Written By Em

Em Morley

Rents in London fall for first time since 2009

Published On: May 8, 2017 at 8:38 am

Tags: Buy-to-Let,landlords,London,London rents,rents

The most recent report from Homelet has revealed that rents in London fell for the first time since 2009 during April. This was a direct result of rental price inflation across the UK sliding to its lowest level for more than seven years.

Capital Falls

Homelet’s report found that rents in the capital were down by 1.2% in April, in comparison to the same period in 2016. This is the first time typical rents have fallen year-on-year since December 2009.

This decline in London, alongside marginal decline across the wider South-East region, drove rental price inflation down across the country as a whole.

Rents for new tenancies in Britain during April were 0.4% greater than in the same month in 2016- the lowest figure since February 2010.

This rental price inflation means that tenants signing for a new tenancy over the last month paid an average rent of £904 per month across the UK. When the greater London region is removed from the analysis, the average rent agreed falls to £754.

Rents in London fall for first time since 2009

Inflation

In addition, the data showed that areas of the country where rents are rising more quickly are those that saw less profound rental price inflation during the first six months of 2016.

Wales for example saw rents 2.2% greater in April compared to the same month last year.

Martin Totty, Chief Executive Officer at HomeLet, observed: ‘Rents have been rising at a more modest pace across the whole of the UK in recent months, with lower levels of rental price inflation and even falling rents in areas of the country where prices were previously rising most quickly. We continue to see landlords’ and letting agents weighing tenant affordability considerations very seriously.’[1]

[1] http://www.propertyreporter.co.uk/landlords/london-rents-are-falling-down.html

Landlord Accreditation Scheme Protecting Tenants from Rogues

Published On: May 8, 2017 at 8:18 am

Author: Em Morley

Categories: Landlord News

Tags: accreditation scheme,landlord accreditation,rogue landlords,tenants

A new landlord accreditation scheme is protecting private tenants from rogue operators in the private rental sector.

Over the past six months, 51 landlords have completed the training and accreditation scheme in North Somerset, which aims to protect good tenants and enable the local authority to effectively target rogue landlords across the district.

Landlord Accreditation Scheme Protecting Tenants from Rogues

Since the first National Landlords Code of Excellence (NLCE UK) training day took place in November 2016, over 60 landlords and letting agents around the country have joined the scheme, with ten more becoming accredited just last week, bringing the total number of accredited members to 56.

The NLCE UK has already accredited more than 1,236 private rental properties, represented by the 56 accredited landlords.

This is broken down by several areas:

North Somerset: 1,091 properties
Bristol: 85 properties
South Yorkshire: 52 properties
Dorset: Two properties
Hampshire: Six properties

The landlord accreditation scheme allows tenants to report property maintenance/repair issues, as well as anti-social behaviour problems within their communities. Primarily, this ensures that the criteria for the Deregulation Act 2015 is met, as well as preventing bogus claims from tenants, such as that they have reported a repair and the landlord has not responded, and vice versa.

Over 20 complaints from private tenants in North Somerset have already been reported through the NLCE UK portal, about landlords unknown to the organisation. This has given these landlords the chance to deal with the problems before they escalate to the council. The most recent case prevented an unprotected tenancy deposit dispute going to court.

Those that attended the NLCE UK’s one-day course on 26^th April 2017 were able to learn more about housing private tenants and complying with legislation in the private rental sector.

Sam Jackson, the Director of the NLCE UK and an experienced buy-to-let landlord, comments: “At the NLCE, we are currently working with North Somerset Council on a weekly basis. I still get asked a lot: ‘Why should I join, if my property is already licensed?’ The accreditation day in its own right is worth joining the scheme, after attending the training day, one landlord said: ‘After 17 years of being a landlord, I thought I realised what was needed. After seven pages of notes, I realised how much I didn’t know.’

“The training day is a great opportunity to network and learn how to save thousands of pounds, run by a professional trainer who also trains landlords for the National Landlords Association.”

