Posts with tag: rents

Serious rental arrears up by 13.8%

Published On: January 8, 2016 at 10:12 am

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A concerning new report has indicated that the numbers of tenants in significant rental arrears has risen significantly during the third quarter of the year.

The latest Tenant Arrears Tracker from estate agency pairing Your Move and Reeds Rains indicates that the number of tenants behind on rent has increased by 13.8% in the three-month period.

Behind

According to the report, there are now 84,200 tenants in excess of two months behind with rental payments, in comparison to 74,000 in the second quarter. Annually, this represents a rise of 13,2000 households, or 18.6% from the same period in 2014.

Historically however, the latest drop in arrears remains fairly mild and a long way below the 116,600 recorded in the second quarter of 2012. Worryingly, the figures for quarter three of 2015 represent the highest levels in more than two years.

Adrian Gill, director of estate agents Your Move and Reeds Rains, notes, ‘the chance of an individual tenant falling into serious arrears remains very low.’ He believes that, ‘in general, renting works for most people. Over the last decade the private rented sector has expanded at an unprecedented pace, providing homes for millions of households at the same time as absorbing the worst financial crisis in living memory.’[1]

‘In the current climate, optimism feels increasingly reasonable. Most households are beginning to earn more, the cost of living is stable and the chance of falling into unemployment is diminishing. For the majority of tenants, paying the rent is becoming easier rather than harder. But beneath this rising tide there are inevitably some households and individuals who are not yet feeling any new economic buoyancy. As others bid rents higher there will be a minority who are still struggling to keep up. Landlords and tenants have a mutual responsibility to be aware of this small but significant risk,’ Gill continued.[1]

Serious rental arrears up by 13.8%

Serious rental arrears up by 13.8%

Evictions

Higher levels of serious rent arrears are yet to be mirrored by rates of eviction. The Tenant Arrears Tracker shows that in the third quarter of 2015, there were 26,712 court order regarding the eviction of tenants. This was 4.3% less than in the second quarter of the year, where eviction orders totalled 27,909.

In addition, there were 7.8% fewer evictions than at the same time in 2014, where the total stood at 28,959.

Gill continued by saying, ‘landlords and buy-to-let lending have been targeted from a variety of angles in 2015-under a harsh political spotlight, subject to new taxes and freshly scrutinised by regulators. There could be a real debate about the role of landlords and indeed the urgent need for more investment to keep up for demand for homes to rent. However this should be done constructively-and any worriers about the financial health of landlords should consider the reality of buy-to-let mortgage arrears at record lows.’[1]

‘In the context of resurgent tenant arrears, landlords are the buffer delaying a parallel peak in evictions. And healthy landlord finances make that tolerant approach more likely. So while penalising landlords may win easy political points, making investment in new homes to let harder could be counterproductive-especially in the face of new challenges,’ he concluded.[1]

[1] http://www.propertyreporter.co.uk/landlords/serious-rent-arrears-up-138.html

 

Nearly half of BTL landlords looking to raise rents in 2016

Published On: December 31, 2015 at 10:30 am

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Categories: Landlord News

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As 2015 comes to a close, a new survey suggests that 2016 could be an expensive year for tenants.

Data from a report conducted by SpareRoom.co.uk found that 45% of buy-to-let landlords are looking to increase rents in the coming year, with 18% planning on raising them by more than 3%.

Legislations

The most common reason landlords questioned gave for stating their plans to raise rents were the upcoming changes in legislation, with 38% giving this as their catalyst. This suggests that future cuts to mortgage interest tax relief, stamp duty alterations and the national Right to Rent roll out could be felt by tenants and landlords alike.

Additional reasons for rent hikes were local rent increases (23%), expensive property repairs (6%) and greater mortgage repayments (4%).

The table below indicates how landlords plan to change rents in the coming year:

Landlords: What do you plan to do with rents in 2016? Response (%)
Raise by more than 3% 18%
Raise by less than 3% 27%
Keep the same 52%
Lower by less than 3% 1%
Lower by more than 3% 2%

[1]

Nearly half of BTL landlords looking to raise rents in 2016

Nearly half of BTL landlords looking to raise rents in 2016

Reality

A harsh reality is that average rents per room could rise by more than 3% in 2016. During this year, the typical UK rent for a double room in shared accommodation increased by 8.6% to stand at £593, according to SpareRoom’s analysis.

