2010 A Year of Tenant-Demand…

Latest Landlord News by: Madalena Penny

As landlords and letting agents draw a close to this year, 2010 has seen some vast changes within and around the private rented sector.  At the beginning of the year 3.1 million households were supported by private residential landlords, the figure is now estimated to be about 3.6 million.

No Room at the Inn

Owing to the decline of mortgage approvals, lack of new builds and a 4.5 million waiting list for social sector housing, privately rented properties are in high demand as potential first-time buyers look to the private rented sector to sustain their housing needs, making the PRS the major player for accommodating the masses.

Growth Industry

As a result of economic decline and demand for housing far outstripping supply, rents have steadily risen, in some regions as much as 13.8% since January and as high as £700 per month outside of London.

Falling property values has given rise again to the ‘accidental landlord’, choosing to rent out their homes amid a stagnated property market.  The year showed a slight improvement in BTL products with some new players re-emerging, but compared to the 3000 products available in 2007, only a mere 300 are on the market today.

Despite the lack of available lending to landlords, the private rented sector continues to sustain its growth as one of the fastest rising sectors of the economy, estimated at a total worth of £500bn in the UK

Three Wise Men?

Bidding farewell to ghosts of Christmas past in the form of the Labour government, 2010 saw the emerging coalition come to power.  Jack the Ripper may have claimed to have given birth to the 20^th century, but many would argue that 2010 gave birth to George Osborne and his austerity measures.

A new coalition government along with housing reform has resulted in housing benefit cuts regardless of 2.5 million people now unemployed.  Pre-election promises have been broken as landlords continue to count the cost of LHA arrears as payments are still being made to LHA tenants.

Morsels from ministers tables in the form of direct payments to landlords in return for reduced rents have left a bitter taste in the mouth for many in this sector.  The cuts, which now only apply to new housing benefit claimants from April 2011 will no doubt bring many low-income households beneath the breadline.  As of January 2012, existing claimants will join the same ranks and fall into line with benefit policy.  Further pressure will be added to the private rented sector as the government try to push social sector rents higher by increasing them to 80% of market value.

Legal 4 Landlords

With a further 10 offices established regionally this year, Legal 4 Landlords now have a national presence incorporating 20 nationwide offices.  Originally established by landlords and experienced businessmen, L4L has serviced 846 landlords this year, completed just over 51,000 tenant references, applied 1,400 evictions with a 100% success rate and recovered over £500,000 in rent arrears and debts.

As an organisation and main industry leader, Legal 4 Landlords continue to adapt to the shift in tenure trends and government reform.  Not only establishing vital and necessary services to landlords and letting agents but by giving them a voice and getting them heard via national, regional press and television.

On behalf of the Directors, call centres and everyone involved in the L4L team, we wish you all a very happy Christmas and a prosperous New Year.