Government says "no" to landlord register

Government says "no" to landlord register, will BoE base rate fall in December 2019?, tenants value short commute over home ownership, clarification on default charges and holding deposits from Welsh Government, buy to let opportunities in under-served rental stock areas of UK;
Richard the lion heart statue in Parliament square

The government has dismissed a recommendation for a register of UK landlords, as it believes it “could place an additional regulatory burden on landlords”.

In October of this year, Baroness Thornhill, of the Liberal Democrats, asked the government for their assessment as to whether a landlord register should be introduced.

This had been a recommendation in a joint report, from the Chartered Institute of Housing and the Chartered Institute of Environmental Health.

Viscount Younger of Leckie answered the question, on behalf of the government.

His response made clear that the government had not pursued the matter to a significant extent, instead highlighting the measures already in place for local authorities to tackle rogue landlords:

“A detailed assessment of this report has not been made. This Government commissioned an independent review into selective licensing which was published on 25 June 2019 and the recommendations are currently being reviewed.

“This Government has no current plans to introduce a national landlord register, which could place an additional regulatory burden on landlords. This Government is committed to improving the private rented sector by driving out criminal landlords and landlords who consistently neglect their responsibilities to provide safe and decent accommodation.

“Local authorities currently have a wide range of powers available to them including banning orders for the worst offenders, civil penalties of up to £30,000 and a database of rogue landlords and property agents targeted at the worst persistent and criminal offenders.”

Source: Parliament.uk

Escaping more red tape and potential costs is undoubtedly good news for landlords.

Red houses on pound coins

Will BoE base rate fall in December?

November’s meeting of the Monetary Policy Committee (MPC) resulted in 7-2 vote to keep the Bank of England (BoE) base rate at 0.75%. But, with two members voting for a decrease to 0.50%, could there be a drop pre-Christmas?

The base rate has sat at 0.75%, since an increase from 0.50% was voted for, on 2nd August 2018.

The vote prior to this, in June 2018, had seen two members of the MPC, Andrew Haldane and Michael Saunders, vote to increase the rate.

The most recent call for change came from MPC members from outside of the BoE.

In November’s vote, economist Michael Saunders again voted for a change, as did Jonathan Haskel, professor of economics at Imperial College London.

The reason cited by both Saunders and Haskel, for their vote, was the weak UK economy, uncertainty around the strength of world growth and ongoing Brexit uncertainty.

What would a decrease in the base rate mean for landlords?

If the BoE base rate were to fall from 0.75%, any landlord on a variable rate that tracks the BoE, would see their monthly repayments reduce.

It may also invoke a favourable response from buy to let mortgage lenders.

Bank rates of lending are commonly influenced by the base rate. So, this could mean that lenders respond in kind with their mortgage rates and reduce them.

Landlords on a fixed rate mortgage would be unaffected.

How likely is a reduction in the base rate in December?

With so many factors at play, it is impossible to predict an outcome.

Looking back at the last five years of MPC votes, there is no precedent. There have been instances where one or more of the members have voted for change, where no change occurred. There have also been instances where a split vote has been followed by a unified vote for change.

The next vote is on December 19th, seven days after the general election.

Short commute more important than home ownership

Buy to let lender, Landbay, has found that the daily slog to and from work has a large part to play in the decision whether to buy rather than rent, for the majority of tenants.

75%, of the 2,000 tenants surveyed, said that whilst they would consider buying property, this would only be the case if their commute did not significantly increase.

But what do tenants consider to be a significant increase on their commute? Based on the results of the survey, the threshold appears to be relatively low. On average, tenants said the maximum increase in commute time they would be happy to accept is 17 minutes.

Other statistics gathered from the survey show that around one quarter of tenants commute via public transport, versus driving, on average.

The clear exception was in the capital, where these numbers flip position – 70% of London tenants are reliant on public transport and only 13% drive.

So, for landlords investing around most commercial hubs, a source of parking is going to be important for the majority of tenants, with access to public transport a good back up.

The attitudes of tenants towards commuting speak to the benefits of renting.

Property in the centre of a town or city is typically more expensive, so to gain access to the facilities and shorter commuter times of central living, renting is often the obvious and most affordable option.

Welsh flag

Clarification on defaults and deposits from Welsh Government

On 1st September 2019 the Welsh Government introduced their Tenant Fees Ban, which echoed a similar ban introduced in England, in June. At that time, issues remained outstanding and a consultation was launched to address them.

The two areas that were the subject of the consultation were around fees which could be charged where tenants defaulted on certain, permitted, payments and the information landlords or agents must give to tenants before a holding deposit can be taken.

The Welsh Government has now published the consultation responses and has said that draft regulations will be put to the Welsh Assembly within six weeks from now.

The consultation responses were from three groups, 77% were landlords, 13% were letting agents and 3% were tenants.

Regulation of fees charged for defaults

New regulations will be drawn up that will outline what can be charged (including limits on charges), where certain payments are in default.

Regulation of holding deposits

A prescribed list will be drawn up, which specifies the information a landlord or agent must give to a tenant before they can be charged for a holding deposit.

The Welsh Assembly will need to agree the new regulations prior to the Renting Homes (Fees Etc.) (Wales) Act 2019 being updated.

To let sign

Buy to let opportunities in sparse supply areas

Areas of the UK with the most sparse supply of rental stock have been unveiled in data presented by online letting agent, Howsy.

The company has compared the number of rental properties listed on property platforms, versus the total number of properties to get their results.

The city of Newport in south-east Wales is the area most lacking in rental properties, with just 13.2% of the total being rentals.

Location Rental stock as % of total
Newport 13.2%
Bristol 15.8%
Glasgow 16.4%
Belfast 16.8%
Plymouth 24.9%

By contrast, the top 5 locations for greatest volumes of UK rental stock are:

Location Rental stock as % of total
Aberdeen 62.2%
Newcastle 53.5%
Oxford 47.3%
London 42.1%
Southampton 41.2%

Landlords looking for investment opportunities in the capital, may find the following statistics for borough-specific figures of interest:

London borough Rental stock as % of total
Bexley 15.2%
Havering 16.4%
Bromley 18.7%
Sutton 21.4%
Croydon 23.7%

The borough with the highest volume of rentals is Westminster, at 62%.

This information should not be interpreted as financial advice. Mortgage and loan rates are subject to change.