There has been a significant increase in the number of landlords and homeowners switching from short-term lets to longer rentals.
Across the UK there has been a 20% drop in people looking for rooms over the last week due primarily to the COVID-19 outbreak, according to SpareRoom.
With a possible countrywide lock down rapidly approaching, the flatsharing website reports that people with rooms to rent are understandably keen to find tenants.
SpareRoom has seen a 15% increase in adverts from agents and a 12% uplift from landlords, just in the past two days. This is driven, in part, by landlords and homeowners switching from using short-term rental sites like Airbnb as tourism tanks and looking for longer term rents for their rooms.
With supply in some parts of the country currently outstripping demand, 18% of agents have reduced their asking rents in the past two weeks, while 11% of landlords have done the same, with some directly mentioning COVID-19 as the reason for this reduction.
With the growing concern about face to face contact SpareRoom has also seen a real trend over the last week of people moving towards video calls – getting to know each other and having a first view of the property this way.
Matt Hutchinson, SpareRoom director, said: “Whenever there’s uncertainty people put off making big decisions, like moving house. We saw it during the confusion over Brexit and we’re seeing it in a much more marked way now. In contrast, people with rooms to fill are desperately hoping to get new tenants in before the country goes into lockdown.
“Although it’s still early days, we’re also seeing some interesting shifts in behaviour on both sides. Following widespread cancellations, we’re seeing both landlords and homeowners moving from short term rents to looking for longer term security.
“Tenants are getting creative by using video calls to hold virtual viewings and interviews. The people you live with make a far bigger difference to you than the property itself, and video calls are a great way to get that all important first impression before deciding to go and see a property. It also minimises the need for travel and social contact so it’s a win-win.”
The Guild of Property Professionals is calling on the new chancellor, Rishi Sunak, to use his Budget speech, which will take place tomorrow, to support investment in the private rented sector, as research shows that buy-to-let landlords are exiting the market in droves.
Tax and regulation changes continue to have a negative impact on the buy-to-let market, with a significant number of landlords selling buy-to-let properties with a view reducing their portfolio, or exiting the market altogether.
Mortgage interest relief changes, the scrapping of the ‘wear and tear’ allowance and the introduction of the 3% stamp duty surcharge have hit landlords’ profits over the past few of years, which partly explains why so many people are exiting the BTL market and thus reducing the supply of much needed private rented stock.
The government’s draconian tax changes have not just pushed a number of BTL landlords out of the PRS, but also left many prospective tenants with little alternative but to bid against each other, pushing rents up in the process, as a result of falling housing supply.
Iain McKenzie, CEO of the Guild of Property Professionals, said: “If we wish to sustain a thriving private rented sector there must be no further taxation on landlords. Tenants want more choice not less.
“The government should do more to support landlords to remain in the sector, not drive them out, which will ultimately cut the supply of rental properties and put upward pressure on rents.”
The housing market has had a strong start to the year, with improved activity levels and property price growth across every region in the UK, and McKenzie hopes that this trend will continue for the foreseeable future.
He continued: “Ideally, the housing market needs 12 months of a stable environment to enable it to bear the fruit of pent up frustration. It would be pertinent for the government to avoid anything that could hamper consumer confidence, which is already at risk with the threat of tough measures to prevent the spread of Coronavirus.
“It is likely there will be further support for first-time buyers by way of discount through a ‘First Home’ scheme, which could see new homes discounted by up to 30%. Whilst it is fair to say that first-time buyers are the lifeblood of the property market, getting the balance right between new buyer incentives and support for second-hand house buyers is the key to a fluid market.
“With that in mind, like many, we would welcome any positive news on Stamp Duty. Boris Johnson had previously pledged to implement changes to current stamp duty legislation by raising the threshold to £500,000. Although mentions of this have been more subdued in recent months, it would relieve large sections of the country from the burden of stamp duty and go a long way to bolstering consumer confidence.”
Two-thirds of private renters who would like to own a pet are being forced to delay by restrictive tenancy agreements, and this is contributing to the UK’s loneliness epidemic, according to new research by YouGov and Mars Petcare.
The study found that private renters believe owning a pet would improve their lives, with four in five – 82% – of those who wish to own a pet of the opinion that it would benefit their mental well-being.
