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Will The Housing Crisis Win The Election?

Will The Housing Crisis Win The Election?

The Politics Of Housing

It is still generally acknowledged by all political parties that there is a housing shortage in the UK, and each political party wants to offer the public alternative methods of tackling the problem in an attempt to win electoral favour.

Most political parties see the housing crisis in the UK as a possible election winning issue and each party’s election manifesto promises the general public many things, including further private rented sector (PRS) reforms and the introduction of additional legislation. There isn’t much offered by any political party for landlords, except for the promise to put an end to the private rental sector.

A recent survey by Ipsos MORI research published in January 2015 discovered a confusing conundrum, in that:

  • 75% of the public agree that there is a housing crisis in the UK
  • 48% of the public disagree there is a housing crisis in their locality

The publication of each political party’s election manifesto is intended to give the public a clearer indication of the housing priorities of the UK’s next parliament.

However, despite claims of a housing shortage nationally there are still some UK regions that have large proportions of derelict and abandoned properties, many still in a habitable condition.

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Government Funding To Boost Shared Tenancies For Homeless

Government Funding To Boost Shared Tenancies For Homeless

£1 million Government funding boosts rental options for single homeless people

This week, Communities Minister Don Foster announced a cash boost of up to £1 Million (GBP) to support single homeless people providing access to shared tenancies within the UK private rental sector.

The funding is intended to help homeless people to find a safe and secure home in shared accommodation or Houses of Multiple Occupation (HMO’s) in private rented sector (PRS) properties.

Mr Foster allocated up to £800,000 (GBP) for homelessness charity Crisis to fund schemes to set up new shared tenancies for single homeless people within the UK’s private rented sector.

The minister also announced a further £230,000 (GBP) for the charity to continue its Private Rented Sector Access Programme, which works with local landlords to help vulnerable people find the homes they need in privately rented accommodation.

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Property Owners In Flood Risk Areas Fear Worst

Property Owners In Flood Risk Areas Fear Worst

With flood alerts and warnings still in place in some parts of the UK, the Association Of British Insurers (ABI) has warned that up to 250,000 residential homes and commercial properties could be left without flood insurance.

The ABI has claimed that it had already reached a crisis point in its talks with the government over replacing an agreement which would ensure that all households in area at high-risk of flooding could still secure some degree of flood insurance. However that was before last week’s heavy rain.

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70% Rise in Tenant Evictions over last 3 years

70% rise in Tenant Evictions over 3 years

The Residential Landlords Association (RLA) and homless charity Crisis say that UK court orders to evict defaulting tenants in the Private Rental Sector have risen by more than 70% over the past 3 years.

Homeless charity Crisis analysed Ministry of Justice figures to reveal that within the last 12 months some 36,211 landlords have been granted a court order to evict bad tenants, an increase of 12% on the previous year and 70% higher than the 21,351 court orders granted in 2009.

Duncan Shrubsole, director of policy at Crisis, said: “Sadly it is no surprise that we are seeing thousands of private tenants facing eviction. They face a dreadful combination of high unemployment and underemployment, draconian cuts to housing benefit and soaring rents. Our concern is that many of these people will have nowhere to turn, and end up falling victim to homelessness. In fact the Government’s own statistics point to this already happening. We are calling on the Government to rethink cuts to housing benefit that will inevitably leave increasing numbers of people unable to pay the rent. We are also in desperate need of more social and affordable housing in order to rein in the soaring rental market.”

The RLA want more done to prevent tenants getting into rent arrears and are currently lobbying the Government to change the way that the housing element of the new Universal credit system will be paid.

Latest Government figures show that between 2009 and 2011, the number of people approaching their local authorities as homeless due to the end of an Assured Shorthold Tenancy or due to rent arrears increased by 42% to almost 10,000 households.

Sim Sekhon spokesman for the UK’s leading Tenant Eviction specialists, Legal 4 Landlords, said “Landlords who do not have specialist insurance in place to protect rental incomes face the prospect of rent default by tenants as they in turn face increasing financial pressures. At Legal 4 Landlords we provide the complete tenant eviction service for landlords with a success record that speaks for itself, that’s why we are the UK’s leading tenant eviction company”.

With the general upturn in mood and less gloomy economic prospects than the majority of developed nations, there is a great deal of speculation that the UK property market is set for boom times again, and our neighbouring counterparts are viewing the UK property market with keen interest.

