Not getting too old for this s*** – Surge in over 60s renters, but rental deposits pose the same hurdle as younger generations

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The latest research by tenant deposit
replacement scheme, Ome, has
looked at the cost required to secure a rental property for the growing trend
of over 60s opting for the rental market over homeownership and what percentage
of monthly income this initial step requires, as well as how it compares to
younger generations. 

With high house prices coupled with the
improving face of the rental sector causing many of us to rent for longer, Ome
looked at the cost of the average rental deposit and what this translates to as
a percentage of monthly net income for tenants based on gender and age.

With the average rental deposit currently
setting tenant’s back £1,139, it can be a tough ask to accumulate such a large
sum of money in order to secure a rental property.

For the average male, this cost equates to
almost half a month’s wages (47%), climbing to 69% for the average female.

When it comes to age, those aged between 18-21
face the toughest task with the average tenant deposit accounting for 118% of
the average salary. This falls to 105% for male tenants, while female tenants
in this age range are looking at 138% of the net monthly wage to cover a
deposit.  

For those aged 22-29, it doesn’t get much
easier, with a rental deposit costing 68% of the average net salary, falling
marginally to 62% for males but climbing to 76% for females.

The latest English Housing Survey shows that
over the last decade there has been a significant increase in the number of
people aged 55-64 living in the rental sector. This also coincides with a fall
in the number of people owning their own home in this age group.  

In the words of Roger
Murtaugh, you may think those approaching retirement would be getting too old
for this s***, but the changing face of the rental sector proves this isn’t the
case, with more and more of us opting to rent, well into later life due to a
more tenant-friendly approach and better facilities for the more mature tenant. 

However, Ome’s research
shows that those aged 60 and above will on average, be required to spend the
same proportion of salary to secure a rental property as those aged 22-29.
Again, this drops to 55% for males in this age range and climbs to 88% for
females! 

Those aged between 30 and 59 are slightly
better off as they hit full pace career-wise, although it would still require
around half of their net monthly income to stump up a rental deposit.

Co-founder of Ome,
Matthew Hooker, commented: 

“There are many tenants who are financially
able to opt for the traditional deposit path when renting and for many it is a
more preferable route, allowing them to pay there and then without any ongoing
commitment or costs.

That said, as our research demonstrates, it can
provide a tricky obstacle and while it might not be such as issue in the
long-term, it poses a cash flow problem for those required to stump up as much
as a month’s wages in one hit.

Of course, those in the youngest age groups
tend to be on the lowest wages and as a result, have to pay out more of their
monthly wage on a deposit, but more often than not they have a support network
of family that can help them start out on their rental journey and contribute
to some of the costs.

However, this isn’t always the case for those
60 and above who may be on a lower wage and don’t have the option to borrow
from friends or family and addressing this issue has been one of the driving
factors behind the launch of deposit alternatives such as Ome.

These alternatives allow tenants the choice to
pay a smaller monthly fee over the period of a tenancy and with more of us
remaining in the rental sector by choice, it provides a different path to do so
without having to worry about large upfront deposits.”

©1999 – Present | Parkmatic Publications Ltd. All rights reserved | LandlordZONE® – Not getting too old for this s*** – Surge in over 60s renters, but rental deposits pose the same hurdle as younger generations | LandlordZONE.

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Property Investment – It’s Just Not Cricket

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People often use sporting analogies to make a point. Cricket and property investment offer just such an opportunity. During the early part of the summer, we witnessed a wonderful festival – the Cricket World Cup – which ended in an extraordinary final and victory for England.

But
while the one-day international form of the game is exciting and
adrenalin-inducing, it’s also high risk, rather like property investment.

There
are those who during various economic cycles have profited hugely from
short-term investment. Players simply place a deposit on a property off-plan
and sell at a profit before completion.

This
practice has worked incredibly well at various times, probably more so for the
high risk speculator. Why stop at one deposit when you can make your fortune by
replicating the transaction – it’s just a numbers game right? Hit as many sixes
as you can and reap the rewards.

This is not property investment. It’s pure speculation and fraught with difficulties. Firstly, most major lenders will not provide mortgage finance against an assigned contract, thus the end buyer of so-called “flipped contracts” have to be cash buyers.

