Weekly landlord news digest: Issue 32

Each week Hamilton Fraser Total Landlord Insurance brings important industry news updates to readers!

In this week’s news digest we investigate how, according to a leading London letting agent, evicting a rogue tenant can leave landlords significantly out of pocket.

Other timely information includes new guidance on the tenant fees ban in Wales – issued 16 days before the ban comes into force on 1 September. Are you up to speed with the new guidance?

This week officials in England, Scotland and Jersey have also released a flood of housing and rent data, and we explore calls for more to be done to reduce tenant and landlord stress in the private rented sector (PRS).

 

Counting the cost of evicting a rogue tenant

Evicting a rogue tenant could cost a landlord tens of thousands of pounds in unforeseen costs, according to a leading letting agent.

Even the best case scenario of losing just nine month’s rent and incurring legal costs adds up to more than £6,000.

Property managers at calculated that if a tenant was to cause significant damage to the property, for example smashing up the home before leaving, the cost to the landlord could rise to as much as £31,000.

The cost of repairing these issues can easily escalate. For example, fitting a new kitchen (£8,000) and bathroom (£4,000); redecorating (£2,900) replacing broken windows (£7,000) and legal fees (£3,000) all add up.

In London, where costs are higher, the bill can rise to £41,300 or even £50,000 or more in prime Central London locations.

“Rogue tenants are a landlord’s absolute worst nightmare, and apart from the stress and time consumed dealing with them, the financial impact can be crippling”

– Marc von Grundherr, director of Benham and Reeves

With this in mind it pays to have a bespoke landlord insurance policy for your specific requirements to ensure that you are covered in the event of damage to your property. In fact, Benham and Reeves claim that their research found that 13 per cent of landlords don’t have any landlord insurance cover, rent guarantee or legal protection cover which could leave them further out of pocket.

Hamilton Fraser Total Landlord Insurance provide comprehensive policy options, and their guests on their Premier policy, to give you piece of mind that your property is covered should the worst happen.

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Welsh government issues guidance on the tenant fee ban

The Welsh government has issued guidance on the tenant fee ban which starts from 1 September 2019.

Landlords should be aware that there are subtle differences between the English ban, which started in June, and the new Welsh law.

Other differences include no cap on security deposits and a wider definition of default fees.

For the full guidance read the Welsh Government’s tenant fee ban guidance here.

 

Landlords buy more than 5,000 new homes to rent

Property investors bought 5,300 new rental properties in June, says the buy to let lending trade body UK Finance.

The figure was 3.6 per cent down on June 2018.

Remortgaging remained steady, said UK Finance, with 12,500 deals, down just 0.8 per cent on the same time last year.

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House prices are still on the rise

House prices across the UK were up 0.7 per cent between May and June and 0.9 per cent year-on-year, making the average house price £230,292, according to the Land Registry.

Wales saw home prices rise at the fastest rate – increasing by 4.4 per cent in the year to June 2019.

House prices were up 1.2 per cent from May, while the year-on-year 4.4 per cent increase took average property values to £163,768.

In England, the June data shows average house prices rose by 0.7 per cent from May to £246,728.

In Scotland, the average home now costs £151,891 after an annual increase of 1.3 per cent.

The lowest annual growth was in London, where prices fell by 2.7 per cent over the year, but the figure was better than in May when the fall hit 3.1 per cent.

…while rents are standing still

Private rents were up 1.3 per cent in the 12 months to the end of July – a figure that has not changed since May, says the Office for National Statistics.

In London, the rise was 0.9 per cent, a rate which has stayed the same since May and reflects the highest annual growth in the capital since September 2017.

By country, rents in England were up 1.4 per cent in the year to July, those in Wales increased 1 per cent, while Scotland saw a 0.9 per cent rise.

Regionally in England, landlords in the East Midlands are seeing the greatest rent increases – up 2.1 per cent in the year to the end of July, followed by the South West (+2 per cent). Rents are rising slowest in the North East (+0.7 per cent).

“Growth in private rental prices paid by tenants in the UK generally slowed since the beginning of 2016, driven mainly by a slowdown in London over the same period. Rental growth has started to pick up since the end of 2018, driven by strengthening growth in London,”

– The latest ONS Index of Private Housing Rental Prices for July 2019