How Scandinavian’s View The English Property Market 2013-2020

The UK property market is divided into London and everything else. London is markedly international and attracts investment and people from all over the world, partly because of it’s non-restrictive taxation policy towards domesticated foreigners which has made London the billionaire capital of the world.

As a result London suffered only a minor setback during the global financial crisis and several property types, like high end residences, are reaching record high prices in today’s market.

At the same time Manchester, Birmingham and many more old west coast industrial cities are reinventing themselves after being hit considerably harder by the crisis and the economic stagnation.

These cities are going through a phase of massive development, often including a total inner city infrastructural makeover and inclusion of old industrial waterfront areas into the living city centre, just as in Manchester (Salford Quays) and London (Olympic park).

At the same time the level of education is relatively low in the UK and the local city economies are often too weak to create new growth and development on their own without help from external capital and an influx of citizens from rural England.

London, Birmingham and Manchester are the future winners in the UK and plans are in place to kick start the development of other cities and the UK property market.

The development of many city centres in the UK over the next decade may finally manage to let go of the old industrial economic foundation and open up the cities for modern knowledge workers and businesses. 

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Massive rise in tenant eviction orders as landlords are forced to get tough causing outcry from homelessness charity Crisis.

Over the last three years there has been a 70% rise in court orders for the eviction of tenants in the UK Private Rented Sector (PRS).

12% Rise in Tenant Evictions over last 3 years

12% Rise in Tenant Evictions over last 3 years

Homeless charity Crisis set about analysing figures released by the Ministry of Justice that revealed in the last 12 months some 36,211 PRS landlords have been granted a court order for the eviction of tenants, a rise of 12% on the previous year, and 70% higher than the 21,351 court orders for tenant eviction granted in 2009.

The data shows that between 2009 and 2011, almost 10,000 individuals approached their local authority claiming to be homeless due to the end of an Assured Shorthold Tenancy (AST) or because of rent arrears. A rise of 42% on previously released figures.

Duncan Shrubsole, Policy Director at Crisis, said: “Sadly it is no surprise that we are seeing tens of thousands of private tenants facing eviction. They face a dreadful combination of high unemployment and underemployment, draconian cuts to housing benefit and soaring rents. Our concern is that many of these people will have nowhere to turn, and end up falling victim to homelessness. In fact the Government’s own statistics point to this already happening. We are calling on the Government to rethink cuts to housing benefit that will inevitably leave increasing numbers of people unable to pay the rent. We are also in desperate need of more social and affordable housing in order to rein in the soaring rental market.”

Sim Sekhon from the UK’s leading tenant eviction specialists, Legal 4 Landlords commented: “In these austere times UK landlords are being forced to take action with bad tenants or tenants with rent arrears as they simply cannot afford to go without the rent. We have seen a significant rise in tenant evictions in the last 12 months and unfortunately this trend is set to worsen due to the raft of benefit cuts and welfare reforms being pushed through parliament. Landlords are finding their own finances stretched and are having to take legal action for the eviction of non paying tenants before their entire rental businesses go bust. There are ways for landlords to avoid being in this situation but it does require action to be taken before the start of a tenancy, all applicants should be thoroughly tenant referenced and landlords can utilise Rent Guarantee Insurance to keep the monthly rent flowing.”

Legal 4 Landlords the UK No.1 specialist landlord service provider

Legal 4 Landlords the UK No.1 specialist landlord service provider

To find out more about the specialist products and services

offered by Legal 4 Landlords please visit their comprehensive website

New Measures Announced To Boost UK Cashflow

New Measures Announced To Boost UK Cashflow

Sir Mervyn King, Governor of the Bank of England, last week announced further measures to boost the UK’s economic recovery, in his Mansion House speech.

The BoE have launched a Multi-Billion (GBP) initiative to increase the cash flow of some of Britain’s biggest financial institutions.

The Bank’s offer of £5 Billion (GBP) in six-month loans at a rate of only 0.75% has already been entirely taken up by major UK banks and it is understood that they were told to apply by Sir Mervyn himself.

The Governor of the Bank of England does not want the scheme to be seen as another ill conceived emergency measure, instead, he intends the money to be considered as a mainstream source of funding.

It is also widely rumoured that a similar loan process will occur on a monthly basis.

The facility announced by Sir Mervyn King is just one of several measures aimed at boosting the economic recovery and encouraging investment.

The BoE Governor also launched an estimated £80 Billion (GBP) policy with Chancellor of the Exchequer, George Osborne, intended to prevent a second credit crunch in the UK as fears surrounding the impact of the Eurozone debt crisis grow.

