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Em Morley

Housing and Planning Bill will Only Help Landlords, Claims Generation Rent

Published On: January 29, 2016 at 2:52 pm

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Unlicensed HMO landlord ordered to refund £84,877 to tenants

The Housing and Planning Bill is set to go the committee stage in the House of Lords, but are its policies designed for the benefit of landlords alone?

Dan Wilson Craw, the Policy Manager at lobby group Generation Rent, seems to think so.

Housing and Planning Bill will Only Help Landlords, Claims Generation Rent

Housing and Planning Bill will Only Help Landlords, Claims Generation Rent

“For someone so concerned about both turning generation rent into generation buy and balancing the books, David Cameron really should have helped to draft his housing bill,” he says.

He calls the measures on the Right to Buy scheme extension and Starter Homes initiative, “a very roundabout way of guaranteeing a larger private renter population, with a bigger bill for the taxpayer”.

Councils will be forced to sell off their highest-value assets in order to fund the Right to Buy extension to housing association tenants. Wilson Craw believes: “High-value council homes will go straight to investors, who will let them out at market rents.”

He continues: “Many properties bought under Right to Buy will end up with landlords when the owners decide to trade up.”

And it doesn’t stop there. Wilson Craw adds: “And the 200,000 Starter Homes sold to first time buyers at a discount will disappear into the open market after five years when those lucky few cash in their subsidised hand-out. The other two million aspiring homeowners are left with nothing.”

So what does this mean for the private rental sector? “With a fall in the number of homes being let at social rents, and far fewer homes being built than are needed to meet demand, more housing benefit claimants will be paying private rents that will rise ever higher,” he states.

Wilson Craw concludes: “Unless rents fall by enough to allow families to stop relying on housing benefit and start saving, the Prime Minister can kiss his dream of a home-owning democracy goodbye.”1 

Keep up-to-date with the developments of the Housing and Planning Bill on LandlordNews.co.uk, and remember to check daily for the latest landlord updates.

1 http://www.independent.co.uk/voices/comment/david-camerons-flawed-housing-policy-will-only-help-landlords-a6840656.html

Average property prices in England and Wales up 6%

Published On: January 29, 2016 at 2:32 pm

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The average property value in England and Wales increased year-on-year by 6.4% in December, according to the latest monthly index report from the Land Registry.

This took the typical house price to £188,270 as month-on month, values rose by 1.2%.

Rise and fall

London recorded the largest increase in average house prices, with an annual growth of 12.4, coupled with a monthly rise of 2.1%, taking the typical price in the capital to £514,097.

The North East saw the lowest annual price growth, with a rise of just 0.8%. This took the average price in the region to £99,069. Wales was the region with the largest month-on-month fall, with a decrease of 0.8%, taking the average price of a property in the country to £121,780.

However, the number of completed house sales in England and Wales dropped by 8% to 79,960. In addition, the number of £1m plus properties sold fell by 2%.

Repossessions also fell by 51%, with London recording a 71% decline.

Average property prices in England and Wales up 6%

Average property prices in England and Wales up 6%

Activity

Mark Posniak, managing director of Dragonfly Property Finance, pointed out that with high demand and weak supply continuing in December, the usual seasonal slowdown was more muted.

‘On a more positive note, we are seeing noticeably more construction activity at the moment, particularly by smaller developers. But this will take time to trickle through into the market,’ he noted. ‘Looking into 2016, it’s hard to see anything other than a continuation of the current trend of steadily rising prices, especially with interest rates unlikely to rise in the near future and a robust jobs market.’[1]

John Eastgate, sales and marketing director of OneSavings Bank feels, sustained demand is driving the growth in values. He said, ‘a strengthening labour market, robust consumer sentiment and a supportive mortgage market all played their part, despite the obstacles provided by the festive period. This strength of demand has been compounded by the record low levels of property on the market at present.’[1]

Caution

‘Uncertainty around economic growth in 2016 provides a reason for caution. The good news however, is that house building starts appear to be at their highest level since 2007,’ he continued. ‘It is not yet strong enough to counterbalance demand. However, if this trend of improvement is maintained, it should lead to a healthier property market for investors and buyers alike.’[1]

Jonathan Hooper, managing director of buying agents Garrington Property, also believes a lack of supply is the issue. He pointed out that, ‘even though the NHBC this week announced that house building in 2015 hit its highest level since 2007, the supply of homes is still falling far short of demand.’[1]

[1] http://www.propertywire.com/news/europe/england-wales-property-prices-2016012911497.html

 

 

Half of All Homebuyers Move Just Nine Miles or Less

Published On: January 29, 2016 at 12:47 pm

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Those moving house appear to like where they live, with a half of all homebuyers moving just nine miles or less from a previous address.

