Posts with tag: renters

Could the North East lose thousands of cheap rental homes?

Published On: January 19, 2017 at 10:00 am

Tags: Buy-to-Let,North East,property,renters

It has been estimated that up to 26,000 of the North East’s cheapest rental properties could be lost by 2020. One property campaigner in particular feels that this gives more evidence that renters should be given better deals.

Figures

Official Government figures released last week indicated that the number of affordable homes available at social rent in Britain fell by 120,000 between 2012 and 2016. This was largely as a result of Right to Buy.

Forecasts from the Chartered Institute of Housing predict that this number will rise to 250,000 by 2020-which will be an overall drop of 10%.

Should these figures be replicated in the North East, it would leave 25,951 less cheaper homes in the region. By area, this would be a reduction of:

Newcastle-3485

Sunderland-3240

North Tyneside-2494

South Tyneside-2120

County Durham-4500

Northumberland-2584

Could the North East lose thousands of cheap rental homes?

Deals

Ajay Jagota, founder of sales and lettings firm KIS, said on the figures: ‘This is yet more evidence of the burning need to give renters a better deal.’[1]

‘It’s no secret that there has been a long-term shift in the UK away from social housing towards the private rented sector. The problem is that the private rented sector hasn’t necessarily evolved to meet the needs of that demand. The biggest example of that is tenancy deposits, which place a huge financial burden on some of our poorest tenants – leaving good people left priced out of good homes rented from good landlords,’ he continued.[1]

Mr Jagota feels that: ‘The easiest way to help them would be to abolish tenancy deposits and for the industry to use sophisticated insurance policies instead. Such a move could save the average renter £1400 while actually protecting property investors assets more effectively.’[1]

‘The craziest thing is that the majority of social landlords do not take deposits, and they seem to manage perfectly well without relying on an out-dated and draconian deposit system. If privately rented homes are the future, why is the privately rented sector stuck in the past?’ he concluded.[1]

[1] http://www.propertyreporter.co.uk/landlords/thousands-of-the-north-east%E2%80%99s-cheapest-rented-homes-to-be-lost-by-2020.html

Should more be done to improve renting?

Published On: January 12, 2017 at 9:56 am

Author: Em Morley

Categories: Landlord News

Tags: private rental sector,renters,renting,tenancies,tenancy agreements

An industry peer has stated that he feels more needs to be done to improve renting, as opposed to focusing solely on making properties more affordable for those looking to buy.

Peter Girling, chairman of Girlings Retirement Rentals, has said he wants to see longer private tenancies introduced, in order to give renters ‘greater security of tenure.’

Tenancies

Mr Girling said: ‘In our latest customer survey carried out in October 2016, we found that 85% of people wanted a tenancy of 12 months or more and 71% said that the security of assured tenancies we offer that enable residents to rent their property for as long as they choose, mattered most to them when making the decision to rent.’[1]

His comments come only days after Citizens Advice said that it will be heightening its campaign for longer tenancies, in an attempt to overhaul the sector.

According to figures, 39% of people living with their children in rented accommodation have a tenancy agreement of just six months or less, which creates uncertainty.

Should more be done to improve renting?

Longer agreements

In addition, 34% of private renters want their tenancy to be longer, with this number rising to nearly 40% for those with children. Families now account for nearly 40% of the private rented sector.

Concluding, Mr Girling noted: ‘Like Citizens Advice, we believe that should longer tenancies become more widely available for all sectors of the market – from young professionals, to families and older people – this may remove the uncertainty people face and give them more reassurance and greater security of tenure to plan for the future.’[1]

[1] https://www.landlordtoday.co.uk/breaking-news/2017/1/longer-term-tenancies-needed-to-enable-tenants-to-plan-for-the-future

Renting couples in London priced out of starting a home

Published On: November 30, 2016 at 12:49 pm

Author: Em Morley

Categories: Property News

Tags: Buy-to-Let,London,london house prices,renters,tenants in london

Concerning new research conducted by crowdfunding platform property partner Property Partner has revealed bad news for renters in London looking to start a family.

Data from the investigation shows that those wanting to start a family while renting in London must pay an average of 55.6% of their combined monthly wage to rent a typical three-bed property.

This means that in one year, a couple would have to pay £29,520 in rent, before they even consider childcare and other associated costs.

Monthly expenses

The research looks at average monthly costs for rental prices for one and two bed flats in London. It then looked at how much it would cost to progress to an average three-bed house in each of the capital’s 33 boroughs.

Using the total average net monthly of earnings of a couple in London, amounting to £4,417, the investigation looked at the proportion of salary required to make the step-up.

Worryingly, it indicates that tenants are facing a nigh-on impossible task to rent larger properties in London. In Kensington and Chelsea-the last affordable borough-an average one-bedroom flat would cost more than 59% of their combined income. This rises to 92% for a 2-bed flat and 168% for a three-bed house!

