UK Landlords Advised to Be More Accurate Over Property Decoration

This article by the Property Wire on October 1st, 2013 the failure of UK landlords to protect themselves from redecoration disputes.

Landlords in the UK are failing to protect themselves from redecoration disputes because they are not accurately recording the condition of their property at the start of a new tenancy, it is claimed.
 
They are also not being clear with tenants on issues such as what constitutes a ‘neutral’ colour, according to the Association of Independent Inventory Clerks (AIIC).

In any dispute involving redecoration costs where the check out evidence shows it is definitely needed, one of the first things an adjudicator will do is look at the check in inventory to see what state the décor was in when the tenant took up residence. The next investigation is how long the tenant has lived at the property.

Industry guidance indicates landlords should expect to decorate every three to five years. It is also suggested that if a tenant has lived in a property five years or more, and they are not required by a contract to carry out redecoration themselves, there is little prospect of success in a claim for costs, where the tenant hasn’t caused the need for redecoration.

‘As a general rule, responsibility for redecorating lies with the landlord. However, lots of disputes are presented where parties agreed to the tenant redecorating, but the precise details were not clearly defined. Landlords can be very shocked to find the walls have been painted jet black or bright red, rather than the desired neutral magnolia or white,’ said Pat Barber, chair of the AIIC.

She explained that the AIIC gets involved with numerous disputes over décor. Recent cases feature a bedroom, which the tenant had been given permission to redecorate. However, he created Lion King murals on all walls. At the end of the 12 month tenancy, the landlord needed to re-let the property, but this room was now firmly designated as a small child’s room due to the décor. As a result, although the walls were in a really good condition, the tenant had to pay for a complete redecoration.

Another case involved four mature and professional sharers. One of them decided to repaint the lounge with the landlord’s permission and a stipulation that it had to be in a neutral colour. At the end of the tenancy, the lounge had been repainted in a dark purple, instead of the required magnolia as agreed.

Fortunately for the landlord the inventory clearly stated the original colour and condition and even though the original décor had been fairly marked, the tenants were made to pay for complete redecoration to return the room to the original neutral colour. The adjudicators agreed with the landlord that purple walls would impair the search for new tenants.

‘Even when a tenant repaints in the correct or authorised colour scheme, there are still problems. We see instances of bad paint application, very patchy walls, paint spills on fixtures and fittings, carpets and curtains, all of which the tenants will be responsible for at the end of the tenancy,’ said Barber.the AIIC has put together to help agents and landlords prevent a dispute over décor. This includes ensuring that there is a detailed account of the décor with description and photographs at check in and making sure the tenancy agreement stipulates clearly that any changes to the property must only be made with the landlord’s permission.

If tenants request to redecorate any areas it should be made clear, in writing , with any authorised colour schemes and any permission given to tenants to redecorate should also include a clause stating the landlord’s right to return the room to its original colour if unauthorised paint colours are used by the tenants.

 Article Source: http://www.propertywire.com/news/europe/uk-landlords-decor-disputes-201310028300.html

U.K. Mortgage Approvals Rise to Highest Since 2008

This article by Eshe Nelson by Bloomberg on September 30th, 2013 reveals the highest increase of mortgage approvals in the UK as the Help to Buy scheme prepares to accelerate.

U.K. mortgage approvals rose to the highest in more than five years in August as the government prepares to accelerate a home-buying program that’s been criticized for potentially over-stimulating the market.

Lenders granted 62,226 mortgages, the most since February 2008, compared with a revised 60,914 the previous month, the Bank of England said in a monthly report in London today.

The improvement in home-loan growth contrasts with business lending, which fell the most in eight months in August.

Hometrack said today house prices rose the most in more than six years this month and Prime Minister David Cameron yesterday brought forward by three months the second phase of his “Help to Buy” mortgage plan, saying it will start within days. The program has drawn criticism it may help fuel a property bubble, prompting the government last week to give the Bank of England the power to perform annual checks on it.

There is a “continued divergence across the household and the corporate sectors,” said Jens Larsen, chief European economist at RBC Capital Markets in London. “This picture will remain a worrying one for the Bank of England. While most commentators are focused on the risk of an overextended household sector, the bank is likely to concentrate its effort on improving credit to the corporate sector.”

The number of mortgage approvals exceeded the 61,500 figure that was the median estimate of 20 economists in a Bloomberg News survey. Net mortgage lending rose 974 million pounds ($1.57 billion) in August, the central bank said. Consumer credit increased 577 million pounds.

Company Lending

Business lending fell 3.8 billion pounds in August from July, the most since December and more than three times the average decline over the past six months. Lending is down 3.6 percent compared with a year earlier. For small- and medium-sized companies, lending has fallen 3.2 percent over the past year, according to the BOE.

“These figures are extremely disappointing, and show that Britain’s business finance system remains broken,” said Adam Marshall, director of policy at the British Chambers of Commerce. “While bigger and older companies can get finance when they need it, many young, dynamic, and fast-growing businesses are still frozen out.”

The pound rose 0.1 percent against the dollar today and was trading at $1.6161 as of 11:32 a.m. London time. The benchmark 10-year government bond yield was down 2 basis points at 2.69 percent.

Help to Buy

The BOE also said foreign investors sold a net 6 billion pounds of gilts in August, the most since June 2012. That followed a net purchase of 1.3 billion pounds in July. It said M4, a broad measure of money supply, rose 0.7 percent in August from July and increased 2.1 percent from a year earlier.

