Tag Archives: africa
Research suggests a third of UK tenants sublet without consent
Around a third of private rented sector tenants in the UK say they are currently subletting without the landlord’s consent and four out of 10 tenants plan to do so in the near future, new research has found. The survey from online lettings agents PropertyLetByUs, also shows that the vast majority of tenants, 96%, are subletting the property for short time to help a family member or friend out and 82% claim they are subletting to help pay the rent. Over half of tenants, 52%, say that they planning to sublet their property in the near future, with the landlord’s consent and 78% think they should be able to sublet the property without the landlord’s approval. According to Landlord Action, there is a growing number of instructions from landlords who want to start possession proceedings against tenants who have sublet, via Airbnb, without their consent. Subletting is fast becoming one of the leading grounds for a tenant eviction. According to Jane Morris, managing director of PropertyLetByUs, it is very worrying that so many tenants are subletting without telling their landlords. ‘It is imperative that landlords make regular checks on the property to check for additional occupants. Many tenants will try to hide the fact they are subletting, so the warning signs can be excessive rubbish and accelerated wear and tear,’ she said. ‘When there is multiple occupancy in a property, wear and tear and damage is dramatically accelerated. There can be increased mould and condensation with more occupants. Landlords can also face expensive repairs for damage and redecoration costs, to bring the property up to the standard it was at check-in,’ she pointed out. Morris also pointed out that illegal subletting falls under tenant fraud and renting a property makes landlords vulnerable to fraud. ‘It is vital that landlords and agents carry out thorough pre-letting checks. The purpose of referencing a tenant is threefold; to check the person is who they say they are, that they can afford the rent and that they have honoured past commitments,’ she explained. Last year, the government said it planned to make it easier for tenants to sublet a room by legislating against the use of clauses in private fixed term tenancy agreements that expressly rule out subletting, or otherwise sharing space on a short term basis. However, it has not yet set a date for a consultation on the plans. PropertyLetByUs recommends that landlords make regular checks on their property, ideally every three to six months and when doing so should look out for additional clothing and shoes, excessive rubbish for the number of registered tenants, additional bedding like sleeping bags and pillows, suitcases and rucksacks and extra toothbrushes ‘Before taking on a new tenant, make sure you carry out a thorough reference to ensure you know who your tenant is,’ added Morris. Continue reading
UK first time buyers with small deposits save £1,300 in mortgage interest repayments
Falling mortgage rates in recent months mean that the average mortgage interest payments for a UK first time buyer mortgage over two years has fallen. It is down from £11,327 in the first quarter of 2015 to £10,019 in the first quarter of 2016, a saving of £1,308, according to research from AmTrust International, Mortgage and Special Risks. Record low interest rates in the first three months of 2016 mean it hasn’t been this cheap to service the interest on a 95% loan to value (LTV) mortgage since lending at this level was reinvigorated in 2013 following the financial crisis and recession. Some 95% LTV mortgages are commonly used by first time buyers who are unable to save a substantial deposit, enabling them to step onto the property ladder. The savings of more than £1,300 in interest payments over two years when compared to the first quarter 2015 is good news for a group of buyers who have been caught by rising house prices and expensive rents. As the interest costs of paying off a mortgage have fallen, this means the amount spent by high LTV borrowers, those with a 5% deposit, on capital repayments has increased, the research also shows. The amount first time buyers spend on capital repayments that help them build the equity in their home has risen 18% year on year from £5,407 in the first quarter of 2015 to £6,391 in the same period in 2016. This means first time buyers can pay off the capital of their mortgage faster, reducing the total amount of interest paid over the lifetime of their mortgage. While the costs of servicing the interest on a high LTV mortgage have decreased sharply, the cost of renting has risen in a further blow to hopeful buyers who will find it hard to save for a deposit while covering the cost of rent. Over the last year, the cost of a year’s rent has increased by £300 or 3% from an average of £9,188 in the first quarter of 2015 to £9,488 in the first quarter of 2016. When you compare the cost of renting to the interest cost of a mortgage, which is the part of the mortgage payment that does not go towards the owner building up their equity share in the property, akin to a form of saving, renting is £4,415, or 87%, more expensive. The current difference is £111 more than the £4,305 extra it cost to rent compared to paying mortgage interest in the fourth quarter of 2015, and £1,900 more than in the third quarter of 2014 when the gap was at its smallest at £2,515. The total cost of servicing a 95% LTV mortgage, interest and capital repayments, is also cheaper than it has been at any point since the Help to Buy mortgage guarantee was… Continue reading
Almost half of UK estate agents think Brexit is having a negative impact
Some 42% of estate agents in the UK believe that the decision to leave the European Union has already had a negative impact on their business, new research has found. One agency even found that following the vote on 23 June some 10% of its sales fell through and valuations were reduced by 40%, according to a survey by software supplier Dezrez. A third of those surveyed predict that there will be between 5% and 20% less properties being put on the market and suggested that home owners may see the value of their house drop by 5 to 15%. But less than believe that property values will fall considerably. The research also found that 52% of estate agents expect vendors or buyers to pull out of sales, or for vendors to take their houses off the market but 53% had seen no affect to date. Indeed, some 37% believe leaving the EU won’t have a long term impact on their business, the remainder are either unsure or anticipate a change in the market and their business model. Few have actually prepared for any kind of Brexit impact. The poll showed that 54% believe it is too early to either have a strategy or indeed need one, while 16% said they have a strategy and 13% are working on one. ‘As the economic landscape continues to shift following the UK’s vote to leave the European Union, the Bank of England Governor Mark Carney has warned prospective buyers to proceed carefully if planning to borrow money,’ said the firm’s chief executive officer Justin Morris. ‘This warning, and the ongoing analysis from property professionals, is unsurprising. However, until the market settles, we won’t know the exact extent the effect Brexit will have on the residential property market. What is clear is that in the short term uncertainty will lead to a dip in market confidence,’ he explained. He added that while opportunist buyers may jump at the chance to renegotiate on price, more prudent buyers will be looking at the affects the turbulent economy is having on their finances, making sure that they will still be able to afford their mortgage. He pointed out that many of the estate agents believe that there are still more buyers than sellers. So, whilst a base reduction in housing stock and value is likely, the market could very well even itself out and remain steady. ‘The role of the estate agent will be increasingly important to vendors and buyers a like. Negotiations may become trickier and sales progression more complex, consumers will rely heavily on traditional estate agents for their experience and advice. There is no doubt that there are challenges and opportunities ahead,’ he concluded. Continue reading
