Written By Em

Em Morley

Over one in four homes in is an unacceptable standard

Published On: October 17, 2016 at 10:05 am

Tags: affordability,Living Home Standard,property,renters,Shelter

A shocking new survey from Shelter has revealed that over one in four homes in the UK do not hit acceptable living standards.

The charity’s new Living Home Standard looks at features such as cleanliness, safety, affordability and space.

Problems

Worryingly, the report found that affordability was the greatest issue and that people should be able to, ‘live and thrive’ in homes, not just ‘get by.’

Prime Minister Theresa May has recently said that the Government is to prioritise housing, doubling its affordable housing budget.

Shelter compiled the Living Home Standard through a series of workshops and questionnaires. The charity also received support from British Gas.

Measurements of homes hitting acceptable living standards were based on results from a survey of 1,961 adults across the UK.

Standards

The Living Home Standard measures five elements according to specific criteria. The concept of space was measured for example by having a sufficient number of bedrooms for the household, and having space for everyone to spend time in the same room together.

Other aspects of space include outdoor room and the amount of space children and adults have to work.

These five elements of the Living Home Standard were measured on:

Affordability: Factors such as how much money is left for peoples’ essentials following rental or mortgage payments

Living conditions: Assessing replies for words such as ‘warm’ and ‘secure’ when asking the participants to describe their home.

Space: Sufficient space was seen as critical for mental and social wellbeing

Stability: This was seen as the extent to which people feel that they can turn their property into a home.

Neighbourhood: Residing in an area where people feel safe and secure was also seen as very important. Living close to work, family and friends was also an important measurement.

Over one in four homes in is an unacceptable standard

Cutbacks

Of the five criteria, 27% of homes failed at least one of the affordability specifications. Shelter revealed that 24% of people were not able to save anything for unexpected outgoings after paying rent or mortgages. 23% worry about their rent or mortgage charges becoming unaffordable should they rise even slightly.

18% of people could not meet their housing fees if they did not cutback on essentials like food or heating. 20% said they have to cut back on social activities in order to meet costs.

In addition, over one in ten people live in homes that do not hit space criteria. This was particularly bad for renters in social housing. One in five said that space was inadequate, while one in four said that they did not feel in control of how long they could stay in their property.

Heart-breaking

Shelter has called for more stable rental contracts, lasting for at least five years to protect tenants against rent increases.

Chief executive of Shelter, Campbell Robb said: ‘It’s heart-breaking to think that so many people are having to make a choice between paying the rent and putting food on the table, or living in fear that any drop in income would leave them unable to cover their housing costs.’[1]

‘The sad truth is that far too many people in Britain right now are living in homes that just aren’t up to scratch – from the thousands of families forced to cope with poor conditions, to a generation of renters forking out most of their income on housing each month and unable to save for the future,’ he added.[1]

[1] http://www.bbc.co.uk/news/uk-37655908

Conservative Peer Attacks Tax Hikes for Landlords

Published On: October 17, 2016 at 9:18 am

Author: Em Morley

Categories: Landlord News

Tags: Autumn Statement,landlord taxes,mortgage interest tax relief,Stamp Duty,tax changes

A senior Conservative peer has accused the former Chancellor, George Osborne, of exacerbating the housing crisis through his tax hikes for landlords.

Conservative Peer Attacks Tax Hikes for Landlords

Lord Flight, who previously served as the Shadow Chief Secretary to the Treasury, has written an article on the Residential Landlords Association (RLA) website to warn all those in the sector that tax hikes for landlords will “drive up rents” and “drive out investment in the sector”, at a time when 1.8m new homes to rent are needed by 2025.

Lord Flight referred specifically to decisions to tax landlords on their income rather than profit and the higher rate of Stamp Duty on additional homes.

In his article, Lord Flight highlights evidence from the London School of Economics that challenges the previous Government’s claims that landlords are buying homes that first time buyers could have purchased. He also points out statements by the Institute for Fiscal Studies that landlords are taxed more heavily than homeowners.

The peer calls on landlords to lobby their local MPs, informing them of the damaging impact that the tax changes will have on the supply of affordable homes to rent, and encourage them to seek changes in the new Chancellor’s Autumn Statement on 23^rd November.

Recently, the Society of Licensed Conveyancers called on the Chancellor, Philip Hammond, to scrap Osborne’s Stamp Duty reforms in next month’s Autumn Statement.

Commenting on Lord Flight’s article, the Chairman of the RLA, Alan Ward, says: “Lord Flight’s analysis is correct. When we need almost two million more homes to rent by 2025, recent tax changes will choke off investment, increase rents and make it more difficult for tenants to save for a home of their own.

“The new Chancellor has an important opportunity next month to correct the previous Government’s changes to the way the rented sector is taxed. We call on him to seize this opportunity with both hands.”

