Monthly Archives: June 2012

Government Review Recommends Changes to Favour Private Rented Sector

An influential government-commissioned review is set to recommend sweeping changes to planning and funding rules to favour the private rented sector over affordable homes.

The proposals are likely to be included in Sir Adrian Montague’s review of the private rented sector, which is expected to be published next month. They include pushing councils to change their housing strategies to promote new private rented developments – waiving affordable housing commitments to do so. It will also recommend the government offers loans, rather than grants, to support large-scale new build PRS schemes – a possible threat to grant funding for affordable homes.

The independent review is also set to recommend the government sets up a specialist housing task force, run by a senior figure from the private sector, to bring forward more public land for private rented sector schemes.

Sir Adrian’s review was commissioned by housing minister Grant Shapps to find ways of encouraging institutional investment in rental properties and feed into the government’s housing strategy.

The news has provoked concern it could be a threat to the affordable housing sector.

Rod Cahill, chief executive of 21,000-home Catalyst Housing, warned: ‘Any money that is used for loans [to support PRS developments] is money that is not available for affordable housing – and it is the affordable programme that has been cut by 67 per cent.’

Mr Cahill added that it is crucial that the government looks at ways of addressing the current housing crisis by increasing the supply of new homes – but that focusing those attempts on the private rented sector would be a mistake.

‘I don’t think that you can possibly say that private renting is a substitute for affordable housing [in housing strategies],’ he added. ‘Private renting is a market solution. The growth problem isn’t in private rented housing – the [growth] problem is owner-occupation and the affordable housing sub-market sector.’

Brighton mayor Bill Randall revealed the proposals in his column for Inside Housing this week. In it he stated that he understands that one of the major strands emerging from the review is that ‘changes should be made to the planning system to change the balance between housing tenures in favour of the PRS’.

He added that the review team is likely to conclude that institutional investors have little interest in development but want to get their hands on large-scale schemes that ‘offer economies of scale’ – a change from the current norm of pepper-potted PRS homes snapped up largely by buy-to-let investors.

The Montague review follows in the footsteps of previous failed attempts to tempt institutions to invest in the private rented sector on a large scale. The Homes and Communities Agency launched a private rented sector initiative in 2009 but it met with limited interest and has since been dropped.

The government is likely to respond to the Montague review in the autumn.

 

Source: Inside Housing

Rental Market Increases Again!

The UK rental market saw a 6.34 % increase in the number of properties advertised between January and March 2012 compared with the same period last year, according to global information services company, Experian. It also found that the number of properties for sale dropped by 2.53 percent. Experian’s Movers Index shows that the number of properties… Continue Reading

Housing Benefit for Under 25’s to be Scrapped

The prime minister, David Cameron, has set out plans to scrap housing benefit for 380,000 young people under 25, which could save up to £1.8bn a year on the welfare bill. In a speech today he said working age welfare should principally be for people with no other means of support who have “fallen on hard times”, and that doesn’t neccesarily include under-25’s… Continue Reading

But To Let Landlords Will Be Hit By Tax Clampdown

Buy-to-let landlords in East Anglia, London, Yorkshire and the North East are being targeted as HMRC has announced ‘tax forces’ in attempts to clamp down on tax evaders.  Geographic areas will be targeted as each tax force clamps down in order to recover an estimated £17 million. Exchequer Secretary, David Gauke, said: “We have made it clear… Continue Reading

HMRC Target Property Rentals

A new taskforce to tackle tax evasion on property transactions and rented properties has been announced by HM Revenue & Customs (HMRC). The taskforce covering East Anglia, London, Leeds, York, Leicester, Nottingham, Lincoln, Durham and Sunderland is expected to recover more than £17m from tax dodgers. Taskforces are specialist teams that undertake intensive bursts of activity… Continue Reading

Private Landlord Rental Income Set to Reach £70bn

Global real estate service provider, Savills, has forecast that the total rental income received by private sector landlords could rise to £70 billion in the next 5 years. This shift away from home ownership towards renting creates a need for significant investment, say Savills. Lucian Cook, director of residential research at Savills, said “Rental growth… Continue Reading

Financing Your Next BTL Investment

When you are ready to purchase a buy to let property it is critically important that you finance it in the most cost-effective way possible. You also need to get your funds in place as quickly as possible, as you won’t be the only one looking to snap up a bargain investment. To ensure you… Continue Reading

Landlords Struggle to Rehouse ‘Bedroom Tax’ Tenants

The so-called ‘bedroom tax’ is an under-occupation charge for people living in social housing who have a spare room.  This ‘bedroom tax’ takes effect April 2013.  Tenants will have a choice of paying, on average, an extra £40 per month if they have one spare room, £70 per month if they have two, or move… Continue Reading

How To Deal With Troublesome Tenants

More and more people are struggling to sell their homes and an increasing number of sellers are opting to let their property out as a result. New research from Total Landlord Insurance has revealed that a staggering number of so-called “accidental landlords” are unwittingly opening themselves up to risk. Letyourproperty.tv is a new live and interactive webTV… Continue Reading