Posts with tag: private rental sector

How to Fall in Love with Your Rental Home

Published On: February 13, 2016 at 2:27 pm

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It’s unlikely that many of us will find our dream home in the private rental sector, but that doesn’t mean we can’t fall in love with a rental property.

If you don’t own a house, you don’t have free reign to decorate the place exactly as you’d like it and you’ll probably be moving on at some point in the near-ish future. So what can you do to give your rental property a personal touch?

Bring your things

How to Fall in Love with Your Rental Home

How to Fall in Love with Your Rental Home

First thing’s first, bring all of your furniture and ornaments with you. You may not think a vintage armchair will fit in in a modern flat, but having your favourite things around you will inject your personality into any property. Don’t buy new things simply to suit the place you’re renting – your home should reflect you. Being surrounded with some special possessions will help you feel more comfortable in a new environment.

Display your memories

Putting things up in your home isn’t restricted to hanging a few photos on the walls… Print out some special pictures of family and friends and buy new frames to display your loved ones. Do you have any cute cards that you’ve been sent recently? Put these out to cheer you up when you need it. And don’t leave keepsakes hidden away – any reminders of holidays you’ve been on or special occasions will keep a smile on your face.

Accessorise

You probably won’t be able to change the fixtures and fittings in your rental property, but don’t let this stop you; think about what you can alter. Choose a theme for each area of the home and find new items that will make the place feel like it’s been freshly decorated – this could be a new set of towels for the bathroom or some pretty candles to transform the atmosphere.

Make the most of the space

Your furniture will make all the difference in rental accommodation – they’re usually decorated with neutral colours, so some standout items will add interest and difference. Remember to consider the size of the rooms and choose appropriately sized pieces; you don’t want to feel crammed in if your furniture is too big. Making the most of the space you have will create a clear, calm feel throughout the property.

Don’t get in trouble

Fancy making a photo wall but don’t want to get in trouble with your landlord? You need to get your hands on Command Strips – they affix pretty much anything to the wall and don’t leave any residue when you leave the property. Perfect for tenants!

If you’re living in a private rental property, follow these tips to create a home you can really fall in love with.

First Time Buyers Spend £50k on Rent Before Buying a House

Published On: February 12, 2016 at 9:44 am

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The average first time buyer purchasing a home this year will have already spent £52,900 on rent by the time they get onto the property ladder, according to the Cost of Renting report from the Association of Residential Letting Agents (ARLA).

The report, compiled with the Centre for Economics and Business Research (Cebr), reveals that the average first time buyer in England in 2016 will have spent 16.4% of their total lifetime earnings on rent for all the years they were a private tenant. It is expected that future first time buyers will spend 22% more than those buying today.

First Time Buyers Spend £50k on Rent Before Buying a House

First Time Buyers Spend £50k on Rent Before Buying a House

First time buyers purchasing this year in the North East will have spent £31,000 on rent – the lowest in England. Contrastingly, those in London will have spent double that, at £68,300.

The South East is the only region other than London where the total spent on rent is above the average, at £55,900.

In 2015 alone, the average tenant in the UK spent 22% of their wages on rent, rising to 30% in the capital. Those in the East of England enjoyed the most affordable rents, due to relatively high earnings in the region. However, rent still ate up 18.9% of their disposable income.

Britons that move out of their family home at the age of 18 will typically rent for 13 years before they buy their own property.

ARLA’s Cost of Renting report revealed that those leaving home and starting to rent this year will spend an average of £64,400 on housing before they can buy their first home – one fifth (22%) higher than the current first time buyer.

Those leaving home and renting privately in London will continue to be worse off, spending an average of £91,500 on rent before they buy a property – £23,100 more than those buying in the capital this year.

The Managing Director of ARLA, David Cox, comments on the findings: “The rising cost of rent in this country is a huge issue, and is preventing tenants from being able to save to buy a home. Our Cost of Renting report reveals that tenants are already spending a significant proportion of their income on rent, and therefore struggling to save any money.

“However, as house price affordability worsens and interest rates start rising, more pressure will be put on renting, with weekly rent likely to rise, so homeownership will remain out of reach for many.”

