Calling Time on Rogue Landlords and Agents in London

Calling Time on Rogue Landlords and Agents in London

The Rogue Landlord and Agent Checker has been launched that will allow tenants to check landlords and agents before they sign a tenancy agreement.

The checker, from the Mayor of London, lists those landlords and lettings agents who have been successfully prosecuted or have faced civil enforcement action for housing offences, along with details of the offences and the properties to which they relate.

At the moment, 10 of the 32 London councils have published data (equivalent to 25% of renters), with another 8 councils to submit data in the coming weeks.

Relief for landlords after Supreme Court ruling on Human Rights

Private landlords can sigh in relief that tenants they want to evict cannot invoke a breach of their 'Human Rights' when they are being evicted.

Following a ruling by the Supreme Court in a case known as McDonald v McDonald, specialist property lawyer Kary Withers of Clarke Willmott LLP has reported the landmark decision.

Overhaul of private tenancies in Scotland

Scottish Parliament has just passed The Private Housing (Tenancies) (Scotland) Act, coming into action in 2017.

The Act will create a much simpler system, including tighter regulation over rent increases and adding increased security of tenure for tenants.

Right to Rent checks in effect across England starting February 1, 2016

Right to Rent checks will be in effect across England starting February 1, 2016, according to a Home Office announcement.  Residential landlords will be required to check and copy prospective tenants’ documents to ensure they are legally present in the country before renting out property. Conducting such a check is a defense to a violation of the law. Those who fail to conduct a check may face a fine of up to GBP 3,000 per tenant.

New Prescribed Section 21 Notice published

Hot on the heels of the smoke alarm debacle new regulations have been published prescribing the form for a section 21 Notice which must be used from 1st October 2015. (The Assured Shorthold Tenancy Notices and Prescribed Requirements (England) Regulations 2015.)

As the name suggests these only apply to England. We think the idea of a prescribed form is a good one as it will help avoid arguments over the wording of the section 21 Notice. Obviously it is concerning that there is such a short lead in time although we have been expecting the same for some months now. For most agents completing the form should cause little difficulty, particularly for those used to giving old style Section 21 notice.

The regulations do however refer to three, in effect, new requirements for service of a valid section 21 Notice. The Landlord or Agent will need to show that the EPC and Gas Safe Certificate was given to the Tenant. Practically we would suggest that additional copies probably should be served with the Section 21 Notice, thereby saving arguments. Agents will no doubt wish to draw this to Landlords attention and make clear without these documents they will not be able to use the non-fault Section 21 Notice.

Also there is an entirely new requirement. At the start of each tenancy (including renewals) you will need to serve “How to rent: the checklist for renting in England”. This will only be available in electronic form on the Gov.uk website and Landlords and Agents will be expected to download and print off this 8 page document for each tenancy.   As with prescribed information it is important agents can prove this was given although again you may wish to serve a further copy with any notice to avoid issues being raised. Plenty to look at and certainly going forward we expect the issuing of accelerated possession proceedings will be more difficult given the extra hoops required to prove which will inevitably lead to further changes to the relevant court forms.

Finally, we comment on the note 1 on the form itself, which seems to be intended to help people give the correct date for expiry. First the note advises the landlord to allow two extra days for service, without advising them to check the terms of their tenancy agreement, or to allow for weekends and public holidays.

Secondly the note refers to serving notice on a statutory periodic tenancy under s21(4). Following the rule in Spencer v Taylor notice on a statutory periodic tenancy may be given under section 21 (1) following the expiry of the fixed term. Section 21(4) applies where there has never been a fixed term, e.g. a contractual periodic tenancy from the outset, or where the term is expressed at the outset to continue on a contractual periodic basis, but neither of these are statutory periodic tenancies. The note does not make it clear that although a notice served under s21 (4) may not expire earlier than a notice to quit could, a statutory quarterly periodic tenancy (under the current interpretation of the Housing Act 1988) may, in our view, be brought to an end by giving two months’ notice under Section 21 (1).

UK rents rise above £800 for first time on record

  • Record surge in month-on-month increases takes average rent to new peak across England and Wales

  • Rents hit highest levels since 2009 in Yorkshire & the Humber, East and West Midlands, and London

  • Proportion of rent in arrears improves to 8.4% in July, down from 8.6% in June and 7.3% in July last year

  • Landlord gross yields have improved to 5.2%, the first substantial increase seen since March this year

Rents across England and Wales hit yet another record high in July, driven to £804 on the back of the fastest month-on-month price increase seen since 2009, according to the latest Buy-to-Let Index from Your Move and Reeds Rains.

On a monthly basis, rents across England and Wales rose by 1.9% in July, up from £789 the previous month in the fastest monthly rise seen since records began in 2009.

