Fourth quarter of 2016 saw rebound in new buy-to-let lending
While the UK’s rent indemnity policyholders may have largely focused on remortgaging rather than new lending in recent times, there are signs of a reversal in the trend, with new data suggesting an increase in the number of landlords purchasing properties in 2016’s final quarter.
The UK electorate’s vote to leave the European Union (EU), combined with proposed changes to stamp duty for additional homes, made it unsurprising that in the third quarter of last year, there was a drop in the number of mortgages for new purchases.
Indeed, remortgaging continued to make up the bulk of activity in the latest quarter, except that the share of the lending market taken up by purchases returned to the levels seen earlier in 2016.
Marked increases are a good sign for landlords
Whereas the share of lending for purchases in the ‘vanilla’ buy-to-let market – that is, in relation to standard buy-to-let transactions – was just 28% in the third quarter, it jumped up to 38% in the final three months of the year. The share of purchases in the Houses in Multiple Occupation (HMO) lending market, while not seeing quite as dramatic a change, also saw a rise of its own to 26%.
Mortgages for Business chief executive officer David Whittaker described the trend as “encouraging”, adding: “Following a notable shift towards lending for remortgage in the third quarter, landlords showed they were once again willing to commit to new purchases.”
The data came from the broker’s latest buy-to-let index, which also found continued stability in average loan to value (LTV) ratios across all products at 67% in the year’s final quarter, as gross yields also remained unchanged.
Landlords looking with optimism towards 2017
The welcome increases come as many holders of a rent indemnity policy have also indicated a high level of confidence in the market.
A poll found that 36% of landlords rated their confidence level in the year ahead at eight out of 10 or higher. 88% of those surveyed said that they intended to remain as landlords for the next year, while a third indicated they would increase their portfolios.
For landlords across England and Wales, 2017 promises to be another lucrative year – and here at Advanced Rent, we look forward to providing the very highest levels of support to buy-to-let investors through our rent indemnity and other acclaimed products.
Rise of nearly 4% in English and Welsh rents over the past year
Despite some adverse headlines during 2016 in relation to the buy-to-let sector, there remains plenty of reason for positivity for those taking advantage of Advanced Rent's landlord rent guarantee and other products. The latest comes in the form of a new index showing that the average residential rent in England and Wales has now reached £830 a month, having increased by 3.9% in the 12 months to November 2016.
Predictably, the data showed that London continued to command the steepest rents, which now averaged £1,295 a month - a new high. The capital's rental market recorded 1.9% of annual growth. Indeed, in nine of the 10 regions included in the index, rents increased, with the only decline - a small one - being recorded in the South West. This contrasted with the 13.6% annual growth seen in the South East, which brought rents in the region to an average of £875 a month.
Wales and the North East also racking up impressive growth
Other eye-catching regions in the survey included Wales, which mustered a 6.2% increase in rents over the year to £584, and the North East, where rents outpaced the national average increase by going up 4.2% year-on-year. This meant that those wishing to rent in the latter region could expect to be charged £542 for the privilege. While this made the region the cheapest place to rent in the country, it is also the North East where the best yields anywhere in England and Wales were recorded, with the average return of 5.3% here comparing well to the 5% seen 12 months earlier.
Yields above the national average were also seen in the North West and Wales, as the below-average property prices in these regions continued to make them unsurprising hotspots for landlord rent guarantee policyholders looking to gain the maximum value from their investment.
With such news accompanied by a recent trend of British expats purchasing UK property to let out while they are living abroad - with Greater London and South East England houses proving especially popular in this regard - it's clear that the buy-to-let market retains its long-held position of strength in the early days of 2017.
Contact Advanced Rent today to learn more about how you can make the most of present market conditions by drawing upon our highly respected landlord-centred products.
Letting fees ban ‘unlikely to greatly impact landlord finances’
With the recent Autumn Statement delivered by Chancellor of the Exchequer Philip Hammond outlining plans to ban letting agent fees, some concerns have been raised that the UK’s private sector landlords could be faced with extra costs as a result.
However, there is unlikely to be any great impact on landlord finances as a result of the change, according to one analysis by a property classifieds site, which estimated that even if letting agents passed on the costs to landlords, rent guarantee scheme policyholders would experience a mere 0.14% drop in returns.
A softer impact on landlords than widely feared
The site stated that the average fees charged to UK tenants were currently around £300, with some London renters being forced to pay as much as £700. However, it was calculated that even if landlords took the financial hit of such changes, they would only miss out on about £25 a month on average.
Much of what landlords already pay is in the management services that letting agents provide, typically charged at between 10% and 15% of their rental income. The total fees for a year at the average UK rent of £902 a month, as of October 2016, would be about £95 a month, or £1,140 a year. If the cost of the banned lettings fees of about £300 is considered, the new total would be £1,440, which equates to an increase of £25 a month.
While such an additional charge may seem unfair to landlords, the increase in monthly fees is unlikely to greatly affect their finances. However, the slightly increased financial pressure may lead more landlords to contemplate managing their properties independently.
Comprehensive rent insurance from Advanced Rent
Although costs may go up slightly for landlords when the ban comes into force, it is unlikely to bring many of them to their knees.
What will probably be more important for many landlords to consider is reliable insurance for their rent. Advanced Rent offers an affordable rent guarantee scheme that will ensure that you always receive your rent on time each due date, even if your tenant doesn’t pay.
To learn more about our landlord services and receive a quick quote, feel free to get in touch with the friendly and professional Advanced Rent team today.
Landlords’ investment plans largely unaffected by mortgage tax relief change
The findings of a new survey have suggested that buy-to-let activity may be largely unaffected by a very uncertain political climate and a substantial cut in mortgage payment tax relief.
According to a recent survey of landlords, four in five landlords have no intention of changing their plans to invest in buy-to-let properties, despite widespread concerns that the UK’s exit from the European Union could slow down the real estate market.
Only 9 percent of respondents claimed that the Brexit vote would lead them to postpone the expansion of their property portfolio.
Meanwhile, the majority of landlords asked claimed that they would stick to their previous investment strategies, even though the government is planning a cut to tax relief on buy-to-let mortgage payments from April 2017.
How the tax relief cut will affect landlords
By 2020, landlords will not be able to deduct mortgage interest costs from rental income when they’re calculating rent. This means that they will have to pay tax on turnover instead of profit.
However, this does not appear to faze landlords, with 70 percent of those participating in the survey claiming that this change would not affect their plans.
4 percent of respondents even said they would invest more as a result of the changes, while 8 percent claimed they would sell one or more of their properties and 12 percent stated they would wait before adding new properties to their portfolio.
A fifth of landlords also signalled that they intended to increase their rents during the next year, in a sign that some may be expecting to pass on the costs of buy-to-let tax relief to tenants. Just 1 percent of landlords suggested that they would reduce their rent over the coming 12 months.
Almost 90 percent of those asked said that they intended to still be a landlord in two years. Indeed, a third planned to increase the number of properties they let in that time.
Such overwhelming confidence as expressed in the survey suggests that the buy-to-let market is likely to continue thriving through the next couple years of Britain’s potential exit from the EU.
Safeguard your investment with our rent guarantee insurance
Advanced Rent can provide landlords with extensive rent guarantee insurance and a comprehensive free tenant referencing service to give them the absolute best peace of mind.
To learn more about how we can prepare you for the exciting and potentially highly lucrative world of buy-to-let investment or give you a greater sense of security as an existing landlord, please feel free to get in touch to speak to one of our knowledgeable team members.
Estate agencies anticipate steep increases in UK rents
Several estate agencies have forecast that there will be a sharp rise in rental prices across the UK over the coming five years, in news that threatens to bring fresh headaches for tenants, but which signals the great potential for rent guarantee insurance policyholders to reap the benefits.
One report has suggested that London landlords will be in a position to bump up their asking rents by 25% during this period, with an only slighter lower 19% rise forecast for the rest of the country.
It is thought that the current mismatch between supply and demand will see rental growth substantially outstrip house price growth, with the latter likely to be dampened over the next few years by uncertainty surrounding the UK’s impending departure from the EU.
Major opportunities for rent guarantee insurance policyholders
Rental growth appears to be rising at the rate it is due to the stark contrast between supply and demand. Supply has tightened up in areas that were already in higher demand such as London, increasing rents exponentially.
Another estate agency carried out similar research and found that the UK could see a total increase in rent values of 17.6% by 2021. London again recorded the most dramatic prospective increase at 19.9%, which would far exceed predicted rates of inflation.
It has been reported that buy-to-let investors are increasingly turning their attentions to higher yielding, lower demand markets in cheaper areas of the country. This is just one more indication of the sheer depth of property investment opportunity that awaits those contemplating a rent guarantee insurance policy like those that Advanced Rent can offer.
Capitalise on rising rents with Advanced Rent’s acclaimed products
As rents continue their steady rise across the UK even in the face of the uncertainty brought by the ‘Brexit’ vote, there really couldn’t be a better time for many prospective or current landlords to purchase their first rental property or expand their portfolio.
Here at Advanced Rent, we are seasoned residential property financiers and private equity investors with an interest in taking much of the stress out of your day-to-day life as a landlord. Simply talk to our team today for more information about our various landlord-centred products, such as our rent guarantee insurance, as well as to receive a free no-obligation quote.
Rentals poised to surpass property sales for first time since 1930s
The rising prices of properties, combined with the low supply of affordable housing, could soon lead to the number of new lettings dwarfing property purchases, which hasn't happened in Britain since the 1930s. It is a development that should be especially welcomed by many landlords, including those making use of Advanced Rent's rent guarantee scheme.
Recent research by estate agency chain Countrywide has shown that it is becoming more difficult for house-buyers to secure affordable properties after a surge in prices in the aftermath of the EU referendum. Would-be tenants are finding themselves needing to borrow more and find larger deposits in comparison to 2015.
Homeownership levels have dropped significantly
This popularity of rentals is not a sudden change in the property market. The same research stated that rental activity had been steadily catching up to sales activity over the last five years.
Such a long-term trend has reached its apex this year thanks to widespread uncertainty after the UK's vote to leave the EU. Last year's sales figures showed an estimated 1.2 million properties worth over £40,000 being sold in the UK.
It is even thought that the amount of rentals may have already exceeded property sales figures if informally advertised lettings are taken into account.
While the popularity of rented properties catching up with average yearly property sales is a long-standing trend, a combination of financial concerns following Brexit and rising prices has sped the process up.
A boom occurred in March this year, with an influx of purchases by landlords attempting to buy properties before a change in stamp duty rates, which may have also contributed to a rise in rental properties advertised this year.
Take out rent guarantee insurance to capitalise on the trend
With the popularity of rental properties showing no signs of dying down, there may be no better time for landlords to invest in the expansion of their property portfolios, while taking out the right rent guarantee insurance like that offered by Advanced Rent.
To find out more about our many landlord-oriented products, simply visit our main site or get in touch with our professional team for a chat about how we could help to give you invaluable additional peace of mind as a landlord.
Latest UK rental figures suggest a market unaffected by Brexit
Users of Advanced Rent's guaranteed rent products may be intrigued to learn that while the period since the UK's vote to leave the European Union on 23rd June has brought political uncertainty and a considerable depreciation in the pound, UK rents are seemingly unaffected.
According to a newly released buy-to-let index, average London rents reached an all-time high of £1,391 per month in August, while values are climbing at an even faster rate in the South East, where the average rent hit £975.
Continued steady rental growth
If the British electorate's decision to split from the EU was speculated to be bad news for the English and Welsh property and rental markets, that doesn't seem to have been borne out so far, with rents across these regions having increased by 4.8% month-on-month, and 8.7% since August 2015, bringing the average rent to £887.
It has been suggested that there is probably a seasonal influence underlying such growth, with the student sector traditionally on the up during the summer months, a trend that is especially noticeable in London, the South East and the North East.
Another region that has seen a big increase in rental values is the North East, where average rents reached £583 during August. The region has increasingly caught the attention of investors due to the low cost of housing and the large return that they can expect to gain on their initial investment.
Indeed, the figures reveal that the North East was also the region generating the highest yields, of 5.6% on average in August, up from the 5.5% seen in July. While house prices in the North East tend to be lower than the national average, relatively high rental values help to ensure that landlords in the region enjoy a healthy income.
Take advantage of the latest rise in rent values
With the rents that landlords can charge continuing to climb and our guaranteed rent products helping to take even more of the uncertainty out of your life as a landlord, now may be a great time to invest in the expansion of your property portfolio to make the most of continuing high demand.
If you are interested in learning more about the products that we offer to make investment in and ownership of buy-to-let property easier, simply contact our friendly and professional team now.
Landlords urged to double-check the standard of their advertising material
The UK rental industry – including not only individual landlords, but also letting agents and firms – has been warned to take care over the quality of its advertising material, in another development that will need to be heeded by many of those benefiting from rent indemnity products.
With lettings sector regulation looking likely to change on a more regular basis in the years ahead, the Association of Independent Inventory Clerks (AIIC) has warned that a great number of companies could find themselves under the scrutiny of the authorities due to inaccurately worded advertisements.
“Misleading” adverts could lead to investigations
The organisation highlighted one particular instance in which an industry firm known as Landlord Certificates was told by the Advertising Standards Authority (ASA) to alter its future advertising. It followed a member of the public's complaint about a Landlord Certificates advert about the requirement for landlords to have smoke and carbon monoxide alarms fitted in their properties.
According to the complainant, the advert could be considered misleading due to its statement that “all landlords will need to install a working smoke alarm and carbon monoxide alarm at their rental property” - although, in reality, the regulations only require carbon monoxide alarms in rooms with a solid fuel burning appliance.
The ASA approached Landlord Certificates, which agreed to completely remove the statement from future adverts or provide additional content fully explaining the regulations. The case was subsequently closed as “informally resolved” by the ASA, but the AIIC called for landlords and lettings firms to ensure that their advertising words are well-chosen and accurate.
AIIC issues warning to lettings sector
Patricia Barber, AIIC chair commented: “This case may have been informally resolved but it highlights the dangers of being seen to put out misleading advertising statements. Having a case like this publicised is not good PR for any company and it could be even more detrimental if a complaint is upheld by the ASA.” She added that landlords could “find out what you can and can't say in advertisements from the ASA and the Committee of Advertising Practice.”
These are certainly sentiments that we can agree with here at Advanced Rent, and we would always advise landlords of all kinds – including those taking advantage of our rent indemnity policies – to pay close attention to their advertising wording to ensure that they do not fall foul of the law. Contact our team today for more information about our products that are designed to make your life as a landlord both easier and more profitable.
Best London buy-to-let areas revealed
Current and prospective landlords investing in such products of ours as our no deposit rental scheme and landlord-tenant referencing may be interested to read evidence of a continuing boom in the London rental market, even in the face of Brexit-induced uncertainty.
However, with some areas of the capital faring better than others, we thought we would provide a breakdown of the most prosperous areas in which to invest in the London buy-to-let sector right now.
Strong yields in both the east and south
Although many landlords are increasingly citing the north of England as the best place to buy-to-let, London is always going to be at the forefront of the market, thanks to its continued rocketing property prices and strong rental yields in many boroughs.
As a whole, the east and south of London are delivering the highest yields, while the west is producing especially attractive capital gains.
In the east – which boasts some of the highest rental yields in the whole of the UK – Newham, Stratford and East Ham are performing particularly well, while Rainham, Dagenham and Romford are hotspots for more affordable properties, also boasting average yields easily exceeding 5.5 per cent.
Southwark and Lambeth in the south of the capital are currently the subjects of significant regeneration projects, which could send property prices soaring in the years to come. Oval and Sutton are also displaying signs of being among the best buy-to-let locations in London, with the latter predicted to see rents rise by as much as 32.9 per cent over the next five years.
West and north set to see significant rental growth
West London also shows considerable promise, with its property prices having already grown by an astounding 13.8 per cent a year since 2010.
Merton has been especially frequently highlighted by many buy-to-let observers, as 33.8 per cent rental growth is expected here over the next half-decade. A similar 33 per cent figure has been quoted for Richmond-upon-Thames, despite the area already boasting some of the UK's most expensive properties.
Finally, north London features Islington and Camden, boroughs that are set to record rental growth of 33.5 per cent and 32.1 per cent respectively in the coming five years, property company CBRE has said.
Such statistics and trends clearly signal that the English capital is set to remain one of the UK's undoubted buy-to-let property hotspots for years to come. Talk to Advanced Rent today about how our no deposit rental scheme and other products could make your life considerably easier as a landlord in this rapidly developing - and still highly profitable - area of the country.
UK property supply on the up in August
A general air of uncertainty may still prevail in the UK housing market, particularly in the aftermath of Brexit, but there is also plenty of evidence that the sector is confidently weathering any challenges.
Prospective landlords seeking well-priced property - and who may therefore have reason to take an interest in our guaranteed rent service - will be pleased to read the latest monthly report from the National Association of Estate Agents (NAEA).
Things are moving in the right direction
The report found that supply in the UK housing market reached its highest level in August since March this year. The number of houses available to buyers rose to 41 per branch in August, which is the highest figure shown since March, when agents reported an average 54 properties registered per branch.
As for the number of house-hunters registered per branch, that number dropped from 298 in July to 287 in August – although the NAEA confirmed that this was in line with seasonal expectations.
A bright future for the property market
The figures regarding numbers of sales also took a positive turn in this month's report. The number of sales made to first-time buyers increased in August to an impressive 28%, compared to the 25% shown in July. Year-on-year, the figure rose by 8%, with August 2015 seeing a fifth of sales going to first-time buyers.
In an optimistic look to the future, 39% of estate agents expect demand to grow following last month's interest rate cut, with a quarter believing that first-time buyers will rise as a result.
Mark Hayward, NAEA managing director, commented: "Following a few months of uncertainty in the market, it's more than encouraging to see things moving in the right direction. Although we have seen a slight drop in demand, the fact that supply has risen means more choice for those that are looking for a new home... now is a good time to be looking to buy."
Whether you are an existing landlord who may or may not be looking to expand your portfolio, or instead someone contemplating entering the buy-to-let market for the first time, when you entrust Advanced Rent with landlord-geared products and services like our guaranteed rent policy, you can benefit from the utmost peace of mind.
Buy-to-let landlords may contravene mortgage terms by letting through Airbnb
Many of our rent guarantee scheme policyholders may have encountered more than a few references to Airbnb in the news as of late, or indeed made use of the service themselves for listing, finding or renting properties on a short-term holiday basis.
However, landlords letting their properties through the platform have been warned that they could be breaching the terms of any associated buy-to-let mortgage, which will likely have been granted on the assumption that the given property would only be rented out to ordinary tenants.
A pronounced rise in London Airbnb listings
Suspicion by many buy-to-let industry observers will have been aroused by the Residential Landlords Association's (RLA) report that the number of London listings on Airbnb jumped by 27% between February and June 2016, to 42,646. Of these, 61% were claimed to be available for over three months.
Short-term holiday lets can present a tempting opportunity to landlords on account of the higher returns that they may generate, given that their per-night price is often significantly greater than could be expected from a standard private rented tenancy. However, the RLA has suggested that the increasing tendency for landlords to let through Airbnb could be exacerbating the UK's housing crisis.
There is, however, a risk to landlords themselves as a consequence of such a practice - that they could be contravening the conditions of any buy-to-let mortgage that they have on a property that they unilaterally use for short-term holiday lets instead of for short-term rental.
Stiff warning from lending industry
Council of Mortgage Lenders (CML) spokesman Bernard Clarke has been quoted as telling the UK edition of the International Business Times: "Most lenders do not allow borrowers to offer short-term lets on their properties, whether on an owner-occupied or buy-to-let mortgage.
"That is because lenders accept the risk associated with a particular kind of mortgage – so a loan to an owner-occupier is advanced on the basis that the property is to be occupied by the borrower and his or her family. Similarly, lenders offer buy-to-let mortgages expecting there to be a stable, reliable rental income to enable repayment of the mortgage.
"Mortgage products are based on a careful assessment of risk, including cash flow, the risk of default, the level and reliability of income and any risks associated with how the property is to be used. If the mortgage is then used in a different way, the risks for the lender may be different."
Clarke urged borrowers to consult their lenders before taking any sort of action that could impact on the terms of their loan.
To learn more about our rent guarantee scheme and the other products that could take much of the uncertainty and stress out of your life as a landlord, please contact our buy-to-let experts here at Advanced Rent today.
UK residential sales brave the smallest of impacts from Brexit
Landlords who benefit from our landlord tenant referencing service, rent guarantee scheme or any of our other services here at Advanced Rent have felt their fair share of uncertainty since Britain voted to leave the EU some two months ago.
It is certainly an uncertainty that has been experienced by many landlords and other property market stakeholders, although they will be happy to know that the UK housing market has suffered very little since the once-in-a-generation decision was made.
Another busy period for the property market
Between June and July this year, residential property sales in the UK only decreased by 0.9%, according to the latest data from HMRC. The number of non-adjusted residential transactions for July 2016 actually rose by about 0.7% from the month before.
The figures also show that transactions significantly heightened in March 2016 before substantially dropping in April, which has been attributed to the introduction that month of higher stamp duty rates on additional properties.
Although April and May 2016 were lower than their corresponding months in 2015, the total for March to May 2016 was still significantly higher than the same period last year, news that should hearten many of the users of our landlord tenant referencing service.
It is thought that non-tax factors could have also contributed to this trend, with the Bank of England's plans to curb buy-to-let mortgages also potentially leading to a pre-April rush to purchase. This does not even take into account the EU referendum's impact on transactions.
Signs of reassuring stability
Among those responding to the figures was Search Acumen director Andy Sommerville, who said that the statistics indicated a stabilising post-Brexit market. He observed: "Many would have expected a sharp fall in transaction activity in what was the first full month in our post-referendum economy, yet an underwhelming change suggests the darkness in our market shows little sign of worsening."
Such sentiments were shared by Doug Crawford, chief executive officer of conveyancing services provider My Home Move, who added that the data showed a property market that had largely shook off the momentary uncertainty brought by the Brexit vote. He explained that "while transaction levels remain lower than a year ago, this is in the context of a market that is still feeling the effects of changes to stamp duty, which led to a frontloaded first quarter."
With the future of the buy-to-let market remaining a bright one, here at Advanced Rent, we can help to further minimise any uncertainty in your life as a landlord through our suite of services geared towards your most specialised requirements. Simply contact us today for more information.
Architects outline potential improvements to UK housing market
Many of our rent guarantee insurance policyholders here at Advanced Rent will be well-placed to appreciate the very real challenges presently faced by a UK housing sector often described as "in crisis", although there are many other stakeholders in the broader debate - not least of which, architects.
Calls to go beyond housing policy
A key conclusion of a new report released by the Royal Institute of British Architects (RIBA) is that housing policy alone will not be sufficient in isolation to solve a housing crisis with both varied and complicated roots.
In particular, architects encouraged the bringing together of the public and private sector to promote, enable, and finance new homes, and improve housing quality. The report also emphasised the importance of high-quality design, stating that "without it, we’ll be solving one problem by storing up further challenges for the future."
Just some of the wide-ranging measures proposed in the report included the addition of housing policy to the remit of the National Infrastructure Commission, the inclusion in future infrastructure schemes of details of their impact on housing supply and the establishment of a Chief Built Environment Adviser.
The report also addressed the need for new types of housing development to cater to the needs of an ageing population, which was said to have "huge implications for the houses that we need to build. A broader range of housing options is needed – both to ensure that people are living in the best possible homes, but also to unlock larger housing."
A wealth of possibilities
The report stated several other improvements that could be implemented to help aid the UK housing market to optimum health in the years ahead. These included central and local governments setting up public sector investment vehicles and a national housing investment bank to issue bonds and ISAs, recycle right to buy receipts and attract long-term institutional investment.
RIBA also called on the government to strengthen building regulations and national standards to ensure the sustainability and resilience of future homes. Finally, the Institute said that the poor condition of much of the UK's existing housing stock also needed to be better addressed.
Whatever may lie in store for the British housing market, as a buy-to-let investor, you can count on Advanced Rent to deliver a range of high-quality landlord-tenant services to help minimise uncertainty in the years ahead.
Simply contact our friendly and knowledgeable team today about the considerable added value that our rent guarantee insurance and related services can bring to your life as a landlord.
Landlords warned about need to ensure the energy efficiency of their properties
UK landlords taking advantage of Advanced Rent's no deposit rental scheme or landlord tenant referencing may be interested to read that 58% of their fellow landlords have reportedly refused requests from their tenants to improve the energy efficiency of their property.
Furthermore, more than half of UK tenants have said that their rental property is cold and draughty – a state of affairs that could put many landlords at legal risk.
Widespread concern in light of new law
The above are findings from a poll conducted by online letting agent PropertyLetByUs, which found that seven in every 10 tenants had indeed requested to their landlord that they make improvements to their property, only for more than half to be refused.
The statistics are a particular warning to landlords in light of legislation that took effect from April of this year, enabling tenants living in G and F rated homes to request improvements such as additional insulation.
In response to such a request, the landlord is legally bound to bring the property up to at least an E rating on the EPC (Energy Performance Certificate) scale. If they fail to comply, they may be forced to pay a penalty notice.
Damp walls and leaking roofs among other reported problems
The survey also found that 76% of tenants claimed the property they rented had an old, unreliable gas boiler, while 48% said their property lacked double glazing.
According to European Union data, an estimated 10 million or so British families live in a property with damp walls, rotting windows or a leaking roof. These issues can lead to damp, condensation and mould, particularly in older, single-glazed homes.
Now is the time to take action for your own property
PropertyLetByUs managing director Jane Morris expressed her disappointment over the proportion of tenants that had seen their requests for energy efficiency improvements to their property refused.
She said that with around one million tenants thought to be paying as much as £1,000 more for their heating each year than the typical annual bill of £1,265, "landlords that are currently renting out F and G rated properties should be looking at the improvements they can make and researching costs".
These are sentiments that we can only very much agree with here at Advanced Rent - indeed, help to upgrade property is available from such sources as the Energy Saving Advice Service (ESAS).
In any case, ensuring the energy efficiency of your buy-to-let property is not only a legal duty but also a moral and financial one, not least as properties that are less costly to run also stand to attract greater interest from tenants.
Rent Guaranteed Premium and Premium Plus insurance from Advanced Rent
Advanced Rent consists of a dedicated team of experienced residential property financiers and private equity investors, who put their utmost into devising and developing a range of innovative tenant referencing services and landlord insurance products.
It is this commitment to coming up with new ways to assist our valued clients that makes us especially proud of the latest additions to our complement of acclaimed services - Rent Guaranteed Premium and Rent Guaranteed Premium Plus.
A great service made better
Many of our blog readers will already be aware of our Rent Guaranteed service, which allows landlords to plan their finances better, secure their income (regardless of whether their tenants pay them upon eviction) and remove the costly burden of collecting rents and managing arrears.
However, Advanced Rent recognises that many Letting Agents prefer to sell rent protection insurance to their customers and so have introduced some industry-leading policies which can be distributed by their Letting Agent partners.
Rent Guaranteed Premium covers legal expenses of up to £50,000, property damage, nuisance and trespass, the cost of repossession and tenant eviction and the cost of prosecution defence in relation to tenancy matters. It also pays any unpaid rent due during the eviction process. Users of this product can also call upon the assistance of our direct UK based claims management team, as well as a 24/7 legal and tax advice line for any personal matters.
The finest rent guarantee insurance around
Premium Plus offers all of the above, with the addition of cover for the main heating system, plumbing and drains, power, toilet, security and keys should they be lost. Tenants can call a 24/7 Emergency Callout number, with five incidents per property every 12 months covered, each of them up to £500, including parts, labour and callout costs.
Both Rent Guaranteed Premium and Rent Guaranteed Premium Plus work according to the same process. First of all, we will obtain details from you or your Letting Agent regarding your property and the incumbent or potential tenant.
Next, we will ask you to complete an application form and supply completed references, or carry them out if you haven’t done so already. We will then pass this information onto our processing team. All being well, your policy will be issued and settled by direct payment or monthly account.
If you believe that Rent Guaranteed Premium or Premium Plus – or any of our other highly rated services – may be of benefit to you in your life as a landlord or Letting Agent, please don’t hesitate to contact us.
Discover more about our highly rated deposit replacement insurance
You may have already read our article discussing our recently revamped tenant referencing service; if you were intrigued by this innovative service, we are sure you will feel similarly about our deposit replacement insurance.
Deposit replacement insurance, for those unfamiliar with its definition, allows a tenant to move into a property without having to save a large, often-unaffordable sum as a deposit. Instead, the tenant pays an insurance premium equivalent to one week’s rent.
However, this service is not only of benefit to the tenant.
Solving problems for both landlords and tenants
As a landlord, a deposit replacement insurance policy will enable you to attract a wider range of tenants, as no incomer will be required to provide a hefty deposit. As a result, you will not have to rely on a costly national scheme to protect your tenant’s deposit, nor deal with any associated disputes.
Landlords taking advantage of Advanced Rent's deposit replacement insurance also benefit from damage (dilapidations) cover of up to six weeks’ rental value or if the tenant vacates the property without paying the last month’s rent or a proportion of that rent, you will be covered for that, too. However, if they buy rent guarantee insurance, they are covered for both.
We hope that you should never encounter tenants and scenarios such as these, but it’s always better to be safe rather than sorry.
Your prospective tenant – no longer having to save a considerable amount for a deposit or wait for a deposit on a previous property to be released from a deposit scheme – will also be able to move into your property much more quickly.
Talk to us today about deposit replacement insurance
Our deposit replacement insurance works in a very simple, easy-to-understand way. First of all, you provide us with details about your property and incumbent or potential tenant.
After that, you complete a simple application form, confirm the all-important inventory and ensure that you complete inspections every 26 weeks. You will also need to ensure that all tenants are fully referenced and credit checked and finally, your tenant - or yourself, if you intend to re-charge the tenant - buys the policy.
This unique, time-saving and cost-effective product is only available through Advanced Rent; a team of property and finance experts dedicated to taking much of the stress and hassle out of your life as a landlord.
Please don’t hesitate to contact our receptive team here at Advanced Rent with any further queries that you may have.
Introducing Advanced Rent’s innovative new tenant referencing platform
Here at Advanced Rent, we pride ourselves on our comprehensive range of services, and we are continually looking for new ways to help our landlord and letting agent clients.
Our tenant referencing service is one such way we have catered for property investors for several years now, but we have recently made some significant improvements to further increase its convenience, efficiency and relevance.
