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Em

Em Morley

Right To Rent rolls out nationally TODAY

Published On: February 1, 2016 at 10:14 am

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Today sees the Right To Rent scheme roll out across the whole of England.

Landlords are now required to check the immigration status of all new tenants before agreeing a tenancy, with fines of up to £3,000 for those who rent to someone without the right to live in the UK.

Criticism

The scheme has received plenty of criticism and has already seen problems during its trial period in some parts of the West Midlands.

As the scheme launches nationally, the Residential Landlords Association claims that 90% of landlords have not been given any information from the Government on their new obligations.

In its survey of more than 1,500 landlords, the RLA found that a lack of correspondence from the Government is leading to widespread confusion on how the checks are to be carried out.

Responsibilities

72% of respondents to the survey said they do not understand their responsibilities under the scheme. As a result, many are likely to refuse accommodation to those who cannot easily prove their right to live in Britain.

44% said that they would only rent to those who were in possession of documents familiar to them. This is likely to cause huge concerns to the estimated 17% of UK nationals without a passport.

The RLA is calling for a more thorough investigation of the pilot scheme, which noted that there was only, ‘limited evidence,’ that it was putting off illegal immigrants from attempting to access rental housing.

Dr David Smith, Policy Director for the RLA, observed, ‘the Government argues that its right to rent plans form part of a package to make the UK a more hostile environment for illegal immigrants. The evidence shows that it is creating a more hostile environment for good landlords and legitimate tenants.’[1]

Right To Rent rolls out nationally TODAY

Right To Rent rolls out nationally TODAY

Difficulties

Smith feels that, ‘landlords are damned if they do and damned if they don’t. Fearful of a fine they face two difficult ways forward. They can play it safe and take a restrictive view with prospective tenants, potentially causing difficulties for the 12 million UK citizens without a passport. Alternatively, they may target certain individuals to conduct the checks, opening themselves up to accusations of racism.’[1]

‘The Government’s own evaluation of its pilot scheme noted that there was only limited evidence that the policy is achieving its objectives. Given the considerable problems it will create for tenant-landlord relations it’s time for the Government to think again,’ Smith added.[1]

Penalties

Figures obtained from the Home Office by law firm Simpson Millar indicate that just nine civil penalties were served to landlords under the Right to Rent pilot scheme, between 1 December 2014 and 19 November 2015.

‘Given that the pilot covered an area with more than 2 million people it is hard to see how the scheme has had any significant financial impact at all, ‘said Sumita Gupta, head of immigration at Simpson Millar in Manchester. ‘Rather, it has the potential to create a culture of fear and discrimination.’[1]

Concluding, Millar said, ‘there will be rogue landlords who won’t care about undertaking the required document checks; they could view this new scheme as an opportunity to exploit a very vulnerable group of people who might otherwise find it difficult to secure accommodation and end up homeless

[1] https://www.landlordtoday.co.uk/breaking-news/2016/2/right-to-rent-goes-live

Help to Buy London Launches Today

Published On: February 1, 2016 at 9:25 am

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The Help to Buy London scheme is launching today, with lenders competing for a wave of new business.

The Government is offering buyers of new build properties equity loans of up to 40% of the purchase price. The borrower will need a 5% deposit and a mortgage. The scheme applies to properties worth up to £600,000 in London.

Help to Buy London Launches Today

Help to Buy London Launches Today

Nationwide and Leeds building societies are some of the first to launch products for the scheme, while Barclays has introduced new rates.

Borrowers can get a two-year fixed rate deal at 1.55% with a £999 fee, or 1.85% with no fee from Barclays.

For longer-term borrowers, the bank is offering a five-year fixed rate of 2.19% with a £999 fee, of 2.49% for a fee-free deal.

These are currently the lowest rates available for Help to Buy London.

Today, Leeds is launching a two-year fix at 1.79% with a £799 fee and a five-year fix at 2.45% with a £199 fee.

Nationwide has updated its shared equity products, which include Help to Buy London and the wider equity loan schemes.

It has a two-year fix at 1.89% with a £999 fee, or 2.29% with no fee at 60% loan-to-value (LTV).

For a 75% LTV loan, Nationwide has a two-year fix at 1.99% with a £999 fee, or 2.39% with no fee.

It is also offering five-year fixed rate deals up to 60% LTV, one at 2.64% with a £999 fee, or a fee-free deal at 2.84%.

At 75% LTV, rates start at 2.74% with a £999 fee, or 2.94% with no fee.

Those applying for a mortgage with Nationwide can receive a fee-free standard valuation, plus £250 cashback if they have a Nationwide Flex main current account.

Help to Buy London is an extension of the Help to Buy: Equity Loan scheme, launched in 2013.

The Government is hoping to boost homeownership levels by providing financial support to enhance a buyer’s deposit.

Outside of the capital, borrowers can top up their 5% deposit with an equity loan of up to 20%, meaning they can effectively put down a 25% deposit.