Secondly,
if you jump on the one-day cricket carousel at the wrong time, you cannot get
off. The likelihood is you will be required to complete the purchase and either
move in or become a five-day Test Match-style investor – digging in for the
long haul, scoring slowly.

It’s
Alistair Cook vs Kevin Peterson. KP is the swashbuckling risk taker who scores
runs on good pitches at a ridiculously quick rate, while Cook is the slow,
methodical innings builder. Guess which one would have a substantial portfolio
of properties by now. It’s little wonder Galliard Homes’ repeat clients are
those in it for the long haul. If I was a national selector, I’d pick Cook over
KP any day – invest for the long term and create a lasting legacy.

©1999 – Present | Parkmatic Publications Ltd. All rights reserved | LandlordZONE® – Property Investment – It’s Just Not Cricket | LandlordZONE.

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Grainger PLC, Britain’s biggest PRS landlord continues to grow its portfolio…

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Build-to-Rent:

Grainger PLC, Britain’s biggest specialist PRS investor that switched its strategy from investing in protected tenancy properties to straightforward buy-to-lets in the form of build-to-rents, announced growth of around 3 % over the 4 months to 31^st January.

A period of political uncertainty and a flat-lining economy has seen its share price rise by around 3.5% as of 5^th February.

The company
continues to demonstrate its confidence that the sector will grow
with its involvement in build-to-rent. Its forward development
pipeline as of 31^st January stands at 24 new-build
schemes. These together represent 9,104 homes and a £2billion in
investment.

Grainger manages
some of this development in-house, while entering into joint ventures
with outside parties including one £845 million deal with Transport
for London and other projected at the planning stage. The company
says its PRS investments continue to perform well, with occupancy at
97.5% and pricing around 1% above valuations.

According to City
analysts, Grainger a company that can trace its roots back 107 years,
the firm was drifting along when ex RBS director Helen Gordon took
over as Chief Executive. Its mainstay was its cash-generating stock
of 3600 regulated tenancy homes, a portfolio built-up over many
years.

These investments
house protected tenants on peppercorn rents, so the value is locked
up until the tenants vacate, or more usually when they pass away. At
that point Grainger would re-let at a market rent or sell the
property.

Grainger had also
invested heavily in the German property market under a joint venture
arrangement and was, given the increasingly restrictive German
letting laws, a capital-hungry business.

One-month after
Gordon took over in 2015 she presented her radical new strategy plan
to the City. The German venture was put on the market and eventually
sold, another branch which managed an equity-release business was
ditched, and a large bet was placed on the growing government
supported build-to-rent sector. Gordon saw the potential to create a
“cash-flow machine” which would provide a high yield and steady
returns over an extended period of time.

Analysts in the City
have admired the “turnaround” of a sleeping giant that Gordon has
achieved, and the share price and dividends are beginning to reflect
that. She parachuted herself into a difficult situation when she left
RBS and started with a completely new management team. Her success
to-date has surprised a lot of people in the City says one analyst.

Build-to-rent has
been an ideal target for Grainger to aim at, as almost 100% of it’s
competition are small-scale and smaller landlords plus the government
has projected that the country needs 1.8 million more rentals by
2025.

Helen Gordon, Chief
Executive, says of her success to-date as reported by UK Investor
Magazine:

“I am pleased to
report a period of continued momentum in our PRS growth strategy, as
the UK’s leading provider of private rental homes. We have made
good progress on a number of schemes in our pipeline, including those
in the planning process and new acquisitions. Lettings on our
recently launched schemes are progressing well and ahead of
underwriting, a testament to the quality of the design of our
buildings and customer service offering.

“We are seeing a
growing customer demand for our rental homes across the portfolio
with 97.5% occupancy and 3.5% like-for-like rental growth. Supporting
our new build investment, sales from our regulated tenancy portfolio
are transacting well, reflecting positive market sentiment.

“Since our last financial year end, we have secured two further schemes in line with our targeted investment strategy: Capital Quarter (307 PRS homes) in Cardiff for c.£57m, and our third scheme in Canning Town (132 PRS homes) for c.£55.5m. In addition, we have received planning consent for the redevelopment of one of our regulated tenancy assets in Waterloo, London

“The outlook for
Grainger in 2020 is positive. Grainger is in a strong position to
benefit from the market opportunities following the clear result of
the General Election which is already driving improved housing market
sentiment. The business is ready and equipped to deliver on our PRS
growth strategy, which in turn will deliver attractive, sustainable
returns to shareholders and, importantly, enable us to provide great
homes and great service to our growing customer base.”

