom

The master bedroom of a property is often one of the most important rooms to potential tenants. So why not market your property with a brand new bedding set and throw, to show off how comfortable and cosy your tenants could be there? This can dramatically freshen up the master bedroom and, more importantly, help your tenants get a good night’s sleep!

Ambient aromas

10 Easy Ways to Refresh your Rental Property for the New Year

Scent plays an important role in interior design, dramatically influencing how one experiences a space, particularly during property viewings. The New Year has arrived, so it’s time for a new scent.

Use luxurious candles and diffusers during viewings to make prospective tenants feel welcome and at home.

Revitalise the coffee table

Make the coffee table a focal point of the living room, restyling it with beautiful books, ornaments and a diffuser or candle. If you prefer a minimalistic look for your properties, use the rule of three to ensure that it looks balanced and stylish.

Apartment Therapy explains: “The rule guideline of threes say that things arranged in odd numbers are more appealing, memorable and effective than even-numbered groupings. Three seems to be the magic number.”

Freshen with florals

Whether you opt for fresh flowers that emit an exquisite floral scent (but are more difficult to maintain), or faux florals that offer a beautiful, authentic look, adding flowers to your interior is the perfect way to freshen up your property for the New Year.

Display florals in all key rooms to rejuvenate the entire space with life and vitality – this will show off how fresh and full your property can be to potential tenants.

Enhance with lighting

Rethinking a room’s lighting scheme can create a whole new atmosphere and give it the boost it needs. Introduce ambient or background lighting where there isn’t any, or accent lighting to highlight special features, colours and patterns in furnishings.

Adding table or floor lamps can also make for a stylish feature in any room, enhancing key areas and making rooms look more spacious.

TOP TIP: Remember that using LED bulbs will also help you comply with the Government’s new Minimum Energy Efficiency Standards (MEES).

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Annual House Price Growth Eased to 2.7% in December, Halifax Reports

Published On: January 8, 2018 at 10:14 am

Author: Em Morley

Categories: Property News

Annual house price growth eased to an average of 2.7% in December, according to Halifax’s latest House Price Index. This is down on November’s rate of 3.9%.

On a quarterly basis, house prices were up by 1.3%, which is down on the 2.3% recorded in October and November.

Month-on-month, house prices dropped by an average of 0.6% on November, following a 0.3% rise in both October and November. This is the first fall since June 2017.

December’s average property value of £225,021 is 2.4% higher than in January last year (£219,741).

Russell Galley, the Managing Director of Halifax Community Bank, comments: “House prices in the three months to December were 1.3% higher than in the previous quarter; a gradual slowdown from 2.3% in both October and November. The annual rate of growth has also moderated to 2.7%, from November’s 3.9%. Ending the year, house prices in December fell by 0.6%; the first monthly decline in six months.

“As we’d anticipated, the housing market in 2017 followed a similar pattern to the previous year. House price growth slowed, whilst building activity, completed sales and mortgage approvals for house purchase all remained flat. This has been driven by a squeeze on real wage growth and continuing uncertainty over the economy.”

He continues: “However, nationally, house prices in 2018 are likely to be supported by the ongoing shortage of properties for sale, low levels of housebuilding, high employment and a continuation of low interest rates making mortgage servicing affordable in relative terms. Overall, we expect annual price growth to continue in the range of 0-3% at the end 2018.”

The latest sales figures, for November, show that property transactions reached 104,200 – the highest monthly level since March 2016, and a continuation of the trend for sales remaining above 100,000 for all months of 2017. In the three months to November, home sales were 7% higher than in the same period of the previous year.

The number of mortgage approvals – a leading indicator of completed house sales – edged up by 0.4% on a monthly basis in November, to reach 65,139. In the three months to November, approvals were down by 2.1% on the same period a year earlier. For the past 12 months, mortgage approvals have been in the narrow range of 64,900-69,500.

New buyer enquiries appeared a little more stable over the month, having declined sharply in autumn. This measure, however, has now dropped for the past eight months. Turning to supply, new instructions to sell continued to deteriorate at the headline level and have now fallen for 22 consecutive months – the worst sequence for close to eight years.

Annual House Price Growth Eased to 2.7% in December, Halifax Reports

Overall, Halifax expects annual house price growth across the country to stay low and in the range of 0-3% by the end of 2018. The main driver of this forecast is the continuing effect of the squeeze on spending power, as inflation has outstripped wage growth and the uncertainty regarding the prospects of the UK economy next year.

Comments

Kicking off industry comments on the latest index, Russell Quirk, the Founder and CEO of online estate agent eMoov.co.uk, says: “Like most of us at this time of year, it’s natural that the UK market may be suffering from a degree of lethargy due to the Christmas period. While price growth is likely to remain subdued for the immediate future, the level of sales completions continues to remain robust and, once the market finds its rhythm again, we should see price growth stabilise. Many have been quick to forecast very dark clouds ahead for 2018, but as buyer interest returns to the market over the coming months, I think the outlook will be a lot brighter than predicted.

