The Rightmove.co.uk April HPI has reported a monthly increase of 2.1% inthe asking prices that sellers are putting on their properties. They see this as related to a shortage in sellers which has already pushed the asking price up 6.9% this year.

Key Facts:

• New seller asking prices up by 2.1% (+£4,996) this month to £244,706, the highest April figure ever recorded
• Fourth consecutive rise sees property coming to market up by 6.9% (+£15,717) so far in 2013, the second highest national figure ever recorded and within £1,529 of all-time high
• Combination of more positive market sentiment and seller shortage fuel upward price pressure:
• number of newly marketed properties down 4% compared to same period last year
• gap between last advertised asking price on Rightmove and sold price narrows to 2.95%

Miles Shipside, director and housing market analyst at Rightmove comments:

“Transaction volumes may be historically low but, paradoxically, new seller asking prices are within a grand and a half of a new record high. With mass-market buyers still sitting on the sidelines, the size of the active market is a lot smaller, making it easier for an upswing in activity to feed through to an upturn in prices. With London prices pausing for breath this month but likely to bounce back next, May looks like an odds-on bet to deliver a new asking price record.

September 2012 marked the start of the first academic year where students could pay anything up to £9,000 per year on tuition fees. As we head towards the New Year, when students would typically start looking for their second year accommodation, Townends estate agents say there has been a noticeable impact on the student rental market and landlords will have to make changes if they want to avoid lengthy void periods.

Areas within which Townends operate, such as Guildford and Egham, not only command some of the highest student rent, but are home to the University of Surrey and the Royal Holloway, both of which are charging students the maximum £9000 fee.  Caroline Kavanagh, Managing Director of Townends Lettings & Management comments “We have noticed a real drop in the number of students looking to secure accommodation for next year, but with fees nearly three times as much as previous years, it’s hardly surprising that those that can, are having to sacrifice the independence of sharing a student let and remain living at home with parents.”

The real impact of this will not hit student landlords until September 2013, as most will have secured tenants for this academic year back in January, which will see their properties tenanted until next summer.  With demand lower than usual for next year, Caroline says landlords should be considering their options. “These are:

1. Set a timeframe by which you are prepared to market your property to students during the prime letting period in the New Year. If your property is still vacant consider other options for your property.
2. Consider renovating the property to bring it up to the standard of a professional let which would give it wider appeal to the likes of families, young couples or professional sharers. The existing condition of student properties rarely entices the average tenant.
3. Renovate the property to appeal to international students who are less affected by the increase in tuition fees and still prepared to pay premium rents as long as the property is of high specification and within close proximity to the university.
4. Consider selling the property and using the money to purchase an alternative buy-to-let investment with greater appeal such as a modern, purpose built two bedroom apartment.”

Some landlords are reluctant to change their properties to ‘Professional lets’ because they don’t typically command as much rent as when the property is let to a group of student sharers. According to Townends, landlords need to look at the bigger picture.  “A four bedroom property brought up to scratch with some renovation work and subsequently rented out for 6-12 months at a £1000pcm is far more profitable than a property which has previously let for £1400pcm, but now faces the possibility of remaining empty for an entire academic year” says Ms Kavanagh.

Unlike the rest of the private rented sector, student landlords have seasonal windows of opportunity to let their properties. Once students start the term, they are unlikely to move, so if landlords are concerned about securing tenants soon, they are advised to speak to an agent for advice on the best way to proceed.

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The Council of Mortgage Lenders (CML) sees signs of the current weak market perhaps coming to an end.

The CML’s estimate is that total gross mortgage lending to £12.9 billion in October. This would reverse the sharp dip reported for September, and imply that lending was 4% higher than the same month a year earlier.

CML chief economist Bob Pannell observes: “House purchase and remortgage activity both appear to have picked up recently, and this should be supported by an improvement in the availability and pricing of mortgages.

The Funding for Lending Scheme is likely to have made an early positive impact, helping to counter some of the negative pressures associated with a protracted and weak economic recovery.”

Chart 1: House purchase and remortgage lending, £ million

Chart 2: Average quoted mortgage rates, new lending, %

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The Halifax House price Index for July shows a continuing picture of a flat UK Housing Market, which considering the wider external pressures on the economy is good that it is at least relatively stable.

The Average House Price in July was recorded down by -0.6%, however this follows two consecutive months of price rises, so was that not surprising.

Key Facts and Figures are:

• The average UK House Prices is £161,094
• So far this year there have been four monthly prices and three falls
• Over the more stable three months period leading up to July, the prices were unchanged against the previous three months
• The yearly change in house prices in July 2012 compared to July 2011 show a fall of -0.6%
• Nationally house prices are at a similar level as they were in the summer of 2009

Commenting, Martin Ellis, housing economist, said:

“The underlying trend in house prices was flat in the three months to July compared with the previous three months. House prices fell by 0.6% in July following consecutive increases in May and June as prices continue to fluctuate on a monthly basis.