©1999 – Present | Parkmatic Publications Ltd. All rights reserved | LandlordZONE® – Grainger PLC, Britain’s biggest PRS landlord continues to grow its portfolio… | LandlordZONE.

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Paws for thought? Pet-friendly model tenancy will cause problems, says leading inventory firm

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Proposals to include more inclusive wording within updated model tenancy agreement will create more disputes with renters, it is claimed.

Landlords face more
disputes with pet-owning tenants following the Government’s plans to remove
restrictions on well-behaved pets from the model tenancy agreement.

Inventory services
provider No Letting Go warns it could cause confusion and put landlords’
properties at risk from unnecessary damage.

Bans on
well-behaved pets will disappear after housing
secretary Robert Jenrick said earlier
this year that he wanted to ensure more landlords were catering for responsible
pet owners.

Total bans on
renters with pets would only be implemented where there is a good reason, such
as a property being too small or having no outside space.

However, Nick
Lyons, CEO and Founder of No Letting Go, says problems could arise due to subjective
animal behaviour.

“If tenants are
able to argue that their pets are ‘well-behaved’, it may be harder for a
landlord to successfully make deductions from a security deposit where damage
is caused,” he says.

Lyons believes grey
areas over liability could cause financial problems for landlords. “We’re also
wondering what would happen to a deposit and the liability for damage if pets
were introduced during a tenancy,” he adds.

Well
behaved

The
Residential Landlords Association agrees that it will be difficult for
landlords to know whether pets are well behaved.

It has
already warned the Government that capping deposits would make it harder for
tenants with pets to access rented housing and believes there
should be an opportunity to increase them to reflect this heightened
risk. 

Policy
manager John Stewart, has told LandordZone: “What happens in properties where a
tenant wants a pet, but another one is allergic to it? And will new grounds for
possessing properties be introduced to deal with irresponsible pet owners?”

A
revised model tenancy agreement will be published by the Government later this
year.

©1999 – Present | Parkmatic Publications Ltd. All rights reserved | LandlordZONE® – Paws for thought? Pet-friendly model tenancy will cause problems, says leading inventory firm | LandlordZONE.

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Call of the Week: Rent arrears

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This week we were able to assist a member with a query about a tenant who had not paid the rent in more than two months. The tenant is a long standing tenant of the landlord but has started to have big problems with paying rent due to a change in their circumstances. They have now missed […]

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Is this what to expect when England’s housing court goes ahead?

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As the government prepares to introduce a housing court, LandLordZone looks at the existing Scottish system to see what the future holds.

The government’s plans to
introduce a dedicated housing court in England will have huge implications for millions
of landlords who, if it takes inspiration from the Scottish system as expected,
will have to attend hearings in person to thrash out disputes and evictions.

Scotland’s government has
invested heavily in its Housing and Property Chamber tribunal system which
offers swift and transparent justice – decisions are often published the next
day highlighting poor behaviour by tenants and landlords alike.

And its most recent case,
published earlier today, is a case in point.

Deposit dispute

Tenant Romy King
took her landlord Lotta Brown to the tribunal after her £700 deposit was not lodged
correctly with an approved deposit protection provider, she had claimed.

King provided the judges
with email proof from all three schemes that they had not received proof of her
deposit’s protection within the 30-day window – or at all, in fact.

King had moved in during
September last year but, after experiencing difficulties with the property’s
heating, gave notice and the two parties then become embroiled in discussions over
a gas bill and when the rent for the notice period would be paid.

During this time, it became
clear that the deposit had not been lodged with a scheme, leaving it
unprotected for 12 days.
Brown accepted this but contested many of the details of when and how the discussions
between the two parties took place.

Although the Tribunal could
have fined Brown three times the monthly rent (£2,100), because of the
circumstances including the early departure of King from the property, this was
dropped to £50.