Tenant referencing is a breeze with Advanced Rent
Our tenant referencing platform has long provided landlords and letting agents up and down the country with a highly cohesive referencing service. However, we like to implement the latest available technologies into our products, which meant we were delighted when we were able to the introduce the capability to integrate via API.
API allows the referencing process to be performed truly seamlessly from start to finish. For example, tenant and property data are automatically transferred from a customer’s existing software, while instant credit file checks are also performed.
Letting agents also receive their own portal login to see real-time updates and view the progress of each application submitted.
Doing our utmost to please our client base
However, those aren't the only recent enhancements to our tenant referencing platform. That's because we have also partnered with Let MC, a leading letting software developer, and we are happy to say that our service now features much more information in the checks that it runs.
A full reference is provided for a fair price, with checks including a six-year credit history check and credit score, address verification and linked summary, employment and income verification, a previous landlord reference and verification, a guarantor validation and suitability check and affordability analysis. The tenant's legal right to rent the property is also assessed.
The results from our tenant referencing process are accepted and approved by DAS, Europe’s leading rent guarantee and legal expenses insurance provider.
Our tenant referencing and landlord insurance products are available nationwide to our letting agent partners, with our industry-leading online product distribution platform serving as an invaluable and powerful tool to aid the growth of a business.
Contact the professional team here at Advanced Rent today to learn more about just how much quicker and more convenient your tenant referencing process could be.
Demand for UK rental properties rises in 2016's first quarter
The first quarter of this year saw heightened demand for property to rent, a development sure to reassure many landlord users of Advanced Rent's acclaimed tenant referencing services.
The number of landlords reporting slight or significant increases in tenant demand in the fourth quarter of 2015 was 34%. The first quarter of 2016 saw that figure rise to 39% of landlords, with another 36% claiming demand to be stable.
This burgeoning popularity of rental properties only further affirms the importance of the tenant referencing services that Advanced Rent can provide, giving landlords the assurance that they are always taking on the right tenant.
High levels of tenant satisfaction
The figures derive from a survey conducted by BDRC Continental on behalf of Paragon Mortgages, which also found a very high level of tenant satisfaction - 79% of tenants surveyed stating that they were satisfied with their current landlord.
The survey also found that 69% of the surveyed tenants believed that the amount of rent they were paying represented good or very good value for money, while 85% of the tenant respondents stated that they considered their current rented property to be their home.
That may make it unsurprising, then, that the average length of time tenants are spending in their current properties is now seven years, with their average time spent in the private rented sector (PRS) in general almost 13 years.
Landlords agree on importance of private rented sector
89% of landlord respondents to the survey, meanwhile, expressed a belief that the PRS had an important role to play in accommodating those priced out of homeownership, while 74% agreed that it played a role in accommodating those denied social housing due to dwindling supply.
78% of landlords agreed that the PRS compensated to some extent for the decline of the social housing sector. Since 1991, around one million homes have been lost from the social housing sector.
John Heron, director of mortgages at Paragon, commented: "This survey clearly demonstrates that the PRS is increasingly providing longer term solutions in housing and that responsible and professional landlords are supporting the provision of housing to those that rely on the PRS for their home."
These trends in tenant demand and tenure look poised to continue as the year progresses, and Advanced Rent will be on hand to continue helping landlords to make the most of their properties.
UK landlord numbers swell to 1.75 million
Another encouraging indication of the present rude health of the buy-to-let property market is the news - drawn from HM Revenue & Customs data - of a stark jump in the number of UK landlords in 2013-14, from 1.63 million to 1.75 million.
Along with the 7% rise in landlords, the combined net income from rental properties has also rocketed; the already-impressive £13.1 billion recorded in 2013 standing at £14.2 billion the following year.
It is worth bearing in mind that the data in question only extends to 2014, meaning that the current figure for landlords and their combined net income is now likely to be much higher.
There are other factors in play that indicate the current figures regarding landlords and their income may be higher. The dawn of a new stamp duty regime on April 1st that heightened the upfront cost of property purchases led to a surge of people investing in buy-to-let properties in the preceding period, which drove up borrowing.
Low interest on savings, cheap mortgages and rising rents are other likely factors in the recent rise in people looking to rent out properties.
How Advanced Rent can help you to thrive as a landlord
As the number of people becoming landlords increases, so there are more landlords eager to safeguard their investment, minimise uncertainty and shore up their financial security.
Maintaining a career as a landlord can be difficult without some external assistance, even if the more negative headlines about the state of the market may be less than representative of the truth.
Advanced Rent was conceived not long after the infamous 2008 credit crunch, after we realised that many landlords were struggling to access the capital needed to expand their property portfolios.
Since then, we have slowly evolved into the company we are today, offering landlords across country services such as landlord tenant referencing, rent guarantee insurance and deposit replacement insurance.
These services, taken together, serve to reduce the likelihood of disputes, decrease risk and hassle and better ensure that your time as a landlord – whatever its length – is as smooth as possible for all concerned.
Feel free to contact one of the Advanced Rent team to find out more about our in-depth and wide-ranging expertise that could prove of immeasurable benefit to you as a landlord.
Average rental period in the UK stands at a year and a half
Being a landlord can be one of the most rewarding occupations of all, but it doesn’t come without its struggles and its worries.
Advanced Rent is dedicated to doing its utmost to address those common stresses, by offering services such as a rent guarantee scheme and landlord-tenant referencing that help to minimise the uncertainties inherent to life as a landlord, even in-between tenancies.
Furthermore, if one needed a further reminder of the importance of such services, they would only need to look to a recent study which found that the average rental period in the UK stands at only 18 months.
What about the regional differences?
The average rental period varied between different cities across the country.
It was found that Birmingham had the longest tenancy periods, with renters staying for approximately two years and four months in the same property. At the other end of the scale, Cardiff had the highest turnover of tenants, with the average property vacated less than a year after being filled.
Bristol and Leeds also both had a high tenant turnover, clocking in at 14 and 12 months respectively.
How long do vacated properties stay that way?
The study showed that it takes, on average, 22 days for a landlord to find a new tenant once a property is left vacant. This could amount to an average loss of £547 in uncollected rent.
Vacated properties in Birmingham were found to be filled the quickest – with landlords finding new tenants in just 11 days – while Liverpool and Aberdeen struggled the most, with it taking approximately 33 days to find a suitable candidate for a tenancy. This equated to landlords in Liverpool losing as much as £761 of their possible income, while landlords in Aberdeen suffered losses of around £913.
The study also found that 9% of tenants moved out early – i.e. before a tenancy agreement was meant to end. It was found that tenants in Aberdeen were the most guilty of this, with 19% of them leaving a property before the end of their tenancy agreements, while Leeds and Sheffield followed close behind at 13%.
Advanced Rent is here to give all landlords the utmost peace of mind, through services designed to help them navigate the ups and downs of life in the private rented sector. Please don’t hesitate to contact us for further information regarding our services.
Returns on buy-to-let property up nearly 10% year-on-year in England and Wales
The latest residential buy-to-let market index from property crowdfunding platform Property Partner will have provided heartening news for landlords up and down the country. This is especially important for many of those presently taking advantage of our wide range of landlord services here at Advanced Rent, including rent guarantee insurance.
Total returns for buy-to-let property in England and Wales rose by an impressive 9.57% in the year ending March 2016, accompanied by a 2.31% quarter-on-quarter increase.
A month-on-month decrease of 0.31% was also recorded, demonstrating the continued momentum of the UK buy-to-let market.
Regional differences more than apparent
The growth over 12 months was predictably led by London, where buy-to-let returns rose by 16.49%. The East of England and the South East followed close behind, with growth percentages of 13.18% and 12.1% respectively.
Next in line is the East Midlands, which showed an increase of 8.59%, and the North West and South West, for which growth figures of 8.44% and 8.42% were recorded respectively.
Finally, the West Midlands saw a generous rise of 6.08%, while Yorkshire and the Humberside and the North East showed the least growth at 4.51% and 2.57%.
Stamp Duty deadline motivates investors
Rob Weaver, Property Partner’s director of investment, pinpointed several causes of such impressive growth.
According to him, one of the main factors was most likely property investors rushing to beat April’s additional home Stamp Duty deadline, stating: “this was especially true of London, where annual returns were in double digits”. As for the North, he found that “from firsthand experience, the Northern Powerhouse regeneration plan is boosting investment activity in the North West, in particular Manchester.”
Although such figures seem to show a prosperous time for buy-to-let landlords, there are still many risks to investors, and it’s always best to do as much as possible to make your time as a landlord go as smoothly as possible.
Please don’t hesitate to contact Advanced Rent to find out more about our wide range of services, including the likes of tenant referencing and rent guarantee insurance, that are designed to shore up your financial security as a buy-to-let investor, giving you vital peace of mind.
First quarter of 2016 sees UK rents rocket
In rather positive news for landlords – who may choose to benefit from such services as our rent guarantee scheme, among others - rents in the UK, excluding London, jumped by 0.8% in the first quarter of 2016, equating to a 3.9% hike on the first quarter of 2015's figures.
The latest index figures from Rightmove found that the average rent in the UK - again excluding London - now stands at £761 a month.
Strong performances in previously unlikely regions
The strongest performing region in the index was the North West, where the first three months of the year saw a rise of 1.1%. However, the East of England’s annual increase of 5.9% outstripped not only that of the North West, but also those of all other regions.
Outside Greater London, the areas with the greatest year-on-year growth were as follows.
Harpenden - the Hertfordshire town saw an increase of 14.3%, with the average rent now standing at £1,217
Luton - a rise of 12.8% means that a house in the Bedfordshire town now sets back tenants £828 a month
Rushden - a bit further up the map, this East Northamptonshire town’s average rent is now £619 – an increase of 12.7%
Corby - also situated in Northamptonshire, Corby has shown a rent rise of 12.6%, with the average rent now £585
Salford - Salford saw a rise of 11.7%, equating to an average rent of £797
Sam Mitchell, Rightmove’s head of lettings, stated: “Whilst the highest demand for rental properties is often in the South and the East of England, this quarter’s data shows demand is growing in Manchester in places like Ashton-Under-Lyne and Stalybridge, so they’re worth considering this year as well.”
How are London's rental values faring?
The capital is infamous for its staggeringly high rent prices.
The index report found that rents in Greater London increased by 1.3% quarter-on-quarter, and are 1.6% higher than a year ago – placing the average rent in Greater London at £2,021.
These are all fairly impressive statistics, indicating a prosperous time for landlords up and down the country, but that still doesn’t mean that you can take a lax approach to your tenants and their rent.
Advanced Rent offers an array of services intended to make your time as a landlord as fuss-free as possible. Please don’t hesitate to contact us for further information.
English property market soars during March, showing there’s never been a better time to enter buy-to-let
The March of 2016 proved to be an expensive time for British home buyers. In fact, it was the most costly March for nearly a decade now. Transactions increased by 30% - equating to approximately 80,000 home sales, according to one new house price index. House price growth also accelerated by 6.9% year-on-year and 0.6% month-on-month.
These increases now place the average house price at a staggering £291,650 – an increase of approximately £18,745 compared to last year.
Stellar growth even outside London
It isn’t just London – a region famed for excessive house prices – that is responsible for these impressive increases. When London and the South East are excluded from the equation, the average house price growth still stands at 5.1% - a clear indicator that the market is still burgeoning outside these areas.
That isn’t to suggest that those areas didn’t show dramatic increases, however. The London property market showed the fastest growth of all the regions, with house prices rising 8.2% year-on-year – a hefty hike of £44,548.
Bath and North East Somerset saw the largest month-on-month increase in property prices, rising 5.3% or £18,603.
Little North/South divide here
It isn’t just the South of the country that is seeing price hikes. House prices are still increasing in many northern regions, too, with the average property price in Manchester hitting an all-time high of £174,448 – a year-on-year increase of 3.35%.
Renting is the way forward
Bumper property price increases like these are far from a mere trend of 2016, with the record actually standing at a year-on-year increase of 20.6% in London, as recorded in July 2014.
If the market continues to follow this trend, buying a house could become an even remoter ambition for many of today's young people. It may, therefore, seem that many such individuals' only alternative will be to rent, giving further encouragement to those contemplating becoming landlords for the first time in 2016.
As strong as the market is, it’s always nice to have some support. Advanced Rent offers a range of services for landlords, including - but not limited to - landlords rent insurance and a tenant referencing service. Please don’t hesitate to contact us with any further queries.
AIIC urges landlords to offer longer tenancies
Those who benefit from our many landlord services, including our rent guarantee scheme and tenant referencing service among others, may soon start to offer tenancies of a much longer period to their tenants - at least if they heed the advice of one inventory organisation.
The Association of Independent Inventory Clerks (AIIC) said that landlords should consider offering long-term tenancies to reflect levels of demand in the private rental market.
However, it said that landlords would also need to prepare accordingly for such a change in emphasis, giving more thought to administration and the furniture and interior design themes that they choose for their properties.
It’s more important than ever to keep yourself organised
Patricia Barber, the chair of the AIIC, stated: “When tenants stick around for longer, often the chances of confusion and disagreement over certain issues are increased when the tenancy does eventually come to an end."
"The longer time goes on, the more likely landlords and tenants are to forget details from the tenancy agreement or important information about the deposit, and that's why stringent administration, including keeping copies of everything and organising it accordingly, is so important.”
In other words; keeping evidence and records organised is vital, as is carrying out a professional inventory at the start of the rental. In fact, a detailed inventory, which has been signed and agreed by the tenant, is often considered the most important piece of evidence available to a landlord or letting agent.
Evidence of ever-longer tenancies
Official statistics show that average tenancy lengths are increasing. The English Housing Survey of 2014/2015 showed that the average tenancy length is now four years, an increase from the three and a half years recorded in the previous survey.
With tenancy lengths increasing, there’s more to be done to better cater for the needs of your tenants and make your time as a landlord go as smoothly as possible. Advanced Rent offers many services of direct benefit to landlords looking to shore up their financial security and maximise their long-term financial peace of mind, including deposit replacement insurance and rent in advance.
Please don’t hesitate to contact us to find out more about Advanced Rent can do to help you as a landlord.
Year to February 2016 sees 2.6% hike in rental values
As the leading provider of a wide array of services for landlords, including no deposit renters insurance, guaranteed rent, and tenant referencing services, here at Advanced Rent, we have supported many a landlord over the years, and have done so during the rental market’s more trying times.
This isn’t one of those times, however; rental prices in the UK have risen by an impressive 2.6% in the year to February 2016, according to figures from the Office for National Statistics. This equates to an increase of 2.8% in England, 0.7% in Scotland and 0.2% in Wales.
A promising regional breakdown
The findings of the report show that rental prices increased in all of the regions in England, with London seeing the biggest rent rise at 3.8%.
The report said that annual rent increases had been stronger in London than in the rest of England since November 2010. However, even if London was excluded from the overall calculation, national rent growth would be a still-impressive 1.9%.
The East of England showed the second biggest increase in rent, clocking in at 3% compared to 2.9% in January 2016. Third place goes to the South East, which delivered a 2.9% increase that was unchanged throughout the same period.
At the other end of the scale, the regions with the lowest annual rental price increase were the North East at 0.9%, the North West at 1% (both unchanged from January 2016) and then Yorkshire and the Humber at 1.3%, up from 1.2%.
A slightly different picture in Wales and Scotland
Wales's annual rental increase remains below that of England, while rental growth in Scotland has slowed slightly, currently standing at 0.7% as opposed to a high of 2.1% in the year to June 2015. For the most part, however, the picture painted of rental values is a positive one for landlords across the UK.
Advanced Rent is here to help landlords throughout England and Wales to make the most of their involvement in buy-to-let property. Please don’t hesitate to contact us for more information about any of our industry-leading landlord services, including rent guarantee insurance, tenant referencing and many more in-demand products.
Landlords enjoying best returns in 17 months amid widespread rent rises
Many of the landlords benefitting from Advanced Rent’s services, including landlord tenant referencing, may be happy to hear that the overall rents they can charge is rising throughout the country.
According to the a new buy-to-let index, average rent rates have increased by 3.3% over the year to February 2016, with the average monthly rent clocking in at £791 a month.
Further results from the index show that, when taking into account rent and house price growth over the 12 months to February, landlords made an average return of 12.7% on their investment – the highest percentage in 17 months.
However, there are some regional differences
It was found that rents rose fastest in the East Midlands, where average rent costs grew by 7% to £609 a month. The West Midlands also showed a notable increase of 6.3%, while the East of England as a recorded an increase of 6.2%.
London’s rent prices, meanwhile, have heightened by 4.8% to an impressive £1,238 a month – the highest monthly rent out of all the regions.
Every other region in the country - bar three - showed an increase in rent.
Wales, the South East and the North East saw rent prices plummet over the last 12 months, with the North East showing a -2.5% change in rent price. The average rent in Wales dropped by -1.5% to £558 a month, and rent in the South East recorded a minimal decrease of -0.1%.
These results leave us with the average monthly rent in the country clocking in at £791 and an average monthly growth of 3.3%.
In comparison, according to the Office for National Statistics (ONC), the average price to buy a house in the UK rocketed 6.7% in the year to December 2015, reaching a staggering £288,000.
This is surely good news for landlords, with the widespread rent rises and growth in tenant demand helping to create highly favourable market conditions.
Talk to Advanced Rent about our landlord solutions
Here at Advanced Rent, we take great pride in the all-encompassing assistance that we provide to landlords for their utmost financial security and peace of mind.
Feel free to contact our team for more information on our services for landlords, including rent guarantee insurance and no deposit renters insurance.
Latest rental index shows that more families are choosing to rent
To further reinforce the picture painted by recent statistical trends of a private rented sector in rude health, a new report has shown that more families with children are choosing to rent instead of buy.
This can only be good news for many landlords, who we hope will choose to benefit from our extensive range of services, including landlord tenant referencing, if they suddenly have an influx of families choosing to rent with them.
The more, the merrier
The rental index in question has shown that the number of tenancies signed by a single tenant has fallen dramatically in the last few years.
The proportion of tenants living on their own stood at 67% back in 2008, but was found to have practically halved to 33% by 2015. In the same period of time, the number of new tenancies signed by two tenants almost doubled from 28% to 52%.
Meanwhile, the proportion of new tenancies signed by three or more tenants trebled from 5% to 15% in those seven years. This information all shows a similar trend – that more families are choosing to move into the private rented sector.
The increasing popularity of joint tenancy
The most recent English Housing Survey further supports this claim. Released only last month, the survey found that the number of privately rented homes let to families with dependent children had risen from 30% to 37% in the last decade.
Various conclusions have been reached by private rented sector experts in relation to the figures, including that families are beginning to recognise rental property as an increasingly important alternative to owner occupation, as well as that many are seizing on the advantages of joint tenancy to minimise costs in the face of ever-increasing rents.
Such trends are all very positive for UK landlords who are especially interested in targeting families with their portfolio. With rent numbers in general still on the up, it is therefore all the more crucial for landlords to do everything possible to ensure their own peace of mind.
Advanced Rent offers an array of services to put your mind at ease as a landlord, from rent guarantee insurance to tenant referencing. For more information, please don’t hesitate to contact our professional and responsive team.
Tenants in East Midlands top English survey for satisfaction with landlords
A recent study has found that renters in the East Midlands are happier with their landlord than those in any other part of England.
The report, carried out by the National Landlords Association (NLA), gathered the average tenant-landlord satisfaction percentage for the nine regions of the country, producing a full breakdown of the results as follows.
The winners are...
Tenants in the East Midlands reported a landlord satisfaction rate of 83%, placing them at the top of the table. Not far behind were the North West and South West, which both clocked in at 82%. The South East showed a still-impressive satisfaction rate of 80%, with the West Midlands just underneath at 79%.
Slightly further down the table was Yorkshire and the Humber at 73%, then London and the East of England, which came in at 72% and 71% respectively. The North East sits at the bottom of the table, with a landlord satisfaction rate of 67%.
One of the report’s most unexpected findings is the stark contrast either side of the Pennines – the 82% satisfaction rate reported in the North West being some way ahead of the equivalent 67% figure seen in the North East.
Across all of the regions, eight in 10 tenants (79%) are satisfied with their current landlord.
Richard Lambert, Chief Executive Officer at the NLA, commented: "Good landlords make up the majority of the market, so it’s not surprising that the majority of tenants are satisfied.
"Private renting is far from the insecure, uncertain and unhappy picture that it is often made out to be, and these findings will help to reassure existing renters and those looking to make their home in the private rented sector."
However, Lambert also emphasised the importance of landlords better catering for the minority of dissatisfied tenants, pointing to the training and accreditation opportunities that the NLA provided to landlords to help them develop and improve their standards and consequently deliver a better service.
The findings emerged not long after the latest Housing Survey by the Department for Communities and Local Government (DCLG) found that the average private sector tenancy now lasts for four years, which is positive news for landlords all round.
Now is a promising time for landlords, who are advised to further ensure their financial security and all-round peace of mind by taking advantage of Advanced Rent’s acclaimed products, including its rent guarantee scheme and landlord tenant referencing service.
Please don’t hesitate to get in touch with Advanced Rent today for more information regarding any of the services that we can provide to make your life easier as a landlord.
End of the decline in homeownership in England - but rich opportunities remain for landlords
Users of Advanced Rent's landlord tenant referencing service will no doubt be interested to read that the decline in home ownership all over England - which has been happening gradually for the last 10 years - has finally showed signs of levelling out.
This is according to a survey that showed the latest figures, indicating that there were no fewer than 14 million people in the country who actually owned their home in 2015.
The survey was thorough in other areas, showing that there was a substantial number of local authority and housing association tenants who are expected to be able to buy the home they currently live in. This is a far cry from where things stood only months previously.
Housing Minister Brandon Lewis spoke about the previous years of decline and how, only a mere six years ago, the housing market had come to a point where people just couldn't afford to buy houses. At the same time, those in the building industry also couldn't afford to construct any houses and lenders couldn't afford to lend them.
What does this all mean for English landlords?
While the levelling-out of the homeownership figures may indicate decreased opportunities for landlords given the decreased demand that the private rented sector will presumably face from would-be tenants, it shouldn't necessarily spell bad news overall, with Lewis signalling that the government was also focused on "delivering a bigger and better private rental sector".
Continued investment in buy-to-let will doubtless remain critical, given that homeownership may not necessarily rise in the months ahead and indeed, may fall again. As a landlord, it is therefore crucial that you continue to focus on providing your tenants with the best living conditions as more choice opens up to many of them, while also diversifying your property portfolio.
Advanced Rent is here to help landlords, whether it's with our landlord tenant referencing service or any of our other highly rated products. We take our trade seriously and can offer all of the benefit of a seasoned and knowledgeable team.
If you would like to learn more about the services available to landlords here at Advanced Rent, please feel free to contact our team today for information.
Rent price increases observed across majority of the UK
A newly-released rental index has shown that residential rent prices have increased in almost all of the UK's 12 regions year-on-year, news that many users of Advanced Rent's landlord tenant referencing service will more than welcome.
The only region to see rent prices drop is the North West, with a decrease of 3.4% - from £646 per month to £624 per month. On the other side of the scale, however, the South East of England and the East Midlands have shown the highest annual rent increases, at 7.2% and 6.8% respectively.
The average rent in the UK, excluding the capital, is £740, while the average in Greater London is almost double that, at £1,510 per month. However, rent prices for new tenancies in Greater London are rising at their slowest rate in two years.
The data from the January index shows that rent prices in Greater London are 6.2% higher for the three months to January 2016 compared to the same period a year earlier, marking the slowest rate of growth in Greater London since March 2014.
A different perspective is given by the index's monthly data for the country as a whole, with half of the 12 UK regions having seen a rise in rent prices in the three months to January 2016 compared to last month, the other six recording falls.
In the UK, excluding Greater London, 0.2% higher rent prices were observed in the three months to January 2016 than in the three months to December 2015. In the capital, there was a 0.9% decline in rental values in the three months to January 2016, compared to the previous month.
Overall, there was much apparent good news for landlords in these new figures. The sustained rises in average private rented sector rents across the UK signal strong demand for rental properties as demand continues to outstrip supply, which should help to keep the buy-to-let sector in rude health for some time to come.
Here at Advanced Rent, we are happy to offer a wide array of services to landlords up and down the country, from our acclaimed Rent Guaranteed and Rent In Advance products to tenant referencing and deposit replacement insurance.
For more information on what Advanced Rent can do for you as a landlord, don’t hesitate to contact our team today.
Buy-to-let landlords risk total of £514 million in fines
Approximately 300,000 Landlords up and down the country are said to be risking facing massive fines for not placing their tenants’ deposits into a choice of government-backed schemes, a recent report reveals.
There are currently three government-backed deposit schemes for landlords to take part in; Deposit Protection Service, MyDeposits and the Tenancy Deposit Service. Failing to participate in one of these schemes offers landlords the possibility to unfairly retain their tenants’ deposits.
It has been said that the associated fines are unlimited, but are calculated at three times the initial deposit taken. Research conducted by the Centre of Economics Business Research for Money.co.uk gave a grand total of £514 million in fines, at approximately £3,750 per landlord (based on a typical deposit of £1,250).
If a tenant’s money is unprotected, it could result in the tenant becoming out of pocket or powerless and having to resort to legal action.
What’s the risk for landlords?
If you haven’t protected your tenants’ deposit, they could apply to a local county court. You could be ordered to either repay it or pay it into a custodial deposit scheme’s bank account within 14 days.
You could also be ordered to pay up to three times the deposit within two weeks of the order being made.
However, it isn't known how many landlords have been fined so far.
With more and more people choosing to rent instead of buy (homeownership in Britain having dropped from 70% to 63% between 2001 and 2014), it is essential that all aspects of your finance as a landlord are as secure as possible. Advanced Rent's many services are designed to provide peace of mind for landlords, whether in the form of our rent guarantee scheme, tenant referencing or any of our other services.
We have only been established for five years now, but each individual member of our team has a wealth of experience in the property and finance industry and is determined to do everything in their power to make your time as a landlord run a lot smoother.
To find out more about our extensive range of landlord-oriented services here at Advanced Rent, don’t hesitate to contact our team today.
House prices have rocketed 300% in the last two decades
A recent report from international real estate adviser Savills that will be of interest to many clients of tenant referencing services has revealed shocking house price growth in the last 20 years. The average sale price in 1995 clocked in at £66,110, which has increased to £262,847 today.
Savills studied two decades' worth of Land Registry data, which has recently been made available for the first time ever. The general trend is one of increase, but the situation does vary by region. 5% of wards across England and Wales have seen increases of 538%, or from £108,032 in 1995 to £689,649 in 2015.
There are now 66 wards with an average sale price of over £1 million, with 53 of these located in London. By contrast, just eight wards had an average sale price of more than £300,000 in 1995. Another incredible result of the report is the less than 6% of wards that now have an average sale price of less than £100,000, compared to 88% of all wards in 1995.
Differences on a smaller scale
There are still big contrasts to be seen in local terms, as well as between regions, London being a prime example. Oval, Lambeth showed a staggering 938% increase, while Erith, Bexley recorded a measly-by-comparison 218%.
Other top contenders for growth outside London included Brighton and Hove, Cornwall and Norfolk, while areas showing only modest growth included wards in Blackpool and Middlesbrough.
Such dramatic house price rises aren't just a phenomenon of interest to prospective and current homeowners, also having an inevitable knock-on effect on the buy-to-let market and the livelihoods of landlords.
While, on one hand, such high prices can trap many more budding homeowners in the rental market, potentially creating opportunities for landlords, they can also be responsible for restricting landlord yields, which has prompted many aspiring investors to look beyond London and the South East, to northern England and even Scotland.
Whatever happens with the housing market, you can make sure you are prepared as a landlord with the assistance of Advanced Rent. We offer a wide range of services tailored to the needs of landlords of all backgrounds during these often-unsure times, including - but not restricted to - tenant referencing services, rent guarantee insurance and rent in advance.
If you think our range of services here at Advanced Rent will benefit you or a landlord you know, don’t hesitate to contact us today for more information.
Buy to let landlords set to fare well against rising interest rates
Here’s some good news for buy-to-let landlords contemplating the right rent guarantee scheme for them: despite a 1.5% rise in the bank rate (another term for the base rate, or benchmark for interest rates set by the Bank of England) being on the cards, the sector is still a fairly stable one.
Majority of landlords have no problem with possible higher costs
Results from a recent survey from YouGov showed that approximately 75% of buy-to-let landlords felt there would be no problem in paying their mortgage if the base rate was to increase.
A staggering 60% said that, despite increased mortgage payments, their rental income would still be higher, while 40% said they already had enough money set aside to cover the expected higher borrowing costs.
Possible declines in buy-to-let purchases shouldn’t be off-putting
At first inspection, data from the Council of Mortgage Lenders (CML) does little to add to the positivity that YouGov’s data brings. CML reported that, after the first quarter, they expected buy-to-let purchases to decline throughout 2016, but that buy-to-let remortgaging would remain steady.
However, the likelihood of stress testing on buy-to-let mortgages has increased thanks to a wide array of lenders. This will probably lead to more reliable and dedicated landlords, which is highly positive for the sector.
Chief Economist for the CML, Bob Pannell, said that while the typical stressed mortgage rate being used by the industry - between 5.6% and 5.7% over the last year - was still some way behind the rates implied for lending to homeowners, a more forced pace of adjustment risked the destablization of the buy-to-let sector.
Mr Pannell also pointed out that tax measures have been announced in recent months, which could possibly have a negative effect on the future growth prospects for the buy-to-let/private rented sector.
As well as this, he noted that landlords have identified a range of tactics to cope with possible higher mortgage costs, including the positive cash flow that rental payments provide, in addition to ready access to contingency funds.
Pannell finally stated that “We will continue to work closely with the Bank of England, to reinforce its understanding of the sector, and to ensure very careful calibration of any forthcoming measures."
If an increase in mortgage prices is just around the corner, make sure you’re as prepared as possible with Advanced Rent. We offer landlords a range of services for peace of mind, including a tenant referencing service and a rent guarantee scheme. Don’t hesitate to contact us for more information regarding any of these vital services for landlords.
Advanced Rent holds Rent 2 Rent training day in London
Property investors and landlords were recently given the opportunity to learn more about the benefits of Rent 2 Rent, as Advanced Rent held a training day on this alternative and innovative route of entry into the private rented market, also covering its associated products for R2R landlords.
The training day took place on 6th December at the Holiday Inn in Camden Lock, London, where we showcased how Advanced Rent could help landlords to grow their business, save money and take full advantage of our relevant products and services.
