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Em Morley

Controversial Landlord Increases Rent by 33%

Published On: September 14, 2015 at 11:19 am

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The country’s most controversial buy-to-let landlord, Fergus Wilson, is increasing rents on his 900 rental properties in Kent by up to 33% and taking in eastern European migrant tenants.

However, Wilson believes that Britain is heading for a “housing disaster”.

Wilson reveals that when he let out a three-bedroom mid-terrace house in Maidstone, Kent last weekend, he put the rent price up from £900 per month to £1,200. He says that most of the demand is from migrants, who are willing to pay higher rents than other locals.

He is now seeking similar rent rises across his buy-to-let empire.

He says: “I will not be asking them to leave, but will serve them with a section 13 notice to increase the rent so that they have the opportunity to move to another landlord should they wish.

“That is if they can find a house of the same quality and a price they can afford. By the time they have paid out fees etc., some will take the view there is not much in it.”

He adds that the thriving rental market in Kent means he fills houses in hours: “In Maidstone, houses are let the moment a tenant moves out. New tenants move in the next day! The houses in Maidstone are filled with east European immigrants who are very necessary for the economy. I do have a concern for low-income Maidstone-born people who are being priced out of it.

“We have more and more legal immigrants but nowhere to house them. It has passed crisis point in Maidstone. We have a housing disaster on our hands. Gobbling up the countryside is hardly the answer, but where do the people go displaced by east Europeans?”

When questioned over his reasons for increasing rents, Wilson states that landlords have no choice in the wake of the Budget announcement that investors’ tax relief will be cut.

He explains: “Many landlords are saying they simply will have to charge more rent. It is the distinct shortage of houses that is fuelling the rent increases. If the Government wish to control rents, it must supply more houses, and quickly.”

Last year, Wilson announced that he was selling his portfolio to foreign buyers, but after the collapse of the Chinese stock market, these plans have been halted.

He says: “Chinese investors are not in the abundance of previous months, for obvious reasons.”1

1 http://www.theguardian.com/money/2015/sep/12/fergus-wilson-rent-rise-property-kent-maidstone

 

New monthly record for Help to Buy in June

Published On: September 14, 2015 at 10:28 am

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Encouraging figures show that the total number of homes sold under the Government’s Help to Buy scheme hit a new high during June.

Data indicates that 4,745 new homes were purchased under the equity loan part of the scheme, which represented the highest total since it began in April of 2013.

Rise

Since its inception, 112,803 mortgages have been set up through the Help to Buy scheme. The vast majority of these sales have been made to first-time buyers.

Made up of two parts-mortgage guarantee and equity loan-the Help to Buy initiative is seeing success in both areas. 56,401 homes have been sold under the mortgage guarantee section and incredibly, 56,402 have been sold under the equity loan scheme.[1]

However, despite its obvious success, the mortgage guarantee scheme is due to end in December 2016. The equity loan initiative, under which the Government takes a stake of up to 20% in the value of a home, is to continue until 2020.[1]

Exit

‘The stronger economy and financial system means we expect banks to start to exit our Help to Buy mortgage scheme and it was introduced in times of financial distress,’ said Chancellor George Osborne. Equity loans are going, ‘from strength to strength,’ he added.[2]

New monthly record for Help to Buy in June

New monthly record for Help to Buy in June

From the start of the initiative, the majority of houses purchased under the scheme have been valued at under £200,000. Almost two-thirds of buyers put down the minimum 5% deposit required, with the Government lending each buyer £42,992 on average. Nearly half of households utilising the scheme earned less than £40,000 per year.[2]

Stewart Baseley, chairman of the Home Builders Federation, commented that Help to Buy was helping construction levels and is continuing to, ‘drive demand for new build homes.’[2]

[1] http://www.bbc.co.uk/news/business-34199318

[2] http://www.ft.com/cms/s/0/1bfa60fc-56d6-11e5-a28b-50226830d644.html#axzz3lhcHlTgW

NatWest and RBS to Reinstate Interest-Only Mortgages

Published On: September 14, 2015 at 10:14 am

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NatWest and RBS are to reinstate interest-only mortgages for the first time in around three years. The loans will be available to those earning at least £100,000 per year.

The mortgages will also only be available if customers take a maximum loan-to-value (LTV) of 75%, with further restrictions if the applicant intends to sell their home to repay the loan.