He continues: “Rents are becoming alarmingly unaffordable due to the lack of available housing; the north-south divide we’re currently seeing in the UK is a clear illustration of this. The London rental market is competitive, with far more prospective tenants looking for properties than actual houses available. This is pushing up rents in the capital, which will continue to put pressure on surrounding areas, including the South East, as Londoners relocate to avoid high rent costs.”1

1 https://www.landlordtoday.co.uk/breaking-news/2016/2/lifetime-cost-of-rent-exceeds-50-000

Many Homes Sold Through Right to Buy Now Owned by Private Landlords

Published On: February 11, 2016 at 12:12 pm

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The Communities & Local Government Committee has warned the Government that many homes sold through the current Right to Buy scheme have ended up being rented out through private landlords.

Many Homes Sold Through Right to Buy Now Owned by Private Landlords

Many Homes Sold Through Right to Buy Now Owned by Private Landlords

The committee revealed that landlords are letting 40% of ex-council homes sold through the controversial scheme at more expensive rent prices.

The warning arrives as the committee discussed the Government’s plans to extend the Right to Buy scheme to housing association tenants. The extension would be funded through forcing local authorities to sell off their most valuable assets.

The Government also expects housing associations to build one affordable home for every property sold.

The Chair of the Communities and Local Government Committee, Clive Betts MP, comments: “The fundamental success of this policy will depend not just on whether more tenants come to own their home, but on whether more homes are built.

“As a committee, we are concerned that there are a number of unresolved issues with the Government’s policy, which could have a detrimental effect on the provision of accessible and affordable housing, particularly affordable rented property.”

He continues: “The Government needs to set out in more details on how it will meet its target of at least one-for-one replacement of the sold homes, particularly given issues such as the availability of land, the capacity of the building industry and the uncertainty of income from council home sales.”1

The concerns were raised after the committee found that a large number of properties sold through the original scheme have quickly become private rental sector homes.

Its report states: “The committee believes the potential for selling social housing assets at a discount, only for them to become both more expensive and possibly lower quality housing in the private rented sector, is a significant concern. The committee recommends measures to restrict homes sold through the Right to Buy ending up in the private rented sector need to the explored.”1 

1 http://www.parliament.uk/business/committees/committees-a-z/commons-select/communities-and-local-government-committee/news-parliament-2015/right-to-buy-report-published-15-16/

Will regulations force many out of BTL sector?

Published On: February 4, 2016 at 12:24 pm

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Yet another investigation into the current state of the buy-to-let market has suggested there could be a gloomy outlook for landlords.

Research by The House Crowd has indicated that buy-to-let investors are predicting a rocky road in 2016. 72% said that the forthcoming legal changes will have a detrimental effect on their investments.

What’s more, one-fifth of landlords plan to sell their properties during the course of 2016.

Changes

Instead of looking on their properties as a solid form of investment for the future, buy-to-let purchasers are becoming increasingly concerned that they are being targeted by the Government. With features such as the Mortgage Credit Directive and the increase in Stamp Duty coming into play in March and April, it is hard to argue.

Results from The House Crowd survey found:

  • Half of investors stated their retirement plans are now at risk to the changes
  • One-third said it would now become harder to support their children or grandchildren to get on the ladder
  • 38% stated that landlords should look at better ways of investing
  • 43% felt that the Government is trying to get rid of smaller landlords
Will regulations force many out of BTL sector?

Will regulations force many out of BTL sector?

Pressure

‘Property investment has long been viewed as a sensible way for the shrewd small investor to save for the future, making life a bit more comfortable and paving the way for a financially secure retirement,’ noted Frazer Fearnhead, founder of The House Crowd. ‘However, these new regulations are putting increasing pressure on those who own perhaps two or three properties, making it very difficult for smaller landlords to remain in the buy-to-let sector.’[1]

‘I’d encourage investors to look at newer options to help them remain in the game, like property crowdfunding-there is another way,’ he added.[1]

[1] http://www.propertyreporter.co.uk/finance/will-new-regulations-force-investors-out-of-btl-this-year.html

 

Demand for rental homes to pass 1 million in 5 years

Published On: February 2, 2016 at 11:45 am

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More analysis of the rental market, this time from real estate advisor Savills, has found that demand for rental accommodation could rise by more than one million households over the next five years.

This will come as a blow to the Government, which has set of target of building 400,000 affordable properties over the course of the Parliament. If the predictions are true, the firm says that there will need to be a further 220,000 homes for rent per annum.

Changes

Upcoming changes in legislation for landlords will see demand for accommodation slow, but Savills still predict that the sector will grow by 1.1m households by 2021.

