Letting And Industry News

Tenants should pay their own deposits in - says lawyer

2010-11-25T05:51:00.000-08:00

A top lawyer has criticised the law on tenancy deposit schemes as flawed and believes tenants should be able to take responsibility for paying their own deposits into the scheme.

Currently, only landlords or agents can pay deposits into the schemes.

John Stephenson, senior partner and head of residential property team at London city firm Bircham Dyson Bell, spoke out after a Court of Appeal ruling in the case of Tiensia v Vision Enterprises.

In the case – reported on by EAT – the court ruled that landlords need not be penalised for breaching the Housing Act requirements on tenancy deposit protection provided they had lodged the deposits and given the tenants the prescribed information by the time any case is brought.

The Housing Act had stipulated that deposits are lodged and the information given to the tenant within 14 days.

But Stephenson said: “The case has called into question the ability of the TDS to protect deposits as the landlord was able to retrospectively pay it into a scheme without any recourse for late payment prior to appearing in court, and forcing the tenant to incur the cost of bringing the action in the first place.

“On this occasion, I have to say that the judgement has seriously weakened the usefulness of the TDS. In most cases it would cost the tenant many more thousands of pounds to bring an action against a landlord, than the amount of the actual deposit itself.

“A tenant’s reassurance that the landlord will invest the deposit has been weakened and he/she can’t be certain their deposit is safe unless they bring an action to make certain that it is – and the cost of doing that is prohibitive in most cases: the loss is greater than the gain.

“Tenants shouldn’t have to get as far as court to force the landlord’s hand – this is not the best use of the law.”

Landlord bodies welcomed the Court of Appeal ruling, as they said it stopped landlords being penalised if they had merely overlooked their administration by mistake, but they nevertheless advise that landlords and agents still lodge the deposits and supply the information within 14 days.

Rent Guarantee Update

2010-11-09T04:51:00.000-08:00

Our popular rent guarantee scheme is proving popular with our Landlords. Our tenant selection criteria is well knows as being extremely strict but, in difficult economic times, the security offered by the scheme is being recognised

Click here to read more

Letting Market Roundup

2010-11-09T04:19:00.000-08:00

By Kevin Baker, Marketing Manager (Brookdale)

There is so much conflicting information in the press and other media about the condition of the UK property market both from sale and rental points of view and much of it is regional. In this article we set out or thoughts on the current and predicted future condition of the let market in and around Peterborough

Tenant Demand
Tenant demand is, quite predictably, high. Someone from ARLA recently quoted "no-one could have predicted how much demand there would be". I found this confusing. Let's face it:

Buy to let almost dried up completely following the recession due to lack of available finance products so there is less stock for more Tenants
First time buyers have been finding it almost impossible to arrange deposits so mroe people are looking to rent instead
House prices are still relatively high keeping people off the property ladder
More people are losing their jobs and are unable to buy due to their credit status
The list goes on....

All the above we in the letting business have been aware of for some time so there is absolutely no surprise at the strong Tenant demand we face today. It is, of course, good news for us all.

However, one observation we have made is that Tenant expectations are higher now than they have ever been in our 21 years of letting. Why not? Many people renting a property now would have been first time buyers. Why shouldn't they want a home presented in good condition? In fact why would a long term renter not want a home presented in good condition?

Our Landlords are aware that, during the management of the property, we regularly make recommendations about improvements to properties during our regular inspections. Many of our Landlords have taken our advice and carried out these improvements. Sometimes not all at once - sometimes a bit here and a bit there. We have been making such recommendations for many years and in today's market this really has paid off.

We listen carefully to what prospective Tenants tell us when we show them your properties. One trend which is on the up is the feedback on the lines of "I have seen lots of properties today with other agents and yours are by far the best". We hear this literally every day.

We believe the feedback above is the result of:

Only taking on properties which are in good condition
Our Landlords ensuring that their properties are maintained and improved over time
Our tenant selection criteria which includes inspecting the home of a prospective Tenant at the application stage

One area where we hear more about this is Hampton. For those of you not familiar with the area it is a modern township built on the old brick pits between Fletton and Yaxley. I stronly believe the reason for most of the feedback being about Hampton is that many of the properties on the let market in Hampton were placed there by "reluctant Landlords" who could not sell them at the height of the recession so decided to let them.

This would have been around 3 years ago which is just about enough time for an agent who badly manages properties to overlook issues at inspections/final inspections and place Tenants who do not look after their home.

Availability Of Rental Stock
Before the recession the number of properties available to let in Peterborough advertised on Rightmove (not an exact science but a trend for comparison reasons) stood at around 550 at any one time. At the height of the recession it almost doubled to a peak of just over 1,000. Obviously this was the result of the new phenomenon known as "the reluctant Landlord" and this pushed rental prices down.

Today (November 2010) that number stands at 540. However, this is not a true comparison as today there are a huge number of room-only lets advertised on Rightmove compared to pre-recession. Also there are more properties advertised by multiple letting agents, many of whom were born of the recession and the peak of properties available, some of whom have already gone bust!

So - we have higher Tenant demand, lower stock levels and yet we are not actually letting any more quickly than before the recession. A steady 30-50 properties per month. Why? The answer is that tenants seem to be taking longer to choose a rental property. This could be because the "well we will rent for a year then buy" plan is is not so common. Perhaps Tenants are looking at renting longer term so are taking more time to weigh up their options. If the latter is true then this is more good news for Landlords.

What About 2011?
I generally don't make predictions in the property market - to do so in a position where I advise buy to let investors would be foolhardy so below I set out what I "hope" will happen in 2011:

I hope that 2011 will be the "year for the Landlord". Rents are slowly increasing due to reasons above. However in making that statement I must add a footnote that some Landlords will still be asked to decrease rents for properties let pre-recession in order to fit into the current market. We did have many Tenants in the last 3 years ask for and receive a rent decrease but some are still paying "pre-recession" rents.

Stock levels will continue to fall as investors stay away from the buy to let market and more people turn to renting due to the tough financial conditions. The first quarter will see the usual frenzy of people moving after Christmas and the inevitable marital breakdowns over Christmas will see the one bedroom flats snapped up by marital breakdown casualties!

It will be at around the end of the first quarter that we will be able to see what stock is left. This will be an interesting time. The reintroduction of the "reluctant Landlord" has already taken place and seems to be gathering pace. Sellers are realising that if they haven't sold by the end of the month then the likelihood of completing in less than 2-3 months is slim. They could turn to renting instead. This is the unknown quantity in this message of "hope".

If we get another flood of properties from the sale market then stock levels could remain almost static and rents will not rise as quickly as we hope they will. If we don't then rents will rise faster.

In 2010 in some areas of London properties are being let on a "sealed bid" system where a number of people are invited to view then submit a bid - the highest bid rents the property! I don't think we quite will reach that point !! BUT - we will see an interesting shift in the positive direction with higher rents and shorter void periods. Call it "payback" time for Landlords who have suffered in many ways during this painful recession.

Finance Fears Are Causing Landlords To Lose Confidence

2010-11-09T02:05:00.000-08:00

The most recent findings from the Upad Landlord Confidence Index show that just 54% of landlords say they are more confident in the rental sector than they were last month, down from 57% in October.

Almost 350 private residential landlords responded to the question: "Are you more or less confident in the rental market than last month?"

Many of those who said they were less confident cited finance as an issue.

One respondent said: "All 55 houses are on standard variable rate. I can’t remortgage because I’ve only got about 15% equity across the portfolio, now banks want 25%. If interest rates go up 1% I will find it hard.

"A 2% base rate will bankrupt me, forcing me to default on a £6million portfolio. I wonder how many landlords are in this situation."

Other comments from those who said they felt less confident included:

"Since the withdrawal of Birmingham Midshires from larger portfolios, financing is very difficult"; and

"I bought at the peak time and my property has depreciated 10% which was my deposit and I have not been able to make anything other than interest payments due to my own employment situation. It is not getting any better nor is it going to - it is going to get much worse."

Meanwhile, others saw the fall in house prices as offering an opportunity for those investors who do still have available cash, with one landlord who said he felt more confident.

He said: "Still some dropping of sale prices over coming months, but lots of investment opportunities for anyone with a bit of initiative and access to funds."

Of landlords who said they felt more confident, most cited tenant demand as the reason. Comments included:

"There seems to be a good demand for quality properties as people are more reluctant to buy their own homes now";

"Perhaps because I'm in the south east, I find that there is no shortage of applicants. The capping of housing benefit will, I believe, only increase the pressure on the rentable properties, further increasing rents"; and

"London market is booming - allowing easy replacement of any housing benefit tenant and a small increase in rents!"

Upad CEO and landlord James Davis said: "This is a very worrying time for landlords. While tenant demand is up and falling property prices ought to offer opportunity for investment, the wider economic climate means that many landlords feel they are on a knife-edge.

"The private rented sector is being left by the Government to pick up many of the pieces from the recent cuts, but not given any support to do so. The nationalised banks must be encouraged to free up finance so that landlords can play their crucial role in supporting those who, for whatever reason, are unable to house themselves."

Shortage Of Buyers Impacting Housing Market

2010-11-09T02:02:00.000-08:00

A shortage of buyers is continuing to have a real impact on UK house prices, according to research from the Royal Institution of Chartered Surveyors.

More than half (55%) of its members who work as estate agents said prices fell locally in the past three months, its latest monthly survey reports.

Just 4% said prices were rising. Downward pressure continues to be exerted on house prices due to caution by potential buyers and the continued rationing of mortgages by lenders.

"New buyer inquiries dropped for the fifth consecutive month as the housing market slowed further during October," a RICS spokesman said.

