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Immigration check scheme in UK makes landlords reluctant to take on foreign tenants
The immigration check pilot scheme in the UK which is running in the Midlands has led to tenants being charged additional fees and is making it harder for foreigners to rent a property, new research has found. Tenants are being charged an extra £100 in administration fees, according to a survey by the Joint Council for the Welfare of Immigrants (JCWI) which polled landlords and tenants in the pilot area since the roll-out. Under the pilot scheme, which is expected to be rolled out across the UK later in the year, landlords are required to carry out checks on new tenants and face action if they are found to be renting to an illegal immigrant. If a landlord breaches the rules they face a fine of £1,000 per illegal adult occupier and for a second offence that rises to £3,000 per adult. The survey also indicated that landlords are now more hesitant to offer viewings to anyone needing more time to provide paperwork, meaning migrants are more likely to be turned down. The research also shows that landlords are discriminating between applicants on the basis of their background and are preparing to turn away tenants because they have a foreign accent. Furthermore, some legitimate tenants who cannot easily identify themselves using a British or European Union passport are finding it harder to secure somewhere to live. ‘This research clearly shows the dilemma that landlords are facing. On the one hand they want to be fair to prospective tenants, but on the other hand, they are fearful of renting a property to an illegal immigrant,’ said Jane Morris, managing director of Property Let By Us. She gave an example of an American tenant who reported that her British husband could secure viewings for the same properties she had been told were no longer available. Morris explained that under the pilot scheme, would-be tenants have to produce evidence from a checklist of documents that they have permission to be in the UK and landlords have to take a copy for their records. ‘So before dismissing a prospective tenant, it is important that agents and landlords make all the necessary checks. For example, if an agent is taking on the responsibility for checking an occupier’s immigration status, he/she must agree this in writing and must report the findings to the landlord,’ she pointed out. ‘Agents should set out timescales for checks and reports in the agency agreement and report occupiers without the right to rent to the landlord in writing. If the landlord still authorises a tenancy agreement, they will be liable for the penalty,’ she added. She also pointed out that in the event of a breach, where an occupier is found to be living illegally in a rented property, the agent or landlord will need to establish a statutory excuse to avoid a penalty. ‘A statutory excuse can be maintained if… Continue reading
Regulation and tax set to impact property markets in Asia Pacific region
Monetary policy, tax, regulations and underlying fundamental drivers such as demographics and urbanisation will have a significant impact on property markets in the Asia Pacific region, according to the latest real estate analysis. The region’s economies are moving at multiple speeds with differing drivers and local dynamics, producing quite a wide range of housing market performance indicator, says the Asia Pacific residential review from international real estate firm Knight Frank. ‘Economic growth can certainly be a reasonable lead indicator as to which way housing markets will go,’ said Nicholas Holt, head of research for the Asia Pacific region. He also pointed out that despite facing many headwinds, the International Monetary Fund is forecasting stronger growth in 2015 for six out of the 11 major countries in the region. ‘While this should be a positive sign for home owners or investors, the reality is that in many cases there has been a divergence between short term economic growth and market performance,’ he added. The report reveals that since last November, the People’s Bank of China has cut interest rates three times, contributing to the first month on month increase in house prices in May this year, after falling for 12 consecutive months. Other countries such Australia, India and South Korea are also pursuing expansionary monetary policy. It points out that with further interest rate rises inevitable in the slow moving market of Singapore, cooling measures introduced previously could start to be reviewed by the government. China and New Zealand have already seen similar moves. And the likely extension of luxury tax and introduction of a super luxury tax have already started to impact market behaviours in Indonesia, as has the announcement of a new capital gains tax scheme in Taiwan. The report also points out that it is not just China that has seen the increasing influence of policy interventions in residential markets, whether fiscal, monetary or regulatory. In New Zealand, for example, authorities have stepped in over recent years. ‘Perhaps now more than ever, property market observers are looking to policy makers, whether Janet Yellen at the Federal Reserve, the Singapore government, the Reserve Bank of Australia, the People’s Bank of China or the Japanese government for clues about how markets will perform. We can expect more of this going forward,’ explained Holt. In Hong Kong the supply of land for development has affected the property market and the report says that until supply catches up with demand the upward pressure on prices will continue in what is already one of the costliest property markets in the world. Indeed, house prices in Hong Kong have continues to defy the ongoing cooling measures by rising 8.4% in the 12 months to the first quarter of 2015, the highest annual price growth in the overall market since the second quarter of 2013. The report suggests that the Reserve Bank of Australia’s recent decision to hold interest rates followed two 25 basis point cuts in the official… Continue reading
Survey confirms UK Help to Buy is popular with first time buyers
The UK Government’s Help to Buy scheme is now the most popular way for first time buyers to get on to the housing ladder, new research suggests. As well as helping first time buyers who can afford to pay a mortgage but are struggling to save a deposit it eases the pressure on families to plug gaps in savings, says the study from mortgage and loans provider Ocean Finance. It found that half of first time buyers would use the Help to Buy equity loan or mortgage guarantee schemes to overcome the barrier of having a small deposit at a time when deposits are the biggest barrier to getting on the housing ladder. The Government started the Help to Buy scheme in 2013 in an attempt to kick start the housing market following the financial crisis which saw lenders tighten their mortgage lending rules and most 95% mortgages disappear. This meant borrowers needed to fund deposits of at least 10% and often, up to 25%, which took home ownership out of the hands of many first time buyers. Almost 40% of first time buyers questioned said being able to save a big enough deposit is the main barrier to owning their own home. This is following by rising house prices, which makes it harder to fulfil tough affordability checks and at the same time, pushes the amount needed for a deposit even higher. Alongside its equity loan and mortgage guarantee schemes, the Government is set to launch a Help to Buy ISA this autumn. The ISA is designed to boost the savings of first time buyers with a top up from the Government of 25%, up to a maximum of £3,000 on savings of £12,000. Almost a quarter of those questioned by Ocean said they planned to open a Help to Buy ISA. That compares with 14% who expect to rely on help from their families to fund their deposit. ‘The Help to Buy scheme is doing its job and helping to remove the deposit barrier that many first-time buyers face. Too many first time buyers have been frozen out of the housing market because they couldn’t save the 25% needed to get the best deals and make their mortgage affordable,’ said Gareth Shilton, Ocean’s spokesperson. ‘It’s interesting to see appetite for the new Help to Buy ISA also, and we’re looking forward to seeing take up levels of this scheme once it’s launched. The big question, of course, is what will happen when the Government steps back from supporting schemes to get the housing market moving. House builders and lenders need to be having conversations to see how they can work together to ensure the momentum isn’t lost,’ he added. Continue reading
