Weekly landlord news digest: Issue 29
The weekly news digest from Hamilton Fraser Total Landlord Insurance conveniently rounds up the private rented sector’s latest highlights in one place.
This week, ARLA reports that landlords have increased rents in response to the tenant fee ban, which has now been in force for two months. We ask whether Boris Johnson will ring in the changes in housing now that he is Prime Minister. New research highlights that homeownership may remain a dream for young people hoping to get onto the property ladder. Social housing tenants illegally sub-letting their properties for holiday lets are in the spotlight and a letting agent faces fines for flouting HMO safety legislation.
Rents are rising in response to tenant fee ban
The number of tenants experiencing rent rises has increased since the ban on letting agency fees was introduced, ARLA Propertymark’s June Private Rented Sector Report has found.
More than half of letting agents (55 per cent) confirmed that landlords had raised rents in June – up from the previous record of 33 per cent in May.
“Unsurprisingly, rent costs hit a record high in June as tenants suffered the impact of the tenant fee ban,” said an ARLA spokesman.
“Ever since the government proposed the ban, we warned that tenants would continue to pay the same amount, but the cost would be passed onto tenants through increased rents, rather than upfront costs. In addition to the repercussions of the Tenant Fees Act, the proposed abolition of Section 21, coupled with the Mayor of London’s recent call for rent controls, will only cause the sector to shrink further. In turn, this will increase pressure on the sector because it will discourage new landlords from investing in the market, causing rents to rise for tenants as less rental accommodation is available.”
– ARLA spokesman
The research also found an average of four landlords for each letting agency branch are quitting the market each month – a figure that has stayed the same since June 2018.
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Will Boris ring in the changes in housing?
Last week saw momentous changes in politics, with a major clear-out of cabinet and a new set of ministers loyal to the new Prime Minister and committed to Brexit. Will he get a grip on housing? asks LandlordZONE.
Esther McVey, former TV presenter, has been appointed Minister of State at the Ministry of Housing, Communities and Local Government, taking over from Kit Malthouse. McVey, 51, is MP for Tatton, Cheshire. Her last role was as Secretary of State for Work and Pensions. She resigned in November after holding the office for just 10 months as a protest against former Prime Minister Theresa May’s handling of Brexit negotiations. McVey is the ninth housing minister since the Conservative Party won power in 2010.
Ms McVey will now work with Mr Robert Jenrick, a lawyer by background, who has been appointed as Housing Secretary after the incumbent James Brokenshire left the role.
In the past Boris Johnson has been critical of his party’s housing policy, especially when he was Mayor of London. But he has recently praised the right-to-buy policy. Conservative policy has always been to encourage home ownership as opposed to rental housing. It remains to be seen whether, under Boris’s new leadership, the ongoing tenure consultations launched prior to Theresa May’s departure will be curtailed.
Home ownership just a dream for young hopefuls
Just one in four adults aged 34 and under are likely to buy their own home by 2026, although nearly all of them aspire to property ownership, says research by high street mortgage lender Santander. The data shows that 90 per cent of under 34s wants to own their own home, with half listing this aspiration as one of their top life goals.
However, the bank suggests that home ownership rates are declining for under 34s earning less than £30,000 a year. It blames problems finding a deposit and a mortgage based on their income to support borrowing as two of the main obstacles they face.
Hamilton Fraser Total Landlord Insurance’s article, ‘Generation Perma-rent: who are they and what do they want from landlords’ investigates this trend in more depth and asks, what does it mean for landlords?
“While the aspiration to own a home is just as strong as in previous generations, it is a dream that is looking increasingly out of reach. Without change, homeownership in the UK is at risk of becoming the preserve of only the wealthiest young buyers over the next decade.”
– Santander Mortgages managing director Miguel Sard