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Em Morley

DWP suspends third-party deductions from Universal Credit

Published On: May 1, 2020 at 8:27 am

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Categories: Landlord News,Tenant News

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DWP suspends third-party deductions

On Wednesday 29th April, The Department for Work and Pensions (DWP) announced its suspension of deductions from Universal Credit payments for rent arrears, service charge arrears and council tax arrears. 

Third-party deductions to a Universal Credit claimant’s monthly benefits have been suspended until 10th May.

A spokesperson from the DWP has told Inside Housing: “We have received an unprecedented number of new benefit claims and have streamlined our operations to make sure people get the support they need during this time.

“As part of this, we have temporarily paused third-party deductions from [Universal Credit] – these will recommence on 10th May.

“We are in the process of explaining the changes to claimants via their online journal and to third parties, including housing providers who collect arrears via this method.”

Ben Beadle, Chief Executive of the National Residential Landlords Association (NRLA), comments: “At such a difficult time the priority should be to do everything possible to prevent tenants getting into rent arrears in the first place by ensuring tenants are able to continue paying their rent in full.  

“This means that the Government should ensure benefits cover the full cost of rents, end the five-week wait for the first payment of Universal Credit and pay the housing element of the Credit directly to landlords.”

More than 85% of buy-to-let lenders are still lending to landlords

Published On: April 30, 2020 at 8:15 am

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Categories: Finance News

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buy-to-let lenders

According to Mortgages for Business, there are still 42 buy-to-let lenders in the market, despite the current effects of COVID-19.

The specialist mortgage broker points out that at the peak of the Boris Bounce in spring, there were 49 lenders in the buy-to-let marketplace. With only seven no longer taking remortgage applications from landlords, this means that the number still willing to lend to property investors has fallen by only 14%.

Steve Olejnik, Managing Director of Mortgages for Business, comments: “While HSBC has recently announced it is no longer able to accept applications for buy-to-let mortgages, other lenders are out there.  

“We’ve seen lenders like Together Money and Vida Homeloans temporarily pull out of the market – but more than 85% of the lenders that landlords rely on are still trying to do their bit – as are we.  

“Four of the lenders that initially withdrew their BTL mortgages – Santander, Clydesdale, Precise Mortgages, and Kent Reliance – are now lending again.  There is no need for landlords to panic!  Yes, landlords looking to remortgage have fewer options.  But they still have plenty.”

The broker also highlights that Saffron Building Society withdrew from the market before the outbreak in March for unrelated reasons. They have indicated their intention to return to the market ‘later in the year’.

Lenders that stopped lending to landlords since the outbreak – and remain withdrawn from the BTL market – include: HSBC; Foundation Home Loans; Together Money; Vida Home Loans; Platform Home Loans; State Bank of India; and Furness Building Society.

Olejnik also comments: “Lots of lenders have cut down the sorts of landlords that they will lend to. They’re pulling product ranges, tighten lending criteria, and increasing margins. But different lenders are de-risking against different kinds of landlord borrowers.  

“So, while some lenders are no longer lending to first-time landlords, there are still lenders who are.  A huge number of 80% LTV five-year fixed rate BTL products have been pulled from the market – about 90% of them.  But not all.  

“A good broker will be able to find you a competitive deal because those deals are still out there, for now.  My advice to landlords looking to remortgage is act sooner, rather than later.”

Rents stay static but will soon reflect impact of coronavirus, says The DPS

Published On: April 29, 2020 at 8:18 am

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Categories: Landlord News

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rental growth

According to the recent Rent Index from The Deposit Protection Service (The DPS), London remains the most expensive place in the UK to rent.

Average monthly rents in London were recorded as £1,345 (representing 42% of tenants’ average wages) during Q1 2020, showing no change since Q4 2019.

RegionAverage Rent Q1 2020Change since Q4 (£)% Change since Q4 2019
London£1,345£00.00%
South East£895£182.05%
South West£753£70.94%
East£812-£11-1.34%
East Midlands£586£40.69%
West Midlands£620£91.47%
Yorkshire£542£183.44%
North West£594– £2-0.34%
North East£517– £1-0.19%
Scotland£642£304.90%
Wales£583– £6-1.02%
NI£521-£27-4.93%

The figures cover the period immediately before the Covid-19 pandemic began to seriously disrupt life in England and Wales, and The DPS said that the next set of figures were likely to be affected by the UK’s Government’s advice that people should not move house and other policies, such as the prevention of evictions.

Matt Trevett, Managing Director at The DPS, said: “Despite the stability of the rental market over the past 12-18 months, it is likely we will see a very different pattern in Q2 2020 owing to the impact of coronavirus on landlords, letting agents and tenants although it is difficult to predict the long-term effect this will have on the industry.

“For example, some landlords are asking for advice on how to make a claim against a deposit if a tenant leaves without giving notice or how to perform check-in and check-out reports during the lockdown. 

“Whether you are a tenant with sudden financial difficulties or a landlord facing changes to your income, we encourage you to communicate with one another as often as possible during this challenging time.”

