BBC scrutiny dents mayor’s bid to paint bleak renting picture

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London Mayor Sadiq Khan has been pulled up for selectively using statistics to lend weight to his demands for rent controls in the capital.

Khan recently Tweeted: “London’s average rent is expected to soar to £2,700 next year. The average take home salary per month in London is £2,131. Londoners cannot continue living this way. That’s why I’m calling on the government to urgently introduce a rent freeze.”

ONS forecast

BBC Radio 4’s More or Less programme investigated his claim and discovered that City Hall had worked out predicted take-home pay using the Salary Calculator UK website while average rent was worked out using Rightmove’s figure of £2,480 a month at the end of 2022 and Savills’ prediction of a 5% increase in rents next year.

The programme explained that Rightmove was describing new rental agreements while by looking at actual rents, the ONS had put the median monthly rent in London at £1,500 a month.

Property types

After speaking to Tim Bannister, director of property science innovation at Rightmove, it discovered that average monthly rent figures included all property types, with the most common properties counting for more. While a one-bedroom flat in London costs an average of £1,800, the most popular type of property is a two-bedroom flat with an average rent of £2,265 which, divided by two is £1,132 per room.

The programme concluded: “Nobody is claiming London is cheap, but if as Sadiq Khan did, you compare this year’s salaries with next year’s rents and if you look only at new rents, not existing ones, and if you focus on a single person’s income while including the rents for multi-person homes, you’re going to make things look considerably worse than they really are.”

View Full Article: BBC scrutiny dents mayor’s bid to paint bleak renting picture

BLOG: Probe will rule that deposit alternatives are pro-consumer choice

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The Competition and Markets Authority (CMA) is to probe five different activities involving landlords and letting agents, and their responsibilities to private tenants, with deposit alternative products as an area of focus (says Ben Grech at Reposit). 

As one of only two FCA-regulated providers within the UK, Reposit is all too aware of the unfair practices that some operators have unfortunately been allowed to continue. We want to see unfair practices banned but also a recognition that deposit alternative products are efficient and help create a more competitive market that improves consumer outcomes. Equally, we’d like to see the deficiencies of the cash schemes examined.   

Fair amounts

We see that, for the most part, landlords claim fair amounts and tenants pay what they owe. After six years of operation, our data shows 56% of tenancies end without any charges for the tenant to pay, while 14% of tenancies end with tenants owing more than five weeks’ rent (the maximum usually allowed from cash deposits). Five weeks’ rent is not enough protection for landlords if things occasionally go wrong and it’s unnecessary, and even inequitable, to require all tenants to lock up a large cash deposit.

So how can landlords secure the right protection without tenants paying more upfront? This cannot be achieved with cash. However, our product solves the tenant affordability issue while ensuring landlords are fairly and properly protected with up to eight weeks’ rent – 60% more cover than cash schemes. At the end of tenancy, any unfair charges can be disputed, while formal disputes are independently adjudicated and settled within 14 days. 

Locked away

Cash schemes are purportedly ‘free’ and protect tenants from unfair charges, while creating a more affordable and equitable rental market. Yet we believe there are two issues: they’re not equitable and are not free. With the Bank of England base rate at 5.25%, over £200 million per year is generated in interest on the £4.5 billion locked away in cash deposits – money which could be released into the economy. 

The CMA’s mission statement is to ‘Make markets work well in the interests of consumers, businesses and the economy’ and we’re therefore confident it will determine deposit alternatives are pro-consumer choice and promote a healthy market. 

• Ben Grech is CEO at Reposit.

View Full Article: BLOG: Probe will rule that deposit alternatives are pro-consumer choice

Local authorities are using selective licensing as a ‘cash cow’ – Special Report

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Lots of councils see selective licensing schemes as a way of improving housing stock in the private rented sector (PRS) and work hard at gaining government permission to set up and run these schemes.

But many of the same councils that claim to need a licensing scheme to boost standards in private rented homes are being regularly condemned by the Housing Ombudsman for ‘apathy and failures’ when it comes to their housing.

View Full Article: Local authorities are using selective licensing as a ‘cash cow’ – Special Report

Rent deposits eat up more than half of the average monthly income

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The average renter in the UK must spend 64% of their net monthly income just to pay the deposit on a new rental property, a study reveals.

