Here is our latest news round-up on what is going on in the world of property …
Property prices hit new record high
House prices in the UK hit a record high this week as Homes & Property reported that the average advertised price reached a peak of £324,000. This represents a 5.5% increase in the past 12 months’ alone.
Moreover, even with the increase in prices, strong demand means that homes are also selling more quickly than ever. The average interval between first listing and completion of the sale is now just 50 days.
As the figures suggest, there is no shortage of hopeful buyers. The number actively looking to buy has increased by 66% since October 2019 and the number of completed transactions has risen by 70%.
Although the recent rate of increase is beginning to tail off, market analysts predict that prices might continue to creep upwards so that, by the end of the year, the annual rise may have achieved close to 7%.
Changes to Right to Rent
Although landlords will have to continue to “act as unpaid border control agents”, their job is at least to be made slightly easier by further computerisation of tenants’ Right to Rent entitlements, revealed a story in Property Wire on the 19th of October.
Since February 2016, so-called Right to Rent rules imposed on landlords a legal obligation to check and verify any tenant’s right to reside – and, therefore, rent – in the UK depending on their immigration status.
With effect from the 2nd of November, landlords will be helped in that task by having access to the online records maintained by the Home Office on the immigration status of potential tenants. They can then match the online photograph with the physical appearance of the individual tenant applicant.
Special rules will also allow visitors from Australia, Canada, Japan, New Zealand, Singapore, South Korea and the USA (so-called B5JSSK nationals), who are granted only a six-month stay on entry to the UK but who nevertheless qualify for an annual tenancy under Right to Rent legislation.
Petition to ban pet “discrimination” in PRS
Spurred on by an online petition, a private members’ bill has been introduced into parliament with the intention of making it easier for tenants to keep pets in private rented accommodation, reported Landlord Today on the 16th of October.
The petitioners are hoping for a change in the law to end “discrimination” against pets and to prevent landlords from including “no pets allowed” clauses in tenancy agreements. The private members’ bill doesn’t go quite so far as the online petition but urges landlords to allow tenants to keep pets in their rented property provided the animals are causing no damage.
In our news story of the 15th of January this year, we noted that an increasing number of developers of private sector rental accommodation are turning to “pet-friendly” tenancies.
Landlord confidence falls amidst the pandemic
The recent coronavirus pandemic has battered landlords’ confidence in the future of the private rented market, said the National Residential Landlords’ Association (NRLA) on the 12th of October. A recent survey of some 2,000 NRLA members revealed that almost a half (48%) believed that the pandemic would negatively impact their buy to let business to some degree and that one in five thought it would have a significantly negative impact.
Plunging confidence in the business of buying to let is accompanied by spiralling levels of rent arrears by tenants. Total debt in rent arrears is so far estimated to have reached £437 million in England alone.
The impact of the recent lockdown, rising levels of rent arrears, and a general decline in confidence have made many landlords think again about their investments in the buy to let market.
Double the number of landlords plan to sell one or more of their buy to let properties than those who intend to add to their portfolios in the year ahead. Nearly one-third of all landlords plan to sell one or more properties, compared with only 16% who intend to buy, reported the property listing website Zoopla in an article on the 16th of October.
Falling confidence in this sector of the housing market is not just bad news for landlords but for tenants, too. Despite the increasing number of landlords looking to sell up and the rising tide of rent arrears, demand continues to outstrip supply – more than a third of all landlords report an increase in demand in the past three months alone. The loss of still more private sector rented accommodation can only make the situation worse.
That is why some landlord groups are asking the government to extend financial assistance to tenants to have fallen into rent arrears – through the provision of interest-free or low-cost loans, for example, similar to those available in Wales and Scotland.