Rental arrears still on the rise

It has been claimed by a property firm that the level of rent arrears amongst private tenants has increased again. According to LSL rental arrears for the month of December increased compared to November, rising from 10 percent to 12 percent. The data was collated as part of a monthly survey that was carried out by LSL, and showed how financial problems were impacting on the abilities of private tenants to keep up with their rent.

According to LSL the level of rent that was either paid late or not paid at all increased by 2 percent between November and December of 2010. In addition, the value of unpaid rent increased to £276 million. Officials from the company said that rising unemployed had impacted severely on the ability of private tenants to pay their rent, and that continued increases in unemployment levels following government cutbacks would see the problems with rent arrears continue.

The data also showed that in the month of December the average rent charged by private landlords actually decreased slightly by 1.2 percent to £684 per month on average. This was because they wanted to try and tempt prospective tenants during the cold winter period, and many prospective tenants did not venture out in the cold weather to look for property.

An LSL official said: “Arrears have been rising since October as public sector spending cuts start to bite in many areas of the country. With unemployment set to increase this year, and rents likely to rise once more in the spring, more tenants will be at risk of falling behind with rent payments.” He added: “Landlords offering properties during the holiday season often lower the asking rent to avoid a costly void period. If a landlord cuts the rental price by 5% to fill a property immediately, he will save £275 over the year rather than seeing their property vacant for the duration of the month. Nevertheless, with the supply of mortgage finance to both first-time buyers and would-be landlords still constrained, we are likely to see rents re-start their upwards march before the spring.”

Tags: average, costly void period, private landlords, Leasehold estate, sector spending cuts, landlord

Landlords remain confident

Confidence among buy-to-let landlords remains very high.

That is according to what Bradford and Bingley is calling the largest and most authoritative landlord survey in the country.

Almost 5,000 people responded to the research, which found that the buy-to-let market is thriving and landlords are confident that it will continue to do so.

A massive 96 per cent revealed that they believe rent levels across the board will either rise or remain the same in the next six months.

In addition, 88 per cent of landlords have plans to either increase or maintain their current portfolio of properties.

All of this, coupled with very few (four per cent) being concerned about low rental yields or availability of tenants makes for a very positive outlook in the market.

“Many of our landlords have been in the market for a long time, with half investing in property for more than five years,” said Bradford and Bingley’s director of mortgages Andy Wiggans.

“Significantly, even those who have been landlords for under four years believe the sector remains strong, with many planning on expanding their portfolios.”

With house prices continuing to rise, more people are renting properties until they can afford to buy. This helps landlords to ensure that their properties are rented out.

Tags: board, Leasehold estate, investing in property, landlords, survey, long time, sector

Tenancy deposit shake up

A new scheme is being introduced which could change the face of property renting in England and Wales.

From April 6th many landlords will be required to protect the deposits of tenants by putting the money in one of three schemes.

The move has been made after homeless charity Shelter warned that too many people are not getting their money back with the landlord failing to provide a good reason.

With the average deposit now sitting at around £700, the withholding of the money can cause serious financial hardship for many and can leave people unable to get a mortgage, or forced to get a loan just to pay another deposit on a rented property.

“This money represents a sizeable chunk of cash for many tenants and losing it unfairly not only leaves thousands of people out of pocket but can lead to homelessness,” said Adam Sampson, chief executive of Shelter.

“The tenancy deposit protection schemes provide a vital safety net for both tenants and responsible landlords, making the private rental sector more professional and fairer for everyone.”

One of the available schemes will physically hold the deposits until the tenancy agreement reaches its conclusion, while the other two will provide insurance cover if a landlord does not return the money.

Tags: homeless charity, money, Wales, shake, deposit, tenancy