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Major portals advise against 'No Benefits Tenants' notices

Both Rightmove and Zoopla have issued guidance that the phrase ‘no benefits tenants’ should not be used in blanket advertisements by agents.

Zoopla posted advice to agents yesterday which said: “You may be aware of a recent campaign from the National Housing Federation and Shelter about the advertising of rental listings which explicitly discriminate against people who rely on housing benefit. Zoopla supports the recommendations of the National Landlords Association (NLA) and the Residential Landlords Association (RLA) which have advocated that landlords do not impose blanket bans against tenants on benefits.
We’re aware of a small number of rental listings on portal websites that fit into this category, and recommend that all our member agents follow the NLA and RLA guidance.”
The Residential Landlords' Association says that decisions on whether benefits tenants can be accepted should be taken on a case by case basis.
Yesterday evening, Rightmove went further, telling EYE: “As per the RLA’s guidance, agents should not impose blanket bans against tenants on benefits.
“We realise that some landlords are subject to restrictions, including from their mortgage lenders, that mean they are unable to rent to a tenant claiming benefits. Where this is the case agents should explain this to prospective tenants and try to help them find suitable accommodation.”
The advice from Rightmove and Zoopla comes in the absence – so far – of any official government guidance as to whether banning tenants on benefits breaches discrimination law. However, Shelter is expected to bring a legal challenge.


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Rents predicted to rise over next 5 years

International property consultants Savills says affordability, not Brexit, will be the major factor in the future for the UK housing market.
Latest residential property market forecast shows predictions for the UK mainstream property market 2019-23:

• UK house prices to rise 14.8% from 2019-2023, with significant regional variation Ranging from 21.6% in the North West to single digit growth in London (4.5%), SE and East (9.3%)
• London’s prime market will perform more strongly, with prime central London +12.4%
• Transactions to stabilise, with first time buyer and cash buyer numbers most resilient
• Rents to rise 13.7% over next 5 years; London rents +15.9%
• UK house prices are set to rise broadly in line with incomes over the next five years, that’s the forecast from Savills latest study released 2nd November 2018.

The traditional north-south divide will turn on its head, says the report, with the Midlands, North and Scotland expected to see the strongest increases, according to this new forecast from the international real estate adviser, Savills.
Brexit will continue to have an impact on sentiment over the short term, particularly in London and its commuter belt, but local market affordability is expected to be more of a determinant of the pattern of price growth over the longer term, says the high-end agent.
Savills predicts that between 2019 and 2023, UK house prices will rise an average 14.8 per cent, ranging from 21.6 per cent in the North West to single digit growth in London and the South, by far the strongest performers since the downturn, due to affordability constraints. Values in the capital’s prime market will perform much more strongly, given price adjustments already seen in those market since 2014, thinks Savills.
Other regions were much slower to recovery post the 2008 recession and the global financial crisis (GFC), and some have only recently returned to peak values. House prices are therefore more affordable, with greater capacity for loan to income ratios to increase.
Lucian Cook, Savills head of residential research, has said:
Savills says that “transactions, rather than house prices, are often seen as the ultimate measure of market strength. Sales volumes have fallen only -6.9 per cent since the Brexit vote to 1.145 million, demonstrating the resilience of the UK housing market.”
The firm expects that this figure will decrease by another 1.0 per cent over the next five years. “But a continued re-balancing of the composition of the market is expected, with mortgaged buy to let investor purchases falling by -23 per cent. This will add to upwards pressure on rents,particularly in London, as investors look to lower value, higher yielding markets.”



Latest on High Street Letting and Selling Agents' Fees

High street agents’ fees vary from city to city, from a low of around 0.8% to a high of 1.7%, while online firms have risen hugely in the last two years. According to estate agents comparison website NetAnAgent.com, high street agents in Leicester and Glasgow have the lowest average fees, while London has the highest average fees. The table below shows the lowest and highest percentage fees, and what that on average works out to, based on Land Registry prices as at the second quarter of this year.

Highest traditional estate agent fees in the UK 1) London 1.70% (£10,877) 2) Sunderland 1.33% (£1,885) 3) Manchester 1.31% (£2,5,95) 4) Birmingham 1.25% (£2,568) 5) Leeds 1.18% (£2,444)

Lowest traditional estate agent fees in the UK 1) Glasgow and Leicester 0.84% (£1,042) and (£1,577) 2) Edinburgh 0.89% (£2,127) 3) Hull 0.91% (£1,086) 4) Bradford 0.94% (£1,555) 5) Liverpool and Bristol – 0.95% (£1,424) and (£2,852)

These statstics also reveal that, overall, traditional estate agent fees have fallen across the UK property landscape since 2016. Leicester saw the biggest reduction in fees going from 1.41% in 2016 to 0.89% in 2018, a drop of over 40%. However, an exception is specialist agents selling properties in high-value areas like N1 in London contributing to a hike of 45% (from 1.5% in 2016 to 2.18% in 2018) NetAnAgent.com CEO Alex Thorpe, said: “It’s no surprise that, over the last few years, traditional agents have increasingly brought fees down to compete with online and hybrid agents. “However, we have seen that high street agents have continued to evolve their service to justify the extra fees with more focus on service along with an emphasis on helping to manage the entire process from marketing to completion. “We provide a level playing field for both traditional and online agents, so sellers can find the best option for them.” The same research also shows online estate agents fees have increased 37% over the last two years.



Letting Agents may face legal action over 'No Benefits Tenants' ruling

Agents and landlords who state in their adverts that they will turn away housing benefits tenants could face legal action from one of the major lobbying groups.

It's understood that Shelter could be considering a class action on the grounds of discrimination. The listed estate and letting agency group said yesterday evening that it had become aware that Shelter had targeted one of its offices, posing as a prospective tenant on benefits. After being told by Shelter that it was breaking discrimination law, the group had taken legal advice. Counsel’s opinion was that a breach of discrimination law looks likely. The agent said it had also been advised by its legal team that landlords might have a defence that is not open to agents – that lenders and insurers do not allow letting to tenants on benefits.

Some of the above stories are taken from Property Industry Eye, a leading online news resource for estate and letting agents.

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