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Em Morley

Tenant demand continues to reach record levels, says ARLA Propertymark

Published On: October 1, 2020 at 8:21 am

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Categories: Lettings News

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Tenant demand

The latest Private Rented Sector (PRS) Report from ARLA Propertymark shows that the number of new prospective tenants continued to rise in August.

The number recorded during that month was the highest since records began in January 2015. The average letting agent branch registered 101 new tenants, which breaks July’s previous record of 97.

Demand from tenants by region in August

The report also records 208 rental properties available per letting branch in August. This remained the same as the record high figure recorded in July, which beat the previous record of 192 properties managed per letting agent branch in July 2017. 

Tenancy lengths have also increased to an all-time high, with tenants staying in the same home for an average of 21 months. Regionally, this figure was highest in the East Midlands with tenancies lasting 25 months. Tenancy lengths are currently lowest in the North East at 10 months.

The number of tenants experiencing rent increases has gone up in August. 48% of agents have witnessed landlords increasing rent, compared to 29% in June and 39% in July. Year-on-year, this is still 16% lower than in August 2019, when the figure stood at 64%.

Angela Davey, President, ARLA Propertymark, has commented: “Our latest figures reveal the rental market still isn’t showing any signs of slowing down. We continue to see record breaking levels of rental stock and demand from tenants, painting a positive picture for the future of the private rented sector.

“With COVID-19 lockdown restrictions starting to increase again as we head towards the colder months, it’s more important than ever for landlords to communicate well with their tenants, and that tenants continue to pay their rent to ensure the market remains strong over the next period.”

View the full report here: www.arla.co.uk/media/1049002/prs-report-august-2020.pdf.

Record number of properties sold for more than asking price in August

Published On: September 30, 2020 at 8:28 am

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Categories: Property News

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properties sold for more than asking price

NAEA Propertymark has released its Housing Report August 2020, which states that 13% of properties sold for more than the original asking price during that month. This is the highest recorded since November 2015.

However, housing demand has fallen marginally from July.

What properties sold for

  • In August, one in eight (13%) properties sold for more than the original asking price
  • This is a rise from 8% in July, and 10% in June
  • The majority (53%) of properties sold for less than the original asking price in August

Sales agreed 

  • The average number of sales agreed per estate agent branch stood at 12 in August, a slight decrease from 13 in July
  • This is the highest figure recorded for the month of August since 2007, when the number of sales per estate agent branch also stood at 12
  • Year-on-year, the number of sales per branch has increased by 33%, rising from nine in August 2019

Demand for housing

  • In August, the number of house hunters registered per estate agent branch fell from 428 in July to 396

Supply of available properties 

  • The number of properties available per member branch stood at 40 in August, falling marginally from 43 in July

Sales to first-time buyers 

  • The number of sales made to first-time buyers stood at 23% in August, a fall from 25% in July

Mark Hayward, Chief Executive, NAEA Propertymark comments: “It’s interesting to see that one in eight properties sold for more than asking in August this year. 

“Last month, we witnessed a boom in the number of prospective buyers following the government’s announcement of a Stamp Duty holiday, and it seems this is increasing the level of competition in the property market. 

“With the increase in the number of prospective buyers since this announcement, many buyers are clearly willing to pay over the asking price in order to secure their dream home.”

Housing Hand calls for Government to introduce rent debt loan solution

Published On: September 29, 2020 at 7:55 am

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Categories: Tenant News

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rent debt loan

UK rent guarantor service Housing Hand is calling on the Government to step in and solve the issue of mounting tenant debt caused by the COVID-19 pandemic.

The company is proposing a simple rent debt loan solution that would enable accommodation providers to avoid evicting non-paying tenants. 

Terry Mason, Group Operations Director of Housing Hand, says: “The Government cannot use private accommodation providers to bail out the rent arrears problem created by COVID-19. 

“Action needs to be taken now, before the second wave builds, to assure both tenants and landlords that there is another option open to them aside from eviction, which in most cases both parties are keen to avoid.”

According to Housing Hand, the pending housing crisis is not one of evictions getting out of control, but the rental debt the tenants owe and how they can repay the landlords who are legally entitled to be paid. A rent debt loan, paid to landlords by the Government and then repaid by the tenant as affordability allows, could provide a simple way to avoid a huge number of evictions.

