April 2022 Property News
The latest property news! Contrary to the bad press that often follows buy-to-let investment, 85% of tenants are happy with their landlord.
Table of contents
Legal Pitfalls Stop Landlords Giving Homes to Refugees
Homes for Ukraine will see thousands of refugees transported across Europe to a new home in the UK. Housing Secretary Michael Gove has urged homeowners to open their doors to refugees for at least six months for tax-free £350 a month. But not every landlord who wants to help can offer refugees a home.
A Lawyer's Perspective
Lawyer Christian Fox explained that as a landlord offering a room in your home is no problem, but inviting refugees to move into a flat, house or self-contained annexe could inadvertently create a tenancy.
Fox said: “There are legal pitfalls to consider that can affect the resident and those they seek to shelter.
“Offering anything other than a room in your own main home, for example, an annexe or separate property, can inadvertently create a tenancy. It is far better for both parties to understand the way they can extend or terminate the agreement now, rather than risking acrimony or legal action later.
“There are also questions around responsibility for property maintenance, insurance and payment for utilities and council tax that need to be considered before, rather than after, the event."
Rent Prices Surge 8.6% In The Past Year
In the latest UK property news, despite the onset of a cost-of-living crisis, energy prices soar and rent surged 8.6% in the past year.
How much rent are tenants having to pay?
Tenants are forking out an average of £1,069 a month rent - up 0.5 per cent from February and a rise of 8.6 per cent in the year. London landlords saw rents fall by 0.2 per cent to £1,757 a month, an 11.8 per cent increase from 12 months earlier.
A closer look at the data
The data from tenant referencing agency Homelet also revealed the East Midlands was the only part of the country to see a rent price fall last month, dropping 0.1 per cent - equivalent to a pound off the rent - to £745 a month. The largest increase of 1 per cent was recorded in the South West, West Midlands and the South East.
An expert's opinion on 2022 rent trends
Homelet CEO Andy Halstead said: “The second month of 2022 followed largely similar trends to the first, with the average rental price across the UK continuing to rise month-on-month. The housing supply required to meet the demand sadly isn’t there. So far this is a trend that will continue to appear throughout 2022, barring an unexpected change.
“It is interesting to see Greater London record a small dip after a sustained period of resurgence, albeit the dip is a relatively small one.
“The cost of living crisis is likely to intensify as the months tick over, due to inflation and rising energy prices. So it's more important than ever for landlords to consider rent protection products. Ensuring they are sufficiently protected against the unpredictable nature of the current situation.”
Ministers hint at what’s coming in Rent Reform Bill
Landlords will find out the government's plans for Section 21 no-fault evictions within weeks.
Justice Minister Kit Malthouse confirmed a policy response would arrive soon as part of the Rent Reform Bill. He added the Housing Department are looking at banning Section 21 but still giving landlords a legal tool to make evictions easier. They are also considering a new housing court.
Meanwhile, a landlord database for England is moving closer as the government has advertised for a policy adviser to take charge of data protection and developing penalties for the measure. The post is full-time and comes with a salary between £36,337 and £39,598 a year. Housing department officials have not publicly confirmed the database is happening, although details were released earlier this year as part of the Rent Reform Bill.
Surprising property news: 8 out of 10 Tenants Happy With Rented Homes
Contrary to the bad press that often follows buy to let investment, 85% of tenants are happy with their landlord. A survey by think-tank Social Market Freedom also found 81% were pleased with their homes. The negatives included renting being more expensive than owning a home, a lack of control over decor, poor energy efficiency and a ban on pets.
The Pros of Renting
However, a positive was not having to arrange or pay for repairs and other housing costs, like insurance. The report also disclosed half of renters expect to own a home within 15 years. By 2035, 50% of renters will be aged 45 or older.
Cladding Crisis Costs Landlords £40k Per Flat
The latest property news surrounding the cladding crisis: landlords with buy-to-let apartments might have to pay millions to strip blocks of dangerous cladding. Professional landlords with two or more rental flats were excluded from the £4 billion rescue plan for homeowners and accidental landlords announced by Housing Secretary Michael Gove.
Michael Gove announced in January 2022 that housing developers must pay to fix the cladding crisis. Mr Gove states that a plan of action is decided, including remediating unsafe cladding on buildings 11-18 metres tall. He warned that he would take all steps necessary to make this happen. Including restricting access to government funding and future procurements, planning and the pursuit of companies through the courts. He added that if industry fails to take responsibility, the government will - if necessary - impose a solution in law.
Just how much is the cladding crisis going to cost?
Developers across the UK could pay an average cladding replacement bill of up to £40,000 for each apartment they own. Some landlords in London have even larger bills - having to fork out up to £100,000 per apartment.
How does this effect those already paying for cladding removal?
Many flat owners have already been handed large bills to pay and have started to make payments. A cap of £10,000 for homes outside London and £15,000 for homes in the capital will protect landlords. Any bills already paid out by leaseholders over the past five years will count towards the cap. This includes extra costs flat owners have had to pay, such as for fire patrols.
What is cladding and how does it affect flat owners? Cladding is the process of adding a new layer of material to the outside of a building. It can increase insulation or weather protection or to improve the building's appearance. But some cladding is combustible, prompting a building safety crisis affecting thousands of homeowners.
How many people are impacted?
There isn't an exact figure for this. The government says that as of 30 November 2021, 407 buildings had cladding removed. A further 70 still require the removal of cladding (although work had already started on 41 of these). However, these figures only cover buildings that are over 18m tall, with the type of cladding used on Grenfell Tower. The government does not supply regular statistics on other types of building. Half a million people are living in a building with unsafe cladding, the Association of Residential Managing Agents says.
What are investors saying?
Experts at investment managers Fidelity claim the decision may leave buy-to-let apartment landlords as mortgage prisoners in blocks renters don’t want to live because of the risk of fire and lenders devalue their investments.
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