"Respondents to the survey report that the market is generally cautious, with many buyers signalling that they are going to wait until the spring to make a decision."

RICS said the figures represented the worst level of sales since June last year.

More Than 7 in 10 Landlords Believe That Professional Property Management Is Money Well Spent

2010-11-09T01:59:00.000-08:00

That is the verdict of the latest Young Index which, in addition to reporting on property price and asset acquisition expectations, also assesses the value investors attribute to property management.

It found:

* 70% of landlords believe that tenants pay higher rent for properties that are professionally managed;
* 68% of landlords believe that average tenancies are longer for property that is professionally managed;
* 71% of landlords believe that tenants take better care of a property that is professionally managed;
* 67% of landlords believe that professional management of property enhances its capital value;
* 75% of landlords would recommend professional property management;
* 61% of landlords questioned employ an agent to manage their property;
* 34% manage the property themselves and 5% of landlords' properties are managed by a member of their family or friend.;
* Of those who self-manage their rental property, 87% enjoy doing so and 85% are motivated by the cost saving;
* 97% of landlords intend to hold their residential property investments for the next 12 months;
* 54% intend to hold their assets for at least ten years;
* 24% of landlords intend to retain their property investments for the next 20 years or more;
* The average period that residential property investors expect to hold their property investment assets is 12.7 years;
* 36% of investors are considering purchasing additional residential property assets within London over the next 12 months;
* 25% of investors are looking at opportunities in the UK outside of the capital;
* 73% of respondents believe that London prices will be at current levels or higher by this time next year;
* For UK property outside of the capital, 46% expect prices to be at current levels or higher by this time next year;
* Landlords expect London property prices to see an average price increase of 1.9% by this time next year, moderated from an increase of 2.5% cited last quarter, but up on the annual increase of 1.48% that was predicted at the end of Q1 2010;
* The predicted 12-month outlook for UK property prices outside the capital is a fall of 3.15%. This continues the recent trend of worsening expectation (-1.0% predicted at the end of Q2 and -0.58% in Q1 this year);
* The average base rate expectation for Q3 2011 stands at 1.16%, virtually unchanged from the 1.14% outlook that was predicted in Q2 2010.

Neil Young, CEO, Young Group said: "The latest quarterly Young Index survey of residential investment sentiment focuses upon property management.

"In a sector that is characterised by large numbers of 'amateur' landlords, it is encouraging to see that they appear to wholeheartedly value professional property management and indicate that they believe it results in higher rents, enhanced capital values, longer tenancies and encourages tenants to take better care of their rental property.

"Landlords undoubtedly still see their property investments as a long-term play, they are not expecting house prices to increase particularly over the coming year - and predict that prices outside London will fall by an average of 3%.

"They expect the base rate to remain well below its long-term average for at least the next 12 months, but there are indications that access to appropriate finance will prevent them from purchasing additional property. Expectation of property asset purchases in London has fallen back from last quarter's figure, whereas interest in property purchases outside of the capital has increased."

Reluctant Landlords Make A Comeback

2010-11-08T02:39:00.000-08:00

The ‘reluctant landlord’ – a phenomenon that emerged during the recession as home owners were forced to let their property rather than sell it – has returned to the rental market, according to Arla.

ARLA’s research revealed that 34% of member offices in the third quarter of this year experienced an increase in the number of rental properties coming on to the market because they can’t be sold. This figure was an increase from 19% in Q2 of this year.

There was variation across the UK in the number of agents reporting this trend, with 58% of agents in the North-East reporting an increase in reluctant landlords, compared with 15% in central London.

The number of reluctant landlords peaked during the recession at the beginning of 2009, when 94% of agents surveyed reported an increase of property coming on to the rental market because it could not be sold.

Ian Potter, operations manager at ARLA, said: “The rise of the reluctant landlord seems to reflect wider market uncertainty and instability.”

Brookdale's Comment

Yet again ARLA make a "prediction" which is obvious!

Three Million "Zombie" Borrowers At Risk If Interest Rates Rise

2010-11-08T02:35:00.000-08:00

Three million 'zombie' households are at risk of falling into financial ruin if interest rates rise, an economist has warned.

Danny Gabay, of Fathom Consulting, says people who took out mortgages beyond their means are on a financial precipice.

He said they were already struggling with their mortgage repayments.

Gabay said: "It is an extraordinary position to be in. Fixing government finances is important but is only part of the problem. The other, larger part, is fixing household finances where in fact the crisis began.

"It is very politically convenient to believe that the crisis was caused by greedy bankers, but nobody made people take out mortgages of five times their income.

"Lots and lots of people borrowed too much."

In a new paper, Fathom Consulting says that low interest rates are allowing banks to avoid facing up to the bad loans on their books.

It calls for the Government to create a new 'bad bank' to buy up toxic mortgages, in order to cleanse the system.

Gabay said: "The solution we are suggesting will be very painful in the short term but if we face up to our debts, we can move on.

"Too much money has been lent against assets that have fallen in value, but those losses have not yet been fully recognised.

"We are being kept alive on a near-zero interest rate drip and we can't move forwards."

He said that the possibility of banks having to make big write-offs was one factor in their reluctance to lend.

Tenant Who Took Out Frustration On Letting Agent Is Sentenced !!!!!!

2010-11-08T02:28:00.000-08:00

A tenant sent dog muck, dead moths, nettles and a dead bird to his letting agent when he was threatened with eviction.

Mark Coleman, 47, sent four packages to Don Scott, owner of Home-Start estate agents, in Hanley, and also poured blue paint at the shop and put up offensive homophobic posters.

North Staffordshire magistrates heard that Coleman and his wife were sent a notice on June 2 telling them they were being evicted from their home in Kidsgrove because they had not paid the rent.

But the court heard that Coleman was at the end of his tether because nothing had been done to fix problems he had been having with the house since 2005.

Coleman admitted the offences when he was arrested by police, and pleaded guilty to harassment.

Peter Howland, mitigating, said Coleman and his wife had moved into his rented property in 2002 and had repeatedly complained about the boiler, hot water tank and gas fire but nothing was done.

Coleman was handed a 12-month community order by the magistrates, with a 12-month supervision requirement.

Brand Awareness Jumps For Digital Property Websites

2010-11-08T02:26:00.000-08:00

Brand awareness of the TDPG websites Primelocation, FindaProperty and Globrix has jumped 19% this year, the company has claimed.

It says it means that three-quarters of all property searchers now think of a TDPG portal when looking for their next home.

The increase to 75% was fuelled by significant marketing campaigns for each of the three sites to build on brand recognition.

In 2010, FindaProperty has launched two heavyweight marketing campaigns across TV, radio, print and online targeting the mass market.

Primelocation has been ever present in leading print and press publications as well as being a sponsor of high-profile events such as Grand Designs Live.

Globrix, the UK’s biggest property search engine, has appeared in national press campaigns in titles such as The Times, The Sun and News of the World.

Sheraz Dar, acting group marketing director, said: “As a group, our brands have been advertised to 90% of the UK adult population who will have interacted with one of our market-leading brands. Knowing that only 10% of this audience will not have seen our marketing is part of the value we deliver to our advertisers.

“This marketing and product development activity has translated into more visitors and enquiries which is at the absolute core of why an agent advertises with The Digital Property Group.”

Both Primelocation and FindaProperty have recently claimed record unique visitor figures of 4 million and 2.5 million respectively.

Dar said that these numbers had converted into 3.4 million monthly enquiries.

Lending Tumbles As 1st Time Buyers and Buy To Let Numbers Dive

2010-11-08T02:24:00.000-08:00

Mortgage lending continued to fall in October, two major valuation firms have said.

The number of valuations fell 16% in October compared with September, said Connells Survey and Valuation.

The fall was largely due to a 23% decline in first-time buyers, whilst buy-to-let activity also fell, by 14%.

However, remortgage valuations accounted for 17% of activity and was up 78% on October last year.

Year on year, there was a 29% fall in valuations for first-time buyers.

Ross Bowen, managing director of Connells Survey and Valuation, said: “Thousands of home owners, concerned over the direction of house prices, are delaying purchases. Instead, many are getting their finances in order for a longer stay.

“With cheaper fixed rate deals on the market and concerns over a potential interest rate hike, those who can afford to are remortgaging to avoid a future jump in monthly mortgage repayments.”

Meanwhile, e.surv reported that mortgage approvals for house purchase were down 2% in October, with LTV ratios falling as lending criteria tightened.

e.surv estimates the number of mortgages approved for house purchase was 46,507, down 18% on a year ago. It says the average LTV was 56.8%. The firm also said there was a major difference in the performance of the market at the top and bottom ends: lower value homes had 8.%% fewer mortgage approvals than in September, while mortgage volumes for homes worth over £500,000 rose 3%.

However, according to a new report by Rightmove, first-time buyers are seriously considering re-entering the market. See next story

Fraud-busting Councils Recover £135M From Benefit Cheats

2010-10-28T02:17:00.000-07:00

In its Protecting The Public Purse 2010 report the Audit Commission finds that last year England’s councils detected around £99 million worth of benefit fraud, over £15 million worth of council tax fraud, and £21 million worth of other types of fraud including false insurance claims, and abuse of the disabled parking ‘blue badge’ scheme.

In addition nearly 1,600 homes have been recovered by councils with a replacement cost of approximately £240 million.

Responding to the report, Cllr David Sparks, Vice Chairman of the Local Government association, said:

“Local authorities work hard to clamp down hard on unscrupulous fraudsters who cheat the tax payer and take money that could be spent on the genuinely vulnerable. Benefits are there to help the needy – not line the pockets of the greedy"

“Thanks to the hard work of councils, the £135 million recovered last year can now be spent supporting those in genuine need, housing the homeless, caring for the elderly and supporting the infirm."

