Selective licensing – Effective tool but needs improving!

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Opinion Research Services was commissioned by MHCLG to carry out a review of selective licensing and carried out in-depth research and consultations with stakeholders from across the sector.

The report finds that selective licensing is an effective tool when implemented properly

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Landlords believe tenant demand is growing

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Rental demand:

Tenant demand is
‘growing’ or ‘booming’, that’s according to landlords
surveyed for the Paragon Mortgages Q3 2019 PRS Trends Report.

Nearly one-third of
landlords (29%) believe that tenant demand is increasing, this is the
highest proportion of landlords reporting this trend in the last 12
months.

John Heron, director of mortgages at Paragon, told Michael Lloyd of Mortgage Introducer:

“A clearer picture
is starting to emerge of the impact that multiple government and
regulatory interventions are having on the PRS.

“In broad terms,
landlords have been buying fewer properties and selling more at a
time when there has been a resurgence in tenant demand.

“RICS reported a
similar trend in their August residential survey and it is widely
anticipated that this will lead to reduced choice and higher rents
for tenants.

“This is probably
not the outcome that policy makers were looking for.�

Meanwhile, portfolio
landlords (those owning several investment properties) continue to
drive an increase in portfolio size and value, with the overall
average portfolio now at 13 properties and worth £1.82m.

However, says
Paragon, landlords are continuing to take a cautious approach to
their investments.

Average gearing
remains historically low at 33% LTV whilst mortgage payments as a
proportion of rent remain unchanged in Q3 at 25%.

Despite more
encouraging signs in portfolio size and value, Q3 saw landlord
optimism decline to 11%.

This extends a
long-term downward trend in optimism since the record high of 41%
recorded in Q1 2014.

This was shortly
before the government announced its plans to change the way landlords
are taxed, increased stamp duty on second homes, and the EU
referendum was held.

©1999 – Present | Parkmatic Publications Ltd. All rights reserved | LandlordZONE® – Landlords believe tenant demand is growing | LandlordZONE.

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Ben Beadle is to be chief executive of new NRLA

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Ben Beadle is to be the chief executive of the new National Residential Landlords Association, formed from the merger of the National Landlords Association and the Residential Landlords Association. The NRLA will launch in January 2020.

Ben is currently Director of Operations at Touchstone

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Fire Door Safety Week: What landlords need to know

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This week the seventh fire door safety week takes place. Fire Door Safety week, organised by the British Woodworking Federation, aims to stamp out bad practice and raise awareness of the important role that fire doors play.To mark the week, and there are a number of resources for landlords and tenants on the fire door […]

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Beadle to lead the NRLA

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Ben Beadle is to be the chief executive of the new National Residential Landlords Association, formed from the merger of the National Landlords Association and the Residential Landlords Association. The NRLA will launch in January 2020. Ben is currently Director of Operations at Touchstone, part of the Places for People housing group. Previously he was […]

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We now pay Affiliates for tax planning referrals

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A huge number of landlords have never sought professional advice to identify the optimal business structure to meet their goals.

In our experience, the most common gaps in landlords business plans relate to considering business continuity, legacy planning

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Flipping – Legal but is it moral?

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Flipping is back with a vengeance. It is quite legal and involves a house purchaser completing the purchase of house, moving in, then putting the house back on the market often for profit. I have seen examples of 40% profit and accept that is achievable.

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Starting from scratch – HMO?

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I’m looking to get into property investment. Buying the property and renting it out. I am trying to learn everything as I can about HMO rules, but I am not sure if I really understand article 4 for HMO, has it made life difficult for the HMO landlord?

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Millennials spending up to 41% of their Budget on Rent

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Rental trends:

Three biggest rental trends influencing 22-37 year olds revealed in a new rental market analysis by London based hybrid letting agents, Home Made.

Over the last 12 months, Home Made, analysed the spending trends on property rentals for Millennial tenants in the 22-37 age bracket.

They have discovered that Millennials in London are spending up to 41% of their net income on rent (Net share of yearly rent/ Annual salary), which compared to 32.5% of net income in 2005.

Rental prices in London are rising faster than pay levels. However, Home Made have
analysed proprietary data alongside multiple data sources to uncover the other major factors influencing this Millenial spending trend:

� 82% of Newly Built apartments’ renters in London are Millennials. This highlights
a willingness within the demographic to pay for top quality new apartments and the
associated amenities, a co-living community lifestyle, in order to live in a newly
developed environment. This trend shows a large portion of London Millennials are
willing to pay extra for quality which is a positive sign for the growing Build-to-Rent
market.

â—� 57% of the rental enquiries made by individuals living in outer London (zone
3-4-5-6) are for inner London properties (zone 1-2) (Share of properties is evenly
distributed by Zone 1-2 vs 3-4-5-6). This trend indicates commute time and being
close to inner-city amenities rank higher in importance for the Millennial demographic as they flock towards smaller, but more expensive rentals. The data does not, however, show that Millenials are too concerned with being as close as possible to their workplace. With an average Millennial commute time in London of 37 minutes, areas such as Hackney, Brixton, and Clapham have greatly benefitted from offering a convenient commute and local amenities.

â—� The Millennial thirst for flexibility is challenging the wider UK trend of longer
fixed term tenancies. Recent reports by Goodlord revealed that the average
tenancy length in the UK is now 14 months, a decrease of over 7% from 2014. Home
Made have observed a drastic increase in the number of Buy-to-Rent operators
and private landlords accepting short and medium tenancies /break clauses (6
months) in London. Aimed at Millenials looking for maximum flexibility, these
shorter-term rental options are typically offering bills included and pre-setup at a
higher price.

Asaf Navot, CEO of Home Made says this about the trends highlighted in Home
Made’s analysis:

“Millennials have very specific requirements and preferences as to how they wish to
rent, different than any other renters’ segment we have ever seen before.

“This translates to changing renting patterns, such as the willingness to pay a growing share of their income in order to belong to the right community and in the right location.

“Renting is no longer an outcome of an inability to buy a house, but a
preference to invest their time and money in the acquisition of experiences over
possessions or savings.

“Landlords who manage to address these needs, will be better positioned to serve the
growing number of renters choosing to rent, and will enjoy better returns on their
assets.�

©1999 – Present | Parkmatic Publications Ltd. All rights reserved | LandlordZONE® – Millennials spending up to 41% of their Budget on Rent | LandlordZONE.

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29% of landlords report tenant demand growing or booming Q3 2019

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The proportion of landlords who believe tenant demand is ‘growing or booming’ has increased to the highest level in almost a year, according to Paragon’s latest PRS Trends Report for Q3 2019

At 29%, the proportion of landlords saying tenant demand is growing or booming reverses a substantial drop in Q1 2019 (21%) and returns the indicator to the same level it’s roughly maintained since Q2 2017 (average 30%).

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