Paul Fryers, Managing Director, Zephyr Homeloans, which like The DPS forms part of the Computershare Group, said: “Under the mortgage payment holiday scheme announced by the Chancellor on 17 March, eligible buy-to-let landlords may apply to defer their loan payments if they cannot make their mortgage obligations because their tenant is unable to pay rent as a result of coronavirus, causing financial hardship.

“Ongoing communication between landlord and lender is key to understanding each other’s situations, and it is crucial that landlords, especially those with large portfolios, contact us so we can talk through the most appropriate solutions.”

Tenancy renewals have increased but renters begin to plan for future

Published On: April 28, 2020 at 8:12 am

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Categories: Tenant News

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Majority of UK tenants are now interested in long-term tenancies

Demand for lets with gardens may be on the rise, but the number of tenancy renewals agreed since lockdown began has increased by 15% compared to this period last year.

This also shows the highest figure for renewals in 10 years, according to Knight Frank.

The estate agency found this figure based on renewal agreements for tenancies that are due to end in May and June.

Gary Hall, head of lettings for Knight Frank, said: “While demand is rekindling, more people are also opting to go with the status quo, particularly if there is no pressing need to move.”

It was during the first week of lockdown that the number of new prospective tenants registering in London and the Home Counties dropped by 59%. This is compared to the five-year average. However, this decline was at 28% in the week ending 18th April, which could suggest tenants are beginning to make future plans yet again.

Jon Reynolds, head of lettings for the City and East region of London at Knight Frank, said: “In the early stages of the lockdown people froze. That has changed as time has gone on. People now know whether they’ve been furloughed or not and some are starting to plan for life after the lockdown.”

David Mumby, head of central London lettings at Knight Frank, said: “It [the letting sector] is the most nimble area of the UK housing market and we trade by the day with a product that can come on or off the market. 

“Small variations in currency or tax policy can produce sudden changes in demand and the infrastructure is now in place that means we can move people quickly.”

Rightmove sees record high searches for rental homes with gardens

Published On: April 27, 2020 at 8:26 am

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Categories: Lettings News

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boost your property value

Data from Rightmove has revealed that recent searches for rental homes with gardens have almost doubled compared to the first week of lockdown in the UK.

When comparing figures to earlier in the year, on average these searches are 16% higher than those of January and February. They’re also 26% up on this time last year.

Rightmove’s commercial director and housing market analyst, Miles Shipside, said: “Having a garden is often a rarity for many rental properties in larger cities, and so it may be that during lockdown people are rethinking their needs and location and are searching for some outdoor space and tranquillity.

“That allure may draw them further away from where they have habitually lived and travelled to work from, as can be seen by some of the coastal locations that have seen the largest search increases. 

“Interestingly we’ve not yet seen this trend mirrored by those looking to buy a home, perhaps as renting is usually a much quicker process and so renters are thinking sooner about what changes they want for their next place.

“Agents report they’re helping their landlords line up new tenants ready to physically view properties when restrictions are lifted and we’re also seeing a lower but steady level of tenant referencing taking place. 

“Those properties with a garden are likely to be able to fill any landlord voids more quickly post lockdown. Understandably most of the rental market has hit the pause button right now except where there are essential moves taking place, and so we haven’t seen an indication of price movements yet.

“If there is a spike in demand that exceeds supply when lockdown ends this may underpin rental prices.”

Read the full report here.

Demand and supply for rental stock drops across UK

Published On: April 24, 2020 at 8:48 am

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Categories: Lettings News

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Safest areas to live in the UK

The latest data from lettings management platform Howsy reports a decline in rental stock levels compared to this time last year.

Rental stock has dropped 12% across the UK’s major cities, with London seeing 20% fewer rental properties now on the market.

Belfast, Cambridge and Newport have been hit the hardest, seeing declines of -57%, -36% and -27% respectively. Comparatively, Edinburgh, Swansea, Leicester, Sheffield, Leeds, Southampton and Plymouth have seen an increase in rental homes available on the market.

Meanwhile, demand has dropped by 5% across 23 major UK cities and 3% across London. Belfast is the only city on Howsy’s list that has seen an increase in demand, at 16%. Portsmouth and Newcastle saw no annual change.

Calum Brannan, founder and CEO of Howsy, said: “The spread of the Coronavirus has clearly caused an immediate impact on rental demand and stock levels across cities which usually remain sought after amongst tenants.

“For market activity to have fallen so considerably across the board tells you just how much the market has been impacted by the pandemic, but while demand has waned somewhat on an annual basis, it is stock levels that have declined the most and there are still plenty of tenants looking for rental properties for those landlords still striving to provide them. 

“For these landlords, remaining visible on the market despite the wider landscape is the sensible approach to ensure any void periods are as short as possible and any financial loss is as limited as can be.  

“This can be done via online and hybrid agents in particular, who can list and rent your property without any physical interaction needed; so not only does your buy-to-let remain profitable, but there is no risk in doing so.”