“The success of these councils demonstrates the importance of them being equipped with the necessary powers to identify and catch those trying to steal from the public purse."

“Local authorities adopt a zero tolerance approach to this sort of abuse. At a time when councils will be struggling to find money to balance their budgets next year, local authorities will come down hard on those trying to steal money intended for the sick and the elderly."

“The message from councils to fraudsters is clear – try to con the system and you will end up in court.”

Landlord Assist is advising landlords to consider the impact of tenants who could lose their jobs due to the Government cutbacks and to take preventative measures

2010-10-28T02:09:00.000-07:00

Over 800,000 jobs were lost during the recession, and with another 490,000 public sector job losses announced as part of the Government Spending Review many tenants could come under increasing financial pressure over the coming months.

(Another reason to consider Rent Guarantee)

For landlords the ramifications are potentially serious should a tenant lose their job. Rising unemployment levels could lead to an increase in arrears and void payments as tenants are unable to afford the rent. This puts increasing pressure on landlords to sustain their own mortgage commitments.

But Graham Kinnear, Director says that by taking precautionary measures landlords can minimise the risk of a tenant defaulting.

He says: “Landlords need to make sure they reference tenants at the start of the tenancy agreement to establish whether the prospective tenant can afford the rental payments. They should also ask for guarantors, namely family and friends, to cover the cost of missed rent should the tenant default on payment.

“Nearly all references include an employment reference nowadays, providing landlords with a great indication of a tenant’s employment history and current situation. However, when gaining a reference check landlords need to pay particular attention to the type of work. Only a few years ago the ideal tenant would be one working in the financial industry, but that is not the case anymore.”

But even the most in-depth reference checks cannot stop a tenant becoming unemployed.
Kinnear adds: “With many more cuts expected in both the public and private sectors, many tenants may find themselves in financial difficulty over the coming months. This level of uncertainty is worrying for landlords and may encourage more to renew their interest in rent guarantee and legal expense insurance.”

Stephen Parry, Commercial Director believes landlords at particular risk are those on a moderate income whose tenants receive some assistance from the state. He says: “Not only could these people lose their jobs but they may also see some of their state assistance withdrawn as part of the impending changes to the welfare system. Social landlords need to prepare for the changes to housing benefit and assess how it will impact their income and business.”

Landlords Ripping Off The Tax Payer Over Benefit Tenants' Claim

2010-10-28T02:05:00.001-07:00

Private landlords with housing benefit tenants are charging the maximum amounts possible – and ripping off the taxpayer.

A study by the Department for Work & Pensions, ‘Low Income Working Households in the Private Rented Sector’, found that private landlords charge higher rents to housing benefit claimants than to working adults, and offer worse conditions.

According to the DWP, private landlords will pocket almost £8.5bn this year through housing benefit. The figure is more than one-third of the total amount of housing benefit handed out.

The study claims that in the past decade, the cost of providing housing in the private rented sector to benefit claimants has jumped by 36% above inflation.

In comparison, social housing providers have raised their charges by 19% above inflation.

Lord Freud, minister for welfare reform, said: “This confirms what we have long suspected, that some unscrupulous landlords are charging benefit claimants over the odds to make a quick buck at the expense of the taxpayer.”

The housing benefit bill comes to more than running the Army and Royal Navy combined, and costs each working adult £689 a year.

Industry "Experts" ?

2010-10-28T01:57:00.000-07:00

Two comments by two different property industry "experts" make us wonder why the word "experts" is ever used to describe them !!!

The "experts" and the names of the organisations will remain unnamed for professional reasons.

Expert 1: Commenting on the current shortage of private rental housing stock and the slow return to positive rent increases:

"No-one could have predicted the unprecedented current demand for rental property"

What? Sorry? We did as did most others. It was quite simple really. High house prices, strict lending criteria, an almost non-existent buy-to-let mortgage product range, high deposits etc. etc. etc. And then we are wondering why more people are trying to rent privately in a market where less investors and buying.

Wait a minute, what did Expert 1 say next?

"This is why it is crucial that all Letting Agents and Landlords become affiliated with a nationally recognised regulatory body"

Who is Expert 1? Of course- the head of one of the regulatory bodies making a completely ridiculous statement - almost indicating he has absolutely no knowledge of the industry whatsoever in a vain attempt to recruit more members.

Expert 2: Commenting on the high number of complaints received about Letting Agents in comparison to Estate Agents:

"The number of complaints against letting agents is on par with the number of complaints against Estate Agents - however there are twice as many Estate Agents showing that proportionally there are more complaints against Letting Agents"

Errrrrr.......There is quite a difference between Letting Agents and Estate Agents: The first major difference is the fact that the Estate Agent's work is done when the buyer turns the key in the front door of the purchased property.

Quite obviously, in the world of Letting, the turning of the Tenant's key in the front door is by far not the end of the job for the Letting Agent.

Does anyone who purchased a property ever complain about an Estate Agent if the boiler stops working and the plumber took 3 days to arrive?

Does anyone who purchased a property ever complain that the Estate Agent charged excessively when the moved out to clean the carpets?

I wont go on but this is another "null" statement. In addition (and again we are not revealing the sources of this nonsense) this "expert" never made it clear in his report the proportion of complaints to Estate Agents who do letting. Were they recorded as complaints against Letting Agents.

The moral is this: Not every expert should be listened to.

Landlords Struggle To Raise Finance To Expand

2010-10-28T01:36:00.000-07:00

More than six out of ten landlords are finding it difficult to get finance to expand their portfolios.

Source EA Today

Their frustrations are underlined in a new report from specialist buy-to-let lender Paragon, which has only recently reopened its books after an 18-month gap, its absence adding to landlords’ difficulties.

The report makes it clear that landlords remain confident, with 40% reporting rising demand for rental accommodation and 42% believing that demand will be higher still this time next year.

The report, covering the three months to the end of September, found that only 17% of landlords are finding it easy to raise money to fund new purchases, but 63% are finding it difficult.

Nevertheless, the average number of properties in a portfolio ticked up during the period, from 12 in the second quarter to 12.5 in the third. The average investment portfolio had a value of £1.45m, with the average gearing – the level of borrowing as a proportion of value – steady at 37%.

Ombudsman Calls For All Letting Agents To Join A Redress Scheme

2010-10-28T01:32:00.000-07:00

Property Ombudsman Christopher Hamer is pressing the Government to make it mandatory for letting agents to belong to a redress scheme.

Although housing minister Grant Shapps has made it clear that any form of legislation to regulate the lettings sector is not on the agenda, Hamer has called on him to review this stance.

He said it is “imperative” that consumers in the private rented sector gain some protection, and that the Government could easily expand the scope of the Consumers, Estate Agents and Redress Act 2007.

The call has come after the Ombudsman’s office received 70% more initial inquiries from people about letting agents than about estate agents.

Although these translated into the same number of cases – 150 – being opened for both the sales and lettings sector, Hamer said he was concerned because there are 46% more sales agents in the scheme than letting agents.

He said that all residential sales agents must join an approved redress scheme. “Encompassing a similar obligation for letting agents would be an obvious consistency,” he said.

By the end of September, there were 7,908 member firms of the Property Ombudsman scheme, operating between them 11,310 sales offices and 7,756 lettings offices.

Brookdale Comment

All very noble. However much of the business we receive from Landlords dissatisfied with their Letting Agent due to poor maintenance and shabby treatment of Tenants comes from Letting Agents who are "regulated".

We receive a huge amount of feedback from tenants renting through "regulated" Letting Agents about poor service and extortionate fees.

I fail to see how the introduction of the above will help?

Tenant Demand For Private Rented Property Continued To Rise In Third Quarter Of 2010

2010-10-28T01:26:00.000-07:00

The Paragon Group’s Private Rented Sector (PRS) Trends quarterly snapshot report of developments in the PRS and buy-to-let market showed that 36% of landlords reported rising levels of tenant demand during the period, compared to 6% who said it was falling.

Source PropertyTalk Live

Both of these variables are more positive than the previous quarter, when 29% reported growing tenant demand and 8% said it was falling. The proportion of landlords reporting growing levels of tenant demand has risen consistently since the second quarter of 2008, coinciding with constrained mortgage supply in the owner-occupier market.

Looking forward, 42% of landlords believe that tenant demand will be stronger in 12 months’ time, which is a considerable increase on the previous quarter (35%), although a higher proportion (10%) also forecast falling tenant demand over the next year compared to the previous quarter (8%).

Nigel Terrington, Paragon Group chief executive, says: “Demand for private rented property is buoyant and many landlords have tenants competing for their properties. The third quarter of the year is historically a strong period for rented property with the beginning of the new academic year and recent graduates starting in employment, but this level of demand has been exacerbated by the low levels of mortgage lending in the owner-occupier market. This continues to translate into demand for rented property as people are unable or unwilling to buy in their current environment.”

The Q3 2010 PRS Trends Report, which covers the three months to September 30, also shows:

-The availability of buy-to-let mortgage finance continues to be constrained
- although 17% of landlords said mortgage finance was either widely or reasonably available, 34% said there was limited availability, with 29% reporting very restricted availability
- Landlord confidence strengthened during the quarter, with one in five stating they were more optimistic regarding the prospects for their property portfolios compared to the previous quarter, whilst 13% were more pessimistic
- Yields increased slightly during the quarter to 6.1%, up from 6% in the second quarter
- The average number of properties in a portfolio ticked up during the period, from 12 in the second quarter to 12.5 in the third. The average investment portfolio had a value of £1.45 million, with the average gearing
- the level of borrowing as a proportion of the property’s value – steady at 37%

Nigel Terrington adds: “The prospects for landlords are strong. Tenant demand continues to strengthen, yields are healthy and stable and confidence is high. The housing market is presenting some strong buying opportunities and landlords are
well placed to take advantage.”