The table below shows that 10 least affordable boroughs in London:

Borough	Average rent for 1 bed flat	Rent as a % of combined salary for 1 bed flat	Average rent for 2 bed flat	Rent as a % of combined salary for 2 bed flat	Average rent for 3 bed house	Rent as a % of combined salary for 3 bed house
Kensington & Chelsea	£2,634	59.63%	£4,059	91.89%	£7,434	168.29%
Westminster	£2,602	58.90%	£3,864	87.47%	£5,978	135.33%
Camden	£1,814	41.06%	£2,738	61.98%	£5,383	121.86%
Tower Hamlets	£1,439	32.58%	£2,399	54.31%	£2,437	55.17%
Hammersmith & Fulham	£1,695	38.37%	£2,389	54.08%	£2,887	65.35%
Islington	£1,738	39.34%	£2,355	53.31%	£3,461	78.35%
Southwark	£1,589	35.97%	£2,194	49.67%	£2,608	59.04%
Hackney	£1,600	36.22%	£2,167	49.06%	£2,811	63.63%
Wandsworth	£1,480	33.50%	£2,152	48.72%	£2,591	58.65%
Lambeth	£1,485	33.62%	£2,099	47.52%	£2,325	52.63%
London average	£1,311	29.68%	£1,839	41.63%	£2,460	55.69

Renting couples in London priced out of starting a home

Shocking

Dan Gandesha, CEO of Property Partner, said: ‘Our research will come as a shock to tenants in the capital. With London house prices now so high, the ranks of Generation Rent are rapidly expanding. And, as demand for larger rental properties has grown, finding affordable accommodation is increasingly difficult.’[1]

Those unable to buy but hoping to start a family and move up the rental ladder may just be able to make ends meet in outer London boroughs. But the harsh reality is that they’ll be forced to bring up their children in a flat rather than a house. Although everyone knows Kensington and Chelsea, and Westminster, are totally out of reach on an average London salary, the surprise comes with Camden and Islington too.[1]

Sobering

Continuing, Mr Gandesha noted: ‘Another sobering thought is that our research assumes both partners are in full time employment and earning the average London salary. The figures do not take into account that if a couple have one or two children, the costs of childcare and household bills would make meeting the monthly rent unachievable.’[1]

‘It’s welcome news that the new Chancellor announced £1.4 billion for affordable homes in last week’s Autumn Statement, and that this is across a ‘wider range of housing’. This sounds like a sage commitment to increase the supply of affordable rental stock which will also help control rental prices.’[1]

Concluding, Gandesha said: ‘Traditional landlords though are suffering from recent tax changes including cuts in mortgage interest relief due to kick in next April. With increasing constraints on making a profit or even balancing the books, buy-to-let investors could be forced to either sell up or increase rents. We must ensure more rental homes are built to balance this out.’[1]

[1] http://www.propertyreporter.co.uk/property/renting-couples-priced-out-of-starting-a-family-in-london.html

Property industry calls for boost to Build to Rent

Published On: November 22, 2016 at 10:51 am

Author: Em Morley

Categories: Property News

Tags: build to rent,housing,investors,renters

The UK housing industry has called on Chancellor Philip Hammond to announce measures in tomorrow’s Autumn Statement that will give a boost to the Build to Rent sector.

Official figures released from the British Property Federation (BPF) reveal that during the last year, the number of Build to Rent units with planning permission, under construction or completed in Briton increased by more than 200% to hit 67,000 units.

Encouragement

The BPF notes that despite these figures being encouraging, the sector could be doing more to deliver homes. It feels that investors could have as much as £50bn to invest.

Interest in Build to Rent has come from far and wide, particularly from the United States where the scheme is already popular.

Research from Strutt & Parker, Stanhope and Network Homes indicates that the UK is on the verge of a large, commercially developed Build to Rent sector.

Growth

Stephanie McMahon, head of research at Strutt & Parker, observed: ‘The UK private rental market is going through a period of sustained growth, doubling in size to 5.4m from 2001 to 2014, a trend which only looks set to continue. Some 48% of those who responded to our Urban Renters survey had been renting the same property for at least the last two years, with 24% of tenants anticipating renting as a family in the future.’[1]

‘Our analysis illustrates that, although the majority may wish to own at some point, a burgeoning group of renters is making the choice for rental over ownership and enjoying the flexibility it provides. While the aspiration to own is still a key motivation for the majority of households, a preference for renting is starting to surface, with 9% of respondents in Greater London preferring to rent. We seem to be on the brink of becoming a rental nation,’ she added.[1]

Property industry calls for boost to Build to Rent

Lifestyle choice

In addition, analysis seems to show that there is growing evidence to suggest that renting is becoming more of a lifestyle choice, as opposed to a consequence of unaffordable housing.

The Private Rental Sector has increased by 82% in the last decade, becoming the second largest tenure group. Halifax’s 2015 Generation Rent survey indicated that between 2012 and 2015, for those aged between 20 and 45, homeownership dropped by 1%. Additionally, there was a 2% fall in first time buyers, while there was also a 3% increase in those who do not want to own a property.

