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Em Morley

Number of Tenants in Serious Rent Arrears Going Down

Published On: March 8, 2016 at 9:37 am

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The number of private tenants in serious rent arrears has gone down, according to the latest Tenant Arrears Tracker from estate agents Your Move and Reeds Rains.

In the fourth quarter of 2015 (Q4), 1,500 households renting from private landlords had moved out of serious rent arrears, compared to the previous quarter. This is a 1.5% quarterly improvement, reversing the worsening trend recorded throughout the early parts of 2015.

In Q4 last year, there were 82,900 households behind on more than two months’ rent, down from 84,200 in Q3 2015.

Number of Tenants in Serious Rent Arrears Going Down

Number of Tenants in Serious Rent Arrears Going Down

As a proportion of all households renting from private landlords, just 1.6% are in serious rent arrears, says the report.

Comparatively, 2.9% of tenancies were in serious rent arrears in Q1 2008 – a record high. The absolute number of tenants suffering serious rent arrears was also considerably higher in Q3 2012, at 116,600.

The Director of Your Move and Reeds Rains, Adrian Gill, comments on the findings: “Private renting is still absorbing thousands of extra households every month, housing millions more than just a few years ago. As this tenure of housing and this way of living grows, affordability is the issue that goes hand-in-hand with questions of capacity.

“An individual tenant is still extremely unlikely to fall into serious rent arrears. In fact, the proportion of renters getting seriously behind on payments has dropped considerably over the longer term. But absolute numbers are now going the right way too. With fewer people at risk from more serious consequences of struggling to pay the rent, this is great news.”1 

Additionally, cases of landlords falling behind on their buy-to-let mortgages are also falling. In Q4 2015, 5,500 landlords were in mortgage arrears, down by 3.5% from 5,700 in Q3.

Annually, landlord finances have progressed even further. The amount of buy-to-let mortgage arrears has dropped by 54% since it stood at 11,900 in Q4 2014.

However, it is still uncertain how the forthcoming changes to landlord taxes will affect investors. Positively, one finance expert has expressed his belief that buy-to-let is not dead, and recent research found that many landlords are still confident in the sector.

If your tenants are suffering from rent arrears, or you just want some peace of mind, the best thing to do is take out a rent guarantee insurance policy, which ensures that you still get paid even if your tenant defaults on the rent.

For more advice for dealing with and avoiding rent arrears, this guide for landlords should help: https://www.justlandlords.co.uk/news/protecting-your-lettings-business-from-rent-arrears/

1 https://www.landlordtoday.co.uk/breaking-news/2016/3/tenants-reverse-trend-to-serious-rent-arrears

 

Radio Station Launches New Property Show for Landlords

Published On: March 7, 2016 at 3:45 pm

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A radio station has launched a new property show with a focus on private landlords.

The Property Hour will be broadcast on LBC (Leading Britain’s Conversation) in association with Direct Line Landlord Insurance. The programme will be co-hosted by LBC presenter Clive Bull and Landlord Action’s Paul Shamplina.

Radio Station Launches New Property Show for Landlords

Radio Station Launches New Property Show for Landlords

The show will initially run every Thursday evening from 9pm-10pm for 13 weeks, starting this Thursday, 10th March.

The programme will include interviews with leading property experts, news and views from the week, and a chance for listeners to phone in with any questions and opinions. Listeners are encouraged to join the online debate using #LBCPropertyHour.

The show will also include a weekly three-minute sponsored feature that will focus on certain issues affecting landlords.

The Head of Direct Line for Business, Nick Breton, comments on the partnership: “We are delighted to partner with LBC for its first weekly property programme. Given Britain’s passion with all things property-related, we believe the show will prove compulsive listening.

“As a leading provider of landlord insurance, we are delighted to be able to support a programme that will discuss key issues facing this audience. From homeowners, single property accidental landlords, right up to serious investors with large portfolios, this show will offer something for everyone.”

Paul Shamplina, the Founder of Landlord Action, says: “Having worked at the sharp end of the property industry for more than 25 years helping landlords with problem tenants, I’d like to think I’ve nearly seen it all, but still some cases surprise me.