Compared to July 2014, when the average rent in England and Wales stood at £753, tenants in July 2015 are paying 6.8% more – also the largest annual rise on record.

This record-breaking increase has been driven by higher rents in Yorkshire & the Humber as well consistently strong rises across southern regions.

Adrian Gill, director of estate agents Reeds Rains and Your Move, comments: “Just when you think the rental market is accelerating at full throttle, it finds a way to shift into a higher gear. We’re seeing rent rises manage to hit record-breaking speeds on both monthly and yearly time-frames as far back as our data can go.

“But rents are just a small part of the larger economic machine. The fact that they’re purring along at higher-than-ever speeds is a sign that the rest of the economy is picking up. An engine can’t use fuel it doesn’t have. These rent rises are a reflection of heavier wage packets being fed back into economy now that the rust from the recession has been cleaned off the cogs.

“But just because a car can break speed limits doesn’t mean it should. We’re faced with a real problem – homes have become a scarce commodity. As house prices and mortgage deposits continue to eat up a larger and larger proportion of wages, appetite for rental properties has begun to outstrip the available stock. This has driven rents up even faster than house prices.

“A clear and concerted effort towards new-build properties is the most sensible way to address this issue. It boils down to supply and demand. However, it’s not the only possible response. The government could also ensure that we’re making the most efficient use of our small supply of homes – for instance by doing more to make it easier for people to downsize their properties when they want to.”

 

Regional rents: Record-breaking highs for rents in Yorkshire and the Midlands

Four of the ten regions of England and Wales saw record rent peaks in July – London, Yorkshire & the Humber, and the East and West Midlands – while every region saw increases compared to last year.

Stronger than usual improvements in the West Midlands saw rents rise 3.6% over the twelve months to July 2015, bringing the average rent in the region up to £583. It’s a similar story in the East Midlands, with a 2.5% annual increase carrying rents up to £584. Yorkshire & the Humber, by comparison, edged its way to a new record with a 2.0% year-on-year increase to £582 on average.

Rents grew 12.0% on an annual basis in the East of England, to stand at £838 in July. Though it’s second only to London (+12.1%) in terms of the speed of the twelve-month improvement, this is actually the first time in fifteen months that the rate of year-on-year rent increases has not accelerated.

Only two regions saw falling rents on a monthly basis: a 0.1% month-on-month drop in Wales and the East of England. Though rents are at a peak, Yorkshire and the Humber saw a modest 0.3% monthly increase.

London took the lead with a 3.3% month-on-month rental increase. However, surprise surges came from the South East (+3.3%), The North West (+1.4%) and the North East (+1.3%), as the rental market in the north starts to build some of the momentum seen down south.

Adrian Gill explains: “With the East showing accelerating rental growth for well over a year, the area has now paused to let off a little steam. It’s interesting to see that the South East has jumped in to take up the slack, neck and neck with London jostling for pole position in monthly rent rises. It shows the effect that the high-density capital is having on the surrounding areas as people move further out in search of affordable homes.

“The Midlands, too, are starting to show some serious purpose as the workhorse of the East eases back. As investment in the Northern Powerhouse starts to mature, we’re going to see more and more people looking for the flexibility offered by rental accommodation as they move in search of the jobs springing up outside of London – especially in high-growth areas like Yorkshire.”

 

Rental yields perk up, but annual returns cool

The gross yield on a typical rental property in England and Wales (before taking into account factors such as void periods) rose to 5.2% in July 2015, the first substantial increase seen since March. This compares to 5.1% in June 2015 and 5.0% in July 2014.

However, total annual returns fell in July. On average, landlords in England and Wales have seen returns of 8.7% over the year ending July 2015 – down significantly from 10.0% in June and 12.5% in the year ending July 2014.

This means that the average landlord in England and Wales has seen a return of £15,632 in absolute terms, before deductions such as maintenance and mortgage payments. Of this, the average capital gain contributed £7,188 while rental income made up £8,444 over the twelve months to July.

Adrian Gill continues: “House price growth is easing back – and this has had an effect on total annual returns. However, rental yields are perking up to compensate. The mortgage market has stabilized after a post-election bounce, and the current political stability makes for clear sailing in the buy-to-let market despite the chronic housing shortage. With mortgage repayment rates so low and returns still remarkably enticing, there’s rarely been a better time to invest in rental properties.”

 

Rent arrears improve in July

Tenant arrears made up 8.4% of all rent payable in July 2015, down from 8.7% in June 2015 but still above 7.3% in July 2014.

Adrian Gill concludes: “July has seen us head back down the path towards greater financial security. It’s true that any rise in arrears is a setback, but the greater trend is clearly towards tenants in better control of their finances.

“The question isn’t if we’re able to improve the proportion of rent that falls into arrears, but how quickly we can improve it.”

