Tag Archives: contracts
Majority of UK tenants face higher rents at end of tenancy agreement, it is claimed
Almost two thirds, 60%, of UK tenants have seen their rent increase on their current property at the end of each tenancy agreement, new research has found. And many are forced to pay additional fees, averaging over £100, to letting agents to renew their contracts, according to a study by mortgage and loans provider Ocean Finance. Landlords increase rent by an average £84 a month, or £1,008 a year, at the end of each tenancy agreement, the figures show. On top of that, 13% of renters are also hit by charges from letting agents of £117 on average for renewing their tenancies. The study shows that over half of tenants stay in the same house for five years or more, which could see them paying almost £600 in letting agents’ fees to continue renting their home. According to the figures from the Office of National Statistics, prices on private rentals increased by 2.1% in the year to March 2015, driven by the buoyant market in London and the South East. ‘The buy to let market is booming at the moment, driven partly by the London market, although there are strong hotspots across the country,’ said Gareth Shilton, Ocean’s spokesperson. ‘As demand for rented properties continues to outstrip supply, and many people struggle to get on to the housing ladder, landlords are in a strong position to continue to increase rents each time a tenancy agreement ends,’ he pointed out. ‘On top of rental increases, tenants are facing rip-off fees from letting agents, not just to take new tenancy agreements, but also to roll-on an existing tenancy for another six or 12 months,’ he added. Continue reading
Brazil hailed as an exciting opportunity for buy to let property investors
Brazil is one of the world’s most exciting emerging property markets for investors looking for buy to let real estate that brings in a regular income, according to a new report. The report highlights how this years FIFA World Cup and the 2016 Olympic Games means that the country will attract more visitors which increases rental prospects in the major cities, especially those hosting these sporting events. The information in the report from Colordarcy is gathered from several independent sources, to give a clear overview of the main property hotspots and the kind of returns investors can expect, according to managing director Loxley McKenzie. ‘With an economy that has grown rapidly, Brazil looks set to continue offering investors high emerging market returns at low risk. Our latest report is designed to give investors, who may not be too familiar with Brazil, advice on where and how to invest,’ he added. Overall the outlook for property prices in Brazil will depend on how many people want a particular property and what they are prepared to pay for it, according to the report. When it come to rents at the moment the volume of rental properties in major cities is very low and vacancy rates are only 10%, according to real estate portal Zap Imoveis. ‘This creates an unique opportunity in Brazil property and see rental yields of 8% to 11% per annum and an increase in the price of property of between 10% and 15% per annum,' the report says. ‘In the major cities young professionals are struggling to afford the kind of prices now being asked for properties in good areas and even with the mortgage rates falling into single figures, affordability is unlikely to improve,’ it claims. ‘As a result those who purchase buy to let properties in Sao Paulo, Rio de Janeiro and Brasilia are cashing in by doubling the rent when tenants come to renew their contracts,’ it adds. The report suggests that the most attractive investments in terms of yields are smaller one and two bedroom apartments in new developments. 'Despite the shortage of rental properties, older developments that lack modern amenities are unlikely to see the dramatic increases in rents seen in new developments,’ the report explains. ‘A 50 square meter apartment will generate yields of 9.6% whereas larger units would be 5.4% to 7.2%. Apartments in the suburbs of Sao Paulo offer yields of between 4% and 8% and in more central areas close to transport links yields can be up to 11%, making it one of the world’s most attractive destinations for buy to let investors,’ it adds. When it comes to looking ahead the report points out that some of the dramatic increases in property prices seen since 2009 are now beginning to stabilise, adding that this is not a surprise as construction has accelerate to meet demand. Indeed, in 2013 price growth slowed from around 20% year on year to 12% and 10% to 12% is forecast for 2014. It also points… Continue reading
Sharing The Risks/Costs Of Biomass Crops
Sep. 4, 2013 — Farmers who grow corn and soybeans can take advantage of government price support programs and crop insurance, but similar programs are not available for those who grow biomass crops such as Miscanthus. A University of Illinois study recommends a framework for contracts between growers and biorefineries to help spell out expectations for sustainability practices and designate who will assume the risks and costs associated with these new perennial energy crops. “The current biomass market operates more along the lines of a take-it-or-leave-it contract, but in order to encourage enhanced participation and promote a more sustainable, stable biomass supply, a new kind of contract needs to be created,” said Jody Endres, a U of I professor of energy and environmental law. Endres said that a good contract gives everyone more certainty. “Incomplete contracts are the hazard,” she said. “We need to develop contracts that nail down all of the details and are transparent about who’s taking on the risk and who’s paying for it. If we get these considerations into the contracts, those who finance this new biomass crop industry will have more certainty to invest.” The study identifies considerations that should be included in the framework for a biomass contract, including a control for moral hazard, risk incentive tradeoff, existing agricultural practices, and risk and management tools to make the industry more sustainable financially and environmentally. Endres said that if biorefineries receive money in the form of carbon credits for reducing pollution, incentives for farmers should be included in contracts because they are the ones who are bearing the risks associated with sustainability practices. “Suppose a sustainability contract lists that the default should be integrated pest management rather than application of traditional pesticides,” Endres said. “The farmer takes on some risk to provide a sustainable product, but the biorefinery gets carbon credit for those sustainable practices. This should be worked into the contract — that if the farmer assumes the risk of IPM as opposed to traditional pesticide options, there has to be some sort of up-front payment or incentive in the contract to account for this risk. Due to the power relationships in this industry, the onus is on the biorefinery to be the leader in developing contracts in this new landscape.” The perennial nature of biomass crops also makes developing contracts challenging. “We’re in a unique environment, and traditional agricultural contracting structures just don’t apply,” Endres said. “Crop insurance is not currently available for farmers who grow biomass crops so they take on additional risk. Likewise, landowners see high prices for traditional commodity crops and do not want to be locked into a multi-year contract with a lessee to grow a perennial biomass crop. It’s complicated,” she said. Endres said that although sustainability requirements are important, having an adequate supply of biomass is important as well. “We’re trying to envision a future in which we have a lot of biomass and one way to secure that is to recognize all of the risks and costs, especially when it comes to sustainability practices. It’s unique, and we do not yet have contracts for this aspect of the industry,” she said. A newly forming biomass standards group, in which Endres holds a leadership role, is looking at how the value of sustainability practices can be measured at the watershed, eco-shed, or air-shed level rather than on the scale of individual farms. Endres said that the working group will examine how to ensure that balance is achieved between producers and consumers of biomass, including through contracts. “I’m optimistic that it can be done,” she said. “Growers and refiners right now are concerned with the industry being financially sound. “There’s also a real need for education in both developed and underdeveloped countries about biomass contracting,” Endres said. “We’re trying to shift the paradigm from traditional agriculture to something that’s more sustainable–and that takes knowledge. If we don’t have that knowledge here in the United States and we’re trying to draft contracts in our very developed system, how is this going to be rolled out in say, Africa, or other areas where the use of production contracts are much more rare, especially in the small farm context?” The research was supported by funding from the Energy Biosciences Institute and USDA National Institute of Food and Agriculture, Hatch Project No. ILLU-470-309. Continue reading