Worryingly, landlords have revealed that the changes to mortgage interest tax relief are most likely to discourage them from investing further in the property market.

Which tax hikes for landlords are you most concerned about?

North-South Rent Price Divide Narrows by 4.6%

Published On: October 17, 2016 at 8:35 am

Author: Em Morley

Categories: Property News

Tags: average rent price,rent prices,rental growth,rents,tenants

The north-south rent price divide across Great Britain has narrowed by 4.6% over the last 12 months, according to the latest Monthly Lettings Index from Countrywide.

The research shows that rental growth has slowed across the country over the past year, but price growth in northern cities has remained at a similar rate to recent months.

Of the 20 largest cities in the country, the five with the fastest growth in new rent prices were in northern England or Scotland.

Manchester recorded the greatest growth in September, with rents rising by 7.1% for new lets over the past 12 months – faster than anywhere else in the country and more than three times faster than the average.

York, Leeds, Liverpool and Glasgow make up the top five, with all seeing the rate of rental growth pick up over the past three months.

North-South Rent Price Divide Narrows by 4.6%

Most southern cities have seen rental growth slow over the year so far. Seven of the ten cities where rents are rising most slowly are in southern England. Oxford, Cambridge and London recorded the largest slowdown in growth, and all drop at least five places from last year.

In the capital, rents are rising fastest in outer London, while across central and inner London, they remain fairly unchanged on last year.

Greater price sensitivity has caused rental growth to slow across the south. The proportion of landlords cutting the asking rent has doubled over the past 12 months in cities in southern England. In September, Cambridge (18%) and London (17%) recorded the greatest proportion of homes with a cut in the asking rent.

Countrywide reports that a spike in the number of homes available to rent since April’s Stamp Duty change has given tenants more choice, increased competition among landlords and slowed the pace of rental growth.

Regionally, the rate of rent price growth has slowed right across the country, falling from 2.8% in September 2015 to 2.2% this year.

Rents are rising more slowly than last year in eight of the 11 regions – northern England and Wales were the only exceptions. With rental growth slowing across the south, the gap between rents in northern and southern cities has narrowed by 4.6% (or £31 per month) over the last 12 months. However, the gap remains 26% wider than it was in 2010.

The Research Director at Countrywide, Johnny Morris, comments on the findings: “A different type of two-speed rental market is emerging, with falling stock and growing demand driving rental growth in many northern cities at a higher rate than those in the south.

“With London rents growing at the slowest rate since the downturn (2008) and northern cities recorded rent rises three times as large as their southern counterparts, there are signs that the north-south rental divide is starting to close. Although at current rates it would take at least five years for the gap between rents in the south and north to close back to 2010 levels.”

He concludes: “As some would-be buyers and sellers sit on their hands, Brexit-induced uncertainty has continued to boost the rental market. Overall, this is yet to stoke rental inflation, but September saw record activity, with increasing numbers of lets agreed and tenants choosing to renew their contracts. On current trends, 2017 could be the first time since the 1930s that more homes are let than sold.”

Tenants tending to rent for longer

Published On: October 14, 2016 at 1:30 pm

Author: Em Morley

Categories: Property News

Tags: landlords,rental agreements,renters,tenancy agreements

The latest investigation from Cover4LetProperty Over half of tenants in the private rental sector stay in their rented accommodation for a period of five years or more.

These surveys are conducted bi-annually from March 2013 to September 2016 and this is the eighth edition.

Longer tenancies

59% of renters said they have been in the same property for more than five years, which was unchanged from one year ago.

In October 2013, 15% of males had lived in four or more properties in the last five years, in comparison to 8% of females.

October this year has revealed that only 8% of males and 5% of females have lived in more than three rental properties, which suggests in tenants are staying put for longer.

Tenants tending to rent for longer

79% of respondents said that opted to rent long-term, representing a rise of 15% over the last 12 months.

15% of existing renters intend to buy their own property within the next six months, down by 18% in the same period. 29% said that hope to buy in the next few years.

Over £1m in tenancy deposits stolen so far this year

Published On: October 14, 2016 at 11:42 am

Author: Em Morley

Categories: Landlord News

Tags: landlords,rental deposits,rents,tenancy deposit schemes

Shocking new figures have revealed that rogue letting agents have been convicted of stealing over £1m in tenancy deposits so far in 2016.

If that is not bad enough, one campaigner feels that this could just be the start, with more bad news to come.

Deposits

Anti-deposit campaigner Ajay Jagota of Dlighted has conducted analysis that indicates courts have found14 letting agents guilty of illegally taking renters deposits this year. The amount of money taken has ranged from £500 to £400,000.

Mr Jagota, who wishes to see more landlords and agents using Dlighted’s deposit-free renting service. He claims that more than 1,000 renters have been ripped off of £1,100, with at least one landlord or agent convicted every month.

