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More Details Emerge On Government Demand For Transparency Over Letting Agent Fees

More Details Emerge On Government Demand For Transparency Over Letting Agent Fees

More Details Emerge From Government
On Letting Agent Fees Debate

The Government have declared that all UK letting agents and property management agents must display full details of all fees charged to tenants on websites and in offices.

Deputy Prime Minister, Nick Clegg faced a tough grilling at his House Of Commons session from Labour MP Harriet Harman, who wanted the Government to back the ban on letting agents charging fees to tenants.

Ms Harman told MPs: “Not least because of the difficulties of affording to buy a home, there are now 9 million people renting, including 1.3 million families with children – security and continuity are particularly important for them. It is time to move from one-year tenancies with unpredictable rents to three-year tenancies with predictable rents. What we need to be sure is that letting agents do not rip tenants off by charging fees to the tenants, as well as charging the landlords.”

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Will Landlords Be Safe Under New Rental Rules?

Will Landlords Be Safe Under New Rental Rules?

Tenants Charter could put tenants in a

stronger position over PRS landlords

Regulations which hand private rented sector tenants more power and rights to request longer leases have been greeted with cautious optimism, although the new code of practice, intended for launch by the Government, would bring in much-needed protection for many tenants from rogue and inexperienced landlords.

The proposed Tenants’ Charter, could mean honest and hard working landlords are at a disadvantage and could be put off from renting out properties.

The results of the introduction, could lead to another shortage of available rental stock for the UK property market leading to rent increases and landlords becoming trapped by more stringent legal binding agreements.

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Good news for landlords

Good news for landlords

There is a lot of Good News For Landlords Around As PRS rents Increase, Tenancies Last Longer And Demand Remains Strong

Good news for landlords as monthly PRS rents have increased by 1.1% year on year to average £845 (GBP) per calendar month (pcm). Scotland has witnessed the greatest rental price increase at 6.7% compared with the first quarter of 2013.

There has also been an increase in the number of older private rented sector tenants according to the latest quarterly index published by Countrywide lettings agency, who noted a 6% annual growth in the number of tenants over the age of 50 renting property in the UK private rented sector (PRS). The lettings agency also report that there has been a 7% annual decline in the number of tenants aged under 25 in the second quarter of 2013.

Buy-To-Let yields are strengthening across the UK, with the average yields being recorded in 3 regions:

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 Obey Gas SafetyLaws Or Face Prosecution – Landlords Warned

Gas Safety Is A Legal Responsibility

Gas Safety Is A Legal Responsibility

UK Landlords need a better understanding of the many laws and regulations regarding the safety of tenants in private sector rental accommodation, or they may find that non compliance with any of the prescribed regulations can make them liable for prosecution and will render their Landlord Insurance invalid.

UK Landlords have moral and legal responsibilities regarding the safety of all tenants living in private rented sector (PRS) rental accommodation, occupied under a lease or licence, which includes, but not exclusively:

  • Residential premises provided for rent by local authorities, housing associations, private sector landlords, housing co-operatives, hostels
  • Rooms let in Houses of multiple occupation (HMO’s), private households, bed and breakfast accommodation and hotels
  • Rented holiday accommodation such as chalets, cottages, flats, caravans and narrow boats on inland waterways.

The Gas Safety (Installation and Use) Regulations 1998 outlines the landlords’ duties to make sure gas appliances, fittings and flues provided for use by tenants comply with all the latest UK safety regulations and are not hazardous to the health of the tenant.

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UK PRS Rental Yields Increase

UK PRS Rental Yields Increase

In the UK the combination of high tenant demand, increasing PRS rents and realistic vendor pricing of properties for sale has been a major driving factor behind the increase in Buy To Let rental yields.

Buy-To-Let rental yields increased from 6.1% to 6.7% over the last quarter of 2012, with the biggest jump in the private rented sector (PRS) coming from houses in multiple occupation (HMO’s) up from 9.2% to 11.1%.

A much needed increase in the availability of buy-to-let mortgages, as well as property investors seeing the benefit of buying high yielding low priced properties for rental purposes, outside of central London and the South East where rental yields had previously been squeezed, has been fuelling the growth.

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EU Decision Good News for UK Buy-To-Let landlords

EU Decision Good News for UK Buy-To-Let landlords

The decision by MEP’s to remove Buy-To-Let mortgages from the scope of a new EU Directive has been welcomed by a host of property professionals including the Residential Landlords Association (RLA) and Legal 4 Landlords.

Under the original European plans, mortgage lenders would no longer have been able to take account of rental income when considering whether to lend to a landlord for a new property, despite the fact that there are specialist insurance products that can guarantee the rent.