The steady economic recovery and record low interest rates have still not stemmed the tide of demand for rental property. In fact, house price inflation pushing ahead of wage growth has served to move homeownership even further out of reach for many. This comes at a time when social housing stock has dipped by 2.8% in the last five years, meaning more households have been forced back into privately rented accommodation.

According to the latest English Housing Survey, private renting has grown by a huge 17,500 households per month in the decade to 2014. The Government hope that their policies, including Shared Ownership schemes and Right to Buy/Help to Buy will reverse this spiral, by helping more people access the property ladder.

Demand for rental homes to pass 1 million in 5 years

Demand for rental homes to pass 1 million in 5 years

Sharp rises

‘Demand for rented homes could still rise more sharply than we have forecast,’ noted Susan Emmett, director Savills residential research. ‘We would question whether policies can accelerate housebuilding enough to see the Government’s target of 400,000 affordable homes for sale reached in the timescale set. And given the overlap between the different schemes, each focused at similar parts of the market, it is possible that one scheme could simply replace the other rather than providing additional homes.’[1]

‘This analysis demonstrates that we still need to provide a substantial number of homes for rent. Government policy should focus on supporting the development of new homes to rent as well as to buy,’ she continued.[1]

[1] http://www.propertyreporter.co.uk/landlords/demand-for-rented-homes-to-swell-by-over-a-million.html

Legal & General Launches £600m Build to Rent Fund

Published On: January 28, 2016 at 9:28 am

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Legal & General has launched a £600m fund to build large-scale rental accommodation. The news arrives as many other firms look to make private rental homes an institutional asset class.

The new fund will take the total amount of institutional money in the private rental sector since the start of the year to over £1 billion – largely fuelled by insurance companies and pension funds seeking long-term, stable rental yields.

Initially, Legal & General will commit £300m from its own balance sheet, with Dutch pension fund PGGM adding the extra £300m.

Legal & General Launches £600m Build to Rent Fund

Legal & General Launches £600m Build to Rent Fund

However, the fund, which could borrow up to a further 50%, is likely to expand once developments are built.

The Managing Director of L&G Capital, Paul Stanworth, says the fund will seek to capitalise on increasing demand for rental homes, after tax changes for buy-to-let landlords push small-scale investors out of the sector.

He comments: “The rental sector has so far been dominated by individuals with buy-to-let properties, and there has been quite a bit of involvement from local authorities, but both of those are set to fall away. This will exacerbate the supply-demand imbalance.”

Additionally, institutional investors are likely to be attracted to the steady yields that Build to Rent schemes offer.

“The value of rents is significantly more stable than the value of house prices,” believes Stanworth.

The Build to Rent sector is already well established in countries such as the USA and Germany.

However, investors have been more willing to commit to UK funds this year, after support from local planners and the Government, which has exempted large, corporate developments from its crackdown on buy-to-let.

The Government’s proposed reduction in mortgage interest tax relief for buy-to-let investors will not apply to those operating through limited companies, and the extra 3% Stamp Duty charge for landlords will not be levied on those purchasing 15 or more properties in one transaction. Find out more about the changes and how they will affect you here: /contrary-to-popular-belief-buy-to-let-is-not-dead-insists-finance-firm/

Last week, Invesco Real Estate launched a £250m fund, with cash from five international, institutional investors. Additionally, LaSalle Investment Management, a US firm, bought property worth £55m as part of a plan to invest £500m into the sector. Gatehouse, a Kuwaiti-owned investment bank, also committed £100m.

Companies believe that a shift to renting among young workers will prove a huge change in the housing market, while house builders continue to fall short of the Government’s target of building 200,000 new homes each year.

Legal & General’s fund will begin with investments in Bristol, Salford and Walthamstow, northeast London, creating 650 homes. It seeks yields of 3-5% on completed assets.

The firm is also researching the use of modular construction in order to boost efficiency and avoid the skills shortage in vital trades, such as bricklaying.

Stanworth says the fund will take on the development risk of the new units, all of which will be purpose-built, and may split into two funds – one for developments in progress and the other for completed blocks, which will offer investors varying levels of risk.

He adds: “We have built this on a scalable model so we can add investors without having to restructure at all.”1

1 http://www.ft.com/cms/s/0/3f42ab82-c41d-11e5-b3b1-7b2481276e45.html#axzz3yWnpPo8L