Posts with tag: renting in london

Boris Johnson’s Landlord Scheme is Unsuccessful

Published On: July 21, 2015 at 8:57 am

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A landlord scheme introduced by the Mayor of London, Boris Johnson, aimed at improving the private rental sector in the capital has been generally unsuccessful.

It was revealed that just 0.2% of advertisements for rental properties mentioned that the landlord or letting agent had signed up to the scheme.

Johnson launched the London Rental Standard in May last year. It is the first citywide scheme to accredit good landlords and letting agents.

He said that he hoped to “improve the experience of everyone involved, from landlord to tenant, with a clear set of good practice rules.”1

The scheme aimed to accredit 100,000 landlords and agents by 2016.

The news release for the launch read: “In time, the London Rental Standard will become an instantly recognisable feature of London’s lettings industry, helping Londoners to pick between the huge array of landlords and agents on offer.”1 

Boris Johnson's Landlord Scheme is Unsuccessful

Boris Johnson’s Landlord Scheme is Unsuccessful

However, over a year later, the official website indicates that by mid-June, just 14,452 landlords and 339 letting and management agents had signed up, significantly below the 2016 target.

A study by the Green Party claimed that the Rental Standard has failed to appeal to letting agents or tenants, despite a marketing budget of £250,000.

On Zoopla, just 114 advertisements mentioned the scheme, 0.2% of the 62,521 total listings of rental homes in July. Most were listings posted by one agent, Prime Estate Agents in Whitechapel, which included the Rental Standard in a list of schemes it is accredited by.

Darren Johnson, Green London Assembly member, comments: “Voluntary accreditation schemes only work if tenants know how to look out for the badge, creating demand that landlords might respond to. Even the agents who are members of the scheme don’t publicise it and don’t let tenants search for accredited landlords.

“The scheme is a flop and is no substitute for adequate regulations.”1

He believes that the answer is compulsory licensing for all landlords, saying that more secure tenancies and rent controls are needed to protect tenants.

Generation Rent’s Dan Wilson Craw says there are numerous issues with the Rental Standard: “It is basic, basic stuff. If a landlord isn’t already doing most of these things, they’re probably breaking the law.

“The scheme is a long way off critical mass and having currency among tenants. Even if it achieved that, there’s nothing forcing landlords who don’t comply to get better and with demand so high, those landlords will always find tenants.”1

Higher profile agents, such as Foxtons and Winkworth, have blogged about joining the scheme in the past, but the Green Party has noted that it is not mentioned in their advertisements for rental properties.

A spokesperson for Foxtons says: “As one of the initial agents to sign up to the London Rental Standard, Foxtons fully supports any initiative that helps to raise standards within the private rental sector and with the backing of the Mayor of London, it’s gained great momentum.”1

Deputy Mayor for Housing, Land and Property, Richard Blakeway, notes that London was one of the first cities to set professional standards for its rental sector.

“Over 130,000 properties are now managed under the London Rental Standard, with a rapid growth in the number of accredited agents who manage the bulk of rental homes,” he says.

“This ambitious project is one of a range of policies pioneered by the Mayor to support 2m Londoners renting, including the creation of a long-term, institutionally backed private rented market and rent to buy to help people convert rent into equity.”1

1 http://www.theguardian.com/money/2015/jul/20/boris-johnson-good-landlord-scheme-flop

Rent Rises Outside London are Surpassing the Capital

Published On: July 16, 2015 at 8:50 am

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Asking rents outside London rose by 2.7% in the second quarter (Q2) of 2015, compared to the capital’s 2% growth, revealed Rightmove.

The South East achieved the highest increase of 4.1%, and rents are up in all regions except Wales (-4.1%) and the North East (-0.5%).

Rightmove data found that in the last year, tenant demand for private rental property has reached a record high around the country, with a 52% rise in email enquiries. The East of England has experienced the greatest increase of 64%.

Grays and Southend-on-Sea in Essex are tenant demand hotspots.

Rent Rises Outside London are Surpassing the Capital

Rent Rises Outside London are Surpassing the Capital

Tenants seeking better value outside the capital have driven asking rents higher in the South East and the South West, where rents have risen by 3% in Q2.

Head of Lettings at Rightmove, Sam Mitchell, says: “Rents have grown this quarter in nearly all regions of England and Wales, fuelled by demand outstripping supply in many of the sought-after areas, especially in the East of England and the more affordable areas of London.

