Zoopla says rents rising at fastest rate for three years, but still affordable
Zoopla reports that rents are rising at their fastest rate for three years.
The report said that the annual rate of UK rental growth for new lets is now 2%, up from 1.3% a year ago. It blames tightening supply as levels of new investment decline, a result of tax and policy changes.
Despite the rent rises, it says the growth is half the level of earnings growth, which the ONS puts at 4% over the last three years, and that actual rental affordability is trending downwards.
The report puts the average rent at £876, up from £859 a year ago, with average time on the market at only 17 days.
The report also says that there are more home moves in the UK rental market than in the sales sector – 1.2m compared with around 1m. It says private renters move on average every four years, while home owners move every 20.
Landlord disincentives encouraging people to sell
According to research by a leading estate agent, only 7% of homes that came on to the rental market this year were listed for sale in the previous six months.
This indicates a decrease in the number of ‘accidental landlords’ - people who decided to rent their property after failing to find a suitable buyer.
Last year, 8.6% of homes were previously advertised for sale before they went on the rental market.
Every region recorded a fall in the proportion of homes let by accidental landlords, with London seeing the biggest drop – although London is still the accidental landlord capital of the country.
So far this year 10.1% of homes listed to rent in London had been up for sale during the previous six months, down from a peak of 12.6% in 2018.
Now, people who might otherwise be considering renting their home out before selling have a strong incentive to beat the taxman – and have only a few months left in which to do it.
Changes introduced in last year’s Budget and set to be implemented next April, will increase the amount of Capital Gains Tax that landlords who have previously lived in the property will have to pay if they sell. This will come on top of the 3% Stamp Duty surcharge that home owners already have to pay if they buy an additional property.
Landlords - help stop abolition of Section 21 - last chance!
The government's consultation on their proposed abolition of Section 21 closes tomorrow, 12th October
This is your last chance to let the government know what YOU think about the proposed end to the Section 21 No Fault Eviction process.
If this no fault process is closed off then the only means of evicting tenants will be via the Section 8 process, which until now has been used to cover non-payment of rent, damage to property etc. It can be an even longer process than Section 21.
Image below links to Government consultation:
Landlords still await announcement on scheduling of new electrical safety checks
The mandatory electrical safety checks announced by the government are yet to receive an actual start date.
Esther McVey, The Housing Minister said “In July 2018, the Government committed to introducing mandatory five-yearly electrical safety inspections for electrical installations in privately rented properties. This will be achieved through secondary legislation, subject to parliamentary time. In the meantime, it remains best practice for landlords to ensure that the electrics in their properties are safe.”
David Smith, policy director for the Residential Landlords Association, told EYE: “The first duty of any landlord is to ensure the properties they rent out are safe.
David Cox, chief executive of ARLA Propertymark, said: “We agree that it is best practice for landlords to ensure that electrical safety checks are carried out regularly in their properties and to get into the habit of doing so before legislation comes in.”
Robert Jervis-Gibbons, public affairs manager at campaign group Electrical Safety First, said: “Electrical Safety First is extremely concerned that the Government has not yet provided a timescale to implement mandatory electrical safety checks in the private rented sector, particularly since it announced its intention of doing so last year.
This has become a critical issue that needs to be addressed, particularly in response to the tragic fires at Grenfell and Lakenal House, which appear to have been caused by electrical products.”
Have YOUR say on the removal of Section 21 now!
New research, commissioned by the National Landlords Association (NLA) and carried out by Capital Economics (CE) has predicted that the private rented sector in England, which now accounts for around 20% of all households, would be devastated by a ban on section 21.
CE’s report also forecasts a 59% reduction in housing for those tenants claiming housing benefit (HB) now incorporated into Universal Credit (UC), and rents potentially could increase by 13 per cent.
• 960,000 fewer dwellings available to renters
• 770,000 fewer dwellings available to tenants on housing benefit or Universal Credit
• 600,000 dwellings could see rent increases.
However the report says there are possible solutions that could avoid this:
Making Section 8 cases, faster and cheaper, could off-set the effects of removing of Section 21 for many landlords.
However, CE thinks the removal of the “no-fault” eviction process, and replacing it with an improved but adversarial Section 8 process, would still see a likely drop of between 180,000-390,000 available homes. Between 130,000-300,000 fewer homes would be available to those on housing benefit, and rent increases are likely from between 110,000-240,000 properties.
Click here to tell this so-called Tory government what YOU think about the abolition of Section 21. But you must respond by 12th October.
