Your weekly landlord news digest: 15/2/19
Struggling to stay on top of the latest landlord updates? Each week, we compile the biggest stories of the week meaning you don’t miss a thing.
This week: Brexit’s impact on house prices, rent payments are falling but the PRS is growing, controversy over the government’s “right to rent” rules, and the importance of the Letting Agent Code of Practice.
House prices felt the ‘Brexit effect’ in January
In January 2019, the average house price in the UK fell by 2.9% to £223,691 – representing a fall in value of around £7,000. The figures, published by Halifax in their monthly mortgage index, mean that the annual house price inflation rate now stands at just 0.8%.
Brexit is being blamed for the stagnation in the housing market, with many in the industry alarmed by the current “grim conditions”. London estate agent Jeremy Leaf says, “Looking forward, we do not expect any significant improvement at least until the odds on a Brexit deal improve”.
Elsewhere, Garrington Property Finders’ Jonathan Hopper is quoted as saying, “the confidence-sapping uncertainty of Brexit it getting worse, not better, and the next few months will be decisive. Barring an improbable Brexit solution that avoids both economic and political turmoil, a return to universally rising prices appears unlikely any time soon”.
Total rent paid by private tenants is falling
It’s not just house prices that are falling, either. New figures from Hamptons International estimate that tenants paid a total of £59.1 billion in rent in 2018: a fall of £1.9bn compared with 2017. The reasons for the drop, they say, are twofold: a fall in the number of households renting, and the stagnation of rent price growth.
Despite the decline, the picture is still more favourable than that of ten years ago. Since then, rent prices have risen by 12.4%, while renters are paying £29.9 billion more than in 2008.
Hamptons International head of research, Aniesha Beveridge, says, “The total amount of rent paid by tenants in Great Britain fell for the first time in over a decade last year. Despite average rents rising 0.4% in 2018, fewer people renting homes meant the total rent bill shrank by £1.9 billion since 2017”.
Private rented sector set to grow
The outlook is positive for landlords, however. Recent research from Your Move shows that the number of private rented households in the UK could increase to six million over the next six years, up from around 4.5 million today.
The growth, Your Move say, is likely to come from both buy-to-let and build-to-rent, with the latter expected to have more of an impact in coming years.
The research also reveals an increase in “Silver Renters”, with over half of those currently living in private rented accommodation being aged 46 and over, compared with just 39% of those aged under 35.
300 Commonwealth nationals evicted under “right to rent” rules
A freedom of information request has shown that 293 renters from Commonwealth countries were the subjects of Home Office notices to landlords, forcing landlords to serve eviction notices as they were “disqualified” from renting.
Guidelines introduced in 2016 require landlords to check the immigration status of both potential and current tenants – and the receipt of a notice means that landlords are required to end the tenancy.
However, the Joint Council for the Welfare of Immigrants (JCWI) has called for the scrapping of landlord immigration checks, stating that the notices can be issued even if the Home Office makes unfair or incorrect decisions in immigration cases.
Chai Patel of the JCWI says, “[The government] is still using its flawed processes to make more Commonwealth nationals homeless. Landlords should not be forced to evict tenants based on dodgy Home Office data”.
Do you have a copy of your letting agent’s Code of Practice?
All letting agents are required to make both tenants and landlords aware of the Letting Agent Code of Practice, giving them an electronic copy if requested. If your agent hasn’t done so, you have every right to ask for a copy. A failure to make you aware – or to send you a copy should you wish to see it – could see a First Tier Tribunal decision raised against them.
In a recent landmark First Tier Tribunal case, an agent was served with a Letting Agent Enforcement Order after being deemed to have failed to meet the requirements of the Letting Agent Code of Practice. For landlords, an agent’s adherence to this code is vital, as it shows that they meet minimum standards in their service to landlords and tenants alike.
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