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UK landlords should be prepared to offer longer tenancies, says inventory organisation
UK landlords and property managers should consider offering long term tenancies as there is increasing demand but it means a different approach, according to the Association of Independent Inventory Clerks (AIIC). The organisation said that heightened preparation must include thorough administration and more thought about the choice of furniture and interior design themes. The AIIC points out that in the recently released English Housing Survey 2014/2015 showed that the average private tenancy length is now four years, up from three and a half years in the previous survey. It also found that some 46% of 25 to 34 year olds lived in the private rented sector in 2014/2015, up from 24% in 2004/2005. ‘Despite numerous reports suggesting that the average tenant doesn't want a long term contract, the official statistics show that average tenancy lengths are increasing, particularly among families, as people rent for longer,’ said Patricia Barber, chair of the AIIC. The organisation explained that these figures should encourage landlords to think harder about what will make their rental property feel more like a home and what can be done to facilitate renters staying in their property for longer. Barber also pointed out that the phenomenon of long term renting highlights how important it is for landlords to be organised and make sure they're on top of their administration duties. ‘When tenants stick around for longer, often the chances of confusion and disagreement over certain issues are increased when the tenancy does eventually come to an end,’ she said. ‘The longer time goes on, the more likely landlords and tenants are to forget details from the tenancy agreement or important information about the deposit, and that's why stringent administration, including keeping copies of everything and organising it accordingly, is so important,’ she added. The AIIC also highlighted that landlords should be aware of the need for evidence and records, especially for long term tenancies, and this again demonstrates the value of a thorough and professionally prepared inventory carried out at the start of the rental. ‘There are more grey areas over the condition of a property the longer a tenancy goes on. A detailed inventory will help landlords and tenants to determine exactly how the property's condition has changed over the course of the tenancy, what can be deemed fair wear and tear and what needs to be replaced and therefore deducted from the tenant's deposit,’ Barber explained. Should a dispute arise at the end of a tenancy, the AIIC maintains that a detailed inventory, which has been signed and agreed by the tenant, is the most important piece of evidence available to a landlord or letting agent. Continue reading
UK prime country house market affected by stamp duty change in first quarter of 2016
Prime country house prices in the UK increased by 0.3% on average in the first quarter of 2016, taking annual growth to 2.4%, down from a high of 5.2% in 2014. The easing of price growth since 2014 reflects a greater sensitivity to pricing from buyers in the prime market following successive increases in stamp duty that culminated in the changes introduced in December 2014. The details from the latest prime country house index from Knight Frank also shows that homes under £1 million have outperformed other sectors, rising by over 4% annually. Sales volumes in the first three months of 2016 were up by nearly a quarter year on year and Knight Frank forecasts price growth of 3% across the prime country market in 2016. This first quarter of the year has probably been affected by the announcement in November 2015 that buy to let investors and those purchasing second homes would be subject to an extra 3% on the rate of stamp duty from April 2016, the index report explains. It says that the November announcement has acted as a catalyst for some buyers looking to forestall a higher tax bill. This contributed to a notable rise in activity in the first three months of 2016, with Knight Frank figures showing a 24% rise in sales volumes across the prime country market compared to the corresponding period of 2015. During this time, activity has primarily been concentrated on the sub-£1 million market, boosted further by a growing economy and continued low interest and mortgage rates. As a result this sector experienced the strongest price growth. In contrast, homes worth £5 million or more saw values fall by 2.7% over the same period, with the higher transactional costs increasingly factored into pricing. With Knight Frank forecasting price growth of 3% on average this year, the report also says that key town and city locations are likely to outperform, as the trend for urban living continues to grow and more Londoners make the move out of the capital. In the short term, however, uncertainty surrounding the outcome of the European Union referendum could have an impact on the market, causing some buyers to adopt a wait and see approach until after the vote, the report concludes. Continue reading
Figures confirm UK landlords rushed to beat April stamp duty surcharge
Some 50% of homes sold in the UK in the last two weeks of March were bought by landlords as they sought to beat the new stamp duty deadline on 01 April, new research shows. There has been a lot of anecdotal evidence that buy to let landlords had been rushing to beat the additional homes surcharge of 3% but the monthly lettings index from Countrywide confirms this. It says that 50% of homes were bought by landlords in the final 15 days of March compared to 18% during the same period in 2015. Countrywide’s whole market estimates also show that £28 billion worth of home sales were completed in March, a 76% increase on the previous year, and overall landlords accounted for 23% homes sold in March compared to 13% in the previous year. This surge in landlord activity means more housing has been made available for tenants to rent and some 22% more homes were brought to the rental market in the first quarter of 2016 than in the same quarter in 2015 and has contributed to lower rental growth rates compared to last year. The percentage increase in the number of homes to rent has not been matched by the increase in the number of prospective tenants looking for a home which has put further downward pressure on rents. The number of tenants registering was up 16% in the first three months of 2016, compared to the same time last year. London experienced the largest increase in new rented homes, up 40% on the first quarter of 2015, but lower growth of tenant numbers, up only 8% over the same period. This has resulted in a rapid deceleration in rental price growth with rents in Greater London growing 2.9% in March, less than half the 7.4% recorded in 2015. The average UK rent rose 3.4% in the year to March 2016, two thirds of the rate in March 2015. Rents grew fastest in the East of England, increasing by 8.5% over the year. Growth in the East of England was driven by increasing numbers of new tenants registering in the first three months of the year, up 34% year on year, the highest increase of any region. ‘Quite at odds with the intentions of the policy, the first measurable effect of the introduction of the new stamp duty rate has been to increase the number of homes owned by landlords, although this will likely be a temporary affect as we see reduced investor activity in future months,’ said Johnny Morris, Research Director at Countrywide. ‘The increase in supply of homes to rent from landlords bringing forward purchases seems to have taken the edge off rental growth. A similar increase in tenants looking for a home to rent though would indicate this may not persist,’ he pointed out. ‘The large number of sharers, and people living with parents means there is a big store of pent up demand in the… Continue reading
