Showing posts with label Tenants. Show all posts
Showing posts with label Tenants. Show all posts
It
is well known that property prices are continuing to spiral out of control and
there is a genuine lack of affordable housing in the UK. It has affected a
lot of people, none more so than first-time buyers. It has given rise to an
increase in the number of people renting instead of purchasing their first
properties.
According
to new research carried out by landlord
insurance specialists Cover4LetProperty,
28% of UK adults are currently living in privately rented or socially rented
accommodation.
Last
year, accountancy firm PwC remarked that due to homebuyers struggling to raise
a sufficient deposit in order to buy their own place, the volume of homebuyers
will continue to drop in the next decade.
Additionally,
fewer people are qualifying for social housing and thus having to identify
other ways to secure accommodation. This is where the need for private
landlords is becoming increasingly more important. PwC study suggests that in
the next ten years, over half of those over 40 years old will be living in
privately rented accommodation.
By
2025, 7.2 million households will be in rental property, a massive increase on
the current 5.4 million.
Chief
Economist at PwC, John Hawksworth said, ‘a large and sustained increase in
affordable housing supply will be required to meet the needs of a UK population
that is growing relatively rapidly by European standards.’
Everything
points towards a sustained and vital need for privately rented accommodation in
the UK. Even though recent trends in government policy have been to undermine
and diminish the important role landlords play in the market. Landlords will
continue to play this vital role and all evidence appears to suggest that this
role will only grow in importance as demand continues to increase.
Now could be the perfect time for potential investors to invest within the market and look to
purchase properties as demand continues to increase and cannot be matched by
the current supply.
With
tenant demand on the rise, it is important that your property provides exactly
what prospective tenants are looking for and that you’re marketing yourself at
a competitive price for both the home and its location. You can find out
exactly how much that is by speaking to Orchard & Shipman and taking
advantage of our FREE Rental Valuation service. By getting your property
professionally assessed you are putting yourself in the best possible position
to make the most of your investment. Simply call your local Orchard &
Shipman property experts and book yours today.
The rental market is growing in strength, thanks in part to both the rise of house prices and the lack of social housing. A recent report from accountants PwC has found that the number of households in the private rental sector has more than doubled since 2001 and forecasts that, should the trend continue, we will be looking at 1.8million private renters by 2025.
This would take the UK to a total of 7.2million households and equate to almost a quarter of the population. According to the report the trend will be particularly applicable to what is known as the ‘Generation Rent’ gap, of those aged between 20 and 39, and of whom 50% are anticipated to be privately renting by 2025.
PwC also anticipates that more people will be renting than taking on mortgages in just a decades time. With a drop from 10million in 2001 to just 8million mortgages last year, there is certainly a trend massively towards private rentals. By 2025 it is expected to drop even further to 7.2million, thanks to limited housing and mortgage availability further handicapping first time buyers and preventing them from stepping on to those first rungs of the ladder.
According to PwC it is the significant rise in the cost of a deposit that is placing first time buyers in such difficulties and bringing about this trend more towards rental properties. What is certain should the trends continue is the emergence of a generation of private renters, a group that will consider private rental the norm between the ages of 20-39.
The peak of owner occupied property was in the mid-2000s, when 70% of the population were buyers both with and without a mortgage. By 2025 it is anticipated that this will fall to 60%, finally seeing a reversal of those post war years when owner occupation rose and rose. The way to combat this, as it was then, is to start to build an affordable housing supply, with incentives and reforms put in place to truly tackle the housing shortage. Announcements made recently in the budget make this seem an unlikely option, making ‘Generation Rent’ almost an inevitability and the drop in mortgages to only increase.
With demand inevitably on the rise, it is important that your property provides exactly what prospective tenants are looking for and that you’re marketing yourself at a competitive price for both the home and its location. You can find out exactly how much that is by speaking to Orchard & Shipman and taking advantage of our FREE Rental Valuation service. By getting your property professionally assessed you are putting yourself in the best possible position to make the most of your investment. Simply call your local Orchard & Shipman property experts and book yours today.
As owner-occupation continues to decline in the UK, the
population is turning to a certain group of people who help fill the gaps in
the housing shortage.
But how much do you know about the average landlord? Our infographic below explores the State of
Residential Investment Landlords. From profiling their current assets, to the
journey of their tenants through their rental cycle.
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Second probably only to healthcare, the housing market is one of the biggest issues on the cards this election. The situation is so bleak that between 2001 and-2012 the number of owner occupied homes increased by only 30,530. However, during the same period the number of homes being occupied through local authorities, housing associations, other public sector organisations and private lets increased by a whopping 15,866%!
Getting on to the property ladder is now but a dream for some but renting isn't a sweeter reality. Rents in just the three months leading up to February this year increased by 9.2%; with stats like these it would be brash to deny that Britain's housing is in crisis. An increasing number of people are unable to afford adequate homes and 'Generation Rent' is only getting larger, so what are the main political parties promising to do to tackle the situation?
We summarise the main elements of their housing manifestos in the infographic below.
We all need it, especially in these colder months. But with the increased costs of living, many of us stretch our money to pay rising energy bills.
