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UK PRS Rents Rise Faster Than Tenant Income

UK PRS Rents Rise Faster Than Tenant Income

Working tenants renting property in the UK private rented sector have diminishing amounts of disposable income after new research revealed that average PRS rents rose four times faster than average UK salaries increased.

The March 2013 HomeLet Rental Index shows the average cost of renting property in the UK private rented sector increased by 3.3% during the first quarter of 2013 to average £776 (GBP) per month.

In contrast, the average amount working tenants earn in a year only increased by a minimal 0.8% over the same period to £27,300 (GBP).

Although the 3.3% rise is much higher than that of tenant income, the increase in PRS rents has apparently slowed.

Data from March’s report also shows the average cost of renting a property in the UK PRS in the first quarter of 2012 increased by 3.4% and a significant 6.9% in 2011.

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We are really looking forward to joining Rob Moore and HMO Daddy – Jim Haliburton (and a few hands-on guests) for the first  ever LIVE Multi-Let Online Training.

Over 640 investors have clicked the link to register for Multi Let Without The Sweat since the post appeared here last week:

5 Simple Ways To Cashflow Multi-Let Properties Using No Money Down, No Mortgage Strategies

5 Simple Ways To Cashflow Multi-Let Properties Using No Money Down, No Mortgage Strategies

Now, you can still get registered, no cost, but don’t hang about, It only takes a second – click the link below, and you’re done:

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(you’ll also get access to the Multi-Let report on that page)

Big question – have real people already gone out and proven this Multi-Let strategy works…?

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No Buy To Let Mortgages For Landlords with Benefit Tenants

No Buy To Let Mortgages For Landlords with Benefit Tenants

It has emerged that one of the property investor’s best mortgage resources is going to have restrictions placed on their Buy To Let mortgage products.

The Mortgage Works, who were once the lender of choice for hundreds of UK property investors, have changed their mortgage acceptance and lending criteria to such an extent that they will no longer accept buy to let properties that will be inhabited by any tenants claiming any form of state benefit, local housing allowance (LHA) housing benefit or even the upcoming Universal Credit.

As the major buy to let mortgage lender used by portfolio landlords, this news is a real blow for anyone with DSS tenants or even working tenants claiming Housing Benefit.

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Controvesial Universal Credit Needs

To Be Given A Chance Landlords Told

Landlords Urged To Give Universal Credit A Chance

Landlords Urged To Give Universal Credit A Chance

Few systems have caused as much controversy before even being launched as the government’s universal credit. It draws together all welfare claims into a single monthly payment, like a salary, so will undoubtedly change the financial landscape for landlords and tenants – yet it has the potential to improve the claims process for all involved.

One of the big benefits of the system – if implemented correctly – is that claims will be processed online and in real time.

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Landlords In Salford Face Selective Licensing

Landlords In Salford Face Selective Licensing

The City of Salford local authority (my local council), have finally approved proposals for a selective licensing scheme for landlords in another 3 areas within their region, these are the areas of Langworthy, Weaste and Seedley.

The areas outlined in the plan are currently undergoing some regeneration as historic churches are flattened along with the former home of Salford Reds rugby ground and entertainment venue, The Willows. New homes are currently being built on former brownfield sites within the area, that is just 5 minutes walk from the new home of the BBC at Media City.

Despite delaying the decision for over month, to consider outcomes and exit strategies, the scheme was finally approved, although it remains unclear if the objectives for the scheme are actually in place.

Instead, Salford promised to implement a number of discounts for compliant landlords and establish an engagement group which will supposedly meet to support the effective implementation of the scheme and shape its development.

The decision by Salford comes just a few weeks after the local authority revealed that the previous pilot scheme, which lapsed in May 2012, had lost £239,533 (GBP) during its five-year cycle; with further undisclosed costs for senior management support, enforcement action and Land Registry searches.

During the same period, Salford refused just five landlord licences, and revoked a further 73 landlord licences.

However, the local authority refused to say on what grounds the landlord licences had been revoked, and whether or not this figure included individuals who had simply sold their rental properties and left the private rented sector (PRS).

Chris Town, vice chairman of the Residential Landlords’ Association responded to Salford’s selective licensing decision,saying “The RLA is extremely disappointed with this decision. We are not satisfied that there is a strong case for this selective licensing scheme. Other local authorities such as Manchester, Leeds and Bournemouth have rejected selective licensing and are now looking at alternative methods of raising housing standards, particularly greater promotion of accreditation schemes and improved enforcement. Selective licensing simply does not work and is the legislative equivalent of using a sledgehammer to crack a nut.”

Want your voice heard?    Join The RLA today!

Universal Credit will not work say landlords

Private landlords have already rejected the Government’s welfare reform plans for housing benefit, before that have even been implemented, stating that there will not be enough private rented sector (PRS) properties available to rent.

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The Residential Landlords Association (RLA) say that cuts made to local housing allowance payments by the government last year have left many landlords with tenants financially struggling to make ends meet.

However the proposed changes to the way in which LHA payments are due to be made, come into force in 2013, will leave more private sector landlords who choose to rent to LHA tenants even more out of pocket.

At present private landlords who have LHA claimants that fall more than 8 weeks into arrears in terms of rental payments can apply to have future LHA payments made directly to them, cutting out the possibility of further arrears.

As of 2013 though this direct payment option will be taken away from UK landlords and it is this change that the RLA has criticised.

