RICS predicting rents will continue to rise in the coming three months

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The latest RICS Residential Market Survey indicates rents are forecast to rise in the lettings market, due to the continued imbalance between supply and demand. This month +36% of agents reported an increase in tenant demand and -11% saw a fall in the number of new landlord instructions.

View Full Article: RICS predicting rents will continue to rise in the coming three months

‘This is why I’m quitting the sector after 20 years’ reveals frustrated landlord

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Fed-up landlord Sue Willis-Hargreaves (pictured, below) is quitting the sector – and taking a hit on her pension plan – after being ground down by anti-landlord rhetoric and red tape.

In a heartfelt message to Whitehall ministers that serve as a reality check for the Government, Sue explains that she’s taken the reluctant step to sell all four of her properties years earlier than planned.

“As a landlord, I am considered a social pariah, vilified in the press, and penalized by legislation and financial constraint,” she tells LandlordZONE.

“When it suits, for taxation purposes, I’m running a business, but if I try to access expenses to which a standard business would be entitled, suddenly I am not.

No training

“I’m expected to take on the role of the Border Agency by checking immigration status – a job for which the government provide no training and, if I get this wrong, for which I will personally be responsible.

“And I’m no longer entitled to any tax relief from mortgage interest, forcing down my profit margin.”

The removal of Section 21 will be the final straw, explains the Oxfordshire-based landlord, who has only once used a notice after unsuccessfully trying to support her tenant.

“In itself one bad tenant would not cause me to turn my back on 20 years of work, but I feel totally unsupported by the government,” says Sue.

2am calls

She insists that she’s always taken her role extremely seriously and doesn’t use a letting agent, which means sometimes taking calls at 2am, acting as a benefits advisor and counsellor.

Sue also allows pets, only offers fixed-term tenancies to give tenants security and won’t even take deposits to help reduce the financial burden.

But Sue is now extremely saddened that her PRS experience is coming to an end.

“These are my properties, I have sweated blood for them but I won’t re-let them when the tenancies end,” she adds.

“They’ll probably get bought by first-time buyers, contributing to a shortage of rental properties, pushing rents up – and landlords will get the blame.”

Sue attended the recent LandlordZONE webinar on the changes to the PRS proposed within the government’s White Paper. Watch it here.

View Full Article: ‘This is why I’m quitting the sector after 20 years’ reveals frustrated landlord

Local Authority insisting on trivial repairs?

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Hi Folks, Recently had a tenant run to environmental health after I told her I’m not willing to re-house her or lower the rent. Anyway, met the officer down there yesterday (after 3 days notice) to go through the place with the tenant to find that very little needs doing

View Full Article: Local Authority insisting on trivial repairs?

Capital gains tax on rented property that was 50/50 but now 99/1?

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I have just sold a rental property and am slightly unsure regarding capital gains tax.

We made a profit of £77,000. The property was originally bought in joint names 50/50 basis with my husband, but we changed a few years ago as he is now disabled so I owed 99% and he owns 1%.

View Full Article: Capital gains tax on rented property that was 50/50 but now 99/1?

Six agents excluded

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Between April and June 2022 (inclusive), six agents were excluded from The Property Ombudsman (TPO) for failing to pay a compensatory award.

The excluded agents include:

• Kingdom Property Services Ltd, a sales and lettings agent in Slough

View Full Article: Six agents excluded

NEW: Study reveals boom in holiday lets investment as staycation trend sticks

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Nearly one in 10 adults is seriously considering buying a commercial UK holiday let over the next five years, according to new research.

A study by the Nottingham Building Society reveals that the staycation boom has inspired millions to think about making the investment, with 52% of those who already own a holiday let having bought them in the past two years.

Would-be owners are not just in it for the money, as 67% say they and their family would go on holiday there every year, which is probably a good thing as the research shows over half (52%) of owners have cut rents, with 27% reducing them by a fifth or more compared with last year.

Despite this, the majority (84%) reported that they made more income from the properties in 2021 than 2020, with nearly a quarter (23%) estimating income was 30% or more higher.

Spotlight

However, short-lets are increasingly coming under the spotlight, with campaigners around the UK pointing to their impact on the availability of rented properties.

Read more: the Ultimate Guide to short lets insurance.

A new government study is looking at tougher checks and a self-certification scheme for hosts, while there have been suggestions that regional mayors could get powers to ban second home owners from renting out their properties on websites such as Airbnb.

The government has already empowered councils to charge up to double the rate of council tax.

Read Tom Entwistle's probe into the holiday lets market.

