Posts with tag: private rental sector

Housing Minister Backs the Private Rental Sector in First Major Speech

Published On: September 14, 2016 at 10:54 am

Author:

Categories: Property News

Tags: ,,,,

The new Housing Minister, Gavin Barwell, has backed the private rental sector in his first major speech.

Barwell, who was appointed as Housing Minister in July, used his speech at the RESI Conference to shift Government policy away from a focus on homeownership.

He insisted: “We need to build more homes of every single type and not focus on one single tenure.”

He also suggested that the Government is considering abandoning its pledge to build 200,000 Starter Homes by 2020, due to a shift towards supporting the private rental sector.

The Government’s Starter Homes policy involved building homes for first time buyers, sold at a discounted rate of 20%. However, Barwell explained that such policies, which encourage homeownership and increase the level of demand, could affect the amount of homes built to rent.

Housing Minister Backs the Private Rental Sector in First Major Speech

Housing Minister Backs the Private Rental Sector in First Major Speech

He said: “There’s a little bit of a tension between the overall supply objective and measures specifically to help people onto the housing ladder.”

Barwell indicated that affordable rental homes could now be included in the Starter Homes target.

He added: “The way you make housing in this country more affordable to rent and buy is you build more homes. There is still a role for the Government doing specific things to help people onto the first rung, but this can’t be at the exclusion of all else.”

In the past, Government policy has largely focused on homeownership, at the expense of private rental sector development.

Additionally, buy-to-let landlords are now facing an additional 3% Stamp Duty charge when they purchase a rental property.

Barwell commented: “A growing number of families and young professionals are choosing the [private rental sector], and while homeownership is still the goal for the majority, many will rent for some years before they buy.

“I’m very clear that our ambitions will never be achieved without a significant boost in institutional investment to the [private rental sector], to ensure more choice and quality for people living in rented accommodation.”

Adam Challis, the Head of Residential Research at JLL, describes the Starter Homes policy as “a big distraction”, adding: “This is welcome news, as it signals this Government’s desire to support housing across all tenures.

“The private rented sector is the fastest growing tenure, but had been overlooked under old policy. This is the first step in putting that right.”

Barwell also gave his backing for build-to-rent schemes, highlighting one by Essential Living in north London and another by Pocket Living in south London, which uses modular techniques.

He said: “Recent growth in the bespoke rental market has been impressive, but this progress must be expanded.”

London’s Deputy Mayor for Housing, James Murray, also expressed his backing for the private rental sector, while defending his 50% affordable housing target.

He said: “If we’re going to increase supply and have affordable [housing] within that, you need to use every route of delivery, and if build-to-rent can deliver at scale and speed, then we should support that.”

Is the Government’s change of focus good news for landlords?

Typical tenants expect to rent for the next decade

Published On: September 14, 2016 at 8:57 am

Author:

Categories: Property News

Tags: ,,,

A new survey has suggested that the typical UK tenant expects to stay part of the Private Rented Sector for the next ten years.

Research conducted by AXA indicates that despite this, fewer tenants say they are renting as they cannot afford to buy a property.

Altering attitudes

In 2013, 67% of tenants questioned said that they rent property as they cannot afford to buy. This year, this figure has dropped to 44%, indicating that people’s attitudes towards renting are changing.

One third of those questioned said that their main reason for renting was due to the ‘freedom and lifestyle benefits’ it brings.

Additionally, AXA says that tenants in the UK are experiencing something of a surge in financial confidence. In 2013, only 13% of those surveyed said they were saving up for a deposit. This figure has nearly doubled this year to hit 25%.

Relocation, relocation, relocation

The survey also shows that tenants are beginning to favour more frequent relocation, believing they will stay in a rental property for an average of two years.

61% of the 1,000 surveyed said that they are in favour of short-term contracts of six months to a year. Just 18% said that they would benefit from five or ten year leases.

In the next five years, nearly two-thirds of those asked said that they plan to relocate to a different part of the UK. 10% said they plan to emigrate.

Topping the list of so-called stepping stone towns were London, Bristol and Edinburgh, where tenants tend to stay for the shortest period.

Typical tenants expect to rent for the next decade

Typical tenants expect to rent for the next decade

Worries

AXA’s survey also reveals that landlords’ biggest concern is a high turnover or tenants. Only a minority said that they know their tenants personally, with a huge 70% saying they see their renters once a year or less!

