Posts with tag: ARLA Propertymark

Rental stock dwindles, despite more tenants than ever seeking housing

Published On: February 26, 2020 at 9:33 am

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ARLA Propertymark’s latest report reveals that demand for rental accommodation reached a record high in January. An average of 88 prospective tenants registered per member branch.

The January Private Rented Sector (PRS) report, released yesterday, also shows that despite this record high, the supply of rental stock has also fallen to the lowest level in seven months.

Demand from tenants

  • Agents have witnessed a 57% increase in the number of prospective tenants registered since December.
  • Year-on-year, demand for rental accommodation has increased by 21%, rising from 73 in January 2019 to 88 in January 2020.

Supply of rental stock

  • The number of properties managed has fallen from 206 in December 2019 to 191 in January 2020.
  • Supply has not been this low since July last year, at which point it stood at 184.
  • Year-on-year supply is down from 197 in January 2019, but up from 184 in January 2018.

Rent prices

  • The number of tenants experiencing rent increases rose in January. 42% of letting agents witnessed landlords increasing prices, compared to 32% in December last year.
  • Year-on-year, this figure is up from 26% in January 2019 and 19% in January 2018.
Rental stock
Average number of tenants experiencing rent hikes in January year-on-year

David Cox, ARLA Propertymark Chief Executive, said: “This month’s results are a huge blow for tenants. With demand increasing by more than half, but rental supply falling, rent costs are unsurprisingly being pushed up.

“Our recent research found that tenants could miss out on nearly half a million properties as more landlords exit the traditional private rented sector and turn towards short-term lets which will only serve to worsen the problem for those seeking longer-term rental accommodation.

“With the Spring Budget around the corner, it’s important that the Government works to make the private rented sector attractive to landlords again, rather than introducing complex legislation which ultimately squeezes the sector and leaves tenants worse off.”

Short-term lets market growth is hurting renters looking for homes

Published On: February 24, 2020 at 9:22 am

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Short-term lets market growth

Finding access to long-term homes to rent is becoming more difficult for tenants, including many with children. The Residential Landlords Association (RLA) says this is due to Government policy driving landlords to move into the holiday lettings market.

This warning comes as new figures show that Airbnb accommodation now accounts for one in four property listings in some parts of the country. It was also recently that ARLA Propertymark published a study that found nearly half a million properties could be left unavailable for longer-term rent, as more landlords exit the market in favour of short-term lettings.

The RLA has been campaigning on this issue since 2016. The association believes that the main reason why it has escalated is the change in taxation for landlords, which is driving many out of the long-term sector.

The full impact of the restriction of mortgage interest relief to the basic rate of income tax applies from April, making many landlords significantly worse off or even unable to make a profit on their lettings. The RLA points out that this change does not apply to landlords with short-term lets, encouraging long-term landlords to move into that market.

Along with the 3% Stamp Duty levy on the purchase of extra housing and other measures affecting landlords’ confidence in the market, there is mounting evidence that this issue is causing a drop in supply, despite demand continuing to increase.

David Smith, Policy Director for the RLA, said: “Government policy is actively encouraging the growth of holiday homes at the expense of long-term homes to rent which many families need. This is completely counterproductive, making renting more expensive and undermining efforts to help tenants save for a house of their own.

“The Chancellor must use his Budget to give tenants a better deal by supporting good landlords to provide the homes to rent that they want to live in.”

Number of tenants negotiating rent reductions reaches all time low

Published On: January 29, 2020 at 9:58 am

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tenants negotiating rent reductions

A recent survey from ARLA Propertymark highlights that the number of tenants negotiating a rent reduction fell in December 2019.

It went from an already low 1.6% in November to 1.1%, making it the lowest figure since records began in January 2015.

It has also been noted that the number of agents witnessing rent increases remained at 32% in December. However, year-on-year results show that this is still a massive increase on December 2017 and 2018, as shown by this chart from ARLA:

Average number of tenants experiencing rent hikes in December year-on-year
Source: ARLA Propertymark

Demand from tenants

As well as a slight dip in negotiations, demand from prospective tenants fell last month. ARLA Propertymark recorded 56 prospective tenants registering per member branch in November, down from 67 in November.

