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Research highlights North East as buy-to-let hotspot

Published On: September 14, 2021 at 8:37 am

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Categories: Landlord News,Property News

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Nation’s HMOs worth £26bn in current market conditions

A buy-to-let boom is expected in the North East, as it overtakes the North West as the best UK buy-to-let hotspot.

The latest Property Market Forecast from Property Forecaster has found that properties in Washington in Tyne and Wear are most likely to increase in value. Hartlepool, Sunderland and Newcastle also feature in the top ten.

The forecast ranks the top buy-to-let locations using a unique algorithm. Investment properties across England and Wales are given a score from one to ten, with properties rated ‘ten’ being the most likely to increase in value and dubbed ‘Diamonds’. Those locations with the greatest concentration of Diamond properties make up the top ten in the monthly forecast.  

Akhtar Hussain from Property Forecaster comments: “The North East has seen rental demand go from strength to strength. Our data now clearly shows a number of locations in the North East are demonstrating strong promise, both in terms of future gains and the highest yields.

“With average Diamond property prices in Washington, Hartlepool and Sunderland of between £48,000 – £53,000, the North East can’t be beaten for value and offers a very accessible investment opportunity with great future potential.

“Property prices in the North East can only go one way from here – they have already started to rise over the last year and recent inward investment in the area will also support future growth. There has never been a better time for investors to look at what the North East has to offer.

“In terms of the UK wide picture there is still underlying strength in the market despite the reinstatement of Stamp Duty and the pending closure of the furlough scheme. Although there may be a slowdown in the next couple of months due to seasonality, the next 12 months will remain strong overall. The Government has done a fantastic job of preventing a possible housing crash with assistance from the Bank of England reducing interest rates to a record low.

“Our previous predictions that prices would increase in spite of the pandemic, and that Brexit wouldn’t cause a crash in the housing market have been borne out. As the economy recovers over the coming months 2022 continues to look positive for investors.”

Record number of students looking for accommodation last minute, Housing Hand finds

Published On: September 13, 2021 at 8:28 am

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Categories: Tenant News

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Record number of students looking for accommodation last minute

UK rental guarantor service Housing Hand has reported an ‘extraordinary surge’ in business, as a huge number of students race to book their university accommodation at the last minute.

James Maguire, Head of Sales and Business Development at Housing Hand, comments: “We’ve not seen a rush like this before. The summer months are always our busiest period for student bookings, as young people arrange their homes for the coming academic year.

“However, this summer we’ve seen a record number of students leaving things to the very last moment before booking their accommodation. Brexit and COVID have created the perfect storm in terms of delaying decisions around committing to the expense of accommodation for the year ahead.”

Terry Mason, Group Operations Director of Housing Hand, comments: “With the prospect of a more normal academic year finally a reality, students are rushing to find the homes that they need in time for the start of the autumn term. It’s entirely understandable why so many have left it so late, but it certainly adds to the pressure in terms of getting everything done in time for the new academic year.”

The Housing Hand team has also commented on the results of a recent study from the Higher Education Policy Institute and Universities UK International. It shows that just 10 international (non-EU) students opting to learn in the UK will generate £1million of net economic impact.

James Maguire comments: “Historically, the UK has always rated very highly for non-EU students, alongside the USA and Australia. With those two countries still a little behind the UK in opening up to students after the pandemic, the UK is benefiting from a major opportunity. Here at Housing Hand, we are seeing record numbers of non-EU students using our guarantor services.

“The last two weeks in particular have seen last minute arrivals from many countries, including India, the United States, Malaysia and many of the Middle East countries. This is definitely filling the gap that has been left by the continuing uncertainty Brexit has caused for students from EU countries.”

Terry Mason adds: “Last year, many UK students decided to take a ‘year out’, as the pandemic added uncertainty. This year, they have enrolled in university courses. It may follow that the European students are taking a year out as the Brexit/fee issue is compounded by the pandemic. If this is the case, then we will be looking at another bumper year next year.”

Over 135,000 households in England homeless with support needs – Crisis responds

Published On: September 10, 2021 at 8:11 am

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Landlords back call for strategic approach to private rental sector

New UK government statistics show that during much of the pandemic, over 135,000 of England households that experienced or were at risk of homelessness also had other support needs.

Homelessness charity Crisis points out the statistics show that from April 2020 – March 2021:

  • Overall, 268,560 households experienced or were at risk of homelessness. This represents a 7% decrease on the year before mainly due to the protections put in place during the pandemic.
  • Half of households experiencing or at risk of homelessness had one or more support need. This includes victims of domestic abuse, young people leaving their family or care, people with learning disabilities, and people with experiences of mental health problems – which was the most common support need (66,470 people overall). These experiences put greater pressure on people and can make ending people’s homelessness even harder to resolve without the right support.
  • Compared to the previous year, 17% more (86,810 households) were pushed into homelessness because family or friends could no longer accommodate them – the single highest cause of homelessness in this time – and 17% more because of domestic abuse (31,190 households).