Darrell Sansom, managing director at AXA Business Insurance, said, ‘rental culture is not as well embedded in British society as in other European countries. Short-term tenancies prevail here and while bringing benefits to some, this means that both landlords and tenants can feel as if the ground is constantly shifting under their feet.’[1]

‘With such a mobile tenant population, landlords need to work that bit harder to encourage longer stays. Few tenants are interested in being locked in to a long lease, but little compromises on things like pets, freebies like broadband or cleaning services, offering to redecorate-can build precious loyalty,’ he concluded.[1]

[1] https://www.lettingagenttoday.co.uk/breaking-news/2016/9/average-tenant-expects-to-rent-for-ten-more-years

Are accidental landlords causing issues for the PRS?

Published On: September 6, 2016 at 9:09 am

Author:

Categories: Landlord News

Tags: ,,,

A concerning new report has suggested that so-called accidental landlords could unknowingly be making serious issues in the private rental sector worse. These problems included property disrepair and unfair evictions.

This worrying report is entitled, ‘The impact of accidental landlords on the private rented sector,’ and was written by property expert Kate Faulkner. Funding for the piece was provided by the TDS Charitable Foundation.

Issues

Faulkner has already penned a separate report, called, ‘who are the individual landlords providing rented accommodation?’ This report highlights that a substantial section of landlords providing accommodating to private tenants are not actually professional landlords. Instead, they are accidental landlords, who never thought of letting their property.

Of course, this has implications for the Private Rental Sector, as there is a risk that some tenants could end up renting from landlords with limited knowledge of the responsibilities attributed to being in this role. Accidental landlords could struggle with rules and regulations, alongside managing costs.

The report suggests that accidental landlords could unwillingly be contributing to the serious issues of property disrepair. The latest English Housing Survey reveals that 29% of properties in the private rented sector are, ‘non-decent.’

Are accidental landlords causing issues for the PRS?

Are accidental landlords causing issues for the PRS?

Focused

Commentating on her report, Faulkner said, ‘due to the impact that accidental landlords can have on the Private Rental Sector, this report considers the definition of accidental landlords and why a landlord who isn’t wholly focused on making money from property may end up being potentially more likely to let one that is substandard and accidentally treat tenants unfairly.’[1]

Data from the report indicates that in some regions, this type of landlord could make up 30% of rental stock for tenants. Faulkner has called on councils to be more aware of the problem as they could let to unsuspecting tenants and unknowingly break letting laws.

In order to educate accidental landlords, the report suggests that lenders and insurance companies give as much information as possible to help them understand their rights and responsibilities.

Understanding

Faulkner has also called on local authorities, policy makers, tenants groups and others that provide services to landlords to ensure that their own staff understand tenants’ rights. She hopes that eventually, accidental landlords will be better equipped to let their properties legally and to treat their tenants fairly.

Concluding, Faulkner said, ‘the problem with accidental landlords is that as they don’t do this as a business they may well not have any way of keeping up to date with changes in rules and regulations. As a result, continuing to simply introduce new legislation to solve the issues around disrepair or tenant security of tenure may have little impact on this sector of the market. A concentrated effort to tackle better education and briefing of accidental landlords may actually be one of the key ways to improving standards in the Private Rented Sector.’[1]

[1] http://www.propertyreporter.co.uk/landlords/are-accidental-landlords-causing-problems-for-the-private-rented-sector.html

 

Government Survey Confirms the Need for Letting Agent Fee Ban

Published On: August 23, 2016 at 10:45 am

Author:

Categories: Landlord News,Tenant Fees Ban

Tags: ,,,

A survey by the Government has confirmed the need for a letting agent fee ban, according to tenant lobby group Generation Rent.

The organisation has called on the Government to ban letting agent fees for tenants, after the Government’s own survey estimates that the cost is discouraging half a million renters from moving out of inadequate housing.

Government Survey Confirms the Need for Letting Agent Fee Ban

Government Survey Confirms the Need for Letting Agent Fee Ban

The Government’s latest English Housing Survey, published on 21st July, found that 34% of private tenants who lived in unsatisfactory homes said that letting agent fees cost too much and would stop them from moving to another property.

A further 35% said that they would have to think about whether they could afford to move out if they were charged fees. Together, this equates to 502,000 households.

The same study found that the average cost of letting agent fees is £223, while 40% of private tenants paid a fee when they moved into their current home. To make matters worse, 30% of renters have lived in their home for less than a year.

Based on a renting population of 4.3m households, the research suggests that letting agent fees cost tenants around £115m per year.

However, Generation Rent believes that this is an underestimate. The campaign’s volunteers are conducting their own research into letting agent fees, which has already found that 800 agents across 12 local council areas are charging the typical two-adult household an average of £398 in upfront fees.