Demand from prospective tenants has also fallen for member branches for the third consecutive month.

Supply of rental stock

Looking at available stock on the market, these results are more positive. The number of properties managed per branch rose last month from 203 to 206.

Year-on-year supply is also up from 200 in December 2017 and 193 in December 2018.

David Cox, ARLA Propertymark Chief Executive, has commented: “Since the tenant fees ban came into effect, our data shows that rents reached an all-time high last year.

“While we have seen a slight drop in the number of agents witnessing landlords increasing rents since then, overall rents remain high and now it seems that tenants are finding it harder than ever to negotiate a reduction in rent. 

“As rents continue to rise, tenants will find it even more difficult to find suitable accommodation. Now that we have a new government in place, it’s important that long-overdue legislative changes are implemented to make the market attractive again for both tenants and landlords.”

Communication and relationships key for private rental sector

Published On: December 2, 2019 at 10:09 am

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Communication and relationships key for improved private rental sector

An industry roundtable recently discussed the needs of tenants and landlords in the private rental sector (PRS). The main outcome was that organisations need to work more closely to bring about meaningful change.

The roundtable was attended by representatives across the PRS including Nationwide Building Society, Fair Housing Futures, Countrywide, ARLA PropertyMark, Connells Group, NLA, RLA, Generation Rent, and the Nationwide Foundation.

They discussed underlying issues in the PRS and how the landlord-tenant relationship could be improved. It was agreed that most importantly there needs to be a level of trust between landlords and their tenants.

The group felt tenants should be able to report issues without fear of eviction, and that landlords are confident their properties are being looked after. All agreed that the following steps could help achieve this:

  • Make tenancy documents easy to understand: Contracts should be easily readable, translatable and clearly and accessibly highlight the rights and responsibilities of tenants and landlords.
  • Role of lettings agents: More should be done to ensure that lettings agents understand and facilitate the necessary regulation at play in the rental process. It was agreed that full mandatory government regulation of lettings agents is the quickest and most effective method to eliminate unprofessional, unqualified and unethical agents from the property sector.
  • Improved, simplified sources of information: There should be a single point of contact for landlords and tenants where they can seek qualified, straightforward advice regarding their respective rights and responsibilities. Giving local authorities the resources to employ more dedicated Tenancy Support Officers was discussed as was the perceived benefits of a single information portal, replacing the current system where information for both parties is scattered across different Government and sector websites, where there is no standard benchmark of quality.
  • A review of insurance products on offer in the sector: There is potentially scope for more use of insurance in the sector, particularly landlords’ insurance as a route to mitigating risk and building trust. Insurance products available to landlords should also be reviewed to ensure they do not contain restrictions such as “no DSS clauses”, and to ensure that they do not inadvertently trigger unnecessary evictions.

A number of issues were discussed which were not uniformly supported but were discussed in a rounded way. These included:

  • A change in language: The current language used to discuss the private rental sector is outdated and has the potential to encourage stigma. Some took the view that the use of new terms like ‘home provider’ and ‘resident’ could encourage respectful relationship-building between both parties.
  • More effective regulation: Some attendees felt strongly that respect and trust could not be developed between landlord and tenant without a robust regulatory framework offering tenants protection from unfair eviction, and potentially recriminatory rent increases.
  • Scrapping Section 21: Some present contested that Section 21 should not be scrapped and that doing so would not necessarily resolve any of the outstanding issues within the sector, including property standards and tenancy length issues. However, others present argued in favour of scrapping Section 21 ‘no fault’ evictions in order to give tenants increased security in their homes. Nationwide Building Society, Crisis, and Generation Rent all support scrapping Section 21, with Nationwide requested it is abandoned in tandem with the creation of a specialised housing court.

Paul Wootton, Nationwide Building Society’s Director of Home Propositions, said: “It was great to convene such a positive and collaborative discussion with people representing different parts of the sector. 

“I feel very optimistic about how we can take this conversation forward, and work to ensure that the private rented sector works for everyone. Nationwide members are both renters and landlords, and we’re keen to ensure that both parties get a fair deal from the sector.”