How does Rent 2 Rent work?
Rent 2 Rent is a slightly different way of becoming involved in the private rented market. A Rent 2 Rent landlord will lease a residential property from its owner. The property will then often be modified to increase the number of bedrooms, turning a family home into an HMO (House of Multiple Occupancy).
This may have the effect of doubling how much rent the Rent 2 Renter can charge for the property. For example, instead of receiving £1,000 pcm for a family home, a landlord may be able to command £500 from each of four or more individual tenants sharing the property.
The lack of requirement for the Rent 2 Rent landlord to buy the property helps to make R2R a much cheaper and quicker way to enter the property market than the traditional freeholding landlord arrangement.
How can Advanced Rent assist?
Advanced Rent should be your first contact if you are a Rent 2 Rent landlord seeking guidance. Our team members possess more than 30 years' experience in the property market, as well as some 25 years' experience in the insurance industry.
Our deposit replacement insurance can be purchased by the Rent 2 Rent landlord to cover the deposit that he would otherwise need to pay to the property owner. In the absence of this insurance, multiple thousands of pounds would be tied up for the duration of the lease. With such money free to use, many R2R landlords with Advanced Rent choose to put it towards the leasing of another property.
Our training day is an indicator of just how successful the work of Advanced Rent is in spreading the word about Rent 2 Rent and how it could serve both aspiring and current landlords. For more information about our full complement of services here at Advanced Rent, or if you wish to know more about the benefits of Rent 2 Rent itself, feel free to contact us today.
British landlords see heightened tenant demand in third quarter of 2015
Recent research conducted by BDRC Continental has given the UK's rent guarantee insurance policyholders further reason to cheer with the news that private rented sector tenant demand has risen across the country in the third quarter of 2015.
Overall, 41% of the UK’s landlords reported higher demand from tenants in the third quarter. This figure represents a positive year-on-year increase in tenant demand for several regions of the country since the third quarter of 2014.
Looking at the figures on a regional basis, landlords in the East of England reported a massive 52% increase in demand in the third quarter alone. With the North East coming in at just 31%, this brought about a national average of 41%.
At the same time in 2014, the North East was only seeing a 23% increase in demand, rising to 31% this year. Outer London is another area to have seen a year-on-year increase in tenant demand, rising from 42% to 48%.
Rental yields, meanwhile, have remained at the same levels throughout 2015 - rental yields being the landlord's annual rental income as a percentage of property value. In the third quarter of 2015, according to the study, yields averaged at 5.6% nationally.
The survey findings stated that 17% of landlords nationwide reported yields of between 3% and 4%, while one in ten landlords claimed yields of at least 10%.
Different regions in the country reported different yields, Yorkshire and the Humber reporting the nation’s highest at 6.1%. Despite having the second largest increase in levels of tenant demand, London reported the lowest yields, at 4.8%.
Such figures will make overall positive reading for both current and prospective holders of a rent guarantee insurance policy. It certainly signals that the UK economic outlook is gradually improving and with it, the attractiveness of private renting as an active choice rather than as a 'marriage of convenience' for those unable to purchase a property.
However positive and encouraging this news should be, however, you can still ensure your time as a landlord goes as smoothly as possible with the help of Advanced Rent. We offer a wide range of services for landlords, including rent guarantee insurance, for peace of mind when you need it most - so feel free to contact our team for more information regarding our expertise in the private rented sector.
Rent2Rent landlords should take out our deposit replacement insurance
Landlords all across the country depend on the income received from their rental properties, but many are worried about the effect that the UK economy may have on their earnings. With this in mind, Rent2Rent schemes are becoming more and more popular because they act as a way to ensure a guaranteed rental income every month.
Landlords who need to bring an extra degree of certainty to their rental income are able to lease their residential properties to a Rent to Rent landlord. This landlord will take over the management of the property completely, then do everything necessary to increase its rental yield. This will involve more than conducting a refurbishment – the Rent2Rent landlord will also tend to modify the property.
Modifications usually involve increasing the number of bedrooms. This means that a standard family home can be turned into an HMO (House of Multiple Occupancy). So, a property earning £1000 per month as a family home could suddenly be earning £500 per month from 4 or 5 individual tenants – it isn’t uncommon for a Rent to Rent scheme to more than double the rental yield of a property.
Rent2Rent schemes are 100% legal, with landlords informed of every decision and guaranteed a rental income from their property. The Rent to Rent landlord will not usually live in the property, instead taking care of its day to day running to ensure that the main landlord receives their money without having to get their hands dirty.
At the same time, things work out perfectly for the R2R landlord. They do not have to buy the property outright, meaning that they can start building a portfolio faster than if they went down the traditional route.
If you’re interested in becoming an R2R landlord, consider taking out our Deposit Replacement Insurance. This will cover your deposit, which would normally be payable to the property owner. Instead of having your deposit money tied up in one building, you can use it to lease other properties and expand your R2R portfolio. If you’d like more information, just contact one of the team at Advanced Rent today.
Gap in rents between London and the rest of the UK rises once more
The already-prominent rent gap between London and the rest of the UK has widened again, according to a new rental index. Figures indicate that although there was a slight closing of the rent gap over the summer months, it quickly became a yawning one once more in the third quarter of the year - news that is unlikely to shock many rent guarantee insurance policyholders.
The capital continues to outstrip the wider UK
The rest of the UK showed a rent increase of 3.5% year on year, while London recorded more than double that at 7.5%. Scotland has seen the fastest pace of rent rise, however, with its own rents increasing by 9%.
Rent inflation has increased in the majority of regions of the country, with the exceptions being the North West , which saw a decrease of 4.9%, Northern Ireland, with a drop of 2.1%, and East Anglia, which saw rents fall by 1.2%.
On average, London tenants paid £1,560 per calendar month, over £800 more than the rest of the UK. Interestingly, the pace of overall rent rises has slowed during the autumn.
Tenants air their thoughts
The latest index report also included new research into tenants' own views on the current rental market. A large proportion of tenants, for example, said that they were renting their homes for the long term, and that they valued relationships of trust with landlords and letting agents.
64% of tenants added that they planned to continue renting for a year or longer, with 90% claiming to be happy with their current landlord. However, 71% of tenants surveyed said they would prefer to buy a home, 66% believing that saving for a deposit was the main obstacle preventing them from doing so.
The findings - of both the rental index and the tenant survey - drew much comment from experts on what they meant for the rental market as a whole. One prominent observer suggested that while the market was seeing upward pressure, it was vital for the sector to drive forward professional standards for the benefit of tenants, landlords and letting agents alike.
Certainly, here at Advanced Rent, we can only vouch for the importance of landlords living up to the highest professional standards. That is why we offer such an extensive variety of services, including rent guarantee insurance, to help you to minimise day-to-day uncertainty in your life as a landlord and give you vital peace of mind.
London rent controls 'would prompt many landlords to sell up'
Several proposed ideas for rent stabilisation in London's private rented sector have met with disapproval from the majority of landlords, a study has found - news that will interest many of those currently comparing rent guarantee insurance policies.
A London Assembly Housing Committee-commissioned report, carried out by Cambridge Centre for Housing and Planning Research (CCHPR), found that over 50% of landlords in the capital would greatly reduce the number of properties in their rental portfolios in the event of a “rent freeze”.
The CCHPR proposed six possible rent control methods as part of its study, including a one-off rent freeze for three years, or the linking of rent rises to wage increases.
Landlords of different backgrounds were surveyed, ranging from amateurs to commercial build-to-rent landlords. The results showed that the majority of landlords would carry letting as normal, as long as rents could be increased in proportion with inflation. However, 40% stated that they would sell some or all of their property if this stabilisation method was implemented.
The findings also showed that overall, landlords were not keen to offer longer tenancies. However, over half said they would be inclined to do so if tax incentives were available.
Tom Copely, chair of the London Assembly Housing Committee, commented:"Much has been said from all sides about rent controls but the debate has been sorely lacking in facts, so it's incredibly useful to have these set out in this report".
He continued that "There is no one size fits all system of rent control... In terms of what would work for London we need solutions that work for the millions of Londoners, especially families, in the rental sector."
However, David Smith, policy director for the Residential Landlords Association, said that the country would need more homes to rent to address the current housing crisis, warning: "This report reminds us of the dangers of rent controls which would in fact reduce supply, thereby increasing rents. Rent controls would also severely reduce standards in rented housing as investment dries up".
Contact Advanced Rent today for more information on such services of ours as tenant referencing, rent in advance and rent guarantee insurance - all designed to minimise the typical causes of uncertainty in your life as a landlord.
Pressure on landlords to properly maintain their property
The Local Government Association (LGA) has called for tougher punishments for landlords who break basic housing rules, in news that is sure to interest many a rent guarantee insurance policyholder. It comes after what have been claimed to be several shocking cases of negligence by landlords, and a lack of fit punishment afterwards.
In North-East London, a property housing 10 tenants was found to be infested with mice and cockroaches, while the kitchen was damp and mouldy. The punishment the landlord received was a £3000 fine. Another case in Coventry saw six tenants spending a full year in a property without working fire alarms and a suitable escape route, for which the landlord was slapped with an £100 fine.
Currently, the highest penalty for housing offences like these is a fine. Although they can theoretically be unlimited, a lack of guidelines often leads to landlords receiving fines based on their current financial circumstances.
Gerald Vernon-Jackson, the vice chairman of the LGA, stated that "For a landlord who owns hundreds of houses and he gets tens of thousands of pounds every month, it's like giving a Premiership footballer a speeding fine of £1,000 - it makes no difference."
Currently, the maximum fine for housing offences is £5,000, with the average being £1,500.
Richard Lambert, chief executive of the National Landlords' Association (NLA), commented: "The only way you're really going to have an impact on those people [rogue landlords] is to find some way of really tough sanctions." He emphasised, however, that such misbehaving landlords were in a minority.
The LGA considers persistent offenders to be a possible solution, its housing spokesman councillor Peter Box having stated that "The courts need to punish rogue landlords proportionately and there should be a consistent standard when it comes to licensing.
"Magistrates should be able to take the seriousness of the offence into consideration and jail rogue landlords who put lives at risk."
Although the NLA gave its backing to plans to clamp down on disreputable landlords, it said that the courts should have the discretion to impose financial punishments that the offender would actually be able to pay.
For total peace of mind when managing and letting your rental property, get in touch with Advanced Rent today. We offer a range of services, including rent guarantee insurance and full tenant checks.
Landlord immigrant checks drive need for proper referencing and insurance
Those who keep up to date with the latest news here at Advanced Rent and who are contemplating investment in rent guarantee insurance may wish to make themselves aware of an imminent new law that has already caused controversy well outside the world of buy-to-let.
A possible 'immigration bill', which is currently being debated in the House of Lords, could see landlords becoming responsible for immigration checks of their tenants.The bill, based on a scheme first introduced in the West Midlands, could see landlords face a jail sentence if they fail to check the residency status of their tenants.
Offending landlords could also incur a civil penalty of £3000 a night per adult resident. Prison sentences for those failing to carry out checks could be up to five years, and they could also have rent payments confiscated under the Proceeds of Crime Act. A blacklist of “rogue landlords” and letting agents who are repeat offenders will be created and they will be banned.
However, if the bill does go ahead, landlords will also be able to evict illegal immigrants much more quickly. When a person’s leave to remain in the UK expires, tenancies could be ended on the spot, even without a court order. The purpose of the bill, say ministers, is to ensure that landlords are meeting their basic responsibilities, amid a crackdown on those who accommodate immigrants in dangerous, overcrowded or unclean properties.
However, there have also been fears of racism in relation to the bill, despite the Home Office's insistence that checks would have to be made “on a non-discriminatory basis”. The UK Association of Letting Agents said that its members performed such checks daily, and that it wasn't up to landlords to police the country’s borders, while the National Landlords Association has previously warned that if immigration checks were left up to landlords, it may drive vulnerable renters into an “underclass of rogue operators” when faced with prejudice from more reputable landlords.
So is the possible immigration bill an opportunity for casual racism, or a preventative measure to avoid the exploitation of vulnerable people? Only time will tell - but one thing that it certainly will mean for many landlords is that the right tenant referencing and insurance arrangements have suddenly become even more crucial, if they are to properly vent prospective tenants and ensure that they have the right to reside in the UK.
Talk to Advanced Rent today about rent guarantee insurance and tenant referencing products that will make your life as a landlord easier - irrespective of the introduction of any immigration check requirement at some point in the future.
Housing shortage driving demand for rental properties
The Government has said that it wants to build a million new homes in England during the next five years. More details about the housing crisis are being revealed by a BBC Inside Out investigation, with the National Housing Federation having stated that 974,000 homes were required between 2011 and 2014.
Figures show that only 457,490 were built during this period - news that is unlikely to shock many prospective or current holders of rent guarantee insurance that have seen unprecedented demand for the rental housing in their portfolios.
The Federation said that 245,000 new homes needed to be built each year, adding that the shortage was “causing prices to soar”. Gill Payne, the Federation's director of policy and external affairs, said that families were struggling to realise their dreams of home ownership.
Factors that have been blamed for the housing shortage include slow planning procedures and developers buying land but not building on it. The Government made amendments to the National Planning Policy Framework in 2012 in order to speed up planning processes.
In 2014, 240,000 planning applications were given permission, compared to the mere 158,000 that gained the go-ahead in 2011. Some critics have accused the changes of making it easier for what have been branded “inappropriate and unwanted” developments to get the green light, while others claim that the rise in applications is merely in comparison to falling numbers in the aftermath of the 2008 global crash.
Still more experts have suggested that developments are being made slowly in order to artificially increase the price of property. Restrictions on housing associations and a fall in new council homes have also been cited as causes.
Here at Advanced Rent, we specialise in helping landlords to protect their income and make more money from their assets. We offer a range of bespoke insurance and financial products to residential landlords and can help you to get the capital that you need to boost your property portfolio. We can arrange for rent to be paid months in advance and bring you the peace of mind that you require to focus on your endeavours.
Why not get in touch with our expert team today to learn more about the various first-class services that we offer to landlords?
Buy-to-letters in Scotland reap big rewards
New research suggests that Scottish university cities are some of the top areas for buy-to-let investors to make profits in the UK. The study showed that Edinburgh offered the best average rent yield. Edinburgh served up a 6.11% yield, with other Scottish cities taking the third, fourth and fifth places.
Coventry was the only English city in the fop five, offering a yield of 6.03% and coming in second place. Do you need to find out more about rent guarantee insurance so that you can start taking advantage of such healthy opportunities north of the border? If so, talk to Advanced Rent today.
Cities in the north of England presented some of the worst opportunities for buy-to-letters to make profits. Middlesbrough had the lowest yield – a figure of just 1.47% - while the second worst yield was recorded by Lancaster, with Lincoln coming in third.
The study showed that the cities home to the best and most prestigious universities were not necessarily providing the best opportunities for landlords to make profits, with Cambridge failing to make the top 10 - the city recording a yield of just 3.65%. London also failed to perform spectacularly well, despite being the home of the London School of Economics, mustering a 3.97% average yield.
Scotland therefore seems to offer some of the very best opportunities for UK landlords, with some Scottish universities renowned all over the world. The growing reputation of Scottish universities meant that demand for accommodation was high, with significant numbers of students competing to live near their campuses, while house prices remained relatively low compared to London and other areas of England.
Although some may have expected London, Oxford and Cambridge to have performed better, high property prices are making it harder for buy-to-letters to make significant profits. Landlords in the south-east are spending a much bigger fraction of their rental incomes on paying off their mortgages than those in Scotland.
Contact Advanced Rent today to find out more about getting several months' rent in advance, which can significantly help your portfolio expansion plans. We have assisted scores of buy-to-let landlords to secure rent up front, and you can get in touch with us at any time if you have any queries about the services that we offer to buy-to-let investors across the UK.
International students helping London rental market growth
A new study has found that the 107,000 international students in London contribute £600 million to the capital's rental market. The most affluent students from such countries as Malaysia, Russia and China are spending up to £1,500 per week to live in popular areas like South Kensington, Knightsbridge and Mayfair.
The lettings firm behind the study used its own data as well as Government statistics, and examined factors including where students came from, where they lived, the kind of properties that they chose and how much they spent - resulting in figures that will interest many of London's rent guarantee insurance policyholders.
Around 107,000 international students are living in London, 40,000 of them from continental Europe and the rest from elsewhere. £1.32 billion is spent on tuition fees with £1.36 billion used for accommodation and subsistence. £600 million is spent on private lets and halls of residence costs, while £121 million is spent on accommodation by friends and family members travelling from outside the UK to visit them.
18% of international students in London originate from China, accounting for the largest group of students by country. 9% come from the United States, with 7% travelling from India. Other common countries of origin include Canada, Hong King, Malaysia and Nigeria. The firm conducting the research said that 20% of its clients in inner London were students, with half of these being international students. It said most of its student clients were between 18-22 years old and came from affluent backgrounds.
The company concluded that most of its student clients were being supported by their parents, though some paid for their accommodation via grants. According to the study, British students usually live in such areas as Bayswater, Notting Hill, Kingston-Upon-Thames and Shepherd's Bush. The most well-off students seem to come from China, Russia, Nigeria, Thailand and Malaysia, with the vast majority of overseas students paying between £500 and £600 a week for two-bed apartments in areas like Notting Hill.
Numbers of international students in London seem to be rising continually, with applications from overseas students up by 18% since the start of the decade – and by up to 30% for the most reputable universities in the capital. International students are often described as quiet, dedicated to their studies and tidy - observations that many of our own rent guarantee insurance policyholders here at Advanced Rent have also made when letting to this relatively vice-free category of student tenant.
New study suggests landlords should improve their safety standards
New research has showed that most UK tenants believe that their landlords are helpful and fair, but could do more on safety issues. In the study, 59% of the people surveyed said that they thought the rental price they paid was fair, while 48% said they enjoyed a good relationship with their landlord. Talk to Advanced Rent if you require advice on landlord issues like choosing the right rent guarantee insurance today.
The results said that only 6% of tenants would describe their relationship with their landlords as poor. The research also found that positive exchanges between landlords and their tenants were common. Nonetheless, the findings also showed room for improvement regarding security and safety.
43% of landlords, for instance, hadn't arranged an annual gas safety check, despite this being a legal requirement. 54% had failed to install a fire alarm, with 71% not providing a carbon monoxide alarm. 68% didn't organise an annual electrical safety inspection, and 74% failed to put locks on all external doors and windows. A worrying 78% didn't install a door chain or spyhole.
However, most UK tenants suggested that they enjoy a good relationship with their landlords. Only 2% said their landlord was “creepy”, with only 3% branding them as “dishonest”. 28% of tenants said their landlord had done something “nice” for them - such as giving gifts, letting their tenants off for late payment and offering extra help beyond what was outlined in the tenancy agreement.
85% of tenants did say that the Government should work harder to protect their rights. Here at Advanced Rent, we are pleased to read of a study backing our view that there are fewer “bad” landlords than many people might imagine there to be.
However, we do believe that some new landlords may need help in identifying what their obligations are in order to ensure relationships between themselves and their tenants remain as positive as possible. Landlords should receive assistance in getting to grips with the latest safety legislation and make sure that all annual checks are conducted so they can fulfil their duty of care.
Talk to Advanced Rent today to find out more about how you can protect your investment in your rental property.
Most private rental growth 'now in regional cities'
New figures indicate that the proportion of people renting privately living in urban areas has risen from 80% to 86% over the last ten years, with most of the growth involving regional cities away from London. Real estate firm Knight Frank looked at a range of studies and concluded that this growth looked likely to continue.
The firm has produced what it has called a PRS Yield Guide after developing its PRS index. It says that demand for rental property has increased due to increasing house prices, which have made it tougher for people who need to live close to their workplace to get on the property ladder - a trend that remains of interest to many a landlord making use of rent guarantee insurance.
Other figures say that tenants are now staying in the same homes for longer. The English Housing Survey showed that 24% of people had been in their current home for between two and four years, compared to 20% a decade ago. Rents continue to rise across the UK, mirroring the increase in wages and inflation. By the end of June, they had grown by 2.5% year-on-year, although there are still significant regional variations in rental growth.
Greater London rents have grown by 3.8% year-on-year – the biggest increase, while the East of England was up 2.6%. The smallest growth was seen in the North West and the North East, which recorded increases of just 0.5%. The report also said that "institutional real estate" investors were playing a bigger role in the market, attracted by the growing demand for rental homes and the returns on offer. Birmingham and Manchester have been of significant interest to such investors, and experts predict that their presence on the market should lead to an increase in "good quality, well-managed rental accommodation".
Advanced Rent can help you if you need advice on bespoke insurance and financial products for landlords. We have an exceptional track record when it comes to helping landlords to grow their property portfolios and release future rental income. You can count on us to deliver accurate, up-to-date advice as well as the products that best suit your circumstances as a landlord, so why not give us a call today?
2.5% rise in UK private rental prices over the year
Prices charged by rent guarantee insurance policy holders for private homes in the UK have continued their upward climb, the Office of National Statistics' most recent data has revealed. They went up by 2.5% over the 12 months to June 2015 in the UK as a whole, although there were inevitable regional variations, with England seeing the most pronounced growth and Wales, the weakest.
Nonetheless, that still equated to a 0.8% expansion in Wales' rents, compared to the 2.1% increase seen in Scotland and the 2.5% higher rents in England over that period. As a matter of fact, rents in every English region rose over the year to June, London's increase predictably being the biggest at 3.8%, with the East recording a 2.6% increase and the South East, 2.5%.
Since 2012 began, annual increases in England's rental values have varied between 1.4% and 3% each year. Not since January 2013 has there been such a big heightening in average rents over a 12-month period, which has been attributed to a combination of strong consumer demand and insufficient numbers of suitable properties.
This was a view shared by Platinum Property Partners founder Steve Bolton, who added that rental properties were not only sought-after by those unable to afford to buy, but also those who found renting to be a better fit to their lifestyle. Such factors were together serving to drive up the prices set by holders of rent guarantee insurance policies.
However, a number of additional costs that landlords are forced to deal with are also contributing to such rent rises, Bolton continued. These include the possibility of a rise in interest rates, as well as the restrictions on mortgage interest tax relief outlined in the Budget, which could prompt some landlords to attempt to recoup their profits by asking tenants to pay more.
With wages also on the up, some tenants will be able to stretch to any further increase in rents, although Bolton warned landlords that they "should be focussing on revisiting their strategy rather than passing their costs directly on to tenants." Here at Advanced Rent, we would humbly suggest that part of such a strategy could be investing in the rent guarantee insurance that would give them extra peace of mind in case their tenant does struggle to pay their outstanding rent on time.
Landlords see rise in both rental prices and demand
According to a recent report by the Association of Residential Letting Agents (ARLA), more than a third of letting agents in the UK saw rents rise last month – the highest recorded for the year – while a third saw a similar increase in short term enquiries.
ARLA’s survey demonstrated that 36% of agents experienced increased rents between May and June, marking the highest figure since tracking began. 80% of those questioned also expected private rents to continue to climb during the coming five years. These results were most significant in the East Midlands, with 48% stating that rents had increased in June.
As the summer holidays begin for university students, the interest in short term rentals has grown considerably, with 33% of agents mentioning an increase in enquires during June. This is a rise of 7% from the previous month’s already significant 26% rise. This has been most noticeable in the North West, with a reported 43% climb.
The confidence that letting agencies show in the idea that these trends will continue is based upon a solid foundation. The current generation is becoming increasingly reliant upon rental properties to provide a place to live while they save their disposable income for a down payment on their own property.
As ‘Generation Rent’ continues to grow, it’s only natural for rental prices to rise and for demand to increase. Landlords and letting agencies across the country will be able to take advantage of the situation while providing accommodation for this growing demographic of renters, but the increase in demand also means that they must protect themselves more effectively against problem tenants.
This is why so many UK landlords are choosing to benefit from Advanced Rent’s rent guarantee insurance. During these booming years, no landlord wants to miss out on rental payments due to untrustworthy tenants. Under this policy, the rent is paid on the due date each month, with payments continuing for up to two months if the tenant must be evicted.
All legal expenses are also covered as part of Advanced Rent's rent guarantee insurance policy, and comprehensive tenant credit and reference checks are given to ensure that landlords remain well-protected.
Research shows the need for guaranteed rent cover
We’re pleased to announce that a new study has demonstrated that close to half of the UK’s landlords are experiencing an increased demand for rental properties – a trend which is expected to continue over the coming year.
Of those surveyed by buy to let lender Paragon Mortgages, 43% have seen demand increase, a desire apparently driven by young people and families. 47% rented to young couples, 43% to young singles, and 42% to families with children. 51% of landlords surveyed were confident that the growth would continue over the next 12 months.
John Heron, the Managing Director of Paragon Mortgages, noted that: ‘It is no surprise that rental demand is steadily increasing. With continued stress on the housing stock driving prices up, tough affordability hurdles for would be buyers and a social rented sector under pressure as a result of renewed interest in right to buy, a steady increase in rental demand was practically inevitable.’
However, separate research undertaken by mortgage and loans provider Ocean Finance reported that more than half of tenants experienced problems with their properties during the last year. 15% complained that landlords were failing to fix structural problems, while a further 13% experienced delays in the replacement of broken furniture and household appliances. 14% were concerned with disputes over deposits and early eviction. 5% boasted that they would take matters into their own hands by refusing to pay rent.
A spokesman for Ocean Finance noted that: ‘One of the problems may be a lack of clarity over whose responsibility it is to maintain different aspects of a property’. Landlords taking advantage of Advance Rent’s rent guarantee insurance will not have to worry about those issues. They benefit from the increase in demand by receiving guaranteed rent each month – even for up to two months after someone needs to be evicted. At the same time, the included home emergency cover – which offers an all-day, all-night call-out number for tenants with household problems – ensures that all issues are taken care of.
For further information on how we can protect your rental income and prevent problems from arising with tenants, contact one of the team at Advanced Rent today, and ask about our rent guarantee insurance.
More property owners showing interest in short term lets
A new report from the Association of Residential Letting Agents (ARLA) says that more than a quarter of UK letting agents have recently seen a rise in inquiries for short term lets.
According to the study, 26% of letting agent members have reported an upturn. These tenancies are seen as particularly attractive to landlords looking for quick income and tenants seeking an alternative to hotels and guest houses. Short term lets are classed as lets under 90 days, and landlords that are interested in obtaining rent guarantee insurance for such a let are advised to get in touch with Advanced Rent.
ARLA has expressed concerns about the legal requirements attached to short term lets and urges homeowners wishing to make the most of the market to ensure a full understanding of the law. The body has stated that landlords should check their mortgage or tenancy agreement to make sure that they are entitled to rent out their properties, in addition to looking for a reputable agent who will be able to help them to adhere to the rules and find the right tenants for their properties.
Agents can help landlords to manage their property by taking on the responsibility for maintenance. Furniture will need to comply with safety legislation and safety checks will also have to be carried out before the property is made available for a short term let.
ARLA has also recommended that landlords arrange for someone to visit their property regularly if the let is only for a couple of weeks or so, such as while the owner is on holiday. Property experts are in agreement that short term lets offer a number of benefits to landlords and tenants, with landlords able to charge more per week than they otherwise would.
The rise in short term let enquiries is being partially attributed to sites like Airbnb, which caters for people looking for short term tenancies. ARLA is advising landlords to read its tips to "ensure they’re following the best practice."
ARLA Managing Director David Cox commented: "Being a landlord is a full time job, not a hobby, even short term lets. So it’s worth working with a reputable ARLA Licensed agent, who can take the job aspect out of it; allowing you to reap the rewards."
Housing rental prices rise in every UK region
An abundance of good news for rent guarantee insurance policyholders across the UK has been revealed in a new rental index - most notably, that every single region of the UK has seen an increase in residential rental prices during the three months up to May.
The UK average price of rent per month is now £935, or £738 when London is excluded. This difference is only the start of good news for London-based policyholders, as the index's findings also indicate that, following a period of relatively slow growth, the capital's housing rental market has recovered to a more typical growth increase.
Fresh numbers to crunch include that rents across the country have risen by 10.7% over the period of a year. This is the first increase in rents across the country since October 2014, and the third since the index started; the first recorded rise occurred in December 2010.
South West England topped the list for the biggest rent rises; average prices in that region are now 13.6% more than they were a year ago. Other impressive rises happened in Scotland, South East England and - of course - Greater London. These regions had respective boosts of 9.6%, 9.4% and 9.2%.
Although the average rent in Greater London is now, as recorded over the three months, £1,472, this rises to £1,506 when only new tenancies signed in May are considered. This is a major milestone, as it is the first time since the index began that average rent has exceeded £1,500.
Although many London-based holders of rent guarantee insurance policies might have been disappointed by the recent stagnant growth of the local residential rental market, during which the rest of the country could have narrowed the gap in growth rates between their markets and the capital's, London's price rises are approaching a double-digit percentage once again.
With a general election having just passed and the next general election unlikely to take place until 2020, the circumstances seem favourable for sustained growth in the private rental market long into the future. Demand looks set to keep rising and many people involved in the market, including rent guarantee insurance policyholders, should continue feeling the benefits.
Buy-to-let property valuations soar
New figures have shown a rise in buy-to-let landlord property valuations, while first-time buyer valuations have slowed down - a combination of events that will bring a smile to the face of many a potential or current rent guarantee insurance policyholder.
The data from Connells Survey and Valuation showed that while there were 33% more buy-to-let valuations last month than in May 2014, first-time buyer valuations slowed down by 4%. The month's buy-to-let valuations were also up by 3% on April, compared to a 2% drop in first-time buyer valuations. Experts are seeing the figures as proof that the buy-to-let market is thriving, with even better news surely to come for buy-to-letters after a pre-election period of uncertainty.
There was a 31% increase in remortgaging valuations between May 2014 and last month. Meanwhile, valuations for those who wished to move instead of remortgage were up 4% month-on-month, with a year-on-year increase of 8%. Experts say that the remortgaging market is going from strength-to-strength due to factors such as record low mortgage rates and low inflation. The Bank of England is widely expected to keep rates low over the coming months. Market analysts that say more and more home-owners are remortgaging their homes in order to upgrade them as a more affordable alternative to moving out.
Overall valuation activity rose by 3% between April and May, with a year-on-year rise of 13%. The figures are being seen as a sign of confidence retuning to the market. It is thought that Labour's failure to get back into Government and impose rent caps has contributed to the buy-to-let surge.
