Posts with tag: rental accommodation

Number of rental properties in UK continues to fall

Published On: June 6, 2017 at 9:32 am

Tags: housing supply,private rental market,rental accommodation,rents

Another report has suggested that the number of properties coming onto the privately rented market is continuing to fall.

This in turn is serving to drive up rents across many regions of the UK – particularly in market towns.

Fall in Landlords

This fall in housing supply can be attributed to the lack of new landlords bringing new stock onto the market, according to Belvoir – one of Britain’s largest letting agents.

Chief Operating Officer of Belvoir, Dorian Gonsalves, feels that the decline in property coming onto the market is directly due to the recent changes in legislation – such as increases in Stamp Duty and alterations to mortgage interest tax relief.

Gonsalves observed: ‘As a result of this stock shortage, properties are often rented to the highest bidder, typically the wealthier tenant, which is raising rents beyond the traditional plus or minus four to five percent trend.’[1]

Number of rental properties in UK continues to fall

Increasing Rents

Belvoir’s Q1 rental index, compiled by property expert Kate Faulkner, indicates that the firm’s offices have seen average rents rise by 5.75% year-on-year. This was a rise from £728pcm in Q1 2016 to £770pcm in Q1 2017 – driven by gains in parts of the East Midlands and Yorkshire.

Rents ranged from £602pcm in the North West, £655pcm in the East Midlands, £842pcm in the South West and £1,440pcm in London.

In addition, the report indicates that 43% of tenants are staying put in their properties for between 13-18 months. 29% stay between 19-24 months and 18.2% rent for over 2 years.

Worryingly, void periods are seemingly on the increase with 60% of properties taking up to two weeks to be let.

Concluding, Mr Gonsalves said: ‘Despite increases in rents in some regions, rent arrears are not increasing, suggesting that tenants are currently coping with landlord rent rises.’[1]

[1] https://www.landlordtoday.co.uk/breaking-news/2017/6/number-of-rental-homes-coming-on-market-falls-sharply

[1]

Landlords told to allow tenants to make improvements

Published On: March 23, 2017 at 9:50 am

Author: Em Morley

Categories: Landlord News

Tags: inventories,landlords,rental accommodation,tenants

The Association of Independent Inventory Clerks (AIIC) has said that landlords should offer a more open-minded approach to tenants’ requests to making improvements to their rental properties.

It suggests that a growing number of number of private tenants are keen to personalise their rental accommodation.

Improvements

A recent study from Plentific found that 73% of tenants have carried out DIY improvements out of their own pocket.

The research questioned more than 2,000 tenants a found that 23% had spent more than £500 on home improvements in their property.

Patricia Barber, chair of the AIIC, observed: ‘It’s clear that tenants are increasingly willing to spend their own money on improving their rental property and this is certainly something landlords should think about.’[1]

Barber suggests that landlords who permit tenants to make reasonable alterations could see long-term rewards.

Landlords told to allow to allow tenants to make improvements

Standards

Continuing, Barber said: ‘We’re seeing more long-term tenants and they’re clearly committed to living in a higher standard of property. Landlords who cautiously allow tenants to put their own stamp on a property could benefit from a lower turnover of tenants and an improved and well-maintained property at the end of the contract.’[1]

She also advises all landlords to make sure that they have an accurate inventory in place, whereby they can long the condition of the property before, during and after the tenancy.

This will not only be imperative in terms of a dispute, but can help eradicate the risk in the first place.

Concluding, Barber said: ‘If rental properties are noticeably changing over the course of a tenancy, it’s vitally important that there is an inventory which comprehensively details the condition and contents of the property at the start of the tenancy. This way any fair deposit deductions can be made by the landlord and the chances of a [tenancy] deposit dispute are minimised.’[1]

[1] https://www.landlordtoday.co.uk/breaking-news/2017/3/landlords-urged-to-allow-tenants-to-personalise-their-rental-properties

Demand for rental property surges in January

Published On: February 23, 2017 at 10:48 am

Author: Em Morley

Categories: Property News

Tags: ARLA,rental accommodation,rental demand,tenants

There was a surge in demand for rental accommodation during January, according to the latest report from ARLA Propertymark.

Data from the investigation shows that there were 34 would-be tenants per ARLA membership branch last month, in comparison to the 26 seen in December. This represented a rise a 31% month-on-month.

Year-on-year, demand has risen by 10%.

Supply Increases

In addition, the number of rental properties being managed by letting agents also rose in January. Last month, there were 193 properties managed per branch, as opposed to 188 in December.

What’s more, there has been a 12% year-on-year rise.

23% of agents saw their tenants experiencing rental rises during January. However, this is less than the 30% seen in January 2016.

Demand for rental property surges in January

David Cox, Chief Executive of ARLA Propertymark, said: ‘As expected, the New Year brought with it a flurry of activity in the rental market. While supply of rental stock rose slightly, the number of prospective tenants increased by a much bigger margin. When supply and demand are out of kilter, as they have been for so long now, the market isn’t balanced and fair for tenants and rent prices will just continue to rise.’[1]

‘Worse still, should the Government decide to implement an out-right ban on letting agent fees when the consultation takes place, the situation will likely get worse for tenants. The costs of the vital services letting agent fees cover will need to be recouped, and this will get passed on to renters in inflated rental prices. This, combined with new landlords’ tax, particularly the upcoming changes to mortgage interest release, means the rental market is far from reaching equilibrium,’ Mr Cox added.[1]

[1] http://www.propertyreporter.co.uk/landlords/demand-for-rental-accommodation-sees-january-spike.html

Lending falls at Paragon during Q4 of 2016

Published On: January 30, 2017 at 9:45 am

Author: Em Morley

Categories: Finance News

Tags: Buy-to-Let,lending,Mortgage lending,rental accommodation

Paragon Bank has become the latest buy-to-let lender to announce a fall in its buy-to-let lending in the final quarter of 2016. This has once again been attributed to the introduction of more stringent conditions for buy-to-let property purchasers.