The findings from Zero Deposit highlight that for women, the proportion is even higher

View Full Article: Rent deposits eat up more than half of the average monthly income

Is The Substantial Incorporation Structure A Tax Avoidance Scheme?

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The Substantial Incorporation Structure is quite the opposite of avoidance from a tax perspective, in that it utilises anti-avoidance legislation to hasten the deemed completion of a business sale from a tax perspective and dovetails with incorporation relief.

View Full Article: Is The Substantial Incorporation Structure A Tax Avoidance Scheme?

Renters Reform Bill debate pushed back but still on track for June

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The Renters Reform Bill is on track to get Royal Assent next June, says the NRLA – despite the possibility of a snap May general election.

The government has confirmed that the first debate on the legislation will not take place until at least after party conference season, meaning that due to lack of time, a carry-over motion is likely to be used to introduce the Bill in the next Parliamentary session following the King’s speech on 7^th November.

The NRLA called for a timetable for the Bill’s progression through Parliament to tackle uncertainty within the sector during its recent meeting with the Prime Minister’s housing policy unit, but policy director Chris Norris says he is concerned about how it will be implemented, rather than whether the Bill will be enacted.

Unlikely scenario

“We could have a new Labour government or a minority government with their own priorities and they might not agree, so it could fail,” he tells LandlordZONE. “However, that’s unlikely, as is the scenario of the government deciding not to schedule the next stages.”

Along with chief executive Ben Beadle, Norris met civil servants at 10 Downing Street to talk about court reform, how possession cases could be dealt with in a timely manner post-Section 21 and whether more court staff would be employed. They also called for selective licensing to be scrapped when the new property portal is introduced, as the new system will render it redundant.

Right to rent

Another topic was anti-landlord rhetoric within government departments as the NRLA has been disappointed with messages that could undermine the association’s work. Beadle points to the recent announcements on right to rent fines that give the impression landlords were to blame for those living in the country illegally, as well as statements on childminding in rental properties, calling on landlords to be ‘open-minded’ – completely ignoring major barriers including non-negotiable mortgage and insurance conditions.

View Full Article: Renters Reform Bill debate pushed back but still on track for June

PRS can grab a share of new insulation fund to save on fuel bills

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Landlords and tenants could be in line for some extra funding towards energy efficient improvements following the launch of the Great British Insulation Scheme.

This promises to boost help for those on the lowest incomes as well as extend support to a wider range of households compared to existing government-funded schemes. Those eligible for support include families in council tax bands A-D in England, A-E in Scotland and Wales, with an EPC rating of D or below.

Cavity wall

The £1 billion scheme is set to help more than 300,000 people save money on their energy bills for installing measures including cavity wall, solid wall and loft insulation. Along with homeowners, landlords and tenants are being encouraged to apply, with tenants asked to speak to their landlord first to get permission.

Support will run alongside the existing Energy Company Obligation (ECO) scheme, which offers free home energy efficiency improvements, such as insulation, heat pumps and solar panels to families on low incomes.

The offer is timely as the government has recently confirmed that it’s set to go ahead with the introduction of rules to raise properties in the PRS to an EPC band C by 2028.

Online tool

The online checker tool asks questions including how they heat their home, whether their home has solid or cavity walls, and if they are receiving any benefits. They will then be referred to their energy supplier for support and if eligible, it will arrange an assessment of the property. They can decide not to go ahead if they do not agree with the assessment or costs.

Lord Callanan, Minister for Energy Efficiency and Green Finance, (pictured) says: “Boosting the energy efficiency of homes creates the best long-term protection against fuel poverty for the most vulnerable. That’s why we are helping families with extra support to make their homes warmer, while saving hundreds on energy costs.”

View Full Article: PRS can grab a share of new insulation fund to save on fuel bills

Fast-growing Scottish rents top UK chart despite cap extension

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Landlords in Scotland hampered by rent controls have managed to drive annual rent growth faster than anywhere else in the UK.

Rents for new lets in Scottish cities are 15.6% higher in Edinburgh and Dundee and up 13.7% in Glasgow compared with a year ago, according to Zoopla’s rental market report for September, which reports that Scotland (12.7%) has overtaken London (12.4%).