If you are a prospective or current landlord hoping to play your own part in the buy-to-let market's recent rude health, talk to Advanced Rent today. We have years of experience when it comes to helping landlords expand their property portfolios and can advise you on an array of topics, including landlord rent insurance and tenant referencing. We have been in the business since 2011 and have already made the final of the Innovation category at the 2013 Landlord & Lettings Awards.
Talk to us today as a potential or present holder of a rent guarantee insurance policy, about securing advanced rent and bringing forward your expansion plans.
Strong investment returns being delivered by UK private rental sector
Total annual returns amounting to £111.5 billion have been seen by British landlords over the last year, amid the continued growth of the private rental market. Rent guarantee insurance policyholders across the UK will be buoyed by the new buy-to-let report from Kent Reliance that indicates an almost 150,000-strong growth in households in the sector in the year to March.
77.4% of new households created across all tenures were in rented accommodation, according to the research. Such swift growth has led to the firm's prediction that - on the basis of current trends - there will be 5.5 million private rented households in Great Britain in 2020, up from 4.8 million now.
The sector's rapid growth has powered an attendant rise in value. The total value of property in the ownership of Great Britain's landlords was £990.7 billion as of the end of March, an 11% increase on last year's figure. This means that the sector is now worth the equivalent of 43.1% of the value of the UK's stock market, compared to a mere 12.2% 15 years ago.
The report also partly attributed the sector's rise in value to house price inflation. Current annual inflation may not be at the highs seen last year, but it is still strong at 7.5%, which is contributing to the similarly impressive current gross total annual returns. The return in rental income and capital gains that the average property generated as of the end of March was £24,221, a mere £1,000 shy of the past 12 months' average salary.
What this meant for the wider country was that £67.2 billion in capital gains were seen by property investors, alongside the 44.3 billion in rents that made up the aforementioned £111.5 billion annual returns figure. This was £5.8 billion up on the £105.7 billion total figure gathered by landlords in March 2014, but was lower than in September, when the highest capital gains in at least seven years contributed to a peak total return of £137.5 billion.
Such figures will help to persuade many a possible or current rent guarantee insurance policyholder that buy-to-let is no longer simply a niche asset class, but actually represents a feasible and profitable alternative to the stock market.
Kent Alliance's analysis indicates that the private rented sector's total value will hit £1 trillion in the next few weeks, reaching £1.07 trillion by March next year.
NLA backs new government proposals for landlords
The National Landlords Association (NLA) has supported new proposals from the government which, while centred on immigration, will also affect the UK's buy-to-let sector. Prime Minister David Cameron has unveiled a series of proposals that will be of interest to rent guarantee insurance policyholders, set to form part of a new immigration bill that will be announced in next week's Queen's speech.
Not only will councils will be given powers to crack down on unscrupulous landlords, but landlords will also be able to more quickly evict illegal migrants and a nationwide Right to Rent scheme will be introduced. The plans also include a new mandatory licensing scheme, with the idea of tenancies being cancelled on the expiry of visas to be consulted on as well.
NLA chief executive officer Richard Lambert commented: "We welcome the initiative taken by government to tackle the problem of criminals acting as private landlords to exploit illegal migrants."
He did, however, urge the government to ensure that councils were given the funding necessary to effectively enforce such powers, adding: "This would help drive up standards in the sector and sends a powerful message to criminals. One of the fundamental reasons that a minority of criminal landlords are able to get away with providing poor living conditions is that councils do not have the resources to make use of their already significant powers."
He suggested that instead of authorities being forced to go "cap in hand to the Treasury", they be allowed to retain the proceeds of the fines from prosecutions, meaning that they would have both the powers and finances for enforcement.
The NLA also saluted Cameron's plans to allow landlords to deal with illegal migrants faster, Lambert expressing his hope that this would deter those remaining in the country unlawfully.
The news of such proposals for UK landlords comes as it is revealed that residential rents across the country have gone up by 4.7% over the last 12 months, with rents also increasing by 1.8% for tenants renewing their contract.
Countrywide Residential Lettings' latest report also found a 10-year high in the proportion of UK properties being purchased by landlords with a sitting tenant. It is yet another statistic that will interest many of those comparing rent guarantee insurance policies, as the nationwide private rented market continues to show rude health.
Stable election result should reassure landlords
Property experts have signalled that house prices in the UK will be on the up in the wake of the Conservatives' general election victory, which should also provide plenty of encouragement for many prospective holders of a rent guarantee insurance policy to invest now.
Many potential property buyers - particularly those from overseas - had been deterred from making a decision as the polls suggested a possible Labour minority government and the associated mansion tax, which stood to especially impact on the London market.
Prime country house prices could even rise by as much as 10% in the coming weeks in light of the news, Edward Heaton of the Heaton and Partners property search agency has said, adding: "There will be bun fights in the next few weeks for the best houses which come to the market as confidence in the top-end of the regional market returns.
"For many operating in the prime property market, there is a palpable sense of relief at the election outcome as there were some genuine concerns about the possible impact of mansion tax tied in with the attack on non-doms proposed by Labour."
Meanwhile, Michelle van Vuuren, managing director of residential development at Sotheby's International Realty UK, said that the result would make for a more stable market, adding that the firm was already receiving calls from would-be global buyers.
She continued: "The removal of the uncertainty that has clouded the last year of the coalition will allow developers to plan confidently for the medium term with a consistent economic policy. Having said that, we do hope to see the Tories come good on their annual pledge of 200,000 new homes and freeing up brownfield sites for development."
Another industry observer expecting a quick return of confidence to the market is Andrew Ellinas, director of central and north west London agency Sandfords. Tipping a late spring bounce in activity in response to the news, he urged those contemplating selling to "make a move now and beat the rush" - something that should alert potential investors in buy-to-let property in the capital.
Declaring that buyers, sellers and the property industry as a whole could now look to the future with confidence, Marsh & Parsons chief executive officer Peter Rollings said that a 'mansion tax' affecting £2 million plus properties would have stifled activity in London and the wider South East.
He concluded, in words that many prospective rent guarantee insurance policyholders are sure to note: "Any such tax could also have had implications on lower rungs of the property ladder too, so it is not just wealthier homeowners who should be counting their blessings. The post-election feel good factor could kick in immediately and 2015 may prove to be a reversed version of 2014 in starting slowly and finishing strongly."
English and Welsh rents near record high
A new buy-to-let index from two leading letting agents has given further reason for cheer among rent guarantee insurance policyholders, revealing that rents in England and Wales have gone up by 3.7 per cent over the last 12 months, bringing them to £768 per month. Rents have not seen such a steep rise over a year since the 12 months to April 2013, when a 3.9 per cent yearly increase was recorded.
Rents rose by 0.3 per cent in the month between February and March, meaning that they are now just £2 shy of the all-time record high of £770 per month that was recorded in October last year. Especially pronounced annual rental growth - of 12 per cent - was racked up in the East of England, making it a considerably more expensive place to rent, on average, than the South East.
An unsurprising second place in the list for annual rent rises was London, with its 5 per cent higher rents than in March 2014, compared to the 3.3 per cent increases in rents seen over the last 12 months in the Yorkshire and Humber region. East of England also saw the steepest month-on-month rent rises of 2.5 per cent since February, shading the North West's 2.3 per cent figure.
Another key metric covered by the index was gross rental yield, which was 5 per cent on a typical rental property in England and Wales as of March 2015. Taking into account continuing property price growth and better void periods between tenants, but not such costs as maintenance or mortgage repayments, the index listed total annual returns on an average rental property as 12.2 per cent in the 12 months to March. The equivalent figure a year ago was 10.8 per cent.
It all means that in absolute terms, over the last 12 months, the average England and Wales landlord has enjoyed a return of £21,078, prior to such deductions as the aforementioned mortgage payments and maintenance. Within that figure, rental income accounts for £8,259, with £12,819 attributable to capital gain.
What's more, if current trends continue, landlords could have a 14.5 per cent total average return to look forward to over the next 12 months, amounting to £26,861. When this is combined with the mere 7.4 per cent of rent now in arrears - down from February 2015's 7.6 per cent figure and the 7.8 per cent seen in March last year - it's clear that this is a time of plenty for many British holders of a rent guarantee insurance policy.
Buy-to-let property 'set to gain popularity as a pension fund'
New pension freedoms that recently came into force in the UK could lead to significant numbers of over-55s entering the buy-to-let market for the first time, an online letting agent has claimed. Property Let By Us has released the findings of new research showing that 70 per cent of younger landlords considered their buy-to-let portfolio to be their sole pension fund.
However, the study also found that a mere one in five landlords regarded their property portfolio as part of their pension provision. An additional third of landlords were expanding their portfolios as an investment for their children to reap the benefits from in the future. More than a third of landlords expected to have completed their mortgage repayments by the time of their retirement, while a mere 6 per cent indicated that they planned to sell their properties when they retired.
Such findings will be of great interest to many of those considering entering the buy-to-let market and taking advantage of Advanced Rent's acclaimed rent guarantee insurance and the peace of mind that it can provide. Prospective and current landlords alike will also be intrigued to read that 28 per cent of respondents to the aforementioned poll intended to spend 2015 expanding their property portfolios. Meanwhile, more than a third accepted the help of a letting agent with the management of their properties.
Jane Morris, Property Let By Us managing director, commented: "With mortgage rates at an all-time low and rents rising across the UK, it is no surprise that more and more investors are entering the buy-to-let market. Our research shows that many landlords see their property portfolios as a long term investment and a major part of their pension planning."
However, she did also emphasise the importance of potential new retiree landlords being careful in their choice of property and location. Chestertons estate agent recently released a report showing that Birmingham, for example, enjoyed a 6.8 per cent average gross rental yield, compared to the 6.4 per cent delivered to Manchester landlords and the 6.3 per cent typical yield in Sheffield. Leeds and Cambridge had 6 per cent and 4.6 per cent average yields respectively.
Morris therefore urged those contemplating becoming a landlord to talk to their local estate agents about rental demand in the area and what they could expect with regard to monthly rental income - advice with which we can only agree here at Advanced Rent.
Void periods drop to lowest level for 13 years
Many a rent guarantee insurance policyholder revelling in the more buoyant buy-to-let market of recent times will be further reassured by new research, indicating that the average annual void period for the UK's residential landlords has reached its lowest level since 2002.
The average void period, which is the length of time separating rental tenancies for residential property, was a mere 2.4 weeks as of the first quarter of 2015, which is actually the lowest that the Paragon Mortgages survey has ever recorded. It compares to the 2.6 weeks for which the average void period lasted as of last year's final quarter.
With the equivalent figure being 2.8 weeks in the first quarter of 2014, the latest results show a 14 per cent drop in the average period of time for which a landlord experiences a void. It continues a trend of low or declining void periods since 2013, with the exception of the middle of that year, when there was a brief marginal climb in the average to three weeks.
John Heron, the specialist buy-to-let mortgage lender's director of mortgages, commented: "Void periods have been consistently low for some time, which is not unexpected when you also look at what landlords are telling us about the level of demand from tenants."
Indeed, another of the survey's findings was that for more than four in 10 landlords (42 per cent), there was either a boom or growth in tenant demand, which was described as stable by 54 per cent of landlords.
As if these were not encouraging enough figures for holders of a rent guarantee insurance policy, it would seem that they are in the buy-to-let sector at precisely the right time as far as the English Housing Survey is concerned. It suggested that a shift is presently taking place in the housing market, the private rented sector gaining in popularity among the nation's residents.
Figures released by the survey this month show that private renting now accounts for 4.4 million households, as opposed to the social rented sector's 3.9 million households - Heron declaring that "this change in housing dynamics appears to be a continuing and long-term trend."
Residential rents increase in most UK regions
UK landlords are seeing ever-higher rental values from their properties, with a new analysis from Countryside suggesting that new tenancy rents have grown by 1.7 per cent in the last year - bringing the average monthly payment to £876.
Greater London saw an especially healthy increase in its rents year-on-year - by 8.4 per cent - which will be welcomed by a wide range of rent guarantee insurance policyholders. Indeed, February was a positive month for rents across the UK, with values increasing in the majority of regions.
Landlords or potential landlords looking to invest should be aware that two or three bedroom properties are showing the largest degree of growth in rental income. The yield on two bedroom properties is up 4.5 per cent year on year – enjoying a month-on-month increase of 0.7% - while the yield on three bedroom properties is up by 3 per cent.
In terms of location, central London saw the greatest month-on-month increase in rents, followed by the Midlands. Greater London experienced the largest year-on-year increase, climbing 8.4 per cent to an average monthly payment of £1,251.
UK landlords with properties in central London, Greater London or the Midlands are likely to find themselves enjoying 2015, with what should prove to be increasingly large monthly payments throughout the year. However, landlords in all areas should make sure that they’re properly protected by taking advantage of Advanced Rent’s rent guarantee insurance.
For a fixed fee of just 6 per cent - with no excess charges or hidden costs – our rent guarantee insurance makes certain that your rent is paid on time, and even covers you for up to two months in case tenants need to be evicted. Instead of having a dormant property cost you money due to untrustworthy tenants, you’ll be able to take your time to find new people to move in without experiencing a dip in your income.
We even provide cover for home emergencies and legal expenses, and conduct exhaustive credit checks for every potential tenant. Visit the Advanced Rent website for a closer look at our complete range of tenant referencing and landlord insurance products that have long helped to make buy-to-let investors' lives easier.
Rents rise in nine out of 12 UK regions in January
If a prospective user of Advanced Rent's landlord tenant referencing service needed any further encouragement to enter or expand their presence in the private rental market in the early period of 2015, they would only need to read the findings of a new rental index indicating a 2.5 per cent rise in residential rents for new tenancies in the UK during January.
It means that rents increased in nine out of the 12 regions that the index covered, the UK's average rent now sitting at £889, or £707 if Greater London is excluded. That former figure compares to the £867 that UK tenants were paying on average as of the end of last year, and the £799 that they were forking out in January 2014. The East Midlands, Scotland and East Anglia saw the steepest rental price growth of 6.2 per cent, 5.7 per cent and 5 per cent respectively.
Looking at these statistics on a regional basis, the East Midlands' average rent is now £617, which is 6.2 per cent up over the month and 7.2 per cent higher than a year earlier. The average rent in Scotland, meanwhile, is £651, which is 5.7 per cent more than in the previous month and an increase of 9.4 per cent on a year-on-year basis.
The monthly rise in East Anglia's rents is 5 per cent, contributing to a 1.6 per cent increase over the last year. It means that the region's average rents are now £762. That compares to a South West average of £830, rents there having rose by 3.5 per cent on a month-by-month basis and by 10.2 per cent since January 2014.
There was a 3.2 per cent heightening in Yorkshire and Humber's rents over the first month of the year, equating to a 10.1 per cent year-on-year rise there to £613. But Greater London was where the most pronounced increase could be observed. Average rents there were £1,425 in January, which was 2.3 per cent higher than a month earlier and 13.4 per cent steeper than in the first month of 2014.
While other regions have seen more muted changes to their rental values, the overall picture remains a very positive one indeed for the typical landlord contemplating the use of a landlord tenant referencing service. Advanced Rent offers just such a service of the most comprehensive nature, encompassing the likes of a six year credit history, address verification and a guarantor suitability check.
The Warranty Hub ceases trading exposing the danger of deposit warranties
Here at Advanced Rent, we realise just how important insured products like deposit replacement insurance, rent guarantee insurance and home emergency insurance are for both the psychological and financial wellbeing of landlords, which is why we go out of our way to offer fully underwritten products from market-leading insurers. All of our products such as Rent Guaranteed, Rent In Advance and Deposit Replacement Insurance are backed by DAS.
DAS is an A-listed London-based insurer with 40 years’ experience and c.£500 million in assets, and is owned by Munich Re., the world’s largest reinsurer.
The Warranty Hub was a company specialising in such products as deposit replacement warranties, deposit shortfall warranties and rent protection warranties. However, in January this year forum posts warned landlords and letting agents that the company had ceased trading, and that any outstanding claims would not be valid given that (as is normal with warranties) The Warranty Hub was underwriting policies itself.
There are several lessons to be learned from the Warranty Hub. First of all, landlords should remind themselves of the difference between a warranty and insurance. Arranging and providing insurance contracts is a regulated activity, which means the company offering it to you must be authorised by the FCA. A company selling warranties does not need to be regulated at all.
If the company selling an insurance policy ceases trading the policy is still valid. Conversely if a warranty provider does likewise the contract will most likely not be honoured. There is also no redress to the Financial Ombudsman with a warranty.
It is crucial to choose a genuinely reputable provider of insurance-backed products. Advanced Rent, for instance, is helmed by a team of seasoned insurance experts who have already become highly respected in the property rental market since the company's establishment in 2011.
Contact Advanced Rent today about landlord insurance products that you can trust - both now and for many years to come.
Greater demand than supply pushes up UK rents
Clients of Advanced Rent's landlord tenant referencing service aren't merely benefitting from a full reference for a fair price, with many also enjoying healthy rents. That's the indication of lettings agency Countrywide's most recent analysis report, which showed a 2 per cent year-on-year rise in the UK average rent to £836 per calendar month.
The figure is one among many in the report pointing to demand now outstripping supply in the UK rental market - a situation that spells good news for landlords. One bedroom properties saw their rent jump by 8.5 per cent to £751, while for two bedroom properties, tenants are now being set back by £810 per month, a 3.6 per cent increase. Three bedroom properties, too, commanded higher rent - by 1.6 per cent to £930.
Among the regions, the most pronounced annual rent rise was seen in Greater London - it went up by 10.6 per cent to £1,265, which beat the 6.1 per cent by which Wales' rental values crept up to reach £666, as well as the 4.1 per cent improvement for South West rents, to £765. Newly let properties also commanded heightened average rents of £883, a 2.8 per cent rise. One bedroom properties in this sector edged up by 3.3 per cent year-on-year, and two bedroom properties by 1.9 per cent.
As for renewed tenancies, rents for these averaged £835 per calendar month, the steepest annual rent increase for this sector being among one bedroom properties at 3.3 per cent. The equivalent figure for two bedroom properties was 1.9 per cent, while a 1.7 per cent rise was recorded for three bedroom properties, to £875.
Rents for renewed tenancies were up for most areas of the UK in January, Greater London's 4.7 per cent rise to £1,110 only being shaded by Scotland's 5 per cent year-on-year increase to £634. Increases in average rents were recorded for all property sizes, the biggest for one bedroom properties, which are now worth £688 per month - a 2.7 per cent rise.
Also pleasing news for anyone making use of the landlord tenant referencing service of Advanced Rent is that almost all regions have seen decreased year-on-year arrears. In the North, they remained the same, while even in central London, they only heightened marginally by 0.6 per cent.
Nick Dunning, Countrywide group commercial director, stated: "Renting is a flexible and relatively hassle free way of living which suits many people's lifestyles... With a growing population of lifetime renters, increasing the amount of good quality, affordable rental accommodation is needed to meet this demand.
"With banks making it easier for landlords to offer longer tenancies and with more competitive buy to let mortgage products available, now is an ideal time for landlords to expand their portfolios and provide a more diverse range of affordable rental properties throughout the UK, not just in London and the South East as many would expect."
Average UK rents on the up towards the end of last year
Landlords will be pleased to learn that new research conducted by Countrywide Residential Lettings has indicated that a slowing of the sales market during the final six months of 2014 has made rental accommodation even more profitable, with average rents up 1.8 per cent. Even more encouragingly, they noted a 4.2 per cent rise in average rents for new lettings, making the start of 2015 a prime time to take on fresh tenants.
These findings fly in the face of traditional reports, which commonly see the first half of the year being more active. However, 7 per cent more potential tenants were registering during the final half of the year than in the first half. This created an annual growth rate of 3.7 per cent during the first six months of 2014, which rose to 4.2 per cent in the final six.
Industry experts point out that these figures are likely due to a decrease in the number of tenants who are looking for their own property. In the words of Nick Dunning, Countrywide Group's commercial director: "This has kept demand for rental accommodation at a high, allowing more landlords to stand firm in the face of attempted negotiation on rent."
The current housing situation has naturally put landlords in control when it comes to new tenants, but even those with sitting tenants are likely to benefit, with current rents increasing from 1.7 per cent to 1.8 per cent during the same part of the year. Over one quarter of those tenants who decided to stay put in their current property at the end of the year saw rents rise over 2.9 per cent annually.
Ultimately, according to Dunning: "The outlook for the rental market in 2015 seems to favour landlords. With lower rates of house price growth expected in 2015, a tenant thinking about buying seems likely to be in less of a hurry to do so than they were a year ago."
Taking the current climate into account, there's never been a better time to take advantage of Advanced Rent’s landlord tenant referencing service. Our results are approved by the DAS and provide a thorough background check to make sure that you receive the full benefit of this period of growth, without suffering the negative effects of problem tenants.
Leicester, Southall and Cambridge among UK lettings hotspots
Landlords contemplating the use of Advanced Rent's comprehensive landlord tenant referencing service and seeking further assurance that they have chosen the right part of the United Kingdom in which to invest will certainly find the latest annual review of lettings intriguing reading.
The rental index, updated on an annual basis, revealed huge jumps from 2013 to 2014 in rents in Leicester, Southall and Cambridge, of 45 per cent, 38 per cent and 24 per cent respectively. On average, UK rents in 2014 were 6.6 per cent up on those the previous year, with tenants now paying an average of £867 in monthly rent.
Greater London and Scotland saw especially pronounced increases in year-to-year rents, of 12 per cent and 9 per cent respectively. Right now, landlords in the capital can expect to charge an average of £1,393 per month. A 1.6 per cent annual rent increase was recorded for the United Kingdom as a whole.
Meanwhile, on a monthly basis, four regions saw a rise in their average rents - the North East (5.1 per cent), the North West (1.6 per cent), the South West (0.5 per cent) and the South East (0.2 per cent). Growth was the main theme in the rental market over the last year, with house hunters still often choosing to rent privately as a result of ever-rising property prices and more stringent mortgage criteria.
Such a situation is of obvious benefit to those investing in the landlord tenant referencing service of Advanced Rent, especially given that 2015 is expected to see continued rises in rental property demand. It means that the UK's rental prices also look sure to increase over the course of the year, particularly as real incomes go up.
The figures also suggest that the market has seen a typical end of year seasonal adjustment, with rental prices decreasing in many of the UK's regions in the last month of the year. This contrasts with the annual variation statistics for that month, showing positive growth for nine of the country's 12 regions.
It all gives plenty of reason for optimism for landlords across the UK who are hoping to make 2015 a lucrative one with the help of Advanced Rent's highly-rated insurance and referencing products.
Problem tenants still causing concern for unprotected UK landlords
Anyone making use of Advanced Rent’s landlord tenant referencing service will know that they made the right decision when they read about the recent survey of UK landlords conducted by PropertyLetByUs, the well-known letting agent.
Its report indicated that problem tenants were by far the highest concern weighing on the minds of landlords. A quarter of all those surveyed stated that late rent payments were a perennial reason for stress, while 20 per cent reported that they worried about dealing with 'tenants from hell'.
The associated risks of accepting tenants without using a referencing service were also highlighted by this survey. 18 per cent of UK landlords were anxious about property damage, while deposit disputes caused concern for 13 per cent, and the need for evictions created worry for 7 per cent.
In stark contrast, only 1 per cent expressed anxiety over tax issues, despite the recent HMRC focus on undeclared income.
Even more surprising is the fact that these concerns are still so pervasive after an extremely successful year for UK landlords. 2014 saw a rise in demand for rented property, with only 1 per cent of landlords finding that looking for tenants was stressful. The aforementioned negative situations appear to have almost always arisen after contracts were signed.
In the words of Jane Morris, managing director of PropertyLetByUs: "On the whole, 2014 was a good year for landlords, with increased tenant demand, rising rental income and asset value growth but late payment of rent is still a big issue for landlords."
Morris said that 2015 is set to be another good year for landlords, although research conducted by the National Landlords Association indicated that a rise in late payments could occur in January after the excesses of the Christmas season.
With demand growing but problem tenants still causing difficulties for many landlords, there’s never been a better time to start using our landlord tenant referencing service. Among other security measures, the service provides a six year credit history, verifies employment and income, gauges credit scores and performs guarantor validation and suitability checks.
All results are approved by the DAS and are available to provide you with perfect peace of mind when renting out your property. For more information, contact one of the team at Advanced Rent today.
Strong rental yields attract London residential investors north
Landlords in London and the surrounding area are always looking for sources of reassurance when investing in new buy-to-let property, alongside the use of such services as Advanced Rent's landlord tenant referencing service. Further evidence of that has been forthcoming in a new study from Sequre Property Investment, which found that nearly two thirds of buyers of investment property in the north of England hail from the south east.
The research also discovered that more than a third of such buyers are from the Greater London area, which suggests that such investors are finding property prices in their home regions to be too high, tempting them to venture north in search of bargains. The firm said that such cities as Manchester, Liverpool, Salford and Preston were proving too much of an attraction for such property purchasers on account of their healthier returns and less daunting entry-level prices.
Manchester, for instance, delivers average gross yields of 8 per cent, compared to the 4.5 per cent possible in London. Meanwhile, those wishing to purchase a typical two bed investment property will be set back about £300,000 in the capital, but only around £90,000 if they opt for the northern city. Sequre has also pointed to talk of a cooling London and south east property market as having a detrimental effect on investor confidence in these areas, leading them to consider northern cities instead.
These northern cities, after all, have been characterised by prices rising at a more sustainable rate than their southern counterparts, as well as continued strong demand from tenants, especially young professionals. The north's profile has also been boosted by the BBC's relocation and such developments as MediaCityUK, which have further helped to draw in investors from outside the region.
Cash buyers made up a significant proportion of those London-based investors purchasing in the north, at 42 per cent, which has been largely attributed by Sequre to the lower entry prices lessening the need for borrowing. Many such investors are coming up to retirement age and are interested in boosting their retirement income, and are therefore anxious to de-risk their investment and avoid overleveraging.
The most popular property types are one, two and three bedroom buy-to-let properties in new build developments of five years of age or less, given the minimal maintenance and hassle-free investments that they represent. Such findings certainly give food for thought for many of those contemplating investment in a buy-to-let property portfolio alongside Advanced Rent's landlord tenant referencing service.
New stamp duty system is expected to save buy-to-let landlords £50 million a year
There are several tax reliefs that already make it easier for buy-to-let landlords to turn a profit, but the new stamp duty regime recently outlined by George Osborne is expected to be of even further benefit to Britain’s increasingly vital private housing providers. Users of Advanced Rent’s landlord tenant referencing service will be happy to learn that the new system is expected to save money on buy-to-let mortgages, freeing up capital for property improvements and accelerating market growth.
Buying cheaper properties will now be more beneficial, a welcome change given that research by the Council of Mortgage Lenders (CML) has found that the average buy-to-let property is purchased for about £200,000, with the average mortgage valued at around £124,000.
According the CML’s research, the demand for those mortgages is growing, with 9000 currently being taken out each month. The new stamp duty system should save landlords up to £500 per transaction. Taking all of these numbers into account, the regime is set to save a total of £50 million each year.
The National Landlords Association (NLA) has been one of the most vocal proponents for this kind of change and has heralded the new system as a “big win”. As reported by one of the organisation’s spokesmen: “The introduction of a straightforward marginal system of taxation will mean private landlords will now not only face lower costs when acquiring property, but also have funds to implement property improvements and keep rents down."
Northern towns and regions are expected to particularly benefit from this system, with property prices in these areas being typically closer to the £200,000 mark than elsewhere in the country. However, some industry experts have indicated that smaller properties in Greater London may also become more popular.
Wherever the property, the larger, faster returns that should come with the new system will be augmented by increased capital, so landlords will be able to improve properties without raising the rent. This means that stamp duty benefits will be passed on to tenants, so there’s never been a better time to take advantage of our landlord tenant referencing service to ensure that every tenant taken on will prove to be reliable.
More than half of buy-to-let landlords expect to add to their portfolios in 2015
Research conducted by online letting agent PropertyLetbyUs has indicated that over half of landlords in the UK are planning to expand their property portfolios in 2015. 2014 has been a strong year for the buy-to-let market and with the trends of the last 12 months showing no signs of slowing, landlords and letting agencies alike are rightfully optimistic about the expected benefits of further investment.
That optimism has partly been the result of a substantial growth in demand for rental property. This has led to a market in which landlords are suffering less from tenant arrears, while enjoying a rise in rental prices. Those that have made use of Advanced Rent’s landlord tenant referencing service and have been able to pick out the most trustworthy tenants will have found themselves particularly benefiting from this trend.
PropertyLetbyUs's survey reported that, over the last 12 months, these factors had led to 50 per cent of landlords attaining yields of between 6 per cent and 8 per cent, while 10 per cent of landlords found themselves achieving yields in excess of 8 per cent. 40 per cent of landlords reported achieving a 4 per cent yield. In equally welcome news, rising rental prices are creating a similar rise in equity, with almost a third of landlords attaining a loan-to-value ratio of between 30 per cent and 40 per cent.
Naturally enough, landlords are currently far more eager to buy than to sell. Intent on capitalising on the upswing in buy-to-let property value, only a quarter are planning to sell theirs during the upcoming year.
PropetyLetbyUs also reported a growth in rental demand, with only 3 per cent of landlords indicating a decrease, so it certainly seems that few investment properties will go empty. Indeed, 41 per cent of the landlords surveyed reported that tenant demand was growing strongly, with 51 per cent saying that it remained stable.
These results correlate with a falling level of home ownership, which has reached its lowest point for over 25 years. With property prices continuing to rise, there can be little doubt that home ownership will fail to rebound quickly, if at all, during the coming year.
Talk to Advanced Rent today about our landlord tenant referencing service, which allows you to separate the reliable from the unreliable tenants and make the most of this boom in the rental market.
New high for England and Wales residential rents
Residential landlords in England and Wales will certainly be pleased to hear of a new record average rent of £770 per month in October, a 1.5 per cent rise on the previous 12 months. This is according to the most recent buy-to-let index from the UK lettings agent networks Your Move and Reeds Rains, which also found tenants to be paying down their rent arrears - another source of reassurance for users of our landlord tenant referencing service.
Advanced Rent assists landlords in need of a tenant referencing product with a service incorporating a range of standard checks, including a six year credit history, employment and income verification and landlord reference and verification. The results are also accepted and approved by DAS, Europe's leading provider of rent guarantee and legal expenses insurance.
Now, clients will be delighted to read of a 0.3 per cent monthly rise in rents in October 2014 that cements the swift growth already seen in recent times. Average rents had risen by 1.9 per cent in the previous 12 months to the end of October 2013, with the preceding year having seen as much as 3.4 per cent rental growth.