‘If a piece of jewellery or a painting worth £1m was stolen or 1,000 consumers were simultaneously ripped off it would be a major news story. So why should another theft of that scale be tolerated?’ Mr Jagota asked. ‘It’s plain and simple: If landlords and letting agents didn’t take cash deposits these thefts would be avoided.’[1]

Continuing, Jagota said: ‘The most horrifying part is that this is in all probability just the tip if the iceberg. Two thirds of the industry opt for a insurance-based tenancy deposit scheme meaning they are custodians of £2.bn of the £3.5bn held in tenancy deposits.’[1]

Over £1m in tenancy deposits stolen so far this year

Deposit schemes

All three tenancy deposit schemes-MyDeposits, Deposit Protection Service and the Tenancy Deposit Scheme-all require deposit money to be placed into an account which is not touched by the agent or landlord.

However, Mr Jagota feels that there is a misconception in the industry that to do so is legitimate. He notes: ‘There are no check and balances stopping them.’[1]

Concluding, Jagota said: ‘Countless agencies could be unwittingly breaking the law, and if some agencies are habitually using deposit money in their day-to-day activities, what happens if they no longer could? They would become insolvent overnight.’[1]

[1] https://www.landlordtoday.co.uk/breaking-news/2016/10/more-than-1m-in-tenancy-deposits-stolen-by-letting-agents-this-year-alone

10 Things to Keep in Mind if You’re Buying in London Post-Brexit

Published On: October 14, 2016 at 10:56 am

Author: Em Morley

Categories: Landlord News

Tags: Brexit,London,property investors,property market

If you thinking of buying a property in London post-Brexit, the Regional Director of Portico London estate agent, Mark Lawrinson, has ten things to keep in mind to make a sound property investment:

Look out for big infrastructure projects

Even in a weak or unstable market, locations undergoing large infrastructure investment are likely to still experience growth in both rental yields and capital gains. Landlords should look to areas being transformed along both the Night Tube and Crossrail lines to identify long-term investment prospects. For example, Forest Gate, Farringdon and Whitechapel are areas set for regeneration and a rise in property prices thanks to the Crossrail service.

Check out the high street

The high street is a great indicator of the demographic of an area and shows whether the area is in decline or has growth potential. Some of the factors you should look at are: Have there been many changes recently? Are shops closing down with no sign of opening, or are they closing with new names moving in? Is the council spending money to smarten it up?

Find good schools

10 Things to Keep in Mind if You’re Buying in London Post-Brexit

Another great way to judge the prospects of an area is the schools in the vicinity. While you may not want to rent to tenants with children, the London population is growing fast, and good schools are becoming more difficult to come by. Therefore, having a good school in the area is a big bonus. People both rent and buy in these catchments to get their children into a good school, which gives you a good return on investment.

Look for a home

If you are buying a property to live in, remember that it’s a home first and investment second. If you plan to live in the property long-term, you should be shielded from bumps in the market. As the London property market has proved itself to be resilient, what happens in the next two years could be completely insignificant if you are there for ten.

Shop around for mortgages

To make a successful investment decision, you should use a broker who has access to the entire market. Be aware that some brokers operate on a panel, which means that when they say they’re getting you the best deal, they are only getting you the best deal from their panel. With lending criteria changing daily, it is advised that you shop around. This is true even for landlords who’ve used the same lender or broker for years.

Choose a good solicitor

If you choose a cheap solicitor, they may end up costing you more. Buying a property is one of the single biggest purchases of your life, so getting the right advice is crucial. With a market that’s changing daily, avoiding delays with the right legal aid could be the difference between completing the transaction or missing out.

Pick the right estate agent

In a tough market, it is more important than ever to pick a local estate agent who knows the area inside out and who will get you the best result as a buyer and a seller. An agent who just instructs and advertises your property and waits for the calls will struggle in a difficult market. A proactive agent who knows their buyers can match the right person to your property, and uses past experience to price your home right. With a no-sale, no-fee policy, high street estate agents now have as much a vested interest in the transactions as the vendor and buyer.

Create a two-year and five-year plan

Most investors would take a two-year fixed rate mortgage, but with lending criteria getting tougher for landlords, some of the better deals in terms of loan-to-value (LTV) can be found at a five-year fixed rate deal. No one knows what will happen to the property market over the next two years, so you must plan for what will happen if circumstances go out of your control.

Add value to your property

From basic redecoration to new kitchens and even structural work, such as loft extensions, adding value to your property will make your home a better investment. If you’re looking for capital growth, not market-dependent, then you must look at innovative ways to add value to your property.

Be clear on your requirements

We all know what we’re looking for in a property, even those seeking investments, but you must remember to be realistic with your actual needs. Always compromise where necessary to make your search much easier.