Meanwhile, 75% said it would benefit their physical health and 76% said it would make them feel less lonely. 61% of women said it would make them feel safer in their homes.
In addition, one in ten private renters surveyed said they had moved or given up a pet because of their pet being unwelcome.
The findings of the research suggest that some landlords are missing out on an additional pool of tenants.
Just 43% of private renters surveyed said their landlord offered a pet-friendly rental policy, while just over half of residendents – 53% – said they would be likely to consider a longer tenancy if their landlord allowed pets.
Some 10% of private renters said they had moved home or given up a pet as a result of restrictive tenancy agreements.
The Tenant Fees Act introduced in June 2019 has seen some pet owners paying increasingly high rents as landlords are banned from requesting pet-specific deposits. Yet, just 22% of private renters said they would welcome paying a higher rent to own a pet, with 53% instead favouring a pet-specific deposit on top of their regular deposit, while half – 50% – of those surveyed would be happy to pay for additional cleaning services.
Mars Petcare is now calling on the government to do more to guarantee the rights of private renters to own pets so that more people are able to reap the benefits.
Helen Warren-Piper, general manager at Mars Petcare UK, commented: “At Mars Petcare we have always known that pets make the world a better place, which is why we have made it our mission to create a world where they are healthy, happy, and welcome.
“Our recent survey shows that many private renters would love to own a pet, but are unable to because of unfavourable tenancy laws.
“We therefore believe that changing the rights of private tenants with respect to pet ownership, is an important step to creating that world. That’s why we are calling on the UK government to work with landlords and tenants to find an improved way forward so that more people are able to enjoy the benefits of responsible pet ownership.”
Georgie Laming, campaigns manager at Generation Rent, said: “Pets are a large part of making a house a home and whatever your tenure you should be able to keep a pet. Tenants with pets are more likely to want a stable, long term home, which benefits landlords in the long run. Whilst we welcome the Secretary of State’s commitment to updating the model tenancy agreement to make renting fairer for pet owners it’s clear that further measures are needed to guarantee the rights of renters to own pets.”
Buy to-to-let landlords across the Midlands are most likely to acquire new property over the next 12 months, new research show.
A survey of almost 800 landlords conducted by BVA BDRC, on behalf of Paragon, found that almost a quarter – 24% – of landlords in the East Midlands plan to purchase property in the next 12 months, with 22% of West Midlands landlords also looking to add to their portfolio.
Other regions that showed high demand for property from buy-to-let investors included the North East and Yorkshire & Humber, with 19% of landlords in both regions looking to purchase.
Landlords in the South West (8%) and central London (9%) were the least likely to purchase property over the period.
Overall, 14% of landlords plan to purchase property, with the average landlord acquiring three new properties.
More than half – 52% – of those looking to buy property are targeting terraced housing, followed by semi-detached property (32%) and flats (26%).
A quarter of landlords also intend to buy a HMO during the year, reflecting the growing popularity of this property type, particularly amongst professional, portfolio landlords.
|% of landlords planning to increase portfolio in next 12 months|
|East of England||13|
|Yorkshire and Humber||19|
Those with larger portfolios expressed a greater desire to buy property, with the research showing that 8% of landlords with one property planning to purchase during the year, rising to 20% for those with 20 or more.
Meanwhile, 12% of landlords with between two-three properties said they will buy, whilst the proportion of landlords with between four-five (15%), six-ten (14%) and 11-19 (14%) properties looking to purchase was broadly balanced.
Richard Rowntree, Paragon’s managing director of mortgages, said: “The proportion of landlords looking to purchase new property has been largely consistent over the past two years, but we are seeing regional variations and also a greater propensity for portfolio landlords to invest in property.
“Portfolio landlords have adopted a number of strategies to adapt to the tax and regulatory changes of recent years and we’re seeing trends such as these landlords buying stock from smaller-scale participants as they exit the market, or targeting higher yielding properties, such as HMOs.”
The researched showed that nearly two thirds (63%) of landlords plan to fund their next purchase with a buy-to-let mortgage, whilst 17% will release equity from existing properties to generate purchase funds. Meanwhile, 18% said they would purchase property outright using previously invested funds.
