LETTINGSnews
MARKET More and more and more… tenants
The number of people wanting to rent homes continues to rise, with four out of 10 landlords
(44 per cent) saying tenant demand increased during the third quarter of this year. Just four per cent said that they thought it had declined. Almost half (49 per cent) said they expect tenant demand to continue to increase. Buy-to-let lender Paragon has
published its Private Rented Sector Trends Report for the third quarter, which also showed that rental income remained healthy with 34 per cent of landlords reporting an increase and only four per cent saying that it had decreased. The type of demand is indicated
by reviewing the types of properties that landlords are looking to purchase. Terraced houses were the most popular choice at 41 per cent followed by
REFORM
Housing Benefit – give tenants the choice An amendment, tabled by
Major housing and consumer organisations are calling on the Government to accept an amendment to the Welfare Reform Bill which would enable tenants to choose who receives their housing benefits. The Government is
proposing that the housing cost element of the universal credit should automatically be paid to tenants, except in certain, restricted circumstances. A large number of organisations representing tenants, consumers, mortgage provides and landlords including Shelter, Citizens Advice Bureau and Money Advice Trust have called on Peers to instead give tenants the right to choose if they would prefer the payments to be made directly to their landlord. This is based on experience that many
Lord Best
tenants feel financially more secure knowing that their rent has been paid.
crossbench Peer, Lord Best, would enable tenants to make the choice for themselves as to who receives their housing payment. Chris Town, Vice Chairman of the Residential Landlords Association, said, “Prior to the election, both parties in the coalition supported tenants having a choice, arguing that it enabled them to better manage their finances, opting, where they felt it was best for them, to have their benefits paid directly to their landlord. “Evidence clearly shows that
tenants themselves would like to be given an opportunity to choose what is best for them, rather than the Government deciding for them. “Where tenants would
prefer payments to be made to their landlord, they do so based on a rational decision that it provides greater security to them, knowing their rent has been paid thereby reducing the prospects of arrears which evidence clearly shows, are increasing. “We call on Peers and the
Government to stand by tenants and give them a choice.”
Prior to the election, both
Conservatives and LibDems preferred the principle of tenant choice. Speaking in October 2009 Grant Shapps MP argued that, “I can see no reason why people on Local Housing Allowance shouldn’t enjoy the freedom to have their Housing Benefit paid direct to their landlord.” The
Liberal Democrats’ then
housing spokesperson, Sarah Teather MP said, “The Liberal Democrats opposed making it compulsory to pay tenants housing benefit when the new LHA rules were proposed, and we continue to feel that individuals should have the choice. Many people genuinely don’t want to manage their rent and feel safer if their housing allowance is paid directly to their landlord.”
PROPERTYdrum NOVEMBER 2011 49 Nigel Terrington
flats (35 per cent) and then bungalows – which have surged in popularity from 2.7 per cent in Q2 to 10 per cent in Q3.
Nigel
Terrington, Chief Executive of Paragon, said, “Tenant demand has continued to increase for a third quarter, which is
perhaps not surprising considering the current squeeze on the UK housing market as a whole. “More people than ever before are relying on the private rented sector so it is positive to see that landlords are looking to invest in their portfolios and are also diversifying the types of property in which they are investing in order to meet tenant demand.”
Meanwhile, new research from
HomeLet suggests that soaring living costs, an increase in youth unemployment and the continuing difficulty in getting on the property ladder may be forcing people to stay at home for longer and, if they do move out of the family home, they are likely to remain in the Private Rented Sector for longer as well. According to the latest HomeLet
Rental Index, over the last two years there’s been a 10 per cent increase in the percentage of new tenants entering the Private Rented Sector aged 18-35 who previously lived at home. In September 2009, just 44 per cent of tenants under the age of 35 had previously lived at home. In September 2011 this figure has risen to 54 per cent.
This trend is most noticeable in the 18–21 year old age group. In
September 2011 the percentage of 18-21 year olds moving from one rented property to another was just 16 per cent. This figure has halved since 2009 when it stood at 30 per cent.
John Boyle, John Boyle
MD of HomeLet said, “Our data shows that average tenant income levels are not increasing at the same rate as rents. With
the sharp increase in youth unemployment and inflation at high levels the prospect of buying a home is a distant dream for many. But for some younger people, particularly those without jobs, renting may also be too expensive, forcing them to stay in the family home for longer.”
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