59% of Private Rental Sector (PRS) landlords refuse to accept applications from tenants claiming benefits, including me!

Landlords claim that tenants who do not receive any form of welfare support are far more reliable when it comes to paying the rent on time and generally looking after the property.

In a survey of more than 1,000 UK landlords by website SpareRoom.co.uk showed that over half of the landlords surveyed had a  “No DSS” clause on their adverts. I too have the same clause and whilst I do not want to discriminate against people I do feel it is necessary to protect my rental income and my properties.

Landlords taking part in the survey were asked why they would not rent out their property to housing benefit tenants:

  • 30% said non-benefit tenants were more reliable,
  • 47% said they did not want the hassle of dealing with payment problems.

SpareRoom.co.uk called for changes to the way Local Housing Allowance (LHA) was paid, joining calls from the Residential Landlords Association (RLA) and homeless charities “Shelter” and “Crisis” to return to direct payments to landlords, which could increase the number of PRS properties being let to tenants claiming state benefits.

Matt Hutchinson, director of SpareRoom.co.uk, said: “The coalition government’s planned welfare cuts to housing benefits, coupled with the lack of affordable housing in the UK, could have a devastating impact on families and individuals relying on the state for help with living costs. But it seems that landlords, who have had bad experiences with housing benefit tenants, are reluctant to help ease the pressure caused by a rental property shortfall, favouring private tenants instead. The move to change the way Local Housing Allowance was paid in 2008 was designed to give those on housing benefits greater responsibility for their finances, but what this poll shows is that the change has had overwhelmingly negative repercussions for British landlords. It’s clear from this survey that a shake-up of the current system of paying housing benefit to the tenant is desperately needed, and reverting back to the old structure, where landlords receive rental payments directly from the council would be a step in the right direction.’

According to the survey, 87% of landlords have had problems with housing benefit tenants not paying rent on time and 11% claimed to have had tenants who had stopped paying rent altogether. I unfortunately fall into both these percentages having bad experiences with benefit tenants and very little help or advice from my local authority.

In the survey, UK landlords said that problems associated with DSS tenants included late rent payments, damage to the property and problems arising from suspension of benefits.

74% of landlords said they would not take a tenant on housing benefit even with a working Homeowner acting as their guarantor and I must agree with them.

Once bitten and all that, but one thing is for sure from my point of view – NEVER AGAIN!!!

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The homeless charity, Crisis have published research figures showing a dramatic rise in private rental sector tenants ending rental agreements with buy to let landlords. Either by mutual agreement or due to the tenant being evicted for none payment of rent.

There has been a sharp increase in the number of people being accepted as homeless as a result.

And the research warns that the situation is set to get much worse.

The Homelessness Monitor – Which tracks the impact of policy and economic change in England, commissioned by Crisis and undertaken by Heriot-Watt University and the University of York, warns that after years of stable or falling levels of homelessness, 2010 marked the turning point when homelessness (in all forms) began to rise again.

The research predicts that the worst is yet to come as the continuing economic downturn combined with the Con –Dem Government’s radical welfare reforms will leave many more people facing the reality of homelessness.

The shocking statistics are the first since the Government cut Housing Benefit or Local Housing Allowance (LHA), for new claimants in April 2011.

The figures show a 46% rise on the same period last year in the number of people being accepted as homeless as a result of their tenancy in the private rented sector ending.

Chief Executive of Crisis Leslie Morphy, said: “The official figures prove once again we now face a sustained increase in homelessness but, worryingly, this research predicts the worst is yet to come. The Coalition Government is dismantling the buffers against poverty and unemployment that have traditionally kept a roof over vulnerable households’ heads. Homelessness is rising and we fear cuts to housing benefit and housing budgets, alongside reforms in the Welfare Reform and Localism Bills will cause it to increase yet further. We need the Government to change course now or risk returning us to the days of countless lives facing the debilitating effects of homelessness.”

Professor Suzanne Fitzpatrick, of the Institute for Housing, Urban and Real Estate Research, Heriot-Watt University, who led the research, said: “International evidence indicates that strong welfare and housing systems are vital in mitigating the impact of difficult economic circumstances on people vulnerable to homelessness. So the Government’s reforms in combination with the pressures of the economic downturn seem certain to increase all forms of homelessness, from rough sleepers on our streets to homeless people hidden out of sight.”

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