Jon Sparkes, chief executive of Crisis, comments: “These statistics make painfully clear that you cannot free people from the cycle of homelessness without a proper home and crucially, the support they need to keep it long term.

“Half of the households forced into or put at risk of homelessness in the last year had one or more support need, which are harder to resolve without a stable home. For many people with multiple issues relating to mental health, trauma or addiction, short-term accommodation cannot prevent them being forced back into rough sleeping.

“We urgently need a national Housing First scheme that delivers them long term housing, alongside tailored, unconditional support to rebuild their lives and leave homelessness behind for good.

“The numbers are not huge: Crisis research shows that 9,000 people who were given emergency accommodation through the Everyone In scheme need this support, out of a total of 37,000. But the difference it would make to each of their lives would be immeasurable.”

Halifax reports annual UK house price growth continues to slow

Published On: September 9, 2021 at 8:26 am

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Average UK house price rises again, Halifax House Price Index reports

The average house price in the UK during August was £262,954, according to Halifax’s latest House Price Index report.

Other highlights include:

  • Annual house price inflation has slowed further to 7.1%
  • Wales remains the strongest region or nation, with London continuing to lag

Russell Galley, Managing Director of Halifax, comments within the report: “Given the rapid gains seen over the past 12 months, August’s rise was relatively modest and the annual rate of house price inflation continued to slow, hitting a five-month low of 7.1% (versus 7.6% in July). 

“However, compared to June 2020, when the housing market began to reopen from the first lockdown, prices remain more than £23,600 higher (or +9.9%).”

Iain McKenzie, CEO of The Guild of Property Professionals, comments: “For all the speculation about what would happen when the Stamp Duty holiday ended, today’s figures look like business as usual for a jaw-dropping year for house prices.

“There’s another record for the cost of an average house, though the pace of growth is slowing month by month.

“Any increase to house prices now is fuelled by a short supply of housing stock coupled with the demand for space, as people continue to work from home and retain flexible working.

“People’s choices are reflected in the regional breakdown, with the South West and Wales seeing the biggest growth, and London lagging behind as commuters flee the rat race.

“Scarcity of properties on the market will continue to prop up prices for the foreseeable future, and we may be entering a period of stability after the rollercoaster of the past 18 months.” 

Lucy Pendleton, property expert at independent estate agents James Pendleton, comments: “London might be continuing to lag, but green shoots are visible now. The capital isn’t used to being a sideshow to the rest of the country but that’s what the peculiar set of circumstances over the past 18 months has delivered. 

“It won’t last though. While annual price growth softens as a whole nationally, demand is strengthening once more in London.

“By the end of the year we expect the narrative to have changed significantly, from one in which London has been the poor relation to a story of the traditional frontrunner regaining its crown, at least on relative terms. 

“That’s partly being powered by first-time buyers. Many young people and professionals still want to live in London, at least for a period, and the numbers of them beating a path to estate agents’ doors has shot up in the past couple of months. It’s no accident that passenger levels on the Tube are also back to pre-pandemic levels. We know who’s filling them. It’s back to the office time, buyers are rediscovering the capital and why it’s great to live there.”

Nicky Stevenson, Managing Director at national estate agent group Fine & Country, says: “The market remains turbo-charged and agents now expect strong growth to continue over the next 12 months.

“Though the Stamp Duty holiday is gradually being phased out, the supply-demand imbalance remains a key driver of prices across the country.

“While the number of new-build homes coming to the market is gradually increasing, there is still much ground to be made up from the market closure last year, and this is one factor that could help moderate price growth later on down the line.

“As we go into the autumn, we can expect the housing market to track the growth of the economy as a whole. The overall picture should remain robust as employment grows, worker wages climb and the economy continues to bounce back from the dark days of the recession.

“Sub one per cent mortgage deals, government support for first time buyers and a dearth of housing stock means a snapback isn’t on the immediate horizon.

“All things point toward a sustained period of year-on-year growth.”

Joshua Raymond, Director at financial brokerage XTB, comments: “The Halifax House Price Index (UK’s longest running monthly house price series) came in below expectations at 0,7% compared to the expected increase of 1.1%.

“Prices have been under increasing pressure after the index showed significant signs of slowdown in the last couple of months after a fairly stable increase throughout Q2. As overall inflation pressures continue to be a key issue followed by the Bank of England, along with other central banks, a continuation of the current trends could see the central bank stepping in and taking action even sooner than was previously expected.

“While a return to work and easing of lockdowns was expected to significantly boost property prices, it seems as if there are still some major hurdles the UK economy has to contend with.”

Self-resolution encouraged for landlords and tenants with deposit disputes

Published On: September 8, 2021 at 8:22 am

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Self-resolution encouraged for landlords and tenants with deposit disputes

Landlords and tenants are opting to solve disputes independently, according to new figures from SafeDeposits Scotland.

This is saving them weeks of waiting and the potential stress caused by lengthy formal processes.

