Government spells out fire responsibilities of private rental sector

A minister at the Department of Communities and Local Government has set out the government’s position in terms of the fire-related responsibilities within the private rental sector.

Junior minister Marcus Jones, answering written questions this week, said:

All homes should be of a reasonable standard and all tenants should have a safe place to live.

“Under the Landlord and Tennant Act 1985, landlords have a general obligation to ensure that they keep in repair the structure and exterior of any property they rent out.

Local authorities have strong and effective powers to deal with poor quality unsafe accommodation and we expect them to use those powers.

“Under the Housing Health and Safety Rating System, local authorities can issue an Improvement Notice or a Hazard Awareness Notice if they find a defect in the property.

In extreme circumstances, the local authority may decide to make repairs themselves, or to prohibit that property from being rented out.

The Regulatory Reform (Fire Safety) Order 2005 places a duty on housing providers to undertake a fire risk assessment of the common parts of their properties and to put in place and maintain adequate fire precautions to manage the risk that lives could be lost in a fire. The Order is enforced by fire and rescue authorities.

Other questions and answers relating to fire safety and Grenfell Tower can be found here.

If you have any queries relating to rental properties and the law, please contact our Lettings Hub.

Rise in number of retirees in rented accommodation

According to new research, there has been a large increase in the number of retirees renting homes over the past decade.

The study, conducted by letting agency Countrywide, showed that retirees have paid a total of £3.7bn in rent over the past 12 months, which equates to an increase of 200% when compared to the £1.2bn paid in 2007.

Retired people now account for 8% of all private tenants, which is up from 5.2% ten years ago. This could be attributed in part to changing perceptions and attitudes regarding renting in the older generation.

Further research by Strutt & Parker and Octopus Healthcare showed that one in five baby boomers would consider living in a professionally managed rental property.

Their survey highlighted that there are several reasons as to why the over 65’s want to downsize in their retirement. The top three reasons were requiring more support (34%), lower property maintenance  (33%) and more accessible home with fewer stairs (26%). Other reasons were wanting to live in a smaller property, reducing their outgoings and having a smaller garden.

Problems may arise though as 42% believe there is a lack of suitable properties in the UK to downsize into. Strutt & Parker state that there is clearly a need for a new breed of retirement communities in the UK.

Tenants not taking out contents insurance?

Shocking figures are released in a recent survey about tenants and their lack of contents insurance.

Recent research has shown that 61% of tenants currently have no contents insurance, with 48% admitting that they have never taken out contents insurance at a property they have lived in during their lives.

The survey further revealed that 19% of tenants questioned said they had no idea what contents insurance was, whilst amongst those who actually did have  a policy, 42% of them did not know what it actually covered or what to do in the event of needing to make a claim.

The figures from the Upad research also showed that 78% of tenants have personal belongings that value more than £1,000, with 22% having belongings  with an aggregate value of over £5,000.

Upad founder James Davis stated:

It is madness that tenants are exposing themselves like this, regardless of whether they are trying to save money or, for some reason, think their landlord’s own insurance will keep them covered in the event of loss or damage to their property.

Tenants are far better served having contents insurance that they don’t need rather than finding out they badly need it at precisely the time when something goes horribly wrong. Remember that, even in a fully furnished property, tenants will still have plenty of their own belongings. If tenants are unsure about their level of cover they should check their insurance policy or with their letting agent or landlord.

During the tenancy application process, Paul Carr Residential Lettings recommend that our prospective tenants take out both contents cover for their personal possessions and also cover for accidental damage to the landlord’s contents (such as carpets).

We can assist our tenants in getting the appropriate cover and will provide a free no-obligation quote.

Further details can be found in our Tenants Guide available on our website.

Right to Rent could impact those without a British passport

According to the Residential Landlords Association (RLA), almost 20% of British citizens could find it harder to access rental property.

The industry trade body surveyed over 900 landlords and reports that 44% of them said they are less likely to let homes to tenants without a British passport.

Currently 17% of British people do not own a passport and this means that gaining access to housing in the private sector may become more difficult for them.

The government’s Right to Rent scheme has been in operation since February 2016 and the RLA has been researching its impact.

Under this legislation, landlords, or letting agents acting on their behalf, are required to check the immigration status of all prospective tenants.

The survey found that over 50% of the participants are now less likely to consider letting to people who are currently living outside of the UK.

Also, 22% said that they are now less likely to let to EU nationals or those from the European Economic Area.

What are the biggest causes of deductions from rental deposits?

When renting out a property, most landlords – or their letting agents – opt to take a deposit from the tenant(s) prior to the tenancy starting.

Deposits offer a level of protection to landlords, meaning that, if the tenant breaches the terms of the tenancy agreement, they can them make appropriate deductions from the deposit.

