Monthly Archives: March 2017

Affordability, Housing

One in ten young Britons would leave the UK to buy an affordable home

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First time buyersOne in 10 people aged between 18 and 34 are prepared to move out of the UK in order to be able to buy an affordable home, a survey by Halifax reveals.

Underlining the generational home-ownership divide, a quarter of young people think they will never be able to own their own home, while a further quarter believe the only way they will be able to get on the property ladder will be through an inheritance windfall.

Forty-eight per cent of 1,500 young Britons surveyed said they think buying a home is now harder than ever. Eight out of 10 felt a lack of affordable property was keeping home ownership out of reach, while 14 per cent believe they will end up renting forever Halifax said.

Despite the gloomy picture, the number of first time buyers rose at the highest annual level since 2008 in the year to January, separate figures from the Council for Mortgage Lenders reveal.

Martin Ellis, Halifax’s housing economist, said: ‘Even with the highest number of first-time buyers in the last decade in 2016, many young people still feel they are running financial gauntlet – saving for a deposit, finding an affordable property in the right area and managing to fund living in the meantime.

‘It’s never too early to do some research to help build a better understanding of how much is affordable, the borrowing options available and calculating what’s achievable to help make owning a property more of a reality.’

Affordability

The average age for buying a starter home has risen to 30, pushed higher by ever increasing deposit requirements.

On average, deposits for first time buyers come in at around £32,321, but can be as much as £100,000 in London, Halifax said.

It is not just sky high property prices and hefty deposits first time buyers are worrying about. Over a third are concerned they don’t meet mortgage eligibility requirements, Halifax said.

While many struggle to get on the housing ladder, Halifax claimed first-time buyers typically end up £651 a year better off than when they were renting.

Although the buy-to-let market and number of people moving up the property ladder stalled in the year to January, the number of first time buyers increased to 340,200 according to data from the Council for Mortgage Lenders.

The CML estimated that gross mortgage lending reached £18.2billion in February, which is 8 per cent lower than January’s total of £19.8billion and just above the £18.1billion lent in February last year.

February’s estimated lending total is the lowest seen since May 2016, which is the month after the Government’s stamp duty hikes on buy-to-let lenders and second home-owners kicked in.

As has been the case since 2013, the number of existing home owners looking to move has stalled, remaining ‘subdued’ at around the 360,000 mark in the last year, the CML said.

In London, the number of existing home owners looking to move has fallen to a 25-year low. Meanwhile, remortgaging activity has increased sharply across the country, rising 20 per cent year-on-year, as people take advantage of competitive rates, the CML’s data showed.

Mohammad Jamei, a senior economist at the CML, said: ‘Mortgage lending is holding up well, but under the surface buyers face mixed fortunes.

‘First-time buyers and customers who are re-mortgaging are driving total lending, while home movers and buy-to-let remain weak.

‘The weakness in home movers means few properties are coming onto the market for sale, which is aggravating a supply demand imbalance that has characterised the market since late 2013.

‘This looks set to continue at least over the next few months, posing an obstacle for would-be borrowers.’

The Renters Alliance helps renters with bad landlords and letting agents. If you have a story you would like to share, please contact the National Renters Alliance through our website or email us at contact@nralliance.co.uk

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Housing Standards, Renters rights

Average of only one rogue landlord per council is prosecuted each year according to Parliament figures.

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Eviction Notice

An average of only one rogue landlord per council is prosecuted each year according to Parliament figures.

Speaking in a debate about the Housing and Planning Bill, the Labour MP Karen Buck claimed that over the last eight years only 2,000 landlords have been prosecuted for housing disrepair across the whole of the UK. The low number of landlord prosecutions stands in sharp contrast with the estimated 700,000 privately rented properties which have a category one hazard which include faulty electrics, damp and broken boilers.

The figures were presented in a debate about standards in the Private Rented Sector in February. During the session, Ms Buck asked the Government’s Planning Minister, Brandon Lewis, whether the low number of landlord prosecutions provided irrefutable evidence that local authorities lack the resources to investigate cases of housing disrepair.

Mr Lewis was also asked whether laws should be passed to allow tenants to take civil action against rogue landlords when their properties are unfit for human habitation. In response Mr Lewis claimed that the proposed Housing and Planning Bill would give councils extra resources to improve housing conditions. It was also stated that councils would be permitted to issue civil penalties against landlords of up to £30,000 and issue rent payment orders for up to 12 months’ rent.

Also participating in the debate was the Labour MP Tulip Siddiq who asserted that many of her constituents who rent privately have reported being the victim of revenge evictions. This comes despite the practice being made illegal for rental agreements signed since 1st October 2015.

Revenge evictions still a problem

Revenge or retaliatory eviction is where a landlord threatens to evict a tenant for requesting repairs or complaining about conditions in their home. It often this affects private tenants with assured shorthold tenancy (AST) agreements since they are the easiest to evict. ASTs are currently the most common type of tenancy agreement in the UK and is usually the default contract type for private sector renters.