HMO Landlord hit with £40,000 fine
Julie Churchill, an HMO landlord has been found guilty and fined £40,000 for letting out a dangerous and unlicensed House in Multiple Occupation.
It is the second largest fine levied against a landlord obtained by City of Lincoln Council.
Julie Churchill’s property was deemed dangerous by the magistrates for failing to comply with a number of safety breaches under the Housing Act 2004.
The house had no fire doors to the bedrooms, ground floor lounge or kitchen, no working fire alarms on the ground floor, and one of the bedroom doors had a large gap to the top which would allow smoke to pass in the event of a fire.
Three of the bedroom doors could be locked by a padlock which if in use would not allow for a quick exit.
The court heard that if a fire had erupted in this building, these inadequate fire warning systems and lack of fire containment measures would have put the tenants at extreme risk.
The stairs were painted gloss black and had no slip resistance in the event of a tenant falling, and the kitchen didn’t have adequate facilities for the seven tenants living in the property. One of the occupied bedrooms was below the legal minimum size for an adult.
It was heard in court that the repair of these defects would have cost Churchill as little as £6,000.
When the four-bedroom property was inspected by police and housing officers under a magistrates’ court warrant in January, the occupants were found to be seven unrelated eastern European and sub-Saharan immigrants in four bedrooms.
The tenants spoke little English and were unaware of their rights, receiving no tenancy agreement, rent book or rent receipt during their tenancy. Only two of the seven tenants knew what the landlord’s name was.
Churchill was taking up to £1,480 per month in rent, which at that rate would give her a massive income of approximately £35,520 over the two years she had owned the property.
It is evil trash landlords like this who, despite being a tiny minority, give all other landlords a bad name.
Prime Central London property prices no longer falling
Falls in the price of prime central London may have bottomed out – but there is still no bounce in sight, a leading agent has said.
Its head of residential research said: “This broad price correction across prime central London is comparable with falls seen after the global financial crisis and in the downturns of the early 80s and early 90s, suggesting the market is now close to a full re-pricing.”
While small and very expensive, the prime central London sector is regarded by some as an irrelevance and by others as comparable to the canary in the coal mine as being predictive for the rest of the UK.The falls are, however, good for those buying in US dollars, who now have an effective price discount of 42% thanks both to the reductions and the value of sterling.
Boris Johnson likened to a dishonest estate agent shock!
The Supreme Court was told that Prime minister Boris Johnson acted like a “dishonest estate agent” and lied to the Queen.
The accusation, which was in my opinion unfair to estate agents, was delivered yesterday in written submissions to the Supreme Court by former prime minister Sir John Major claiming that Johnson had not told the truth.
Major said that Johnson’s behaviour was similar to that of an agent in breach of his fiduciary care when he had not told a vendor that the buyer planned to ‘flip’ the property for a quick profit.
He said that the duties of the prime minister to the Queen could hardly be less than those of an agent to their client.
Major is supporting Gina Miller, a prominent Remainer activist in her attempt to get the proroguing of Parliament ruled unlawful.
In written evidence, Major cited a court case where an estate agent was found to be in breach of his fiduciary care after he lied that the buyer of a new home would live there.
In fact the agent knew all along that the buyer not would not live there and that the property would be sold again for a profit as soon as the sale completed.
Major argued: “It could hardly be suggested that the duties of the prime minister to the monarch are less than those of an estate agent to a home owner.
“Accordingly, if the court is satisfied that the prime minister’s decision was materially influenced by something other than the stated justification, that decision must be unlawful.”
There are two main rules under fiduciary duty – no conflict, and no profit.
In fact, I think very many agents feel insulted that they should be considered as low and untrustworthy as Boris Johnson!
End-of-tenancy cleaning service introduces body cameras
An interesting new innovation has been introduced to help with landlord-tenant disputes that often occur at the end of tenancies. An end-of-tenancy cleaning service available right across the UK has introduced body-worn cameras for all its teams.
It has done so after deposit schemes say that most disputes are to do with cleanliness, and in the wake of the tenancy fee ban where firms do not want staff tied up in costly and time-consuming emails and calls where there are arguments.
Its cleaners all wear body cameras from the moment they cross the threshold, and can film up to eight hours continuously.
The cameras pinpoint any scratches, scuffs or stains before starting to clean, and show the results in detail.
At the end of the clean, the video footage is then uploaded to the company’s servers and kept for five years. This then allows agents, landlords and tenants who have used the service to have a clear record of what work was needed and carried out.
Letting agency fined for fly-tipping
A Peterborough agency and its sole director Asif Hasham were prosecuted by Fenland District Council for five counts of fly-tipping.
