Short-Term Demand Is Up For Rentals In U.K.

Despite a recent bounceback, rental demand across the U.K. remains significantly impacted by the coronavirus pandemic, according to a report from Zoopla. In the two weeks to April 14, demand for rental properties increased 30%, the online real estate portal said. Though notable, the increase immediately followed a 57% decline in demand for rental homes in the two weeks to March 30, and still remains 42% lower than at the start of March. The uncertainty induced by the pandemic means households will turn to the rental market before the sales market to “meet any immediate housing need,” the report said. Read more on the Mansion Global website.

https://www.mansionglobal.com/articles/short-term-demand-is-up-for-rentals-in-u-k-but-the-market-remains-significantly-impacted-by-coronavirus-214218

Short-Term Lets Could See Tenants Leave 500,000 Properties

Nearly half a million properties could be left unavailable for residents looking to rent in the private rented sector, as more landlords exit the market and move into short-term lets due to the raft of legislative changes they have been faced with. ARLA Propertymark, in partnership with leading research consultancy Capital Economics, has launched its Impact of Short-Term Lets report, which looks at the scale of the UK’s short-term lets sector and the wider implications on the private rented sector. Download the report from the ARLA website.

https://www.arla.co.uk/media/1048597/the-impact-of-short-term-lets.pdf

Could Regulating Short-Term Lets Help The Rental Market?

According to lettings payment automation provider, PayProp, regulating the fledgling market would reduce the number of negative experiences and allow more people to benefit from the availability of short-term rentals. The fast-growing short-term lettings market could benefit from regulation of short lets, akin to that seen in traditional lettings, is needed to provide the necessary protection for all stakeholders. The short-term lets market has grown rapidly in recent years – tenants enjoy the flexibility it offers, while landlords are attracted to the high yields it can provide. This boom has created many new management opportunities for letting agencies. Read more on the Property Reporter website.

https://www.propertyreporter.co.uk/landlords/could-regulating-short-term-lets-help-the-rental-market.html

Rent A Room Allowance Review Hidden In Budget Small Print

The government will review the way rent a room relief operates – in what appears to be a bid to tackle the rise of short term lettings. People renting out rooms in their homes to lodgers can currently earn £7,500 tax free under the scheme. However people offering short terms lets through sites such as Airbnb can also take advantage of the relief. RLA research shows there are more than 23,000 rooms listed on Airbnb in London alone. As rent a room was introduced to increase the supply of affordable long term lodgings it would appear the government review is taking place in direct response to the popularity of short term letting sites. Read more on the RLA website.

Government Reveals Criteria For £3bn Home Building Fund

The government has published details of eligibility criteria for its £3bn Home Building Fund, which will be administered by the Homes and Communities Agency and will provide development and infrastructure loan funding for community-led housing projects, serviced plots for custom and self-builders, offsite manufacturing, new entrants to the market and groups of small firms working together to deliver larger sites. The fund will provide £1bn of short-term loan funding for small builders, custom builders and ‘innovators’, to deliver 25,000 homes by 2020. It will also provide £2bn of long-term funding for infrastructure, to support 200,000 homes over the longer term. Housing associations will be able to bid for loans from the fund. Read more on the GovUK website.

Buy To Let Activity Saw Significant Increase In August

Buy to let activity increased by 12.7% in August as the sector successfully absorbed policy changes and enjoyed a post Brexit bounce, according to new research. Changes to the tax treatment of the buy to let sector looked to be choking off activity in 2015 and early 2016, says the latest report from Connells Survey and Valuation. Although the restriction of tax relief on mortgage finance costs to basic rate tax only, the removal of the 10% wear and tear allowance, and the introduction of additional 3% stamp duty surcharge hit the sector following the 2015 budget and the last Autumn statement, but the report explains that the August rebound suggests the Government’s changes are set to have been a short term problem for the sector. Read more on the PropertyWire website.

Interest In Buy-To-Let Drops By Over A Quarter

Interest in new purchases from buy-to-let investors dropped 27% in March compared to the same month last year as April 1st tax change starts to bite. The fall reverses the upward trend between December and February which saw a 24% year-on-year increase in buy-to-let enquiries, indicating a potential slowdown in new investor purchases at least in the short-term. Demand from home-hunters is at an all-time high with a record number of Q1 enquiries, so the pause from investors could give some first-time buyers more of an opportunity to make a move. Read more on the rightmove blog.

