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ARLA calls for better regulation of rental fees in the UK
Better regulation is needed in the private rental sector in the UK to stop rogue agents charging over the odds tenant fees, according to the Association of Residential Letting Agents (ARLA). ARLA’s most recent report on tenant fees found that 74% of ARLA licensed agents charge tenants no more than £250 in tenant fees. Overall, among the members surveyed, the report found ARLA licensed agents charge a reasonable £213 on average in tenant fees to cover the lettings process. While many are concerned about tenant fees, David Cox, managing director of ARLA, said they are needed. ‘Tenant fees cover the cost of essential items during the lettings agreement process such as reference checks, the drafting of the tenancy agreement, and the management of tenancy extension or renewal,’ he explained. ‘All of these items cost the agent money to carry out, and in fact, provided the agent has a fair pricing structure, the agent will not make a noticeable profit on charging for these items,’ he added. However, there are some landlords and agents that do take advantage of the cost of tenant fees. ‘This is where better regulation is needed in the private rental sector to ensure consumers are not taken advantage of,’ said Cox. ‘We want to see tenants paying a fair price for the service they receive. Regulated agents don’t charge excessive fees. The results of our survey show that on average ARLA licensed agents charge a reasonable £213 in tenant fees; which we see as a fair price,’ he added. Among ARLA licensed members, the services which tenants are most likely to be charged for are reference checks, with 98% of branches doing so. Some 69% charge for the tenancy agreement and 65% for tenancy renewal. Also 57% of ARLA licensed agents stated they charged a flat fee that includes all of these services for tenants, rather than charge individually itemised and calculated tenant fees. ‘Renting a property is a big financial commitment and tenants should be made aware of what exactly they are being charged for and what they are getting for their money. ARLA supports openness and transparency when it comes to fees,’ Cox pointed out. ‘By choosing an ARLA Licensed agent, tenants are reassured that members follow a strict code of conduct which puts the tenant first. This not only ensures a fair fee structure, client money protection which means their deposit will be reimbursed if their agent goes bust, but also that they will be dealt with in a professional way by a qualified agent to receive the best advice when renting a property,’ he added. Continue reading
Survey reveals many non-home owners in UK think they will never be able to buy
Almost half of non-home owners aged 25 to 34 in the UK don’t think that they will ever be able to buy a property, new research has found, while one in three have no interest in buying. Just 28% of non-home owners questioned for mortgage and home loans broker Ocean Finance say they would like to be able to buy a property one day, and expect to be able to do so. Conversely, 40% of those questioned say that while they would like to be able to buy a home in the future, they do not expect they will ever be able to do so while 32% claimed they are happy to continue renting and have no interest in buying. These findings may suggest that people’s attitude to owning could be changing, whether through opinion or circumstance. And there are numerous reasons why this may be the case, the firm says. These include rising house prices, especially in London and the South East, which mean that even saving for the deposit for a property seems out of reach for many. For example, a 25% deposit on the average house price is now £68,000, more than double the UK average income. Changes to the mortgage market mean it has become harder to access mortgages, with fewer higher loan to value products available and tighter affordability rules. It also says that real income is being squeezed with prices rising faster than income for the past few years meaning that people have had less money to commit both to saving and to thinking about paying a mortgage. In fact, the survey shows that nearly half, 46%, of non-home owners in the key first time buyer bracket of 25 to 34 years old did not think that they would ever be able to afford to buy a house. Perhaps surprisingly, adults aged under 25 remain quite optimistic about their future prospects with 54% of them both wanting to buy a house in the future and believing that they will be able to do so. For people who haven’t got on the housing ladder by the age of 55 the dream of home ownership has faded. Just 4% of non-home owners aged over 55 still expect to be able to buy. ‘Home ownership is already at a 25 year low and our survey suggests that this figure is likely to continue to fall. While four in 10 people still say they’d like to own a property one day, they already seem resigned to not being able to do so,’ said Ian Williams, spokesman for Ocean. Continue reading
IMF no longer concerned about property price bubble in Dubai
The International Monetary Fund (IMF) has announced that it is no longer concerned about a property price bubble in Dubai. According to Masood Ahmed, head of the IMF's Middle East and Central Asia Department, price growth on the emirate has moderated considerably. He said that Dubai authorities had taken steps to limit speculative buying and along with mortgage curbs the market is now much less likely to see a spike in real estate values. However, he said there were still areas that needed to be watched, and that real estate projects needed to be sequenced and carefully managed to avoid encouraging excessive risk taking by government related enterprises. The IMF had previously warned that rapid rises in Dubai real estate prices, which earlier this year were in some cases a third higher than they were 12 months previously, could lead to another bubble and then a crash in the UAE emirate. A report by property consultants JLL last month found residential rents and sales prices rose 2% and 1% respectively in the third quarter compared to the previous quarter, slower than the 3% and 6% recorded in the second quarter of the year. Between June and August 2014, prices in some of Dubai's most popular areas fell by almost 4% according to a Mashreq Bank report. Jumeirah Park saw prices fall by 3.5% the largest of the declines, while Greens saw a decline of 3.1%, the Springs and Meadows dropped 3.4%, Arabian Ranches 3.3%, Jumeirah Village 2.6% and JLT 0.9%. Dubai Marina saw the smallest drop with prices declining just 0.2%. Meanwhile, Jumeirah Beach Residence (JBR) prices continued to rise. Between June and August, prices rose by 3.2%, bringing the overall annual increase to 15.2%. Mohamed Alabbar, chairman of Dubai's biggest real estate developer Emaar Properties, said he welcomed the slowdown in the emirate's property market and vowed to keep supplying new homes to help hold prices at 'a reasonable level'. 'In 2013, things went crazy because supply was limited. For me as a long term developer, this spike scares me, so I'm glad people are saying the market is cooling down. I think that is healthy,' he said at the launch of the first phase of a new high end residential development called Dubai Creek Harbour, a joint project between Emaar and Dubai Holding, the personal investment vehicle of Dubai's ruler Sheikh Mohammed bin Rashid al-Maktoum. Continue reading
