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Em Morley

Where in the North East can you expect a quick let?

Published On: August 9, 2016 at 9:56 am

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An average North East rental property houses a tenant within 97 days of going onto the market, according to new research.

Analysis of 15 North East regions by sales and lettings firm KIS reveals that there are a few unlikely rental hotspots in the region.

Tenant turnover

Landlords in Consett can expect to have the shortest wait to find tenants.

The report indicates that buy-to-let investors in the region see properties rented out within an average of 58 days. Other fast-renting areas include Chester-le-Street (75 days), Whitley Bay (81 days), Cramlington (83 days) and Durham City, (86 days).

At the other end of the scale, the second slowest region in the North East to rent out a property was Newcastle, where homes take an average of 125 days to let.

Houses in the North East take an average of 17 days less to rent out than flats.

Where in the North East can you expect a quick let?

Where in the North East can you expect a quick let?

Quick lets

Ajay Jagota, managing director of KIS, said, ‘Consett may not be the first place you think of when it comes to Northern property hotspots, but there are some obvious reasons for why properties there seem to rent out faster than the rest of the region. The most obvious one is that as a smaller area than most of those we’ve surveyed there are likely to be less houses to rent and more competition for properties as a result-something always worth considering for landlords and prospective property entrepreneurs.’[1]

‘The time it takes to rent out a property is, of course, not the only factor you need to consider when it comes to deciding where to invest in property. Although these figures suggest Gatesehead is somewhere to consider avoiding it has offered investors the region’s highest rental yields in almost every survey we’ve ever undertaken. If you are looking to rent out a property quickly, the quickest way to do it is to remove the biggest and bizarrest obstacle to finding and keeping good tenants-rental deposits,’ he continued.[1]

‘Our research shows that tenants on average need to find £798 in deposits to move into a rented home. By insisting on deposits when you could instead use an insurance-backed deposit free solution is intentionally limiting potential tenants to people who have that sort of money lying around,’ Jagota added.[1]

[1] http://www.propertyreporter.co.uk/landlords/where-do-north-east-properties-rent-the-quickest.html

Landlords Urged to Help Tackle Homelessness

Published On: August 9, 2016 at 9:51 am

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A Hertfordshire-based housing association has called on landlords to help tackle homelessness in the area through its new social lettings scheme.

The Hemel Hempstead-based Hightown Housing Association, based in the Dacorum Borough Council area, is launching its own social letting agency to help combat the increasing problem of homelessness in the district.

Landlords Urged to Help Tackle Homelessness

Landlords Urged to Help Tackle Homelessness

Hightown Lettings will offer private landlords a three to five-year lease for their properties, which they will let to families who are homeless or facing homelessness.

Under the terms of the new scheme, landlords will be guaranteed a monthly rent, whether their property is occupied or not, while Hightown Lettings will also manage the properties.

Landlords will also benefit from quarterly inspections, a £300 contribution towards minor repairs each year, and the ability to fund more expensive repairs/renewals by taking the cost out of their monthly payment.

Hightown will also return the property at the end of the lease in the same condition as the start, aside from fair wear and tear.

All properties leased under Hightown Lettings will be let and managed on Assured Shorthold Tenancies (ASTs), with a break clause for either party to end the agreement within three months.

The housing association hopes that the scheme will help to reduce homelessness in the area, as the number of applications in the Dacorum Borough have risen by a huge 70% between 2014-15 to 131 in the last quarter.

The Chief Executive of Hightown, David Bogle, says: “The number of people being made homeless is increasing nationally, with 68,560 households living in temporary accommodation at the last count. Locally, the overall trend is not improving and we’ve been looking for new ways to assist local authorities with the problem.

“We hope this scheme will assist the local community and help us fulfil our aims of providing homes for those in need. For local landlords, they’ll have the benefit of long-term, no hassle letting with the rent and welfare of the property guaranteed.”

The housing association also reminds landlords that they will save on letting agent fees by leasing through the scheme, but they must be aware that the rental income they earn will usually be controlled by the amount of housing benefit that the tenant receives, which is typically 80% of the average local market rent.

The Lettings Manager of Hightown, Brian Finn, adds: “By guaranteeing the rent every month and not charging fees, the landlord’s income under Hightown Lettings will be very similar to the income received by going through a high street letting agent.”

The call from Hightown Lettings arrives as a new report highlights the chronic housing crisis in the UK. Shelter recently found that three million working families in England are at risk of losing their homes due to sky-high housing costs: https://www.justlandlords.co.uk/news/3m-working-families-one-pay-cheque-away-losing-home/

Could you join the new scheme?

Rents rising across Britain, but at a slower rate

Published On: August 9, 2016 at 9:01 am

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New research has revealed that average residential rents in Britain continued to rise during July, with demand still outweighing supply. However, the rate of growth is slowing.

Analysis from HomeLet reveals that with the exception of Greater London, the average monthly rent now stands at £779 per month. This is 2.3% higher than one year ago.

In the capital, rents are now £1,599 per month, a rise of 4% in the twelve month period.