Clear property damage, poor cleanliness or anything that is different from the property’s original state, which is easy to identify if there is an inventory management report and a schedule of condition in place at the start of the tenancy agreement, will enable the landlord or their agent to rightly off-set the compensation from the tenant’s deposit.

Research by interior specialists Hillarys, part of ongoing research into the habits of Britons and their attitudes towards renting, showed that top reasons that tenants were given for why they had lost part, or all, of their tenancy deposit.

Marks on the walls, carpet stains, the need for redecorations and mould were among the five most common reasons listed as to why tenants had had money deducted.

Broken furniture29%
Marks on walls24%
Carpet stains21%
Redecorations12%
Mould9%

Spokesperson for Hillarys, Tara Hill, said:

Security deposits are an unavoidable part of renting a property, and can be an essential way for landlords to deal with damage caused by tenants. But they can result in disputes and are a major cause of distrust among tenants.

Whilst there appears to be an issue around the lack of trust when related to deposit protection, according to the research, Paul Carr Residential Lettings use The Tenancy Deposit Scheme (TDS), which is run by The Dispute Service under a government awarded contract.

For further details in regards to The Tenancy Deposit Scheme and the guidelines Paul Carr Residential Lettings follow, please see our Tenant’s Guide.

ARLA and NAEA comment on the appointment of Alok Sharma as Housing and Planning Minister

David Cox, Chief Executive, ARLA Propertymark (Association of Residential Letting Agents) and Mark Hayward, Chief Executive, NAEA Propertymark (National Association of Estate Agents) comment on the appointment of the new Housing and Planning Minister.

David Cox, Chief Executive, ARLA Propertymark (Association of Residential Letting Agents) and Mark Hayward, Chief Executive, NAEA Propertymark (National Association of Estate Agents)
Pictured, David Cox and Mark Hayward.

We would like to congratulate Alok Sharma on his appointment to Minister of State for Housing and Planning. We worked closely with the former administration to secure a number of key improvements to the industry including support for greater property transparency and more appropriate regulation through the introduction of Client Money Protection for letting agents.

However, more can be done and the Minister will have a lot in his in-tray as he arrives on his first day as long standing issues continue to impact the sector. We call on the Minister to build upon the underwhelming recommendations contained within the Housing White Paper and take forward a series of fundamental reforms to change the industry for the better. Demand continues to greatly outstrip supply and more appropriate regulation of the sector is vital if we are to improve the experience of people looking to rent and purchase a home.

The Government has a good opportunity at the Queens Speech to introduce a new and radical Housing Bill to address these significant concerns. The challenges are not insurmountable and we greatly look forward to working with the DCLG team to find solutions to these challenges in the months ahead.

Paul Carr Sales and Lettings are members of both the NAEA Propertymark and ARLA Propertymark.

Almost half of BTL landlords are looking to expand their portfolios

Almost half of buy-to-let landlords are looking to expand their property portfolios, according to a new poll.

The Mortgages for Business’ Property Investor Survey revealed that, despite the existing phasing out of mortgage tax relief and the introduction of the 3% stamp duty surcharge last year for those acquiring an additional home, including a buy-to-let property, 48% of landlords are currently looking to add to their portfolios.

This figure is up from 45% in November and 41% a year ago.

The study, which was carried out over a two-week period last month, had landlords answering questions about their portfolios.

Steve Olejnik, chief operating officer of Mortgages for Business, said:

“Although we expect buy-to-let lending to reduce somewhat this year, these results demonstrate that landlords are a resilient bunch, capable of adapting their investment strategies to successfully accommodate the new fiscal and regulatory landscape.”

The research found that 62% of landlords have been adapting to the changing environment by consulting tax advisers in regards to recent tax amendments and 42% of investors are currently opting for longer fixed-term mortgages.

He added:

“Incorporation is becoming a standard practice and the move towards five year fixed rates allows landlords to maximise their borrowing options.”

If you are looking to invest in the North Birmingham, Sutton Coldfield or South Staffordshire areas, please contact our dedicated Lettings Hub to start your property journey with Paul Carr Residential Lettings.

Significant increase in first-time investors in buy-to-let sector

A new report has stated that there has been a significant increase in the number of first-time investors in the buy-to-let sector over the past year.

This is despite various tax changes, political and economic uncertainty and tougher mortgage lending conditions.

Buy-to-let specialist, Sequre Property Investment, revealed that new investors entering the market accounted for 61% of their property sales in the 12 months to March 2017, up 15% year-on-year.

Over a quarter, 26%, of those surveyed stated the they had chosen to invest in the buy-to-let market in hopes of generating a secondary income, 23% were doing it for retirement, 18% wanted to start their own property portfolio and 14% had opted to invest for inheritance purposes.

Secure Property Investment reported a 14.8% increase in overall sales over the past 12 months despite the introduction of the 3% stamp duty surcharge on additional properties, which came into force in April 2016, and the reduction in mortgage interest relief. The mortgage interest relief is being phased in from now until 2010.