“The smaller rise in the capital is likely to do with the fact that costs in many areas are nearing many people’s affordability ceiling.”

The average asking rent in London, £2,052 per month, is now almost double that in the second most expensive region, the South East, at £1,078. It is also around four times more expensive than the cheapest region, the North East, at £534.

Rightmove reveals that two of the highest growth areas are Bushey, Hertfordshire, which has seen prices rise by 21% in the past year and Stevenage at 13%. Deal in Kent has also witnessed prices rising by 13% over the last 12 months.

Within the capital, rental prices have grown the most in Battersea, fuelled by the redevelopment of the area, up by 14% in the past year. North West London areas, Wembley and Brondesbury, follow at 11%.

London’s demand hotspots all have average asking rents much lower than the capital’s average. The top three are Bexleyheath at £1,048, Sidcup at £1,073 and Carshalton at £1,095.

Mitchell continues: “Tenants staying longer in a property is contributing to the lack of supply in some areas and agents tell us that in the most in-demand areas, good properties on at the right price are being snapped up within a few days.

“In the fastest moving areas, prospective tenants are sending email enquiries to agents within a few minutes of the property being marketed on Rightmove, showing that people need to get in quick and have all of their references ready to have the chance of getting the property they want.

“The substantial rent rise this quarter will offer some encouragement for the buy-to-let sector, following the summer Budget’s announcement of a clampdown on tax relief.”1

Head of London Lettings at Strutt & Parker, Zoe Rose, expands: “Rents are rising at a more subdued rate in the capital than the rest of the country for a number of reasons. In prime central London, there is more stock because tenants are very much in the driving seat.

“As people are also being accustomed to renting for longer periods, a lot of tenants are signing up for two or three years from the outset with rental increases of 3-5% per year written into their contracts.

“This keeps rental rises at a more sensible level, as landlords are being asked to commit to longer term tenancies.

“Over the past few years, it’s been an intense market in the centre of London, with rents in zone 1 and 2 gently creeping up, prompting tenants to look further afield than traditional areas like Clapham, Fulham and Battersea, to get good value.”1 

1 http://www.4-traders.com/RIGHTMOVE-PLC-9590217/news/Rightmove–Rent-rise-surge-as-rest-of-country-outstrips-London-ndash-high-tenant-demand-growing-20691366/

Tenant Says Letting Agent Adverts are Misleading

Published On: July 14, 2015 at 10:57 am

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One tenant says that letting agent advertisements are often misleading, especially in London. She has found that three-bedroom flats shown on Rightmove and Zoopla only have two bedrooms.

Tenant Says Letting Agent Adverts are Misleading

Tenant Says Letting Agent Adverts are Misleading

To form the third bedroom, the living room will have been converted.

Katie Morley says that this is not acceptable. She has been searching for somewhere to live with two flatmates.

She explains: “Most adults paying a big chunk of their salary on rent want a proper home – not one room to eat, sleep and socialise in. For that reason, communal living space is essential, not optional.”

She has discovered that two-bedroom flats are often unaffordable for two sharers.

Morley calculated that if three people moved into a two-bed flat, converting the living room into a bedroom, they would pay £733 per month, or £8,796 a year, each.

However, if two people moved in, they would pay £1,110.50 a month, or £13,326 per year, each. To afford this, they would both need to earn an annual salary of £60,000.

Morley believes that “thousands” of homes in London are being advertised misleadingly; by saying they have three bedrooms when they have two, or four when they have three.

This is normal, she has found, and is being pushed by landlords and letting agents.

She says: “In this day and age it should be illegal to misleadingly advertise rental properties and encourage tenants paying market rent to go without a living room or a kitchen.

“Sneaky practices as demonstrated by these examples are masking London’s escalating housing crisis. When young professionals with good jobs are being cattle herded into box rooms in run-down hovels with no communal living space, there is something very wrong with the system.

“A clear minimum standard for renting must be enforced without delay.”1

1 http://www.propertyindustryeye.com/tenant-says-letting-agents-adverts-are-misleading/

The House that Costs £1,000 a Day in Rent

Published On: July 7, 2015 at 3:39 pm

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A mansion on one of London’s most exclusive roads has been put on the rental market for an enormous £1,000 per day.

The 6,300 square foot house in St John’s Wood, North West London, has six bedrooms. The main reception is larger than the average family home.

Described as an “ambassadorial”1 property, the Victorian home has fine marble and parquet flooring over its four floors.

The master bedroom suite looks out over the back garden, and has its own drawing room, two dressing rooms and an en-suite bathroom.

