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Research reveals the extent of sub-letting in the UK without landlords’ permission
One in six tenants in the UK have rented out part or all of their property to someone who isn’t on the lease agreement, new research has found. Some 25% who sub-let their property didn’t check the terms of their lease to see if it was permitted, while 34% had not informed their landlord of the decision, according to the survey by landlord insurance provider Direct Line for Business. Of the sub-letters who did not inform their landlord, 23% got found out in the end anyway and the firm points out that the consequences when landlords catch tenants sub-letting can be severe. Indeed, some 11% of cases the tenants named on the lease were evicted with 6% losing their deposit in the process. Other repercussions include landlords increasing rental charges which happened in 22% of cases, 14% were fined and 8% given a formal warning. In spite of this, Direct Line for Business’s research reveals that 2016 could see an increase in the number of people sub-letting their properties. Some 15% claim they are thinking about sub-letting part or all of their rented property by advertising on property letting websites such as Airbnb. ‘The average monthly rent across the UK currently stands at £739. This means on average, approximately a third of people’s income goes towards accommodation. With the market having seen a five per cent increase in average rents in the last year, it seems that a larger number of renters are tempted to offset this expense by sub-letting their properties,’ said Nick Breton, head of Direct Line for Business . Over the last two years, Landlord Action, a firm that represents landlords, said it has seen an 18% increase in the number of instructions from from landlords with sub-letting cases. ‘Sub-letting is fast becoming one of the leading grounds for eviction, alongside rent arrears and Section 21 for possession only. This has been fuelled by sky high rents preventing some tenants from being able to afford even single-unit accommodation, forcing many to resort to bedsits or shared accommodation,’ said founder Paul Shamplina. ‘Organised sub-letting scams are also becoming more prevalent, where tenants, or sometimes even fake tenants, advertise properties and rooms on holiday/accommodation websites in order to cream a profit without the landlords’ consent,’ he added. The research also found that 28% of tenants who had sub-let had done so to friends or people recommended to them. Family members accounted for 21% while 19% of renters have sub-let to strangers responding to an advert. Sub-letting is most common in the North West and West Midlands with 27% of private tenants say that have sub-let their properties. In London it was 23%, it was 9% in the South East 7% in Northern Ireland. ‘There could be some serious consequences for tenants who sub-let, but landlords need to be aware that in these circumstances there could also be insurance implications. Sub-letting is not covered under… Continue reading
Need for affordable housing not likely to be met by Starter Homes scheme
The vast majority of councils in England do not think that Starter Homes should be classified as affordable housing and only 7% of councils think they will address the need for affordable housing in their local authority areas. Indeed, new research shows that local councils, of all political parties, believe that the Government's Starter Homes policy will hinder rather than help to tackle the growing need for genuinely affordable housing in England. They have also raised concerns about the impacts of the Government's plans to reduce social rents by 1% a year for the next four years and the extension of the Right to Buy to housing association tenants, according to a survey commissioned by the Town and Country Planning Association (TCPA) and the Association for Public Sector Excellence (APSE). It found that over two thirds of councils, 69%, anticipate that they will be building less social and affordable housing as a result of the Government's plans to reduce social rents by 1% a year for the next four years. Only 3% say they plan to build more social and affordable homes as a result. ‘Low cost home ownership, such as starter homes, may help some people get a first step on the housing ladder, but as the survey of council's highlights this will not address the need for genuinely affordable homes,’ said Kate Henderson, chief executive of the TCPA. ‘We need a housing strategy for the nation that provides decent homes for everyone in society, including those most in need in the current housing crisis. Our survey has revealed that four out of five councils do not think starter homes should be classified as affordable housing because they are simply not affordable for essential low paid workers or for many people on average incomes,’ she added. Almost three fifths of councils described their need for more affordable housing as severe and 37% as moderate, and 89% of respondents think that the extension of Right to Buy will lead to less housing available for social rent, with only one council thinking that it would be beneficial. ‘What is clear from these survey results is that the headlong rush to extend Right to Buy to housing associations is an ill-thought out measure which enjoys little support, and this is reflected across the different political parties at a local level,’ said Paul O'Brien, chief executive of APSE. ‘With Nine out of 10 councils genuinely concerned that the extension of the Right to Buy to housing association tenants will further diminish the already short supply of socially rented homes, available in their local communities, we say to Government now is the right time to listen on Right to Buy,’ he added. Continue reading
UK farmland market sees east/west divide open up
An east/west divide in value growth for farmland in the UK has opened up in what has been a mixed year for sector, according to a new analysis report. Indeed, 2015 was a year of change across the farmland markets as, for the first time in a decade, price falls in arable land values were recorded in the eastern counties of England, the Savills Farmland Value Survey shows. Grassland values, generally in the west, which have lagged behind arable values, have continued to increase and this has created an east/west divide and also mirrors the contrasting supply dynamics, as noted on Supply and Demand 2015, which has also been a contributory factor to supporting values in the west. Farmers made up 50% of farmland sellers last year, the highest proportion in seven years as low commodity prices and the short term outlook for UK agriculture prompted some to capitalise on high average land values and retire. The report points out that farmers made up the smallest proportion of buyers since 2003 at 43% of all transactions. Meanwhile, non-farmers including lifestyle buyers, investors and institutional/corporate buyers represented the biggest percentage of purchasers in the past 12 years. Expansion of an existing holding was the principal motivation to buy, representing the predominant reason in more than half of all transactions, with three quarters of those farmers who took on more land citing expansion as the reason to buy. Just short of 176,500 acres of farmland were publicly marketed across Great Britain in 2015, an increase of 24%, or an additional 34,000 acres compared with 2014. Across England, market activity increased by 16% to around 120,000 acres with a clear divide between the eastern and western regions. Increased supply was recorded in the eastern regions, most notably in the East Midlands. In contrast, reduced supply was recorded down the western side of England. In Scotland market activity increased 47% in 2015, which may be the result of a combination of factors including pressure on farm incomes and some pent-up activity following a year of uncertainty caused by the Scottish Referendum. ‘In the light of recent market evidence, the short to medium term expectations for commodity prices and therefore farm profitability, we have downgraded our forecasts for the next five years. We expect values to be much more varied than in the past five years,’ said Alex Lawson, director of National Farms and Estates at Savills.. ‘Exceptional prices may still be achieved if all the right factors come together, but conversely it is very likely that there will be more farms where potential sale prices fail to reach expectations or they fail to sell. We expect this market will last three to four years until commodity prices start to recover, following stronger global growth,’ he explained. Continue reading