The NLCE UK was set up in response to North Somerset Council’s plans to introduce a selective licensing scheme in Weston-super-Mare town centre last year.

Millennials spending over one-third of their take home pay on rent

Published On: May 5, 2017 at 10:32 am

Author: Em Morley

Categories: Property News

Tags: rental growth,rents,tenants,young tenants

According to the most recent Rental Index from Landbay, young tenants are spending one-third of their monthly take home pay on rent.

Those residing in a three-bed property spend 30% of their pay on rent, while those in a two bed spend 39% on average. For those living alone, rental payments hit them hard in the pocket, with them spending an average of 69% of their take home pay on rents!

Rents

For tenants aged between 18-39 renting alone, 69% of their monthly post tax-income of £1,447 is spent on £1,012 worth of rent.

For two people sharing a house, overall rent of £1,152 amounts to 39% of each tenant’s income.

Rents have continued to spiral in the last five years, rising by 9% across Britain since April 2012. London has seen rental growth of 8% over the same period. This of course is impacting on those struggling to save for a deposit, despite the pace of rental growth slowing from August 2015, from 2.66% and 0.82%.

Despite rents beginning to show signs of stabilising for young people, spending such a high percentage of their take home pay on rent leaves them little to play with for essentials, never mind for savings.

Millennials spending over one-third of their take home pay on rent

Tough

John Goodall, CEO and founder of Landbay noted: ‘For intermediaries, this generation is the future of their client base, a generation who will face a tough financial journey.’[1]

‘Whether these millennial tenants are renting as a stepping stone on the way to home ownership – or in some cases choosing to rent for life – this generation are relying on a well-served buy-to-let market to ensure rental growth doesn’t become unbearable. What is now needed is some firm Government commitment to improving standards, affordability and supply of rental properties,’ he continued.[1]

Concluding, ‘Institutional investment and the subsequent growth and professionalism of the private rental sector are already helping control rental growth and improve living standards for renters, so we hope to see some clear plans outlined in this month’s party manifestos ahead of the General Election in June.’[1]

[1] http://www.propertyreporter.co.uk/finance/millennials-spend-over-a-third-of-take-home-pay-on-rent.html

TSB Reduces Rates on Mortgage Products to Improve Presence in Buy-to-Let Market

Published On: May 5, 2017 at 9:32 am

Author: Em Morley

Categories: Finance News

Tags: buy to let mortgages,buy-to-let sector,finance,mortgage rates,mortgages

TSB Reduces Rates on Mortgage Products to Improve Presence in Buy-to-Let Market

TSB has reduced its rates by up to 0.25% on a selected number of mortgage products, in a bid to improve its presence in the buy-to-let market by offering more competitive deals.

New products include two-year fixed rate deals for property buyers and remortgage borrowers, with rates cut by between 0.2-0.25%.

Meanwhile, the three-year fixed rate for property buyers and remortgage borrowers has been cut by between 0.1-0.15%, excluding the no fee 60% loan-to-value (LTV) product.

TSB has also reduced the five-year fixed rate product for property buyers and remortgage borrowers by between 0.15-0.25%.

The two-year tracker rate for property buyers and remortgage borrowers has also been cut by between 0.2-0.25%.

The Mortgage Distribution Director at TSB, Roland McCormack, comments: “TSB helped over 14,000 people with their mortgages in the first three months of 2017 and provided £2.2 billion of new mortgage loans.

“We are committed to helping people borrow well, and these rate cuts across the LTV ranges are an example of us doing exactly that.”

Paragon Mortgages has recently updated its buy-to-let range to focus on the longer term plans of landlords. Meanwhile, specialist lender Investec Private Banking is targeting high net worth property investors with a new range of buy-to-let products.

The latest study by the Bank of England shows that mortgage rates dropped yet again in March, taking the average to a new record low.

Rogue landlord fined over £5k for fire safety negligence

Published On: May 5, 2017 at 8:47 am

Author: Em Morley

Categories: Landlord News

Tags: fire safety,HMO's,landlords,rogue landlord

A rogue landlord with a property in St Helens has been fined over £5,000 after inspectors from the local council found serious fire safety issues within his rental property.

