investments
Housing associations organisation criticises lack of affordable homes in UK
More British landlords now rent to people on housing benefit with amounts increasing from £4.6 billion in 2006 to £9.3 billion last year, new research shows. According to the study from the National Housing Federation the reason are twofold. Firstly a 42% rise in the overall number of private renters receiving housing benefit since 2008 and secondly the fact that claims in the private rented sector (PRS) are much higher than in the non-profit housing association sector. The research says that it costs £21 a week more to house a family in a PRS home than in a social home at £110 overall in comparison to £89 and points out that over a year this is an additional £1,000 per family being spent at £5,705 in the PRS compared to £4,638 in the social rented sector. In London, the contrast is even starker with PRS payments at £64 per week more than to those in social homes, adding up to £3,300 more each year, according to the NHF which represents independent non-profit housing associations. It says that the lack of affordable housing available means that a wider group of people need housing benefit. Nearly half, 47%, of all families claim housing benefit in the PRS sector are in work, almost double the proportion it was six years ago at 26%. Housing benefit recipients renting privately now earned an average £4,000 more than on six years ago. The NHF believes that the increase in taxpayer’s money being spent on housing benefit would have been better allocated to building more affordable homes. ‘It is madness to spend £9 billion of taxpayers’ money lining the pockets of private landlords, rather than investing in affordable homes,’ said David Orr, NHF chief executive. ‘Housing associations want to build the homes nation needs. By loosening restrictions on existing funding, the Government can free up housing associations to build more affordable housing at better value to the taxpayer and directly address the housing crisis,’ he added. But the National Landlords Association (NLA) said it should not criticise PRS landlords and pointed out that the number letting homes to housing benefit recipients is now falling. ‘Housing benefit is not a subsidy to landlords; it’s a support for tenants to ensure they can pay for their housing. However, the proportion of landlords who let to tenants in receipt of housing benefit has halved over the last five years as benefit levels have not kept up with rents,’ said , Richard Lambert, NLA chief executive officer. ‘The private rented sector has grown as the market responds to the increasing demand for homes, particularly from a growing proportion of tenants whom the social sector and housing associations simply are not able to support in the current circumstances,’ he explained. ‘The private rented sector plays a significant role in providing much needed homes for tenants. What we should all be talking about is the failure of successive governments to adequately allocate its housing budget and to incentivise… Continue reading
Rents down in all Australian cities apart from Melbourne and Hobart
Residential rents in Australia fell in all cities except for Melbourne and Hobart in July taking the combined capital city median weekly rent to $483 a week, the lowest since December 2015. Combined capital city rental rates are $485 a week for houses and $467 a week for units, according to the latest rent index from real estate firm CoreLogic. Overall the index fell by 0.3% over the month and is 0.6% lower than it was in July 2015 and it is anticipated that the rental market weakness will persist and that on an annual basis rents will continue to fall over the coming months. A breakdown of the figures shows that over the past 12 months rental rates have increased in Sydney by 0.4%, in Melbourne by 2%, in Hobart by 6.2% and in Canberra by 1.9%. Rents fell by 1% in Brisbane, by 0.5% in Adelaide, by 9.2% in Perth and by 15.7% in Darwin. CoreLogic research analyst Cameron Kusher pointed out that Hobart and Canberra are the only capital cities to have recorded stronger rental growth over the past year compared to the previous year. He explained that the market is currently seeing the softest wages growth on record and the declines are being cause by relatively high levels of housing investment following record highs recently and well as historically high levels of new dwelling construction as most of them are units which are more than twice as likely to be rented. He also pointed out that slowing population growth creates less overall demand for housing at a time when home commencements and the number of dwellings under construction were at historic high levels in March 2016. ‘The combination of all these factors means that landlords have little scope to increase rental rates in this current market. Potentially, the changing rental market conditions will have a flow on effect for older stock, particularly units given we’re seeing so much new unit supply being added to the rental market, much of which is located in inner city locations,’ he explained. He also said that while rental rates are falling and values continue to rise, gross rental yields remain at record low levels. ‘As a result of record low rental yields and the weakest rental market on record, those investors currently active are clearly focusing on capital growth potential,’ he added. Continue reading
Research suggests UK tenants worried about deposit protection
The majority of private sector tenants in the UK are worried that the deposits they pay for their rented home are not protected. Under the law a deposit, the money held as a fund for any damage caused during the tenancy, should be put into a deposit scheme and not held by a landlord or a lettings agency. But some 70% of tenants are concerned that their deposit has not been placed in a protection scheme and believe their landlord or letting agent has kept the deposit, according to new research. The study, conducted by online letting agent PropertyLetByUs, also shows that just 50% of tenants have ever received confirmation that their deposit is in a protection scheme and three quarters of tenants believe their landlord, or agent, will try and keep the deposit at the end of the tenancy. It is estimated that £3.2 billion deposits are being held in the deposit schemes, or by letting agents and landlords. The government intends to reform rental deposits and is looking at what it can do to make sure that people who rent have ‘proper consumer protection, including protection from landlords who withhold deposits unreasonably’. Tenant Deposit Protection was introduced in April 2007, as part of the Housing Act 2004 for all assured shorthold tenancies in England and Wales where a deposit was taken. It was identified as a way to raise standards in the lettings industry and ensure tenants are treated fairly at the end of the tenancy. ‘Tenants are right to be concerned. While deposit protection schemes protect tenants, there is little or no policing to ensure landlords and agents are compliant,’ said Jane Morris, managing director of PropertyLetByUs. ‘Our research shows that tenants simply don’t trust landlords and agents with their deposits, which is disappointing in light of the fact that the schemes have been around for many years. Agents and landlords have a legal obligation to put deposits in one of the three approved schemes within 30 days of receiving it,’ she explained. ‘There definitely needs to be reform and hopefully the Government will introduce new measures that will ensure that tenant deposits are fully protected,’ she added. Continue reading