The banks revealed that the mortgages will only be offered on the condition that the applicant has “an acceptable repayment strategy, such a savings or a pension plan, to make sure they are able to repay the capital at the end of the term.”

A NatWest Intermediary Solutions spokesperson says: “Having undertaken a thorough review of the market, we now believe it is appropriate to offer our customers, who meet certain criteria, to take out

NatWest and RBS to Reinstate Interest-Only Mortgages

NatWest and RBS to Reinstate Interest-Only Mortgages

interest-only mortgages to purchase their residential properties.”1 

The banks’ previous interest-only mortgages, which were taken off the market in December 2012, were available to customers who banked with RBS/NatWest for a minimum of three months and who earned at least £50,000 per year.

This news arrives after Citizens Advice estimated that almost one million people with interest-only loans do not have a repayment plan in place. Read more here: /almost-1m-face-mortgage-repayment-difficulties/

NatWest and RBS reported that they will write to customers throughout the mortgage term to ensure they are on track with their repayment plan.

The banks added that the new mortgages will not be available to customers who plan to repay within three years, if they intend to use the mortgage to consolidate debt, if they are using a Help to Buy or shared equity scheme, or if they live outside the UK or have no right to live in the UK.

Head of Mortgages and Protection at RBS and NatWest, Lloyd Cochrane, comments: “Interest-only mortgages will give our customers more choice and provide additional flexibility in how they repay their mortgage.

“We are re-entering this market due to customer demand and we will keep in touch with our customers to support them to stay on track with repaying their mortgage.”1

Head of NatWest Intermediary Solutions, Graham Felstead, says: “We are delighted to be reintroducing residential interest-only mortgages for brokers and their customers.

“Having undertaken a thorough review of the market, we believe we can help many customers, who meet specific conditions, with their homeownership needs with interest-only mortgages.

“Customers who take this option will need to have approved repayment strategies in place and agree to engage with us during the loan period so that we can support them to stay on track to repay the loan.

“The mortgage market is currently a very dynamic one, which is set to continue on its growth path.

“We have enjoyed great support from the broker market this year and look forward to continuing to help more and more customers with their borrowing needs for the rest of 2015 and beyond.”1

1 http://www.propertyindustryeye.com/natwest-and-rbs-to-re-introduce-interest-only-mortgages/

Rents Rise Slowly in Every Region

Published On: September 14, 2015 at 9:20 am

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The rate of rent rises has slowed in every UK region over the last three months, according to the HomeLet Rental Index.

In the three months to August, new tenants paid an average of £992 per month, a slight increase from the £977 a month paid in the three months to July.

The study also found that in the South East, North East and North West, rent prices decreased.

Rents Rise Slowly in Every Region

Rents Rise Slowly in Every Region

The greatest drop was in the North East, where rents on new tenancies in the three months to August were an average of 2.1% lower than in the three months to July.

However, the index also shows that new tenants paid an average of 10.5% more than they did a year ago.

In Greater London, the average rent on a new tenancy is now £1,558 per month.

Overall, the average rent on new tenancies across the UK has risen by 1.6% in the three months to August, compared with an increase of 2.2% for the three months to July and June.

Apart from Wales, where rents rose by 2.5%, no region experienced growth of over 2%.

CEO of Barbon Insurance Group, Martin Totty, comments on the index: “Rents continue to run slightly ahead of house prices, with the majority of the UK still experiencing rising rents, albeit at a much slower pace than we saw in the early part of 2015.

“On an annualised basis, however, rents in most regions are still significantly higher than the same period a year ago, with only the North West reporting lower rents for new tenancies in the three months to August 2015 than for the same period last year.

“Broadly we are continuing to see a robust rental market with rent prices continuing to rise.

“This picture is consistent right across the UK with only one or two exceptions, such as East Anglia, where prices rose sharply in 2014 and early 2015 but have now slowed notably, and the South West, which continues to see annual price rises in double figures.

“We now ask ourselves: Will the next few months see the pace of rent price growth resume, or has this slowing set the tone for the rest of 2015?”1

1 http://www.propertyindustryeye.com/rent-rises-slow-in-every-uk-region/

Lewisham Council Consulting on Landlord Licensing

Published On: September 14, 2015 at 8:17 am

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Landlords in the London Borough of Lewisham are invited to a public meeting tomorrow (Tuesday 15th September) to discuss proposals for a selective licensing scheme.

