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Em Morley

Is This £95-a-Week London Flat Too Good to be True?

Published On: January 12, 2016 at 3:05 pm

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Many Londoners are searching for cheap rental accommodation in the capital – could this property be what they’re looking for?

A property has been advertised on Gumtree in the desirable W4 postcode area of Chiswick for just £95 per week. At a much cheaper price than London’s average £1,500 monthly rent, what’s the catch?

The advertisement describes the flat as “a spacious single studio with kitchenette and own shower, pine furniture and double bed”.

It is also “well-served by Chiswick Park and Turnham Green Tube stations and the London Underground”.

Additionally, residents will enjoy the nearby Chiswick High Road, which “is home to a wealth of fabulous amenities, including Harvey Nichols, Waitrose, Caffe Nero. Acton Green Common, Chiswick Common and Turnham Green offer plenty of spacious, green areas close by”1.

So far, so good.

However, the studio flat is so crammed that the shower is installed right next to the kitchen.

Is this a good use of space, or does the flat highlight the extraordinary crisis in the London housing market?

As the property has been unoccupied since the beginning of November, it appears that even though this place is cheap, it may not be suitable for even the most desperate tenants.

1 http://metro.co.uk/2016/01/08/this-spacious-west-london-flat-is-a-bargain-at-95-a-week-but-theres-a-catch-5609206/

London rent growth stalls in final quarter of 2015

Published On: January 12, 2016 at 2:13 pm

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Rents have finally begun to slow slightly in London, following two quarters of sustained growth. However, experts have forecasted that this fall could only be a temporary one.

Capital rents

Many parts of central London saw rents stay fairly constant, or experience increases of less than two percent. These statistics marry with market conditions across the majority of east and south London, which also experienced rental growth slips after a prolonged period of growth.

One notable exception is the Covent Garden area of the city, where rental growth is rising as the area becomes a more established residential location. Another is the up and coming trendier area of Hackney, where young professionals are continuing to relocate.

On the other hand, parts of north London saw price falls similar to those in the previous quarter. Issues on the Northern Line and the closure of the interchange at Tottenham Court Road have moved to deter many potential commuters.

London rent growth stalls in final quarter of 2015

London rent growth stalls in final quarter of 2015

Future falls?

‘Successive budget announcements have seen many landlords’ tax advantages disappear while regulations increase,’ said Marc von Grundherr, Lettings Director of Benham & Reeves Residential Lettings. ‘With stamp duty attracting an extra three percent from April, we anticipate supply will fall as amateur landlords exit the market or seek out other asset classes.’[1]

‘When supply falls, rents will invariably go up. This will be the last chance for many tenants to move into a nice apartment while rents are plateauing and there is a choice of properties. Once Osborne’s measures really start to be felt, the market will change,’ von Grundherr went on to forecast.[1]

[1] http://www.propertyreporter.co.uk/landlords/rents-plateau-after-two-quarters-of-growth.html

 

 

 

What trends will BTL market follow in 2016?

Published On: January 12, 2016 at 12:18 pm

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Buy-to let remortgage transactions outweighed purchases by more than two to one in 2015, according to data released by Mortgages for Business.

However, this is likely to change during 2016, if the results for quarter four are any sort of a guide.

In the final quarter of 2014, remortgages for vanilla buy-to-let property accounted for 64% of transactions. HMO’s and Multi-Unit Freehold Blocks saw larger remortgage activity, at 78% and 88% respectively.

Unsurprising

David Whittaker, managing director of Mortgages for Business, noted, ‘the results aren’t surprising; for some time now landlords have been making considerable savings through remortgaging. Many have also been releasing equity to make improvements and plans further purchases, However, I anticipate that we will see a reversal of this trend in the first quarter of this year as landlords hurry to expand their portfolios before the stamp duty surcharge kicks in on 1st April.’[1]

‘The number of enquiries for purchase finance is already well ahead of where we were this time last year, particularly from those looking to sell their personally owned property into a corporate vehicle,’ he added.[1]

What trends will BTL market follow in 2016?

What trends will BTL market follow in 2016?

Pace

Yields for all property types increased in Q4 of 2015 but in real terms, continued to fall as rental income struggled to keep up with rising property prices. Returns for the more complex properties however remained well above the 6% mark.

The total number of lenders in the market remained at 33, with the number of buy-to-let mortgage products rising to an average of 975.

Whittaker observed that, ‘it is unlikely that this average figure will be topped going forward unless new lenders enter the market, or some of the existing providers start to offer products to limited companies. Of course, that figure is only an average-at one point at the beginning of December our tracking system, Mortgage Flow, showed £1,168 products..’[1]

[1] http://www.propertyreporter.co.uk/finance/will-btl-purchases-transcend-remortgages-this-year.html

 

 

Video Launched to Help Tenants Avoid Deposit Disputes

Published On: January 12, 2016 at 12:03 pm

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A video has been launched to help tenants avoid tenancy deposit disputes over cleaning when they leave their rental property.

