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UK landlords expect rent rises to slow by next year
UK landlords expect annual rent growth to slow to 1.7% by next year, down from 3.7% currently, according to the latest sentiment survey. However, a quarter want to buy more rental properties this year and 60% thing it is a good time to invest in the buy to let property sector, the survey from UK lettings agent network Your Move and Reeds Rains. Overall it suggests that after a recent spurt of rent growth, landlords anticipate that rent rises will taper off over the next 12 months, seeing a sharp slowdown from the current rate of annual rent growth to a steadier trajectory. According to the latest buy to let index from Your Move and Reeds Rains, average residential rents across the UK climbed 3.7% in the year to March 2015, the fastest pace for two years, but that is set to change. Indeed, the proportion of landlords who will not raise their rents in the next 12 months has increased from 56% in September 2014 to 60% currently. Only a minority of 40% intend to increase their rental prices before March 2016. The research also shows that over the last six months some 45% of landlords have witnessed an increase in tenant demand, rising from 41% of landlords in September 2014. There has been a boost in lettings activity recently, with new tenancies agreed across England and Wales climbing 6.9% in the month to March 2015. As a result, the proportion of landlords who expect tenant demand to grow further now stands at 63%, up from 56% in January 2014. Only 3% of landlords currently anticipate demand for rental properties to fall within the next two years. However, strong demand for homes to let is a considerable factor encouraging further investment into the private rented sector. Some 60% of landlords now believe that it is a good time to invest in buy to let, a rise from 54% of property investors in September 2014. The main reason underpinning this increase in confidence is that buy to let offers better capital returns compared to other forms of investment, cited by 54% of landlords who think it is a prime time to purchase a rental property. Meanwhile 40% of property investors perceive now to be an ideal time given that current market conditions offer the opportunity to buy properties at more attractive prices, as price growth has stabilised. Some 18% of landlords have already expanded their buy to let portfolio in the last year, and a further quarter of landlords expect to purchase another rental property in the next 12 months, an uplift from 22% in September, in a sign of rising optimism in buy to let as an investment. According to Adrian Gill, director of Your Move and Reeds Rains, demand for homes to rent isn’t going to dissipate. ‘First time buyers have been thrown a lot of floating aids in the past year, most recently the reform of stamp duty… Continue reading
Most tenants fail to get all of their deposit back, new survey finds
The majority of people who’ve rented a property in the UK in the past five years have failed to get their full deposit back after vacating, new research has found. Some 52% of deposits were fully or partially withheld over the past five years, equivalent to more than 400,000 deposits per year and overall 80% of tenants had some degree of trouble getting their deposit back. The survey by London removals company Kiwi Movers also found that cleaning and minor repairs are the most common reasons for withheld deposits, however, 28% of respondents said their landlord delayed returning their deposit despite not making any deductions. Of those who said they experienced difficulties with their landlord when it came to the return of the deposit, 6% lost their entire deposit, the equivalent to 252,000 deposits being fully withheld over the past five years, and 46% lost part of their deposit. Some 20% said they got their full deposit back without any problems while 28% said they managed to get their deposit back in full only after a dispute with the landlord or letting agency. London is the deposit dispute hotspot, with residents in the capital almost twice as likely (11%) as the survey average (6%) to lose their whole deposit, while tenants aged between 18 and 24 living with friends, as opposed to living with a partner or spouse, living alone or with people they didn’t know prior to moving in, are most likely to lose their full deposit. ‘We've seen an increase in customers hiring professional cleaners before checking out of a rented property. It seems to be the only way to counter what they see as the inevitable attempts to withhold part of their deposit,’ said Kiwi Movers director Regan McMillan. ‘Our customers tell us they feel vulnerable unless they have paperwork to prove that they left the property in an acceptable state. Moving is stressful enough without having to worry about having your deposit unfairly withheld,’ he added. Amy Williams, a digital producer from Southampton took her London landlord to court and won after he withheld her deposit. ‘It was only a six month contract and the landlord tried to make us pay for problems that were in the flat when we moved in,’ she explained. ‘The court said it was wear and tear, ordered the landlord to return our deposit and told him that wear and tear was something he’d have to get used to. The landlord also choose to hold the court session not in London but on the south coast. But luckily because we won he had to pay for our train tickets too,’ she added. Daniel Zambas, a Manchester based musician, also took successful legal action against a former landlord. ‘The agent told us the landlord wasn’t going to return our deposit. We successfully challenged this and once we’d had our money… Continue reading
UK mortgage seekers set to change spending to deal with tougher lending rules
A fifth of mortgage borrowers in the UK will use cash more frequently to avoid lenders seeing exactly what items they are spending on due to tougher lending regulations brought in a year ago. Some 25% plan to rein in their spending by £159 a month in a bid to present themselves as sensible with money and a fifth plan to spend on credit cards to maintain a healthier balance in their current accounts and pay off the balance each month. The research by comparison site MoneySuperMarket shows that 20% of those looking to apply for a mortgage in the next three years are planning to use cash more frequently to hide exactly what they spend their money on from a prospective lender. Some 21% will pay for more items on their credit card and then clear the balance at the end of each month so they can maintain a healthier balance in their current account. Spend-conscious borrowers also plan to rein in their monthly spend by an average of £159 by cutting back on non-essential items so as not to appear frivolous with their money. And 29% intend to pay off all debts in the lead up to their mortgage application. However, some 8% had never even heard of the new mortgage market review rules. ‘Since the new mortgage lending rules came into play a year ago, those looking to remortgage, existing borrowers who are moving home and looking for a new deal and first time buyers will have been subject to their lender looking more closely, almost forensically, at their monthly outgoings,’ said Kevin Mountford, head of banking at the site. ‘While the rules were introduced for the right reasons, in some cases borrowers who can easily afford a mortgage are being turned down for arbitrary reasons, despite them being able to easily afford mortgage repayments,’ he pointed out. ‘We wouldn’t want to see the ease of approval going back to the pre-credit crunch levels, it is clear than some consumers have changed their spending habits in order to pass the tests, so may be trying to paint a picture that is far from the reality just to satisfy the requirements,’ he added. He explained that paying off debts is always a good way to start when it comes to applying for a mortgage as existing borrowing will be taken into account by a lender when it comes to your application. Reducing the amount you spend each month could also help when it comes to the amount a lender thinks you can afford to borrow. ‘But those trying to ‘play’ the system should exercise caution as lenders may still require you to prove where your cash goes. Using a credit card to hide your spending may also count against you as lenders have access to your credit report, so will be able to see a real-time snapshot of your credit card balance at any time within the month,’ Mountford added. ‘Research… Continue reading