Bank Lending To Property Developers Halves In Just Two Years To £16bn

Bank lending to property developers has halved over the last two years, making it more difficult for companies to kick-start schemes that could help ease the housing crisis. Bank finance has dropped from £34bn in January 2014 to just £16bn the same month this year – with bridging finance or auction finance particularly hard to come by. These are usually short term loans used to take ownership of a property before obtaining a traditional term loan or mortgage. However, without access to this type of finance developers cannot take projects beyond the planning stage. Banks are happy to offer long term mortgages and term loans secured on property but see the short-term loans as too risky. As a result alternative lenders, who can make quicker decisions and have different lending criteria to banks, are stepping into the lending gap. Read more on the City AM website.

UK House Price Growth Set To Slow

The pace of house price rises will slow when tax changes "take the heat out" of interest from investors, surveyors suggest. The Royal Institution of Chartered Surveyors (Rics) predicted that the UK housing market will slow down over the next three months. In April, landlords and second home owners face a 3% stamp duty surcharge on new purchases. This would slow price rises, Rics said, but only in the short-term. Surveyors still expect house prices to rise by 25% over the next five years. Read more on the RICS website.

Eight Out Of Ten Renters Want Tenancies Of A Year Or Less

Eight out of ten of those renting accommodation want tenancy agreements of one year or less, a large Deposit Protection Service (The DPS) survey has suggested. 39,855 tenants whose deposits are protected by The DPS’ responded to the survey, with 80.1% saying that they preferred agreements that lasted no longer than 12 months. 89.83% said that they preferred agreements that lasted up to two years, with 34.60% of the total saying they wanted contracts for six months or less. Read more on 24dash.

Tory Housing Association Right-To-Buy Policy Attacked By Big Business

The Conservatives have come under fire after David Cameron pledged to give people the chance of a “good life” by extending Margaret Thatcher’s right-to-buy scheme to 1.3 million families in housing association properties. The Confederation of British Industry and the blue chip Jones Lang LaSalle (JLL) property firm joined many housing associations, warning that the Tory plan would not address the chronic shortage of housing.  Adam Challis, head of residential research at JLL said: “The expansion of right to buy may be good politics, but represents terrible policy. This is exactly the kind of short-termist thinking that the country’s 4.7m households in social housing don’t need, not to mention the same number again of aspiring owners in private renting. Read more on the Guardian website.

Shift Spending From Benefits to Building Homes and Tackling Unemployment

Shifting spending from housing benefit to house building and tackling low pay and unemployment is the best way of lifting people out of poverty and cutting the housing benefit bill, according to a new report. The report, from the CIH, concludes that short-term measures that cut the amount of benefits people can receive (such as the bedroom tax and the benefit cap) do nothing to tackle the causes of welfare dependency and are unlikely to have any significant impact in reversing it.  Download a copy of the report from the CIH website.

As Renters Cry Out For Change, Ministers Bury Their Heads in the Sand

Private renting used to be a stepping stone – a short-term place to stay before moving on, usually to home ownership, often to a social home. But with the number of private renters now reaching 9 million in England, media coverage has in recent years focused in on the problems of insecure, expensive, and poor quality private rented homes for Generation Rent, unable to get a long-term home of their own.  So the investigation of the CLG Select Committee into private renting is welcome. Their report makes a number of sensible and uncontroversial recommendations about improving renting, and fixing what it calls an “immature market”. At Shelter we would put it more strongly –the private renting market is broken. Renters have little ability to shop around for better deals, little redress when their landlord acts illegally or fails to maintain a property, and no choice but to accept end of year rent hikes. We hope the government will waste no time in agreeing to implement the report’s recommendations in full.  Read more on the Shelter website.

Housing Report Critical Of Government 'Short Termism'

Successive governments have failed to produce a coherent long-term strategy for housing, the Royal Institution of Chartered Surveyors has said.  In a report, the RICS housing commission said some of the coalition's policies were providing short-term help for the house-building industry.  But it argued that ministers' lack of consistency over the past 50 years has exacerbated the failures of the market.  The RICS study concluded that the housing market has not delivered enough homes at affordable prices.  Read more on the BBC website.