The campaign to ban letting agent fees is already gathering momentum. A petition organised by The Debrief website has amassed more than 250,000 signatures, while an early day motion in Parliament has attracted signatures from MPs on both sides of the House.

Additionally, Liberal Democrat peer Baroness Grender has introduced a private member’s bill, the Renters’ Rights Bill, in the House of Lords, which would ban fees for tenants. Peers are expected to debate the bill at committee stage later in the year.

The Director of Generation Rent, Betsy Dillner, says: “If a customer is getting bad service, they’re normally able to take their business elsewhere, but in our broken housing market, unhappy tenants are stuck because it costs so much to move. As a result, bad landlords get away with neglecting their properties.

“Letting fees are already perverse – agents charge inflated fees to tenants who aren’t even their customers. Landlords should be paying agents’ costs instead. And on top of that, tenant fees create a distorted market that isn’t responsive to the consumer’s needs.”

Do you agree with the plan to ban letting agent fees for tenants?

New Energy Efficiency Laws a Tax on Tenants, Says RLA

Published On: August 15, 2016 at 8:30 am

Author:

Categories: Landlord News

Tags: ,,,,

New energy efficiency laws for the private rental sector will become a tax on tenants, warns the Residential Landlords Association (RLA).

New Energy Efficiency Laws a Tax on Tenants, Says RLA

New Energy Efficiency Laws a Tax on Tenants, Says RLA

The Government’s new policy to improve the energy efficiency of private rental housing in the UK will inevitably increase rents for tenants, believes the landlord group.

From 2018, it will be illegal for private landlords to rent out property with an energy efficiency rating of F or G. However, the RLA says that having removed all support for landlords to fund this, landlords will have to raise rents for tenants.

Almost a third of private rental housing was constructed before 1919, making them some of the hardest properties to treat for energy efficiency improvements.

With fuel poverty a bigger problem in the private rental sector as a result, the RLA insists that it is careless of the Government to make no reference to the market in its consultation of the future of the Energy Company Obligation (ECO), which closes this week.

Although the ECO was designed to focus on fuel poverty, the consultation does propose extending the scheme to the already heavily subsidised social sector, which has newer housing stock and fewer tenants in fuel poverty.

Previously, the Government supported private landlords in improving energy efficiency with the Green Deal and a tax allowance. However, these have now ended and the RLA has been told that landlords could potentially have to pay up to £5,000 up front for improvements.

The RLA fears that, on top of recent tax hikes from the Government, the new energy efficiency costs will inevitably be passed on to tenants in the form of higher rents.

It is calling for a specific allocation under the ECO scheme to support improvements in the private rental sector and avoid the “tax on tenants”.

The Policy Consultant at the RLA, Richard Jones, says: “Whilst we all want to see improvements in the energy efficiency of homes to rent, that cannot come at the expense of driving up rents. The Government’s proposals will amount simply to another tax on tenants.”

Last week, an established property investor also insisted that the Government should be helping private landlords with the cost of improving their rental properties: /government-helping-landlords-energy-efficiency/

New housing minister supports longer tenancies

Published On: August 9, 2016 at 11:03 am

Author:

Categories: Landlord News

Tags: ,,,

New Housing Minister Gavin Barwell has pledged his support to the concept of longer tenancies for renters in the private rental sector.

Responding to a question in the House of Commons for Conservative Julian Knight, MP for Solihull, Mr Barwell said he was looking into how to make longer tenancies more accessible to tenants.

Encouragement

Barwell said, ‘My department (the DCLG) has developed a model tenancy agreement for use by landlords and tenants in the private rented sector, which encourages longer-term tenancies for those who want them. We are working with the sector to actively promote the use of this and to identify any barriers. We have also established a working group, focussed on affordability and security in the private rented sector, which will look at what more we can do to help people who require longer tenancies to get them.’[1]

New housing minister supports longer tenancies

New housing minister supports longer tenancies

The concept of longer tenancy agreements has been discussed in the Commons previously. In 2013, it was announced that the Government was to introduce new measures to encourage longer-term, family orientated tenancies in the sector.

A recent report revealed that the average tenancy agreement for residential property in England stands at just 18 months. This indicates that tenants are looking at a shorter-term view of renting property.

More pleasingly, the report showed that landlords’ typical annual void periods currently stand at 22 days.

[1] https://www.lettingagenttoday.co.uk/breaking-news/2016/8/housing-minister-says-he-backs-long-private-rental-tenancies