David Newnes, director of the Reeds Rains and Your Move estate agents, commented: "Rents have edged to a new record and the rental market is pulsing with new demand. Yet at the same time, tenants are getting on top of their finances helped by a cooling pace of such rent rises."
Newnes said that better affordability was of long-term benefit to both landlords and tenants, with the former able to depend on steady revenue to pay their bills. This, in turn "helps to support a virtuous cycle of only gradual rent rises. Alongside slower overall inflation, a material boost to the supply of properties available to let has helped keep rents from rising as quickly as in previous years."
The overall improvement in tenant finances last month meant that only 6.9 per cent of all rent was now in arrears, compared to 7.2 per cent in September and 7.1 per cent in October 2013. It also leaves rental arrears only 0.3 per cent higher than November 2013's record low of 6.6 per cent.
There have also been improvements in the levels of the most severe tenant arrears. Whereas in the third quarter of last year, households facing rental arrears exceeding two months accounted for 1.6 per cent of all tenancies, that figure had dropped to 1.4 per cent in the most recent quarterly Tenant Arrears Tracker from Your Move and Reeds Rains.
Such figures will hearten a large proportion of those considering, or currently using, the landlord tenant referencing service of Advanced Rent to guard against the possibility of any problems with their next tenant.
Government to speed up eviction of problem tenants
The Government has launched an initiative to make it easier for UK landlords to evict problem tenants, a process that was often time-consuming and overly-complicated in the past. The Section 21 accelerated possession procedure will require landlords to fill out an N5b form online, then post the printout, along with the tenancy agreement and fee.
Landlord Action, a leading tenant eviction firm, spearheaded the campaign as part of its role in a Government Think Tank aimed at increasing the speed of evictions. They point out that the new method will make it easier for landlords to remove problem cases, with commentators predicting that this is only the first step towards a total digitalization of the process.
Landlord Action found that landlords without legal representation frequently make mistakes on the existing applications to court, which can lead to delays and further frustration. With the suggestion of a digital issue – similar to the Section 8 PCOL service - the HM Courts and Tribunals Service worked with the Ministry of Justice Digital Services to design a new service that would streamline the way claims could be made. This reportedly explains complex legal points in easy to understand language, and is designed to easily collect information about the individual situation and eligibility of a possession claim.
Paul Shamplina, founder of Landlord Action, stated that: "This new online N5b form will go a long way in helping to prevent the most common mistakes landlords make, which often cause costly delays. We also hope that landlords will be empowered by the knowledge that improvements are underway to make possessions quicker and easier in the future."
Even as the Government continues to work to improve the ability of landlords to evict problem tenants, it remains important to use a proper landlord tenant referencing service to help ensure that even the new streamlined service never has to be used. Any landlords who have experienced problems in the past should contact Advanced Rent to take advantage of our DAS approved service, which puts potential renters through a quick but exhaustive check to help ensure that they prove reliable tenants.
1 per cent year-on-year rise in British private rental prices
Property owners who make use of our excellent landlord tenant referencing service will be thrilled to hear that figures just released by the Office of National Statistics show a 1 per cent rise in British private rental prices in the twelve months to September 2014. This news comes as another sure sign that economic recovery is well underway and that, more than ever, renting out residential housing is one of the best ways to create passive income. These figures mark a return to healthy price growth.
Since the start of 2014, growth rates in Wales have fallen below those in England. In Scotland, the opposite is true, with rental prices growing by 1.4 per cent from September 2013 to September 2014. However, London is still the frontrunner, with the capital boasting an outstanding growth rate of 1.5 per cent.
Over the past few years there have been three main periods of rental price fluctuation in England. Rental prices increased between early 2006 and mid-2009, at which point they began to decrease. From late 2009 onwards, steady growth was seen once again. Due to the higher inflation the city experiences in rental prices and its unmatched importance in the English property market, London tends to skew these figures. However, when the capital is excluded from calculation, England demonstrates a similarity in 2014 to the pattern of 2008, the year of largest rental price growth.
The Index of Private Housing Rental Prices or IPHRP measures the difference in prices that tenants pay landlords from month to month, and can therefore provide a reliable estimate of larger trends in rental prices. Its survey covers all of Great Britain and its constituent countries, so the results are highly dependable. The index covers price changes for all renting of residential property from private landlords.
Here at Advanced Rent, our landlord tenant referencing service can help you to make the most of these rising prices by ensuring that you’re renting your increasingly valuable property to responsible and financially sound tenants. Our results are approved by Europe’s best rent guarantee and legal expenses insurance provider, the DAS. We provide affordability analysis, six year credit checks, address verification and a number of other services, so contact us today.
Record high advertised rents in the South East, East Anglia and Scotland
Although there are many sources of cheer at the moment for landlords in the South East of England, East Anglia and Scotland, including Advanced Rent's own landlord tenant referencing service that provides them with a complete reference at a fair price, another great piece of news for such investors is the record advertised rent levels currently being seen in their regions.
The most recent published index from Move With Us, relating to the third quarter of 2014, indicates that nationwide rents rose by an average of £66 per month in a yearly comparison, reaching £1,034 per month. Advertised rents reached £1,254 per month in the South East and £947 per month in East Anglia, bringing both regions to record highs. It meant an £18 and £11 rise respectively.
The data made similarly pleasing reading for Scottish landlords, however, with their advertised monthly rents hitting £727 - another record. A burgeoning London market had a major influence on the average national rent, according to the firm, with the capital seeing a £118 increase in its average advertised rent over the quarter to £2,452 per month, £230 up on the same period last year.
Comparing these strongest-performing regions with those that saw less impressive change, Move With Us director Robin King commented that "Annual growth is always good news for landlords but those in regions where we are not seeing huge amounts of growth shouldn't be too concerned as we approach the end of the year. January is likely to bring a new influx of potential renters to the market who are looking to move in the New Year."
London's average rental price has now exceeded that seen in the summer high of 2012, when advertised rents were artificially inflated by the London Olympics. The continued upward trajectory for rents in this part of the country is set to last into 2015. There has also been a steady growth in the South West's average rental values, with the region's rents having never dropped below an £800 per month average during 2014.
Average advertised rents in the South West are now £813 per month, which is £33 or 4.28 per cent higher than in last year's corresponding quarter. The best-performing region outside London, however, remains the South East, the last two years having seen continuous rental growth there. Average asking rents in the region have increased by £112 per month over the last 12 months.
Talk to Advanced Rent about how our landlord tenant referencing service can allow you to make the most of such significant rental rises, with its standard checks that include a six year credit history, address verification and link addressed summary and employment and income verification.
UK’s economic rejuvenation signals increased Central London rents
Here at Advanced Rent, we offer some of the market's leading landlord tenant referencing services. Our service includes features like six year credit checks, address and employment verification and affordability analysis, all provided at fair prices and with all results approved by DAS, Europe's premier Rent Guarantee and Legal Expenses insurance provider.
If you're interested in taking advantage of our services, there's never been a better time, with rental values in Central London rising once again, continuing a seven month growth streak that is pushing the capital's rental values back up to pre-credit crunch rates.
Economic recovery in the UK took huge strides forward this year. The Office for National Statistics reported in September that the nation's economy was 2.7% greater in the second quarter of the year than at its pre-crisis height, and changed the growth figure for that quarter to 0.9% - far higher than anticipated.
In line with the return to economic wellbeing, rental values in Central London locations have experienced a 0.2% increase in the last month, which has pushed annual growth to 1.6%. This increased valuation represents the largest rate in two and a half years, and is symptomatic of a market that is pushing beyond the limits of the credit crunch and reaching new heights.
Both new and existing users of our landlord tenant referencing services should note that these healthy figures were accompanied by a similarly positive growth in prospective tenants, with an increase of 22% from September 2013 to September 2014. The quantity of prospective tenants had already shown tremendous development in the first nine months of 2014, with numbers rising 19% from the figures of the previous year, and September's figures point to a continued escalation of this trend.
The opportunities for investors are obvious, as is the increased need for landlord tenant referencing services to weed out unsuitable prospects during this time of growth. While the number of tenants increases, so does the demand for housing, and landlords must be able to take advantage of this boom by using a quick, reliable and cost-effective referencing service. This is why the landlord tenant referencing services of Advanced Rent remain a sensible and profitable choice.
New research reveals UK's buy-to-let yield hotspots
While new and established landlords alike continue to search for the best landlord tenant referencing service, many will be intrigued to read about a new buy-to-let interactive heatmap released by credit comparison site TotallyMoney.com. The heatmap is based on research into more than 2,600 UK postcode districts, and provides a convenient overview of the average yields from rental properties across the country.
Delivering the highest yield in England, Scotland and Wales, according to the research, was Sheffield city centre (S1 postcode) with 11.1 per cent, followed by the respective 10.4 per cent and 9.2 per cent yields from Aberdeen (AB24) and Bradford (BD1). The national average buy-to-let yield was 4.17 per cent, with above average yields mostly being seen in Scotland and northern England.
However, there are also still several areas of the capital where higher than average yields can be attained, led by Plaistow (E13, 5.78 per cent), East Ham (E6, 5.55 per cent) and Edmonton (N18, 5.45 per cent). Above average buy-to-let yields were also recorded in Deptford and Bow, despite London's average yield of 3.4 per cent being the lowest of any UK city.
Nonetheless, those seeking the best landlord tenant referencing service can be left in no doubt about the geographical divide between the north and south as far as rental yields are concerned, with other locations in the top 10 including Manchester, York, Greenock, Aberdeen, Glasgow and Paisley. Indeed, Southampton was the sole city outside the Scottish and north/Midlands regions to figure in this top 10.
The overall picture garnered from the analysis of 751,600 properties for sale or rent is of soaring demand for rental properties - by 18 per cent across the UK in the past year. In the capital alone, that figure is 50 per cent. Meanwhile, the same period has seen a 19 per cent drop in supply (3 per cent in London). Such a combination of figures has made the rental market ever-more competitive, with up to seven tenants viewing each property.
The opportunities are clear for both prospective and current buy-to-let investors on the lookout for a landlord tenant referencing service, with TotallyMoney.com CEO Nigel Pocklington observing: "Although property prices are rising faster in London than the rest of the UK, this growth rate hasn't been mirrored in rent prices. Property investors looking for high yields on rental developments could see the best returns from northern cities or Scotland."
Rental market booming for English landlords
It will please many an English landlord making use of Advanced Rent's tenant referencing services to learn that their rental market is presently a booming one. A new study has found that earnings from rental payments now exceed £32 billion per year, or almost £2.7 billion per month.
The largest proportion of private rental income in England is collected by London landlords at £14 billion per year, which is higher than the North East, East Midlands, West Midlands, Yorkshire and East Anglia put together. It means that the capital accounts for 44 per cent of England's rents.
Outside London, Leeds is the highest ranking city for annual private rent paid at £565 million, followed by Birmingham at £521 million and Manchester, which recorded £401 million. Rental incomes, however, are dominated by London and the Home Counties, with Inner London's highest average rents being £19,596 per year or £1,633 per month.
The capital aside, the highest rents were seen in Elmbridge in Surrey, at £18,948 per year or £1,579 per month. South Buckinghamshire's private rental costs of £1,530 gave it a ranking of second place. However, strong rental incomes were still commanded by landlords outside these regions. High rental costs were seen in many areas outside the London commuter belt like North Somerset and Bath and the Cotswolds, both areas where annual rental incomes exceeded £11,000.
The largest proportion of households privately rented, when London was not considered, could be found in Bournemouth (30 per cent), followed by the Isles of Scilly (29.7 per cent) and Brighton and Hove (29.6 per cent). However, Inner London still boasted the country's highest proportion of private renters, at 30.7 per cent.
While soaring property prices have made for greater numbers of private rented tenants, landlords need to be aware of the dangers before investing. Thankfully, Advanced Rent can provide the insurance products to give new and established landlords vital peace of mind, particularly when they come to expand their portfolios.
Advanced Rent has won particular acclaim in recent times for its tenant referencing services that give landlords a full reference for a fair price. With standard checks including a six year credit history as well as employment and income verification and a guarantor validation and suitability check, they're among the many aspects of Advanced Rent's offering that help to make life easier for landlords throughout the United Kingdom.
Northern England 'brings best rental yields'
For any landlord anxious about achieving the best returns from their buy-to-let investment at the same time as minimising the hassle associated with deposits by taking out a no deposit renters insurance policy, new research from BM Solutions will make very interesting reading. The specialist buy-to-let lender's latest quarterly index indicates that UK landlords can enjoy the greatest rental yields from properties in the North of England.
Average rental yields of 6.4 per cent were recorded for the North West, North East and the West Midlands, these three regions only narrowly shading the East Midlands, which saw 6.3 per cent returns, followed by Scotland, with 6.2 per cent. 6 per cent yields were seen in Wales and the South West, dropping to 5.9 per cent in the South East and outer London. The East of England and Yorkshire and Humber delivered 5.7 per cent, leaving central London to prop up the list with 5.5 per cent.
Student property investors The Mistoria Group suggested that much of the revived interest in the UK's northern regions could be attributed to the BBC's relocation to Salford, with no other towns in Britain seeing such fast rises in their property values since the start of 2014 as Salford and Liverpool.
Mish Liyanage, managing director of The Mistoria Group, commented: "The North West offers buy to let landlords a multitude of affordable properties that will give net returns of up to 10 per cent. For example, an investor can buy a HMO student let property close to a university that has been fully refurbished and furnished, and that is already tenanted for the coming year, for less than £150,000. This will give investors annual net returns of 9 per cent."
Liyanage added that with the right choice of property and agent, landlords "can sit back and after years of working for their money, can finally see their money working for them."
His view was backed by a recent buyer of two investment properties through The Mistoria Group, retiree Joy Townley from Calne in Wiltshire. Describing the North West as "a growing market" for landlords, she added that "The numbers just added up and I am enjoying a consistent income stream. I'll be keeping hold of the properties for the long term."
Contact Advanced Rent now about how you can attract the broadest possible range of tenants with a no deposit renters insurance policy from us, allowing you to make the most of the advantageous northern England rental yields.
Landlords urged to offer furnished town and city flats for higher rental returns
UK landlords seeking the best rental returns should look to furnished flats in towns and cities given the demand for these from young, mobile tenants, according to Countryside research. Users of Advanced Rent's tenant referencing services will be intrigued to read of the 8.1 per cent premium for furnished flats and the 2.8 per cent premium for furnished houses, compared to their unfurnished equivalents.
The report also showed a 3.7 per cent year-on-year rise in UK rents as of July, outer London being the major driver of growth. The letting agency also advised landlords that educating themselves on the properties that potential tenants are looking for and letting furnished properties in key areas would enable them to achieve higher monthly rental returns.
The greater profitability of furnished properties in towns and cities can be attributed to such areas having a younger tenant population. Such tenants typically possess little or no furniture, and are therefore willing to pay more for the landlord to provide it. This compares to rural areas, where there tend to be more families who already have their own furniture and therefore specifically seek out unfurnished properties.
Some urban locations of greater affluence even enable a landlord to attract a third more in rent from a furnished property than they could expect from an unfurnished one. UK city centre locations where landlords offering furnished properties have prospered include Salford in Manchester. Here, the rental market has been transformed by the influx of BBC employees willing to pay a premium for furnished flats in close proximity of the offices of the corporation that has partly relocated here.
Users of tenant referencing services like those of Advanced Rent will also be pleased by the continuing rise in average monthly rents in England, Scotland and Wales, which stood at £898 as of July 2014. Central London continues to enjoy the highest average monthly rent at £2,503 per calendar month. Year-on-year average monthly rent rises have been seen across almost all property sizes, the greatest increases being recorded for one bedroom properties, seeing a 4.2 per cent year-on-year increase and a 1.5 per cent rise on a month-by-month basis.
Nick Dunning, Countryside Group commercial director, commented: "Whether you are a first time landlord or a seasoned investor it is important to understand what tenants are looking for. This not only helps to minimise void periods but also assists in achieving the highest return from the rental property."
How our deposit replacement insurance helps landlords to swerve the 'no win no fee' lawyers
As much as any competent and diligent landlord will keep up to date with the latest legislation concerning the protection of tenancy deposits, there's also been little question in recent times of the burden that it represents to them - and as can be relieved with our renowned deposit replacement insurance here at Advanced Rent.
Unfortunately, not all landlords treat their tenants and their deposits as they should. They may fail to give their tenants the full details of how their deposit is being protected, and it may not have even been registered and protected at all. This has brought an attendant rise in 'no win no fee' lawyers, who chase tenants to sue lawyers for not protecting their deposit properly.
It is entirely understandable why tenants may take advantage of such a service in the face of landlords who abuse the legislation concerning the protection of tenant deposits. Such landlords may not only fail to register the tenant's deposit, but also behave in a difficult and obstructive fashion when they are required to return it.
Tenants renting a property are normally not handed the keys by the landlord or letting agent until they provide a deposit, usually amounting to one month's rent, in order to protect the landlord against damage or rent arrears. While most landlords act fairly, registering the deposit with a recognised third party in addition to returning it once the tenancy ends, this is sadly not the case for all.
However, while tenants have certainly benefitted from the measures in The Housing Act 2004 (as amended by The Localism Act 2011) for punishing landlords who abuse them and their deposits, it is undoubtedly one more layer of legislation making landlords' jobs harder. The law as it stands demands that following the payment of the deposit by the tenant, within 30 days, the landlord must either lodge it with a government scheme - providing the full, prescribed details to the tenant - or protect the deposit through an insurance-backed scheme.
Failure to protect the deposit in this manner compels the landlord to return the tenant's deposit and pay compensation of between one and three times the deposit's value. This is the process with which landlords customarily assist tenants, negotiating with the landlord to ensure that they meet both of the above requirements. If the landlord refuses, the 'no win no fee' lawyer may apply to the Court for the deposit's return and the maximum compensation.
This is an expense and inconvenience as a landlord that our deposit replacement insurance policy enables you to avoid. Our product gives you the same rent/dilapidations protection as with a deposit, but without the risks associated with not properly accepting and protecting it.
UK private rental sector on the up again
When landlords buy an Advanced Rent product such as deposit replacement insurance, Rent Guaranteed or Rent In Advance, they can also benefit from free tenant referencing, which even if they need to purchase it separately, gives them a full reference at a fair price. Now, there is further good news for such landlords' financial security, the latest Sequence rental index suggesting a 4 per cent annual increase in the UK's monthly rents, excluding London.
This rise means that landlords outside the capital are now charging £689 on average, with each available property being chased by six tenants - the highest since 2011. Indeed, the last year has also seen a 15 per cent increase in overall demand for the country's rental properties, an accompanying 17 per cent drop in the supply of homes suggesting plenty of opportunity for incoming holders of a tenant referencing policy. London, meanwhile, has seen rents hit a four year peak, thanks to a 10 per cent annual rise to £1,515, with tenant demand also heightening at more than nine times the rate of supply.
Almost seven tenants pursuing every London rental property has made the capital's rental market a hive of activity, according to Sequence's head of lettings Stephen Nation. He added - in response to the news that buy-to-let mortgage applications had reached their highest level in 2014 - that the new mortgage market rules did not scrutinise buy-to-let mortgages, with change to pension annuities also making property an attractive alternative pension pot to investors.
Applications for such mortgages rose by 14 per cent annually in June and 12 per cent since May.
Current and prospective tenant referencing policyholders will even be heartened by the latest figures on viewings, which across the country - excluding London - rose by 6 per cent over the year and 2 per cent since May. Not since November 2011 has there been so many viewings in one month. New agreed tenancies have also seen a 17 per cent annual rise, bringing them just shy of their September 2013 peak, London recording an even bigger 28 per cent increase in new agreed tenancies over the last 12 months.
Such figures all point to good news for Advanced Rent's new and present clients, Nation concluding: "Across the country it is clear that the rental market is very active this year, which goes to show how a healthy rental market works independently of the sales market."
Greater London rents now more than double those of rest of UK
It will doubtless interest many of those landlords investing in a zero deposit scheme rent policy like Advanced Rent's to read about the findings of a new rental index. The research showed that for the first time ever, it now costs more than twice as much on average to rent in Greater London - at £1,412 - than across the rest of the UK, where average rents are £694.
The study also found a 6.3 per cent increase in average UK private home rents over the last 12 months, from £811 to £862 per month. In addition, the North East of England, Scotland and Wales were shown to be the most affordable parts of the UK to rent a property when rental prices are compared to the average incomes of tenants in these regions. Such figures were in contrast to the increasing unaffordability of regions like Greater London, the South West and the South East of England.
Overall, 10 of the UK's 12 regions have seen year-on-year rent rises, with only minor falls in rental values being seen in the North East of England and Scotland. Greater London saw an especially pronounced rise over the period, of 11.2 per cent. It is also the UK's least affordable rental market when average rental values are compared to average tenants' incomes. The average Greater London tenant earns a gross income just 2.3 times the average annual rental.
There's also continuing pressure on affordability in the South West and South East of England, where the average tenant gross income is respectively 2.55 and 2.93 times the average annual rental value. Rental property is generally considered affordable when the tenant's gross income is at least two and a half times greater than the cost of renting over the year.
The figures also showed variation in average rental value over the year of 11.2 per cent in Greater London, 6.4 per cent in East Anglia, 4.7 per cent in Wales, 4.6 per cent in the South West, 4.4 per cent in the South East and 4.3 per cent in the West Midlands. Rent rises were also seen in the North West, Yorkshire and Humber, Northern Ireland and the East Midlands. They indicate that there are plenty of alternative regions of the country with opportunities for significant profit to be enjoyed by landlords with a zero deposit scheme rent policy from Advanced Rent.
Number of tenants with rental arrears 'falls by thousands'
Landlords throughout the UK looking to firm up their financial peace of mind with products like Advanced Rent's own tenant referencing policy will be reassured by new research showing a 35,000, or 35 per cent, drop in the number of tenants with severe rental arrears over the last 12 months. It is complemented by the further good news of a sixth fall in landlords' own mortgage arrears in as many quarters.
LSL Property Services' latest Tenant Arrears Tracker report found that significant rental arrears were now avoided by 98.5 per cent of private sector tenants. Indeed, while there were still some 67,000 households behind on their rental payments by more than two months, this marked a noticeable improvement on the 102,000 recorded in the second quarter of 2013. Between this year's opening quarter and the three months to June, there was a further 0.2 per cent reduction in the number of tenants in severe arrears.
The figures for tenants in serious arrears exceeding two months also looked good when taken as a proportion of all tenants, the 2.2 per cent seen in the second quarter of last year comparing to 1.5 per cent for the equivalent three months in 2014. Overall tenant arrears - those of all durations - are now just 7 per cent as of May 2014, whereas 12 months earlier, they had been 8.2 per cent.
But it isn't just tenants that have benefitted from the more benevolent recent economic climate, with the first quarter of 2014 also seeing a 10.9 per cent fall from the previous three months in the number of buy-to-let mortgages in arrears of more than three months, to 14,700. This amounts to a 17.9 per cent improvement in buy-to-let mortgage arrears over the last 12 months.
Paul Jardine, director and receiver at Templeton LPA, commented: "Landlords and tenants depend closely on one another. But communication is always vital to keep that relationship in effective working order. A good landlord or managing agent will have a working knowledge of their tenants' situation." He added that when tenant arrears did occur, they were usually resolved within a month or two.
Commercial director of LSL Property Services, David Brown said that the landlords worst affected by the credit crunch were now paying down their arrears, and also hailed the combination of favourable interest rates, solid rental yields and the boost provided to total returns by capital appreciation. Overall, the picture is of a rental market that landlords are showing more and more confidence in, as they contemplate investment in associated policies like the tenant referencing of Advanced Rent.
Property damage is 'biggest cause of landlord-tenant disputes'
An understandable eagerness on the part of landlords to be proactive in minimising the chances of a dispute with their next tenant is precisely why Advanced Rent instituted its acclaimed tenant referencing product, which is the complete solution for both referencing and credit checking prospective tenants. However, of the disputes that do arise, the most frequently cited cause in one recent survey is property damage - decoration and rent arrears being ranked second and third.
According to the research by a leading online letting agent, the 58 per cent of respondents mentioning damage surpassed the 50 per cent citing redecoration and the 42 per cent who complained about rent arrears and cleaning. The survey results also showed that two thirds of landlords sought to settle disputes by going to court, with the disputed amount exceeding £1,000 for 20 per cent of those polled.
Prospective or current clients of Advanced Rent's tenant referencing product will also be intrigued to read that for landlords who experienced a rent arrears dispute, the majority had to deal with an average late payment time of six weeks. However, 20 per cent were left waiting more than four months for outstanding rent to be paid. In addition, for all of the well-publicised help that inventories can give in the resolution of disputes, a fifth of landlords said that they failed to carry out check-ins and check-outs.
Not only did the research reveal the continued great problems of property damage and rent arrears for many landlords, but the Ministry of Justice has also recently released figures indicating that in the first three months of 2014, landlords in England and Wales went to court to make 47,220 property repossession claims - the equivalent of 525 per day.
These statistics only signal the great importance of landlords adopting certain measures to protect their rental investment, including carrying out a professional inventory with a check-in and check-out at a tenancy's start and end, as well as making regular visits during the tenancy to check for damage.
By taking advantage of Advanced Rent's own acclaimed tenant referencing product, landlords can draw on a series of standard checks, including a six year credit history, address verification, employment and income verification, affordability analysis and guarantor validation and suitability check. Such checks only give the landlord even greater peace of mind, however substantial their portfolio or established they are as an investor.
NLA study signals UK landlords' intention to buy local
The National Landlord Association (NLA) has conducted a study showing that of the UK's landlords contemplating purchasing property in the future, most intend to buy in their local area. It will interest prospective users of Advanced Rent's tenant referencing product to read that three quarters of private residential landlords plan the next property that they purchase to be close to home or in or around the area where they presently reside.
10 per cent of respondents signalled that they would buy within a radius of 100 miles, while 9 per cent intended to purchase further afield. The news comes on a backdrop of the increasingly prevalent use by councils across Britain of landlord licensing schemes, criticised by the NLA as expensive, ineffective and having an adverse effect on local investment.
Carolyn Uphill, NLA chairman, commented: "Local investment in housing is essential if towns and cities across the UK want to attract people and business to the area. The private rented sector (PRS) is growing at a steady rate but we still need further investment in housing if tenant demand across the UK is to be met."
Uphill described the survey findings as "positive news", adding that they showed how landlords could provide local authorities with a "vital lifeline" for meeting rapidly increasing demand for accommodation in their area. She said that councils contemplating the introduction of landlord licensing schemes that failed to "take these findings on board" could find themselves alienating great numbers of landlords, deterring badly needed investment in the process.
Prospective users of the Advanced Rent tenant referencing product may also take an interest in the NLA's list of key considerations for new landlords looking to invest in local property. The recommendations, which are part of its Professional Practice for Profit campaign, include researching local tenant demand and employment conditions in an area, as well as the types of tenants that are most attracted to the given locality.
Other suggestions include finding out about rent levels in the area, the rental yields that can be anticipated and the desirability of the property with regard to the closeness of transport links, local amenities and schools. The NLA also advised landlords to investigate an area's crime levels, future development plans and the property's likely capital value potential - all points well worthy of consideration by those perusing the tenant referencing and other highly acclaimed landlord products of Advanced Rent.
Fastest-growing buy-to-let returns seen in Reading and Brighton
As anxious as many landlords are to find the right deposit replacement insurance to avoid the hassle of accepting and protecting tenant deposits, if there's one priority that's even greater for many investors, it's ensuring the maximum rental return. On that front, it looks like Reading and Brighton are the emerging hotspots, recording the biggest rises in rental returns over the past 12 months, according to HSBC research.
Such increases of more than 12 per cent in the two commuter towns show how they have become more and more in favour among young professionals priced out of London living. The analysis was based on figures from the home.co.uk website and the Land Registry, and found that Reading had a £950 average monthly rent. That, combined with an average property price of £207,934, resulted in a 5.48 per cent average yield for landlords, compared to the 4.86 per cent recorded a year earlier.
Brighton, meanwhile, saw properties sold for an average of £242,535, average monthly rents of £1,248 meaning an increase in the average yield from 5.58 per cent to 6.16 per cent. Almost a quarter of the housing stock in Reading was rented, according to the bank, that figure rising to 28 per cent for Brighton. Other cities to see marked buy-to-let yield growth over the past year include Bristol, Bournemouth, Cheltenham, Oxford and Manchester, all exciting news for deposit replacement insurance policyholders in these areas.
Peter Dockar, HSBC head of mortgages, commented: "Landlords are reaping the benefit as young professionals say goodbye to capital living in favour of more affordable commuter towns. Despite the inevitable increase in commuter costs associated with moving further out, many still feel it is worthwhile in order to save towards property deposits."
He added that while even houses in these areas were often unaffordable for many first-time buyers, they were within greater financial reach for many landlords investing in property, rents and returns both being driven up by the demand from young professionals.
The biggest monthly return overall, however, was seen in Southampton, where an average house price of £143,011 alongside a £1,040 average monthly rent equated to an 8.73 per cent return, up from the previous year's 7.82 per cent. Strong demand for rented property in the city clearly has much to do with its coastal location for seasonal workers and holidaymakers, as well as university students.
Prospective deposit replacement insurance policyholders in London, meanwhile, are advised to look towards to the borough of Newham, where a 6 per cent yield was recorded in the survey as a result of a £239,942 average house price and average monthly rent of £1,200.
Rent rises planned by most UK landlords
If there's anything that reassures British landlords, it is being able to minimise the likelihood of misbehaviour or arrears from their prospective tenant through comprehensive tenant referencing, as is provided by Advanced Rent's dedicated product. However, it will also greatly please prospective investors in the private rented sector to see that landlords in the UK generally intend to raise their rents over the coming few months.
That is the conclusion of a new study from The Online Letting Agents, which found that nine in 10 landlords planned a rent rise. For more than half of landlords (51 per cent), the intention was to up their rent by 3 per cent, while a 5 per cent rise was planned by 33 per cent of landlords and 10 per cent expected to give their rents a 6 per cent hike.
The survey findings also showed much optimism that property prices will continue to rise during the next 12 months. Most respondents - 65 per cent - reckoned that values would increase by as much as 5 per cent in their area, although more than a third predicted even bigger rises, of between 6 per cent and 10 per cent.