Banishing uncertainty

Data from the report suggests that buy-to-let landlords have been able to secure higher rents on new tenancies, despite the uncertainty created by the Brexit vote in June.

This is in line with the housing market, as mortgage lenders are also reporting modest growth in house values in the month following Brexit.

Moving forwards, the private rental sector looks set to be unchanged by the result. A growing population, unaffordability of house prices and lack of new supply suggests that sector will be a vitally important component of the housing market in years to come.

Regional variation

A further look at the figures shows that there is a tangible regional variation recorded. Month-on-month, rents rose most in East Anglia, by 3.7%. In addition, the region came out on top for annual rises, seeing a yearly rise of 9.7%. As such, average rents in the area now stand at £897 pcm.

However, in Scotland rents dropped by 3.7% month-on-month. On a yearly basis, rents increased by 1.4% to an average of £676. The only other area to see a fall in the month was the North East, where rents fell by 0.4% to £537. Yearly, rents dropped by 5%.

Rents rising across Britain, but at a slower rate

Rents rising across Britain, but at a slower rate

Supply and demand

Martin Totty, chief executive at HomeLet’s parent company Barbon Insurance Group, believes rents will be determined by supply and demand in the sector.

Totty noted, ‘population growth will continue to increase demand and the housing stock isn’t growing quickly enough to meet that demand. However, with rents ultimately limited to a tenant’s ability to pay, rents are likely to continue to climb, albeit at the slowing pace noted most recently.’[1]

‘We won’t know exactly how Brexit is impacting the private rental sector and it will be several months yet until we see some clearly established trends in the marketplace. It seems likely that with lenders concerned about the prospect of falling house prices, loans to value in the mortgage market are going to become less generous, which may see more people turn to the rental sector rather than buying a property. However, it’s possible we may also see renewed interest in the London rental market as foreign investors seek to pick up investment property to make the most of the big exchange rate advantage following the fall in the pound,’ he continued.’[1]

Concluding, Totty said, ‘we may also see foreign investment increase outside the capital, in other cities across the UK. This coupled with recent figures showing that the number of people becoming homeowners is falling across the country, the demand for rental accommodation is likely to remain strong.’[1]

[1] http://www.propertywire.com/news/europe/uk-rental-market-prices-2016080912239.html

Government Should be Helping Landlords with Energy Efficiency, Says Investor

Published On: August 9, 2016 at 8:31 am

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Eco-friendly ways to reduce running costs and add value to a property

The Government should be providing buy-to-let landlords with energy efficiency support, warns established investor Peter Armistead, of Armistead Property.

Government Should be Helping Landlords with Energy Efficiency, Says Investor

Government Should be Helping Landlords with Energy Efficiency, Says Investor

New Government plans will require buy-to-let landlords to spend up to £5,000 on energy efficiency improvements.

The new legislation, which will be introduced from 2018, requires landlords to raise the energy efficiency of their rental properties to at least an E rating for new tenancies. Many landlords will be forced to carry out improvements, such as insulation, cavity wall filling and new boilers.

The Residential Landlords Association (RLA) believes that a total of 330,000 rental properties, typically Victorian and Edwardian homes, will be affected by the new legislation. It also warns that the new “green tax” could push rents even higher.

However, the Government has suggested a £5,000 cap, insisting that most landlords will have to spend no more than £1,800.

But Peter Armistead has urged the Government to provide alternative support to landlords, now that the Green Deal has ended.

“Landlords have been bombarded with new tax measures over the last 12 months, and this is yet another cost that some landlords will have to face. Landlords can’t be expected to absorb all these new taxation measures and just stand back and watch their profits being eroded. Unfortunately, it will be tenants that will have to bear the brunt of these costs through higher rents.”

He continues: “While it is a good move to improve the quality of rented accommodation, there should be another scheme to help landlords make the improvements. The Green Deal gave loans to improve energy efficiency, and these loans were then repaid by tenants, who, as a result of the works, were paying lower bills.

“To help spread the improvement costs, landlords should start upgrading their properties before it becomes mandatory in 2018 for new tenants. Buy-to-let mortgage providers will require borrowers to comply with the regulations, and valuers are likely to amend their criteria in the run-up to 2018, making buy-to-let mortgage applications more difficult.”

Armistead adds: “Most insurance policies require landlords to comply with all relevant statutory requirements. This may mean that it could be more difficult to get insurance unless landlords comply with the forthcoming regulations. Landlords with F and G-rated properties need to manage the upgrading and improving their properties to avoid potential prosecution and fines.”

Landlords, have you started thinking about any energy efficiency improvements your rental property needs?

27% of tenants felt rushed into signing tenancy agreement

Published On: August 8, 2016 at 11:44 am

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Concerning new research has revealed that 27% of tenants feel they were rushed into signing their tenancy agreement.

The investigation from Ocean Finance shows that many renters felt the pressure of competition in the market made them sign an agreement on the day they viewed the property.

Rushing renters

One in ten renters said that their time taken between viewing and entering an agreement was between 2-3 days. A further ten percent said they signed a contract 4-7 days after viewings.