Increases in rents for existing tenancies are capped at 3% a year but as properties become vacant, Scottish landlords can reset the rent to the full market rate. This means landlords are seeking to maximise the rent for new tenancies to cover increased costs and allow for the fact that future rent increases will be capped over the life of the tenancy, says Zoopla.

Final time

The Scottish government intends to extend the private sector rent cap for a final time until 31st March and this week, Tenants’ Rights Minister Patrick Harvie assured MSPs that it would “bridge the gap” for tenants once the emergency legislation expires. He said it recognised landlords might want to increase rents all at once following the expiration of the Cost of Living (Tenants Protection) Act and has therefore got the power to put rent adjudication procedures in place to facilitate the transition.

Annual increase

Zoopla’s research also finds that double digit rental growth means rental affordability across the UK is at its worst for over a decade at 28.4%.

Meanwhile, letting agents are frustrated by government policies that are pushing landlords out of the PRS and hammering their stock. The latest Royal Institute of Chartered Surveyors market report highlights immense tenant demand that continues to rise, according to a net balance of 47% of agents, across all regions and countries.

View Full Article: Fast-growing Scottish rents top UK chart despite cap extension

LSA selling landlord portfolios for higher than market value, faster than anyone else

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If you need to sell you no longer have to worry about Estate Agents taking too long, or auctions offering too low a price, portfolio exit specialists are the solution.

Over the last 12 months we’ve have had to deal with impossible rules and regulations that have put an end to property being a savvy decision when it comes to making money. Put simply, unless you’re a new landlord with fresh cash, our rents just aren’t enough to make our portfolios worth it.

Understandably, some landlords have been on the fence. In the current market, landlords have been struggling to get out, with many agreeing to knock off 30% equity expected back from their houses just to get rid of them. Refurbs have gone up to around £30K per property, and buyers are trying to knock £70K off the price of un-refurbed properties to cover costs and make sure they still get their margins. That’s why so many landlords are turning to portfolio exit specialists, and the results speak for themselves.

At Landlord Sales Agency we’re beating the market drop and are selling properties no matter what their condition. Aith 250 landlords approaching us each month, we get landlords the best possible prices as fast as possible so they can exit and reinvest elsewhere.

For portfolios that need a refresh, we have a team of builders who can help you achieve the refurbs you need to get your properties sold. We’ll manage the entire portfolio for you to prep for sale. In some cases, we can even give landlords cash advances for the refurbs, we’re that confident.

In the cases where properties need even more building help than we can offer, we have the team to get you the best prices regardless. How? We’ll throw everything at the properties including all of our contacts and resources to get them sold for a high price. We know exactly what it takes to sell tenanted properties without a single change to the portfolio and get the rents up to attractive rates for buyers without needing to evict and without the stress of you having to get involved.

Our extensive database of 30,000 buyers ready to buy our deals triggers a bidding war over your buy-to-lets the moment we list them, full of new landlords who don’t mind taking the work on with pre-existing tenants. They have fresh cash and fresh investment to weather the storm no matter how long it takes, allowing you to get out with the most equity possible.

For any tax issues or outstanding bills we’re partnered with Property118 to help you sort it all out for you. There’s absolutely no problem we can’t fix when it comes to selling your portfolios.

Make no mistake, the market has got to a point where it’s not easy to sell, but our team is able to adapt, fix the difficult issues, go above and beyond to solve problems and inspire each other to get the sales over the line.

What’s more, unlike auctions which will take a huge chunk of the sale, or estate agents who will make promises that can take months or years versus weeks, we’ll sell your portfolio fast, no nonsense, no fees to pay, and we’ll simply take our costs out of the profit, allowing you to walk away with around 85% – 90% of the value.

We’re completely transparent with everything we do, and communicate to both buyers and sellers to ensure you know you’re getting a deal that everyone is happy with.

There’s a bubble right now of landlords who need to sell urgently. We’re in the right place at the right time, but it’s important to act now.

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View Full Article: LSA selling landlord portfolios for higher than market value, faster than anyone else

Sharp rise in renters struggling to make ends meet

admin    Uncategorized     agents

A staggering five million households will be forced to spend more than a third of their income on housing by the end of the decade, according to a new study.

The National Housing Federation reveals the sharp rise in renters struggling to meet housing costs.

View Full Article: Sharp rise in renters struggling to make ends meet