The Glasgow-based tenancy deposit scheme saw cases completing with a self-resolution increase by 11% between April and June. This accounts for 9% of all dispute cases in April, 17% in May, and 20% in June. Over the same period, the number of cases using the free dispute resolution service called Alternative Dispute Resolution (ADR) decreased by 10%.

Overall case numbers increased by 20%, which indicates that despite the rise in disputes during the same period, more are being resolved independently.

The scheme holds tenants’ deposits on behalf of landlords and letting agents in line with government regulations designed to ensure responsible leasing. This includes the ADR service, with an independent adjudicator using evidence submitted to reach a decision. The process can take up to 12 weeks to complete.

SafeDeposits Scotland says self-resolution is an increasingly popular alternative, where mutual agreements can be made between the two parties, often through a simple conversation. Cleaning costs, unpaid rent and property damage are among the causes for deposit deduction claims that can result in disputes between landlords and tenants. The scheme is urging more tenants and landlords to consider self-resolution where possible to help both parties reach agreements quicker.

Mike Smith, operations manager at SafeDeposits Scotland, comments: “About 40% of all disputes that were brought to us last year were solved independently once the parties understood their options.  

“One of the major benefits of self-resolution is that the disputed funds can be accessed sooner. Once an agreement is reached, funds will be released and will reach parties within five working days. This means money can be available much quicker for those needing a new deposit or landlords looking to pay for property repairs before new tenants arrive. 

“When going down the ADR route, it’s worth noting the decision is then out of your control and could take weeks or months for an answer. Our independent adjudicators can only make decisions based on the evidence provided, which varies in quality and quantity. This means those disputing a case don’t always get the outcome expected. 

“With such a challenging year for the country almost behind us, where we can support people in solving issues quickly and easily, we will. If you have a dispute but you’re not sure on which route to take, we can help advise parties before submitting a proposal to hopefully save everyone time and effort in the long-run.”

In line with Government regulations, SafeDeposits Scotland only refers dispute cases to adjudication when satisfied that the landlord (and any agent acting on their behalf) and tenant have attempted to resolve the dispute but without success.

Insecure tenancies cost private renters £229 million a year

Published On: September 7, 2021 at 8:14 am

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Categories: Landlord News,Tenant News

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Renters (Reform) Bill to cost letting agents £278.7m according to government

Private renters are spending an estimated £229 million every year on unwanted moves, an analysis from Generation Rent reports.

The 2019-2020 English Housing Survey found 134,000 private renter households moved home after either being evicted, reaching the end of a fixed term tenancy, or being faced with a rent increase.

Generation Rent has called on the Government to introduce open-ended tenancies as part of its reforms to the rental market. Where landlords wish to sell up or move in, they should pay the equivalent of 2 month’s rent towards tenants’ moving costs, to minimise the stress of moving.

At present, renters can be forced to move home if their landlord increases the rent to an unaffordable level or issues them with a Section 21 ‘no fault’ eviction notice after a fixed term ends. However, the Government has committed to abolish Section 21.

The new analysis by Generation Rent found that the average up front cost of an unplanned move for the median private renter household is £1,709. This includes:

  • The deposit on a new home, worth five weeks’ rent (£808) 
  • Two weeks paying rent on two properties while moving (£323) 
  • Time off work to view properties, pack, and move home (£250 for 28 hours at minimum wage)  
  • Cleaning costs (two hours at £24) 
  • Van hire (one day at £34)  
  • Broadband installation (£20) 

Generation Rent also looked at how different renters are affected. This figure is highest for a single parent with children, at £1,451 per person, and lowest for sharers in a three-bedroom property, at £731 per person.

It’s analysis of the Government’s English Housing Survey found that 57,000 households moved in the private rental sector after being evicted from a private tenancy. 66,000 moved due to a fixed-term tenancy ending, and a further 11,000 moved due to a rent increase. This has resulted in a total of 134,000 home moves a year that were unwanted. Given the cost of moving for each household, these unwanted moves cost renters £229 million a year.

A Generation Rent survey of 884 people who have rented from a private landlord in the last 5 years found that 56% paid more rent when they last moved home. Alongside financial costs, 44% reported having to move further away from friends or family, 15% were further from a hospital, and 5% had to move their children to a different school.

Alicia Kennedy, Director of Generation Rent, comments: “Renters are shelling out millions to pay for house moves that they have no choice but to make. Not only is moving home expensive, it can force renters to move away from essential support networks, family and friends, and can disrupt children’s education. Renters deserve secure and stable homes where they can put down roots in their communities and thrive. With tenancies so short and evictions so common, this right is out of reach for millions of private renters.

“Generation Rent is calling on the Government to commit to open ended tenancies in the upcoming Renters Reform White Paper, and to make landlords contribute to renters’ moving costs in the event of an unplanned and unavoidable move.”

Katie, a private renter living in Brighton, comments: “The last time I moved it cost me upwards of £800. I rely on welfare due to my disability, so moving home takes a huge toll financially. My new flat is more expensive, and further away from my local hospital, which I make regular trips to. I’m worried about the prospect of moving again if my current landlord puts the rent up or wants to sell the property, as I’m not sure how I would afford it.”