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Tenants without Rent Guarantee Insurance Face Higher PRS Rents

Tenants without Rent Guarantee Insurance Face Higher PRS Rents

Rental prices in the UK Private Rented Sector have now reached a new record high, with the average PRS rent during September across the UK reaching approximately £741 (GBP) per calendar month (pcm).

The startling cost of PRS rental was revealed by LSL property services and represents a rise of 1.1% on the previous record high of £734 (GBP) set in August 2012.

Taken as an annual average, PRS rents have increased by 3.2% across the whole of the UK.

Rental prices in London and the South-East regions went up the most, with PRS rents rising by 1.7% and 1.9% respectively.

Average rent in London is now 6.2% higher than in 2011, averaging £1062 (GBP) pcm.

In other parts of the UK there are still pockets where rental prices are being forced down due to tenants driving a hard bargain with landlords and letting agents. Rental prices saw a decrease in three UK regions in September:

  • East of England
  • Yorkshire & Humber
  • West Midlands.

However, the increase in PRS rental prices in the rest of the UK has also left tenants without Rent Guarantee Insurance financially struggling, with 9.1% of all rent due to landlords being late or unpaid at the end of September.

Landlords can take steps to ensure regular rental income and ease the financial burden faced by many tenants by obtaining market leading Rent Guarantee Insurance from Legal4Landlords.com

275,000 new tenants flooded the UK Private Rental Sector in 2011 – a 24% increase on the previous year.

275,000 new tenants flooded the UK Private Rented Sector in 2011

Latest Government Figures Confirm What savvy UK Property Investors & Landlords already knew

Latest Government figures confirm the steady decline of UK Home ownership and the social rented sector, (Council Houses), together with the indisputable rise of the Private Rented Sector (PRS) following the credit crunch.

The figures confirm what property investors who have been expanding their rental property portfolios already know, Buy-To-Let in the UK is BOOMING!

The new 2010-2011 English Housing Survey shows that in that period;

  • 66% of households (14.5 Million) were owner occupiers, down 1% from the previous year, continuing the downward trend observed since 2007.
  • The social rented sector last year accounted for 17.5% (3.8 Million households)
  • The private rented sector accounted for 16.5% (3.6 Million households).
  • Thirty years ago, there were over 3 Million more tenants in the social housing sector than in the private rented sector.

Now the gap is just 200,000.

Last year, a total of 394,000 new households were formed in England

  • 68% were private tenants forming 268,000 of the new households
  • 14% were owner occupiers (55,000 households)
  • 18% were social renters (71,000 households).

One key difference is that couples with no dependent children were the most common type of household in 2010-11 with 35% in the owner occupied and 43% in the private rental sector.

However, the most common type of household in the social rented sector was a single person aged 60 or over (24%).

17% of tenants in the social sector, were lone parents with dependent children, compared to 12% of tenants in the private rented sector with the same status. The figures compared to just 3% of owner occupiers.

In 2011, private sector rent was around twice that of social rents (an average weekly £160 compared to £79).
In the same period, 63% of social renters and 25% or private tenants received Local Housing Allowance (LHA) or Housing Benefit.

Another key difference is in length of tenure: 54% of private tenants had been in their home for under two years, whilst 59% of owner occupiers and 43% of social tenants had been in their home for ten years or longer.

Chief Executive of Countrywide, Grenville Turner, said of the survey: “Successive governments have widely encouraged home ownership but the impact of the recession has led to a structural change in the property market. The impact of this has caused an additional 275,000 new tenants to flood the private rental sector in 2011 – a 24% increase on the previous year. Current demand levels indicate that there will soon be more people in the private rental sector than social housing, which will only add to the already saturated demand and supply imbalance in the market.”

BTL landlords can cash in on the current rental property boom by utilising the wide range of landlord and letting agent services offered by Legal4Landlords.com to ensure thorough tenant vetting and cashflow, including Tenant Referencing, Landlord Insurance, Rent Guarantee Insurance as well as Debt / Rent Recovery and Eviction services.The full report contains information about overcrowding, occupancy patterns, energy use and decent homes and can be found at the link below.

http://www.communities.gov.uk/publications/corporate/statistics/ehs201011headlinereport

UK Private Rented Sector Survey by MyPropertyPowerTeam.co.uk

UK Buy To Let Landlords Want More Properties But Are Unable To Get Mortgage Finance

A new survey of Landlords in the Private Rented Sector (PRS) has discovered that only 20.2% ( 1 in 5 landlords) in the UK, were able to add fresh residential properties to their existing residential portfolio stock during 2011.

Property value growth expectations and the prospect of a regular income were the key drivers behind the property investment trend and only the lack of available mortgage finance, and/or financial know how, held back even more landlords from adding to their property portfolios.

Out of all the landlord insurance customers interviewed, 85% predicted that residential property values in the UK would remain the same for at least the next 12 months and private sector residential rents were expected to be considerably higher in 2013.

London led the way, after 87% of respondents said they believed that rents in the UK capital would continue to rise throughout 2012.

The data is from the PRS Landlord Survey carried out among subscribers by MyPropertyPowerTeam.co.uk during the last quarter (Q4) of 2011.

The data also showed that 59% of landlords have been investing for more than 5 years would hold onto their property until around the year 2025, however, the average holding period for UK PRS properties was around 15 years.

The appetite from property investors in the UK PRS for additional property assets is still extremely strong and the UK rental market is seeing demand outstrip supply as private tenants seek quality PRS accommodation. The current rental trend shows little sign of abating at present, despite all the UK Governments welfare reforms.

The UK Private Rented Sector is currently buoyed up by a growing population that is spending longer periods than ever living in rented homes, similar to the continental norm.

Landlords are making use of insurance products to protect their property assets and even Rent Guarantee insurance to ensure regular monthly rental income.

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UK tenants competing with at least 5 others for property

Competition for UK rental properties is fierce

Demand for UK Rental Property continues to soar, with lettings agreed within a record low of 12.7 days and up to 5 tenants competing for each private sector (PRS) rental property.

Since the beginning of 2011 there has been a significant increase in tenant demand for private rented sector property. UK residents are adopting the European style of living choosing to rent rather than buy and this trend looks set to continue.

Even with a slight seasonal fluctuation, demand for residential rental property has risen rapidly throughout the year.

Tenant demand has increased by 10.8% in the 3rd quarter of this year, compared with the same period last year, and is also up by 11.9% from the 2nd quarter of this year.

The data comes from the Countrywide group’s quarterly research into the private rental sector, who also found that the volume of property viewings increased by 17.8% compared to the previous quarter, an annual increase of 8.2%.

Demand from investors is also strong, with an increase in the first-time investor category.

In the 3rd quarter of this year, 23.5% of all landlords were investing in property for the first time, compared to 18.7% in January 2011.

Many people see renting property as a realistic alternative to home ownership, either because they are unable to get a mortgage or are waiting for further house valuation falls or they are attracted to the flexibility that renting offers.

First time investors mean inexperienced landlords and rather than taking a chance based on applicant numbers, they should obtain a comprehensive tenant reference for all applicants and make sound decisions about their future tenants based on factual evidence.

In addition to Tenant Referencing Legal 4 Landlords offer a wide range of services for all landlords including insurance and debt / rent recovery and tenant eviction.

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