The proposed scheme would require landlords that rent out accommodation above commercial properties – such as flats above shops – for multiple occupation to obtain a license from the council.

Lewisham Council Consulting on Landlord Licensing

Lewisham Council Consulting on Landlord Licensing

The council believes that the licensing scheme will improve conditions in these properties. It says it would ensure that landlords manage the immediate environment around their properties, including waste and recycling. Additionally, the council says it will improve the health of tenants living in these homes.

Councillor Damien Egan, Cabinet Member for Housing, says: “With around 33,000 properties the private rented sector in Lewisham is now huge and growing every day.

“While most landlords play by the rules there are an increasing number of rogue landlords who are exploiting vulnerable tenants. We’re building on some high profile successes in Lewisham where we’ve prosecuted these landlords, with our new licensing scheme.

“The scheme will start with properties where we have the biggest problems; rented flats above shops. Although the rents can be very expensive, some of these flats are unsafe and unfit for human habitation.”1

Lewisham Council estimates that there are 4,224 private lets in 1,813 properties above commercial premises in the borough. Evidence indicates that large Houses in Multiple Occupation (HMOs), already subject to mandatory licensing, provide more satisfactory housing than small HMOs. The council says that this proves licensing helps improve standards.

Under the proposed scheme, all landlords renting out private rental flats in multiple occupation above commercial properties must apply for a license, prove that they comply with the requirements of the license and pay the fee. A license is likely to cost between £100-£110 per year.

If a landlord continues to let a property without a license, they will be liable for prosecution. They could also be liable for a Rent Repayment Order (RRO).

Lewisham Council is calling for comments on the scheme, the proposed standards that would need to be met to be eligible for a license and the fees to be charged to landlords.

The public meeting will be held at 6pm on Tuesday 15th September in the Council Chamber, Civic Suite, Catford. Landlords can reserve a space here: http://www.eventbrite.co.uk/e/lewisham-additional-licensing-public-consultation-tickets-18412349834

The consultation will run until 5pm on 24th November 2015.

1 https://www.landlordtoday.co.uk/breaking-news/2015/9/lewisham-consulting-on-licensing

The Top 10 Cheapest Areas to Rent a Room in London

Published On: September 13, 2015 at 2:49 pm

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The average cost of renting a room in the capital has hit £743 per month, according to the latest research from SpareRoom.co.uk.

The flat and house share website also found that 10% of its listings are now priced over £1,000 a month.

However, there are still parts of London where rooms can be rented for around £500 per month.

Director of SpareRoom, Matt Hutchinson, says: “The southeast is generally the cheapest area of London, but most renters outside the capital would still be shocked by the prices.

“Chasing cheaper rents in London normally requires a heavy dose of compromise.”1

Abbey Wood is in zone 4 and rooms here average £503 per month. The area is also believed to have great potential for buyers, due to the forthcoming Crossrail service. Launching in 2018, London’s high-speed rail network is already causing local regeneration projects.

However, Abbey Wood’s high street currently needs some improvements and the train takes 30 minutes to reach London Bridge.

Top 10 cheapest places to rent a room in London

Position

 Area Postcode Average room rent per month

Quarterly price change
1 Abbey Wood SE2 £503 0.86%
2 Plumstead and Woolwich SE18 £533 -0.81%
3 Eltham SE9 £533 2.44%
4 Chingford E4 £546 0%
5 Lower Edmonton N9 £550 4.72%
6 Plaistow E13 £550 -10.24%
7 Forest Gate E7 £550 -3.94%
8 East Ham E6 £550 1.57%
9 Upper Edmonton N18 £555 0.78%
10 Manor Park E12 £555 3.91%

Other areas set to benefit from the Crossrail service are Plumstead and Woolwich. In these zone 4 districts, the average monthly room rent is just £533, suggesting that they are in the early stages of development. However, existing transport links already connect residents to other parts of southeast London via mainline rail and river bus services.

Plaistow is one of the most untouched parts of the capital. Despite its low rental costs, regeneration has not yet reached this area.

However, change is coming to Forest Gate, where monthly rents are similar to those in E13. This up-and-coming East London spot, next to Stratford, will have its own Crossrail station. Locals are hoping for an upgraded high street, although their commutes are worth the lack of regeneration – trains to Liverpool Street take 13 minutes and the Overground services connect with the District and Hammersmith & City lines at Barking.