In Q4, the Bank agreed mortgages for rental accommodation worth £185.2m, which was less than half of the £400.9m leant during the opening quarter of the year.

Clampdown

Alongside the more stringent stress tests for buy-to-let investors, the Government has also moved to clamp down on buy-to-let lending by removing wear and tear allowance, introducing a 3% stamp duty surcharge and phasing out mortgage interest tax relief.

Despite the fall in completions during the last three months of the year, Paragon feels that the market will improve significantly. This is due to the fact that more private rental properties are needed to meet increased demand from tenants.

Lending falls at Paragon during Q4 of 2016

Nigel Terrington, Paragon Group’s chief executive, noted: ‘We have made a strong start to a year that will see the group continue its transition to a lending and operational model that is orientated around Paragon Bank.’[1]

‘The lending growth we haven’t seen in asset finance is encouraging and reflects the increasing diversification of the group. Lending across all divisions and the strong growth in the buy-to-let pipeline bodes well for the year as a whole,’ Mr Terrington added.[1]

[1] https://www.landlordtoday.co.uk/breaking-news/2017/1/lending-to-buy-to-let-lending-falls-after-introduction-of-new-rules

[1]

Rents set to increase by 15% by 2020?

Published On: December 12, 2016 at 10:17 am

Author: Em Morley

Categories: Property News

Tags: Buy-to-Let,landlords,rental accommodation,rents,Stamp Duty

UK rents are expected to rise much faster than property prices over the next three years, according to the chief operating officer of one of Britain’s leading property franchises.

Dorian Gonsalves of Belvoir, suggests there will be a 15% increase in rents by 2020. This, he feels, is due to, ‘a raft of recent anti-landlord Government policies in the past year,’ though he notes the rent rises will vary depending on region.

Buy-to-let measures

New measures introduced, including the new 3% stamp duty rise and tougher mortgage lending criteria, could well see many landlords making a loss. Gonsalves also believes that the Government’s failure to improve the availability of social housing for rent has led to a shortage of quality rental accommodation in the private rental sector.

Mr Gonsalves believes: ‘’Throughout 2017 Belvoir will continue to work with decision makers and we hope that some of the Government’s recent changes will either be reversed or incentives will be launched to help drive up the supply of rental properties. This would then bring down rents and benefit millions of tenants, making for a healthier rental sector.’[1]

The most recent rental index from the firm reveals that 88% of offices had recorded an increase in demand for properties to rent during Q3 of 2016. However, a huge 86% of tenants-around 6m households-had less than the £8,838 needed to secure a 5% deposit on the average home. This means that they are hugely unlikely to be able to buy a property.

Rents set to increase by 15% by 2020?

Struggling

Continuing, Gonsalves said: ‘People from all walks of life, including students, migrant workers and professionals with families, are struggling to meet strigent lender affordability ratios.’[1]

‘When someone is not in a position to buy, they obviously start looking for somewhere to rent, but unfortunately, Government policies seem to lack any direction and have done nothing to benefit either landlords or tenants, so tenants could find it more difficult to find good quality suitable accommodation in 2017 and beyond,’ he concluded.[1]

[1] https://www.landlordtoday.co.uk/breaking-news/2016/12/rents-predicted-to-increase-15-by-2020

Only 2 weeks left to register for Rent Smart Wales

Published On: November 8, 2016 at 2:32 pm

Author: Em Morley

Categories: Landlord News

Tags: landlords,landlords in Wales,letting agents,Rent Smart Wales,rental accommodation

Landlords in Wales have just two weeks to sign up for Rent Smart Wales, before the scheme becomes a mandatory requirement.

A new registration and licensing system, Rent Smart Wales represents a large change for the private rental sector. The scheme is intended to push up the quality of rental accommodation in the country and went live last year.

Rent Smart Wales requirements

The scheme obliges all landlords and letting agents to register their investment properties and to undergo training to gain a licence, should an investor wish to self-manage their property.

Now, only 2 weeks remain until the 23^rd November deadline, after which it becomes an offence to either let or manage a property without the sufficient licence.

Designed to improve standards in the private rental sector in the principality, Rent Smart Wales offers training courses and information for landlords. In addition, it gives local councils a greater understanding of where properties are located.

Only 2 weeks left to register for Rent Smart Wales

Registration

David Cox, Managing Director, Association of Residential Letting Agents, observed: ‘The law means landlords in Wales-and those in the rest of the UK who own properties in Wales-need to register themselves and their properties with Rent Smart Wales, as well as being suitably trained and licensed to carry out letting or property management activities.’[1]

‘If landlords do not wish to get trained, they need to arrange for a trained and licensed agent to manage their properties on their behalf,’ he continued.[1]

However, concern is growing that a number of buy-to-let landlords and letting agents in Wales have not signed up for Rent Smart Wales.

Cox notes: ‘Given the 23^rd November deadline for registration and licensing is only two weeks away, it’s concerning that it appears only about one quarter of agents are currently licensed.’[1]

‘If landlords and agents find themselves unlicensed when the deadline arrives on 23^rd November, they will be unable to practice, so it’s important to act to soon to ensure the necessary qualifications and other regulatory requirements have been undertaken before then, in order to comply with the legislation,’ he concluded.[1]

[1] https://www.landlordtoday.co.uk/breaking-news/2016/11/deadline-looms-for-landlords-to-register-in-wales