Rental Scams On The Increase, Say Fraud Police

2010-10-13T08:21:00.000-07:00

Online rental scams are on the increase, the National Fraud Intelligence Bureau has warned.

It is dealing with 95 complaints – half from London, but with cities in the north-east also targeted. Many victims are students or new graduates starting their first jobs.

The scam works when a rental advert is placed online, apparently by a letting agent or landlord. The property is ‘virtually’ or sometimes physically viewed and the ‘tenant’ signs a rental contract and agrees to pay a deposit plus a month’s rent in advance.

Funds are paid by Western Union or Money Gram. In reality the property does not exist, has already been rented, or has been rented to multiple victims at the same time.

Fraud police point out that there is very little regulation as to who can advertise online.

They are warning tenants not to try and rent properties they have not physically seen, to check landlords’ and agents’ credentials, and to only transfer money straight into the landlord’s or agent’s own bank account – a traceable transaction.

Police, who are keen to push the rental scam message as widely as possible, believe many of the conmen are from abroad.

Campaign Launched To Speed Up Evictions

2010-10-13T08:13:00.001-07:00

A campaign has been launched for Parliament to change the law to speed up the eviction process and give landlords more right of access to their own properties.

It is being spearheaded by Landlord Action and is backed by the Residential Landlords Association and Mike Weatherley, Tory MP for Hove and Portslade in Sussex.

Paul Shamplina, of Landlord Action, said: “We are seeking changes to the law in order to speed up the eviction process. This is particularly important when there is a clear case of non-payment of rent or anti-social behaviour.

“We are also seeking changes to the law to improve a landlord’s rights of access to their own property in the case of non-payment of rent or anti-social behaviour.

“We also want commitment from the Government that the proposed closures of county courts will not result in delays for landlords trying to obtain possession of their property.”

Suzy Butler is also backing the campaign. She returned to the UK from a charity tour in Peru (ironically, to help with homelessness) to find that her tenant was in arrears and refusing to move out of the property. It took months for her to regain possession of her property.

Shamplina said: “Landlords are forced to go through a drawn-out process just to get their property back.

“We accept that in many cases, tenants will have a valid defence against being evicted where, for example, the landlord has not maintained the property properly. Quite rightly, evidence must be heard and these cases should take longer.

“But, in most eviction cases, tenants do not turn up to court and there is not enough support for single property landlords who may have been forced to let out their properties due to financial hardship or unforeseen personal circumstances, so not being able to reclaim their homes is disastrous.

“It leaves the owners feeling no one is on their side, especially as local councils are advising tenants to stay put until they are legally obliged to leave. The system needs a complete overhaul to give more support to landlords, in particular single-property landlords.” 

Confidence amongst homeowners about the outlook for the property market has fallen sharply amid growing concerns over the availability of mortgage finance

2010-10-06T01:41:00.000-07:00

The latest Zoopla.co.uk Housing Market Sentiment Survey reveals that only 63% of homeowners now expect property prices to rise over the next six months, compared to 78% of homeowners three months ago, showing a staggering decline in confidence in the housing market.
Source Propertytalklive

According to the survey of 6,149 homeowners by Zoopla.co.uk, the average growth predicted for house prices in the next six months has also dropped to only 3% from 5.5% three months ago. And the number of respondents who expect property prices to fall over the coming six months is up sharply to 1 in 4 (25%) from 1 in 10 (11%) only three months ago.

Interestingly, the survey results reaffirm that homeowners in the UK view their home as their castle. Whilst 25% of those surveyed said they expect house prices in their local area to fall over the next six months, only 21% expect the value of their own home to fall over the same period.

And whilst the average rise in values was predicted as 3% for the local neighbourhood, homeowners surveyed expect their own homes to rise by 3.4% on average indicating that they expect their own home to perform 13% better than their neighbours.

The survey also shows that the severe shortage in the availability of mortgage finance is having a detrimental effect on the health of the property market and consumer confidence with 9 out 10 respondents (89%) stating that it is now no easier to get financing than it was three months ago.
Across the UK, the Scots remain the most upbeat with 71% expecting house prices in their area to rise over the next six months, but this is down from 84% three months ago.

In England optimism has fallen the hardest with 62% predicting a house prices rise compared to 79% three month ago. And the Welsh are the most pessimistic on the chances of local property prices rising in the next 6 months with only 61% of Welsh homeowners predicting an increase versus 73% three months ago.

Nicholas Leeming, Commercial Director said: “The ongoing mortgage drought has started to have a real impact on consumer confidence, with optimism about the outlook for the housing market dropping sharply. The shortage of funding on offer is preventing many people who do want to buy from being able to purchase a home, particularly first time buyers. Increasing activity levels is vital for the health of the property market, and the wider economy in turn, and the banks must pull out all the stops to increase lending.”

Could British Banks Need A Second Taxpayer Bail-out?

2010-10-06T01:35:00.000-07:00

Britain’s banks may need to be bailed out by taxpayers again, an economic think tank has warned.
Source EA Today

The New Economics Foundation calculates that banks’ own borrowing needs will more than double to £25bn a month next year – something it dubs a “funding cliff”.

Whilst total public sector support for the banks already amounts to at least £1.2 trillion, it says this will not be enough.

In its report ‘Where did our money go?’ the NEF concludes: “We believe the public sector is likely, once again, to be asked to bail out the banks for the emerging funding gap.”

The report also refers to a “shocking lack of information” about where the money used to bail out the banks had been used and what the banks have done in return for the support.

Andrew Simms, policy director at the think tank and a co-author of the report, says there has been “scant new regulation… to prevent a repeat of the crisis”.

Simms argues for a rewiring of the banking system, calling for the creation of a ‘Big Society Bank’, a green investment bank and a Post Office bank.

Tenants protected If Landlord Defaults On Mortgage

2010-10-06T01:33:00.000-07:00

Wednesday 6th October 2010

Tenants will no longer be kicked out of their home with no warning if their landlord defaults on their mortgage.

Source EA Today: October 6th 2010

New rules have come into force giving judges the power to delay repossessions in order to give tenants time to find a new place to live.

People could previously be evicted from rental properties with little or no warning if their landlord had defaulted on their mortgage and had failed to inform their lender that they were renting out the property.

In some cases, tenants were not even aware of the situation until a court summons was received or bailiffs arrived, despite the fact that they had kept up with their rent.

But under the new rules, they will be able to attend court repossession hearings for the first time, while judges will also be able to take their situation into account and delay repossession by up to two months.

Lenders must also ensure tenants know that their home is going to be repossessed by sending a letter to the property giving them notice of a court hearing date.

Once a repossession order has been granted, the lender must send a second letter to the property telling tenants they have a warrant for its possession.

The tenant can then request a delay of up to two months if they have not previously had the opportunity to do so.

Housing minister Grant Shapps said: “Of course all landlords should get permission from their lender before renting out their home. But when landlords don’t, and they face the real prospect of repossession, their tenants should not be left worse off than any other tenant as a result.”

The changes have been introduced under a Private Members Bill brought by Dr Brian Iddon, Labour MP for Bolton South

Buy To Let Lending Remains Very Subdued

2010-08-13T08:00:00.000-07:00

The freezing up of the buy to let mortgage market that emerged as an unwelcome side-effect of the credit crunch appears to have eased a little, according to the latest buy to let survey results from the Council of Mortgage Lenders.

Source Propertytalklive.co.uk
While buy-to-let lending still remains very subdued and ongoing challenges remain, in the second quarter of 2010 the number of buy-to-let mortgages taken out was 24,900. This was 13% up on the 22,000 in the first quarter, and 15% higher than the 21,600 in the second quarter of 2009.

The value of buy-to-let lending in the second quarter was £2.4 billion, of which £1 billion was remortgaging. Although business is only just over a quarter of its level of three years ago, both the number and the value of buy-to-let loans were at their highest level since the fourth quarter of 2008 (other than in the fourth quarter of 2009 - where demand was artificially inflated by the end of the stamp duty concession).

As at the end of June, there were 1.26 million buy-to-let mortgages outstanding, worth a total of £149 billion. By value, buy-to-let mortgages accounted for 12% of all mortgages, the highest proportion since records began.

In the buy-to-let market, arrears cases have improved markedly. Repossession rates remain higher than in the owner-occupier market, however, not least because of the extended forbearance that lenders extend to home-buyers to try to help prevent them losing the homes in which they live. In the buy-to-let market, a "receiver of rent" may also be appointed, instead of the lender taking possession of the property.

Commenting on the performance of the buy-to-let market, CML director general Michael Coogan said:

"The buy-to-let market has continued to grow, albeit slowly, throughout the period since the credit crunch. And with fewer people able to afford the entry costs to home-ownership, as well as the pressure on social housing, tenant demand for private rented property will remain strong.

Finance for private landlords, whether institutional or individual, is crucial if the UK is to have enough homes to meet the needs of the population. Funding conditions for lenders remain tight, but there is every reason to expect the buy-to-let sector to continue to make a powerful contribution to helping meet the country's varied housing needs."

