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Immigration check scheme in UK makes landlords reluctant to take on foreign tenants
The immigration check pilot scheme in the UK which is running in the Midlands has led to tenants being charged additional fees and is making it harder for foreigners to rent a property, new research has found. Tenants are being charged an extra £100 in administration fees, according to a survey by the Joint Council for the Welfare of Immigrants (JCWI) which polled landlords and tenants in the pilot area since the roll-out. Under the pilot scheme, which is expected to be rolled out across the UK later in the year, landlords are required to carry out checks on new tenants and face action if they are found to be renting to an illegal immigrant. If a landlord breaches the rules they face a fine of £1,000 per illegal adult occupier and for a second offence that rises to £3,000 per adult. The survey also indicated that landlords are now more hesitant to offer viewings to anyone needing more time to provide paperwork, meaning migrants are more likely to be turned down. The research also shows that landlords are discriminating between applicants on the basis of their background and are preparing to turn away tenants because they have a foreign accent. Furthermore, some legitimate tenants who cannot easily identify themselves using a British or European Union passport are finding it harder to secure somewhere to live. ‘This research clearly shows the dilemma that landlords are facing. On the one hand they want to be fair to prospective tenants, but on the other hand, they are fearful of renting a property to an illegal immigrant,’ said Jane Morris, managing director of Property Let By Us. She gave an example of an American tenant who reported that her British husband could secure viewings for the same properties she had been told were no longer available. Morris explained that under the pilot scheme, would-be tenants have to produce evidence from a checklist of documents that they have permission to be in the UK and landlords have to take a copy for their records. ‘So before dismissing a prospective tenant, it is important that agents and landlords make all the necessary checks. For example, if an agent is taking on the responsibility for checking an occupier’s immigration status, he/she must agree this in writing and must report the findings to the landlord,’ she pointed out. ‘Agents should set out timescales for checks and reports in the agency agreement and report occupiers without the right to rent to the landlord in writing. If the landlord still authorises a tenancy agreement, they will be liable for the penalty,’ she added. She also pointed out that in the event of a breach, where an occupier is found to be living illegally in a rented property, the agent or landlord will need to establish a statutory excuse to avoid a penalty. ‘A statutory excuse can be maintained if… Continue reading
Survey confirms UK Help to Buy is popular with first time buyers
The UK Government’s Help to Buy scheme is now the most popular way for first time buyers to get on to the housing ladder, new research suggests. As well as helping first time buyers who can afford to pay a mortgage but are struggling to save a deposit it eases the pressure on families to plug gaps in savings, says the study from mortgage and loans provider Ocean Finance. It found that half of first time buyers would use the Help to Buy equity loan or mortgage guarantee schemes to overcome the barrier of having a small deposit at a time when deposits are the biggest barrier to getting on the housing ladder. The Government started the Help to Buy scheme in 2013 in an attempt to kick start the housing market following the financial crisis which saw lenders tighten their mortgage lending rules and most 95% mortgages disappear. This meant borrowers needed to fund deposits of at least 10% and often, up to 25%, which took home ownership out of the hands of many first time buyers. Almost 40% of first time buyers questioned said being able to save a big enough deposit is the main barrier to owning their own home. This is following by rising house prices, which makes it harder to fulfil tough affordability checks and at the same time, pushes the amount needed for a deposit even higher. Alongside its equity loan and mortgage guarantee schemes, the Government is set to launch a Help to Buy ISA this autumn. The ISA is designed to boost the savings of first time buyers with a top up from the Government of 25%, up to a maximum of £3,000 on savings of £12,000. Almost a quarter of those questioned by Ocean said they planned to open a Help to Buy ISA. That compares with 14% who expect to rely on help from their families to fund their deposit. ‘The Help to Buy scheme is doing its job and helping to remove the deposit barrier that many first-time buyers face. Too many first time buyers have been frozen out of the housing market because they couldn’t save the 25% needed to get the best deals and make their mortgage affordable,’ said Gareth Shilton, Ocean’s spokesperson. ‘It’s interesting to see appetite for the new Help to Buy ISA also, and we’re looking forward to seeing take up levels of this scheme once it’s launched. The big question, of course, is what will happen when the Government steps back from supporting schemes to get the housing market moving. House builders and lenders need to be having conversations to see how they can work together to ensure the momentum isn’t lost,’ he added. Continue reading
Average residential rents in Scotland reach new peak
Average rents in Scotland reached a new peak of £544 per month in May after a record monthly increase of 1% and annual growth of 2.7%, the latest buy to let index shows. The rise was led by a 1.9% monthly increase in the south of Scotland, the biggest regional change and annual growth is now the fastest since the summer of 2014, according to the latest index from Your Move, one of Scotland’s largest lettings agent networks. The average Scottish rent has reached an all-time high of £544, following a 1.0% boost in May 2015. In contrast, over the past six months, rents have risen by an average of just 0.1% per month. May’s rise represents the strongest monthly uplift on record, as rent growth begins to pick up. This also represents a significant increase from 1.6% annual growth in April 2015 and 1.3% in March, after a recent lull in annual rent rises. According to Brian Moran, lettings director at Your Move Scotland, the rental market has seen growth more than doubled since March, when annual rent rises were only 1.3%. ‘After a downtrend in rent growth over the winter months, we’re now back on par with the rate of rises a year ago. In fact, at the same time last year, rents were rising at a moderately faster pace, with 2.8% annual growth in May 2014,’ he pointed out. He also explained that affordability is one of the main handicaps reining back private sector rents from rising even faster, but with recent boosts to wage growth, most household incomes are weighing in higher, and tenants can finally afford to pay more. ‘However, this needs to go hand in hand with supply. With a strong economy and sturdy jobs market, demand for homes to let is standing tall. The stock of available housing needs to rise to match this level to maintain the delicate balance with rent rises, and tenant incomes,’ he added. Rents are higher than a year ago in all but one of the five regions of Scotland. Compared to last year, rents in Glasgow and Clyde have seen the biggest movement, rising 5.7% in the past 12 months, equal to £30 in absolute terms. This brings the typical rent in the region to £566 as of May 2015. The second most significant increases were found in the South and the East of Scotland, with average rents in these both regions up 2.7% since May 2014. Rents in the Highlands and Islands experienced more moderate annual rent growth of 1.9%. Edinburgh and the Lothians is the only region where typical rental prices have fallen year on year. The average monthly rent in the region is now 0.6% lower than it was a year ago. At £593 per month, the average rent is now considerably below its November 2014 peak, when prices reached £617. On a monthly basis, rental prices have risen across all regions of Scotland. Rents in the South… Continue reading