 

REGIONAL BREAKDOWN

 

METHODOLOGY:

The index is based on analysis of approximately 20,000 properties across England and Wales. Rental values refer to the actual values achieved for each property when let. Yield figures are unadjusted, and do not take account of void periods or arrears. Annual returns are based on annual rental property price inflation and void-adjusted yield at the point of purchase. These figures are subject to revision as more data becomes available.

This Buy-to-Let Index has been prepared by The Wriglesworth Consultancy for Your Move and Reeds Rains, part of LSL Property Services.  It has been compiled using information extracted from LSL’s management information.  The copyright and all other intellectual property rights in the Buy-to-Let Index belong to LSL.  Reproduction in whole or part is not permitted unless an acknowledgement to LSL as the source is included.  No modification is permitted without LSL’s prior written consent.

Whilst care is taken in the compilation of the Buy-to-Let Index, no representation or assurances are made as to its accuracy or completeness. Your Move, Reeds Rains and LSL reserve the right to vary the methodology and to edit or discontinue the Buy-to-Let Index in whole or in part at any time.

Courtesy of LSL Property Services

Fastest UK rent rises on record

  • Annual rent rises hit 5.6% across England and Wales – the fastest increase since records began in 2009

  • Rents are now growing faster than house prices on an annual basis, for the first time since July 2013

  • Rent rises decouple from the rate of inflation, with annual CPI standing at 0% in the same month of June

  • Landlords targeted in Summer Budget could pass along the cost, causing rents to accelerate further

  • Proportion of rent in arrears jumps to 8.7%, up from 7.6% in May 2015 and 7.8% in June last year

 

The average cost of renting a residential property in England and Wales has accelerated, to rise more quickly in June than in any month previously on record, according to the latest Buy-to-Let Index from Your Move and Reeds Rains.

Rents across England and Wales reached a new record high at £789 in June, standing 1.4% higher than the £778 recorded in May and up 5.6% on an annual basis since June 2014.

This is despite consumer price inflation falling to 0.0% in June, and underscores a new trend since the beginning of 2015 by which rents have risen out of line with the rate of inflation.

This is also the first month since July 2013 where rents are rising more quickly than house prices for comparable properties, with this annual rate of house price growth standing at 4.5% over the twelve months ending June 2015.

Adrian Gill, director of estate agents Reeds Rains and Your Move, comments: “The pedal is pressed to the metal in the rental market.  Not only have rents hit a new all-time record high – but we have never seen them rise so quickly.

“Growing wage packets and a strengthening economy mean that a greater number of tenants are able to afford higher rents. With such an overall shortage of housing in the UK, rental costs are primarily driven by the amount tenants are capable of paying. Rents have also decoupled from inflation. While record low inflation fueled by falling oil prices might bring clothes or food within the range of tenants’ purchasing power, it doesn’t have much of an effect on the property market in the short term.

“There may be new factors on the horizon too.  In the wake of the Summer Budget’s reduced assistance for landlords, we might see many aim to pass additional costs onto their tenants. If so, rents would receive yet another acceleration.

“In all this, we mustn’t lose sight of the driving force behind rent increases – the mismatch of supply and demand. Expanding our housing stock needs to become a national priority. If anything, competition for homes is only going to get more intense over time. The fierceness of housing competition needs to be met with an equal dedication to homebuilding.”

 

Regional rents: Accelerating East

Annual rent rises in the East have accelerated at a record pace to a new record high, increasing 13.8% over the twelve months to June 2015 to stand at £839. This is the fifteenth consecutive month of accelerating rent rises seen in the region and goes alongside rapid growth in purchase prices in the East.

London showed the next strongest year-on-year growth in rents, with a 9.6% increase since June 2014, pulling rents in the capital up to an average of £1,241, a new record high. In third place but some distance behind, rental costs increased 2.2% year-on-year in the South East to stand at £778 in June.

Due to a mild slowdown, rents in the South East are still short of record levels. By contrast Yorkshire & the Humber is the third region to have witnessed a new record high in June, with an average monthly rent of £550.

On a monthly basis, London led the way with a 2.8% increase just between May and June, closely followed by the East with 2.4% month-on-month growth and the East Midlands at 1.5%. Over the same monthly period, rents fell in the South East (-0.2%) and the South West (-1.3%).

Adrian Gill explains: “Annual rent rises in the East are nearly half as fast again as in the capital. It seems like we might have a new hotspot on our hands.

“At the heart of the Eastern region, strong property price growth and some of the best job prospects in the UK combine to make Cambridge fertile ground for rental growth. But one city alone can’t account for the record rate of growth experienced across the whole Eastern region. We also have to take into account the wealth of commuter areas for the capital based there. It may be that we’re seeing an unusually high number of Londoners making the move out to Essex and Hertfordshire, while keeping their London salaries, driving up demand for higher end rental property.