18-24 year olds were found to be the age group acting with most haste, with 46% saying they rushed into signing a deal. In contrast, just 17% of those aged over 55 felt pressured to move quickly to secure their tenancy.

Unsurprisingly, tenants in the capital felt under more pressure to sign quickly, with 40% stating that this was the case in their experience. Renters in Northern Ireland felt under similar pressure, but just 12% of tenants in Wales felt obliged to rush.

27% of tenants felt rushed into signing tenancy agreement

27% of tenants felt rushed into signing tenancy agreement

Regrets

Of those tenants who felt pressured to sign their tenancy agreement, half wished that they hadn’t.

The top reasons for regretting signing were:

Reason for regret % of rushed tenants who gave reason
Property is too cold 10%
Property is too small 9%
Property needs too much work doing to it 9%
Dislike of surrounding area 8%
Not enough outdoor area 6%
Property lacks character 4%
Property is too old-fashioned 4%
Property is too far away from amenities 2%

[1]

Ian Williams, spokesman for Ocean Finance, said, ‘our figures demonstrate just how hard it is to rent a property across much of the UK. The best properties are often snapped up within hours or even minutes. As a result, would-be tenants feel under pressure to sign quickly to secure the property. Sadly, half of those go on to regret their haste, finding themselves in a home that they don’t like or which doesn’t suit them.’[1]

[1] http://www.propertyreporter.co.uk/landlords/1-in-4-tenants-say-they-rushed-into-their-tenancy-agreement.html

Looking to Buy a UK Holiday Home? Find the Best Rental Returns in Cornwall

Published On: August 8, 2016 at 11:07 am

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If you’re thinking of tapping into the UK holiday home market in order to expand or begin your property portfolio, look to Cornwall for the best rental returns in the country…

Cornwall continues to benefit from the staycation trend, with Visit England reporting a 10% year-on-year increase in the number of people holidaying in the UK in the first quarter of the year.

With many concerned over exchange rate fluctuations, port and airport delays, and a general desire to stay out of travel trouble, the amount of British holidaymakers staying in the UK should rise even further this summer.

So, why Cornwall?

If you find a holiday home that has sea views, mod cons and is within walking distance of a beach, you’re onto a winner, says Miles Kevin of Chartsedge, a specialist coastal and rural holiday homes agent.

Looking to Buy a UK Holiday Home? Find the Best Rental Returns in Cornwall

Looking to Buy a UK Holiday Home? Find the Best Rental Returns in Cornwall

Potential rental returns are also strong in the county, adds Kevin.

“Since the Brexit result, there has been an increase in buyers seeking investment homes in the lower price ranges who plan to use the property themselves but also earn some rent,” he explains. “Our current best seller on the north coast is Bay Retreat, four miles from Padstow, which provides a £10,000 annual income for two years.”

The development in St Merryn includes 28 low-maintenance, modern properties based around a shop, pub and tennis courts. The open-plan homes boast steel-and-glass balconies and timber-decked patios. Prices for the remaining two-bedroom, 700 square foot properties start from £149,000 on a 999-year lease.

As a growing foodie destination, Cornwall attracts a stylish crowd from London and the South East. Padstow, in particular, sees visitors travel from across the country to enjoy the hometown of seafood chef Rick Stein and Jamie Oliver’s Fifteen restaurant.

Budget-conscious buyers should focus on the southeast coastal spots of Cornwall. The twin villages of Cawsand and Kingsand at the head of the Rame Peninsula are just ten minutes away from the centre of Plymouth on the ferry, while still off the beaten track.

Visitors come to the villages to sail and kayak, as well as enjoy the two sandy beaches and pubs and cafes. A tall, four-bedroom house with direct sea access in Cawsand is currently on the market for £460,000.

But what does someone who owns a holiday home in Cornwall think?

Anne Hibbert bought a holiday home in East Looe back in 1987, when her husband worked in the City of London and they had no grandchildren. Now, they have 11, aged from five to 28, all of whom learned to swim in their pool overlooking the sea.

She says: “We have a full sea view from our house with our own land in front and Looe Island to the right. We are totally tucked away, not overlooked. We really value the privacy, especially in high season. We are only 18 miles from Plymouth, but we don’t see many holidaymakers. In Fowey or Salcombe, you could probably add another number in front of the value of homes.”

Anne has made changes to her four-bedroom holiday home over the years, but has also witnessed changes to Looe: “It is still essentially a fishing village, not a yachtie place, but the quality of new shops, particularly in the past three years, has improved. Once it was just fudge shops, but now we have farm shops, excellent butchers, even artisan fish and chip shops.”

The Hibberts are selling their property for £1.25m.

Will you decide to take advantage of the huge numbers of Britons staying in the UK for their holidays?

If you do, remember to take out specialist UK holiday home insurance with a market-leading provider.

The Just Landlords policy includes additional covers that could affect anyone with a holiday home in the UK. Take a look and get an instant quote now: https://www.justlandlords.co.uk/holidayhomeinsurance