The video is aimed at landlords and letting agents to offer to tenants when they move in to prevent any disputes at checkout. Former letting agent and independent adjudicator for the Tenancy

Video Launched to Help Tenants Avoid Deposit Disputes

Video Launched to Help Tenants Avoid Deposit Disputes

Deposit Scheme (TDS), Joanna White, who is the head of Property Principles, created the video.

Cleaning is the biggest cause of deposit disputes, appearing in 50% of cases, according to the TDS.

The Clean Up video also comes with a booklet. It includes a series of practical, clear explanations of the standards of cleaning expected in the rental industry. It will also help tenants get their deposits back quickly and easily.

The Association of Residential Letting Agents (ARLA) and the Association of Professional Inventory Providers (APIP) have welcomed the video.

White comments: “Time and time again, large sums of money are deducted – correctly – from deposits, only because a property has not been cleaned to the professional standards that will have applied when a tenancy started.”1

The Clean Up video and booklet can be downloaded for £5.99. A yearly license includes unlimited usage of the video for one year from the purchase date.

It is the first in a series of guides to be published for landlords and tenants.

Property Principles advises:

  • Include a copy of Clean Up in every moving-in pack.
  • Ensure tenants understand that this is the cleaning standard expected when they leave.
  • Refer tenants to the video (in writing) before they move out.
  • If possible, have tenants attend the checkout process.

The 20-minute video is clearly voiced and is to a high industry standard.

Find out more and download the video here: http://propertyprinciplesltd.com/product/856/

1 http://www.propertyindustryeye.com/new-video-launches-to-help-end-tenancy-deposit-disputes/

Housing and Planning Bill to get Third Reading Today

Published On: January 12, 2016 at 9:34 am

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The Housing and Planning Bill is set to get its third reading in the House of Commons today.

The bill will then go through the House of Lords on a date yet to be confirmed, where it will be formally introduced in a first reading, proceed to a second reading, followed by the committee stage and a third reading.

Housing and Planning Bill to get Third Reading Today

Housing and Planning Bill to get Third Reading Todayand a third reading.

The Residential Landlords Association (RLA) has published a briefing paper to peers, calling for numerous amendments.

The RLA wants local authorities to be obliged to collect information on landlords through Council Tax forms from tenants.

It explains: “At present, local authorities have the right to ask for details of a property’s landlord to assist with the collection of Council Tax, but very few use the power.

“The RLA believes local authorities should now be compelled to collect such information on Council Tax registration forms for use in the enforcement of regulations affecting the sector.

“Getting tenants to identify landlords will mean that criminals will find it harder to hide from local authority enforcement officers.”1

The organisation is also calling for an amendment to make it easier for landlords to offer longer tenancies.

It states that in London, a huge problem is that leases on blocks of flats prohibit tenancies of more than a year. The RLA would like landlords to be able to grant sub-tenancies of up to a year.

Another amendment suggested by the RLA is that landlords included on the blacklist of rogue landlords and letting agents, which the bill would introduce, should not have their names on it permanently if they commit to a period of education.

The body notes that the banning orders on landlords and agents are not permanent under the bill’s provisions, and this should also be applied to the blacklist.

Additionally, the RLA calls for tenancy deposit schemes to be modernised, so that the prescribed information that landlords must provide to their tenants can be offered electronically as well as in paper form.

Do you agree with the RLA’s suggestions? What would you request?

1 http://news.rla.org.uk/wp-content/uploads/151109-Housing-Bill-Committee-Briefing.pdf

 

Universal Credit January Roll Out

Published On: January 11, 2016 at 4:06 pm

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Today sees the Universal Credit scheme roll out further across the UK.

Universal Credit January Roll Out

Universal Credit January Roll Out

The new system replaces six benefits with a single monthly payment. Landlords have expressed concern, as the payment includes housing benefit, which will now be paid to the tenant, not the landlord.

When the pilot scheme was in effect, warnings arose that Universal Credit could lead to rent arrears. Landlords of housing benefit tenants were advised to plan for the changes.

As the scheme spreads across the country, landlords are reminded to keep up to date with changes to benefits and therefore their tenants’ finances.

From today, the following areas will be subject to Universal Credit payments:

  • The BA1 8 and BA1 9 areas of Bath and North East Somerset.
  • The following parts of Bristol: BS7 O, BS7 9, BS10 6, BS10 7, BS15, BS16 1, BS16 2, BS16 4, BS16 5, BS16 6, BS16 7, BS16 9, BS30, BS31 2, BS32, BS34, BS35, BS36 and BS37.
  • These postcodes within Gloucester: GL9, GL12 8 and GL13.
  • And SN14 7 and SN14 8 in Swindon.

If you are a landlord with rental properties in any of these postcode areas, be aware that your benefit tenants will be receiving Universal Credit from today. This means that, if you were receiving housing benefit directly before, you will not be paid housing benefit from today. Instead, your tenants will be paid the benefit and will then pay you rent.

It is important to communicate often with your tenants, so that they feel comfortable in discussing financial matters with you. If you do start to experience rent arrears as the scheme is enforced, it is a good idea to look into rent guarantee insurance, which will protect your lettings business.

Landlord News will continue providing the latest updates for landlords regarding Universal Credit and offering advice to those suffering with rent arrears – LandlordNews.co.uk