Predictions that landlords are not buying properties to let out because of tougher rental taxes and regulations appear to be short of the mark according to new mortgage data.
Statistics for December from UK Finance, the mortgage lenders’ trade body, suggest that there were 5,700 new buy to let home purchase mortgages completed in December – that’s 3.6 per cent more than this time last year.
There was also a small rise in first time buyer mortgages completed in December – 29,490 which was 0.3 per cent up on the same month a year earlier.
There were also 29,400 ‘home mover’ mortgages completed in December 2019, 3.2 per cent more than in December 2018.
“These figures reflect what was happening in the months leading up to the election so only show a more solid resilience in activity in what was still quite a turbulent period” notes Jeremy Leaf, north London estate agent and a former RICS residential chairman.
But he adds: “Of just as much interest is the strong increase in buy to let home purchases, which we also noticed on the ground as aspiring first-time buyers squeezed by strict lending criteria continued to rent. This has encouraged more landlords to expand their portfolios or join the sector.”
And Mike Scott, chief property analyst at online agency Yopa, says: “It takes a long time for an increase in buyer interest to feed through into mortgage completions … so this December figure demonstrates that the upturn in market activity must have started much earlier in the year.”
The housing market has enjoyed what some are calling a “Boris bounce” following the result of last month’s general election, with confidence in the market hitting a three-year high, according to a new survey.
Zoopla, in partnership with MonkeySeed, surveyed 6,000 people, and over 650 agents from the sales and lettings landscape across the UK, and found that the housing market is seeing some benefit from the greater clarity provided by the decisive election outcome.
Estate agent confidence levels are up, with more than half – 55% – of those surveyed reporting that they feel either ‘very confident’ or ‘somewhat confident’ in the strength of the market during the next year. This follows a three-year consecutive decline in agent confidence.
From a regional perspective, agents in the north are registering the highest levels of confidence in market performance for 2020 at 57%; meanwhile, agents in the south come in at 53% and demonstrate the highest turnaround in sentiment, up from 46% recorded 12 months prior.
Some 52% of agents expect to see an increase in the supply of stock coming onto the market over the next 12-18 months to start meeting buyer and renter demand.
Additionally, 45% of agents believe that there will be an increase in the number of property transactions that take place across the year ahead, in a further sign of renewed market health.
The economic and political landscape, as well as current stock levels, were cited as immediate market challenges; however, the subsequent election outcome is already starting to reshape market dynamics.
Andy Marshall, chief commercial officer at Zoopla, said: “It comes as little surprise that the so-called ‘Boris Bounce’ has already started to reshape the market in the immediate term – particularly amidst reports of improving consumer confidence following the decisive election outcome.
“Without doubt, appetite to buy and sell property has been pent up since the aftermath of the Brexit vote in 2016, and it would now appear that we have the green shoots of a new cycle in the market.
“While we don’t expect runaway prices – indeed we have forecast a modest 3% growth for 2020 – we are definitely heading in the right direction and agents are rightly benefitting from what we hope will become a new dawn.”
Fresh figures from Howsy has revealed the most in-demand cities to rent property in the United Kingdom, with some surprising findings.
The rental management platform analysed demand across 23 major UK cities as well as each borough of London, based on the proportion of rental listings that had already been snapped up by renters as a percentage of all listings available online.
The study found when it comes to existing demand, Newport is home to the highest level of tenant demand with 35% of all rental homes listed on the major portals already let.
Other highly ranked in-demand cities for rental properties include Bristol at 34%, Nottingham (33%), Cambridge (33%) and Belfast (25%).
Elsewhere, Plymouth (23%), Portsmouth (23%), Bournemouth (23%), Leicester (18%) and Manchester (18%) complete the top 10.
Aberdeen remains the least sought after area for rental properties in the UK with tenant demand at 5% followed by Swansea (8%) and Leeds (9%).
In London, Bexley, Bromley, Sutton and Lewisham are the hottest boroughs for tenants straight off the bat in 2020, with 38% of all rental stock listed online already being snapped up.
Merton (32%), Croydon (31%), Greenwich (30%), Haringey (29%), Enfield (29%) and Kingston (27%) are also amongst the most popular.