Half of All Homebuyers Move Just Nine Miles or Less

Half of All Homebuyers Move Just Nine Miles or Less

The figures arrive from home removals website Reallymoving.com, based on 200,000 quotes.

The average distance moved by Reallymoving.com customers was 52 miles last year, down from 55 miles in 2014.

According to the site, over two-fifths of all movers were first time buyers, up from 37% in 2014.

However, the amount that first time buyers have been paying for a property, as a proportion of the average house price, has been in decline.

In 2014, the average first timer paid 79% of the price paid by other buyers. But in 2015, the typical first time buyer property cost £202,000 – three-quarters of the average house price paid by other buyers, says Reallymoving.com.

The Chief Executive of Reallymoving.com, Rob Houghton, comments on the data: “It’s good to see the increase in first time buyers, although large areas of the country remain prohibitively expensive for many.

“Until planning regulations are changed to allow more properties to be built, we don’t see much prospect of a significant change in this.

“We’re also encouraged to see the average distance of home movers continue to drop. Our belief is that as the jobs market improves, people are not having to move as far to find work.”1 

Have you moved home recently? If so, how far away did you move?

1 http://www.propertyindustryeye.com/half-of-all-home-movers-go-just-nine-miles-or-less/

Property market confidence is still high

Published On: January 29, 2016 at 11:55 am

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A new report is sure to please those in the property market, as it indicates that confidence in the sector is continuing to rise.

Research conducted by Clydesdale and Yorkshire Banks suggests that around half of British homeowners feel their property will increase in value during the next year.

Confidence

The report seems to suggest that the market is certainly levelling out, showing that confidence has more than doubled since 2013. In addition, the findings show that just 2% of the population are worried that their home will decrease in value. 48% said that they expected no change.

The table below indicates have confidence has changed in the past few years:

Jan 2016 Jan 2015 Jan 2014 Jan 2013
Increase 50% 54% 48% 25%
Stay the Same 48% 44% 49% 66%
Decrease 2% 2% 3% 9%

[1]

Property market confidence is still high

Property market confidence is still high

‘There have been great changes within our property market and our latest research shows a sustained level of confidence in property values over the past three years,’ notes Steve Fletcher, Director of Retail Banking at Clydesdale and Yorkshire Banks.’[1]

Capital Gains

London is still the region with the most confidence in property prices, with 73% predicting higher prices in the coming year. No-one in the capital is predicting a decrease in property values.

In contrast to this, the North West saw 33% of respondents indicate that their property will rise in value in the next twelve months. 65% said there will be no change, while just 2% said there will be a fall.

By region, the predictions for property growth in 2016 were found to be:

Region Increase Stay the Same Decrease
London 73% 27% 0%
South East 64% 34% 2%
East 60% 38% 2%
South West 52% 44% 4%
UK average 50% 48% 2%
Midlands 43% 56% 1%
Yorkshire 43% 54% 3%
Scotland 43% 51% 6%
North East 42% 49% 9%
Wales 36% 64% 0%
North West 33% 65% 2%

[1]

Mr Fletcher added, ‘there are a number of different factors which have played their part in the ongoing recovery of the property market. The bank of England base rate has remained low and there has been steady growth in property prices and this has been reflected with sustained confidence of UK ho

[1] http://www.propertyreporter.co.uk/property/confidence-in-the-property-market-is-booming.html

 

 

£1.4bn in Build to Rent investment this week

Published On: January 29, 2016 at 10:21 am

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The upcoming Build to Rent scheme has received a staggering £1.45bn worth of investment in this week alone.

Build to Rent, where institutions both fund and manage specifically built rental accommodation, is seen by many observers as a government-backed scheme to improve the standards of British lettings.

However, many within the industry are concerned that this will reduce the importance of buy-to-let investors.

