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Over half of UK first time buyers rent before they buy
More than half of the UK’s first time buyers now try before they buy when it comes to owning their first home, according to an annual survey. The research from Clydesdale and Yorkshire Banks found that 54% of the nation’s first time buyers rent before they take the house buying plunge. A further 35% stay with family and 6% rent but move back to the family home to save for a deposit. The same survey last year revealed that 67% of first time buyers in the UK were waiting longer than planned to buy their first home with more than half of those surveyed revealing it had taken up to three years longer than anticipated. There is a clear financial benefit with 39% of those at home claiming to live rent free. Some 61% pay rent every month and a further 21% make a contribution through helping at home, paying bills or buying food for the household. However, 80% of Scots living at home pay rent compared to just 46% of those in London. The majority, 56%, of first time buyers said they feel pressure to buy their own home and this is felt most keenly amongst those renting a property. There were regional variances with 65% of first time buyers in London admitting to pressure to take their first step onto the property ladder. This compared to just 37% in the North East. ‘We know that first time buyers face a number of pressures and challenges and are focused on providing support throughout the process from helping to save for a deposit to finding the right mortgage to suit different needs and budgets,’ said Steve Fletcher, head of Clydesdale and Yorkshire Banks retail network. He pointed out that Clydesdale and Yorkshire Banks are offering first time buyer mortgages with a 5% deposit. ‘We are proud that we were one of only a handful of lenders who continued to support this market throughout the economic downturn,’ he said. First time buyers with a deposit from as little as 5% can apply for a first time buyer mortgage and receive the benefit of no arrangement fee, £250 cashback and one free home valuation. The Banks offer a three year fixed rate of 3.59% with 90% LTV or 4.89% for a three year fixed with a LTV of 95%. Continue reading
Landlords needing to evict a tenant face rising UK court costs
Rising court fees in the UK could tempt law abiding landlords to cut corners when it comes to tenant evictions, it is claimed. For the second year running, the Ministry of Justice is increasing fees for landlords who want to evict tenants who have fallen into rent arrears. The cost for filing a paper application will rise by £75 to £355. Online applications will rise from £250 to £325. This comes on top of increases last year of £100 for online applications and £175 for paper claims. According to Legal 4 Landlords the spiralling court costs could lead to landlords being tempted to evict problem tenants without following official procedures, risking prosecution and a criminal record. ‘The spiralling costs are unfair and are hitting landlords in the pocket yet again. However, the law is complex and too many landlords serve invalid notices delaying the process and waste their money,’ said Sim Sekhon, managing director of Legal 4 Landlords. ‘Landlords must follow the correct procedure and expert guidance is paramount. Evicting a tenant is stressful enough but many landlords are concerned about rising court costs so it’s not surprising some are tempted to take the law into their own hands,’ he added. The firm explained that there are several routes that can be taken to evict a tenant and every case is different. The court expects landlords to follow procedures to the letter so they should always seek expert guidance. Legal 4 Landlords offers a range of services for landlords and letting agents with a network of offices across the UK. This includes advanced tenant referencing and general insurances products. It offers a free eviction case review and recently launched a rent and legal protection insurance product. This safeguards landlords from future hikes in court costs at the legal stage for landlords who may need it for their next tenants. The number of people evicted from rented properties hit record levels in 2014, with 42,000 homes repossessed by landlords, according to the Ministry of Justice. Continue reading
Call for lettings agent fees to be banned in England
Letting agents’ fees in England should be banned to protect tenants in the private residential rental sector, a hard hitting new report has urged. According to new evidence uncovered by a charity, Citizens Advice, tenants are frequently ripped-off by fees often hidden by letting agents to the tune of £337 on average. These charges come on top of advertised rent prices and deposits and in some cases can force people into debt, the report says, adding that letting agents have refused to adopt measures that were supposed to bring transparency and competition to the market. Most agents charge for checking references, but costs range from as little as £6 to £300, according to the study. Renters can also be hit by charges ranging from between £15 to £300 for simply renewing their tenancies. Some agents charged £300 for credit checks that are widely available for £25. Even when moving out of a property, almost half of the 353 agencies polled by Citizens Advice said they charge an average ‘check out’ fee of £76. Despite an Advertising Standards Authority (ASA) requirement introduced in 2013 that agents should give clear information about fees, this study found that only a third provided full written details. The requirement will become law later this year which will mean agents have to publish fees on their websites and in their offices. But Citizens Advice is concerned this will have little impact. The report says people face a lot of pressures when looking for a property and the main priorities amongst tenants is location and the price of rent. Fees often do not get disclosed until later in the process and only 25% of tenants told this study that they took fees into account when leasing a property. The charity says it does not call for a fees ban ‘lightly’, but said alternative measures have not worked. It adds that if charges are to be made, they should fall on landlords as they are in a better position to shop around and pick the best agency. A fees ban was introduced in Scotland in 2012 and there is no clear evidence to suggest it has led to an increase in rental prices, the report adds. Almost 90% of renters told the report that the charges caused them problems. A fifth said they went overdrawn on their bank accounts as a result and 42% had to borrow from friends and family. ‘Letting agents hold all the cards meaning tenants are open to abuse. Renters are regularly stung by arbitrary fees which can range from modest amounts to hundreds of pounds,’ said Gillian Guy, chief executive of Citizens Advice. ‘Our research confirms renters don’t shop around for letting agents, they shop around for properties so the idea that transparent fees will solve these problems is misguided. Landlords can hold agencies to account so it is right that they should shoulder the responsibility of fees. That would end once and for all the situation in which letting… Continue reading