“The market has weathered the storm of market uncertainty in 2017 and fared much better than many believed it would, so I don’t think the market slowdown over the year ahead will be as exaggerated as some are making it out to be.”

Paul Osborn, the Chief Executive of Foresters Friendly Society, also comments: “Regardless of today’s dip, first time buyers are still facing an uphill battle to get one foot on the housing ladder, with the few that are successful being met with limited choice and sky high prices.

“But progress is being made. Our research suggests that 58% of millennials saving for a deposit are more confident about achieving their goal following the Chancellor’s Stamp Duty changes announced in the last Budget. The key, however, is saving early and in the right way. A product such as the Lifetime ISA, which offers savers a 25% boost to their annual savings, is a great way for those under 40 to save significant amounts towards a home deposit. With this at the heart of their long-term savings plan, young people can bring that homeownership goal much closer.”

The Founder Director of independent estate agent James Pendleton, Lee James Pendleton, gives his thoughts on the figures: “Even in the winter month of December, the UK housing market failed to suffer frostbite, but prices did continue to gently chill.

“Anyone hoping for a Santa Rally thanks to the Chancellor’s Stamp Duty exemption for first time buyers will have been disappointed. In fact, instead of positive pressure on prices, the opposite is happening for those homes priced at just over £500,000, as vendors are forced to follow the crowd below the threshold where they are picking up their tax break.

“For those able to capitalise, it was an early Christmas present that looks set to keep on giving throughout 2018.”

Ishaan Malhi, the CEO and Founder of online mortgage broker Trussle, adds: “The slowdown of price growth last year won’t have been welcomed by existing homeowners and buy-to-let landlords. But, for those looking to get on the property ladder, it’s good news. With the continued pressure on household incomes, it’s unlikely that we’ll see significant growth in prices this year, so 2018 could be a good time to buy for those that already have some savings set aside.

“As well as benefitting from weakened price growth, many new buyers will benefit from the Stamp Duty changes introduced in the Autumn Budget. They should also still be able to lock in a low rate mortgage, before interest rates inevitably creep further up in the coming months and years.”

Nationwide released its latest House Price Index for December last week. Compare the figures here.

The 9 Financial Changes that Landlords Must Prepare for in 2018

Published On: January 8, 2018 at 9:14 am

Author: Em Morley

Categories: Landlord News

We’re now officially settled into 2018, which means that those renting out property will be thinking about which tax and regulatory changes will hit them next. We have nine financial changes that landlords must prepare for this year:

Improve energy efficiency

From 1^st April 2018, all new tenancies must meet the Government’s Minimum Energy Efficiency Standards (MEES), which will make it illegal to grant a new lease (even to existing tenants) on properties with an Energy Performance Certificate (EPC) rating of F or G.

The MEES will apply to all tenancies from April 2020, so it is essential that you focus on making sure that your properties have an EPC rating of E or above. If you plan to grant a new lease on your property from April this year, the property must meet the MEES on the first day of that month.

Prepare for longer tenancies

In the Autumn Budget back in November, Chancellor Philip Hammond announced plans for a consultation on how to incentivise landlords to offer longer-term tenancies.

Some industry experts are calling for landlords to receive tax relief if they offer longer-term tenancies to renters. David Cox, the Chief Executive of ARLA Propertymark (the Association of Residential Letting Agents), believes that combining tax relief with a new housing court to speed up the eviction process will help to encourage landlords to offer longer-term tenancies.

We will keep you up to date with any developments on the consultation.

Rent-a-room changes

The 9 Financial Changes that Landlords Must Prepare for in 2018

Hammond has also called for evidence to show how rent-a-room tax relief could be better used to target long-term lettings. Currently, homeowners can earn up to £7,500 a year by renting out a room in their home before they have to pay Income Tax on the earnings.

The problem with the scheme is that it was designed to encourage people to let out a room in their home on a long-term basis, but the rise in popularity of short-term lets, due to websites such as Airbnb, has meant that the relief is being used by homeowners looking to make some extra money, rather than offering long-term lettings.

Changes may be brought in to make the rent-a-room scheme more targeted to long-term lettings.

Rent payments and credit scores

The Government has asked technology firms to create tools that will make it possible to record tenants’ rent payment histories in their credit scores. The Rent Recognition Challenge will run until October 2018.

The idea is that, by including rent payments in tenants’ credit scores, more renters will be able to get mortgage finance, but the measure will also benefit landlords, as they will be able to see whether a prospective tenant has paid their rent on time in the past.