According to the Hometrack report, house prices in England and Wales rose 0.5 percent in September after a 0.4 percent gain in August. Annual price inflation accelerated to 2.4 percent. Prices rose in nine of 10 regions tracked by Hometrack. London led gains, with a 0.8 percent increase.

The first phase of Help to Buy -- interest-free loans for buyers of newly built homes -- began in April and has already contributed to the strongest housing market since the financial crisis. The second will provide government-guaranteed mortgages for buyers with a deposit of as little as 5 percent of the value of a home costing as much as 600,000 pounds.

With the plan facing criticism, Chancellor of the Exchequer George Osborne has downplayed risks of a property bubble, saying the housing market outside London remains weak. While the BOE has said property activity remains below its historic average, it will be “vigilant” to any risks.

“There is a mounting danger that house prices could really take off,” said Howard Archer, an economist at IHS Global Insight in London. “It is therefore of vital importance that policy makers closely monitor the situation and are prepared to act quickly and decisively if signs of the housing market overheating become increasingly widespread and pronounced.”

 Article Source: http://www.bloomberg.com/news/2013-09-30/u-k-mortgage-approvals-rise-to-highest-since-2008.html

Student Flatshare Rents 'up 8.5%'

According to a study, rents are higher in a third of university towns than students are willing to pay as revealed in this recent article by Express & Star on September 5th, 2013.

Research reveals that the cost of a room in a student flatshare has soared by 8.5% in the past year, to an average of £357 per month.

The research based an analysis of rents in 25 university towns and cities, and a survey of students, found that unsurprisingly, London is the most expensive place, with average monthly rents of £567, followed by Cambridge (£450) and Oxford (£398).

At the other end of the scale, Cardiff and Swansea are the cheapest, with landlords in these places asking for £255 and £260 a month respectively.

The research, conducted by flatsharing website easyroommate.co.uk, found that in eight of the areas examined, rents were higher than the maximum amount students were willing to pay.

The biggest discrepancy was in Exeter, where the average monthly student flatshare rent was £385, but students said they were only willing to pay out a maximum of £300.

Other places where rent exceeded expectations were Bournemouth, Hull, Leeds, Leicester, London, Manchester and Plymouth.

More than half (54%) of the 1,100 students surveyed said they had seen their rent rise in the last 12 months, the research found.

It claimed that the rate of growth in the cost of rents had been fuelled by higher numbers of people going to university.

Increasing rents had also forced students to change their lifestyle and accommodation, the study found.

Over a fifth of those questioned said they now shared a property with more people than last year to reduce their costs, while more than a quarter (28%) said they had less money to spend on their social life.

Around one in eight (12%) said they were able to save less money for after they graduate, while 7% had had to cut back spending on books and study materials.

Rishi Patel, manager of easyroommate.co.uk, said: "Student rents are once again on the march as student numbers begin to recover following the increase in tuition fees.

"Rents for student flatshares are now at their highest level in five years which is increasing the financial pressure being felt by many students across the country who also have to deal with higher fees and more expensive day-to-day living costs."

The survey questioned 1,122 students between August 16 and 27.

Article Source: http://www.expressandstar.com/business/uk-money/2013/09/04/student-flatshare-rents-up-8-5/

Private Rents Edge Up Slightly

This August 16, 2013 article by Express & Star reveals that private rents has only lifted a slight pace.

Private rents have edged up by just £1 on average over the last couple of months as more people find it easier to get on the property ladder, according to a major lettings network.

Rents saw a small 0.2% increase in July to reach £738 a month typically, following a flat month in June, according to LSL Property Services, which owns chains Your Move and Reeds Rains.

The findings mean that rents across England and Wales have risen by just £1 typically since May, LSL said.

Its report comes in the same week that the Council of Mortgage Lenders (CML) said that first-time buyer numbers have soared to their highest levels since 2007.

A range of Government schemes have made it easier for people with smaller deposits who may have found themselves previously "trapped" in the rental sector to get access to a mortgage.

London is the only area where rents have lifted at a faster pace than inflation over the last 12 months, with an annual increase of 5.7%. Rents in London rose by 0.3% month-on-month to reach a new high for the study of £1,118 typically.

Wales and the South East saw the strongest month-on-month increases in rents, both recording rises of 0.8%. By contrast, rents in the South West fell by 1.1% and the North East saw rents drop by 0.8% on a monthly basis.

Across England and Wales, rents are around 1.8% higher than they were a year ago, which is well below consumer price index (CPI) rate of inflation of 2.8% in July.

The easing pressure on rents led to an improvement in tenants' finances. Some 8.1% of rent across England and Wales was late or unpaid in July, edging down from 8.3% in June.

LSL said that in the medium-term it still expects rents to at least keep up with wider inflation as demand in the sector is still strong, despite the softening in demand due to people getting on the housing ladder.

David Newnes, director of LSL Property Services, said: "This summer, the house purchase market has jerked into motion. And everyone is feeling the impact of that sudden change of gear.

"Buying a first home might only be possible for those with a big enough deposit and sufficient earnings, but the effects are reverberating through the rental market too."

He added: "It's unlikely July will be typical after the initial change of pace in the purchase market, but a few months of more affordable rents are win-win for everyone."

The findings are based on rents achieved on 19,000 properties.

Article Source: http://www.expressandstar.com/business/uk-money/2013/08/15/private-rents-edge-up-slightly/