Posts with tag: rental market

Call for extra funding for building additional homes to rent

Published On: July 27, 2016 at 8:56 am

Tags: funding for new homes,homes to rent,public funding for new homes,rental market

The new UK housing minister Gavin Barwell has been urged by property peers to pledge his support to funding for building of new homes to rent. Observers feel that this can be achieved by relaxing the rules around public funding in the sector.

This appeal has been driven in response to a report published this week by the Centre for Economic and Business Research. Commissioned by the National Housing Federation, the report suggests that the UK economy could contract by £145 million during the next decade, should the rate of new housing completions drop at the levels seen in 2008.

Austerity

Figures from both the National Housing Federation and the Chartered Institute of Housing believe that more homes for rent would keep both housebuilding and the economy buoyant in times of austerity.

The National Housing Federation has predicted that 300,000 units could be built by housing associations by the year 2020, if funding is made available.

These calls from sector bodies is likely to be welcomed by would-be tenants, with demand continuing to massively outstrip supply.

Budgeting

A reallocation of the central budget to ultimately allow housing associations to build more rental homes would negate the effects of a slowdown in the housebuilding sector, according to James Howard, partner in Clarke Willmott LLP’s social housing development scheme.

Howard said, ‘a change in funding strategy to switch the balance to building more for rent than for sale should allow for a supply of new homes to continue despite the gap private sector housebuilders might leave behind.’[1]

Jonathan Hulley, Clarke Willmott’s head of housing and asset management, believes the Government’s Starter Homes scheme could undermine sales of more affordable shared ownership properties.

Hulley noted, ‘the social housing sector argues that housebuilding is needed now more than ever. People are in need, waiting lists are still growing, so the policy of building more homes for sale only needs to be revised and adapted to allow for the building of more homes for rent.’[1]

Call for extra funding for building additional homes to rent

Lack of capacity

Mr Hulley went on to say, ‘there is also worrying lack of capacity on the ground to deliver which needs to be addressed and a question mark over what appetite there is for outright purchase of house on large scale.’

‘On the other hand the kind of shared ownership offered by housing associations puts homes within the reach of the many people who would otherwise be unable to afford them. It’s high time for a change in Government policy to support greater flexibility to deliver not just on homes for sale, but also allowing more to be built to rent,’ he concluded.[1]

[1] http://www.propertywire.com/news/europe/uk-new-homes-rent-2016072712189.html

Landlord fined after ignoring improvement notice

Published On: July 26, 2016 at 11:20 am

Author: Em Morley

Categories: Landlord News

Tags: buy to let landlord,improvement notice,landlords,rental market

A buy-to-let landlord who failed to comply with an improvement notice has been hit with a fine and costs of almost £1,000.

Richard Barratt, of Gainsborough in Lincolnshire, was told to pay these costs having ignored the local councils’ order to improve a run-down property he was renting out in the region.

Failures

Mr Barratt admitted failing to take action following a prohibition order issued by West Lindsay District Council. Barratt was told to pay up within 14 days.

Pleading guilty to the charges, Mr Barratt was fined £550, with council costs of £335 and a victim surcharge of £56.

The court was told that West Lindsay District Council issued the prohibition order in November 2015, which required the property to either be improved or vacated by December 2015.

However, subsequent inspections found that the property was still let despite the order still standing and the required improvements not being made.

Landlord fined after ignoring improvement notice

Licensing

The council has recently introduced a Selective Licensing Scheme for the Gainsborough area in an attempt to reduce anti-social behaviour and standards of housing.

This requires every property in the area to be licensed and to comply with conditions set out by the council. A licence for five years costs £375 per property. All landlords in the region must apply for a licence, with failure to do so a criminal offence incurring fines of up to £20,000.

Standards

Councillor Sheila Bibb, chairman of West Lindsay District Council’s prosperous communities committee, noted, ‘poor property standards do affect the quality of living for local people and it is unacceptable.’[1]

‘Whilst West Lindsey District Council works closely with partners including landlords to support them, we will take enforcement action where necessary. Overall this is an excellent result and provides a clear example for landlords in West Lindsey that the council will take the necessary enforcement action in order to ensure that poor property standards are addressed.’[1]

‘I would like to thank our officers involved in this case for their due diligence.’[1]

[1] http://www.lincolnshireecho.co.uk/landlord-who-failed-to-repair-run-down-rental-property-faces-near-1-000-court-bill/story-29548782-detail/story.html

Rental market stays stable post Brexit

Published On: July 26, 2016 at 8:46 am

Author: Em Morley

Categories: Property News

Tags: ARLA,Brexit,Buy-to-Let,housing demand,rental market

The latest report from the Association of Residential Letting Agents has suggested that the rental market has stayed relatively stable following last month’s Brexit vote.