Peterborough magistrates heard how Hasham illegally dumped large amounts of waste during late 2016 and early 2017.
The waste originated from a number of his rental properties and included household items such as furniture, clothing and general rubbish. Materials were also found that were used to grow cannabis.
Streetscene enforcement officers from Fenland District Council undertook detailed investigations into the company’s activities.
At formal interview, Hasham was unable to provide evidence of correct disposal of waste for nine homes managed by Cozy Properties, or for waste found belonging to his personal address and the former address of his wife.
On August 19, the District Judge found Hasham and Cozy Properties guilty of all five offences under the Environmental Protection Act 1990.
In sentencing this month, Hasham was fined a total of £7,500. Cozy Properties was ordered to pay the council’s full costs of £15,446 and £1,000 compensation for the clean-up costs.
Riskier mortgages make a return
According to the Bank of England, high loan-to-value (LTV) mortgage lending has hit an 11-year peak.
Bank of England data shows that the share of mortgages advanced in the second quarter of 2019 with LTVs exceeding 75% was 39.7%, the highest since 2008 and we all know what happened next.
The share of mortgages with LTVs exceeding 90% was 5.5%. This is the highest since the fourth quarter of 2008.
At the same time, the proportion of total mortgage balances in arrears has fallen to its lowest level in 12 years, falling from 0.99% to 0.97% which is the lowest since the series began in 2007.
Commenting on the data, Mark Pilling, managing director at Spicerhaart Corporate Sales, said: “It is obviously great news that arrears are low and still falling, but that does not necessarily mean that people are not experiencing financial difficulties.
“This suggests that some borrowers may be stretching themselves too thin, and if rates do rise, they may start to struggle with their repayments.”
Protesters in Liverpool try to stop landlords selling property!
Now it seems that some people don’t even think landlords have the right to sell their own properties! Demonstrators at Liverpool Town Hall disrupted a property auction to protest against the sale of rental properties occupied by families with children.
Acorn, a renters’ union staged the demonstration outside Liverpool Town Hall, where well-known agents and auctioneers Venmores were holding the sale.
The two had been advertisedproperties as ideal for those looking to turn them into student house shares, increasing the amount of rent that could be brought in.
While some Acorn members protested outside the auction sale, others went to disrupt the sale.
An Acorn spokesperson said: “When the time came for our members’ homes to be sold, our members stood up and made clear that the properties being sold were family homes.
“Our members in the auction room made so much commotion that the sale of one of the homes had to be abandoned.”
The other home was sold, to a telephone bidder, and Acorn said it would monitor the situation and object to any attempts to evict the tenant.
A Liverpool councillor, Nick Small, was among the protesters.
The auctioneers said “These vendors have a legal right to sell their property.”
Connolly said that tenants have rights and are protected by law, but that if Cllr Small “deems these insufficient then his protest should be brought to Westminster, not against an employed auctioneer merely trying to process the sale and especially not against an owner of a property who is just trying to sell for personal reasons and has done absolutely nothing wrong”.
Idiot Marxist wants to force landlods to sell at a discount
John McDonnell, the shadow Chancellor of the Exchequer (seriously) has revived a Jeremy Corbyn idea from 2015 of forcing landlords to sell their properties at a discount to their tenants. This is not a spoof story!
This giant brain has said that the special price would be a 'reasonable' price - not the 'market' price. He goes on to say that this is because of the problem of 'many' landlords not properly maintaining their properties
It is in fact a bizarre parody of Mrs Thatcher's Right To Buy policy of the 1980s
What this would do to the whole house market is unfathomable but it wouldn't be good. Many people might be forgiven that McDonnell is actually a Tory mole working from within to destroy the chances of another Labour government no matter what a mess the Tories make of the country.
But maybe he is just another idiot Marxist.
Brexit devaluation encouraging overseas property buyers to London
A London agent has revealed that his firm is currently handling a single transaction involving 75 units worth over £40m.
Lee Pendleton, founder and director of James Pendleton which has nine offices in the south-west of the capital, said that demand from foreign investors and funds is “rampant”.
He says he thinks that overseas buyers are detecting the bottom of the London Property Market and, further encouraged by the huge Brexit devaluation in the pound are piling in.
Property values in the capital have been falling since 2014, but Lee Pendleton says that demand from foreign investors buying in bulk is stronger than ever.
He said: “Anyone who thinks foreign investors and funds have beat a retreat from London are mistaken. The only people who have backed away are UK investors.”