The high financial barrier of rental costs is evident at the top end of the ladder with Kensington and Chelsea (7%), Westminster (7%), Camden (11%), the City of London (12%) and Hammersmith and Fulham (13%) all ranking with the lowest number of properties let as a percentage of total properties listed.
Calum Brannan, founder and CEO of Howsy, said: “The buy-to-let sector may have had a rough ride of late but the UK rental market is still heavily relied upon by many in order to put a roof over their head and as a result, many cities still provide a great opportunity for buy-to-let investors due to the lower levels of available stock and consistently high tenant demand.
“When looking to invest, this combination of high demand, an affordable initial cost and a good rental yield should all be considered in order to maximise a return. For those that do their research and tick these boxes, bricks and mortar remains a very sound investment despite attempts to dampen the financial return via stamp duty hikes and changes to tax relief.
“Hopefully, a newly refreshed Government will realise that the buy-to-let landlord is the backbone of the UK rental market and we need to encourage investment into the sector rather than deter it.”
An assembly member has welcomed the introduction of legislation for carbon monoxide detectors in rented homes in Wales.
The Welsh Government says new regulations are to be introduced to tackle the threat of carbon monoxide poisoning.
Around 60 people a year are killed by carbon monoxide poisoning in Wales and thousands are hospitalised.
The regulations will require landlords in Wales and their agents to install working carbon monoxide alarms, smoke alarms and undertake an electrical safety test at least every five years.
The time frame is not clear at this stage, but it would appear that it will be implemented as part of the introduction of Section 91 of the Renting Homes (Wales) Act 2016 and prior to the end of this Assembly term in 2021.
Clwyd West AM Darren Millar previously expressed concerns to the Senedd over the absence of legal requirements for the detectors to be installed in rental properties.
But he has welcomed confirmation that a new section of the Renting Homes (Wales) Act 2016 will include additional requirements for landlords to install working carbon monoxide alarms, smoke alarms and undertake an electrical safety test at least every five years.
He said: “I’m absolutely delighted to hear that new regulations will be coming into force to ensure landlords install carbon monoxide testers in their properties and the Minister is committed to ensuring they are implemented by the end of this Assembly term.”
Many people are at risk of carbon monoxide poisoning, particularly if they do not have a CO alarm in their property.
In the short-term, carbon monoxide poisoning can cause dizziness, sickness, tiredness and stomach pain, while prolonged exposure can lead to loss of consciousness and have a significant impact on an individual’s mental state, coordination and heart health.
Carbon monoxide is a poisonous gas that is produced when fuel does not burn properly – usually from badly fitted or poorly maintained appliances.
Though carbon monoxide is a poisonous gas, it has no smell or taste, so it is not obvious when someone has been exposed to it. Just breathing it in can make somebody very unwell and it can kill if a person is exposed to high levels.
Millar added: Carbon monoxide is a toxic gas, but, being colourless, odourless, tasteless, and initially non-irritating, it is very difficult for people to detect.
“Unfortunately, many people across Wales still do not know enough about its dangers and it continues to claim lives or leave people with long-term chronic health problems.
“Currently 60 people a year are killed by carbon monoxide poisoning and thousands are hospitalised. Hopefully, these new regulations will help to reduce that figure.”
It now takes private landlords across the UK more than five months on average from making a claim to the courts for a property to be repossessed to it actually happening, with the problem most acute in London, new figures show.
The data reveals that the average length of time from a claim from a landlord in London to a court issuing an order for a property to be repossessed for legitimate reasons is currently 30 weeks, up from 23 weeks a year earlier.
Landlords in London have the longest wait in the country followed in second place by those in the North East who have to wait an average of 23.5 weeks.
The findings suggest that a major problem contributing to the backlog is the fact that the courts are unable to cope when landlords look to repossess properties for legitimate reasons.
The Residential Landlords Association (RLA) is warning that without major reform and greater funding for the courts the time taken to process cases will only get worse as Ministers prepare to end Section 21 repossessions.
The RLA is calling on the government to establish a dedicated housing court with a view to improving and speeding up access to justice for landlords and tenants in the minority of cases where something goes wrong.
