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Research reveals that almost half of UK tenants sublet their property
Almost half of tenants who sublet their property in the UK do so without their landlord’s consent, according to new findings from the National Landlords Association (NLA). The findings come as the government recently announced proposals to introduce minimum room sizes in order to crack down on problems with private rented accommodation such as unauthorised subletting, which often results in overcrowded and cramped properties. Of the 11% of tenants who say they have sublet all or part of their property before, just 5% did so with their landlord’s permission. Some 26% of tenants say they have approached their landlord about subletting but have had the request declined and 63% say they have never asked their landlord about subletting their property. Overall, the findings show that 32% of tenants have approached their landlord about subletting their property with 22% of requests being permitted by the landlord. ‘These findings indicate that subletting is not common in private rented homes, but worryingly that where it does happen, much of it takes place behind landlords’ backs, without their knowledge or permission,’ said Carolyn Uphill, chairman of the NLA. ‘This isn’t something apparently harmless, like putting your flat on AirBnB while you are on holiday. We are talking about individuals looking to deceive their landlord and maximise their personal gains at the expense of proper property management standards and the risk of others. It not only increases the cost of renting for the unwitting sub-tenants, it affects their rights and can reduce security of tenure,’ she explained. She also pointed out that subletting can also breach a landlord’s mortgage terms, the conditions attached to licenses granted for letting out shared homes and invalidate existing insurance products so they must be aware of the problems it presents. ‘The NLA advises all landlords to insert a clause into new tenancy agreements that makes clear sub-letting is only allowed with the landlord’s permission, which should not be unreasonably withheld. This would reduce their exposure to a whole host of unnecessary risks, including hefty fines and even a prison sentence,’ said Uphill. ‘Landlords who are worried that subletting may be occurring in their properties without their permission should seek advice from a professional organisation such as the NLA which can provide help and support,’ she added. Continue reading
UK private rented sector stable with voids at historic lows
The private rented sector in the UK is a stable market where yields have seen modest improvements and void periods, the average amount of time PRS properties spend unoccupied, are at historic lows. More than half of those landlords surveyed in the latest trends data report from Paragon Mortgages report steady tenant demand over the quarter, while 40% said tenant demand was either ‘growing’ or ‘booming’. The percentage of respondents expecting tenant demand to remain stable over the coming 12 months, or grow, has also increased from 85% to 89%. The latest data also shows that average yields have grown over the last three months from 6.3% to 6.4%. This improvement is in line with steady growth seen throughout 2015. In another key indicator of confidence that the PRS market will remain stable, landlords indicated that they expect yields to remain stable and maintain current levels over the coming 12 months. On the direct question of whether or not landlords intend to purchase properties over the coming 12 months, the figures again show a steady market, and a slight increase in optimism. Those intending to buy are up from 16.8% to 18.4%. Reflecting the overall stability of the market, however, landlords on average expect the number of PRS properties in their portfolio to be the same as they are currently in 12 months’ time. Void periods remain historically low at just below 2.6 weeks. This could be a reflection of the changing demographics of those choosing to live in the PRS. The most recent data shows an increase in the numbers of families with children moving into the PRS, and a corresponding decrease in young couples without children and single professionals. But despite the changing makeup of the tenant population, demand for longer term rental agreements remains relatively low, the research shows. These demographic changes also appear to be reflected in the ongoing buying intentions of landlords who are investing more in traditional family housing. On the question of how landlords view their portfolios compared with three months ago, levels have remained stable throughout 2015 and continue to do so in the latest data. Those feeling a little more optimistic are up by 1.6% and 58% report that optimism levels are unchanged since the last quarter. ‘This quarter’s results present a picture of a PRS sector that is neither booming nor contracting, but rather growing steadily,’ said John Heron, managing director of Paragon Mortgages. ‘There is room for improvement and it will be interesting to see, in future reports, if macroeconomic concerns about the stock market and the Eurozone, and changes in tax and regulation such as those recently announced by the Chancellor, have an impact on sentiment,’ he explained. ‘For the time being however, landlords are seeing steady growth and they expect to see this continue as demand for quality PRS accommodation remains buoyant,’ he added. Continue reading
NZ prices up year on year but down month on month, latest index shows
Residential property sales in New Zealand increase by 18.6% year on year in October but where down 4.1% compared to the previous month, according to the latest index figures. The national median price was $460,000, up $30,000 or 7% on October 2014 and down 5.1% on September, the data from the Real Estate Institute of New Zealand shows. Excluding the impact of the Auckland region, the national median price rose $28,500 to $370,000 compared to October 2014 to reach a new record high and rose 1.4% on September. There was a new record national median price excluding Auckland of $370,000, up 8.4% compared to October 2014 and up 1.4% on September and new record median prices for Northland, Manawatu/Wanganui, Wellington and Nelson/Marlborough. But the market paused in Auckland with a year on year rise of 16.8% with month on month median prices down by 3%. The data also show that there was a 57% rise nationwide in the number of sales over $1 million year on year and a 47% rise in the number of properties sold by auction. ‘The drop in the number of sales in Auckland in October is the result of a softening of demand over the past few months and the new IRD and bank account rules introduced at the start of October,’ said REINZ chief executive Colleen Milne. ‘However, the fundamental supply and demand drivers of the Auckland market remain in place, and the result for October is indicative of the market adjustment phase as it adapts to these new requirements,’ she explained. ‘Elsewhere across the country we are seeing increasing demand and rising prices as buyers of all types emerge to take advantage of low interest rates. It is further evidence of the halo effect of Auckland based buyers searching for value in regional markets,’ she pointed out. ‘During winter and into early spring, the property markets in a number of regions have been far more active than would normally be expected, thus a slowdown or pause is not surprising following this burst of activity,’ she added. Overall 10 regions recorded increased sales volumes compared to September, with Central Otago Lakes volumes growing 31%, followed by Southland with 21% and Canterbury/Westland, 15%. Compared to October 2014, all regions recorded increases in sales volume, with Waikato/Bay of Plenty recording the largest increase of 54%, followed by Hawke’s Bay with 52% and Central Otago Lakes with 50%. On a seasonally adjusted basis, the national median house price fell 5.5%, indicating that prices fell slightly more in October than would normally be expected at this time of year. Northland, Manawatu/Wanganui, Wellington and Nelson/Marlborough all reached new record median prices in October. Northland recorded the largest percentage increase in median price compared to October 2014, at 18%, followed by Auckland at 17% and Taranaki at 12%. Hawke’s Bay recorded the largest percentage increase in median price compared to September, with a 9% increase, followed by Northland with 7% and Nelson/Marlborough with 5%. Continue reading