Worries

Grainger PLC, Britain’s largest listed residential landlord, is the latest investor in the scheme and says it is going to spend around £850m on Build to Rent by 2020.

Helen Gordon, the new chief executive of Grainger Plc, said, ‘it is clear that swift and decisive action is required to capitalise on the compelling market opportunity and to enable Grainger to realise its potential of being the UK’s leading private landlord.’[1]

The firm’s latest trading statement to the City seems to suggest a restructuring of Grainger, to make sure it can obtain a share of the ever expanding Build to Rent Market.

Additionally, the company says it will, ‘re-allocate development team resources to deliver new PRS stock,’ and, ‘refocus the acquisitions team to improve access and conversion of PRS opportunities.’[1]

£1.4bn in Build to Rent investment this week

£1.4bn in Build to Rent investment this week

Statement Of Intent

Grainger’s trading statement also says, ‘as we look out to 2020, our PRS- led strategic targets are:’

  • invest over £850m into PRS assets to drive rental income growth
  • net rents and income to more than cover overheads, expenses and financing costs;
  • net rental income to exceed profit from sales
  • dividend will increase, reflecting the greater proportion of rental income

Just last weekend, Gordon said that Grainger’s Build To Rent offer would include tenancies ranging from six months to three years In length.

[1]https://www.lettingagenttoday.co.uk/breaking-news/2016/1/build-to-rent-is-coming–1-4-billion-in-investment-this-week

REMEMBER: Right to Rent Launches on Monday

Published On: January 29, 2016 at 9:24 am

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Categories: Law News

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From Monday (1st February), all landlords and letting agents in England must conduct immigration checks on prospective tenants under the Right to Rent scheme.

The Managing Director of the Association of Residential Letting Agents (ARLA), David Cox, warns that landlords or agents that have already agreed contracts or agree some over the weekend for tenancies starting on or after Monday must comply with the rules.

Although landlords can pass the responsibility onto letting agents, this must be agreed in writing and agents should add a clause into their contracts stating that they will conduct Right to Rent checks.

Cox also reminds that referencing agents cannot undertake the checks: “All they can do is check the documents are genuine. All identification checks need to be done by the letting agent.

“Also, remember it’s not just tenants who need to be checked. It’s all adult occupiers in the property.”1

REMEMBER: Right to Rent Launches on Monday

REMEMBER: Right to Rent Launches on Monday

The checks must be made within 28 days before the start of a new tenancy agreement, meaning that landlords and agents should have already conducted immigration checks if a tenancy is to start on Monday.

Landlords and agents must remember that they are not just legally obliged to check their prospective tenants’ immigration status, but to copy identification documents, such as passports, and keep the copy throughout the tenancy and for one year afterwards.

Those that do not comply with the Right to Rent scheme can be fined up to £3,000 under the Immigration Act 2014.

However, the new Immigration Bill 2015 – which is currently going through the House of Lords – will bring in criminal penalties for landlords and agents.

Several peers have expressed concern.

Conservative peer Lord Howard of Rising believes: “I find it a bit rich that landlords should risk imprisonment for housing an illegal immigrant when it is the Government’s failure in their duty to protect the borders of this country that has resulted in the illegal immigrant being here in the first place.

“I fully understand the difficulties in controlling our borders, which will inevitably lead to errors, but should the person responsible for the error go to prison? If those responsible for allowing illegal immigration should not go to jail, why should a landlord?”

He continues: “It is not unreasonable for landlords to play their part in helping with the problem of illegal immigration, but what they are asked to do should be reasonable and proportionate.

“Landlords being subject to imprisonment for something over which, in practical terms, they can have little or no control is not reasonable.

“I point out that the people most affected by this will be that huge army of small landlords who do not have agents to act for them.”1

Another Conservative peer, Lord Deben, adds: “There is a fundamental concern about this legislation.”

He calls for a delay to Monday’s launch, saying that there should be a pilot scheme, which should be independently evaluated and “shown to have a real effect on illegal immigration”1.

Government advice on the Right to Rent scheme can be found here: https://www.gov.uk/check-tenant-right-to-rent-documents

For all of the latest landlord updates and advice, check back on LandlordNews.co.uk. 

1 http://www.propertyindustryeye.com/important-reminder-all-landlords-and-letting-agents-in-england-to-make-right-to-rent-checks-from-monday/