Using a letting agent

In November last year, the Government published a draft bill, which included a ban on letting agents charging fees to tenants. It is believed that the law changes will come into force this year, but they could cause landlords to stop using their letting agents.

If letting agents are banned from charging fees to tenants, they may choose to pass the costs onto their landlord clients instead. This may cause landlords to drop their letting agents, as their overall costs will be higher.

Rogue landlord database

A database of rogue landlords and letting agents is expected to go live in April 2018, having been delayed from October 2017. Only local and central Government will have access to the database, and it will include operators with criminal convictions and any landlords or letting agents that have been issued with banning orders for housing offences.

Please note that the Mayor of London has already introduced a similar blacklist for landlords and agents in the capital.

Additional HMO licensing

The Government is also expected to target rogue landlords running Houses in Multiple Occupation (HMOs) by introducing tougher new rules.

At present, all large HMOs require a license, but this could be expanded to far more properties. The rules look set to remove the minimum three-storey requirement on what qualifies as an HMO.

This could mean that HMOs of five or more individuals, regardless of the number of storeys, will need a license, increasing the number of licensed properties from 60,000 to 175,000.

Landlord regulation

At the Conservative Party conference last year, the Communities Secretary, Sajid Javid, announced plans to make it a legal requirement for landlords to belong to an ombudsman scheme.

Javid hopes to create a single housing ombudsman that replaces the four current schemes. The plan could be good news for landlords, as it should improve dispute resolution with tenants.

Further tax relief reduction

This year, the Government’s mortgage interest tax relief restrictions will continue to bite. From April last year, the amount of tax relief that landlords can claim on finance costs (including mortgage interest) is being gradually reduced to the basic rate of Income Tax.

The tapering has already restricted tax relief to 75%, and will fall to 50% in April this year, then 25% in 2019 and 0% in 2020.

We suggest that all landlords take professional financial advice if they are worried about any of these changes. We will keep you up to date with all legal and financial changes in the buy-to-let sector through our handy monthly newsletter. Sign up for FREE here.

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Commuters Faced with Double Blow of Rent and Rail Fare Hikes

Published On: January 5, 2018 at 9:56 am

Author: Em Morley

Categories: Lettings News,Tenant News

In a week that saw rail fares rise by an average of 3.6% across the UK – the greatest increase since 2013 – Landbay’s Rental Index reveals that commuters in almost half of London’s most popular commuter towns face a greater overall financial burden from growing rents than from rail fares.

Of the capital’s 40 commuter belt hotspots – all found in the East or South East of England – 17 are being hit with a double blow, with extra annual expenditure on rail fares surpassed by spending on higher rent prices.

Average rents in these 17 towns rose by £183 (1.68%) in the year to December 2017, while rail fares have jumped by an average of £142 (3.6%). Combining annual rent and rail fare increases, the average commuter in these areas is facing a total additional outlay of £325 per year.

Cambridge and Brighton have experienced the greatest monetary rise in rents – £228 (2.06%) and £202 (1.58%) respectively – as rail fares grew by £172 and £163.

A further six towns in London’s commuter belt saw average rents rise by more than 1% in 2017 – double that of the UK average. Luton, Hastings, Basingstoke, Ashford, Canterbury and Horsham have witnessed average rental growth of £146 – almost as much as the average £166 increase in rail fares.

Commuters living in Guildford, Reigate and Woking, which all saw rents drop by £127 (-0.73%) in 2017, will be saving enough to offset the rail fare hikes of £126, £99 and £113 respectively. Those in Aylesbury and High Wycombe (-£43) and Slough (-£4) have also made rent savings, but hardly enough to chip away at the £141, £124 and £91 increases to rail fares.

There are now signs that demand for low-rent housing by long-distance commuters to London is pushing up prices in these areas. 31 of the 40 most popular commuter routes have seen rents rise by more than the UK average of 0.56% over the past 12 months, and by as much as 2.15% in Southend-on-Sea and 2.06% in Cambridgeshire. Only Slough (-0.04%), Buckinghamshire (-0.31%) and Surrey (-0.73%) have experienced average rent declines, while Reading (0.03%) and Bracknell Forest (0.05%) have recorded sub-average growth. This is in stark contrast to London, where they dropped by 0.80% in 2017.

Nevertheless, with rents in the capital averaging £1,872 per month, they remain more than twice the £765 average across the rest of England.

John Goodall, the CEO and Founder of Landbay, comments on the findings: “Commuters have seen their season ticket prices rise by more than £100 this week – the vast majority of whom are also looking at a double whammy of rent rises driven by greater tenant demand. At a time when rents in the capital are falling, some may even be considering a move into London, to be done with the train commute altogether.

“With inflation riding so high, rail fare growth shows no sign of slowing and, without a radical housebuilding plan for purchase, as well as purpose-built rental properties, rental price growth is expected to accelerate this year as well.”