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UK mortgage holders expect to be in a better financial position in three years
Some 60% of mortgage holders in the UK anticipate that they will be in the same financial position or better in three years' time even though the majority expect interest rates to rise. Around half expect their finances to be broadly unchanged, with more than 10% predicting their financial position will improve, according to new data published by the Council of Mortgage Lenders (CML). The figures, published in conjunction with YouGov, shows that almost one third expect their finances to worsen as rates rise with a fifth say they are currently experiencing some financial difficulty, but fewer than half this amount believe themselves to be in danger of missing a mortgage payment. Across the market, however, mortgage arrears are continuing to decline, and CML data shows there are currently only 1.18% of loans with arrears amounting to 2.5% of the outstanding balance. The data also sheds light on likely triggers of mortgage payment difficulties, many of which are not simply related to the loan commitment itself. Some 61% said that a higher cost of living is the most common factor affecting future mortgage affordability, with 41% citing minimal savings, 36% low or falling income , 30% other debts and 17% ill health. The survey identifies that borrowers have a range of coping strategies or actions they are prepared to take to ensure that their mortgage remains affordable. Top of the list is cutting back on non-essentials cited by almost 40%, but other options include cancelling major spending plans, remortgaging to a cheaper deal or working more hours. ‘Those who expect their situation to get worse and to be in some degree of difficulty over the next few years are willing to take more action and consider a broader range of actions. They are generally open to trying a combination of coping strategies, rather than just opt for one,’ said a CML spokesman. ‘Although this might be a hypothetical situation, it shows households apparently have a well-grounded understanding of the plausibility of their coping strategies and are being realistic about their prospects,’ he added. Continue reading
Advertised rents growth varies considerably in the UK
The South East of England, East Anglia and Scotland have seen advertised residential rents reach record highs in the third quarter of 2014, according to the latest published index. Overall across the UK, advertised rents increased by £66 per month in a yearly comparison to reach £1,034 per month, the data from Move With Us shows. In the South East and East Anglia they reached the highest recorded levels in at £1,254 and £947 per month, increasing by £18 and £11 each month respectively and Scotland also continued to be a strong performing region, with average rents hitting record levels of £727 per month. The firm said that, as with the second quarter of the year, the average national rent has been significantly influenced by a burgeoning London market. The average advertised rent in London increased by £118 in the quarter to reach £2,452 per month, some £230 higher than it was during the same period in 2013. In northern regions of England, however, rents have fallen gradually across the board with Yorkshire and Humber seeing price reductions of over £20 per month. ‘There is a stark contrast between the South and North of England as the divide between the cost of renting increases,’ said Robin King, director of Move With Us. For example, in Yorkshire and Humber the average rent is only £4 per month higher in a yearly comparison but in the South East this figure is significantly higher at £112 per month. North of the border, in Scotland, landlords have benefited from a significant rise in the average advertised rental price. ‘Annual growth is always good news for landlords but those in regions where we are not seeing huge amounts of growth shouldn’t be too concerned as we approach the end of the year. January is likely to bring a new influx of potential renters to the market who are looking to move in the New Year,’ he added. A regional breakdown shows that the average rental price in London is more expensive than in the summer high of 2012 when the London Olympics artificially inflated asking rents. Rents are continuing on an upward trajectory which is likely to continue into 2015. The quarter ended with the average advertised rent at £2,452 per month. Average rents in the South West have grown steadily throughout 2014, however, rents have fluctuated week to week while never falling below an average of £800 per month. In the third quarter the market improved marginally in July before dipping £3 or 0.4% in August and September. The average advertised rent is the region is £33 or 4.28% up in a yearly comparison at £813 per month. While the average rent seems set to continue to grow over the next year, it’s likely that minor fluctuations will persist, according to the index report. The South East is the strongest performing region outside of London and the average advertised rents have grown steadily over the past two years. In the last year, rents have… Continue reading
New online services launches to help UK landlords with immigration checks
A new service for UK landlords has been launched to help them cope with the new legislation that means they must check the immigration status of potential tenants before agreeing a rental. The first groups of landlords will be required to undertake the checks from December 2014 under a pilot scheme in the West Midlands with the requirement being rolled out across the rest of the country in 2015. The new online Ready Rentals system has been created to help landlords who will have to ask those applying to live in one of their properties for proof of their right to reside in the UK such as a passport, right of abode certificate, or alternative documents that confirm their immigration status. Under the Immigration Act a landlord failing to comply could receive a fine of up to £3,000 and the new rules have already stirred up much feeling amongst the private rented sector, making it a controversial topic, with some questioning whether it is the landlord's place to act as 'immigration officer' in this way. Others fear the additional weight of responsibility on private landlords might negatively affect the industry, putting people off renting out their properties as they struggle to cope with the changing legislative demands. ‘The immigration issue is a hot topic at the moment, with the government and opposition openly debating their approach to the nation's growing problem, but I don't see this new legislation merely having been presented as a vote-winner. Checking a tenant's immigration status is not only beneficial to the country as a whole, it also helps the landlord to feel more assured that they will receive their rent successfully,’ said Neil Woodhead, founder of Ready Rentals. ‘For some it can feel as though the legislation that private landlords have to follow is constantly changing, and this can be daunting for many. Yet it is important that private landlords face this, and other legal demands placed upon them, in a thorough manner. The result is legal compliance and a professional service for tenants, a win-win for all,’ he added. Just one of the issues that Ready Rentals will address, the new immigration laws will be fully supported by the service, providing landlords in the West Midlands and further afield when it is rolled out, with access to all the advice and referencing systems needed to ensure that they meet the new demands of the immigration legislation. Woodhead explained that the online system will be available for an affordable annual fee and aims to make the life of a private landlord easy and the service they offer legally compliant and seamless, addressing concerns and providing invaluable answers to problems faced by individual landlords. This is achieved by providing access to all the documentation needed to become a private landlord, a tailored system to suit individual needs; continually updating advice on statutory regulations and letting a property; providing the ability to market online to major portals; giving information on general marketing and advertising;… Continue reading