‘No excuse’

There should be no excuse
for landlords or their agents not protecting the tenant’s deposit as the
legislation has been around for a number of years now,” says David Gibb of
MyDeposits Scotland.

“The new Private Residential
Tenancy (PRT) agreement also details the requirement to place the deposit into
a scheme within 30 working days of the start date.

“If the PRT is being brought
to end prior to the 30 working days deadline, the landlord should return the
deposit in full to the tenant, or place into a scheme if they wish to make a
claim against the deposit.”

Eviction delays

Whilst these kinds of cases
are dealt with fairly swiftly by the FTT, landlord and agents in Scotland are
still concerned that eviction actions are taking too long.

A recent FOI request by agent
Aberdein Considine
confirmed the average time for an
eviction case is 141 days.

“As the landlord or agent is unable to raise the action until the tenant has been in rent arrears for three months, these time-frames can leave landlords facing a significant period without receiving rental income,” adds Gibb.

©1999 – Present | Parkmatic Publications Ltd. All rights reserved | LandlordZONE® – Is this what to expect when England’s housing court goes ahead? | LandlordZONE.

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Buying Freehold of shared garden

admin    Uncategorized     agents

Hi, we own the ground floor flat in a two flat Victorian house. We have a 900+ year lease.

The upstairs flat is let out and the property freehold belongs to the landlord.

We would like to buy the freehold of the garden or exclusive use by licence or contract if this possibility exists.

The post Buying Freehold of shared garden appeared first on Property118.

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The signs are there, or they were – should for-sale & to-let boards be banned?

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To-Let:

The banning of two
many unsightly boards on houses has long been a bone of contention
between local authorities and agents and landlords. All other signs
on building are subject to planning permission in one form or
another, so that the local authority has some control over the
appearance of the neighbourhood.

However, letting and sale boards are of a temporary nature, or should be, and have been tolerated by most councils. But with the proliferation of lettings over recent years means that boards contribute to a more permanent and unsightly scene in may neighbourhoods, triggering complaints from residents.

Camden Council’s
latest announcement that it is planning to ban all “To-Let”
boards from rented houses in the borough has brought the issue to the
fore once again.

Several other
authorities have been making noises along the same lines including
north east towns like Durham, Newcastle. Lincoln has now joined
Brighton and Hove which has an actual ban in place, and has had for
many years now.

Another problem is
that some boards are being left up virtually permanently, even after
the property is let, and some councils are resorting to set fines if
they are not removed after the property is no longer on the market.

Boards are perhaps
the least expensive way to market a property, whether for sale or to
let, attracting interest from people in the immediate locality; there
are other local methods including the local newspapers, but these
days it is more common to rely on the Internet.

Most people today start property searches online, so the need for a board is diminishing, councils are arguing. Lincoln’s planning boss is reported as saying that “a ban on ‘to-let’ signs in five areas of Lincoln should not have a negative effect on landlords.”

The council’s
planning manager, Kieron Manning has said:

“In recent years,
the council has witnessed a significant increase in the number of
complaints about the proliferation of ‘to-let’ boards in certain
parts of the city.

“Any letting sign
should be a temporary feature but, when signs are left up too long in
areas containing high numbers of rental properties, they can begin to
dominate the street scene.

“We became aware
that some signs were staying almost all-year-round and this was
beginning to have a negative effect on the look and feel of our
streets, so we decided to take pro-active action to solve the
problem.

“We are very
pleased that government has listened and agreed to allow us to
implement the ban.

“We don’t
expect this to have a negative impact on the city’s rental market
as searches are now mostly done online, and people who are interested
in moving to these particular areas will be able to find homes to
rent very easily on the internet.

The Residential
Landlords Association (RLA) has reported that the bans or proposed
bans are having a mixed reception among landlords.

Some have said that
“to let” boards are outdated anyway and they don’t use them;
they are “harking back to the days when putting a sign in a window
was the only method of attracting tenants” and with the Internet
they are rendered them obsolete.

Other landlords,
according to the RLA, have said this is “just another example of
‘landlord-bashing’ and that to-let signs are still an important
tool when it comes to marketing a property.”

Labour-controlled
Camden council claims it has received over 1,000 complaints about
for-sale and to-let boards over the past five years.