“However, aside from any particular hotspot one trend is clear – nine out of ten regions have seen faster annual growth last month than the month before. Across England and Wales rents are going one way for the time being.”

 

Rental yields steady but total returns cooling

The gross yield on a typical rental property in England and Wales (before taking into account factors such as void periods) stayed steady in June at 5.1%, the same as the month before as well as June last year.

Total annual returns fell again in June, but only slightly. On average, landlords in England and Wales have seen returns of 9.2% over the year ending June 2015 – down slightly from 9.3% in May and 11.9% in the year ending June 2014.

This means that the average landlord in England and Wales has seen a return of £16,216 in absolute terms, before deductions such as mortgage payments and maintenance. Of this, the average capital gain contributed £7,946 while rental income made up £8,270 over the twelve months to June.

Adrian Gill continues: “Resilient yields backed up by rapid rent rises are a boon for landlords in otherwise trying times. Though the Summer Budget threatens to eat into their profits, record rents should provide buy-to-let investors with some comfort: the fundamentals still make being a landlord an attractive proposal.

“The fact that rents have risen faster than house prices should reinforce that the primary source of a buy-to-let investor’s income is rent rather than capital gains – house price growth is a welcome bonus, but not the be-all and end-all of rental property investment. Meanwhile, with mortgage rates so low, there’s rarely been a better time to invest in new property.”

 

Rent arrears higher in June

Tenant arrears made up 8.7% of all rent payable in June 2015, up from to 7.6% of all rent in May, and 7.8% in June 2014.

Adrian Gill concludes: “While any uptick in the proportion of rent in arrears is a step down the wrong path, this should be seen in context. The overriding trend is still towards lower proportions of rent in arrears – far lower than was seen during the financial crisis.

“A certain degree of variation is to be expected – tenants aren’t robots, and bad months happen. The important thing is to ensure that tenants are able to avoid these situations becoming more serious if arrears build up.

“In the long term, if we want more encouraging trends to continue, there needs to be a greater emphasis on what can be done to help tenants and landlords alike. It’s one thing to slap landlords with a tax and call it a done deal, and quite another to address the issue of housing in a consistent and sustainable way. The cornerstone of progress, as ever, is housebuilding.”

Courtesy of LSL.

 

METHODOLOGY

The index is based on analysis of approximately 20,000 properties across England and Wales. Rental values refer to the actual values achieved for each property when let. Yield figures are unadjusted, and do not take account of void periods or arrears. Annual returns are based on annual rental property price inflation and void-adjusted yield at the point of purchase. These figures are subject to revision as more data becomes available.

This Buy-to-Let Index has been prepared by The Wriglesworth Consultancy for Your Move and Reeds Rains, part of LSL Property Services.  It has been compiled using information extracted from LSL’s management information.  The copyright and all other intellectual property rights in the Buy-to-Let Index belong to LSL.  Reproduction in whole or part is not permitted unless an acknowledgement to LSL as the source is included.  No modification is permitted without LSL’s prior written consent.

Whilst care is taken in the compilation of the Buy-to-Let Index, no representation or assurances are made as to its accuracy or completeness. Your Move, Reeds Rains and LSL reserve the right to vary the methodology and to edit or discontinue the Buy-to-Let Index in whole or in part at any time.

Celsium announces partnership with ARPM

Celsium is delighted to announce its partnership with ARPM Outsourced Lettings Support, UK experts in property management and tenancy-related matters.

ARPM has been at the forefront of outsourced lettings provision for over eight years and today supports hundreds of letting agents across the UK by delivering a first class tenancy facility, all thanks to the expertise of its industry-qualified team.

“Businesses spend a considerable amount on rent for their employees, so they naturally expect excellent service from their tenancy management support team. It’s all too easy for a relocation management company to put a team together and scrape by with the bare minimum of relevant training, but that’s never going to meet, let alone exceed, the client’s expectations,” commented Stuart Beaty, Celsium’s Joint Managing Director. “

ARPM is a fully qualified member of ARLA (www.arla.co.uk), NALS (www.nalscheme.co.uk) and the Property Ombudsman (www.tpos.co.uk), has full access to all of the government approved deposit schemes, and has Client Money Protection insurance in place, so compliance with current legislation and security of tenant monies is absolutely guaranteed. Their service has the further benefit of being “white label” so that employees will see the familiar Celsium name when contacting ARPM.

“Celsium’s aim is provide every single client with an outstanding level of support, and this can only be achieved if our tenancy management team has the right training, qualifications and attitude. That’s why we have chosen to partner with ARPM,” added Beaty.

Partnering with ARPM allows us to focus on our core business as a relocation management company, ensuring that our clients are receiving the crucial support they need, at the right time and in the right place.

Celsium. Making relocation easy.