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Posts Tagged ‘rent’

Rents hit record highs as landlords good run continues

Tuesday, November 1st, 2011

The continuing upsurge in demand for rented accommodation has seen rents rocket to their highest levels this summer, and the good news for those with an interest in landlord insurance is that the good times look set to roll for some months yet. The latest figures suggest that the average monthly rent of a property in England and Wales is now almost £720 and those in London almost £600 higher than that.

Demand gets higher as tenures last longer

According to figures released by letting agents LSL Property Services this week, last month showed increases in the average rents achieved by landlords in every region of England and Wales. It is the first time increases across the board have occurred in the same month and can only spell out continued success for property investors. Six regions recorded record highs and residential landlords across the UK are still reporting levels of prospective tenants making enquiries on their properties. Further proof of the lack of necessity in empty home insurance comes from the Association of Residential Letting Agents (ARLA) who say their members are now reporting an average tenure length of over 18 months, once again a record and indicative of a renting population wary about leaving their present abode because of the demand for housing.

Demands on private sector will grow

With no change in the banks attitude towards deposit demands on first time buyers, there seems little likelihood that landlords will be facing stiff opposition when they start bidding on properties to extend their portfolios. Of course the present Government have reasserted their encouragement for Right to Buy schemes for council house dwellers, although there seems little appetite from residents. There is also the initiative involving the building of thousands of homes around the UK in the next ten years. This is about to start, with Government help for builders and housing associations that come up with credible plans. The scheme is the key to Whitehall’s long term housing plan but in truth these two projects will still leave the growing population of the UK in desperate need of a healthy private letting sector. There is no doubt that landlords with their finger on the pulse of the market know their business is in the rudest of health and should remain so for a long time yet.

Tags: empty home insurance, housing plan, Landlord Insurance, landlords, rent, tenants
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Rental arrears still affecting majority of landlords

Tuesday, May 24th, 2011

It will come as no surprise to many residential landlords that a recent survey carried out by the National Landlords Association (NLA) found that over half of landlords who responded to the survey said they had experienced rent arrears problems in the last 12 months. Unfortunately it is a hazard of the business and just one reason why a commercial property insurance quote should always include a price for rental guarantee.

Average debt equivalent to one month’s rent

According to the NLA, the average debt that landlords incurred from late paying tenants was £730, which is roughly equal to the monthly rent landlords in the UK are generating at the present time. What the survey did highlight though was the fact that landlords themselves often have mortgages on their own homes to pay, and how seriously late rental payments can affect them. Of course landlords with several properties in their portfolio can soon find their business in trouble if more than one tenant starts defaulting on payments.

Business management more time consuming

The survey also revealed that the majority of landlords questioned thought the day to day running of a lettings business was becoming more difficult. This at a time when the sector is experiencing one of its biggest boom periods for many years. A comment perhaps on the ever expanding rules and regulations landlords have to meet to lawfully conduct their business. The recent changes in the way Houses of Multiple Occupation (HMO) are governed and the many local authority schemes which now require landlord registration have added to the paperwork already required for compliance with heating, electrical and health and safety issues.

Housing benefit changes won’t help landlords

The recent changes in Local Housing Allowance as well as other factors in the Welfare Reform bill, suggests it will be even more important for landlords to get good property insurance. The sector is expecting rental arrears to mushroom, certainly in the short term as tenants come to terms with a cut in income.

Support available for landlords who look

Organisations such as the NLA offer support and expert advice to landlords at all times, something that is absolutely essential when problems arise. Landlords new to the business will find that the NLA or organisations similar to them operate in most areas of the UK and membership will open their eyes to the many pitfalls that surround the business before they actually fall in them.

Tags: commercial property insurance, Houses of Multiple Occupation, landlords, local housing allowance, national landlords association, rent
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Good news for landlords as rent arrears fall

Friday, September 3rd, 2010

It appears that landlords looking to add to their portfolios by buying more properties and purchasing landlord insurance, could not pick a better time than now. With house prices falling again, landlords have received even better news, as a survey of landlords reveals that rent arrears are falling also.

The report, based on a survey of landlords by LSL Property Services, revealed that 8 out of 10 landlords say the amount of rental arrears owed by tenants has fallen or at worst remained stable over the last 12 months. Of the landlords who reported an increase in arrears the majority said the increase was only minimal. The report pinpoints tenants in cheap accommodation as the ones most likely to be in arrears.

The average rent of those actually in arrears works out at £472, considerably less than the average rent in the UK, which is around £625. The amount of rent owed in one calendar month in the UK is not to be sneezed at however. According to the report July 2010 saw the lowest recorded arrears for several years yet the figure was still £213 million. To put that in context, £213 million is less than 10% of the overall amount paid out in rent each month.

The commercial director of LSL said “The hike in tenant arrears hasn’t materialised in the last 12 months as many feared. With the labour market remaining relatively strong, most tenant finances have been in better shape than expected – keeping the overall arrears across the UK down. But a minority of landlords have experienced an increase, driven by lower income tenants renting out cheaper accommodation. Those who suffered first from the recession were those in lower paid jobs, often the most disposable workers when employers look to cut. Even so, a changed tenant mix has improved the arrears picture for many landlords. Thousands of would-be first-timers are remaining in the private rental sector. These are generally more financially stable, and able to meet higher rents on time.”

Tags: Landlord Insurance, Property insurance, rent, tenants
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