Asked for his views on the proposed changes, Richard Jones, policy director for the RLA, said that “The government approach is flawed, and there will be a much higher level of arrears, an unwillingness of landlords to house benefit claimants (at a time when there is huge pressure on social housing), increased unwillingness by banks to lend for this kind of property, much higher levels of tenant evictions and much greater degree of homelessness. Although the objective of helping tenants to manage their financial affairs is in isolation a laudable one, the Government has wholly failed to appreciate the consequences of this.”

UK Landlords Need To Sign Up To Force The Government To Listen To Common Sense

UK Landlords Need To Sign Up To Force The Government To Listen To Common Sense

Under the next wave of welfare reforms, new rules set to be introduced next year, mean that the housing benefit allowance of the new Universal Credit system, will not be paid directly to landlords.

Instead the Government proposes that all payments will be paid directly to tenants, even if they are vulnerable or in arrears!

Please Sign The e-Petition Now!

This will not only expose the landlord to the threat of tenant rent default, it will increase financial pressure on all parties involved and the possibility of repossession proceedings if the rent is not passed over to the landlord.

The proposed welfare reforms will also increase the likelihood of landlords refusing to take any further applications from DSS/LHA/Housing Benefit tenants, in the future as well as bringing to an end existing tenancies, further increasing the pressure on local councils and housing associations, who under the same proposals, will also not be able to request direct payments for non paying tenants.

The Government needs to take on board UK landlords views, that tenants who receive housing benefit directly and who do NOT pay their rents are not financially responsible and therefore it should be allowed that rents can be paid directly to their respective landlord, when tenants are vulnerable or in arrears, as per the current rules.

Failure to take note of this common sense approach will cause more issues for the Government, Local Authorities, Homeless Charities, Tenants and Landlords.

This is a common sense and a logical solution for all concerned – Pay rent direct to landlords where it is needed please!

Please Sign The e-Petition

Responsible department: Department for Work and Pensions

Hi All
My property management agents were in the process of interviewing a pair of prospective tenants for one of my properties. The applicants were a homeless married couple who had been forced to relocate to the area due to losing their jobs and wanted to move to an area with better employment opportunities.

The application was going great until it came to checking the couple’s housing benefit entitlement….

According to the local authority (I wont name and shame them here for legal reasons) the married couple were only entitled to the shared room rate because they were married and under 35. The management company attempted to argue over such blatant discrimination by the local authority but the facts seemed to fall on deaf ears.

Single claimants under 35 would be entitled to receive the shared room rate in full as individuals, but because the applicants were married they only counted as a single applicant!

It has taken 4 months of hard work, stress and a great deal of legal wrangling to sort out, including requests for Discretionary Payments, consultations with LHA professionals and arguements with various Government departments.

Following tips and advice gleaned from “The Essential Landlords LHA Handbook” I have now been able to get the full 2 bed LHA rate paid directly to me and the local authority have been forced to make a grovelling apology to the tenants!

It just goes to show that when armed with the right information and legal standpoints there are always options open to landlords, and it pays to invest in the knowledge of experts!

I would like to publicly thank the LHA Expert for his brilliant LHA book and tons of helpful advice!

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Help the RLA

Join The Residential Landlords Association

Details of the Government’s new procedures for the payment of universal credit have been released – and they confirm that the landlord’s right to insist on direct rent payments if a tenant is in arrears will be scrapped.

Instead, payments will be made directly to tenants and it will be up to them to pay their rents or not. The proposals will mean the end of direct payment to landlords for rent as we have known it, and the new procedures will apply across the board to local authority tenants, housing association tenants and tenants in the private rented sector.

The RLA has serious concerns about the proposals:

1. No back stop provision under which a landlord can demand payment direct.
2. Lack of clarity/much greater individual discretion in operating these rules because “guidance” replaces regulations.
3. No means of redress for landlords if things go wrong/no rights of appeal.
4. No proposal that the guidance should reflect the landlords interests to make sure that rent is paid and that a roof is kept over the head of the claimant.
5. The whole concept of trying to improve tenant’s responsibility at the cost of much greater risk to landlords with strong likelihood of significantly higher arrears.
6. Much less likelihood of landlords being willing to take on benefit claimants. This could even translate into less likelihood of a willingness to take on claimants who are in work especially part time work because the same rules will apply to them.
7. No provision for first payment of benefit direct to the landlord.
8. We have argued with DWP that there should be a right for landlords to be paid direct payments once there are six weeks arrears and also that the whole system of vulnerability should be assessed according to the tenant’s interest of keeping a roof over their head and the landlord’s interest to receive the money, as well as the public interest of making sure that the benefit is used for its intended purpose.

Richard Jones, the RLA’s policy director, said, “We strongly believe that the Government’s whole approach is flawed and although the objective of helping tenants manage their financial affairs is in isolation a laudable one, the Government has wholly failed to appreciate the consequences of this. There will be a much higher level of arrears, an unwillingness of landlords to house benefit claimants (at a time when there is huge pressure on social housing), increased unwillingness by banks to lend for this kind of property (or increased interest rate to reflect the risk), much higher levels of evictions and much greater homelessness.”

The RLA has produced a briefing note for landlords, and this can be downloaded by clicking here.

What can I do?

Further details will follow about how you can assist the RLA in opposing these proposals.#

Join the Residential Landlords Association

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