Graham Davidson, Managing Director at Sequre Property Investment, said:

It’s clear that many investors and landlords remain undeterred from investing in property and are buying wisely to mitigate the changes.

Investors had over a year to prepare for the stamp duty changes and were also given plenty of time to adjust to the revised stance on tax relief, however the level of enquiries we’re receiving are at an all-time-high.

He continued:

Low mortgage rates and rising house prices have both resulted in favourable market conditions for landlords. Savvy investors understand that purchasing buy-to-let property which produces strong yield returns from the rental income is crucial, as is choosing the right property type and location.

A shortage of housing supply in many large cities has continued to keep rental demand high, and these factors are all key attributes of a successful buy to let investment which many novice investors have been keen to take advantage of.

Buy-to-let property in central locations with high yields and great scope for capital growth results in investors continuing to make a sizable profit even with additional tax payable.

Politicians must vote for housing

Principal of Paul Carr Estate Agents, Paul Carr, looks ahead to the 2017 General Election and an often ignored – but vitally important – area of policy.

No doubt Brexit, the economy and the NHS will dominate the 2017 General Election. Energy, education and defence should also get a strong look-in while the devolved governments will be trying to get as much air time as possible.

But do spare a thought for housing, as, on the evidence of the recent past, it doesn’t look as if any political party will.

Over the past nineteen hearts, and during the tenure of four Prime Ministers – Blair, Brown, Cameron and May – there have been no fewer than fourteen housing ministers.

This post seems to have become a stepping-stone for ministers who are either on an upwardly mobile career path or heading in the opposite direction into the political wilderness. That such an important part of our daily lives can be dealt with in such a perfunctory way seems short sighted and negative to most outside Westminster.

Property is a national obsession yet the politicians seem to treat it as a short stop to somewhere else. Property also provides important jobs and revenue through allied industries such as furniture, flooring, lighting and decorating, and in the service sector – finance, legal, surveying, etc.

We need more housing in the UK and we need better housing. Yet successive governments have failed to plan, have failed to act and have failed to build the 250,000 new homes that we are estimated to need each year. They have failed to establish any sort of meaningful housing policy – indeed how could there be a meaningful one with so many different housing ministers? By contrast, in the same nineteen-year period, there have been only seven Home Secretary’s.

Too few new homes being built creates greater demand for the properties that are already part of the ageing national estate. Strong demand and insufficient supply inevitably means rising property prices. The lack of any cohesive housing policies over two decades has not just added to the housing problem but has helped create it.

No market likes uncertainty and for the fourth year in succession, we have an important election which will bring fresh uncertainty. Brexit will rumble on for several years yet, adding to this uneasiness. But we hope that whichever party prevails on June 8th, the new Prime Minister will take his or her housing ministry more seriously.

We need a committed housing minister prepared to stay in the job for more than sixteen months. We also hope that the new housing minister will not use housing as another easy way to create revenue without first thinking through the implications a higher rate of tax will have on the property market as a whole, and our lives as citizens – after all, we all have to live somewhere.

Tenant happiness on the rise due to longer rentals

A study of over 3,000 tenants has found that an increasing number of renters are very happy with their living situation.

The LSL Corporate Client Department’s 2017 Tenant Survey found that 32% of renters claim to be very happy, which is up from 28% last year.

A further 37% claimed that they are happy, up slightly from 36% in 2016.

The survey claims that the increase in satisfaction amongst tenant is due to a reduction in frustrations with maintenance, fees and restrictions.

The report also highlighted growth in the long-term rental market with 33% of tenants having rented for six years or longer, which is up from 29% in 2016.

Renters were split into four groups in the survey, namely, Younger Independents, Struggling Savers, Moving Up and Reconciled with Renting.

The Struggling Savers and Moving Up groups are more likely to be renting due to having a lack of deposit or have difficulty in getting a mortgage. This means they are less inclined to see renting as a lifestyle choice.

The Young Independents and Reconciled with Renting groups are, on the other hand, more likely to appreciate the flexibility that renting offers them.

Conditions of the rental property and value for money were the two most important deal breakers for the tenants surveyed. These were followed by good communication with landlords/letting agents and the overall quality of the landlord.

If you are thinking of becoming a landlord, 28% of tenants said that they would pay more rent if they were allowed to keep pets and 21% said they would pay more for high speed internet. Points to think over!

Ian Fletcher, director of policy (Real Estate) at the British Property Federation said:

“The results show that the vast majority of the sector’s customers are happy but there is no room for complacency. The rental sector’s customer base is changing, for example with far more families, and what customers want is changing too.”

He continued:

“The private rented sector can’t divorce itself from these wider social, economic and technological changes and the impact that is having on how people want to lead their lives.”

If you are looking to rent a property or are looking to become a landlord, please contact our Residential Lettings team to find out about our with you every step of the way personal service.