Despite the new revenge eviction laws, many private tenants are worried that if they complain too much they will be evicted. Furthermore, figures gathered by Radio 1 Newsbeat through Freedom of Information requests show that more than half of local councils across England have not used their new powers under the revenge eviction law. Tightening of council budgets is also claimed to be a further impediment to investigating housing complaints. The Housing Law Practitioners Association is also concerned that the way the law is designed is too complicated.

The extent of the housing crisis comes as data show that private sector rented housing is the most expensive and has the lowest standards of any housing type.  According to Parliament reports, private renters now spend an average of 49% of their income on rent despite nearly one-in-three privately rented houses failing to meet minimum government housing standards.

The Renters Alliance helps renters with bad landlords and letting agents. If you have a story you would like to share, please contact the National Renters Alliance through our website or email us at contact@nralliance.co.uk

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Affordability, Housing, London

Seven disgraceful statistics about renting in London

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Rent Costs London

1. London Renters spend 60% wages on rent

The English Housing Survey reports that Londoners spend an eye-watering 60% of their gross earnings on rent. Excluding housing benefit this figure rises to 72%.

Even more shockingly, 16-24-year-olds are forced to pay 88% of their income on rent in the capital. When housing benefit is included this falls to 81%. However this age group is particularly vulnerable to reductions in housing benefit.

2. It is cheaper to commute from Madrid each day than rent in Camden Town

Renting a flat in Camden Town and working in Liverpool street will cost a Londoner £2,128 monthly or £25,532 yearly.

If the same Londoner rented a flat in Madrid’s city centre and booked return flights from Madrid to Stansted from Monday to Thursday, he or she would spend £1,725 a month or £20,708 a year.

3. The average rent on a two-bedroom flat is £707 a week or £100 a day  

Figures from property investment firm London Central Portfolio (LCP) show that the average rent on a two-bedroom flat in central London is a whopping £707 a week.

Average rental prices of rooms in a flat-share in Paddington (Zone 1), can cost around £1100 a month.

Council taxes are also a significant  consideration. Areas like Richmond and Kingston tend to be the most expensive at around £1929 a year.  Cheaper areas include Wandsworth where council tax averages £823 a year.

4. London professionals are being forced to live “12 to a house”

According to Ealing Central and Acton MP Rupa Huq, London professionals are being forced to live “12 to a house”, thanks to the soaring rents.

In a House of Commons debate Huq said: “Renting is no longer just a transitory thing for those who are in their twenties. It’s becoming routine for people further up the age scale.

“Many in my constituency in their 30s on good money find themselves sometimes 12 to a house with shared sitting room and kitchen.

“At that age, ‘who stole my cheese?’ should not be a way of life.”

5. By 2025, more than half of people under 40 will be living in property owned by private landlords

Over half of 20 to 39-year-olds will be renting from private landlords by 2025, according to accountancy firm Price Waterhouse Coopers.

PwC economists state that: “For 20-39 year olds, we would expect over half to be renting by 2025, implying a continuing rise in the size of ‘Generation Rent’.

The report suggests that home ownership levels will continue declining to dramatic new levels, dropping below 60% by 2025, as the rise of ‘tenant nation’ looms.

6. The UK has the highest private rents in Europe

A study by British Housing Federation found that rents in the UK are the highest in Europe.

In countries like Germany and Holland, private rents are around 50% cheaper than in the UK.

David Orr, chief executive at the National Housing Federation, said: “British renters get a raw deal in comparison to their continental counterparts. Not only do they face crippling rents, but renters in the UK have almost no certainty about whether they will be able to stay in their home from one year to the next.”

7. One in three rented homes are “not fit to live in”

One in three British three homes do not meet the government’s decent home minimum standard, according to 2014/15 English Housing Survey.

A Parliament report published last year admitted that there have been no minimum property standards for private rented housing in England since 2006.

Furthermore, more than 170 tenants are being evicted every day according to 2015 Ministry of Justice figures.  In total 42,728 evictions recorded in England and Wales in 2015.

According to Gillian Guy, CEO of Citizens Advice, “It’s hard to feel at home in the private rented sector. People can struggle to lead a normal life when their home is in a state of disrepair and they could be told to leave at any time. But many feel powerless to speak out.”

The Renters Alliance helps renters with bad landlords and letting agents. If you have a story you would like to share, please contact the National Renters Alliance through our website or email us at contact@nralliance.co.uk

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Affordability

London Homeowners Slashing Prices As Political Uncertainty and High Prices Impact Demand

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London House Prices Fall

London home sellers are having to cut asking prices for their homes and are offering greater discounts as high house prices and brexit uncertainties impact demand.