At a national level, house prices have been very stable over the past year or so. This can largely be explained by the static nature of supply and demand conditions during this period. Looking forward, we expect little change in prices over the remainder of 2012 so long as the economic climate in the UK does not worsen substantially.”

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Thanks to upad for providing this great article. For 50% off your first listing click here.

Finding a long-term responsible tenant who respects your property and pays promptly isn’t all about luck. There’s a science to it too.

Key Points:

Ensure you meet tenants personally before letting to them.

Professional comprehensive tenant referencing is essential.

If you have any doubt about tenants, secure a guarantor.

Showing tenants around your rental property is your chance to get a glimpse of the people who may be living in your property. It’s a good opportunity to engage your landlord instincts and if you meet the tenants up-front, it’s easier to build a robust long-term relationship.

Reference your tenants: comprehensive referencing shows you that the tenant can afford the rent, and that they don’t have a dubious renting history. Remember, Upad referencing is free for landlords, regardless of whether you have enlisted us to find tenants for you.

If you are still not certain that the tenants will always be able to pay the rent every month, acquire a UK-based guarantor, who will then be liable to pay the rent if they default. Guarantors are especially common for student tenants.

Ensure your tenant sets up their payments through a standing order. It means your tenants won’t forget to pay and you won’t have to chase. If you have found tenants and would like us to take care of this, just give us a call. We’ll also draw up the tenancy agreement and collect the first month’s rent.

Keeping in contact with your tenants will make them less likely to default on a rental payment. If they are having trouble receiving payments due to a short-term financial situation, then maybe a short-term payment solution can help. After all some cash is better than no cash – but be sure to make the terms of the payment solution clear, and follow it exactly.

Thanks again to upad for this article. For 50% off your first listing click here.

Nationwide survey shows 0% of landlords think that deposit schemes are designed in their favour

A startling zero per cent of landlords said they felt that deposit schemes are designed in their favour over tenants, according to a new survey released today by digital inventory platform, Imfuna. Just over half (54 per cent) said that they thought current schemes favoured tenants, while 35 per cent claimed that neither party benefitted from the schemes.

Letting agents also largely mirrored that sentiment; only 20 per cent said that the schemes, in their current format at least, favoured landlords and 52 per cent said the balance has been tipped in favour of tenants. And, a further 22 per cent felt that the schemes benefit ‘neither’ party.

The statistics have emerged after a nationwide survey of landlords, tenants and letting agents, and follow the announcement of the new Localism Bill which came into effect on April 6th. The new act means all landlords now face large fines of up to three times the deposit if it is not registered with a tenancy deposit scheme within 30 days. The ruling, passed by the Government’s Department for Communities and Local Government will also see landlords unable to seek possession of their property using a section 21 notice until the penalty is settled.

Imfuna creator, Jax Kneppers comments: “The survey presents a picture of landlord disenchantment with the deposit schemes. The fact that not a single landlord surveyed felt they were designed in their favour, shows that there is still some work to be done by all parties in order to democratise the inventory process and ensure that everyone involved feels they are supported in equal measure.”

Landlords beware, tenants be aware

Overall awareness of the deposit schemes was found to be high amongst landlords (99 per cent) and lettings agents (88 per cent). Tenant awareness levels were much lower however, only 43 per cent were aware of the schemes before their tenancy began.

This lack of knowledge translated into the take-up of the schemes; nearly half (49 per cent) of the tenants surveyed claimed they have not taken part in a deposit scheme.

Furthermore, 37 per cent of landlords, compared to 78 per cent of tenants, believe deposit schemes are an effective tool for minimising conflict between landlords and their tenants. Whereas just 19 per cent of landlords and 36 per cent of letting agents believe deposit schemes reduce the time taken over disputes, indicating the process still isn’t working.

Kneppers adds “The new April 6th ruling places an even greater emphasis on adhering to tenancy deposit schemes regulations. A comprehensive and robust inventory will help arm landlords with the necessary information and ensure they aren’t further penalised when it comes to the check-in / check-out process.”

Deposit schemes heavily relied on

The figures show that when disputes arise, people look to deposit schemes for help, 26 per cent of landlords, a further 26 per cent of letting agents, and the majority (57 per cent) of tenants believe deposit schemes provide a fair resolution when disagreements arise.

Despite deposit schemes being the preferred go-to for resolutions, some tenants still think they are getting a raw deal, 68 per cent felt dispute outcomes were in favour of the landlord / letting agent, compared to only 10 per cent of landlords, and 19 per cent of letting agents. Which shows some educational work needs to be done around how the schemes work amongst tenants.

Interestingly, nearly half of letting agents (48 per cent) and 30 per cent of landlords reported that they have settled individual disputes privately, without the aid of a deposit scheme.

Finally, and perhaps on the contrary to the views of many, 42% of landlords admit to having never had a deposit dispute with a tenant, with a quarter (24%) of letting agents reinforcing this.

Kneppers concludes: “There is also a case for making use of the technology and expertise available to make the difference in deposit disputes. This is a really exciting time for the property sector which is on the verge of a technological revolution, and we will all soon feel the benefits.”

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