However, for those in London, where the average house price is £506,724, a 5% deposit is still a huge £25,336.

Homebuyers can also take advantage of Government-backed schemes such as Help to Buy: Mortgage Guarantee and the Help to Buy: ISA.

The Most Expensive and Cheapest Road Names in the UK

Published On: January 31, 2016 at 4:47 pm

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Categories: Property News

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Ever wondered where the most valuable homes are found? On roads with the word Warren in their name apparently!

These properties cost an average of £607,267 – more than double the typical house price in the UK of £282,978, according to Zoopla.

The Most Expensive and Cheapest Road Names in the UK

The Most Expensive and Cheapest Road Names in the UK

Other pricey homes can be found on roads including the words King, Queen, Prince or Princess.

Zoopla has analysed more than 28m properties in the UK to find the most expensive and cheapest road names.

The cheapest properties have Street in their address and are worth an average of £184,722, followed by homes on roads with Court or Terrace in their name.

The majority of homes – around 2.1m – have the word Road in their address, while more than one million properties are in roads with Street in their name.

The property portal’s Lawrence Hall comments: “The saying goes that the three most important factors in buying a house are location, location, location; our research shows that even the road name you choose can make a difference to how much you can expect to pay when finding a property.”1

Here are the most expensive and the cheapest property prices, based on road name:

  1. Warren – £607,267
  2. Chase – £482,867
  3. Mount – £390,500
  4. Path – £389,732
  5. Park – £384,809
  6. End – £381,933
  7. Green – £363,348
  8. Way – £358,981
  9. Hill – £354,301
  10. Lane – £342,059
  11. Gardens – £340,461
  12. Paddock – £320,984
  13. Walk – £319,926
  14. Rise – £307,965
  15. Lawns – £302,760
  16. Place – £293,403
  17. Road – £292,403
  18. Grove – £289,385
  19. Drive – £286,098
  20. Parade – £275,766
  21. Square – £272,614
  22. Nook – £270,511
  23. Close – £268,957
  24. Crescent – £265,055
  25. Pastures – £262,060
  26. Avenue – £261,850
  27. Meadows – £252,000
  28. Row – £233,778
  29. View – £207,641
  30. Terrace – £194,403
  31. Court – £194,172
  32. Street – £184,722

1 http://www.independent.co.uk/property/house-and-home/property/the-uks-most-expensive-and-cheapest-road-names-revealed-a6836771.html

One-third of tenants frustrated by home buying barriers

Published On: January 31, 2016 at 9:42 am

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33% of private tenants in Britain have been thwarted in their attempts to purchase their own property and have stayed in rented accommodation longer than they had originally planned, according to new research.

Frustration

Experian’s latest analysis of 1,500 renters in the UK suggests that many are frustrated first-time buyers.

18% of private tenants said they believed they wouldn’t be accepted for a mortgage with 10% saying they faced struggles in raising a deposit, thus delaying their plans to purchase. A further 5% said they had been held up with a mortgage agreement, prolonging their time in the private rented sector.

In spite of making regular payments as part of their tenancy agreement, many renters do not see this reflected on their credit score in the same way as mortgage holders.

‘Many would-be first time buyers face the challenge of saving for a deposit on a home while paying rent each month,’ observed Jonathan Westley from Experian. ‘While our research also shows that a significant amount of people are happy to rent in the long-term, whether it’s because they enjoy a good relationship with their landlord or the flexibility of rented accommodation.’[1]

One-third of tenants frustrated by home buying barriers

One-third of tenants frustrated by home buying barriers

 

Plans

25% of tenants surveyed intend to purchase a place of their own in the near future. 9% said that they were currently saving for a deposit, believing that this will be achievable within 18 months. 16% said they would need between two and five years to gain the necessary deposit.

On the other hand, one-third of renters said that they were content in the sector and had no plans to own a home of their own.

Would-be first time buyers that have been thwarted in their attempts to get a foot on the housing ladder are most-likely to be single parents or couples with young children. Three-quarters of this group said they would like be see rental payments contribute to their credit report.

Those who are happy to rent or live alone or with other adults are less likely to see rent as ‘dead money.’ 26% of happy renters disagree when asked if renting is a waste of money, in comparison to 16% of private renters.

[1] http://www.propertyreporter.co.uk/property/17m-tenants-frustrated-by-home-buying-hurdles.html

 

 

London Students Protest Against Rising Accommodation Costs

Published On: January 30, 2016 at 2:42 pm

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Students at a university in London are refusing to pay rent in protest against spiralling accommodation prices and are demanding a 40% reduction in rent prices.

Over 150 students in two halls of residence at University College London (UCL) are refusing to pay rent amounting to more than £250,000. The Cut the Rent campaigners say they will not pay until UCL meets their demand for rent to be cut by two-fifths.

An accommodation representative and a campaign organiser, Angus O’Brien, explains: “The cost of rent has gone up dramatically and it’s preventing people from studying at university. This is a massive problem across London and the country. We are showing that something can be done about rising rent prices; our action could be the start of something much wider.”1

Campaigners claim that rents at UCL have increased by around 56% since 2009.