“Education is key, particularly for amateur landlords entering the world of buy-to-let for the first time, which is why I’m thrilled to be co-hosting The Property Hour.”

LBC is available on 97.3FM in London and across the UK on DAB digital radio, online at lbc.co.uk, through the LBC app and on digital television.

The station reaches 1.4m listeners every week across the UK, with the average listener tuning in for over ten hours.

For your daily landlord updates, visit LandlordNews.co.uk, where you will find the latest information and advice for landlords.

Tenants staying in the PRS for longer

Published On: March 7, 2016 at 1:40 pm

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Landlords are being warned to prepare for longer tenancy agreements, following a new survey by the Association of Independent Inventory Clerks (AIIC).

Data from the report shows that the average length of a private tenancy is now four years, up from three and a half recorded in the previous survey.

As such, the organisation said that more thorough preparation must be conducted by landlords, including choosing furniture and interior design schemes.

Rises

The report also found that 46% of 25-24 year olds live in the Private Rented Sector during 2014-15, up from 24% in 2004-05.

Patricia Barber, Chair of the AIIC, noted, ‘despite numerous reports suggesting that the average tenant doesn’t want a long-term contract, the official statistics show that average tenancy lengths are increasing-particularly among families-as people rent for longer.’[1]

These figures should make landlords think more about what features could make their rental property feel more homely. In addition, they should consider how these changes might entice renters to stay in the property for longer.

Organisation

Barber also believes that a rise of longer-term renting underlines the importance of landlords being organised with their administration requirements. She said, ‘when tenants stick around for longer, often the chances of confusion and disagreement over certain issues are increased when the tenancy does eventually come to an end.’[1]

Tenants staying in the PRS for longer

Tenants staying in the PRS for longer

As a result, she said, ‘the longer time goes on, the more likely landlords and tenants are to forget details from the tenancy agreement or important information about the deposit and that’s why stringent administration- keeping copies of everything and organising it accordingly-is so important.’[1]

Important inventories

The AIIC is reminding landlords of their duties and the need for evidence and records, particularly for longer-term tenancies. A professionally prepared, thorough and detailed inventory is essential at the beginning of all tenancy agreements.

‘There are more grey areas over the condition of a property the longer a tenancy goes on,’ Barber continued. ‘A detailed inventory will help landlords and tenants to determine exactly how the property’s condition has changed over the course of the tenancy, what can be deemed fair wear and tear and what needs to be replaced and therefore deducted from the tenant’s deposit.’[1]

An inventory , which has been signed and agreed by the tenant, is the most important piece of evidence that a landlord or agent can possess, if a dispute should arise at the conclusion of a tenancy.

[1] http://www.propertyreporter.co.uk/landlords/landlords-warned-they-must-prepare-for-longer-tenancies.html

Universal Credit Now Enforced in More Areas

Published On: March 7, 2016 at 12:40 pm

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The Government’s new welfare system has been rolling out across the country since last year. Today, claimants in four different parts of the UK will be subject to the new payment method.

Universal Credit Now Enforced in More Areas

Universal Credit Now Enforced in More Areas

Under Universal Credit, benefit recipients will receive one monthly payment instead of several payouts for different benefits. This includes housing benefit.

Additionally, any private tenants in receipt of housing benefit will be paid the allowance, rather than having the payment directly paid to their landlords.

If you are a landlord with tenants on housing benefit, be aware that they will now be responsible for paying their rent and their financial circumstances will be changing.

To avoid them falling into rent arrears, ensure that you communicate with your tenants about their finances and use rent guarantee insurance to make sure you still get paid.

As of today, the following areas will be moved onto Universal Credit:

  • FK20 in Falkirk.
  • G63 0, G82 5, G83 7, G83 8 and G84 in Glasgow.
  • NR13 3, NR29, NR30 and NR31 of Norwich.
  • PA20, PA21, PA22, PA23, PA24, PA25, PA26, PA27, PA28, PA29, PA30, PA31, PA32, PA33, PA34, PA35, PA36, PA37, PA38, PA41, PA42, PA43, PA44, PA45, PA46, PA47, PA48, PA49, PA60, PA61, PA62, PA63, PA64, PA65, PA66, PA67, PA68, PA69, PA70, PA71, PA72, PA73, PA74, PA75, PA76, PA77 and PA78 in Paisley.