In the capital, average room rents increased by 6.3% to hit £721 per month.

‘The roll out of Right to Rent legislation, removal of mortgage interest tax relief and changes to the wear and tear tax break from 2017, on top of stamp duty changes coming in 2019, means buy to let looks like far more of a risk than it did at the start of the year,’ noted Matt Hutchinson, director of SpareRoom.co.uk. [1]

‘The worry is that tenants will bear the brunt of these changes. And if renters end up being the ones to shoulder the burden of legislative change, something has gone very wrong. The private rental sector is already under immense pressure,’ he concluded.[1]

[1] http://www.propertyreporter.co.uk/landlords/45-of-landlords-say-they-will-raise-rents-next-year.html

ARLA believes rents will rise in 2016

Published On: December 29, 2015 at 1:09 pm

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The Association of Residential Letting Agents (ARLA) has issued a warning that rents will rise early in the New Year, with the vast number of rule changes affecting landlords the catalyst.

David Cox, MD of ARLA, said that the vast changes in legislation coming into force next year will see increased compliance costs for landlords and push rents up as a result.

Re-think

Cox said that ARLA wishes the Government to, ‘re-think its proposals around reducing mortgage interest relief, scrapping the wear and tear allowance and hiking up stamp duty by 3% on buy-to-let properties.’ He says that, ‘whilst these remain, the Government’s goal of increasing the percentage of people in home ownership is getting further out of reach.’[1]

‘The issue of supply and demand in the rental market will be increasingly pushed to its limit with rising demand outstripping supply,’ he continued.[1]

ARLA believes rents will rise in 2016

ARLA believes rents will rise in 2016

Tightening

However, ARLA believes that it is good news that regulation in the industry will be getting tighter in the coming year. The trade body also said that it is confident that the provisions outlined within the Housing and Planning Bill will give courts more powers in combating rogue landlords and letting agents.

Mr Cox went on to say, ‘the Right to Rent checks introduced in the Immigration Act 2014 will be rolled out nationally from 1 February 2016 following a successful pilot scheme in the West Midlands. However, we worry that the goodwill established towards the scheme may be tested by the increase in volume, disenfranchising landlords from the process.’[1]

[1] https://www.landlordtoday.co.uk/breaking-news/2015/12/arla-rents-will-increase-in-2016

 

 

Rents slowing across Britain

Published On: December 19, 2015 at 10:20 am

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New figures indicate that rents are seemingly slowing across Britain.

Data from the Homelet Rental Index shows that rents on new tenancies during the last three months dropped in the majority of regions. In addition, nine out of ten landlords said that they were not looking to raise rents on existing tenancies in the first half of 2016.

Steady

Rents for new tenancies either remained steady or slipped slightly in 10 out of the 12 UK regions in the three months to November, in comparison to October.

Throughout England but excluding London, the average rent for a tenancy signed in the previous three months was £743 per month, 0.7% down on the last three-month period. In Greater London, the average rent was found to be £1,544, down by 1%.

Rents slowing across Britain

Rents slowing across Britain

Furthermore, the Index reveals that just two regions saw increases for rents on new tenancies. In Yorkshire and Humberside, rents on new tenancies were 0.8% greater than in the previous three months, averaging £626 per month. In the East Midlands, rents were up by 1.2% at £635 per month.

Just 34% of landlords plan to increase rents in the coming year.

