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Immigration check scheme in UK makes landlords reluctant to take on foreign tenants
The immigration check pilot scheme in the UK which is running in the Midlands has led to tenants being charged additional fees and is making it harder for foreigners to rent a property, new research has found. Tenants are being charged an extra £100 in administration fees, according to a survey by the Joint Council for the Welfare of Immigrants (JCWI) which polled landlords and tenants in the pilot area since the roll-out. Under the pilot scheme, which is expected to be rolled out across the UK later in the year, landlords are required to carry out checks on new tenants and face action if they are found to be renting to an illegal immigrant. If a landlord breaches the rules they face a fine of £1,000 per illegal adult occupier and for a second offence that rises to £3,000 per adult. The survey also indicated that landlords are now more hesitant to offer viewings to anyone needing more time to provide paperwork, meaning migrants are more likely to be turned down. The research also shows that landlords are discriminating between applicants on the basis of their background and are preparing to turn away tenants because they have a foreign accent. Furthermore, some legitimate tenants who cannot easily identify themselves using a British or European Union passport are finding it harder to secure somewhere to live. ‘This research clearly shows the dilemma that landlords are facing. On the one hand they want to be fair to prospective tenants, but on the other hand, they are fearful of renting a property to an illegal immigrant,’ said Jane Morris, managing director of Property Let By Us. She gave an example of an American tenant who reported that her British husband could secure viewings for the same properties she had been told were no longer available. Morris explained that under the pilot scheme, would-be tenants have to produce evidence from a checklist of documents that they have permission to be in the UK and landlords have to take a copy for their records. ‘So before dismissing a prospective tenant, it is important that agents and landlords make all the necessary checks. For example, if an agent is taking on the responsibility for checking an occupier’s immigration status, he/she must agree this in writing and must report the findings to the landlord,’ she pointed out. ‘Agents should set out timescales for checks and reports in the agency agreement and report occupiers without the right to rent to the landlord in writing. If the landlord still authorises a tenancy agreement, they will be liable for the penalty,’ she added. She also pointed out that in the event of a breach, where an occupier is found to be living illegally in a rented property, the agent or landlord will need to establish a statutory excuse to avoid a penalty. ‘A statutory excuse can be maintained if… Continue reading
Survey confirms UK Help to Buy is popular with first time buyers
The UK Government’s Help to Buy scheme is now the most popular way for first time buyers to get on to the housing ladder, new research suggests. As well as helping first time buyers who can afford to pay a mortgage but are struggling to save a deposit it eases the pressure on families to plug gaps in savings, says the study from mortgage and loans provider Ocean Finance. It found that half of first time buyers would use the Help to Buy equity loan or mortgage guarantee schemes to overcome the barrier of having a small deposit at a time when deposits are the biggest barrier to getting on the housing ladder. The Government started the Help to Buy scheme in 2013 in an attempt to kick start the housing market following the financial crisis which saw lenders tighten their mortgage lending rules and most 95% mortgages disappear. This meant borrowers needed to fund deposits of at least 10% and often, up to 25%, which took home ownership out of the hands of many first time buyers. Almost 40% of first time buyers questioned said being able to save a big enough deposit is the main barrier to owning their own home. This is following by rising house prices, which makes it harder to fulfil tough affordability checks and at the same time, pushes the amount needed for a deposit even higher. Alongside its equity loan and mortgage guarantee schemes, the Government is set to launch a Help to Buy ISA this autumn. The ISA is designed to boost the savings of first time buyers with a top up from the Government of 25%, up to a maximum of £3,000 on savings of £12,000. Almost a quarter of those questioned by Ocean said they planned to open a Help to Buy ISA. That compares with 14% who expect to rely on help from their families to fund their deposit. ‘The Help to Buy scheme is doing its job and helping to remove the deposit barrier that many first-time buyers face. Too many first time buyers have been frozen out of the housing market because they couldn’t save the 25% needed to get the best deals and make their mortgage affordable,’ said Gareth Shilton, Ocean’s spokesperson. ‘It’s interesting to see appetite for the new Help to Buy ISA also, and we’re looking forward to seeing take up levels of this scheme once it’s launched. The big question, of course, is what will happen when the Government steps back from supporting schemes to get the housing market moving. House builders and lenders need to be having conversations to see how they can work together to ensure the momentum isn’t lost,’ he added. Continue reading
US existing home sales jump to highest pace for almost six years
Existing home sales in the United States increased by 5.1% in May year on year to their highest pace in nearly six years, partly fuelled by an increase in first time buyers. The latest data from the National Association of Realtors shows that all regions, led by the North East, saw sales increase. They have risen year on year for eight consecutive months and are 9.2% above a year ago. The median existing home price for all housing types in May was $228,700, which is 7.9% above May 2014, the 39th consecutive month of year on year price gains. According to NAR chief economist Lawrence Yun May home sales rebounded strongly following April's decline and are now at their highest pace since November 2009. ‘Solid sales gains were seen throughout the country in May as more home owners listed their home for sale and therefore provided greater choices for buyers,’ he said but added that overall supply still remains tight. ‘Homes are selling fast and price growth in many markets continues to teeter at or near double-digit appreciation. Without solid gains in new home construction, prices will likely stay elevated even with higher mortgage rates above 4%,’ he explained. The data also shows that total housing inventory at the end of May increased 3.2% to 2.29 million existing homes available for sale, and is 1.8% higher than a year ago. Unsold inventory is at a 5.1 month supply at the current sales pace, down from 5.2 months in April. The percent share of first time buyers rose to 32% in May, up from 30% in April and matching the highest share since September 2012. A year ago, first time buyers represented 27% of all buyers. ‘The return of first time buyers in May is an encouraging sign and is the result of multiple factors, including strong job gains among young adults, less expensive mortgage insurance and lenders offering low down payment programmes,’ said Yun. ‘More first time buyers are expected to enter the market in coming months, but the overall share climbing higher will depend on how fast rates and prices rise,’ Yun added. With demand continuing to far exceed supply, properties typically stayed on the market for 40 days in May, up from 39 days in April but the third shortest time since NAR began tracking in May 2011. Short sales were on the market the longest at a median of 131 days in May, while foreclosures sold in 56 days and non-distressed homes took 38 days. Some 45% of homes sold in May were on the market for less than a month. All cash sales were 24% of transactions in May for the third straight month and are down considerably from a year ago when they were 32%. Individual investors, who account for many cash sales, purchased 14% of homes in May, unchanged from last month and down from 16% in May 2014. Some 67% of investors paid cash in May. Distressed sales, that… Continue reading