Referendum reality

In the aftermath of the decision to leave the European Union, there has been very little movement in terms of rental costs.

12% of letting agents reported a fall in rent, while 77% saw no change.

Prior to the vote, 19% of agents suggested that rents would increase, with 20% expecting them to drop. 61% thought that they would stay the same.

Supply of available properties and housing demand has also stayed fairly constant since the referendum. 67% of ARLA members have reported no change to supply, with 64% saying that there has been no change in the number of tenants looking to secure a rental property.

This said, 45% of letting agents have seen uncertainty from landlords looking to let, which could cause problems in the coming months.

Calm

David Cox, managing director of the Association of Residential Letting Agents, noted, ‘the rental market has responded to Brexit in a calm fashion, with no immediate fallout amid extreme political and economic uncertainty. What we need is some certainty from the new Government that housing remains a priority with the rental market playing a central role. For example, we want to avoid a situation where institutional investors start pulling away from the market, because ultimately this will impact tenants by squeezing supply further and pushing up rents.’[1]

‘Although we’ve seen some hesitation from landlords this is relatively mild and it’s importantly they do not act in haste. Any inevitable longer-term changes will then be taken on board with greater ease,’ he continued.[1]

Rental market stays stable post Brexit

Monthly rises

On a month on month basis, demand for rental accommodation was up during June. In addition, the supply of properties managed on agents’ books also rose. There were 37 would-be tenants on average registered per ARLA branch in June, up from the 33 recorded on average in May.

The supply of rental properties increased by 3% in June, from 171 in May to 176.

Cox concluded by stating, ‘if one thing is clear following Brexit, it’s that supply and demand remains a real issue in the rental market. If supply continues to dwindle against growing demand, no matter what the eventual implications of Brexit are, renting will become more difficult and expensive for tenants.’[1]

[1] http://www.propertyreporter.co.uk/landlords/rental-market-survives-storm-brexit.html

More over 50’s renting than ever before

Published On: July 6, 2016 at 11:42 am

Author: Em Morley

Categories: Landlord News

Tags: over 50's renters,rental market,renters,renting over 50

The changing demographic of the UK housing market has been underlined with the news that the number of over 50’s residing in rental accommodation has risen steadily over the last five years.

New research from Saga Home Insurance has revealed that one-third of people aged 50 or over currently live in rental accommodation. This is a rise from just over one quarter at the start of 2011.

Changing circumstances

Reasons for the rise in over 50’s residing in rented accommodation vary. Of course, spiralling house prices mean that many are cashing in for their retirement years.

However, a rise in divorces for couples over 50 has also had an impact. More people over 50 are getting divorced than ever before, with 20% of renters in this age bracket being single and trying to get back onto the housing ladder.

For people living in rented accommodation as a whole, there has been an increase in the number of people under 70. The largest increases have been for those between the 50-54 age bracket.

In addition, people over the age of 50 living in rented accommodation have on average £20,000 worth of contents in their property. However, 59% of people over the age of 50 living in rented accommodation do not have home insurance, leaving them liable to large bills should anything happen to their property.

More over 50’s renting than ever before

Social impact

Roger Ramsden, chief executive of Saga Services, noted, ‘social changes certainly seem to be having an impact on the homes of the over 50’s. It is concerning that so many do not have insurance for their belongings, whilst the landlord has responsibility for repairing the building should anything happen, they are not responsible for replacing valued possessions should they for example be damaged by fire or even a significant water leak.’[1]

‘Without insurance, it is not just people’s own possessions they would have to foot the bill for if they were damaged. Any fixtures and fittings or other items tenants are listed as responsible for in the inventory agreed with the landlord will have to be replaced if they are damaged by tenants, which could add up to a significant sum,’ Ramsden added.[1]

[1] http://www.propertywire.com/news/europe/uk-home-rental-research-2016070612110.html

Rents rise by 2.5% year-on-year

Published On: June 28, 2016 at 11:45 am

Author: Em Morley

Categories: Landlord News

Tags: rental market,rental property,rents

New figures released by the Office of National Statistics suggest that rents in Britain increased by 2.5% in the year to May.