Relationships

Martin Totty, Barbon Insurance Group’s chief executive officer, said, ‘the research reveals the vast majority of landlords enjoy strong relationships with their tenants and are keen to keep them. Just 4% said they were unhappy with their current tenants, while 18% said high tenant turnover was the most stressful part of being a landlord, more than cited on any other single issue.’[1]

‘Being a landlord is a long term investment and attrition of tenants is not something landlords desire; our own clients tell us they would rather retain a good tenant over the longer period than seek additional income,’ he added.[1]

[1] https://www.landlordtoday.co.uk/breaking-news/2015/12/rents-slowing-across-uk-says-homelet

 

 

 

Rental market sees start of seasonal slowdown

Published On: December 15, 2015 at 11:48 am

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Categories: Landlord News

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A new investigation by Landbay suggests that the UK rental market entered a seasonal slowdown over the last month. Research from the report shows that rents fell by 0.4% in November to stand at £1,290.

There was no festive cheer for landlords in London, where rents were down by 0.6%, bringing down the overall UK average. Typically, the rental market in the capital is sensitive to fluctuating demand from tenants and often sees this type of seasonal slowdown as demand from the summer relaxes.

Yearly rises

However, rents did continue to rise on a year-on-year basis. UK rents were 2.9% greater than in November last year, with wages also up by 3.0%.

These rent increases were driven by one-bed homes, popular with young professionals. Rents in these properties were up by 4% year-on-year, while three-bed properties saw a 3.6% increase.

Rents have seen a upward trend since January 2013 and have climbed by 7% from this period. Wage growth has risen by 4.8% over the same timeframe. One-bedroom rents have increased by 8.6%.

The Southeast was revealed to be the area with the quickest rental growth over the last year.

Rental market sees start of seasonal slowdown

Rental market sees start of seasonal slowdown

Slowdown

John Goodall, CEO of Landbay, said that, ‘a seasonal Christmas lull has finally managed to put the brakes on the speedy London rental market. But this is a case of notching down a gear rather than an emergency stop, Rents continue their upward trajectory, albeit at a slightly less frenetic pace.’ He observes that,’ London’s rental market is a very sensitive to changes in supply and demand. The November dip is likely to reflect softening tenant demand as new hiring slows in the run-up to Christmas and fewer people move to the capital for work.’[1]

‘On an annual basis rental inflation is tracking wage growth quite closely,’ he continued. ‘Scotland was only part of the UK to see rental growth below 2%. The big picture is that we are in the midst of a housing crisis and that wages are rising-both these facts mean that rents are more likely than not to continue to climb next year. With house prices rising at the same time it is a little wonder that there is such a strong appetite for investments that are secured against British homes.’[1]

[1] http://www.propertyreporter.co.uk/landlords/rental-market-slows-as-uk-enters-festive-period.html

Rent collector jailed for running over tenant

Published On: November 25, 2015 at 2:30 pm

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A son of two landlords has been put behind bars for 10 years, after he deliberately ran over a tenant following a heated dispute over rent.

Mr Shahid Hussain drove his vehicle at Muhammed Pervez outside the rented accommodation in Bradford in July 2014. As a result, the victim was left with injuries to his jaw, cheekbone, eye socket, teeth and nose. In addition, he was left with severe bruising to his hands, back, legs and torso.

Guilty

As a result of his attack, Mr Hussain was found guilty of causing grievous bodily harm with intent. In addition, Hussain and brother-in-law, Mohammed Khurshid were found guilty of two charges of committing an act intending to pervert the course of public justice after the pair threatened and abused witnesses at the scene of the crime.

The court heard that Mr Pervez was involved in a confrontation with Hussain, after he had gone to collect rent on behalf of his parents, the landlords of the property. The Bradford Telegraph & Argus reports that Mr Hussain drove his car at Mr Pervez before reversing the vehicle back over him.

Rent collector jailed for running over tenant

Rent collector jailed for running over tenant

Sickening

Even more sickening was the fact that Mr Hussain had two young children inside the vehicle at the time of the attack. After Mr Pervez had been hit, Mr Khurshid is then alleged to have arrived at the scene driving a different car.

Witnesses reported that Khurshid shouted, ‘are you happy now? This is what happens when you don’t pay your rent,’ at the stricken victim. Not content with these actions, the two men then turned on witnesses, saying, ‘you had better not make this look bad for us. We will track you down.’[1]

[1] https://www.lettingagenttoday.co.uk/breaking-news/2015/11/10-years-in-jail-for-rent-collector-who-deliberately-drove-over-tenant