Darshan Sidhu, of Walsall, was fined after fire escapes in his rental property were found either to be obstructed or not of a high-enough standard.

Unsafe

St Helens Council took action in order to prevent potential tenants from living in unsafe conditions, following Mr Sidhu’s failure to comply with an improvement notice.

The judge at Liverpool, Knowsley and St Helens Magistrates’ Court described the living conditions for tenants as, ‘miserable.’

Mr Sidhu pleaded guilty by post for failing to comply with HMO regulations. The judge also noted that this was a commercial enterprise and that Mr Sidhu would have made a substantial profit on his HMO.

This case was categorised as one of high culpability, as a result of the commercial profit gained. It was also classed as high risk, given the substantial difficulty that tenants would have had leaving a property in the event of a fire.

Rogue landlord fined over £5k for fire safety negligence

Punishments

As a result of his negligence, Sidhu was ordered to pay a total of £5,032, including a fine, costs and a victim surcharge.

Talking on the outcome, St Helens Council’s strategic director of people services, Mike Wyatt noted: ‘The majority of St Helens landlords are responsible and provide good quality and safe accommodation.’[1]

“Unfortunately, as in this case, not all landlords follow their example and the accommodation they provide is extremely poor and hazardous to the health and wellbeing of tenants.’[1]

Concluding, Mr Wyatt said: ‘The council enforces the law to make sure tenant’s health and safety welfare is protected, and will take formal action against landlords who don’t comply.I would encourage landlords to contact the council to seek any advice and ensure compliance with legal requirements.’[1]

[1] https://www.landlordtoday.co.uk/breaking-news/2017/5/andlord-fined-over-5k-for-exposing-tenants-to-miserable-living-conditions

Mortgage Rates Continued to Drop in March, Reports BoE

Published On: May 5, 2017 at 8:07 am

Author: Em Morley

Categories: Finance News

Tags: borrowers,finance,housing market,mortgages

The Bank of England (BoE) has released its latest Money & Credit Report for March, revealing that mortgage rates continued to drop yet again in the month before last.

Mortgage Rates Continued to Drop in March, Reports BoE

Average mortgage rates fell yet again in March, with two, three and five-year rates at 75% loan-to-value (LTV) all reaching record lows.

The Executive Director of the Intermediary Mortgage Lenders Association (IMLA), Peter Williams, explains what this means for the housing market: “Lower mortgage rates reduce borrowers’ monthly payments, thereby boosting housing affordability and easing the effects of high prices. This improving affordability is illustrated by the fact that the amount borrowers spend on paying off mortgage interest is at a low; in 2016, home movers spent an average of 7.2% of their income on interest payments, while first time buyers spent an average of 9.1%. Many borrowers will also rightly look to capitalise on the fall in the average 10-year mortgage rate, and secure a long-term deal.”

Nevertheless, he highlights that the price of higher LTV products continued to rise in March, taking the average rate on a two-year fixed rate mortgage at 95% LTV to 3.99%.

“Higher LTV products are essential to providing borrowers with modest deposits with the opportunity to get a foot on the property ladder, and rising prices in this segment of the market could stretch affordability,” Williams says. “Ensuring that the housing market is open to a wide range of borrowers should be a key objective of both policymakers and industry, and it is therefore important that higher LTV products are accessible.”

Looking ahead, Williams predicts: “IMLA expects total gross mortgage lending to reach £260bn in 2017, which is 5.9% higher than the £245bn recorded in 2016. The market has been supported by high levels of public demand for housing from a variety of different customer profiles. Furthermore, low mortgage rates and relatively modest levels of inflation have instilled borrowers with confidence, and made them willing to take out loans for purchase.”

Are you confident in the future of the mortgage market?

Any landlords looking to take out buy-to-let loans must be aware of the Government’s recent phasing out of mortgage interest tax relief. These changes will restrict the amount of mortgage interest (and other finance costs) that investors can offset against tax.