Customer Feedback

2010-08-11T11:54:00.000-07:00

An interesting post this one as we treat Landlords, Tenants and Prospective Tenants as equal Customers. Hence we receive so much feedback about our service. The comments in this post compel us to thank our Landlords [for following our advice about presenting properties in a great condition], existing Tenants for looking after our properties for our Landlords and our Marketing department for refusing to take on sub-standard properties which are often then taken on by Letting Agents who simply don't care !

A prospective Tenant didn't want to use us initially as we have higher deposits than others. Our Agent said[during a viewing] that this is down to the quality of properties we take on. Also Tenant selection criteria is higher than other agents. She then said "I realise this after looking at other agent's places. Only Brookdale have shown me good standard places". She then went on to say that she has a friend who works for a letting agent in Peterborough and she confirmed that Brookdale present the best properties to let.

Another prospective Tenant has found a property with another agent after viewing some Brookdale properties. He advised us that if it does not go through he will come back to us straight away as our service level has been very good - he was really impressed with SMS property alerts and appointment confirmation. The alerts he said "They are great. Even if you don’t get a chance to look at them now - you always go back to them".

Again Thanks to our Landlords who enjoy Tenants who look after the property and have the incentive to continually improve their property and attract such quality Tenants.

Our motto is "Quality Property Management Begins With A Quality Tenant"!

A Third Of Tenants Are In Arrears - NOT AT BROOKDALE!

2010-08-11T11:22:00.000-07:00

A strange report is this! aboutproperty.co.uk report that a third of Tenants are in arrears. We do not understand this statistic at Brookdale. We manage 850 properties and can count on one hand the number of Tenants in arrears. This is clearly not a third.

Anyhow - worth publishing this story as it is a testament to Brookdale's strict Tenant selection criteria and our ability to offer a non-insurance based guaranteed rent scheme.

Landlords are currently seeing 37 per cent of their tenants in arrears according to research published today by the National Landlords Association (NLA).

Over the last six months, 44 per cent of landlords have experienced rental arrears, contributing to the significant rise in repossessions and the growing number of landlords having problems meeting their mortgage repayments.

The NLA said when faced with arrears, 50 per cent of landlords attempted to recover the loss of earnings through the courts. The research found many landlords were waiting for over three months before their case was heard, and one respondent said: "The court process for evictions takes far too long which could potentially lead to hardship for many landlords, especially smaller ones."

David Salusbury, chairman of the NLA, said: "This is becoming a serious problem for landlords all over the UK. Paying the rent has to be right at the top of tenants' priorities as even one month's arrears, in this climate, could be the straw which breaks the camel's back. The mortgage has to be paid and the vast majority of landlords do everything in their power to make sure this happens.

"It is important to remember that only about 35 per cent of rental properties are secured on existing buy-to-let mortgage finance.

"Contrary to recent reports, most landlords are not expecting to be repossessed and lose their asset. Landlords and tenants need to communicate and work together to tackle financial problems before they result in a loss of rent and a potential default on mortgage repayments."

Research Your Agent Before Committing

2010-08-11T11:06:00.000-07:00

Many Landlords choose a Letting Agent based on cost alone. They do not take into account the experience of the company (in terms of years trading) nor the experience of the staff nor the level of Customer Service. A web-site dedicated to exposing bad agents is a great place to research your agent. www.allagents.co.uk receives regular reviews of agents up and down the country. Just type in the name of the letting agent in the box at the top of the screen.

An example: Belvoir Letting Allagents Review

At Brookdale we share over 160 years combined experience in the property industry. In fact, we have so much in-house knowledge that we do not even employ solicitors. This is one of the reasons we have never sold insurance policies (for which Letting Agents are paid commission) to cover legal costs! Everything is done in-house.

We do not even sell insurance to cover rental loss. We offer a unique rent guarantee scheme where you are paid the rent even if the Tenant is late or does not pay. It is not insurance based, does not penalise Landlords by taking the first month's loss as an "excess" and we are not selling it to earn commission as most other agents are. We simply guarantee Landlord rental payments. Read more.

Tenancy Deposit Rules Side With Tenants, Says Agent

2010-08-11T10:56:00.000-07:00

Source EA Today: Wednesday 11th August 2010

A letting agent has accused the TDS of failing to address the fundamental problem of tenants raising spurious disputes, knowing that it costs them nothing to do so and they might as well “gamble on recovering some of their money”.
Ian Sanford, managing director of Pennington Properties in Huntingdon, Cambridgeshire, wrote to TDS chairman Professor Martin Partington following the TDS’s latest letter and invoices to its members.

Sanford wrote: “It would appear, reading between the lines, that TDS would rather agents themselves paid for dilapidations to properties to keep their landlords happy and refunded deposits to tenants in full to avoid the likelihood of a dispute being instigated – hardly a fair and equable system.”

He added: “I am also concerned about your comments regarding the fact that you are increasingly relying on your own resources or your insurance policy to return deposits. Surely you should not be accepting an agent into the scheme who does not comply with the strict accounting regime required by ARLA. If you are accepting less than this standard, then I am not surprised that you are experiencing problems.

“Disputes raised by tenants appear to be accepted on face value by your office and once in the system become registered against that agent, whatever their merits, thereby effectively increasing the agent’s subscription.

“We recently had a situation where we initially paid tenants back part of their deposit and advised them that, because of some apparent damage to the carpets, we were having them examined by a carpet contractor, and that, until we received his report, we would be unable to deal with the balance of their deposit. In the event, following receipt of the report, the landlords accepted the damage as ‘fair wear and tear’. The tenants were then refunded the balance of their deposit but in the meantime had raised a dispute with TDS, so another one was ‘chalked up’ against us.”

He said the first he knew that the tenants were disputing the deductions was when paperwork was received from the TDS.

He said: “Would it not be sensible, when receiving disputes from tenants, for your office to email the agent first to ask whether the matter was still subject to negotiation, whether the agent intended to go to adjudication or maybe even settle with the tenant if the amount was deemed to be trivial, before entering the case into the system?”

Sanford also said that, contrary to prescribed procedures, the TDS apparently allows to raise disputes up to six months after the end of the tenancy – “a period which is totally unreasonable and disadvantageous to the agent and landlord when monies will have already been disbursed”.

Sanford went on: “It is interesting to note that the other two tenancy deposit protection schemes do not appear to be suffering the same problems as TDS with an escalating number of disputes. Perhaps TDS should consult with them to find out why this is the case.”

He concluded: “Although I agree entirely with the principal of deposit protection, I believe that the scheme is flawed and that you should be lobbying the new Government to change the rules so that tenants and landlords pay a modest fee of, say, £25, when raising a dispute. This fee would be repaid if the dispute was well-founded but forfeited if found to be spurious. The benefits of this arrangement would be to help eliminate disputes raised for small amounts and possibly bring some welcome additional income for TDS.”

Letting Agents Prove Better At Avoiding Voids

2010-08-09T10:58:00.000-07:00

Source EA Today:

Letting agents are more successful at keeping rental properties occupied than individual landlords, according to the Deposit Protection Service.
Lettings agents ensure that the void period on a property is kept to within two weeks on 63% of properties, compared with only 38% for those marketed by landlords directly.

The DPS has assessed the void periods across 597,753 deposits it holds on rentals in the UK.

The figures also point to huge regional differences throughout the country, the worst scenario being two-thirds of available rental properties lying empty for more than three months.

Two of the ten worst areas for empty properties were in Lancashire. However, the South was also badly hit, with areas in Surrey, Essex and Hampshire among the worst. In some areas, half of rental properties have been empty for more than three months.

Kevin Firth, director of the DPS, said: “Many landlords market their properties very effectively, but the evidence we have compiled in the past two years demonstrates clearly that there is more they can learn to try to decrease void periods.

“In the current market – where demand for rental property far exceeds supply – there is no excuse for allowing properties to remain dormant and not earning income.”

Dealing With Rising Interest Rates - A Guide For Landlords And Business Owners

2010-07-14T00:31:00.000-07:00

Interest rates have now been at their record low of 0.5 per cent for 15 consecutive months. This unprecedented situation, which came about as a result of the government and Bank of England’s attempts to stimulate the economy, has been very good news for those with buy-to-let mortgages or business loans.

Borrowing has been cheap, and many landlords and business owners have enjoyed relatively low repayments on their debt.

But it is impossible for this situation to continue forever. At some point in the coming months, interest rates will begin to rise; a recent survey of economists by Reuters suggested that this will happen early next year.

Landlords and business owners need to be prepared for this rise. An increase in rates will hit your bottom line and make a dent in your cashflow – so it is vital that you plan ahead in order to minimise the impact.

How will a rate rise affect me?
Rising rates will affect different business in different ways. The impact on your business will depend on how your borrowing is arranged, and how dependent your customers are on credit.

• Landlord mortgages. Rising rates will obviously have a significant impact on landlords. The nature of your mortgage will determine how much a rate rise is likely to affect your cashflow. If you are on a variable-rate deal, an increase in the base rate could significantly increase your monthly repayments. Even those on fixed rate or introductory terms will have to plan ahead, remembering that the cost of their repayments will be higher when their fixed rate term ends and they remortgage or move onto a variable rate.

• Business loans. If you have a business loan, it may or may not rise in accordance with base rates. Some loans are pegged to base rates (or, more accurately, to your bank’s base rate, which in turn moves with base), while others are priced purely according to risk. Alternatively you may have a capped rate loan – meaning that the cost of your repayments can go up, but only to a previously agreed limit.

Should I change my mortgage?
If you currently have a variable rate mortgage but are concerned about the prospect of rising rates, you might well be considering moving to a fixed-rate deal instead. There are a few things to consider here.