John Stewart, policy manager for the RLA, commented: “If landlords feel that they might have to wait forever to regain possession of their property where they have good reason, such as tenants committing anti-social behaviour or failing to pay their rent, increasing numbers are going to feel it is not worth the risk of letting the property out in the first place.
“This will just add to the already growing shortage of investment in rented housing which is badly needed to meet a rising demand.
“The RLA was delighted when the government consulted on its proposal for a housing court a year ago but nothing has happened since. It needs to get on and get it set up for the benefit of landlords and tenants alike.”
Rents look set to rise over the next 12 months as the supply of new rental properties dries up, according to the latest survey by the Royal Institution of Chartered Surveyors (RICS).
It said small scale landlords are pulling out of the market due to recent tax and legislative changes which have made buy-to-let investments less profitable.
Landlord instructions remain in decline, with this indicator having been stuck in negative territory since 2016.
Going forward, rents are expected to increase as a consequence of the imbalance between rising demand and falling supply.
In the sales market, activity levels are benefiting from greater political certainty following the outcome of last month’s general election.
There has been a notable increase in residential property sales and this trend is likely to continue for the foreseeable future.
The December 2019 RICS Residential Market Survey shows that sales expectations have increased significantly, with a number of other key activity metrics turning positive for the first time in several months.
Sales expectations for the next 12 months have increased to a net balance of +66%, up from +35% in November, following a sharp rise in enquiries from potential buyers.
This change in activity levels is expected to lead to property price growth in the near and longer-term due to continued imbalance in supply.
In December, 17% more survey respondents saw a rise rather than fall in enquiries from new buyers, up from -5% in November, at the headline level across the UK.
Regionally, the majority of areas saw growth in interest from new buyers, with respondents in Wales and the North East in particular reporting solid growth.
Enquiries also rose in London and the South East, marking a noticeable turnaround from the negative results in November.
Aside from a rise in enquiries from buyers, the number of agreed sales edged up at the national level to +9% net balance. This is the first time since May 2019 that the number of agreed sales has shown a positive result.
Agreed sales in London and East Anglia delivered amongst the strongest improvement in sentiment, with net balances of +22% and +23% respectively, while sales reportedly weakened in Northern Ireland and Scotland.
Sales expectations for the next three months are also positive, for the third month running, with +31% of respondents anticipating transactions will increase.
This sentiment is mirrored for sales prospects over the 12 twelve months, which have seen an even greater improvement.
A net balance of +66% of survey participants forecast that sales will rise in the year ahead, up from +35% previously. The strongest net balances were returned in Wales and the South West, although all regions are showing strong improvement.
Simon Rubinsohn, RICS chief economist, commented: “The signals from the latest RICS survey provides further evidence that the housing market is seeing some benefit from the greater clarity provided by the decisive election outcome.
“Whether the improvement in sentiment can be sustained remains to be seen given that there is so much work to be done over the course of this year in determining the nature of the eventual Brexit deal.
“However, the sales expectations indicators clearly point to the prospect of more upbeat trend in transactions emerging with potential purchasers being more comfortable in following through on initial enquiries.”
While new instructions picked up at the national level, a net balance of +9% of contributors reported an increase, outside London and the South East, new sales instructions were more or less flat rather than picking up to any degree.
With regards to house prices, the survey’s headline net balance came in at -2%, compared to -11% previously, signalling a broadly flat national trend for the time being.
Going forward, however, near term price expectations were revised higher in all parts of the UK. This indicates a large shift across previously weakening areas, such as London and the South East.
Back at the national level, a net balance of +61% of survey participants see prices increasing at the twelve month horizon (a rise from +33% last time). What’s more, the outlook for house price inflation was adjusted higher right across the UK.
Rubinsohn added: “The ongoing lack of stock on the market remains a potential drag on a meaningful uplift in activity although the very modest increase in new instructions in December is an early hopeful sign.
“Given that affordability remains a key issue in many parts of the country, the shift in the mood-music on prices is a concern with even London expectations pointing to a reversal of course both over the coming months and looking further out.
“This highlights the critical importance of the government addressing the challenge around housing supply particularly with the gradual phasing out of the Help to Buy incentive.”