The European Parliament committee looking at the Directive has decided that buy-to-let mortgages would be taken out of its scope altogether, after a great deal of high pressure lobbying from a number of sources including the RLA.

Alan Ward, Chairman of the RLA responded to the EU announcement saying: “Today’s decision by MEPs represents a common sense solution to a measure that would have crippled the private rental market in the UK. With a chronic shortage of properties in the sector, the initial proposals would have exacerbated the problem still further, causing further difficulties and higher rents for those looking for rental accommodation.”

Sim Sekhon, spokesman for specialist landlord services provider, Legal 4 Landlords also commented on the decision “It’s good to see that sense has prevailed within Europe, now landlords can get on with providing quality housing for tenants in the private rental sector without worrying that they were going to lose the right to expand their property portfolios. The EU decision to exempt Buy To Let mortgages from the firing line is good business for UK landlords. Rental income is the lifeblood and there are steps for landlords to take to ensure that cashflow remains constant, such as using comprehensive tenant referencing services to make sure you accept the right tenant and rent guarantee insurance to provide a guaranteed income. Having a secure income is vital for any business and property is no exception”.

We are now building fewer new properties than when the Queen first came to the throne in 1952!

While residential properties are smaller than in previous decades, property prices have increased and modern conveniences have changed beyond recognition.

The biggest change in the last 60 years has been in home ownership: this has more than doubled from 32% of all households in England in 1953 to 66% in 2010-11.

The Right to Buy scheme in the 1980s was a key driver of the rise, helping to lift owner occupation from 57% in 1981 to 68% in 1991.

However, owner occupation has been declining since its peak of 71% in 2003.

The Private Rented Sector (PRS) trend shows the reverse of the home ownership pattern. The proportion of rental accommodation in the PRS has fallen by two-thirds since the fifties, from 50% in 1953 to 17% in 2010-11.

However, the private rented sector has been rising again over the last decade, after being as low as 10% in 2001.

The proportion of social (council) housing has also risen and fallen over the same period. From 17% of all households in coronation year, peaked at 32% in 1981 and is now just 18%.

201,860 new residences were built in 1951, compared with an estimated 137,000 in 2011.

New house building reached record levels in the sixties with 425,830 new homes being built.

New residential properties have also been shrinking in size. Properties less than 538 sq ft in size accounted for just 9% of all new homes built before 1980, this proportion doubled after 1980.

The types of new properties being built has also changed. Semi detached houses accounted for 41% of new homes built between 1945 and 1964, but represent only 15% of homes built after 1980.

Flats used to account for 15% of newly constructed property between 1945 and 1964, but after 1980, accounted for 20% of all new housing stock.

There has been a dramatic improvement in the quality of residential property of all types since the end of WWII.

In 1947, 42% of households had no bath or shower and 64% had no basic water supply: by 1991, the proportion had fallen to 0.3% and 1% respectively.

Households in the UK with a second toilet have increased from 31% in 1996 to 41% in 2007.

Another noticeable trend has been the fall of the ‘traditional’ family unit household.

The proportion of households in England occupied by married couples has dropped from 70% in 1971 to 40% in 2011. Over the same period, the proportion of single person households in the UK has risen from 19% in 1971 to 33% in 2011.

Single person households are expected to replace married households as the most common form of household over the next decade.

Over the last 60 years the average UK residential property price has increased 7,278% from £2,200 in 1951 to £162,338 in 2011. This is three times the rise in retail price inflation over the same period (2,477%).

UK property prices have risen in real terms in nearly two out of every three years – 38 out of 60 – since 1951.

* Research compiled from a number of sources by Lloyds TSB

Buy-To-Let Boom Continues !

Buy-To-Let Boom Continues!

According to the Royal Institute of Chartered Surveyors, (RICS), latest Residential Lettings Survey, the UK Private Rented Sector (PRS) experienced sustained growth between February and April 2012, with houses in greater demand than flats.

13% of chartered surveyors reported that PRS rents had increased with tenant demand largely responsible for the growth.

15% of chartered surveyors also reported rises in the numbers of prospective tenants seeking rental properties.

Landlords with Comprehensively Referenced Tenants and Rent Guarantee insurance witnessed an increase in their gross rental yields during the first few months of the year, although the pace has now begun to slow slightly.

Unaffordable mortgage finance, high deposits and stricter lending criteria has also forced many potential home buyers to instead turn to the UK rental market.

PRS rental prices have been rising steadily in the UK since 2009 due to the high demand for suitable rental accommodation available to rent.

An increase in the supply of properties to the rental market has also been cited as a contributing factor of the success of Buy To Let, with 7% of surveyors revealing increases in the numbers of landlords looking to let their properties to private tenants.

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