Tag Archives: london
UK Lib Dems set out plans for a Help to Rent scheme for young people
The Liberal Democrats, one of the main political parties in the UK, have announced plans for a new Help to Rent scheme to support young workers move out of their family home and into a rented property. The party, which was part of the coalition government, said it would introduce the scheme if it is again part of the new government after the general election next month. It pointed out that research shows that around two million young working adults still live with their parents despite being in paid work because they can’t afford to get a home of their own. Rising rental costs mean that many young workers can't afford the money needed for a tenancy deposit of the one to two month's rent expected up front unless they have financial help from their parents or friends. Under the Help to Rent scheme, young working people in England would be able to borrow up to £1,500 or £2,000 in London from the government to go towards their tenancy deposit. To be eligible, tenants would need to be between 18 and 30 years old, in paid employment and not be home owners or seeking social housing tenancy. Loans could be paid over one or two years and once paid off, could be used for future rental properties. The knock-on effect of having young working adults in the family can also lead to parents having to upsize or delay the downsizing of family homes to accommodate older children, thereby reducing the availability of family homes. ‘Increasingly we see young people stuck in the family home as they can't afford the upfront costs of a deposit to rent a property despite having a paid job. It's simply unfair that thousands of hard working young people still have to live in the same bedroom they lived in when children,’ said Deputy Prime Minister and Leader of the Liberal Democrats Nick Clegg. ‘When you get your own job, you want to stand on your own two feet, have your own space, and not have to rely on the bank of mum and dad. Our Help to Rent scheme removes this barrier to young people's independence, providing access to up to £2,000 towards their tenancy deposit so they can fly the nest and rent their own space,’ he added. Ian Fletcher, director of policy of the British Property Federation, pointed out that young renters often do not have a credit history and therefore struggle to raise a deposit. ‘This welcome policy will help more people into their first homes and stop them having to raise funds through pay-day lenders and other risky means,’ he said. ‘This announcement builds on the excellent work of the Confederation of British Industry and housing charity Shelter, who have encouraged employers to voluntarily offer loans for tenancy deposits, much like loans already offered for travel season tickets,’ he explained. ‘Schemes such as these are also made possible by the vast majority of legitimate landlords and agents, who… Continue reading
Average UK home changes hands every 23 years, new research shows
The average home in the UK changes hands every 23 years and while this may seem not very often it is almost three times longer than in the 1980s, new research shows. The low housing turnover is driven by people buying their first homes later, a larger private rented sector and the baby boomer ‘hoarding effect’, according to the annual report from the Intermediary Mortgage Lenders Association (IMLA). The report, which examines trends in the mortgage and housing markets in order to assess the strength of the post-recession recovery, also shows that annual turnover of the private housing stock fell from over 12% to 4.5% over the last three decades. As a result, IMLA’s analysis indicates the average home currently changes hands once every 23 years compared with every eight years during the 1980s. The IMLA report argues that low housing turnover is driven by a combination of people buying their first homes later; by a larger private rented sector where turnover is lower; and by the baby boomer ‘hoarding effect’ where middle aged home owners are staying put, tying up a large part of the housing stock. These factors are likely to keep turnover down for the foreseeable future, potentially limiting mortgage lending and restricting access to existing properties. IMLA’s analysis also shows the estimated contribution of mortgage finance to the total value of UK housing transactions hit a new all-time low of 41.7% last year. It means just £4.17 of every £10 spent on house purchases in 2014 was funded by mortgages while cash or equity made up £5.83 or 58.3%. Despite forecasting a slight increase in gross mortgage lending over the next two years, the IMLA expects the estimated contribution of cash, including deposits and cash purchases, to housing transactions will exceed 60% for the first time on record by 2016. ‘These figures paint a picture of a housing market where turnover has drastically slowed in the last thirty years. Quite simply, in the absence of a sustained rise in housebuilding and improved affordability and turnover, the fact that properties are coming onto the market less frequently severely limits the scope for would-be first time buyers to graduate to owning their own homes,’ said Peter Williams, IMLA executive director. ‘Inertia in the property market spells danger for future owner-occupation levels, and the growing influence of cash and equity is sowing the seeds of a permanent social divide. Having said that, we will see some continued growth in mortgage lending and as the market stabilises and wages rise, we may also start to see affordability improving,’ he added. The report also assesses how the mortgage market recovery has been tempered in the last year by worsened housing affordability and tighter lending restrictions since April’s implementation of the Mortgage Market Review (MMR) and October’s macro-prudential changes prompted by the Financial Policy Committee (FPC). While gross mortgage lending was running 36% up year on year in January 2014, it was… Continue reading
UK landlords get confused over betterment principle, study finds
Some 60% of landlords in the UK admit they don’t understand the betterment principle, whilst 90% say they fully understand fair wear and tear, according to a new report. The betterment principle means that if an item, such as a carpet was old at check-in, the landlord can’t replace it with a new carpet, but some compensation is allowable towards the item. The research from My Property Inventories also shows that over 80% of landlords said inventory evidence helped them to win a tenant deposit dispute. Furthermore, 60% of landlords admit to never visiting their properties to check the condition, while just 6% say they regularly make spot checks on their property. ‘We do find that landlords and agents push for new for old at the end of tenancies, and have unrealistic expectations of what they can claim against tenant deposits,’ said Danny Zane, director of My Property Inventories. He explained that the tenant has a duty of care to return the property in the same condition at the end of the tenancy, as at the start and listed on the inventory report, with an allowance for wear and tear. The law does not allow landlords to claim ‘new for old’ from the tenant deposit. ‘The key problem is that agents, landlords and tenants have different expectations when it comes to fair wear and tear issues. There is a distinct difference between fair wear and tear and actual damage. For example, carpet tread will flatten over time where there has been foot traffic, but cigarette burns, stains or soiling will incur a charge,’ said Zane. He pointed out that the betterment principle applies to cleaning issues too. ‘If a carpet was stained and marked at the time of check-in, a landlord can’t expect the tenant to pay for carpet cleaning at the check-out, no matter how long the tenancy has been,’ Zane explained. ‘However, if the carpet was recorded in the unbiased inventory report at the start of the tenancy as clean, with accompanying photos and is found to be stained or marked at check-out, the cleaning costs can be deducted from the deposit,’ he added. The firm believes that it is important to note that normal wear and tear is a fact of life within tenancies. ‘The best way for landlords and agents to ensure that the property’s condition is fully recorded at the start of the tenancy, is by having a thorough and professional un-bias inventory, along with a detailed check-in and check-out report,’ Zane concluded. Continue reading