It has now applied
to the Department for Housing, Communities and Local Government for
permission to ban the boards unless planning permission is sought and
granted.

The council’s
planning committee chair, Danny Beales, has said:

“It’s clear that
from our consultation that an overwhelming majority of residents
support the change. The boards are cluttering our streets, often left
for months on end, effectively free advertising.”

A statement issued by Camden says:

“Estate agent
boards continue to be one of the most common complaints made to
Camden’s Planning Enforcement Team. Across the borough there are
examples of estate agents disregarding the regulations, displaying
numerous boards per building and keeping them up for long periods
despite properties being sold or let.

“Estate Agent
boards are seen by many as outdated eyesores, which merely add
unnecessary clutter to our streets and take up valuable council
resources as we seek to secure their removal.”

©1999 – Present | Parkmatic Publications Ltd. All rights reserved | LandlordZONE® – The signs are there, or they were – should for-sale & to-let boards be banned? | LandlordZONE.

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Latest: Has the tenant fees ban been the disaster for landlords it was predicted to be?

admin    Uncategorized     agents

Rental market data covering before and after the fees ban shows small reductions in yields which, it is claimed, have been kept to a minimum by landlords putting rents up.

Many
landlords and industry associations predicted last year that the tenant fees
ban might be the ‘final nail in the coffin’ for the private rental market
because it would push up costs and reduce yields.

Landlords
must now pay for referencing and many other moving in, property management and
check-out costs that used to be charged to tenants but that, in England since
June 1^st and in Wales since September 1^st, must now be
paid for by the landlord.

Despite
this, data published today by lettings platform Howsy reveals that these extra expenses
for landlords have only marginally dented yields in England while in some areas
they have increased.

The
average yield for a buy-to-let property prior to the tenant fees ban was 4.08%,
down from 4.21%, with only the North East seeing a significant reduction of
0.25%.

“The resilient nature and
diverse landscape of the UK rental sector means there are plenty of pockets
that have actually seen yields improve and while this growth may only be
marginal at present, it is a very positive sign given the short time scale,”
says Howsy founder Calum Brennan.

“As with all investments, the
buy-to-let sector is all about knowing the market and picking the right options
and if you do, bricks and mortar remain a very sound one.”

The fees ban has also failed to cut the costs of
renting for tenants; while the legislation was said to save tenants on average
£70 a year in fees across the life of a tenancy and £300 each time they moved,
letting agents’ association ARLA Propertymark recently revealed that 64% of
tenants experienced rent hikes during the traditional busy month of August,
when tenants are most likely to move home.

©1999 – Present | Parkmatic Publications Ltd. All rights reserved | LandlordZONE® – Latest: Has the tenant fees ban been the disaster for landlords it was predicted to be? | LandlordZONE.

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Notorious landlord faces final financial reckoning under Proceeds of Crime Act

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Ferrari-driving Mark Fortune appears in court after he admitted both making threats against a tenant and various rental frauds.

A notorious rogue landlord is waiting to discover whether he
faces prosecution under the Proceeds of Crime Act.

Prosecutors are pursuing Mark Fortune, 51, in a bid to seize
assets which could total millions of pounds.

The confiscation case was launched shortly after Fortune was
sentenced over a host of charges at Edinburgh Sherriff Court in September 2016.
However, his complex financial affairs have caused years of legal wrangling.

At the time, Fortune admitted offences including making threats
of violence against Alvaro Espinosa in 2013 in the city’s Bruntsfield while
demanding he pay rent.

He also pleaded guilty to a number of frauds where prospective
tenants responded to his Gumtree adverts for properties to rent, paying him
deposits for accommodation which never materialised. In 2017, Ferrari-driving
Fortune admitted owning 70 flats.

Solicitor Gillian Law,
representing Fortune, who appeared in the dock, said the defence was engaging a
specialist accountant to study evidence. The next hearing has been set for March.

It’s not known exactly how much
prosecutors hope to seize from Fortune. A Crown Office spokeswoman told
LandlordZone that the figure could not be disclosed as it was a live
investigation and subject to change.

©1999 – Present | Parkmatic Publications Ltd. All rights reserved | LandlordZONE® – Notorious landlord faces final financial reckoning under Proceeds of Crime Act | LandlordZONE.

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