First of all, as base rates are currently low, trackers and variable rate mortgages are still cheap. At the time of writing there is a deal at 3.64 per cent on offer, with a 60 per cent loan-to-value ratio. Fixed rate mortgages are comparatively expensive; you will be hard-pushed to find a buy-to-let loan at a fixed rate of much less than 4.6 per cent.

Moving from a tracker or variable rate to a fixed rate mortgage is therefore something of a gamble. Analysts are divided on how sharply rates are likely to rise; some believe that the Bank of England will ratchet up rates relatively slowly, while others expect to see a very pronounced spike. Moving to a fixed rate that is one or more per cent higher than your current variable is, as a result, quite a risk – but if rates rise sharply, you stand to save.

How can I minimise the impact?
As a mortgage holder, you can help to minimise the impact of rate rises by making overpayments now. Depending on your arrangement with your lender, making overpayments now may mean that you can take payment holidays in the future, or reduce your repayments in the event of a future rate rise.

You can also minimise the impact as a business loan holder by paying down your debt more quickly. In both circumstances, though, you should check with your lender before making extra payments; some will charge early repayment fees which may outweigh your savings.

If you choose not to refinance or increase your repayments, you should make sure that your financial forecasts change to reflect the increase costs of servicing your debt. If yours is a consumer-facing business you should also remember that many of your customers may also struggle with the increased cost of borrowing. As such, both footfall and turnover may go down.
It is inevitable that rates will rise.

The big questions facing landlords and business owners are: when, and by how much? There is a sense amongst analysts that businesses should be prepared for the worst. By thinking ahead you can minimise the impact on your wallet, and successfully navigate your business through the choppy waters of rising rates.

Tenancy Deposit Law Should Be Totally Revised Says Expert

2010-07-14T00:28:00.000-07:00

A lettings industry consultant has called for the existing law on tenancy deposit protection to be revoked, with totally new measures put in place.

Laurence Dillamore says the current system is not working.
He wants the existing law to be heavily amended so the current structure that compels CLG to license two types of scheme disappears.

He says there should be a single licensed body which could, if it chose, provide both ‘insured’ and ‘custodial’ schemes.

He is also calling for that single authority to be empowered to charge a fee for usage when interest rates are low.

Currently, there are three different schemes, including the Deposit Protection Service which provides a custodial service. It is not allowed to charge, but is run on the interest paid on the deposits it banks.

Dillamore has told housing minister Grant Shapps that a single body would mean a single statistical database from which the Government could decide housing policy.

It would also save public money, as CLG would only have to monitor one scheme, not three.

Hitting out at the original procurement process for the insured versions – in which he was involved – he said the process was “profoundly unsatisfactory” and has caused many problems.

He said there was public confusion as to who the insurance schemes indemnify, and that one scheme was making windfall profits whilst the other had faced near ruin.

Dillamore said: “The current three supplier arrangements are confusing, unwieldy and in some cases completely misleading to the point of being unsound. I believe that the changes proposed would be welcomed. However, I have no doubt that there will be considerable adverse comment.”

The Popularity Of Renting Property Is Set To Rise, According To One Industry Practitioner

2010-07-09T01:11:00.000-07:00

Commenting on the issue, chief executive officer of Upad.co.uk James Davis said that the price of buying homes may put increasing numbers of people off.

This could be welcome news for landlords, who are likely to see increases in demand for their buy-to-let residences if the expert's prediction comes true.

He remarked: "It's becoming more financially astute to rent than purchase from an affordability perspective. 15 per cent of the UK population currently rent, which is expected to grow to more than 25 per cent over the next ten years."

Mr Davis went on to state that renting is the preferred form of tenure in many other countries.

For example, a quarter of French people do not own their dwellings and the same is true for 60 per cent of Germans.

His comments follow the release of research conducted by Easyroommate.co.uk, which suggested that the average cost of a rented room in a shared house stands at £348 a month.

Property Shortage For UK's Nation of Renters

2010-07-06T04:39:00.000-07:00

With the UK set to follow in the footsteps of it's European neighbours and become a nation of renters, Email4property.co.uk reports that current demand for rental property is far outstripping supply.

Despite research by Key Note, in which nearly 95% 16-19 year olds questioned said they expected to rent rather than buy their home in the future, the firm says that on average lettings agents have seen the number of properties they have to let 20% down on average from last summer.

Spokesman Steve Lees said:

“The lettings market has contracted over the last few years, with the number of available properties coming onto the market slowing dramatically. Fierce competition from tenants means that when properties do become available they are snapped up. As a result, landlords have also been able to push up rents.

“The government offered a small pick-me-up to the rental sector in the form of a lower-than-expected CGT increase. But we also need to see buy-to-let lending restrictions relaxed, encouraging even more landlords to invest in the market. Once this happens, I would expect to see a slow but steady increase in supply, benefitting those who are unable to find a property and bringing rental prices down.”

Nick Barrow, Branch Manager at Linley and Simpson in Leeds, adds:

“The number of properties on our books has fallen in the last 12 months by at least 20%, while the numbers looking to rent has increased. This is because many tenants are deciding to stay in their current properties rather than terminate contracts and there are fewer individual buy-to-let landlords entering the market. In Leeds, a shortage of three bedroom family homes to let has meant that rental prices have also increased by 5-10%.”

Secret Way The Tax Man Is Watching Landlords

2010-07-06T04:36:00.000-07:00

If you own more than one property, the taxman is employing shadowy tactics to ensure you pay enough tax. Here John Fitzsimons , personal finance editor at lovemoney.com exposes the secret way the taxman is watching Landlords.

The Budget was a bit, well, underwhelming really wasn’t it?

After weeks and weeks of careful briefings to the press about the age of austerity, and how we were all going to have to do our bit, the end result wasn’t half as painful as we’d been led to expect.

That was all clever politics of course, softening us up, particularly over Capital Gains Tax, which had been the subject of many furrowed brows thanks to speculation that the tax would rocket from 18% to 40% overnight.

In the event the tax was only increased to 28%, and even then only for higher tax-rate payers.

However, while the tax threshold itself was only moved a little, HM Revenue & Customs has developed a sneaky new way to ramp up its takings from both Capital Gains Tax.

This week, one of the shadowy tactics employed the taxman to ensure it maximises its Capital Gains Tax receipts came to light. Thanks to a freedom of information request from accountancy group UHY Hacker Young, we now know about how HMRC has been raking it in from its Capital Gains Tax enquiries. This is where the taxman challenges the accuracy of a tax return, and attempts to get more money out of the taxpayer.

Back in 2007/8, the taxman established a number of special teams focused on CGT compliance – in other words these teams make sure we are all paying the right amount of CGT. And boy, have they been busy!

And it’s property – or in other words, buy-to-let landlords – that the teams have clamped down on most during their special investigations. Their work has included secretly trawling through Land Registry data to identify residential property sales by buy-to-let investors, and they have also been sneakily gathering enough evidence to challenge claims by some investors that a certain property has been their main residence, which would exclude it from CGT.

The moves have been very successful – over the past two years, the amount of revenue these enquiries have brought in have rocketed 23%, up to £73.6m in 2009/10. A figure that is all the more remarkable given that the amount of CGT which HMRC calculates is payable has more than halved over the last two years, falling from £5.3bn in 2007/8 to £2.5bn in 2009/10.

While Revenue & Customs is right to do this – tax evasion is not exactly a good thing for any of us – its shadowy tactics are somewhat unnerving, as is the fact that the success of these enquiries has only come to light thanks to the Freedom of Information Act.

Part of the problem with Capital Gains Tax is that it is a fairly complicated tax, with many loopholes or exemptions, that are open to abuse by the unscrupulous.

So if you want to pay as little Capital Gains Tax as possible, but without falling foul of Revenue & Customs, what should you be doing?

How CGT works
A good place to start is to look at how Capital Gains Tax works, and when you need to pay it. Any profit made on a property (unless it is your main residence – more on that later) is subject to 18% tax if you are a basic rate taxpayer, or 28% if you’re a higher rate taxpayer.

You will be required to pay the Capital Gains Tax by 31 January of the year following the year in which you sell the property.

Exemptions and loopholes
However, there are lots of exemptions and loopholes that are available on Capital Gains Tax for landlords, so buy-to-let is clearly an area that HM Revenue & Customs is targeting with its special enquiry teams.

Let’s take a look at how to successfully avoid a large tax bill - without coming under scrutiny for tax evasion.

You do not have to pay Capital Gains Tax if the property you sell is your main home.

However, the way the taxman views what constitutes your main home is somewhat idiosyncratic, which can be an advantage if you own more than one property. You only need to have lived in the property for a short time for it to be classed as having been your main residence, thereby entitling you to the relief.

In fact, as long as you've owned the property for less than two years, you can decide for yourself which property is your main home and nominate that property as such to HMRC. However, you have to do this within two years of changing the number of properties you live in, whether the change is an increase or a decrease. Note that your spouse must have the same 'main home' for tax purposes.

If you don't nominate which property is your main home within two years of buying the second property, the tax office will make a decision "based on the facts", so potentially evidence like the electoral roll or the address your bank details are registered at. However, you could potenitally buy a third property and then nominate your main home as one of the other properties at that moment in time.

Even if you no longer live in the property, you can still qualify for the full amount of Private Residence Relief, provided that you sell it within three years of moving out or it no longer being your main home. The relief is given automatically, though you may need to show the amount of relief due on your Self-Assessment tax return.

Letting exemption

If you’ve let out all or part of the property while you’ve owned it, you may not be entitled to Private Residence Relief, but you should instead be able to claim letting relief.