Director of The Online Letting Agents, Eleanor Carroll, said that while LSL Property Services' latest buy-to-let index suggested that there had been a mere £5 heightening in average rents over the last 12 months, from £736 to £741, this did not reflect how drastically the situation varied between the regions. London and the South East, for example, saw immense demand that pushed up rental values, prices in parts of Essex even increasing by more than 30 per cent year-on-year.
She continued: "With potential rate rises on the horizon and a surge in demand for rental property, it is understandable that the majority of landlords are going to continue increasing rent prices. Our new research shows that confidence among landlords is running high, with a third saying they will boost their buy to let portfolios in 2014, in the wake of escalating property prices and a host of attractive buy to let mortgages."
She added that a "huge" 10.3 per cent total return - equating to nearly £17,000 on average - had been enjoyed by private landlords over the previous 12 months as a consequence of swiftly increasing house prices. Furthermore, the number of landlords registering with The Online Letting Agents' lettings service has seen a 60 per cent rise over the last year, Carroll describing this as a firm indication of the expanding buy-to-let sector.
It's all just one more reason for prospective or current holders of a tenant referencing policy from Advanced Rent to seriously consider whether now could be the time to start or add to their portfolios.
Introducing Advanced Rent's new tenant referencing product
As seasoned and successful financiers of residential property and private equity investors, the individuals behind Advanced Rent have long assisted buy-to-let landlords with the most suitable bespoke insurance and financial products.
The company was established in 2011 in response to the difficulties that many landlords were experiencing in attempting to access capital to expand their portfolios in the wake of the credit crunch. The firm has since gone on to establish an enviable industry reputation with its innovative Rent In Advance and Rent Guaranteed products, later venturing into the deposit replacement insurance market.
These products have brought immeasurable benefits to landlords across the United Kingdom in shoring up their financial security and minimising the hassles of their day-to-day lives as buy-to-let professionals. However, there is another pressing need for many landlords that, if left unaddressed, can cause great problems in their work - that of ensuring that the people to whom they are letting their property make sound and suitable tenants.
It is with the aim of tackling this requirement that Advanced Rent is pleased to announce the introduction of its standalone tenant referencing product. Existing holders of our landlord insurance policies can already take advantage of free tenant referencing, but this service and appropriate credit checking are now also available to those wanting to make the most of these products on their own. Tenant referencing and landlord insurance products are also able to be specified across the country by our letting agent partners.
Features of Advanced Rent's standard tenant checks include the acceptance and approval of results by the largest rent guarantee and legal expenses insurance provider in Europe, DAS, together with a six year credit history search and address verification and linked address summary. Also included is employment and income verification, landlord reference and verification and affordability analysis. The package is completed by a gauge credit score and guarantor validation and suitability check.
All in all, the tenant referencing product of Advanced Rent is one that provides a fair reference for a fair price, with the landlords that buy the most paying less. It is free for those buying any of Advanced Rent's other products, or can otherwise be purchased for £9.99 excluding VAT. Enquire now to find out more about this exceedingly useful service.
A third of landlords 'in buy-to-let for the long haul'
If there are two things that help to reassure anyone of the wisdom of entering or increasing their involvement in the buy-to-let market as landlords, it is market stability and a strong likelihood that they will be renting to sound and suitable tenants. The latter is certainly boosted by Advanced Rent's new and highly regarded tenant referencing product, while there are plenty of signs of the former in one recent survey.
The poll, conducted by Precise Mortgages, found that more than a third of landlords considered buy-to-let as a long-term investment opportunity. Meanwhile, the company's Mortgage Voice report also suggested that 27 per cent of rental market investors planned to retain their properties for a significant period of time after they had retired. For a further 18 per cent, the plan was to keep hold of their properties until their retirement, suggesting no shortage of long-term commitment to buy-to-let.
The same percentage of respondents, 18 per cent, indicated that they would like to expand their portfolio by one or two properties over the next 12 months, and for an additional 7 per cent, it was five or more properties that they wished to purchase. The research also revealed a mere 12 per cent of buy-to-let landlords to be in the 55 or over age group, which pointed to the long-term nature of their plans. Increasingly strong market involvement even extended to a rise in 'opportunistic' landlords, 28 per cent of respondents stating that they had opted to rent out a property that they had inherited.
21 per cent of those polled claimed to have moved in with a partner who already owned a rental property. These signs combine with continued strong buy-to-let returns and high demand for such property to indicate a "thriving" rental market presenting "buy-to-let landlords, whatever their genesis, significant opportunity", according to Precise Mortgages managing director Alan Cleary.
It is a viewpoint that we can only agree with here at Advanced Rent, and when new and old landlords alike also invest in our tenant referencing products, they can have even greater confidence that their time in the rental market will be lucrative and well-spent.
Channel 4 report highlights importance of right deposit protection measures
Deposits on rental properties have long been a source of anxiety for both landlords and tenants, with the former group needing to adhere with the increasing amount of legislation concerning the holding of tenant deposits. The latter group, meanwhile, simply want to know that their deposit will be protected, with Advanced Rent's tenancy deposit replacement insurance also allowing them to move into a new property quickly without the need to wait for a scheme to release any deposit they may have had on a previous property.
Indeed, one recent Channel 4 News investigation has highlighted how tenants can be put at risk by rogue letting agents and ineffective deposit protection schemes. It started last November when the broadcaster tracked down lettings agent and self-styled property guru Daniel Burton, who had been running seminars on how people could use the rental market to get rich quick. His company Unida Place maximised profits by renting from landlords and subletting properties as single rooms, getting in the greatest possible number of tenants.
Mr Burton's registration of deposits with MyDeposits, a government approved protection scheme, ensured his compliance with the law. The insurance-based scheme allows the landlord or letting agent to retain the money for as long as the tenancy runs. However, it was discovered by Channel 4 News that a failure to comply with procedures had led to Mr Burton's expulsion from MyDeposits. Despite the supposed aim of a deposit protection scheme to protect deposits from rule-flouting landlords or letting agents, MyDeposits was only able to expel the landlord, not safeguard tenants' deposits.
If a landlord or letting agent cancels their membership of the MyDeposits scheme, the affected tenants are told that their deposits will become "unprotected" in three months. However, this was also the case for the tenants of Mr Burton, who was left with a bank account of unprotected deposits worth £145,000. MyDeposits CEO Eddie Hooker told Channel 4 News that it had simply complied with the relevant legislation, the deposits becoming unprotected due to Unida Place ceasing to be a member of the scheme.
Nonetheless, the predicament for so many tenants of a supposed deposit protection scheme not protecting their deposit does make one wonder about the system's openness to abuse. It again simply highlights the importance to both landlords and tenants of the right tenancy deposit replacement insurance, as offered by Advanced Rent, and which can bring convenience and peace of mind to both parties. Contact us now for more information about our own policy.
Heightened demand sees rise in prime Home Counties property rents
For those landlords taking advantage of an Advanced Rent tenant referencing product who are also considering investment in one of the undoubted gardens of England, the Home Counties, there is good news from Knight Frank. The London estate agent reported that rents in the region had risen by 0.7 per cent in the first quarter of 2014, driven by rental property becoming increasingly sought-after in the area.
The news shouldn't be a shock given the typical nature of the local market, of staff relocating for work in the London financial services and Thames Valley blue chip sectors, combined with the increasing buoyancy of the UK economy. These developments are contributing to a greater number of lettings in the Home Counties, with the index suggesting that five of the seven areas it covers saw unchanged or heightened rents in the first quarter.
The greatest rise, 4.9 per cent, was observed in Guildford, followed by a 3.6 per cent increase in Beaconsfield and 3.5 per cent in Virginia Water. Ascot saw its rents rise by 1.1 per cent over the period, while they were static in Henley. Such rises tally well with the most recent CBI/KPMG London Business Survey of the city's business leaders and chief executives, who expressed a level of optimism about the economy unmatched since 2010. Indeed, 56 per cent of London firms indicated that they were taking on more staff.
There was also a 38 per cent increase during the first three months of the year in the number of new applicants registering with Knight Frank's Home Counties letting agents, compared to the first quarter of 2013. The same period also saw 11 per cent more viewings. It's little surprise, therefore, that there was a 74 per cent year-on-year rise in tenancies agreed over the quarter. More 'try before you buy' family tenants have been seen in the Home Counties recently, say local letting agents, as incomers get accustomed to the area before buying a property outright.
The report concludes by predicting a higher number of deals in the £3,000 plus per month bracket as the summer months wear on, with activity in 2014 having thus far largely centred on the sub £3,000 per month market. For landlords looking to tap into the strengthening Home Counties rental market, Advanced Rent's tenant referencing products can be invaluable. While free tenant referencing is included in every one of our landlord products, we can also provide tenant referencing and credit checking on a standalone basis.
'Third more' buy-to-let mortgage choice in early 2014 than in early 2008
For the average client of Advanced Rent's security deposit replacement insurance who is looking to take the hassle out of accepting and protecting the deposits of their tenants, anything else that can give them greater assurance about their finances is very welcome. Sure enough, such buy-to-let investors are likely to be heartened by reports that there are now a third more buy-to-let mortgages on offer in the UK than in early 2008, immediately prior to the financial crash.
That is according to the most recent Buy to Let Mortgage Costs Index for the first quarter of 2014 from Mortgages for Business. By the end of March, 644 products were available, outstripping 10-fold the number on offer as of the market's May 2009 nadir. The Index also stated that it was not how much funds cost in the money market, but instead competition with lenders that had led to changes in prices.
The first three months of 2014 saw an 1 per cent increase compared to the previous quarter in the number of mortgages at 75 per cent loan to value, now standing at more than 45 per cent. The Index said that it was actually no more costly, and could even be cheaper, to take out an average 75 per cent LTV mortgage compared to the average 65 per cent LTV mortgage, with only five year fixed rate mortgages making greater financial sense at 65 per cent than 75 per cent.
Mortgages for Business managing director David Whittaker commented: "It is evident that the 75 per cent LTV market is now where the competitive action is, although the full extent of this counter intuitive pricing is only apparent once the full costs of arranging the mortgage are factored in."
He said that the current situation of no appreciable difference in average pricing between 65 per cent and 75 per cent deals differed drastically from that of nine months or so ago, when a premium of up to 1.75 per cent p.a. was commanded by 75 per cent LTV mortgages over their 65 per cent equivalents. He described the latest trend as "certainly good news for investors with smaller deposits."
Similarly helpful to landlords as the significantly expanded amount of choice in the buy-to-let mortgages market, however, is an assurance that they can avoid a costly national scheme for holding their tenant's deposit, while attracting a wider range of tenants due to the lack of need to request a deposit. This is certainly assured by Advanced Rent's highly rated security deposit replacement product - just contact us today to find out more.
Both rents and landlord confidence up over last 12 months
There was more good news this month for landlord rent insurance policyholders across the UK, with new statistics showing rises in both rental values and landlord confidence over the last year. The 12 months to February saw a 1.6 per cent increase in rents across England and Wales, according to the most recent Buy to Let Index of LSL Property Services. Meanwhile, National Landlords Association (NLA) research found that there had been a tripling in confidence in the UK's financial markets among landlords in the past year.
The latest heightening in rents brings the average UK rent to £743 per month, with seven in 10 regions seeing higher rents in February than in January, when there was a 1.4 per cent rise. Holders of a no deposit renters insurance policy will also be pleased to hear of improved tenant finances, with the proportion of late rent having dropped to 6.9 per cent during the month. The last 12 months have seen landlords earn an average annual return of 9.7 per cent, or over £16,000.
In the words of LSL Property Services director David Newnes, "Property to rent remains in high demand. Despite great improvements in the prospects of many first time buyers, there are still millions of households who rely on a healthy private rented sector for their homes." The fastest monthly rises were seen in Yorkshire and the Humber and the West Midlands, where 1.2 per cent increases were recorded, while Wales saw a 1 per cent monthly rise and rents rose by 0.6 per cent between January and February in the East Midlands.
There seems to be plenty of positivity among the UK's no deposit renters insurance policyholders, certainly by the evidence of the NLA's recently released data. Almost a third, 31 per cent, of landlords rated their expectations of the UK's financial markets as 'good' or 'very good' for the months to come, which is a 21 per cent increase on a year ago. Furthermore, an intention to buy property over the next 12 months was cited by 27 per cent of landlords.
Carolyn Uphill, chairman of the NLA, said that optimism among landlords towards the UK's financial recovery, together with the Bank of England's announcement that interest rates would stay at their present low of 0.5 per cent for now, "makes good reading for anyone considering buy to let investment." That doubtless includes many a prospective investor in no deposit renters insurance, which is available from Advanced Rent for landlords looking to avoid the hassle associated with the acceptance and protection of tenant deposits.
Scotland seeing fastest rent increases in early 2014
With the coming of a New Year, potential and present landlords alike have investigated means of lessening the hassle and uncertainty associated with their property investment, including taking out a security deposit replacement policy. Landlords in Scotland, in particular, will be pleased by recent figures showing that their region has seen the greatest percentage increases in advertised rents, over both the past month and year.
According to data from property company Move with Us, February saw advertised rents in Scotland of an average £695 per month, which is not only £20 – 2.84 per cent – higher than January’s figure, but also a 3.96 per cent or £28 improvement on the same time a year earlier. It was part of a rosy picture for significant numbers of security deposit replacement policyholders across the country, with the last 12 months having seen rises in average advertised rents in nine of Great Britain’s 11 regions. In fact, the UK’s average asking rent is at its highest since Move with Us first recorded it in the third quarter of 2012.
UK landlords are now charging an average of £923 per month, a more than £20 increase on the same stage last year. Unsurprisingly, Greater London continued its strong performance, with the capital seeing a 1.31 per cent, or £29 rise in average advertised rents last month. This was the second month of growth in a row, enabling current security deposit replacement policyholders in Greater London to request rents 2.54 per cent or £56 higher on average than in February 2013.
Director of Move with Us, Robin King, agreed that there was plenty of reason for optimism among landlords holding or considering a security deposit replacement policy for the months ahead, commenting: “2014 is shaping up to be a good year for landlords with rents increasing in most regions.” He added that January 2014 had seen an increase by a third over the past year in gross mortgage lending, from an estimated £11.6bn to £15.5bn, according to the Council of Mortgage Lenders (CML).
King said that given the increasing trend for people to eschew poorly performing savings accounts as an investment choice in favour of property, it was likely that this rise in gross mortgage lending could be attributed to buy-to-let lenders. He did also warn, however, that it wasn’t necessarily the highest rents that determined the best choice of investment location for prospective security deposit replacement policyholders, with the highest rental yields being of greater importance. That could mean actually looking to areas with lower property prices, like the North East and the Midlands.
He therefore concluded: “Any aspiring buy-to-let landlords looking to invest in property should follow the golden rules of finding a place with a good rental yield that is in a nice area and is close to local amenities and transport links. Landlords should also check that the property can easily be upgraded to meet the legally required energy performance rating that will be introduced in 2016.”
15 per cent year-on-year rise in demand for rental properties
Potential investors in a deposit replacement warranty like that offered by Advanced Rent may have received the final encouragement that they required to start a rental property portfolio or expand an existing one, with the news that new tenancies across the UK have jumped by 15 per cent over the last year. This was accompanied by an 8 per cent rise in monthly rental prices to around £758.
Those are the findings of the latest index from the lettings group Sequence, and although rent growth was not so pronounced in London, the capital's deposit replacement warranty policyholders could at least take heart in a 1 per cent rise in rents across the city since January 2013. This brings the capital's average monthly rent to £1,395.
However, London did compare better to the rest of the country in terms of the number of new tenancies, with a 17 per cent rise having been recorded on an annual basis. There was also a 17 per cent increase in applications for a buy-to-let mortgage over the past year. This suggests that many holders of a deposit replacement warranty are acting on the positive signs of the rental market and the economy as a whole to boost their investment in property.
Sequence's head of lettings, Stephen Nation, observed: "The rental market across the country has started the year with renewed vigour and increasing levels of demand. We have seen a surge in the number of new tenancies this month, up 15 per cent annually across the UK and 17 per cent in London as tenants compete to secure their property at the start of the year."
Nation attributed such a high level of activity to "the sheer volume of new tenants coming into the market", as he pointed to a 6 per cent annual increase in new tenant applications across the UK, a figure that rose to 10 per cent in London. He described the UK-wide picture as one in which supply was continuing to keep pace with demand, as the last 12 months had seen 6 per cent more new rental properties, although he warned of a shortfall in the capital, where a 4 per cent decline had been recorded.
Of the heightening in the number of mortgage applications over the last year, Nation added: "The pipeline of new investors we are seeing will continue the flow of properties onto the market and appease the demand, which should in turn, keep rents stable." By enquiring about a deposit replacement warranty now, current and prospective landlords alike can soon take maximum advantage of such positive figures.
London landlords enjoy especially strong returns over past year
As current and prospective landlords continue to investigate the latest insurance policies such as a no deposit rental scheme, so many of them will be encouraged by the most recently-released figures concerning rental yields. In the 12 months to January 2014, landlords in London saw total annual returns of 14.6 per cent, according to the latest buy-to-let index of LSL Property Services, compared to 11.4 per cent a year earlier.
Such returns surpassed even the healthy increases seen among no deposit rental scheme policyholders across England and Wales, with landlords in these areas seeing total returns on an average rental property over the past 12 months of 8.9 per cent, up from 5.7 per cent. This total annual returns growth for England and Wales landlords equates to an average return of £14,767 per property, including rental income of £7,961 and £6,806 in capital gains.
However, London landlords saw an even more impressive annual return of £38,104 per property, which surpassed the total return per property in such areas as the North East and Yorkshire and the Humber five-fold. The figures make extremely positive reading for those contemplating a no deposit rental scheme now. They indicate that if there continues to be a rise in rental property values at the same pace as the last three months have seen, a total annual return of 13 per cent can be expected by the average buy-to-let investor in England and Wales over the next 12 months. That is the equivalent of £22,256 per property.
The latest figures show little discernible change in gross yields on a typical rental property, with January's 5.2 per cent comparing to the 5.3 per cent seen 12 months earlier. However, capital accumulation and reduced void periods between tenants have bolstered total returns.
David Brown, LSL Property Services commercial director, commented: "Rental yields remain historically high, and such rental income is still underpinned by a demand driven lettings market. Meanwhile, rising prices are delivering an equity bonus for landlords, considerably boosting total annual returns."
He continued that landlords with an interest in funding new purchases through the remortgaging of their existing properties would also take notice of such equity growth, and that many landlords will continue adding to their portfolios with the increasing availability of mortgages at fair rates.
With the index also showing a 1.4 per cent rise in average rents across England and Wales in the past year, reaching £742 per month in January, there was no shortage of good news to further encourage landlords to finally invest in property or expand an existing portfolio, and with it, a suitable no deposit rental scheme for maximum letting convenience.
Proportion of private renters twice levels of 2000
Many landlords contemplating a zero deposit rent insurance policy as a means of minimising the hassle for both themselves and their tenants will be interested to read a new report from property group Knight Frank, revealing that there are now some 10m people in the UK - roughly one in six of the population - living in private rented accommodation. That this is about double the proportion seen in 2000 suggests that the buy-to-let sector will continue to play an integral role in the country's housing market for a while yet.
Indeed, Knight Frank predicted that such growth would continue to rise, sustaining a trend since the peak of homeownership in the UK in 2001, when 69 per cent of British households lived in their own properties. That proportion is now shy of 65 per cent, according to the report, with 17 per cent of British households renting in the private sector, significantly up from the 8 per cent level at which it had hovered for much of the 1990s.
However, prospective holders of a zero deposit rent insurance policy will also likely note marked regional differences, with the proportion of private tenants being much greater in especially expensive areas like major cities and the south east. London landlords, in particular, will be unsurprised to read that the more than 20 per cent of households renting privately in the capital in 2011 was more than double that of 2001, when the proportion was less than 10 per cent. Data is not presented for more recent years, but there is sure to have been a further increase in the proportion of private renters in the capital, given how prices have shot up since then.
There seems to have been a particularly pronounced surge in private renting since the onset of the financial crisis in 2008, with Knight Frank citing such factors as a "clampdown in mortgage lending", in addition to "a mix of the scrapping of rent controls, the proliferation of buy-to-let mortgages and rising prices in relation to earnings." The property group added that the credit crunch had a much less adverse effect on those with high levels of equity or cash, leaving them well-placed to invest in rental property. It added that this underlined equity's role in the sector's expansion.
Also highlighted by the report to the potential interest of zero deposit rent insurance policyholders was evidence of a significant decrease in renting from local councils, suggesting that authorities are continuing to loosen their grip on the country's rented housing stock. The report's focus was on major urban centres including London, Manchester, Glasgow, Bristol, Leeds and Birmingham, and it also introduced an index of total landlord returns, recording an average of 11.3 per cent for the year ending December 2013.
Landlords with, or who are considering a zero deposit rent insurance policy are advised that this figure was based on flats within blocks, with both rental returns and a rise in value being factored in.
UK-wide rent rises good news for landlord rent insurance policyholders
Landlord rent insurance policyholders across the UK will be pleased to read that December saw an 8 per cent annual increase in national monthly rents to £763, according to the most recent rental index from Sequence. The data also showed an 18 per cent annual rise in the number of new tenancies, indicating just how much stronger the market has become over the last 12 months.
London landlords also have reason to be pleased, with their average monthly rents reaching £1,417, a 3 per cent increase over the year, alongside an 11 per cent boost in the number of new tenancies in the capital. The outlook also looked good for buy-to-let mortgage applications, which were up 17 per cent annually, pointing to an increasing willingness among prospective investors to finally enter the market and take out a landlord rent insurance policy. Sequence added that the heightened number of buy-to-let investors had contributed to a 6 per cent annual rise in the number of new rental properties coming onto the market.
Stephen Nation, Sequence head of lettings, said that his firm's figures "entirely" disproved the "common misconception" that the rental market lagged behind whenever the sales market was booming. He continued: "The annual growth of rents across the UK highlights just how far the rental market has come in 2013 and with transactions up 13% annually it is clear that the demand for rental property is stronger than ever."
He described the combination of high buy-to-let mortgage registrations, the consequent increase in new properties for rent and greater demand from tenants as representing "a very healthy and balanced market." Nor was there any sign of this strong growth in supply relenting into 2014, with the first two weeks of the year having seen a 6.5 per cent increase, month-on-month, in new properties available to rent. He added that with demand continuing to keep pace with supply, he expected a significant heightening in the number of transactions as the year progressed.
However, Sequence's rental index was far from the only source of good news for landlord rent insurance policyholders over the last month, with the Office of National Statistics releasing figures showing a 1 per cent increase in the private rental prices paid by tenants in the 12 months to December. Scotland saw the greatest rent increases of 1.3 per cent, followed by the 1.2 per cent recorded in Wales and the 1 per cent posted for England. However, within England, London rents saw a particularly healthy 1.6 per cent rise.
Such figures all point to a positive climate in which to invest in rental property for the first time or expand an existing portfolio, in addition to taking out a landlord rent insurance policy like the highly regarded Rent In Advance or Rent Guaranteed products of Advanced Rent. Interested parties are welcome to contact us today for more information.
Advanced Rent's Deposit Replacement Insurance means less hassle for landlords
Those landlords that have previously taken advantage of Advanced Rent's financial products, such as Rent In Advance and Rent Guaranteed, will know that the company is committed to providing investors with more than a straightforward rent guarantee scheme. Having identified issues that can prevent landlords from receiving rent in a timely fashion, this team of experienced residential property financiers has continually sought to develop solutions to shore up clients' financial security. Now, similar convenience has been provided for those with concerns about deposits, in the form of Advanced Rent's Deposit Replacement Insurance.
Seasoned landlords are acutely aware of the problems in accepting and protecting the deposits of tenants. Holding tenants' deposits is becoming an increasing hassle due to the onslaught of new legislation with which landlords are required to comply, while tenants can also find it a burden to provide a sufficiently large deposit. It all points to the need for a solution for doing away with cash deposits that can also incorporate a rent guarantee scheme for making the time-pressed and anxious landlord's life a little easier.
It is just such a solution of benefit to both the landlord and tenant that Advanced Rent has devised. Not only is the tenant freed of the need to stump up what may be a very significant lump sum as a deposit prior to moving into a property, but it also provides the landlord with vital coverage for unpaid rent as well as for damage to their property. The tenant's much-reduced burden for a deposit amounts to an insurance premium equivalent to just a week's rent, thus allowing them to move into a new home so much quicker without the need to save. Nor are is the tenant forced to wait for the release of their previous property's deposit from a deposit scheme.
For the landlord, however, the benefits of Advanced Rent's Deposit Replacement Insurance are surely even greater. There is no need for an expensive national scheme in which to hold a tenant's deposit, damage (dilapidations) is covered for up to five weeks' rental value, and the policy also includes a rent guarantee scheme whereby the landlord is covered for the whole or part of the last month's rent, should the tenant vacate the property without paying it.
This product, which is free for landlords, underwritten by one of the biggest European insurers and available exclusively through Advanced Rent, works in much the same way as either rent guarantee scheme already offered by the company. The landlord passes Advanced Rent the details of their property and potential tenant, which are then fully referenced and credit checked. The tenant - or the landlord, if it is the intention to re-charge the tenant - can then purchase the policy. Simply contact Advanced Rent today for more information on this distinctive product.
Rent indemnity policyholders optimistic about 2014
A new survey has indicated that there is plenty of positivity about the coming year among the UK's holders of a rent indemnity policy, with more than half of landlords anticipating heightened tenant demand. Indeed, four in 10 said that there had been growth over the last six months, while almost a fifth signalled an intention to add to their property portfolios during 2014.
Those were the findings of the most recent landlord sentiment survey of LSL Property Services, which reported that an overall 58 per cent of landlords predicted an increase in tenant demand over the coming 12 months. Also revealed by the survey was that three quarters of landlords believed now to be an advantageous time to buy or sell rental property, amid rising prices that are attracting new rent indemnity policyholders.
2,195 landlords were polled, with 41 per cent stating that the last six months had seen greater demand from tenants. This compared to a mere one in 16 landlords that had seen a decline. Rental properties becoming more sought-after has certainly contributed to successive rent rises over the past year, and only 10 per cent of landlords expect a fall in demand. With 16 per cent of landlords having expanded their portfolios in 2013, 18 per cent said that they expected to follow suit this year.
David Newnes, director of LSL Property Services, commented: "The rise in house prices is evidence of the underlying buoyancy in the property market and the stabilising of rent rises is an indication of the current healthy state of the rental sector." He said that this placed landlords in "a prime position" to take advantage of strong property yields, adding that climbing tenant demand made for encouraging news for aspiring buy-to-let investors.
He continued: "Demand for rented accommodation is strong, exemplified by the fact that the number of lettings, new viewings and applicants are all rising. There are strong foundations for prosperity in the rental sector, fuelled by increased economic optimism and future job creation." He said that with the economy becoming more stable, there was greater confidence among those searching for attractive buy-to-let mortgage deals, enabling them to benefit from healthy returns.
Of those landlords polled that considered now to be a good time to purchase, 71 per cent cited attractive property prices, while half pointed out the superior capital returns on offer for rent indemnity policyholders compared to alternative investment types. For 47 per cent of respondents, now was partly a good time to invest due to strong tenant demand.
With Belvoir Lettings also predicting growth in the private rental sector in 2014, anyone considering a rent indemnity policy will certainly be encouraged to invest in rental properties in what promises to be a lucrative year ahead.
2014 expected to see rise in prime central London rental prices
Landlords rent insurance policyholders who own or invest in prime central London property are being urged not to worry about declining rents in the category in the latter part of 2013, with rising demand and economic data suggesting that prices will be back on the up next year. The news will reassure many landlords in the capital shoring up their financial security with the assistance of Advanced Rent's (http://www.advancedrent.co.uk) highly regarded products.
According to the Prime Central London Rental Index of Knight Frank, there was a 0.3 per cent decline in overall rents in November, which means that for 18 months, luxury rents have been either flat or in decline. Doubtless that many holders of a rent guarantee insurance policy relating to prime central London property will be concerned by a rate of decline this year that has now reached two per cent, but the situation looks likely to differ greatly in the months ahead, with Knight Frank predicting that 2014 will see a return to rental growth.
Associate for rental research, Tom Bill said that demand for rented accommodation in the capital was "certainly on the rise", adding that there had been an 18 per cent increase in the number of new lettings in the year on the previous 12 months, while there were also 8 per cent and 9 per cent rises in new viewings and applicants respectively. He pointed out that there had traditionally been a link between the performance of the prime rental market in London and the wellbeing of the financial services sector, which was still suffering in the wake of widespread layoffs at banks and other financial sector organisations a few years ago.
Mr Bill signalled his expectation that such downward pressure would ease next year, when rents should rise by 2 per cent in prime central London, thanks to a combination of job creation and a more optimistic outlook for the City's economy. He explained: "As a result, we expect prime central London rents to outperform other markets over the medium term, rising 18 per cent between 2014 and 2018 versus 16 per cent in the UK and 17 per cent in prime outer London." He said that London's economic outlook had continued to improve as economists - such as the Confederation of British Industry - upwardly revised their growth forecasts, all news that should encourage many a rent guarantee scheme policyholder in the capital.
Mr Bill continued, in what should be further music to the ears of current and prospective holders of a rent indemnity policy such as Advanced Rent's (http://www.advancedrent.co.uk) Rent Guaranteed: "The improving data on the London economy is positive for the rental market where the index is still only 5 per cent below its all time high in September 2011 and a fifth higher than the Post Lehman low in the middle of 2009."
Series of measures confirm upward trend for UK house prices
Current or prospective landlords considering expanding their portfolios or entering the private rented sector for the first time will always have reason to take an interest in the latest UK house prices. Many presently holding a landlord rent guarantee policy with Advanced Rent (http://www.advancedrent.co.uk) will be intrigued to read that according to a series of measures from various sources, UK house prices remain firmly on the up.
Halifax, for example, one of the biggest mortgage lenders in the country, has said that the three months to November saw a 7.7 per cent rise in UK residential property prices compared to the year before, according to its most recent house price index. Not for six years has there been such a big annual price increase, with the last month alone seeing a 1.1 per cent rise, bringing the average price of a UK home to £174,910. Such rises could be attributed to a combination of increased demand and a shortage of homes for buyers to choose from, said housing economist Martin Ellis.
This latest trend for potential rent guarantee scheme policyholders was also in evidence in the most recent monthly property market survey from the Royal Institution of Chartered Surveyors (RICS), which found that during November, expectations for the future growth of UK house prices hit a more than 14 year high. Echoing the words of Mr Ellis, RICS said that there had been another fall in the number of homes coming onto the market, meaning insufficient supply to keep pace with rapidly increasing buyer demand. 59 per cent more chartered surveyors across the UK predicted a continuing upward movement in house prices rather than a downward trend over the coming three months, the highest reading since September 1999.