Lucian Cook, residential research director at Savills claims that price cuts seen in prime central London following the Brexit vote are now filtering through to outer boroughs. “Affordability issues are now a problem after a decade of house-price growth, and buyers are finding they increasingly come up against mortgage-lending limits.”

The latest slowdown in London house price growth comes after home prices in the capital have surged by around 86 percent since 2009. London house prices are now 14.2 times the average buyer’s gross salary according to the research firm Hometrack. This is the highest house price to salary ratio on record and more than double the rate for the UK as a whole.

Data released by the  Council of Mortgage Lenders also shows that there has been a fall of 12 percent in the number of mortgages advanced to first-time buyers in London.  High London asking prices have in many cases now exceeded lending limits allowed to banks under rules set by regulators in 2014.

Central London hit hardest

The house price decline has been most notable in central London. Average prices were cut by 8.2 percent in Kensington & Chelsea on an annualized basis compared with 7.8 percent in July.  Westminster and Wandsworth have been similarly affected recording 7.7 percent and 7.1 percent declines respectively.

london_house_prices

In an apparent reversal of typical trends, outer boroughs have been less affected than prime central London. The percentage of sellers cutting asking prices in January rose in all but two of the capital’s 33 boroughs compared with July.

Listings reductions

According to the property website Zoopla, 37.1 percent of property listings in Merton have been reduced.  John J. King, managing director at broker Andrew Scott Robertson added that sales are down “about 25 percent in the past six months, as they were already affected by stamp duty and the referendum made things worse.”

In Kensington and Chelsea 35.4% of listings have been reduced. Estate agents attribute the fall to changes in stamp duty and the effects of the Brexit vote. However, the house price declines may already be leading to greater interest in buying in the borough. Toby Whittome,  a broker at real estate agent Jackson Stops & Staff, claims that “applicants looking to buy are up nearly 40 percent in January, but that doesn’t necessarily result in sales, as people are hoping and waiting for some good news about stamp duty and clarity over the possible impact of the referendum.”

Ealing has also seen a considerable number of price reductions. Following five to six years of steep price increases, 35.4 percent of listings are now reduced. According to Alex Jerram, a broker at Dauntons, a two-bedroom new build in the borough now costs the same as one in Pimlico. “You cannot justify asking the same price for a property in greater London as one in central London. If sellers really need to sell, they have to reduce prices.”

The Renters Alliance helps renters with bad landlords and letting agents. If you have a story you would like to share, please contact the National Renters Alliance through our website or email us at contact@nralliance.co.uk

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Enforcement, Housing Standards

Nine out of Ten Private Renters In London Have Experienced Serious Problems While Renting

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for_saleNine out of 10 of London’s private renters have experienced at least four serious problems during their tenancy, including electrical faults, incomplete repairs and lost deposits. The survey commissioned by the Green Party London Assembly Member Sian Berry, asked 1,530 Londoners about their experiences, with nearly 70% of respondents writing in to share their stories. 

The results corroborate previous reports conducted by the Housing Charity Shelter which in 2014 found 61% of renters had experienced damp, mould, a leaking roof or window, electrical hazards, animal infestation or a gas leak in the previous twelve months.

Private renters often tolerate poor conditions due to the fear of retaliatory (also known as revenge) eviction. Many renters for example fear possible rent increases if they move or do not wish to provide their landlord with a justification for increasing the rent. In high-demand areas, landlords are able to evict tenants without reason and with just two months’ notice.

The recent law banning of revenge evictions  for tenancies starting after 1st October 2015 was hoped to give renters additional protection from eviction. However, many tenants are unaware of their rights. Moreover, the current revenge eviction legislation heavily depends on the tenant to negotiate with their landlord about disrepair before informing the council.

Very often cases are not investigated by local authorities due to lack of council funds and resources.  A recent study conducted by London Assembly member Caroline Pidgeon found that the ratio of environmental health inspections to number of private rented sector homes was as high as one in ten in Greenwich, but only one in 689 in Lewisham.

Figures gathered by Radio 1 Newsbeat through Freedom of Information requests show that more than half of local councils across England haven’t used their powers to investigate revenge evictions.

The magnitude of the problems facing the private rented sector were further corroborated by the Living Home Standard report produced by the housing charity Shelter. The report which asked 1,691 adults about their homes, assessed the affordability, neighbourhood, stability and living conditions of private renters.

It concluded affordability to be the biggest issue, saying people should “thrive” in homes, not just “get by”. It also found 24% of people were unable to save after paying their rent or mortgage each month. A further 23% would struggle if their rent or mortgage costs rose. 18% said they had to regularly cut back on food or heating to meet escalating housing costs, with 20% having to sacrifice social activities to meet the bills.

The Renters Alliance helps renters with bad landlords and letting agents. If you have a story you would like to share, please contact the National Renters Alliance through our website or email us at contact@nralliance.co.uk

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