Working this one out can be pretty tricky – the maximum sum is £40,000 , though it will be reduced if you have made other gains on the property. Essentially, you are entitled to the lowest of these three figures: £40,000, the amount of Private Residence Relief due or the amount of gain you’ve made on the let part of the property.

This isn’t necessarily an easy estimation to make, so I’d advise having a read of the examples on the Revenue & Customs website which provide a decent guide.

Furnished holiday lettings
This is one area that the Government is currently consulting on, as we need to ensure our rules match up with those of the rest of the EU.

However, as it stands, if your rental property is classified as a holiday let, then you may be entitled to a further three Capital Gains Tax reliefs.

These are :

- Business Asset relief - all or part of your gain may be postponed if you buy another property or certain other assets for business use.

- Gifts Hold-Over relief – If you give away your property (say to a family member) all or part of your gain will be postponed until the property is sold.

- Entrepreneur’s Relief – Your gain may be reduced by four ninths for the first £1m of gains. (The new Government has proposed doubling this to the first £2m of gains).

- What’s clear is that while there are many potential reliefs involved with Capital Gains Tax, the Government is going to be casting a very keen eye over the veracity of your returns. Make certain you know exactly what you can and cannot claim – it may cost you a lot more in the long-run if you make a mess of it!

VAT Increase January 4th 2011

2010-07-04T09:07:00.001-07:00

Landlords please remember that VAT increases to 20% from 4th January 2011. This will affect your payments we make at the end of January.

Brookdale Rent Guarantee Scheme - It Really Guarantees Your Rent!

2010-07-04T09:00:00.000-07:00

Brookdale are the only agent that offer a rental guarantee which is not based on an insurance policy we sell you to earn commission (as with most letting agents). It is a simple GUARANTEE that your rent will be paid on time whether your Tenant pays us or is late paying their rent.

Click Here for more.

The New Persimmon I-Home In Cardea Stanground

2010-07-04T08:43:00.000-07:00

Persimmon Homes are developing a new site in Stanground called "Cardea". The "Aster" is a one bedroom property priced very competitively and is a great deal for property investors. It is named the "I-Home" as it boats connection to fibre-optic broadband with speeds up to 50MB/S. We cuurently have one to rent at a monthly rental of £450.

This brand new one bedroom corner house type property is located on the new Persimmon Cardea development which is conveniently located on the Stanground bypass providing easy road access.

It is of an "upside down" design which means on the ground floor is the large double bedroom and on the first floor is the attractive open plan living space. It benefits from UPVC double glazing, full gas central heating and an off road parking space.

The front door leads to a spacious entrance hallway with the double bedroom leading off to the left. The bedroom has a TV point and a bay window. It measures approximately 16'4 X 8'2.

The property is connected to fibre optic broadband.

Also on the ground floor is a large full height storage cupboard and the main bathroom which has a shower fitted over the bath.

Upstairs is the main living space comprising open plan kitchen and lounge. The overall living space is approximately 16'4 X 15'5 so there is ample room for a suite and TV.

The kitchen area is fitted with gloss white kitchen units, a built in gas hob and electric oven with stainless steel splash-back, a washer/dryer and full height fridge/freezer.

Outside there is a bike store.

The property is available on an unfurnished basis.

Click here to view a virtual tour of the property

Useful Links For Our Tenants

2010-07-04T08:21:00.000-07:00

Our website has a number of useful links for Tenants click here to view them.
Also we have created a page on our web-site for Tenants to send us enquiries. Click here to view it.
Prospective Tenants can apply for a property on-line by clicking here.

Letting Agents Going Bust

2010-07-04T08:07:00.000-07:00

Since 1989 we have seen a number of letting agents go bust but never more that during the recession of 2008.

It is quite extraordinary how many Landlords contact us and ask for 8% management fees. Many specify "price" as their only criteria in choosing a letting agent. Quite foolhardy.

We are competitive in terms of our charges and are independent so not controlled by a group or franchise. The bonus in using Brookdale is that there are no hidden fees. However, our emphasis is on Tenant Selection. Our motto is "Quality property Management Begins With A Quality Tenant."

In this new blog we intend to publish stories (and we hear many) about Landlords (many of whom we would not deal with anyway) taking the "cheap" option, using a letting agent which has been in business for a matter of months then feeling the pinch when the agent goes bust. What they do not realise is that the deposit is repayable to the tenant by the Landlord - not the agent.

This year we have seen 3 agents go bust and expect to see a good few more in the next few months.

Research Your Letting Agent By Reading Customer Reviews

2010-07-04T08:01:00.000-07:00

www.allagents.co.uk provides a quick summary/reviews about letting agents and estate agents. It is well worth a look. Just type in the name of the agent in the box at the top and read the reviews.

It must be said that many of the posts on allagents.co.uk are from Tenants (when referring to the letting division) but we must remember that Tenants are EQUAL Customers when compared to Landlords. When you inherit one property you inherit TWO Customers – a Landlord and a Tenant.
It’s easy to assume that all letting agents offer the same service but, clearly looking at the reviews above, this is not true. To read more about our service click here.

The UK Housing Market Is A Relatively Safe Bet For Those Who Choose To Invest In It

2010-07-02T07:52:00.000-07:00

According to LandlordZONE.co.uk director Tom Entwistle, property is a good option compared to many other assets in an unstable economy.

He remarked: “Low interest rates on savings and the volatile performances of investments, pensions and the stock markets means that UK housing looks a relatively safe investment.”

The expert added that rental demand in the country is currently strong and is likely to remain so.

However, Mr Entwistle went on to note that mortgages are still hard to come by for some people.

This is particularly the case for business portfolio landlords, whereas one-off buy-to-lets may have a slightly easier time, he claimed.

His comments came after a survey by Paragon Mortgages, which indicated that 21 per cent of such individuals plan to invest in property during the third-quarter of this year

UK House Building Levels Rise

2010-07-02T07:50:00.000-07:00

House building levels across the UK rose during May, according to the latest NHBC statistics, offering a positive backdrop to the coalition’s first budget.

During March to May 2010, 32,352 new homes were registered across the UK. This was a 68 per cent increase on the same three month period in 2009 (19,286), indicating continued year-on-year solid improvement across the sector.

Registrations during May 2010 (10,870) were also 56 per cent higher than in May 2009 (6,953).

Commenting on the figures, Imtiaz Farookhi, chief executive of NHBC, commented: “Despite the impact of the general election and the political uncertainty that surrounded it, NHBC’s figures show that the number of homes being built in the UK is continuing to improve at a steady rate.

“Sustaining this level of improvement post-budget and into the summer building season however will be the next major challenge to face the industry”, he added.

NHBC statistics for the three months to the end of May 2010 show that both private and public sector demonstrated significant improvements:

- Private sector registrations were up 89 per cent (at 20,877) when compared with the same period last year (11,062)

- Public sector registrations were 11,475 – 40 per cent higher than the same period a year ago (8,224).

More Imagination And Investment Needed In the Private Rental Sector

2010-07-02T07:40:00.000-07:00

The emergency budget bought mixed blessings for the property industry. The rise in CGT from 18% to 28% will hit buy to let landlords if they decide to sell inthe next few years , but not if they are looking at property as a long term investment.

And, things could have been far worse. In the run up to the budget experts had predicted CGT rises of 40 or 50%.

Let’s not forget too that Landlords received a boost earlier this month when Housing Minister, Grant Shapps, announced that he will be scrapping plans to introduce a national register for private landlords and regulate managing and lettings agents. However, this news was dampened somewhat this week when over 25 MPs signed an Early Day Motion calling for the private rented sector to be fully regulated, despite Shapps’s announcement.

More regulation and red tape is exactly what we don’t need right now. The majority of lettings agents are regulated already by industry bodies including the Association of Residential Lettings Agents (ARLA) and the Property Ombudsman and licensed by bodies such as the National Approved Letting Scheme. Such accreditations demonstrate the quality of service letting agents provide to their tenants and it is a shame that a few rogue landlords are giving the rest of the industry a bad name.

Strikingly, the budget did not really deliver any positive news for the private rental industry. In many UK areas there is a real shortage of good quality housing for many groups of people, including the retired, and we would like to see the government introduce targeted measures to encourage the growth of the Private Rented Sector in these regions to accommodate such people.

Measures could include a reduced and flat rate of stamp duty on investment property acquisitions regardless of the size of the transaction. This would help to encourage institutional and corporate investment in the sector. We would also like to see a beneficial rate of CGT for individual tax payers if they make their investment property available for letting for more than, say, three years.

The budget also lacked imaginative thinking about ways to encourage investment in the Private Rented Sector. This will be particularly important over the next few years as we will see continued growth in demand for properties from groups of people including the retired and also possibly from people working in the public sector, given the planned pay freezes and anticipated job cuts.

VAT Increase Set To Boost "Black" Economy

2010-07-01T07:34:00.000-07:00

The Chancellor's announcement to increase VAT to 20 percent from January 4th 2010 triggers the FMB (Federation of Master Builders) to issue a warning that this will boost the "black" economy.

Richard Diment, Director General of the FMB said:

“Cash strapped homeowners will be more likely to resort to ‘cash-in-hand’ traders in order to avoid adding 20 percent to the cost of keeping their home in good condition. This in turn will leave homeowners more vulnerable to being ripped off or having sub-standard work done on their home.

Every year over £170 million is stolen from unsuspecting homeowners by rogue traders and today’s VAT increase will be a further incentive for this figure to escalate.

“The VAT increase makes no sense because for the Chancellor as there is no guarantee that the tax revenue will actually increase for the Treasury. Higher taxes send consumers into the informal economy whereas a low taxation economy stimulates growth. Independent research has shown that reducing the rate of VAT to five percent on the labour element of housing repair, maintenance and improvement work would have a multiplier effect of more than £1 billion as well as creating more than 55,000 extra new jobs this year alone.”

