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Half of landlords in England unaware of start date for right to rent rules change
Half of UK landlords are not prepared for the Right to Rent legislation set to come into force on 01 February with some thinking they had another two years to wait. Indeed some 20% believed that they had until April 2017 to prepare for the changes, while 3% believed they had until 2018 to get ready, the research from online estate agent Urban shows. The new legislation, already implemented in the West Midlands, will soon require all landlords and agents in England to check a tenant’s immigration status or ‘right to rent’ in the UK. A failure to prepare could leave landlords at serious financial risk, with potential fines of £3,000 if they do not comply. The survey report also found that only 10% of landlords provide the correct information to tenants at the start of a lease and 90% were unable to identify the characteristics of a House in Multiple Occupancy (HMO). Some 16% were putting themselves at serious financial risk by failing to provide a valid contact address on tenancy agreements; an action which could see contracts being deemed as null and void. One reason to explain the lack of industry knowledge could be due to the rise in accidental landlords who rent property due to circumstance beyond their control such as having inherited property, according to the firm. ‘There has been an influx of new legislation relating to the rental market made in recent years and we know that UK landlords are struggling to keep on top of these changes. Despite knowing many of the basics, many find it difficult to navigate the minefield of changing renting rights and wrongs and this is particularly so for accidental landlords,’ said Adam Male, Urban cofounder. However, despite a lack of understanding in some areas, reassuringly, the majority of landlords were abreast of most other rental fundamentals. For instance, 77% were aware of the need for an up to date Energy Performance Certificate (EPC) and 95% of landlords correctly identified their gas safety responsibilities, 76% also knew the need for a smoke alarm on every floor and 7% even put one in every room. The Landlord Knowledge League Table, a map which ranks the most knowledgeable regions in the UK according to the survey results, found that the most knowledgeable landlords let property in Southampton, while those in Newcastle-under-Lyme were unaware of many key landlord responsibilities. ‘It is great to hear that knowledge about things such as gas safety is a widely understood and implemented landlord legislation, however, there is still a long way to go in educating landlords about the varying aspects of renting,’ said Male. ‘New regulations such as the Right to Rent have the potential to stop back door lettings and create a better environment for all, however, this will only happen if the scheme is communicated to landlords properly. We as an organisation want to do our bit to clean up the industry and help landlords protect… Continue reading
Quarter of UK buyers would consider a home on a flood plain despite recent floods
With the UK again being hit by bad floods this winter new research has found that a quarter of buyers would consider properties on known flood plains. The research from HouseSimple also found that of those who would buy on a flood plain some 65% would want a price discount of at least 21%. The poll asked respondents whether they would buy a home next to one of 17 undesirable locations including a prison, rubbish tip, busy school and electricity pylons. Just 16% said they would buy near or next to a rubbish tip. And of those who would 37% said they would seek a discount of at least 31% on the typical asking price of a property in that area. Some 48% of buyers would consider a property on a busy flight path and 36% would consider a property near a cliff susceptible to erosion. Of those who would, half would expect at least a 31% reduction in the asking price. Blights that buyers were less concerned about included, wind turbines or solar panels, next to or near a school and above a restaurant or take away. ‘We have all seen in vivid detail just how devastating the floods have been over the past month. Flooding seems to becoming a more regular occurrence, and prospective buyers are likely to be more aware of the risks associated with buying a property on a flood plain than maybe they have been in the past,’ said Alex Gosling, the firm’s chief executive officer. ‘Home owners looking to sell a property on a known flood plain may well need to be willing to discount hard if they want to secure a quick sale and it is no surprise that living next to a rubbish tip came out at the bottom of the heap,’ he pointed out. ‘No-one necessarily wants to live next door to a rubbish tip or under a busy flight path, but sometimes budget constraints mean that might be the only option, particularly if you want to buy your dream property or you’re a first time buyer,’ he explained. ‘If you are buying a property that is in an undesirable location, make sure you do your research. The last thing you want to do is buy something that you regret buying soon after and then struggle to sell. Saying that, at the right price, you could get far more for your money than you would a few streets away, if you’re willing to compromise on the undesirability of the location,’ he added. Continue reading
Rents in UK likely to grow at a slower pace in 2016
Rents for newly let homes in the UK continued to grow in 2015 albeit at a slower pace than in 2014, according to the latest index report. Average rents grew by 3.1% over the year, taking the average monthly rent to £919 per calendar month, according to the data from property services group Countrywide. Rents rose in all regions of the country with the East of England seeing the highest growth, up 6.5%, and the c London market seeing the lowest with 0.5% growth. The report also shows that 34% of tenants who renewed their tenancy faced higher rents, an increase of 7% from last year. However, the average rent for renewing tenancies only grew by 1.3%, less than for those moving into a new home. Rental growth over 2015 was supported by increasing demand for rental homes and low stock of homes available to rent. This imbalance between supply and demand has intensified competition for homes in the market. The average property is now let within 20 days of being instructed; two days quicker than it was in 2014. The time to let has fallen across the country, but homes in the North of England and the Midlands are now let almost three days quicker. Greater London as a whole saw a slowdown in rental growth in 2015 compared with 2014, but rents still rose by 4.7%. As rents have risen in recent years, tenants have increasingly looked to cheaper areas in Outer London. As a result the proportion of under 25s living in the rental sector in London fell by 4% in 2015, the continuation of a longer term trend. As rents continue to increase and outpace earnings in the capital, younger people and those in lower income brackets, have found it harder to remain in the capital, particularly in central areas. Surrounding regions in the South of England have seen small growth in the proportion of under 25s in their market, as Londoners look further afield for more affordable markets. ‘A mix of steadily increasing demand and a lack of homes to rent supported rental growth in 2015, even though wage growth remained subdued. In London rising costs meant renters were more likely to move to outer London or the commuter belt in search of more affordable places to live,’ said Johnny Morris, research director at Countrywide. ‘2016 looks to be a complicated year for landlords as the government focuses its efforts on boosting homeownership. The additional 3% stamp duty charge, stricter regulation and changes to tax relief from 2017 onwards will all take their toll on investor sentiment and impact behaviour,’ he explained. ‘With stock at a premium, the smaller landlords who decide to sell up will add upward pressure to rents, although any rises will be tempered by affordability pressures,’ he added. Continue reading