In other news that will be deeply unsurprising to holders of a landlords rent insurance policy in the English capital, another report has said that London property prices will continue outperforming the rest of the UK's next year, albeit with a more stabilised rate of growth. That was the verdict of estate agent Marsh & Parsons, which predicted a 5 per cent to 7 per cent increase in the city's house prices. Meanwhile, a longer-term view for the whole country was given by a revision of the Office for Budgetary Responsibility's (OBR) forecast for the next five years of house price growth, from 15 per cent to 27 per cent.
The independent fiscal body tipped 2013/14 to see rises of 3.7 per cent, followed by 5.8 per cent in 2014/15 and 7 per cent in 2015/16. The figures for 2016/17, 2017/18 and 2018/19 were 4.2 per cent, 3.7 per cent and 3.8 per cent respectively. Such sustained rises are expected to keep a greater proportion of the UK population renting for longer. This, in turn, suggests greater possibilities for those taking advantage of a rent factoring product from Advanced Rent (http://www.advancedrent.co.uk) to put them in a more secure position to expand their portfolio.
25 per cent increase in buy-to-let lending predicted for 2014
Leading buy-to-let mortgage broker Mortgages for Business has stated that it expects buy-to-let lending to rise by 25 per cent in 2014, surpassing £25 billion - which also represents yet more good news for Advanced Rent's (http://www.advancedrent.co.uk) current or prospective rent guarantee scheme Policyholders. Although the present value of the buy-to-let lending market is still shy of the £45 billion peak recorded in 2007, it nonetheless represents a 135 per cent improvement on 2009's £8.5 billion total figure.
The specialist mortgage broker made its predictions on the buy-to-let market for the coming year after a separate survey found an intention among three in five landlords to add to their portfolios. According to the research, landlords rent insurance policyholders anticipate the rapid expansion of their property portfolios over the next six months, which is set to be quickest among landlords with the greatest number of properties.
An intention to expand was cited by more than half (54 per cent) of landlords possessing between one and 10 properties, while for those landlords with at least 11 properties, the figure was 66 per cent. About two thirds of respondents said that they would achieve this by refinancing in the New Year. As for the number of holders of a landlord rent insurance policy that anticipated downsizing their portfolios over the coming six months, this was the case for only seven per cent of landlords surveyed.
David Whittaker, managing director of Mortgages for Business, said that although owner-occupiers and first-time buyers were seeing easier conditions, the private rental sector remained a prominent part of the housing mix. He cited as proof of this, the rise in lending to property investors, as well as landlords' stated intention to add to their portfolios, a sign that demand remained strong for private rented property.
Among prospective or current rent indemnity policyholders looking to invest in buy-to-let, vanilla residential buy-to-let property was the most popular type, being targeted by some 84 per cent of landlords. The intention of around 20 per cent of landlords, meanwhile, was to purchase Houses in Multiple Occupation, while 14 per cent took an interest in Multi-Unit Freehold Blocks. But there weren't so many investors paying much attention to semi-commercial and commercial property, these property types being considered by just 11 per cent and 9 per cent respectively.
According to Mr Whittaker, there remains a considerable appetite for expansion among property investors, at a time of strong yields, rising property prices and healthy tenant demand. Such a situation will be very much music to the ears of present and future landlords considering a rent factoring policy. A product of this type can be provided by Advanced Rent (http://www.advancedrent.co.uk) to lessen your worries about financial security and in so doing, give you yet more scope to add to your portfolio.
Rents at record highs, says LSL Property Services
With another month comes another Buy-to-Let Index from LSL Property Services, and it provides yet more good news for rent indemnity policyholders, Advanced Rent (http://www.advancedrent.co.uk) can report. That's because the figures not only show rents at record levels, but also the lowest amount of tenant arrears since 2008. October saw average rents across England and Wales hit £758 per month, a 0.2 per cent increase on September's figure and 1.9 per cent higher than October last year, meaning all-time high average rental figures. Those considering a rent guarantee insurance policy should also be pleased by the heightened lettings activity, with a 7.4 per cent boost in tenancies in October compared to the previous month. Meanwhile, there has also been a 9.7 per cent rise in an average rental property’s total annual returns. This equates to an average annual return of £15,837, with that figure potentially increasing to £24,921 per property - a 14.5 per cent annual return – over the coming 12 months, should the rate at which rents are increasing remain unchanged.
Of further encouragement to those taking advantage of a product like Rent Guaranteed will be a corresponding improvement in tenant finances. The period since September has seen a £49 million drop in the total amount of late rent, with the value of arrears now standing at £245 million, a mere 7.1 per cent of all rent. It means that on a month by month basis, tenant finances have never looked better since this measure first began to be recorded by LSL in 2008. Now is certainly a fine time to become a buy-to-let landlord amid a rental boom, despite assistance being given to first-time home buyers by government initiatives like Help to Buy.
David Brown, commercial director of LSL Property Services, said that rents had again increased at a time when one might have expected to see a seasonal slowdown, suggesting "an extended Indian Summer" for the lettings market. He commented that while it was "certainly getting easier" to purchase a home, for most new households, the private rental market was continuing to take the strain, adding: "With below inflation rises it is renting which is still relatively affordable in the face of struggling wage growth and rock bottom savings rates."
He added, in words that will please many of those contemplating whether to take out a landlords rent insurance policy: "The first rung of the housing ladder is still a big step up... even a 5% deposit is fast becoming a challenge for many would-be first-time buyers. For the foreseeable future a healthy private rented sector will be as critical for the UK economy as it is for those besieged every month with other household bills." Contact Advanced Rent (http://www.advancedrent.co.uk) today about a rent factoring product that could help you to take advantage of such a buoyant buy-to-let market.
Landlords increasingly adding to their property portfolios
The buy-to-let market may be becoming more lucrative according to recent statistics, but does this translate into landlord rent guarantee policyholders actually investing to expand their property portfolios? The answer is yes, Advanced Rent (http://www.advancedrent.co.uk) clients may be interested to read, according to the Mortgages for Business Complex Buy to Let Index, which found a number of landlords securing finance to purchase property during the third quarter of 2013, making the most of increasingly advantageous mortgage lending conditions.
Every section of the buy-to-let mortgage market saw an increase in new purchases for the third quarter of the year, with the exception of semi-commercial investments. Although there were slightly lower figures for re-mortgaging compared to the previous quarter, it remained a dominant part of total lending for the other three buy-to-let property types. These are findings that will encourage many of those considering a landlord rent insurance policy. 62 per cent of the market was accounted for by standard buy-to-let, or Vanilla lending, a 3 per cent decline from the second quarter.
As a proportion of loans, the most re-mortgaging in the third quarter was recorded for Houses in Multiple Occupation (HMOs), at 77 per cent, compared to the second quarter's 84 per cent figure. Meanwhile, 70 per cent of multi-unit Freehold Block (MUFB) loans were refinancing, a fall from the 88 per cent of the previous quarter. Prospective or current holders of a landlords rent insurance policy will be encouraged to read that for the second consecutive quarter, there was an improved choice of different buy-to-let products. The last three months saw 484 mortgage products on offer, 19 more than the second quarter figure and a 4 per cent boost.
Also of interest to many of those considering a landlord finance product like Rent Guaranteed will be the continued stability in loan-to-value ratios recorded by the Index, with quarter three's 68 per cent figure matching that of quarter two. However, for the vast majority of property types, there was an increase in gross yields between the second and third quarters. Mortgages for Business managing director, David Whittaker, saluted the "sustained improvement in the choice of different mortgage products for landlords", adding that cheaper deals should also result from such heightened competition.
Whittaker said that landlords were being encouraged to increase their activity by continued low rates and high yields, with plenty of confidence exhibited by both lenders and investors. It's hardly surprising, then, that the sector is continuing to grow, and there is a lot of evidence of that, too, in demand for the highly rated finance products of Advanced Rent (http://www.advancedrent.co.uk) Rent In Advance and Rent Guaranteed. With these rent indemnity products, landlords can have fewer worries about expanding their portfolios to take advantage of the improved market.
Continued increase in UK average rents
As if budding rent guarantee insurance policyholders haven't had plenty else to celebrate in recent months, they have further reason for cheer in the form of increased rises in the UK's national average rents, with new agreed tenancies across the country now at a three year peak. Average rents have risen by 11 per cent over the year and are now £781, according to the Sequence Group index, bringing them higher than August's record level, those taking advantage of Advanced Rent's (http://www.advancedrent.co.uk) well-priced products may be interested to read.
The index also showed a 5 per cent month on month rise in tenancies, which increased by 7 per cent annually. London's average rents, meanwhile, have increased by 7 per cent over the year to £1,456, while a 1 per cent monthly increase in tenant demand means that there are now five applicants per property in the capital. These figures are being recorded on a backdrop of fewer available rental properties, suggesting the ever-increasing opportunities for those taking out a rent indemnity policy now. Indeed, there has been a 4 per cent fall in the number of new rental properties across the country, with London seeing a 5 per cent decline.
Signs of more landlord rent insurance policyholders identifying the opportunities of buy-to-let as an investment choice include a 15 per cent monthly increase in buy-to-let mortgages, with the annual figure being 46 per cent. Sequence Group's head of lettings, Stephen Nation, said that the rental market was seeing continued growth with the revival of the sales market, adding that although tenants continued to be attracted to the flexibility of renting, many now seemed to be seeking greater security in what is a fiercely competitive market - driving up the average tenancy length from 12 to 19 months.
Mr Nation continued: "New agreed tenancies are at a three year high with levels of demand up 9 per cent annually across the UK and average national rents are also up 11 per cent annually. The buoyancy of the market and low interest rates are continuing to attract buy-to-let investors in their droves, with the number of applications for buy-to-let mortgages up an unprecedented 46 per cent annually, which is the largest annual growth for three years. This growth should impact supply over the coming months so we expect to see the number of properties available increase before the end of the year."
With the head of lettings at Sequence Group - which consists of 300 branches covering leading brands like Fox & Sons, Barnard Marcus and William H Brown - adding that the supply deficit in London raised the prospect of further increases in the capital's rents, now may be an especially advantageous time to take out a landlords rent insurance policy. Certainly, the highly rated products of Advanced Rent (http://www.advancedrent.co.uk), including Rent In Advance and Rent Guaranteed are designed to enhance landlords' financial security and give them even greater confidence to invest in their portfolios.
Students offering especially strong average rental yields, says TBMC
Landlords rent insurance policyholders will find plenty to like in the latest Landlord Profile Tracking Index of TBMC, which tracks developments in the UK's buy-to-let mortgage market. The report's findings for the third quarter of 2013 confirmed the continued stability of the residential property investment environment throughout the year to date, with good rental income assured by high tenant demand and competitive rates also available on buy-to-let mortgages, Advanced Rent (http://www.advancedrent.co.uk) reports.
The most recent report highlighted a series of trends that will interest rent factoring policyholders, including continued strong average rental yields, continued low buy-to-let mortgage rates, fairly evenly split demand for variable and fixed rates and evenly split demand for purchase and re-mortgage products. The result of these trends is an average rental yield exceeding 6 per cent since the turn of the year. In the third quarter of 2013, there was a 6.06 per cent average rental yield for buy-to-let applications that TBMC had processed.
However, the Landlord Profile Tracking Index also showed that by far the highest returns were consistently delivered by student tenants, with the average rental yield from a student during the third quarter being 7.5 per cent - compared to the 6.06 per cent overall average. TBMC's chief executive Andy Young said: "It is surprising therefore that such a small percentage of applications processed by TBMC have been for properties rented out to students. He said that only nine of the 425 applications sampled in the third quarter were for student properties, making up just 2 per cent of the total - compared to 62 per cent and 33 per cent for families and professionals respectively.
Young admitted that there may be reservations among prospective rent guarantee scheme policyholders about student renting, perhaps including that such tenants would not be reliable payers or would cause a heightened property maintenance bill. However, potential holders of a rent indemnity policy may want to cast their eye over recent National Landlord's Association research, showing that students are actually among the most reliable tenants - with only 38 per cent of student landlords experiencing arrears over the past year, compared to 59 per cent of those that let to blue collar workers, 40 per cent that rented out to families and 71 per cent letting to those receiving benefits.
The report for 2013's third quarter also showed continued low interest rates being offered, with the average variable rate chosen for mortgage offers that TBMC processed during the period being 4.25 per cent, while the average fixed rate was 4.15 per cent. It would seem that such attractive fixed rate deals are certainly drawing in landlords, with 56 per cent of the offers processed by TBMC during the quarter being for fixed rate products.
Certainly, the Index should give prospective or current landlords greater confidence to start or add to their portfolios over the coming months - and with products like Rent Guaranteed from Advanced Rent (http://www.advancedrent.co.uk), they can be assured of even greater financial security.
Severe rental arrears at lowest level for two years
Amid so many signs of an improving economy and with it, increased financial security for landlords and tenants alike, landlord rent guarantee policyholders have even more reason for cheer with the news of a sharp fall in the number of tenants with severe rental arrears, to the lowest level in two years. That is the headline finding of the latest Tenant Arrears Tracker of LSL Property Services, which might just embolden a few Advanced Rent (http://www.advancedrent.co.uk) clients into investing further in their portfolio.
The third quarter of 2013 saw a 25 per cent decline in the number of tenants behind on their rent by a period exceeding two months. It means that there are now just 69,000 tenants in severe arrears, which is 23,000 lower than the figure recorded in the second quarter. It's the lowest level of severe rental arrears that the Tenant Arrears Tracker has recorded since the third quarter of 2011, which is obviously very good news for rent indemnity policyholders.
Paul Jardine, Templeton LPA director and receiver, described the figure as "an important landmark", adding that "Tenants in these most severe situations could face eviction whereas the majority of arrears cases are resolved much more easily." He said that there was "a qualitative difference which makes this particular improvement so important. Such a dramatic fall in the number of people potentially losing their homes is not just an excellent signal for the private rented sector but for the entire UK economy.
All other relevant figures point to an economic environment that is increasingly conducive to landlord rent insurance policyholders choosing to add to their portfolios. Tenants in severe arrears now account for only 1.7 per cent of all tenancies in England and Wales, compared to the previous quarter's 2.4 per cent. The improvement is even more dramatic when judged on an annual basis, with 34 per cent fewer tenants being in severe arrears in the third quarter of this year compared to the same quarter in 2012.
But there has also been a more general improvement in tenant finances for landlords involved in a ('rent guarantee scheme](/rent-guaranteed) to savour, with LSL's most recent Buy-to-let Index having also revealed a fall in overall tenant arrears in August, in which 7.8 per cent of all rent was late or unpaid - compared to the previous month's 8.2 per cent. Even the number of tenants facing eviction through court order has plummeted, with the 26,759 tenants that faced eviction notices in 2013's second quarter representing a 9.7 per cent improvement on the previous quarter's figure.
With our acclaimed Rent In Advance and Rent Guaranteed products, here at Advanced Rent (http://www.advancedrent.co.uk), we can further assure you of financial security as a landlord, an assurance that goes hand in hand with the real improvement in the state of the buy-to-let sector over the last year or so. Contact us now to find out more.
Glasgow is the place to go for student buy-to-let profits, says new study
Taking out a rent indemnity policy may be all about better protecting your profits as a landlord, enabling further investment in your portfolio, but which UK city should you look to for the best profits from student buy-to-let? Topping the list is Glasgow, Advanced Rent (www.advancedrent.co.uk) can report, with a study from Zoopla having ranked the Scottish city as offering superior yields to any other university town. Hull and Manchester made up the top three, again suggesting the strong investment opportunities for buy-to-let investors in northern cities.
A property's rental yield is the annual return that it is expected an investor can make, with a year's rental income being calculated as a percentage of the rental property's initial purchase price. Zoopla made its findings for gross yields, prior to tax and expenses being deducted. Glasgow, for example, ranked highest in the profit stakes for landlord rent guarantee policyholders, on account of low house prices combined with medium rents, exceeding £1,000 for a four bedroom house. It equates to returns of around 4.95 per cent for the city's buy-to-let investors, compared to runner-up Hull's 4.80 per cent and 4.59 per cent for third-placed Manchester.
With southern areas having higher property prices, they did not deliver as strong a performance as their northern counterparts, although several southern cities did still figure in the top 10, including Cambridge, with returns of about 4.54 per cent, in addition to the surprisingly lowly-ranked London, in 10th, for which the average gross yield was 4.20 per cent. Although London is home to the largest student accommodation in the country, rent guarantee insurance policyholders saw their profits in the capital eroded by house prices presently increasing at a faster pace than rents, said Zoopla.
London is seeing 10 per cent year-on-year increases in property prices with the acceleration of the housing market, and there were further surprises in the list for prospective and current holders of a rent factoring policy. Cheltenham, Buckingham, Luton, Bristol and Lincoln all outranked the capital in the student buy-to-let profits league, while Oxford - despite its formidable international reputation - could only muster 14th, with its 4.02 per cent expected average rental yield placing it behind Sunderland and Coventry.
Meanwhile, the lowest potential returns for landlords were offered by Carlisle, Middlesbrough and Bournemouth - with the Teesside town's average rent for a four bedroom property of just £562 a month, comparing to £3,485 a month for a London-based four bedroom property. All in all, it's clear that the most prestigious university cities are not necessarily the best bet for those with a landlords rent insurance policy from a firm like Advanced Rent (www.advancedrent.co.uk), with investors needing to consider student demand, property supply, average monthly rents and average property prices before making their final buying decisions.
Bank confirms 29 per cent yearly rise in buy-to-let lending
Landlord rent guarantee policyholders will be pleased to read yet more evidence of a burgeoning buy-to-let market, with the Bank of England releasing data showing a significant rise over the last year in mortgage lending to landlords, Advanced Rent (www.advancedrent.co.uk) can report. The increase in lending was, in fact, on a par with that to first-time buyers, with the second quarter of the year seeing total lending to landlords amounting to £5bn, a 29 per cent rise from the £3.9bn recorded a year earlier.
Such a figure compares to an annual rise in first-time borrower lending of about 30 per cent, from £6.1bn to £8bn. The Bank declared the lending figures from April to June to have broken records across "a number of metrics", as overall lending over the quarter rose by 23 per cent compared to the previous quarter - a rate of growth described by the Bank as "the highest in any year since the series began in 2007." But as encouraging news as a more active property market is to those contemplating a rent indemnity product, they will doubtless have greatest interest in the landlord lending statistics - as well as a continued general decline in interest rates.
Although a fall was recorded for all rates, fixed rate mortgages saw the steepest decline. Four in five new mortgages are presently fixed rate deals, as borrowers seek protection against future rises in rates. Average rates on all new loans taken dropped from the first quarter's 3.65 per cent to 3.47 per cent with the arrival of the summer. There was a slight decrease in the overall average interest rate across all mortgages, from 3.47 per cent to 3.43 per cent - all positive reading for landlords considering a product like Advanced Rent's Rent Guaranteed to further cement their financial security.
Indeed, there was further good news for landlord rent insurance policyholders lately from the Council of Mortgage Lenders, which released figures showing an 11 per cent monthly rise in buy-to-let lending in July. £2bn was advanced to landlords by lenders in July, compared to the £1.8bn advanced in June. It meant that the number of buy-to-let loans reached 15,200 during the month. There was a 7 per cent rise over the month in lending for buy-to-let house purchases, meaning that the total for loans advanced for purchases was now 7,600. The £900m value of these loans represented a 13 per cent improvement on June.
However, for all of the positivity in these latest figures, there was also a warning for rent guarantee scheme policyholders from Shawbrook Bank's managing director of commercial mortgages, Stephen Johnson, who urged those looking to buy properties to take a long-term approach. He said that investors required a portfolio that would continue to make sense in a more normalised interest rate environment, stating that their hard-earned equity could be put at risk by over-gearing. Ask Advanced Rent (www.advancedrent.co.uk) about how our products can help to minimise your financial worries as a landlord.
More evidence that non-London postcodes often bring better returns for landlords
London may be an obvious hotspot for prospective clients of a rent guarantee scheme like that of Advanced Rent (www.advancedrent.co.uk), but more research has emerged suggesting that it may be a better idea for them to investigate postcodes outside the capital, in Birmingham, Merseyside and Kent. Property services provider Move with Us has published data showing the parts of the UK that produce the greatest buy-to-let yields, defined as rental income as a percentage of the purchase price of the property.
The study, which examined two-bedroom properties for sale and for rent, showed that the highest yields were generally found outside Greater London, being scattered widely across regions - encouraging news for many provincial rent guarantee insurance policyholders. The capital's expensive property prices put paid to its chances of ranking well for returns, despite high rents. Instead, it is the B7 postcode in Birmingham that tops the list of the ten best-yielding postal districts in England and Wales, with a 10.6 per cent gross rental yield - narrowly beating the 10.5 per cent yield managed by the TN28 postcode in Kent. Merseyside's L14 postcode, with its 9.6 per cent gross rental yield, ranked third.
Rounding out the top ten were the B18 and EN8 postcodes in Birmingham and Hertfordshire respectively, which each recorded an 8.7 per cent gross rental yield, some distance ahead of the 7.8 per cent managed by the highest-ranking Greater London postal district, N9 Lower Edmonton. E13 Plaistow and SE2 Abbey Wood also figured in high positions in the list for Greater London, with 7.5 per cent and 7.4 per cent gross rental yields respectively, but nonetheless indicate that central London is not the place for rent indemnity policyholders to look to maximise their yields - not least as average yields in large parts of the capital are presently less than four per cent.
Chief executive officer at Move with Us, Sean King, explained that London-based holders of a landlord rent insurance policy didn't necessarily need to look too far afield for lucrative investment opportunities. Commuter belts to the west and east of the capital, for instance, command high yields, thanks to the combination that they offer to renters of the social and work opportunities of the capital with rental prices lower than those of central London. Collection of the data took place during the first half of 2013, with the gross rental yield being defined as the median annual rent divided by median asking price.
With the share of households renting from a private landlord or letting agency rising from nine per cent in 2001 to 15 per cent in 2011, according to those years' respective Censuses, there are clear opportunities across the UK for landlords choosing to receive their rent on time every month, by taking advantage of the highly rated Rent Guaranteed product of Advanced Rent (www.advancedrent.co.uk) - or for that matter, accessing their income before it is due by taking out our Rent In Advance policy.
Budding buy-to-let investors urged to look to university towns outside London
Those individuals that are considering becoming rent indemnity policyholders by entering the buy-to-let market should consider investing in university towns beyond the capital for the healthiest returns, according to new research. Advanced Rent (www.advancedrent.co.uk) reports that affordable buy-to-let mortgages may be attracting a greater number of investors, but this can come at the cost of market saturation, making it especially important to choose the right location in which to buy.
The continual slashing of interest rates and deposit requirements by banks has led to a five year high in mortgage lending to landlords, with deals below 3 per cent easy to find. This may tempt many new rent guarantee scheme policyholders to immediately start browsing the London classifieds. But although the capital is the most popular landlord hotspot, its high house prices equate to a surprisingly modest 5.7 per cent yield, according to mortgage lender Landlord Centre. It cites 6.2 per cent as the national average yield - defined as rent as a percentage of the value of the property.
Leeds saw the best yields, at 7.6 per cent, followed by the 7.4 per cent and 7 per cent recorded for Liverpool and Nottingham respectively. These locations are all characterised by a combination of healthy rents and affordable house prices for many prospective rent guarantee insurance policyholders. For such landlords, although London may offer greater long-term capital growth potential, a similar monthly rental income could be achieved from a much less expensive property in the more northerly cities. According to Savills estate agency analyst Sophie Chick, the best landlord returns tend to be achieved in urban areas where students and young professionals are most strongly concentrated.
Savills estate agency lists Manchester, Liverpool, Bristol, Birmingham and Leeds as the five largest rental markets outside London, with all of these cities being well known for their strong student populations and with an average of 23 per cent of their populations living in private rented accommodation. There are, however, several steps that rent factoring clients can take to maximise their chances of success in the student market. These include focussing their searches on multiple-bedroom properties in popular student areas or in close proximity to the university, as well as ensuring that their investment has a good standard of all-around security - including good window and door locks and secure bike storage. The latter is especially appreciated by students, who are common targets for thieves. Parents should also always be asked to act as guarantors for the rent.
Before investing, landlords should also factor in the costs that aren't included in yields, such as mortgage payments, letting agent fees, maintenance costs and periods when the property is unoccupied. Finally, they should consider how they can best shore up their income security in the event of the late or non-payment of rent. Among the popular and innovative products available are Advanced Rent's (www.advancedrent.co.uk) own highly-rated Rent In Advance and Rent Guaranteed policies.
Benefits tenants increasingly denied by buy-to-let landlords
Such products as Rent Guaranteed from Advanced Rent (www.advancedrent.co.uk) are designed to cater for a very real need among buy-to-let landlords for the enhanced financial security that allows them to plan their budget in advance with more confidence, even possibly expanding their portfolio. If any more evidence was required of this being a major concern for many landlords in the present financial climate, one only needs to look at the way benefit reforms seem to be impacting on the buy-to-let market.
An industry survey has suggested that there has been a sharp drop in the number of landlords renting to tenants claiming benefits. Last month, the proportion of landlords with tenants receiving Local Housing Allowance (LHA) was 27 per cent, compared to the 34 per cent figure recorded in March, the last time the poll was conducted. April saw changes to welfare in which the amount of total benefit that families with children could claim was capped at £500 per week, with individuals being limited to £350.
Such a rule, which was initially introduced in several London boroughs in mid-April ahead of a roll-out to the rest of the country over the summer, understandably prompts many landlords to reconsider their landlord rent insurance policy, given the impact that it has on the amount paid under the LHA. The London buy-to-let market was expected to be affected most, given the far higher rents in the capital than elsewhere, with large families also especially feeling the pinch. Fast-rising rents and high income yields have led to millions of Britons becoming landlords, and subsequently rent guarantee insurance policyholders.
Now, however, the National Landlord Association (NLA) has conducted research showing the depth of concern over the changes among all landlords - not just those renting to what it estimates to be one million tenants receiving help with their housing costs. It found that 38 per cent of all landlords were worried about the impact of Universal Credit, while more than half (51 per cent) were making the active choice to avoid letting to benefit claimants. Whereas housing benefit is presently paid to landlords rent insurance policyholders directly, Universal Credit will include it as part of a single payment made to claimants.
The NLA has cited fear among its members of budgeting problems arising as a result of tenants being paid on a monthly, as opposed to a weekly or fortnightly basis, with landlord payments not being the greatest priority. Concern was most pronounced among landlords with single properties or smaller portfolios, with letting to benefits claimants having already been ruled out by six in 10. This is not good news for a government that depends on the private rented sector to support housing provision for benefit recipients.
Buy-to-let remortgaging on the up in second quarter
One of the biggest reasons for a landlord to invest in one of the highly rated products of Advanced Rent (www.advancedrent.co.uk) such as Rent Guaranteed is so that they can enjoy greater financial security over the long term, enabling them to expand their portfolios. One indicator of a thriving buy-to-let market is greater mortgage availability, which is why many landlords will be encouraged by the news of an increase in buy-to-let remortgaging in the UK in the second quarter of the year, as more investors refinance to raise capital for future projects.
That is according to the Mortgages For Business Complex Buy to Let Index, which found that there was a rise in remortgaging as a proportion of transactions on all property types except vanilla during 2013’s second quarter. The firm said that the availability of buy-to-let mortgages had been boosted by the government’s Funding for Lending scheme, with rates being reduced and lenders encouraged to relax criteria. Prospective rent guarantee insurance policyholders will be encouraged by the 31 more deals on offer in the second quarter than the first, bringing the total to 465, despite the number of lenders – 27 – not changing.
Managing director at Mortgages For Business, David Whittaker, said that buy-to-let mortgages had never been so affordable following the downturn, stating that the assistance on offer from FLS had been “gratefully accepted” by lenders, as it had enabled them to pass on some of the savings to investors in the form of greater choice and more competitive rates. He added: “This has encouraged a record proportion of refinancing with landlords taking advantage of cheaper remortgage deals in order to expand their portfolios further down the line.”
That wasn’t the only good news for investors looking for a landlord rent insurance policy. Although most property types had seen a slight fall in yields, the outlook for yields was good and they remained strong. Whittaker added that even with first time buyer numbers seeing a slight improvement, the demand for rented accommodation remained “astronomically high”.
The survey recorded the biggest increase for semi commercial property (SCP), with the second quarter seeing remortgages account for 9 in every 10 transactions, compared to a mere 54 per cent in the previous quarter. Meanwhile, 88 per cent of all Multi-unit Freehold Block (MUFB) deals were accounted for by refinancing, compared to the first quarter figure of 75 per cent. In the first quarter, just 69 per cent of total Houses in Multiple Occupation (HMO) deals had been remortgages, but this jumped to 84 per cent in the second quarter. There was a slight fall for vanilla property by this measure, although the second quarter still saw refinancing account for 65 per cent of all vanilla transactions, compared to the first quarter figure of 69 per cent.
Latest severe tenant arrears rise highlights importance of right landlords rent insurance
If there is one recurrent worry for landlords both new and seasoned, it is the possibility of tenant rent arrears – especially when those arrears are severe. Irrespective of their extent, they can cause great frustration for buy-to-let investors, bringing unwanted financial uncertainty that makes it more difficult to invest in and grow their portfolios. It’s why the right rent guarantee insurance from a provider like Advanced Rent (www.advancedrent.co.uk) can be so attractive, and a new warning has now come in the form of increased severe rent arrears for tenants.
According to the latest Tenant Arrears Tracker of LSL Property Services, the second quarter of the year saw an increase to 98,000 in the number of tenants in the UK in severe rent arrears. The 3.3 per cent rise in the number of tenants in severe rent arrears – defined as those who are two months or more behind on their rent payments – brought the number to the third highest level ever recorded. However, the figures did bring some good news for landlord rent insurance policyholders, with tenancies in severe arrears still representing a small minority of all those in England and Wales, at 2.4 per cent – even if this was up from 2.3 per cent in the first quarter of 2013.