Some landlords might be able to assist their tenants by deferring or rescheduling payments, but not all can afford to. Some may have no choice but to evict perfectly good tenants due to the financial impact of COVID-19. Other landlords may even be forced to sell up and leave the buy-to-let market.

Terry Mason continues: “Almost all landlords are content with tenants remaining in their properties as long as they are paying rent, so this is the area the Government needs to address to maintain tenancies – not put a blanket ban on evictions and expect the private housing sector to foot the bill.”

Housing Hand also points out that student rental debt is building up. Student tenancies are further complicated by the migratory nature of those who hold them, along with the potential for further lockdowns and remote education.

The combination of these factors has led many students to favour a “no stay, no pay” mentality. However, that ignores the fact that student renters are still legally obliged to pay their landlords under the legally binding commitments made in their Assured Shorthold Tenancy (AST) agreements.

Some accommodation providers have agreed that students who cannot travel to the property to start the AST will be released from the contract. Some have even gone further and said that if students are told by the Government or World Health Organization to move out during the tenancy, then they will be released from the AST.

Jeremy Robinson, Group Managing Director of Housing Hand, comments: “The private rental sector is vital to the UK’s housing makeup. If tenants genuinely cannot pay their rent, the Government must step in and support them. Private accommodation providers cannot be expected to provide homes without being paid.

“In many instances, rent covers the landlord’s mortgage and maintenance costs, meaning that non-payment puts both the tenant and the landlord at risk. We need a solution in place before the second wave really hits and delivers a huge economic as well as health impact.”

Winter Economy Plan – Primary goal to support people’s jobs, but “way we achieve that must evolve”

Published On: September 25, 2020 at 8:11 am

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Categories: Landlord News,Tenant News

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Winter Economy Plan

Chancellor Rishi Sunak has announced the Winter Economy Plan, which includes plans for a new Job Support Scheme and an extension of the Self Employment Income Support Scheme.

The report on the Government website also highlights that ‘over one million businesses will get flexibilities to help pay back loans.’

The package of measures, which applies to all of the UK, includes:

  • Support for workers
  • Tax cuts and deferrals
  • Giving businesses the flexibility to pay back loans
  • Investment in public services

The full details have been published at: https://www.gov.uk/government/news/chancellor-outlines-winter-economy-plan

The Chancellor of the Exchequer Rishi Sunak said: “The resurgence of the virus, and the measures we need to take in response, pose a threat to our fragile economic recovery…

“Our approach to the next phase of support must be different to that which came before.

“The primary goal of our economic policy remains unchanged – to support people’s jobs – but the way we achieve that must evolve.”

Responding to the Chancellor’s Winter Economy Plan, Chris Norris, Policy Director for the National Residential Landlords Association (NRLA), has commented: “We welcome the Government’s measures to subsidise wages. 

“We warned that the end of the furlough scheme ran the risk of many households facing further difficulties in paying their rents. Today’s announcement is an important first step to prevent this.

“That said our research still shows that private landlords across England have faced rental loses of up to £437 million as a result of COVID-19. 

“It is vital that the Government now follows the example set in Wales and Scotland and develops interest free, government guaranteed hardship loans to help tenants pay off rent arrears built as a result of the pandemic. 

“We cannot expect them, or landlords, the vast majority of whom are individuals without the means to absorb significant losses, to continue to struggle without support.”

Over £600,000 in tenancy deposits unclaimed in Scotland

Published On: September 24, 2020 at 10:45 am

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Categories: Tenant News

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tenancy deposits unclaimed

Tenants across Scotland could be due a share of £697,554, after failing to claim back deposits at the end of their tenancies.   

This information comes from SafeDeposits Scotland, the Glasgow-based tenancy deposit scheme. It holds deposits on behalf of landlords and agents in line with government regulations.

Renters are supposed to claim their deposit bac at the end of a tenancy, but it seems many are forgetting. In 2019, SafeDeposits Scotland tracked down 2,750 tenants to return £912,418 from the scheme to those who should have already claimed it.