“This VAT rise will have a disastrous affect on many businesses and people cross the UK. The new 20 percent VAT rate will hit the building industry particularly hard as the industry is still struggling to recover from a recession in which it has been the single biggest cause of redundancies and business failures. Today’s VAT increase will mean 7,500 jobs are lost in the SME construction sector this year.

When you include the effects of the multiplier the total employment lose to the UK economy could amount to 23,000 jobs by the end of this year.”

TDS Bring Back External Adjudicators

2010-06-30T07:32:00.000-07:00

The Tenancy Deposit Scheme has brought back some of its external adjudicators in order to improve turnaround times for disputes.

Source EA Today Wed 30th June 2010

The Tenancy Deposit Scheme has brought back some of its external adjudicators in order to improve turnaround times for disputes.

It axed about 70 of them last year during its financial crisis, but has now brought back a ‘small’ number. As a result of this and other measures, over 80% of disputes are now being resolved within four weeks.

In May, 1,123 disputes were resolved, and 1,582 had been resolved by the time of the June board meeting last week.

The successful speed-up in dispute resolution comes from new methods that ensure the way cases are examined is proportionate to their complexity and value, instead of using the one-size-fits-all methods of before.

“This has led directly to the improvement in the quality and quantity of adjudication and has helped with monitoring the consistency of our decision making,” said Michael Morgan, acting head of adjudication at TDS.

The new methods and results will be subject to audit in the autumn, when decisions about a new chief executive and the setting up of a user group should be finalised.

TDS chairman Martin Partington said: “I think the first months of this financial year have been very productive and auger well for cost effectiveness, user satisfaction and the future of the Tenancy Deposit Schem

10 Reasons To Buy A New Build Home

2010-06-30T07:26:00.000-07:00

This is an interesting article from Property Talk Live specifying 10 reasons to buy a new build home. It is primarily geared to the home buyer but all points are relevant to renters. We find investors who buy new builds secure Tenants much more quickly than seconds. In addition there are benefits associated with guarantess etc.

Buying a new build home makes perfect sense on so many levels. The standard of home building in the UK is at its peak at the moment and as we are an ever-expanding country the need for housing is currently at an unprecedented level.

This is why home builders are investing huge amounts of resources into building the highest quality properties and more and more people are opting to buy new.

1) The best reason for buying a new build home may sound obvious, but buying new means that no-one else will have lived there before. The house will be completely yours and you dont have to worry about stripping away that horrendous yellow wallpaper or knocking down that ugly fireplace before you get started putting your own stamp on the place. As the house is brand new you have a completely blank canvas to play with and you dont have to worry about having to clean up the mess left by the previous owners. Your new home will be clean and ready for you to move in without having to worry about refurbishment or repair. After all, you wouldnt want to wear second, third or even fourth hand shoes, so why buy an old house?

2) Your new house will perfectly suit your modern lifestyle. A lot of older buildings do not fit in with how we live in todays society. Some older houses dont utilise space in the best possible way and that is why most new build houses now feature larger kitchens, more luxurious bathrooms and en suites and open plan living spaces. New build houses are specially designed to accommodate modern living so every mod con will have been thought of in order to make your life more comfortable.

3) The problem with buying an older house is that you can never be completely sure about what you are buying. You can have all the surveys and inspections you want but sometimes things just go wrong with older houses. You may experience electrical problems or have to splash out on fixing dodgy plumbing and this can seriously dent your decorating budget. Most new build houses come with a ten year warranty so you can buy with a peace of mind that there wont be any nasty surprises.

4) Older homes tend to be poorly insulated and not very energy efficient. New Homes on the other hand, are more eco friendly and are built specifically to be more energy efficient than older properties, in some cases up to 4 times so! Insulating technology has come on a long way and new homes are fitted with the latest energy saving devices and insulation. The result is less money spent on energy bills and a smaller carbon footprint to boot!

5) New homes often come with state-of-the-art fitted kitchen and bathrooms and all the facilities you could want to turn your home into a home entertainment centre therefore your house will completely up-to-date.

6) Safety is paramount when building new homes. They often feature secure double glazed windows, fire resistant materials, circuit breakers and smoke alarms so you can rest assured that you are safe in your new home.

7) With older homes, maintenance can become a big problem. Old houses can spring leaks or become infested with pests and these can be costly issues to sort out. Investing in a new property means that once you have shelled out for the agreed price you dont need to worry about spending more money once youve moved in.

8) New homes tend to be built as communities rather than as a one-off so a community will be established. It can be hard to move to a new place if others have lived there for a long time but with a new build you will all be new-comers with the chance to build up a community from scratch. The location of new builds are often fantastic, with close proximity to shops, schools, transport links and local amenities you will have all you need on your doorstep.

9) Moving home can be incredibly stressful. With a new build home it doesnt have to be. Buying a new home saves you all the stress and delays usually associated with moving such as surveys and waiting for the occupiers to move out. Once the house is built you move straight in- as simple as that.

10) And finally, buying new means that you can get a brand new home, just the way you want it. If you reserve before the building is finished then you can add personal touches such as carpet, tiling and paint colours.

Suspension of HIPS Triggers Flood Of Properties Onto The Market

2010-06-20T07:24:00.000-07:00

A flood of new properties has come on to the market since HIPs were scrapped on May 20, giving estate agents their busiest week in nearly three years.

Source EA Today 20th June 2010

A flood of new properties has come on to the market since HIPs were scrapped on May 20, giving estate agents their busiest week in nearly three years.

Rightmove says new listings on its website have increased by 35.4%, while the UK’s largest estate agency chain, Countrywide, says the number of new properties coming on to the market through its 1,200 branches jumped by 34%.

Rightmove’s commercial director, Miles Shipside, said: “We would expect to see a post-election pick-up in fresh stock coming to the site as people have been put off by the uncertainty of the election recently.

“However, 35% is a significant increase in new listings, and indicates that many more speculative sellers have been encouraged to bring their properties to market since HIPs were scrapped. It seems that the additional cost and red tape were putting sellers off.”

New listing numbers were up throughout the country, although levels varied across each region. Wales had the highest increase in listings, with the number of new properties going up by 66%, while the lowest was in the North-West where the rise was 12%.

Countrywide says its new instructions were a 68% increase on the same week last year, with the number of new properties reaching levels not seen since September 2007 – the same month that HIPs were extended to cover three-bedroom properties.

Robert Scarff, managing director of Countrywide’s estate agency division, said: “The results speak for themselves and show that the timing of the suspension of HIPs was crucial.

“This decision has provided home owners with the incentive they need to put their properties on the market. Those sellers who were in two minds are now doing so and causing a big spike in activity for agents.”

Figures from around the regions show the increases in sellers for Countrywide companies:

East Midlands: Frank Innes 53%
Central & West Midlands: Dixons and RA Bennett combined 126%
East: Abbots 47%
North-West: Bridgfords 50%
North-East: Bairstow Eves 58%
Greater London: Bairstow Eves and Mann Countrywide 26%
South-West: Millers and Stratton Creber 17%
South-East: Bairstow Eves, Taylors, Wilson, Alan De Maid, Geering & Colyer and Mann Countrywide 32%

Scarff added: “The increase in activity kicked off as soon as the Government announcement was made. Not surprisingly, there have been no reports of buyers questioning how the HIPs suspension will affect them.

“This supports our view that the Government was 100% right in their decision to suspend the scheme.”

Landlords Can Pay Off Mortgages Easier Due To Reduced Arrears

2010-05-28T07:15:00.000-07:00

Landlords of buy-to-let properties could pay off mortgages quicker because of lower interest rates, according to one specialist.

Source: Houseladder 28th May 2010

Private rental expert Malcolm Harrison believes the reduction in arrears for these properties will benefit owners and tenants.

He said: “Landlords don’t have as many outgoings so they are in a better position. The only way to satisfy the market is to attract more landlords.”

According to the Council of Mortgage Lenders, the number of loans that had arrears of more than 1.5 per cent of the mortgage balance had gone from 28,800 in 2009 to less than 19,500 at the end of March 2010.

Figures also show that at the start of 2010 the buy-to-let market improved despite an increase in house purchase during last year’s stamp duty holiday.

Mr Harrison added that although experts had predicted private rental would account for 15 per cent of the housing market a few years ago, it is now hoped to grow to 20 per cent.

Move To Bring Institutional Landlords Into the Letting Sector

2010-04-04T08:12:00.000-07:00

With collaborative politics the name of the game, a coalition of large landlords, lenders, property investors and surveyors has formed.

The new Property Industry Alliance believes many people have given up all hope of being able to buy their homes.

One of those involved in the campaign, Andrew Stanford, head of residential at Cluttons, said: “It is clear that institutional investment in the PRS could be a key contributor to solving the UK housing crisis.”

The PIA wants the Government to alter the tax system to encourage large-scale housing development by institutions such as pension funds and insurance companies.

The new Alliance includes the RICS, CML, British Property Federation, British Council of Shopping Centres and British Council of Offices.

Liz Peace, chief executive of the British Property Federation, said: “The public are bored with countless political promises to fix our housing crisis, and while there is no silver bullet, it’s clear that we need to look at new avenues of finance.”

Mark Goodwin, director of external affairs at the RICS, said: “Action must be focused on ensuring that renting becomes a tenure of choice rather than a poor substitute for owning a home. A combination of increased investment and effective regulation can help show that the private rented sector can offer a realistic alternative to owner occupation.”