Indeed, tenant finance actually improved overall during the period, with only 8.2 per cent of all rent in May being late or unpaid, compared to the previous month’s 8.4 per cent figure. Paul Jardine, director and receiver at Templeton LPA, the specialist practice of LPA Receivers, hailed tenants’ generally “great resilience to setbacks” so far, adding that he expected a halving in the proportion of all rent in arrears between 2008 and 2018. He said that tenants had been helped in their efforts to keep up with their rent payments by slower rent rises in recent months – all very encouraging news for landlords making use of rent factoring.
However, Mr Jardine warned rent indemnity policyholders that there was a “longer-term battle” with other forms of inflation, in addition to unemployment and low wage growth. He said that the Bank of England’s target for consumer inflation was being persistently outpaced, “escalating much faster than either rent or wages.” There was also an increase in the first quarter of the year in the number of tenants facing eviction via court order, by 4.9 per cent to 28,473 – all suggesting that many landlords could still do with the extra help with dealing with rent arrears.
Such help could be forthcoming from such products of Advanced Rent (www.advancedrent.co.uk) as Rent In Advance, which enables landlords to guarantee their cash flow in the form of six months’ rent upfront, every six months, or Rent Guaranteed, a more conventional [rent guarantee scheme(/terms-and-conditions) that ensures that landlords receive their rent on time every month. We build long relationships with our landlords and can be easily contacted online, by phone or via email.
Private rental costs rise again in May
Buy-to-let professionals looking to take out a rent guarantee insurance policy like that offered by Advanced Rent (www.advancedrent.co.uk) have had reason to be encouraged by the state of the market in recent months. Now, they have even more good news, as it is revealed that UK-wide private rental prices saw a 1.3% increase in the twelve months to May 2013 – according to the latest data from the Office for National Statistics (ONS).
Although England saw a 1.3% rise in rental payments over the period, it is actually landlords rent insurance policyholders in Wales recording the biggest increase in the prices they charged tenants over the past year, specifically 1.5%, while rental prices rose by 1% in Scotland. The figures made May the second consecutive period since January 2012 in which Wales recorded higher price increases than England. Although private rental prices in England rose again, the rates at which such increases have taken place seem to have remained stable since the first quarter of 2012.
Unsurprisingly, London remained the most expensive region in which to rent a home in the UK, with a 2.2% rise in average rents between May 2012 and May 2013. All in all, the figures are positive ones for the many landlords and prospective landlords in the UK that are interested in products like Advanced Rent’s own Rent In Advance, which allows them to guarantee their cash flow with 6 months’ rent up front every 6 months. Also available is Rent Guaranteed which makes it possible for a buy-to-let professional to receive their rent on time every month.
The numbers are backed up by those released earlier this month by LSL Property Services, which revealed that those renting a home in the capital are now paying an average of £1,106 per month. This is the highest level ever recorded, and represents a 7.9% rise since May last year. Also recently released for perusal by prospective rent indemnity clients is The UK Buy-to-Let Report of Select Property, which revealed that the market has become more robust in the last few months.
Giles Beswick, Director of Select Property, commented: “This report will explain more about how the property market has come to favour buy-to-let investors since the economic crisis and why this sector of the industry is now looking relatively robust as a result of strong rental demand and occupancy rates.” Quoted in the report are figures from The Council of Mortgage Lenders (CML), which stated that there had been an increase in the number of buy-to-let mortgages lent in the UK over a 12 year period, from 44,000 in 1999 to 122,000 in 2011.
There was also a significant rise during the same period in the amount of money lent, from 3,100 million to 14,000 million. It all suggests that for enterprising landlord rent insurance policyholders, opportunities continue to abound in the buy-to-let market – especially when they shore up their financial security with the assistance of Advanced Rent’s (www.advancedrent.co.uk) highly acclaimed products.
How prospective landlords should prepare to enter the buy-to-let market
Any prospective landlords rent insurance policyholders who have not yet become involved in buy-to-let, but are nonetheless waiting for the right time, may be encouraged by some of the latest news about the sector. Right now, it is very much a landlords’ market, with lower house prices combining with attractive mortgage deals and increasing rents to make a booming buy-to-let sector. Those who enter it may be able to count on the products of Advanced Rent (www.advancedrent.co.uk) but there are other factors that they will need to be mindful of to ensure success.
The combination of the high demand from tenants who make up what is fast becoming ‘generation rent’ and low housing supply may seem to offer many opportunities if you are entering the market, but there are also important obligations. First of all, you will need to put together a carefully considered plan and budget, as is the case with any business. Many unexpected costs can arise for the ill-prepared landlord, and these all need to be accounted for – from legal and agency expenses and rent guarantee insurance to gas certificates, Energy Performance Certificates (EPCs) and professional property inventories.
Before any of that expenditure arises, however, you will need to do your initial critical research, finding the right property in the right area. The type of property that you will need to search for, as well as the area that you need to peruse, are both affected by the kind of person that you would like to rent to. Student property, for example, is inevitably most lucrative when it is near a university campus. For families, meanwhile, homes near good schools are the likely priority. Young professionals tend to look for properties that are in close vicinity to major transport links.
As a landlord, you will have responsibilities to your tenants, and will need to ensure that all of the appropriate standards are met by your property. For example, you’ll need to ensure the approval of qualified tradesmen for any plumbing and electrics. It’s also necessary for deposits to be placed in a protection scheme, with the relevant scheme making the final decision in the event of any disputes once the tenancy comes to an end. There can be great variations in the fees and services of letting agents, while it’s also wise to put aside about £1,000 for legal fees.
However, one of the most vital considerations for prospective landlords is how you’ll cover for rent arrears and void periods – as demonstrated by the fact that buy-to-let properties account for one in five repossessions, according to recent statistics from the Council of Mortgage Lenders (CML). Such dreary figures help to explain why so many landlords decide to shore up their financial security by taking out one of Advanced Rent’s (www.advancedrent.co.uk) renowned guaranteed rent products. These include Rent In Advance as well as the recently introduced Rent Guaranteed, which enables a buy-to-let investor to receive their rent on time every month.
Of all of the reasons for those owning a portfolio of buy-to-let properties to invest in the right landlords rent insurance so that they can expand their portfolio further and boost their income, it appears that using such income as a pension is one increasingly prominent motivating factor. That’s according to a major survey by The Mail on Sunday, which found that it appears to be income rather than capital growth that has led most current or prospective buy-to-let investors to the sector, Advanced Rent (www.advancedrent.co.uk) reports.
The survey polled 1,065 readers – including both current buy-to-let investors and those considering moving into it – about their attitudes towards the sector. The findings showed strong confidence in this investment sector, with 65 per cent either using or planning to use buy-to-let as a pension alternative. The sector was also favoured to cash deposits by 60 per cent of respondents, with 69 per cent even backing buy-to-let as a less risky alternative to equities.
30 per cent of respondents owned one property, compared to 39 per cent who owned between two and five. 27 per cent of investors planned to add to their portfolio in the next year, with further purchases being ‘considered’ by 33 per cent. It was also clear from the survey that many landlord rent insurance policyholders place the greatest emphasis on the income that can be delivered by buy-to-let, with 85 per cent of respondents reckoning that over the next five years, it will be income, rather than capital growth, that provides the majority of returns.
The results will be unsurprising to many of those who have already taken advantage of rent indemnity policies as a result of becoming a buy-to-let landlord, having grown disillusioned by alternative sources of retirement income. While pension funds are continuing to perform disappointingly, with poor interest rates also being delivered on savings, more and more people in the UK of all ages are being forced to rent rather than buy a home, creating ready demand and an associated steady income for investors. Whereas putting cash on deposit results in annual interest that barely exceeds one per cent, the average buy-to-let yield is presently about six per cent.
The findings only confirm the continuing emergence of buy-to-let as a crucial part of many lenders’ portfolios. The inability of many prospective home buyers to obtain a mortgage is pushing many into the private rented sector, ensuring that demand for rental property continues to outstrip supply, which has kept yields up. Nor do yields look likely to drop any time soon, with buy-to-let investors enjoying returns nearing 10 per cent in some regions. Such figures far exceed what either savings accounts or the stock market can offer.
This only makes it all the more unsurprising that so many landlords are taking advantage of products like Rent In Advance and Rent Guaranteed from Advanced Rent (www.advancedrent.co.uk) to provide them with the longer-term financial security that they require to confidently expand their portfolios.
Landlords enjoy increased rents, but are warned about contingency funds
There has been a boost to many of those that are considering a rent guarantee scheme with the news that around 41% of landlords have bumped up monthly rental costs over the last year, making the most of a healthy rental market. However, there was also a warning for those who failed to account for the costs of owning a buy-to-let property with a contingency fund, reports Advanced Rent (www.advancedrent.co.uk)
The headline percentage comes from the Rent Check Report of the market research firm BDRC Continental and property consultancy Allsop LLP, which also found that over the coming year, almost a quarter of landlords intended to add further properties to their rental portfolios, as tenant demand remained buoyant. Those with an interest in rent factoring may be pleased to find that according to the survey of 1,500 property investors, 61% were confident about the prospects for their rental businesses.
With some 17% (3.8 million) of England’s households now being private rented homes, the private rental accommodation market has seen particularly pronounced growth in recent times, as tenants have also seen a rise in rental costs over the last couple of years, especially in London. Those looking to rent a typical two-bedroom flat in the capital, for example, can now expect to be at least £1,060 out of pocket per month, while for three-bedroom semi-detached properties, that figure increases to £1,435 – compared to the £500 monthly costs of the average rental property in the North East.
Partner at Allsop LLP, Paul Winstanley, commented: “The demand for rented housing and the constraints on the wider housing market mean that rented housing is likely to retain the same income dynamics for the medium to long-term.” He added, in words that will encourage so many of those contemplating a landlord rent insurance policy, that “the rented sector is growing at such a rate that landlords will share in a secure and attractive return.”
However, such good news for landlords rent insurance policyholders is tempered by too many of them failing to factor in the costs of buy-to-let property ownership, which is pushing up repossessions, according to Invest Connect. The property investment specialists said that rising rent arrears and void periods were behind this rise, with business development director Charles Brittain warning investors and landlords that in the absence of contingency fund to cover “unforeseen circumstances”, they could encounter financial difficulties, potentially leading to the loss of their property.
Brittain cited among the expenses that needed to be factored into such a contingency period, not only rent arrears and void periods but also the likes of maintenance, repairs and refurbishment, in addition to such ongoing rental costs as letting agent fees and gas safety certificates. Certainly, ensuring such financial security is a major worry for many landlords, which helps to explain the popularity of Advanced Rent’s (www.advancedrent.co.uk) own Rent In Advance and Rent Guaranteed products that have already attracted significant industry acclaim.
Buy-to-let lending gets £500m boost over past year
In a sign that buy-to-let lending is in increasingly good health despite the Government’s recent policy focus on help for first-time buyers, the Council of Mortgage Lenders (CML) has confirmed a £500m, or 13.5% increase in buy-to-let lending in the first quarter of this year, compared to the same period in 2012. Such news should encourage many of those considering taking out a rent indemnity policy, says Advanced Rent (www.advancedrent.co.uk)
The CML confirmed that landlords were given 33,500 mortgages worth £4.2bn by its members in the period from January to March 2013, a notable increase on the £3.7bn that was recorded in the first three months of last year. Buy-to-let deals also occupied a greater proportion of the mortgage market, now accounting for 13.4% of total outstanding lending, compared to the 13% seen in 2012’s final quarter and the 12.9% recorded at the end of the first quarter of last year – more good news for those with an interest in a rent guarantee scheme
According to the Council, the UK now has some 1.46m buy-to-let loans, which is triple the figure of a decade ago. Buy-to-let lending in the first quarter did come slightly short of the last quarter of 2012’s £4.6bn figure, but otherwise, the trend is of a long-term rise. This is despite Government initiatives aimed at reviving the property market, like the Help to Buy scheme, specifically excluding buy-to-let landlords, with the exception of the Funding for Lending scheme of the Bank of England, for which an extension was recently announced until January 2015.
With rents across the United Kingdom recently increasing at a rate double that of wage increases, with returns of 10.9% a year now being predicted for landlords by property firm LSL, obvious opportunities now exist for investment. However, the fact that one in 11 tenants is now in arrears also highlights the important role that can be played by products like Advanced Rent’s own [Rent Guaranteed](/rent-guaranteed] scheme in shoring up buy-to-let investors’ financial security.
More and more landlords are noticing the returns on offer from buy-to-let, which is fuelling the sector’s present mini-resurgence. For all of the Government’s efforts, there remain a meagre number of first-time buyers, which is leaving the rental sector with plenty of excess demand and ensuring that buy-to-let investors continue to benefit from healthy yields. With rates and fees both down and landlords gaining more options for the financing of more complex deals, those with a landlord rent insurance policy are making the most of the chance to expand their portfolios.
Funding for lending extension ‘a boost to landlords’
It is thought that buy-to-let landlords, including those considering products like Rent Guaranteed from Advanced Rent (www.advancedrent.co.uk) should be boosted by the Bank of England’s recently announced extension of the £60bn Funding for Lending scheme until January 2015.
The Funding for Lending scheme was conceived with the aim of incentivising lending to SMEs. With landlords that have an annual turnover of less than £25m being classed as SMEs, many individuals with a rent guarantee insurance policy should be among those to benefit in the form of increased capital.
So that more funding for SMEs can be obtained, lenders will have the ability to draw £5 from the scheme for every £1 of net lending to SMEs in 2014, as well as £10 in 2014 for every £1 loaned in the rest of 2013. Participants using the FLS to source cheap credit will find that when they invest in landlords, that capital will be subjected to a five times multiplier in 2015 and a 10 times multiplier in 2014.
Although the changes to the scheme do not have a direct impact on the ability of a prospective recipient of landlords rent insurance to secure mortgage lending, the scheme now presents participating lenders with a greater incentive to lend to SMEs in the form of, for example, business loans. It is thought that the extra capital that buy-to-let landlords may therefore be able to obtain will have an indirect effect on buy-to-let mortgage rates and the market as a whole.
The greater amount of cash available should drive demand for funding among landlords, meaning that in order to keep pace, supply will need to be improved, equating to lower mortgage rates. According to the Council of Mortgage Lenders, there was an increase in buy-to-let lending as a percentage of total gross lending from 9.8 per cent in 2011 to 11.5 per cent in 2012, or to £16.4bn from £13.8bn.
Even under the existing FLS, however, landlords have benefitted from lower borrowing costs passed onto them by banks and building societies, with financial data provider Moneyfacts stating that there had been a drop in the average buy-to-let rate from 5.09 per cent in August, the month of the launch of the FLS, to 4.28 by late April. This contributed to a 19 per cent rise in buy-to-let lending in 2012, meaning a four year high in the number of buy-to-let mortgages.
Although the government has generally targeted its recent initiatives at the invigoration of the housing market by giving assistance to owner occupiers, FLS is the sole scheme from which buy-to-let investors have not been specifically excluded.
This has only increased the amount of attention that the scheme has received from prospective landlords, many of whom may also be interested in the ability of Advanced Rent’s (advancedrent.co.uk) rent indemnity products to boost their financial security and place them in a better position to expand their portfolio.
New research reveals UK’s unlikely buy-to-let hotspots
Prospective buy-to-let landlords, or indeed those that are already involved in the sector and perhaps take advantage of the products of rent factoring specialists Advanced Rent (www.advancedrent.co.uk) may be intrigued to read of new research revealing the towns that offer the best returns. The findings may surprise many, with less desirable postcodes like Slough, Portsmouth and Blackpool figuring near the top of the list.
That such towns and cities provide some of the best rental yields in the country can be attributed to low property prices combined with a thriving local rental market, the latter often driven by a nearby university. At the top of the charts is Southampton, which has an average property price of £138,311, £901 average monthly rents and a yield before tax of 7.82 per cent for landlords – making investment in the city’s property a sound bet, and providing reassurance to many of those considering landlords rent insurance
Following Southampton in the list are several northern cities, with Blackpool’s combination of a £75,943 average property price and £494 average monthly rent equating to a rental yield of 7.81 per cent. Other cities to deliver rental yields exceeding 7.5 per cent include Kingston upon Hull, Manchester and Nottingham, with the only other city providing a rental yield of more than 7 per cent, Coventry, having an average monthly rent of £624 from an average property price of £104,970 – meaning a yield of 7.13 per cent.
The findings show that buy-to-let is still a good investment for those desiring above average returns. Of the top 50 areas, 23 offer yields exceeding 5 per cent, which far surpasses what more traditional savings options can offer. However, landlords do need to do careful research, given that it isn’t always the most popular locations that offer the best return. Advanced Rent (www.advancedrent.co.uk) offers products like Rent In Advance and Rent Guaranteed that help to boost a landlord’s financial security.
Nonetheless, with cash and stocks and shares often producing volatile or poor returns, many may be encouraged to move into property investment in some of these unsung areas of the country. Also attracting plenty of attention are seaside towns, on account of seasonal work and holiday rentals. Blackpool is at the top of this list, with second-placed Bournemouth providing a 5.81 per cent yield and third-placed Brighton and Hove, 5.48 per cent. However, overall rental yields can be affected in areas where the landlord is unable to rent out their property for the whole year.
In the London area, meanwhile, Southwark came out top, with an average property price of £401,405 and an average monthly rent of £2,058 equating to a 6.15 per cent rental yield. Indeed, the high property prices in the capital mean that it does not perform especially strongly in the overall yield rankings. Nonetheless, opportunities exist for enterprising clients of Advanced Rent’s (www.advancedrent.co.uk) rent guarantee scheme in more traditionally affordable outer London suburbs like Brent, Enfield and Newham.
‘Severe arrears’ among tenants an increasing problem for landlords
As if any more evidence was needed of the ever-heightening financial insecurity faced by many landlords in recent years that has made bespoke financial products like Advanced Rent’s (www.advancedrent.co.uk) own Rent Guaranteed popular, new figures show a worsening epidemic of “severe arrears” among UK tenants.
According to the Tenant Arrears Tracker of LSL Property Services, the first quarter of 2013 saw 94,000 tenants more than two months behind on payments, which is an increase of 4,000, or almost 5 per cent. This represents 2.3 per cent of all of England and Wales’ renters. The statistics buck an earlier trend of improvement. Although 2012 had largely seen about 50 per cent more severe arrears than in 2011, the later stages of the year saw a significant improvement in this figure, with 14.5 per cent fewer cases in the final quarter.
LSL said that the figure for severe arrears over the last 12 months now exceeded the long-term average by 20 per cent and that a record figure had also been recorded for eviction by court orders, being 10 per cent above that of a year earlier. The 25,286 tenants facing eviction notices in the last quarter of 2012 represented a 5.7 per cent increase on the previous quarter.
Paul Jardine, director at the Templeton LPA property receivers that are part of LSL, commented: “Household finances are feeling the impact of spiralling costs, particularly energy bills, which were recently predicted to grow by an average £214 this year. And wallets are under pressure from the other side.
“According to the ONS, wages are creeping along at 1.2 per cent annual growth, well behind a rebounding rate of inflation. Many tenants have finally pulled their finances back together after the strain of the festive period. But for a significant minority the situation is actually much worse than three months ago, and this is reflected in the most severe tenant arrears.”
Although the fact that more tenants are encountering severe difficulties is hardly good news for buy-to-let landlords, there was an improvement in the number of tenants only a little behind on rents. LSL’s most recent Buy-to-Let Index shows a fall in overall tenant arrears in February, with the 7.4 per cent of all unpaid or late rent being the lowest since November last year.
Templeton added that buy-to-let landlords were also benefitting from lower buy-to-let mortgage rates as a result of the Funding for Lending Scheme of the Bank of England. According to Council of Mortgage Lenders data, buy-to-let mortgages that are more than three months in arrears were reduced in number by 20 per cent in the final quarter of 2012 compared to the final quarter of 2011.
Nonetheless, financial pressures remain very real for many tenants and landlords alike, with the latter likely to appreciate a reliable means of receiving their rent on time, every time – or even in advance. Get in touch with Advanced Rent (www.advancedrent.co.uk) now to learn more about our rent guarantee scheme
Should the Government’s Help to Buy scheme have been extended to landlords?
All eyes in recent weeks have been on the Chancellor of the Exchequer, George Osborne, as he made his finishing touches to this year’s Budget. But was an obvious opportunity missed in the failure to include property investors in new plans designed to help people buy properties? It’s one more development that has moved landlords to consider other ways of unlocking capital, such as the guaranteed rent products of Advanced Rent (www.advancedrent.co.uk)
In a climate in which access to vital funding seems more restricted than ever, with banks not lending and landlords clasping for anything that could afford them that vital extra financial security, many were disappointed that the Government’s newly announced Help to Buy scheme would not be open to property investors. Combined with the projected corporation tax cut, such a move would have helped to address the current housing shortage by stimulating buy-to-let investment.
The £3.5 billion Help to Buy scheme is designed to help people get a foot on the property ladder by making mortgages more available to those who are unable to afford a large deposit. Buyers in the scheme will be able to top up a 5% deposit of their own with a five year interest free loan from the government of up to 20% of the value of a new property. The scheme has a second strand, “Mortgage Guarantee”, which will see the Government invest an additional £12 billion as insurance to lenders who provide buyers with better mortgages where there is a high loan to value ratio.
Although it is thought that the plans will boost the construction sector and put as many as 500,000 buyers in a better position to borrow, there are also many clients of landlord rent insurance who wonder whether the buy-to-let market could have received some similar much-needed stimulation. With so many people now appreciating the flexibility of renting rather than buying a property and a great imbalance between demand and supply still prevalent in the rental market, the scheme could have been used to invite more prospective buy-to-let investors to address the shortage.
A Help to Buy scheme extended to landlords could have increased the availability of properties to renters and helped to keep rent affordable, boosting the economy. In the absence of this, however, there remain several options open to landlords looking to improve their access to rental income. Such solutions include the aforementioned Rent In Advance, which allows landlords to access rental income six months before it is due, meaning that they can invest in and grow their property portfolio at a faster pace. In addition, Advanced Rent has recently launched its Rent Guaranteed product.
This latter product lacks the rent advance element of Rent In Advance, and is instead an enhanced version of the conventional rent guarantee insurance with participating landlords being paid their rent each month, on time. Contact Advanced Rent (www.advancedrent.co.uk) for more information about how either of these schemes could greatly enhance your buy-to-let business.
Tips for ensuring your financial security as a landlord
The buy-to-let market may be a potentially rewarding one for newcomers and more established property investors alike, but the returns are not sufficiently strong and reliable that no financial advice and assistance is required from time to time - as is shown by the growing popularity of landlords rent insurance and products like the acclaimed Rent In Advance from Advanced Rent (www.advancedrent.co.uk) So, how can you minimise your own financial insecurity as a residential property landlord?
First of all, it is important to keep things simple if you are not to make the most basic of investment mistakes. When you are on the lookout for a rental investment property, bear in mind such factors as location, transport links and how close the property is to good schools and sources of work. Period properties and properties in towns have been shown to hold their value better over time than new-build properties and properties in rural areas, respectively. Prime property also tends to hold its value better when the market suffers.
Prospective landlords should always seek good advice and keep an eye out for the next "hot spot" that will buck market trends with growth in the double digits. Development plans may boost the values of properties in a certain area, but that area may already have high prices, so there may be even greater returns to be enjoyed elsewhere. However, there are market downturns as well as upturns, so you should always be responsible, bearing in mind that if you borrow to invest, a market slump can magnify losses. Although rent guarantee insurance can’t protect you from a reduction in the value of your property it can ensure that you maximise your rental income and, with [Rent Guaranteed](/rent-guaranteed], that you receive your rent on time.
It isn't as easy these days to borrow more than you can repay, given the far stricter lending guidelines now in place at the banks. However, buy-to-let landlords can still struggle with their cash flow if they find themselves unable to replace tenants. This helps to explain why rent indemnity products remain so popular for when they do finally find a tenant. Put simply, rather than the licence to print money that it may have been portrayed as in some quarters, life as a residential landlord can be precarious at times, and market conditions can swiftly change.
You should ask yourself, therefore, whether you could still afford your mortgage if you fell ill for an extended period, lost your job or were forced to work reduced hours. Naturally, another option is to enquire about one of Advanced Rent's highly regarded products. Rent In Advance, for example, allows landlords to instantly bank six months' rent, continuing every six months, while the more recently introduced Rent Guaranteed is an enhanced rent guarantee scheme not involving an advance/loan element but still ensuring that landlords get their rent on time each month.
Contact Advanced Rent (www.advancedrent.co.uk) now to learn more about the suitability of our products if you wish to prioritise the payment of rent on time and the associated financial security.
UK landlord possession claims at five year high
In a firm sign of the present rental income uncertainty for many landlords across the country that has led to the introduction of the Rent In Advance and Rent Guaranteed products from Advanced Rent (www.advancedrent.co.uk) the number of landlords seeking possession claims and the number of court orders in the UK show little sign of abating, having now reached a five year high.
According to the latest Court statistics from the government, 2012 saw 103,329 landlord claims that led to an order for possession being made. It is estimated that a possession order was obtained in between 67% and 80% of claims. Private landlords are continuing to find it difficult to chase rent from defaulting tenants, as indicated by the 85% increase over the last three years in the number of such professionals using the accelerated procedure to apply for possession.
Many landlords across the UK remain greatly concerned by the non-payment, late or partial payment of rent. This lack of guaranteed rent not only threatens landlords’ livelihoods, but also makes it harder for them to plan ahead with investment into their property portfolio. That’s why, in 2011, a team of experienced residential property financiers and private equity investors established Advanced Rent to design a solution to increase landlord financial security by releasing future rental income.
That solution was Rent In Advance, which allows landlords like those affected by the above statistics on possession orders to guarantee their cash flow by transferring the risk of late or non-payment of rent to Advanced Rent. In return for a highly competitive fixed fee of 12.5% of annual rental income including all taxes, these landlords can immediately bank their next six months’ rent. This arrangement continues for every subsequent six month period.
The Rent In Advance product includes both legal expenses cover and 24/7 emergency call-out insurance as standard, and represents something more than the traditional rent guarantee scheme as was recognised by the Landlord & Lettings Awards 2012, which shortlisted the product in the Innovation category. However, for those property landlords that are looking for a more conventional ('rent guarantee insurance](/) policy, with rent being paid on time each month and no advance/loan element, Advanced Rent has also recently launched the [Rent Guaranteed](/rent-guaranteed] product.
Both products have already won favour with a wide range of landlords that harbour real ambitions for their portfolio, but that might have thus far been hampered or deterred by the presently prevalent difficulty in receiving rent on time
Contact Advanced Rent (www.advancedrent.co.uk) today for a more detailed discussion about the product that would best suit you.
Advanced Rent (www.advancedrent.co.uk) a team of seasoned private equity investors and residential property financiers, has already made a notable impact in the property rental market, having been recognized as a Finalist in the Innovation category of the Landlord & Letting Awards 2012/13. That was on account of its Rent In Advance product, but now, the company has introduced a rent guarantee product by the name of Rent Guaranteed
Whereas the established Rent In Advance product allows landlords to immediately bank their next six months’ rent as part of a recurring arrangement every six months, Rent Guaranteed lacks this rent advance element. It is an enhanced conventional rent guarantee insuranceas participating landlords are paid their rent each month, on time. This is another product of Advanced Rent that provides landlords with a more predictable cash flow, and minimizes administrative stress and hassle.
Landlord rent insurance first came into being as a way for landlords to reduce the amount of rental income lost at the expense of unreliable tenants, as well as cover the legal expenses involved in fighting the tenant. To this end, Rent Guaranteed incorporates legal expenses cover as well as 24/7 emergency call-out insurance. Landlords are charged an affordable fixed fee of 6% of annual rental income, including all taxes, with no hidden costs. In return, landlords enjoy the peace of mind of being protected in the event of a tenant being unable to pay their rent in any given month.
With its enhanced landlords rent insurance Advanced Rent serves a wide variety of landlords, from hobby landlords who view their property as a nest egg and want to protect its long-term rental value, to full management landlords who appreciate the relationships that the company has struck up with national tenant-find and property maintenance providers. Products like Rent In Advance and Rent Guaranteed are also used by landlords with serious ambitions to expand their portfolio, as well as armchair investors who are thankful for a risk-free, guaranteed return.
Landlords with an interest in either product are simply advised to phone 01603 821030 or email 'firstname.lastname@example.org' for a more detailed discussion about the benefits that are specific to them. An introducer’s fee can be earned by partner landlords that also tell any friends who then have a property accepted with us. Once you provide Advanced Rent (www.advancedrent.co.uk) with details on your property and its incumbent or prospective tenant, we’ll carry out a complete reference and credit check and give you the benefit of a market leading rent guarantee insurance product.
Better than guaranteed rent, bank six months’ rent upfront with Advanced Rent
As rewarding as life as a property landlord can be, ensuring that you receive your rent on time can be extremely frustrating, not least as you may desire access to it for further investment in your portfolio. Many landlords find the cash flow that rental income provides to be unreliable, and would like to somehow guarantee their future rent. Thankfully, the innovative and unique product of Rent in Advance Rent in Advance is designed for exactly that purpose.
Rent in Advance is more than a rent guarantee scheme it allows landlords to access income before it is due, averting the risk of late or non-payment of rent. The ability that it gives our growing base of partner landlords to immediately bank their next 6 months' rent, continuing every 6 months, provides them with valuable peace of mind, as well as the resources that they require to much more rapidly invest in or grow their property portfolio. It is available for a fixed fee of 12.5% of annual rental income including all taxes, with no hidden costs.
Advanced Rent was established in 2011, by a team of seasoned private equity investors and residential property financiers who realised how difficult it was for many landlords to access capital for the growth of their property portfolios. These professionals, who already had a proven track record in providing residential landlords with bespoke insurance and financial products, decided to improve upon standard landlords rent insurance with Rent in Advance.
In the short period for which it has been available, this enhanced guaranteed rent product has already attracted acclaim, as shown by Advanced Rent's shortlisting as a finalist for 2012/13 in the Innovation category of the prestigious Landlord & Letting Awards. Similarly, the more direct feedback that has been received from partner landlords has been extremely positive, with many choosing to tell their friends. Such landlords may want to know about the introducer's fee that we pay for every property of their friends that we accept.
Our bespoke landlord rent insurance includes both legal expenses cover and 24/7 emergency call-out insurance, and both are included as standard with Rent in Advance. It is a straightforward process to take advantage of. Interested landlords simply have to provide us with details of their property and incumbent or potential tenant, for a full reference and credit check. After the collection of the first month's rent, we advance you 6 months' rent less our fee. You will receive another 6 months' rent upfront, 6 months later.
For landlords that are presently struggling to access capital, there is nothing else currently available in the sector.