The property has four bathrooms and four reception rooms, as well as a large kitchen and garden.

Situated on Avenue Road, the property is partly furnished with antique furniture, opulent chandeliers and paintings.

Rescorp Residential has put it on the rental market for £6,950 per week, equating to £361,000 a year.

1 http://www.dailymail.co.uk/news/article-3100935/The-house-earns-1-000-DAY-Six-bedroomed-home-one-exclusive-roads-London-available-rent-7-000pw.html

Central London Prices to Grow by 18% in Next Five Years

Published On: June 10, 2015 at 3:39 pm

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Property prices in central London are expected to increase by 18% in the next five years and rents will rise by 19.5%, as the market picks up after the general election, a report suggests.

The recent analysis claims that the uncertainty surrounding the election last month caused a stagnant housing market in London, with the rate of house price growth at under 4%, compared with the 9.6% rise seen in 2014.

The capital was preparing to be most affected by the proposed rent caps and mansion tax. However, neither of these pledges will be followed through after the Conservatives surprisingly won a majority.

Central London Prices to Grow by 18% in Next Five Years

Central London Prices to Grow by 18% in Next Five Years

However, the research from international real estate consultant, Cluttons, indicates that the damage to both domestic and international buyers’ confidence was seen in a drop in demand during the first quarter (Q1) of 2015. Vendors were withdrawing properties from the market and buyers were waiting to see the outcome.

Cluttons’ International Research and Business Development Manager, Faisal Durrani, says: “There is no doubt that the results of the general election have helped to re-inject confidence into the market that had receded early on this year.

“The outlook for the London housing market has stabilised, while buyers and vendors have returned to the market following a conspicuous absence of activity. Our outlook for the rest of the year is for increased stability in the market and a return to a more normal state of activity.”

The report also revealed that, despite the Mortgage Market Review (MMR) causing a 16% annual fall in mortgages in Greater London to March 2015, affordability seems to be improving slightly, with the average home loan size declining to 3.86 times annual income in Q1.

However, internationally there are still risks. Durrani explains: “International risks, such as the threat of another Scottish referendum, a disorderly Greek exit from the European Union and a potential Brexit, mean that the market has moved from a situation of having several unknown unknowns to being left with a handful of known unknowns. A Brexit remains the biggest threat as the impact on the economy is the biggest unknown at this stage.”

Cluttons predicts slight central London house price growth of between 2-3% in 2015, before rising to almost 5% in 2016 and steadying at around 4% per year between 2017-19. Cluttons believes this level of growth will deliver cumulative capital value appreciation of around 18% in the next five years.

Expectations for the prime central London rental market are stable, at 4% per year for the next five years.

Cluttons says that affordability and the desire to buy a home are still key challenges for the capital’s renters and although supply is increasing, the strong rate of job creation in London will complement this.

Durrani comments: “The more subdued growth forecast by a number of factors, but the propensity of tenants to show less geographic loyalty now means that households are not put off by the idea of moving out of the prime core in search of lower rents.

“The key driver of course for this behaviour is the desire to purchase. The breach of affordability thresholds now means that the rippling out of buyer activity from the prime core markets has meant that Greater London boroughs such as Newham, Lewisham and Enfield have all emerged as the capital’s three best performing markets over the last 12 months, according to data from the Land Registry.”1 

1 http://www.propertywire.com/news/europe/central-london-property-market-2015060910608.html

 

Letting Agency Now London’s Largest Independent

Published On: June 10, 2015 at 12:32 pm

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Letting Agency Now London's Largest Independent

Letting Agency Now London’s Largest Independent

A letting agency in London is claiming to be the capital’s largest independent letting agent after opening its 13th office.

Benham and Reeves recently opened the new branch, which is in News International’s former headquarters in Wapping.

The company says it is planning further expansion with a branch in Surrey Quays due to open in September, and offices in Fulham and Kew expected later in the year.

The firm’s Lettings Director, Marc von Grundherr, says that although some competitors have been forced to close offices, Benham and Reeves are valuing “face-to-face contact and a handshake” more than ever.

He continues: “These new offices will allow us to ensure customer service is always at the forefront. Many of these new offices are also located onsite at large St. George developments where tenant demand is high. By being onsite, we will be better able to respond to tenants’ needs quickly.”1 

1 http://www.lettingagenttoday.co.uk/breaking-news/2015/6/agency-becomes-london’s-‘largest-independent’-with-new-office