To rent a room in Ramsey Hall, one of the halls of residence affected by the strike, it costs £158.97-£262.43 per week. At the other building, Max Rayne House, rent is £102.97-£232.40. It is one of the cheapest halls at the university.

Nyima Murry is a 19-year-old first year History of Art student. She says: “I’ve struggled massively with the cost of rent. I’m not from a wealthy background and last term, I had to work two jobs, which really affected my studies. I can’t afford to eat if I don’t work. Studying is becoming about your background and how much you’re earning, rather than your ability.

“Many people I know are putting off moving to London because they can’t afford to study here. I’m striking so that future students have the opportunity to study at UCL on their academic merit, not because of their financial background.”1 

This latest protest follows another campaign at UCL last year, where students were collectively awarded £400,000 in compensation over a dispute against noise and a rat infestation.

The Cut the Rent campaign was set up last year. It says it previously raised the issue of increasing rents with the university, as well as setting up a petition and organising strikes against poor living conditions.

One of the campaigners, 22-year-old David Dahlborn, a third year Eastern European and Jewish Studies student, hopes to bring wider change.

He says: “This strike is extraordinarily significant. Education is becoming unaffordable because of tuition fees and rent. There’s also a housing catastrophe going on in London and a student debt crisis. It’s important that we succeed, because we need to change things.”1

The Vice President of Welfare at the National Union of Students (NUS), Shelly Asquith, also comments on the situation: “I take my hat off to the students at UCL who, for the best part of a year, have mounted a militant and successful rent campaign. Now they are taking their demands further and asking for a cut in rent. This is not unreasonable when the rent in London is more than 100% of the maximum loans and grants available for students. The UCL Cut the Rent campaign is right to point out that accommodation costs are equating to social cleansing of working class students from education. NUS fully supports the campaign.”1 

A UCL spokesperson has defended the rent rises, saying that the university’s prices are competitive for the capital: “We are seeking dialogue with the Cut the Rent campaign to discuss the issues and set out how the finances of UCL accommodation work. While we understand the concerns around the cost of accommodation in London, it is inaccurate to suggest that UCL accommodation is making a profit for the university.

“All of the money that UCL receives in rent is ploughed back into residences. While the proportions may vary year-on-year, we invariably spend more on residences than we receive in rental income.

“We make every effort at UCL to keep rents as low as possible, which is a difficult challenge considering our central London location. Our rents are competitive in comparison with equivalent London institutions and far less than for comparable accommodation in the private sector.”1 

Do you agree with the students’ campaign, or do you believe the university has set competitive rents?

1 http://www.theguardian.com/education/2016/jan/25/london-students-refuse-to-pay-rent-and-demand-40-cut

Buy-to-let remains attractive, according to broker

Published On: January 30, 2016 at 11:48 am

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A leading mortgage broker has recently performed a detailed analysis of the buy-to-let sector and has concluded that investment in the market is still an attractive proposition.

Private Finance also noted that accessing necessary finance will prove to be the greatest challenge for amateur landlords looking to enter the sector.

Changes

The firm’s analysis accounted for the upcoming changes to the market, such as the reduction of higher rate tax relief and hikes in stamp duty, alongside the impact on house prices and yields.

In addition, the broker looked at the impact of the European Mortgage Credit Derivative and found that whilst these factors might have a negative impact, they are most unlikely to harm to market as a whole.

As part of its analysis model, Private Finance used an average buy-to-let situation in a typical town. The findings show that a potential 62% return on capital could well be an achievable goal. This is on the basis that the investment is held for at least five years, utilising a fixed-rate mortgage at 3.6% for the duration.

Buy-to-let remains attractive, according to broker

Buy-to-let remains attractive, according to broker

Conservative

A number of industry commentators have noted that annual capital appreciation of up to 5% is achievable in some areas. However, Simon Checkley, managing director of Private Finance believes that a buy-to-let investment remains viable at a smaller rate of appreciation.

Checkley said that, ‘of course, these figures assume the full extent of the tax relief reduction and stamp duty hike so the short term returns could look more attractive if you are able to take immediate action and complete a purchase before 1 April 2016 when the increased stamp duty will appear.’[1]

‘We are not underestimating the impact of the loss of higher rate tax relief of the increase of stamp duty on the market. What we are saying is that they are not necessarily deal brokers. There have been many protestations in recent weeks from concerned landlords as a result of the planned tax changes. What is less commonly recognised is that are still opportunities in this market if an investor makes a sound purchase subject to other underlying economic factors, ‘he continued.[1]

Concluding, Checkley said that, ‘understandably, many landlords are claiming they will lose considerable sums of money as a result of these changes. However this does beg the question of the true viability of their original investment.’[1]

[1] https://www.landlordtoday.co.uk/breaking-news/2016/1/buy-to-let-still-attractive-according-to-broker