[1] http://www.propertywire.com/news/europe/property-industry-uk-wants-tax-boost-build-rent-sector/

UK lenders urged to take rental payments into consideration

Published On: November 8, 2016 at 9:57 am

Author: Em Morley

Categories: Finance News

Tags: Experian,mortgage lenders,renters,tenants

Home lenders in Britain should take rental payments into account when making lending decisions, according to Experian.

Research from the firm has revealed that rental rates are rising significantly, whereas monthly mortgage payments are dropping.

Rental increases

During the third quarter of 2015, private tenants in Britain paid more for their rental accommodation in 57% of districts, in comparison to the same period in 2015.

At the same time, monthly mortgage payments expected to be paid by first time buyers has fallen in almost two-thirds of districts. This is on the assumption that their loan was for 90% of the property on a two-year fixed-rate mortgage deal over 25 years.

The amount of money tenants pay for their accommodation is either above or within 10% of the monthly payments that they could expect to pay for a mortgage in 27% of UK districts. Experian’s research suggests that if these renters were able to raise a deposit, a large percentage of the 4.3m private rental tenants in Britain would fine mortgage payments manageable in line with their current rental outgoings.

Exceeding

Data from the investigation shows that Scotland is home to six of the ten districts where rental rates are higher than mortgage payments by the biggest margin. In addition, Manchester, Salford and Hull also offer the most favourable conditions for tenants to get onto the property ladder.

Jonathan Westley of Experian, said: ‘What our research shows is that while a mortgage is a major ongoing commitment, renters often have a track record of making monthly payments which are often similar to what they might pay on a mortgage.’[1]

The Mortgage Market Review has already seen lenders subject to stringent checks assessing the suitability of candidates to keep up with their mortgage payments. However, Experian argues that by taking rental payments into consideration, lenders can get a better overall view of a borrower’s track record.

UK lenders urged to take rental payments into consideration

Responsibility

Mr Westley continued by saying: ‘Lenders take more into account than simply the amount you have raised for a deposit and what multiple of your earnings you are looking to borrow. The responsibility of ensuring mortgage payments are affordable for borrowers in the long term is one lenders take seriously.’[1]

‘They want to get a complete picture of a would be home owner’s financial commitments and see a strong track record of making regular payments. This helps lenders to understand how a borrower would manage mortgage payments now and in the future,’ he concluded.[1]

[1] http://www.propertywire.com/news/europe/home-lenders-urged-take-rental-payments-account/

‘Buy as you go’ plan to make renters homeowners

Published On: November 7, 2016 at 10:19 am

Author: Em Morley

Categories: Property News

Tags: buy as you go,renters,rents,tenants

Struggling families who are just about able to keep up with their rental costs will get the chance to purchase their property, after 25 years of paying rents.

This new proposal, entitled, ‘buy as you go’ is expected to be announced during a wider revamp of the housing market towards the end of this month. Buyers will not require to have paid a deposit or require a mortgage. Instead, they will build up equity in their homes over time.

Housing

This policy is due to be unveiled in the Chancellor’s Autumn Statement. It is believed that the National Housing Federation has informed ministers that housing associations will be able to purchase 335,000 homes in the next four years. This will include a substantial number on a ‘buy as you go tenure’, if additional funding is provided.

Proposed rents paid by people in ‘buy as you go’ would be roughly 90% of the market rate in the local region. The split between rent and equity payments would change over time, until the tenant is in a position to own outright.

Private renters normally pay around 47% of their take-home pay to their landlord. This means that a large number of would-be homeowners on a low wage have little or no chance of saving for a deposit.

A recent report has revealed that tenants in the capital face a 25% increase in rents over the next five years. The average interest in the rest of the country is due to be around 19%.

Priorities

Top Government sources said that Downing Street is determined to improve the chances of long-term renters owning their own property.

This proposal comes as Labour has released new figures which indicate that the fall in homeownership seen since 2010 has been worst for those in the north of England.

Data from the Government’s English Housing Survey indicates that between 2010 and 2015, the number of homeowners in the north of England has fallen by more than 130,000.

This problem has been particularly prominent in younger households in the North, with 90,000 fewer homeowners under 45 recorded in Yorkshire, and 100,000 in the North-West.

‘Buy as you go’ plan to make renters homeowners

Failures

Shadow housing secretary John Healey, noted: ‘Six years of failure on housing under the Tories have meant a big drop in homeownership for young people right across the country, with the fall sharpest in the north of England.’[1]

‘This is no longer just a problem for London and the south-east, but a national problem that requires new national leadership. Short-term gimmicks from Conservative ministers over the last six years were too often designed to give the Conservatives a poll boost rather than real support to first-time buyers on ordinary incomes. Young people are now paying a price for this failure,’ he added.[1]

Young people are now paying a price for this failure,’ he added.[1]

[1] https://www.theguardian.com/society/2016/nov/05/rising-rents-force-housing-policy-change-homes-tory