The latest annual report by Ofgem on Suppliers' Social Obligations shows that a total of 1.9 million customers were in debt on their electricity or gas payments. This is around one in every 17 customers who owe an average of more than £300 to their energy provider.
Between July and September last year just over 39,000 people contacted Citizens Advice for information and guidance on fuel debts. However, there is more help out there. Most people may perhaps be unaware that all major utility companies have established Charitable Trusts to help assist consumers who need a little financial support.
Primarily based on relieving fuel poverty these Trusts also provide help ranging from boiler repair and advice on managing your finances to support for buying energy efficient household items. We've listed below the Trusts that we are aware of, if you know of any others please leave us a comment.
- NPower
- British Gas
- EDF
- Anglian Water
- Severn Trent Water
- The Southern Water
- South East Water
- South Staffordshire Water
- United Utilities
- Thames Water
By accessing these support networks you can reduce the damage caused to your property through lack of heat and the potential for rent arrears if you have to juggle money to pay energy bills at this time of year. To further help reduce fuel bills you can also make little changes within your home, see our post 10 Steps to Saving Energy This Winter.
For Landlords who do not have the resources available to support Tenants through periods of rent arrears we offer a full property management service with guaranteed rent; you can find out more by visiting our website.
by Angela McLachlan, Director of Letfirst
Deposits concern me. I understand them and why they are used. I also recognise they are designed to protect landlords and letting agents from the costs of damage at the end of a tenancy. The reason for my concern is that discussions and debates about deposits seem to provoke angry reactions with both sides citing anecdote as evidence and proof of each other’s negligence and dishonesty.
For any innocent walking into the midst of the ding-dong, one could be forgiven for thinking that landlords and tenants were on opposing sides of a war zone. In actual fact, most landlords and tenants get on quite well. They have the odd disagreement, but overall, they are generally quite a peaceable bunch quietly getting on with their lives, with tenants paying the rent and landlords fixing the washing machine.
There are of course, exceptions to the rule. The small percentage of landlords who deliberately evade regulation and legislation are not representative of the thousands of landlords offering good quality properties to people from all walks of life. Likewise, the small percentage of tenants who wilfully or neglectfully damage their property are in no way representative of tenant behaviour.
So why is the issue of the deposit fused with such distrust? The recent introduction of the Tenancy Deposit Scheme in Scotland aims to diffuse some of the problems of deposit management by arbitrating in the event of a dispute. This is good news, particularly for tenants with landlords who would seek to withhold more than necessary. But, coming back to my earlier point, most landlords and tenants have good relationships and haven't, and probably never will need arbitration to sort out a disagreement over a deposit.
The bigger question is whether deposits actually act as a deterrent to the minority who behave badly? I would say no. The minority of bad landlords are under the radar anyway so poor practice in all areas of tenancy management will continue, with or without a deposit. And the minority of tenants who have no respect for the property probably won't pay their rent in the last couple of months of their tenancy because they know they have no chance of getting their deposit back. So, in the few cases where a deposit may actually be useful, a landlord has no real chance of recovery.
Is the deposit therefore more of a ritualistic transaction which offers no real benefit to anyone?
Are deposits not simply a waste of time and furthermore actually act as a barrier to letting?
On average, a deposit and one month's rent in advance costs around £1000 - £1500, which is a lot of money, particularly these days when people have less income than before and less access to credit. This led to questions around how many people were actually denied access to a private let who could afford the monthly rent, but simply couldn't raise money to cover the up-front costs?
This figure was not possible to quantify, but intuitively we knew it was high and we anticipated this number could only rise given the combined effects of the economic downturn and changes within the housing market. With mortgages nigh on impossible to secure and social housing in short supply, private renting was going to become a far more attractive, and in some cases the only option for people looking to find a home.
It was against this backdrop that Letfirst was launched and we began to persuade landlords round to our view. We had no expectation that any landlord would simply agree with us and it would be fair to say that our position was met with some scepticism. We recognised that in order to win confidence we had to put our money where our mouth was and share the financial risks - real or perceived - associated with the absence of a deposit.
Letfirst achieved this by offering landlords Guaranteed Rent, so, should the worst case scenario arise and a tenant does damage the property, then the landlord won't have to absorb the total costs associated with these types of situations. No business is ever risk free, but by turning the issue of deposit management on its head, we were able to have a more pragmatic discussion around risk management in the lettings business.
The upshot? Letfirst has been operating for just over 3 years and in that time have secured homes for nearly 1000 people in Edinburgh alone and we are now operating in Midlothian and East Lothian. Letfirst properties are not vacant for long due to high demand from a previously untapped customer base. This is good news for landlords, who, let's not forget, are as affected by the economic downturn as anyone else. Mortgages, council tax and utility bills still need to be paid on vacant properties, so the key objective, for landlords as well as tenants is to secure a tenancy.
Which brings me back to where I started. Deposits bother me - but is holding out for a deposit the best way forward, particularly when it's a toothless tiger anyway?
For more information on how Letfirst find the perfect match between people and property, you can visit the website here.
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