View Full Article: NEW: Study reveals boom in holiday lets investment as staycation trend sticks

Minister defends decision to exempt PBSA from periodic tenancy proposals

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Housing minister Eddie Hughes has attempted to justify why institutional landlords who run Purpose Built Student Accommodation (PBSA) are to be exempted from the Government’s proposal to move all tenancies in the PRS to periodic ones.

Hughes was asked by Conservative MP for Hendon Matthew Offord (pictured) what his department’s rationale is for the policy decision within the Fairer Renting White Paper, which has annoyed many private landlords who operate student houses, whose tenants will – if the government’s proposals become law – have to be offered periodic tenancies.

In response, Hughes said: “PBSA is distinct to the rest of the PRS.

“It caters specifically to student needs, is often restricted to housing students due to planning constraints, and it is not designed to offer long-term accommodation.

“Standards in privately managed PBSA are upheld by Government Codes, which outline the obligations of PBSA landlords and set benchmark standards for the accommodation they manage.

Compliance

“Compliance with The Codes also ensures that problems or disputes can be resolved promptly if they do occur. Currently around 95% of PBSA providers are signed up to The Codes.

“PBSA developments are an important part of student accommodation supply.

“Under our proposed reforms to the private rented sector, private PBSA providers who are signed up to a government-approved code will be exempt from assured status and therefore the new periodic tenancy system.

“This will make sure that PBSA can continue to provide efficiently run housing in line with the academic year for the students that choose to live there.”

Landlords of PRS student houses, which will not be exempt, means students will have to be offered periodic tenancies of a fixed length instead of ASTs even though the nature of student renting means this will be difficult to navigate legally.

View Full Article: Minister defends decision to exempt PBSA from periodic tenancy proposals

How the changing letting market brings good news for landlords

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According to Paragon Mortgages, over the past 10 years there’s been a 110 per cent increase in the number of households aged between 55-64 that are renting privately.

Paragon’s data shows that there are 2.5m households aged over 35, compared to 1.9 aged 34 or younger, and there’s been a 115 per cent increase in the number of those living in a rented home for over 10 years and up to 20 years.

That’s good news because it brings stability to the market, longer term tenancies and secure rent payments.

Later life tenants

So, the fastest growing group of renters is in the middle-age bracket. Later life tenants living in privately rented homes has accelerated at a much faster rate than those in the under 35 age group, over the past decade, Paragon Bank’s analysis has shows.

In round numbers, the number of households aged 65 and over reached 382,000 in 2021, that’s up 38% on a decade before. The group aged between 55-64 reached 485,000, whilst those aged between 45 and 54 increased by 50 per cent to 691,000.

Conversely, there was a marked decline in the youngest age group: the number of 16 to 24 year-old households in the private rented sector declined by 3.7 per cent over the same period to 560,000, with those aged between 25 and 34 increasing by 6% to 1.37 million.

The figures appear to challenge the general belief that renting is for young people, renting until they manage to get onto the housing ladder. Evidence is building that shows renting is becoming embedded in the housing market, with people choosing to rent for longer or enter the rental market in later life.

Overall, the Paragon figures show that those households aged 35 or over living in rented homes totalled 2.5 million, compared to 1.9 million aged 34 or below.

In general, this trend is good news for landlords as older people in tenancies, where they intend to stay longer, adds greater stability and security and therefore peace of mind for owners.

Richard Rowntree, Paragon Bank Managing Director of Mortgages, has said:

“The private rented sector has evolved over the past decade and has seen strong growth in the number of middle-aged and later life tenants. The perception of rented property as being the preserve of the young is outdated.”

There is evidence that people are staying longer in their rented homes. There has been a 132 per cent increase in the number of households who have lived in their home for between five and 10 years over the past decade. There’s been a 115 per cent increase in those living in a rented home for between 10 and 20 years according to Paragon, while it says for those living in a rental property for between one and two years the increase was only 5%.

Again, Richard Rowntree says:

“There could be a number of reasons for the growth in older tenants. We are seeing a greater number of people living in rented accommodation for life, plus people are releasing the equity in their homes and opting to rent instead. The growth of single person households is also driving some of the growth.

“Landlords need to consider what these cohort of tenants need. For example, those between 35 and 55 are more likely to have family, so need larger detached or semi-detached homes, whilst those in later life require simpler homes to maintain that are close to amenities. In addition, tenants want flexibility about making adjustments to their homes, or keeping a pet.”

The number of tenants over 45 has more than doubled over last decade says Paragon.

View Full Article: How the changing letting market brings good news for landlords