Currently across Scotland, there are 2,418 unclaimed deposits, amounting to £697,554. Edinburgh and Glasgow postcodes have the highest value of unclaimed deposits, with a combined total of £374,081.

The Aberdeen area alone has 282 unclaimed deposits worth £83,095 while 256 tenants in and around Dundee could claim back a share of £58,450.

Over 4,500 active deposit accounts have been found for tenancies lasting 10 years or more. One of these tenancies, located in Peebles, started in 1976. While many of these tenancies will still be active, there may be some cases where a tenancy has ended and none of the parties have ever instigated the repayment process.

Mike Smith, operations manager at SafeDeposits Scotland, said: “Our priority is to make sure tenants’ deposits are safe for the duration of their tenancy, and that both landlords and tenants have access to our dispute resolution service should there be any disagreement over the deposit once the tenancy ends. 

“When a tenancy ends, most tenants claim their money back promptly. However, we’ve found that thousands of people across Scotland have left their homes without claiming back their deposit, some of which are worth thousands of pounds. 

“These are instances where landlords have instructed for the deposit to be repaid, but the tenant hasn’t completed the process to receive their funds. We’ve also discovered that there are thousands of older tenancies, some of which may be no longer active and with deposits to be repaid. 

“There are lots of things to think about when moving to a new house or flat but there’s no reason why a tenant shouldn’t claim their deposit back when they leave.”

If tenants in Scotland think they have left a deposit with SafeDeposits Scotland unclaimed from a previous tenancy, they should enquire with the scheme on 03333 213 136.

Property professionals comment on the end of the eviction ban

Published On: September 23, 2020 at 8:27 am

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Categories: Law News

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Landlords welcome plans to tackle unruly tenants

In response to the ban on possession proceedings coming to an end, law firm Royds Withy King says it is unlikely there will be an immediate spike in evictions.

Jacqui Walton, a senior paralegal in the residential property team at Royds Withy King comments: “The government introduced its moratorium on tenant evictions in March and extended it further in June. 

“The moratorium expired on 20th September, although we should not rule out a further reintroduction if lockdown measures need to be reintroduced.

“It is unlikely that we will see an immediate spike in evictions and certainly not tenants kicked out onto the streets any time soon. Landlords are bound by strict rules designed to slow the process down.

“Landlords that started eviction proceedings before the 3rd August must now serve what is called a ‘reactivation notice’. If they do not, any claim will not be relisted by the courts or heard by a judge. 

“And even when a reactivation notice is served, in fault-based evictions the courts will allow more time between the claim and hearing, typically eight weeks, and given the backlog of cases that is likely to be significantly longer.   

“Eviction claims that started on or after the 3rd August now require landlords to enter into what is called a ‘pre-action protocol’, with landlords needing to attempt to agree a resolution with their tenants before issuing a possession claim. 

“Landlords will also need to provide the courts with information on what impact the coronavirus pandemic has had on a tenant, which may have an impact on how much time a tenant is given by the court to vacate a property. 

“The guidance on what this means for landlords, what information is needed and what happens if it is not provided is unclear and could leave eviction claims stuck in the courts for many months to come, leaving landlords in limbo.

“Whilst this may give respite to tenants, there does not appear to be any recognition from government that landlords too may be struggling with the loss of income during the coronavirus pandemic.

“Private landlords play a major role in the provision of homes in the UK and whilst it is right that tenants are protected, it must also be remembered that landlords too need protections. The current regime is failing landlords.”

Elisabeth Kohlbach, CEO of property investment firm Skwire, also comments: “Ending the eviction ban is the right decision. Although on the surface it may seem a blow to renters facing ongoing uncertainty brought about by COVID-19, without the specific legislative measures in place to truly and fully prevent evictions, the temporary ban has left tenants at continued risk.

“At the same time, landlords have been and remain unlikely to evict tenants financially impacted by COVID-19, but they themselves have been faced with significant arrears with no prospect of relief.

“Were the ban to continue, the burden would weigh ever more heavily on the many landlords across the UK who depend on rental income for their livelihoods. While tenants themselves have been able to rely on pandemic assistance, such as furlough pay, landlords have, throughout the pandemic, had no government support.

“The eviction ban has served neither landlord nor tenant and any continuation or extension would be short-sighted.”