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Research suggests a third of UK tenants sublet without consent
Around a third of private rented sector tenants in the UK say they are currently subletting without the landlord’s consent and four out of 10 tenants plan to do so in the near future, new research has found. The survey from online lettings agents PropertyLetByUs, also shows that the vast majority of tenants, 96%, are subletting the property for short time to help a family member or friend out and 82% claim they are subletting to help pay the rent. Over half of tenants, 52%, say that they planning to sublet their property in the near future, with the landlord’s consent and 78% think they should be able to sublet the property without the landlord’s approval. According to Landlord Action, there is a growing number of instructions from landlords who want to start possession proceedings against tenants who have sublet, via Airbnb, without their consent. Subletting is fast becoming one of the leading grounds for a tenant eviction. According to Jane Morris, managing director of PropertyLetByUs, it is very worrying that so many tenants are subletting without telling their landlords. ‘It is imperative that landlords make regular checks on the property to check for additional occupants. Many tenants will try to hide the fact they are subletting, so the warning signs can be excessive rubbish and accelerated wear and tear,’ she said. ‘When there is multiple occupancy in a property, wear and tear and damage is dramatically accelerated. There can be increased mould and condensation with more occupants. Landlords can also face expensive repairs for damage and redecoration costs, to bring the property up to the standard it was at check-in,’ she pointed out. Morris also pointed out that illegal subletting falls under tenant fraud and renting a property makes landlords vulnerable to fraud. ‘It is vital that landlords and agents carry out thorough pre-letting checks. The purpose of referencing a tenant is threefold; to check the person is who they say they are, that they can afford the rent and that they have honoured past commitments,’ she explained. Last year, the government said it planned to make it easier for tenants to sublet a room by legislating against the use of clauses in private fixed term tenancy agreements that expressly rule out subletting, or otherwise sharing space on a short term basis. However, it has not yet set a date for a consultation on the plans. PropertyLetByUs recommends that landlords make regular checks on their property, ideally every three to six months and when doing so should look out for additional clothing and shoes, excessive rubbish for the number of registered tenants, additional bedding like sleeping bags and pillows, suitcases and rucksacks and extra toothbrushes ‘Before taking on a new tenant, make sure you carry out a thorough reference to ensure you know who your tenant is,’ added Morris. Continue reading
Report highlights low number of first time buyers in UK housing market
First time buyer numbers in the UK remain 2.2 million behind where they should be given demographic trends despite significant government investment in home ownership, according to a new report. The report from the Intermediary Mortgage Lenders Association (IMLS) suggests that it means that current policy behind interventions in the housing market is missing the mark but they are likely to remain priorities for any new government that emerges in the post-Brexit political environment. The report finds that government investment in home ownership, including through the 15 different Own Your Own Home schemes currently on offer, is yet to have the desired upward effect on home ownership levels. Schemes including the Help to Buy ISA and the Starter Homes Scheme are designed to boost home ownership. They will also expand a demographic that has traditionally voted for the Conservative party, the report points out. At the 2015 General Election, 46% of outright owners and 39% of mortgaged home owners voted Conservative against 28% of private tenants and only 18% of social tenants, meaning homeowners remain a vital demographic for the Conservatives. This approach of extending support to help first timers get on the property ladder is partly being funded by the Conservatives’ second major intervention in the housing market, managing demand through the introduction of extra tax on buy to let and second home purchases. The report explains that the Exchequer is set to raise around £1.7 billion a year from these new taxes, although spending on home ownership far exceeds these costs and the latest UK Housing Review research from the Centre for Housing Policy estimates Government spending on home ownership in England through grants, guarantees and loans will total £40 billion over 2015 to 2021, equivalent to over £6.6 billion a year. But despite Government efforts to bolster home ownership, first time buyer numbers are still tracking lower than expected. The IMLA report finds that between 2007 and 2015 the number of first time buyers in the UK was some 2.2 million lower than past demographic trends suggested it should have been. The report also points out that so far some 90,000 new home sales have been made under the Help to Buy equity loan, NewBuy and FirstBuy schemes and a further 74,000 mortgages have been completed with the support of the Help to Buy mortgage guarantee scheme but the government has failed to reverse the decline in home ownership. Indeed, between 2010 and 201, the latest year for which data is available, the number of owner occupied homes in the UK fell by 270,000. This decline may now be stalling as the latest English Housing Survey showed no change in owner occupation rates between 2013/2014 and 2014/2015, but there is yet to be any increase in home ownership levels. The IMLA’s analysis of data from the Building Societies Association (BSA) suggests more people worry about accessing a mortgage than affording one. In research conducted in March 2016… Continue reading
Property prices up modestly in UK in May but now likely to see fall due to Brexit
Residential property prices in the UK saw modest growth in May but central London experienced a fall in values, according to the latest market survey report. UK house prices are now expected to experience a short term drop for the first time since 2012, according to the monthly report from the Royal Institution of Chartered Surveyors (RICS). House prices in central London are already falling, according to the survey with 35% more property professionals reporting that prices had fallen rather than risen over the past month. While prices are continuing to climb modestly across the rest of the UK, this trend looks set to fade, with 10% more respondents predicting that prices would fall rather than rise over the coming three months. This is the first time that a fall in prices has been predicted since 2012. London and East Anglia are expected to be worst hit with 43% and 33% of respondents saying that prices will fall over the next quarter. ‘Sadly, for the many young people looking to enter the property market, it is unlikely that we are seeing the emergence of a more affordable market,’ said Simon Rubinsohn, RICS chief economist. ‘Instead, it appears to me that what we are looking at is a short term drop caused by the uncertainty resulting from the EU referendum coupled by a slowdown following the rush to get into the market ahead of the tax change on the purchase of investment properties,’ he explained. ‘Certainly, that’s the story we are hearing from our members. There is not at this point a sense that a fundamental shift is taking place in the market,’ he added. The market report also shows that buyer demand fell across the UK for the second consecutive month and at the fastest pace since 2008, with 33% more property professionals saying that demand decreased last month. The survey revealed that in the longer term, while house prices are thought likely to regain momentum, rents look set to outpace them, with UK rents predicted to increase by 4.7% year on year for the next five years, compared to house price increases of 4.1%. The number of agreed sales also fell for the second consecutive month with a net balance of 22% of respondents reporting a fall rather than a rise in activity. Continue reading