We have been keeping you updated since the start of the year on where Universal Credit is rolling out to and will continue to offer this information for landlords.

For last week’s areas and the previous parts of the country subject to the change, visit: /new-welfare-system-introduced-for-more-housing-benefit-tenants/

Upcoming tax changes not deterring many landlords

Published On: March 7, 2016 at 11:38 am

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A new survey of 170 property investors has revealed that many are not being deterred by the forthcoming changes in stamp duty land tax.

The investigation by Shawbrook suggests that 56% of their clients are looking to purchase a buy-to-let property within the next year.

Tax changes

With the tax changes fast approaching, the survey also revealed that 40% of investors plan to launch a limited company for their properties to soften the impact. 33% said that they planned to increase rents as a result of the alterations.

These new changes to both stamp duty and tax relief have led many investors to reassess their ambitions. Of the 44% of people who said they did not plan on purchasing a new buy-to-let property in the next twelve months, 37% said this was due to the tax relief changes. 16% said that the 3% stamp duty levy on second homes and buy-to-let properties was the reason they will not be investing.

Issues

In addition, the changes show that 49% of clients believe regulation to be the largest challenge facing property investors during the next six months. This is a huge jump from the same time last year, where only 23% of investors believed regulations to be their biggest investment hurdle.

Upcoming tax changes not deterring many landlords

Upcoming tax changes not deterring many landlords

Encouragingly, despite the changes, 61% of respondents said that they had a positive outlook for the next year. This proportion believe there will be an increase in property value over the coming year. 43% said they saw an increase in tenant demand in 2015, with 61% saying their rental income also rose.

44% said that they were confident their business would grow further during 2015.

Positivity

Karen Bennett, Sales and Marketing Director Commercial Mortgages noted, ‘as a lender, it is always great to see such positivity in the market and as with our Broker Barometer conducted in late 2015, it seems that there is a lot of optimism amongst property professionals also. Obviously the new changes will have an effect and may instill more caution across the market; however, Shawbrook is well-placed to adapt to change and we are expecting the market to remain buoyant.’[1]

[1] http://www.propertyreporter.co.uk/landlords/majority-of-btl-investors-say-its-business-as-usual-despite-tax-changes.html

 

 

Agent jailed after foiled ‘back to back sale’ attempt

Published On: March 7, 2016 at 10:21 am

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A rogue letting agent has been jailed following ‘thoroughly dishonest’ behaviour.

Stephen John Jones was sentenced to 10 months behind bars, following an attempted fraudulent transaction.

Mr Jones tried to con an 89 year-old woman, by attempting to by her flat in his wife’s name for £10,000 less than the price he intended to sell it for. As such, Mr Jones was found guilty of an attempted ‘back to back sale.’

Offers

Jones actually received a genuine offer of £27,000 for the flat but did not inform the pensioner, who had expressed her desire to use any funds to pay for her nursing home fees.

The transaction was foiled after the police uncovered the fraud after a tip-off.

Caernarfon Crown Court was told that the 89 year old owner of the flat in Colwyn Bay resided in a nursing home. As a result, her flat was advertised in Mr Jones’s agency to be sold for £17,000 at the end of the year 2014.

However, it became apparent that Mr Jones intended to sell the property to his wife. After this, Jones wanted to arrange a back to back sale, which would see the property sold for £27,000, making him a profit of £10,000.

Agent jailed after foiled 'back to back sale' attempt

Agent jailed after foiled ‘back to back sale’ attempt

Charges

In court, Owen Edwards, serving as defender for Mr Jones, said that the accused was a hard-working family man, who built up his business renovating properties. Mr Edwards said, ‘as a result of that work he became an estate agent because there were advantages in having a one stop shop.’[1]

‘He’s entirely aware he’s the author of his own misfortune. It’s a case where others will suffer as a result,’ Edwards added.[1]

Judge Harris-Jenkins told Jones that he had acted in, ‘a thoroughly dishonest manner,’[1] which could have had severe detrimental effects on a vulnerable elderly woman.

[1] http://www.propertyreporter.co.uk/business/thoroughly-dishonest-agent-jailed-for-10-months.html