Unless restrictions on new shared housing are eased more people could be forced into poor quality ‘beds in sheds’ accommodation, according to private landlords.
Recent changes to housing benefit rules mean more young people are fighting for each room in shared houses – and MPs on the Works and Pension select committee have warned that vulnerable tenants could end up in inappropriate or even illegal housing.
Increasing the age limit at which single claimants can only claim for a room in a shared house from 25 to 35 “may have reduced the availability of safe, appropriate accommodation for younger people, some of who are vulnerable,” according to the committee’s report.
It advised that the government should “investigate introducing exemptions for vulnerable people, and take steps to increase provision of appropriate accommodation.”
However, the Residential Landlords’ Association (RLA), warns that planning red tape is making it difficult to provide the new shared homes needed to keep up with demand.
The unexpected recent changes to UK pension regulation – which allow savers to do as they please with their pension pot – have led to speculation that many retirees could choose to invest in the buy to let property market.
Many of Britain’s 1.4 million private landlords have enjoyed a significant profit over recent years, helped by rising rents, a shortage of available property and limited mortgage availability for first time buyers increasing the pool of tenants. So it is easy to see why many pensioners could see property as a simple way to guarantee an income.
However experts are warning that potential landlords need to do their homework and bear in mind that mortgage rates are unlikely to stay at their current historic low for much longer.
It is easy to see why many landlords are tempted by the “guaranteed rent” concept – after all how many landlords would say no to guaranteed rent plus not having to find and manage tenants?
Under a guaranteed rent arrangement, the landlord signs over their property for a specified period of time – typically 5 or 10 years – in return for a set monthly income.
The agent then sublets the property and manages the tenancy. They make their money on the difference between the rent they pay the landlord and the rent they receive from the tenants. Most schemes will promise to cover any void periods and maintenance costs.
MPs have passed the first stage of a bill calling for greater protection for private rented sector tenants.
The bill was introduced by back bench Liberal Democrat MP Julian Huppert and calling for the housing ombudsman to be given powers to oversee private landlords.
It calls for a ban on “exorbitant” letting agent fees to prepare or renew contracts, a review of the law applied to landlords and tenants, and a review of the way councils set up landlord and property accreditation schemes.
Advertised rents in the UK reached their highest level since the third quarter of 2012, according to the latest rental index.
Nine out of 11 regions surveyed saw growth, with Scotland seeing the biggest increase of 2.8%, taking the advertised monthly rent to £695 and up 3.96% compared to the same time last year.
The country’s average asking rent is now at the highest level since it was first recorded by Move with Us in 2012.
Rents in Cambridge have risen by 38% over the last decade, according to a new study.
The average weekly rent in the city now stands at £206 according to the National Housing Federation, with rents in the region expected to rise more quickly than anywhere else in the UK up to 2020.
The figures from Cambridge are symptomatic of the way house prices have galloped ahead of wage rises across the country.
City of London landlords are collecting £1,059 more each month compared to 12 months ago as asking rents increase (31.43%) to an average of £3,369 per month.
The fastest rising incomes for landlord in the capital, after the City of London, are in Westminster, Hammersmith and Fulham, according to the data from the Move with Us Greater London Rental Index.
In Westminster, advertised rental prices have increased £433 (8.49%) since January 2013 to an average of £5,098 per month.