This represented a slight fall from the 2.6% annual increase recorded in the last month.

Rental rises

Statistics reveal that rental price increases were led by England, with values increasing by 2.6% year-on-year. Scotland saw a rise of 0.4%, with Wales recording no increases.

In Great Britain as a whole, the average rental price was £512.50, up from £500 per month in the same period in 2015.

Rents in the UK, with the exception of London, rose by 2% over the same period. Rental prices increased in all English regions year-on-year, with rental prices rising most prominently in the South East. Here, rental values rose by 3.4%, up from 3.1% in the previous month.

London saw rents heighten by 3.3% annually, but the yearly rate of growth was down by 3.7% in April 2016.

Rents rise by 2.5% year-on-year

Lows

The lowest yearly rental prices were seen in the North East at 0.8%, unchanged from April 2016. The North West saw rises of 1.2% and Yorkshire and the Humber 1.2%.

Since January of 2011, rental prices in England have risen more than those in Wales and Scotland. From the beginning of 2012, England’s rents have seen annual increases between 1.4% and 3% year-on-year. This is partly due to the large imbalance between supply and demand registered in the market.

Northern Powerhouse scheme in danger after Brexit

Published On: June 28, 2016 at 9:11 am

Author: Em Morley

Categories: Property News

Tags: investors,landlords,Northern Powerhouse,property,rental market

Fears are growing that the Northern Powerhouse scheme could be in danger following the momentous EU referendum result.

The scheme, designed to rival London and the South East as the main economic growth driver, is in doubt following the resignation of David Cameron and uncertainty over George Osborne’s future. Chancellor Osborne, the main thinktank behind the Northern Powerhouse, could soon be on his way out of office.

Shift in (Northern) Powerhouse

However, according to one onlooker, the outcome of the referendum makes the case for the Northern Powerhouse more compelling than before. Martin Venning, director at UK Northern Powerhouse, runs the UK Northern Powerhouse Conference, which took place at Manchester earlier in 2016.

Mr Venning noted, ‘the result of the EU referendum makes the case for the UK Northern Powerhouse more compelling. Our stakeholders will continue to contribute to the process of building a stronger, more productive and stable Northern economy. The challenges of growth post Brexit will require innovation and new forms of collaboration which can create new opportunities for all. We expect to play our part in shaping that agenda.’[1]

Interest

The scheme has already attracted much potential investment, in particular from China. This has served to assist in pushing up property prices and rents across the North West.

Ged McPartlin, sales director at Manchester-based dales firm Ascend Properties, observes that, ‘while the initial shock might be hard to swallow for some, the reality is that Manchester’s economy has never been stronger-and will only continue to grow.’[1]

‘The level of internal investment pouring into the city has reached many millions of pounds, spanning new homes, commercial ventures, offices and infrastructure. Manchester will also be seeing investment from China which will be going into Airport City, testament to the strength of the Northern Powerhouse. We are confident for the future,’ he added.[1]

Northern Powerhouse scheme in danger after Brexit

Life-changing

Mr Graham Davidson, managing director of Manchester-based Square Property Investment, offers a more optimistic view of the referendum result.

Davidson noted, ‘The decision to leave is truly a once-in-a-lifetime decision and should now be embraced. The UK economy is going from strength to strength and the people of the UK have decided that now is the time for us to break away from the rest of Europe and gain back more control on our own future. Our economy continues to develop, particularly outside of London in light of the Northern Powerhouse agenda which is key to growth.’[1]

‘Investment in Manchester over the past 12 months for example has been unprecedented and this month it was announced that MediaCityUK is set to double in size, with investment from UK companies creating thousands of new homes and job opportunities – a show of confidence in what we can achieve on our own. It’s safe to say The Northern Powerhouse agenda is well underway, and the referendum results being announced in Manchester’s town hall was testament to this.’[1]

Concluding, Mr Davidson noted, ‘The reasons for investing in UK property won’t change, with returns still outperforming all other forms of investment. Our own business is testament to this – enquiry levels have not declined despite what much of the media has portrayed; people understand that property investment can be highly rewarding, whether you are topping up your pension, saving for your children’s future or looking for additional regular income.’[1]

[1] https://www.landlordtoday.co.uk/breaking-news/2016/6/does-brexit-mean-the-end-of-the-northern-powerhouse