Renting for life – what’s the problem?

Letting Agent Today claims that a third of millennials will never own their own home. The report quotes new research from interiors firm Thomas Sanderson showing why the rental market is seeing such strong demand: it reveals that 28% of people under the age of 35 have no money set aside for a deposit on a house. Of the remaining 72%, the average amount people had saved was just over £6000 – that’s under a fifth of the average deposit for a house in the UK. And 30% of Britons aged 18 to 35 years old say they have given up on the idea of owning their own home completely.

What all this adds up to, is that large numbers of us will be living in the rented sector, not only while we are young and single but once we’re married and start a family, into middle-age and beyond. Research from the Resolution Foundation and Shelter predicts that by 2025, 33% of families with children living in London will be renting.

So given that more of us will be renting for longer – or for our whole lives – should we be moving to a regime more like the European model. In Germany for example, tenants have extensive rights including security of tenure, assured rental rates and protection from hardship caused by unfair practices.

These aspects of a highly-regulated rental market are great for tenants but may be viewed less favourably by landlords the majority of whom, understandably, want to be in control of their own property. They want to be able to decide who lives in it and for how long. If tenants prove troublesome they want to be able to evict them. Conversely, if tenants are happy in their home, easy to deal with and pay their rent on time, most landlords will let them stay for as long as both parties are happy.

Getting the balance right by ensuring legislation works for both sides of the renting equation is the job of government – but it’s not an easy task. New legislation coming forward aims to tackle some of these issues and stronger regulation around property agency will undoubtedly help too. Dealing with the fall-out when landlords and tenants clash is part and parcel of our role as property managers. Alongside our technical and professional role as agents we often feel we should win prizes for diplomacy too!

Vidhya Alakeson, director of research at the Resolution Foundation, said recently that families who rent need security in a regulated market. “With children attached to schools and parents to work, it is critical for households – and for society – that families can find stable and secure rented accommodation to raise their children in.” That sounds about right to us. What do you think?

Take-aways from National Residential Investment Conference


Today I have been talking about the rental market at this year’s sold out National Residential Investment Conference, held each year in London.

Among other topics, in the spotlight during the course of the day was JLL’s recent research on the institutional (non-Housing Association) sector.  Having analysed seven residential developments comprising 911 units with an average scheme size of 130 homes, JLL reveals that average gross to net is 26.6% with an average rent premium of 9% for high quality build-to-rent developments and 3% rental growth.

The average tenant across these schemes is 31 years old, achieving circa 30% more than the mean UK salary.  Tenants are prepared to pay to be in a BTR or multi -family scheme and are not over extending themselves with rent to income at 28%, compared to the UK over-burdened rate of 40%.

JLL also identified these net initial yields:

  • London Zones 1-2 suggested yields 3.5%
  • London Zones 3-6 suggested yields 3.75%
  • Regions 4.15 to 5%
  • Glasgow the highest at 5%

Urbanisation remains the trend, with 4bn of world’s 7.5bn now living in cities.

The conference also threw up some interesting statistics on the changing nature of UK households. The number of people getting married is on a downward trend. In tandem with this, the average number of children per couple is reducing and people continue to start their families later than previous generations.  The knock-on effect of all this is that two thirds (or 17 million) of UK households do not contain children.

In terms of future property provision, this means that what the  UK needs are more homes suited to couples with no children, retirees and single sharers.   As a result, we anticipate that micro-living solutions and co-living will get more air space going forward.

The Collective at Old Oak is one of the first purpose-built co-living developments in the UK.

So what is micro-living, I hear you say. Isn’t that just an HMO?  Rightly or wrongly, for most of us HMOs tend to conjure up visions of badly converted, poorly maintained housing stock – not the purpose-built, thoughtfully designed new spaces now coming on line.  The Collective at Old Oak is a good example, although arguably it could be termed student accommodation for grown-ups!

So the answer is surely not more HMOs, but well-designed spaces concerned largely with common, outside-the-apartment space.   This puts me in mind of 1930s mansion blocks with their own restaurant and no individual kitchens to speak of.

At Ringley we manage some of these, which – without all the original amenities that have gradually been lost over time – are often now just cramped flats.  I trust in future these shared spaces will be better designed and the ‘outside-the-home’ spaces will be more about living than eating.

Landlords beware – Don’t believe everything you read!


A property management company that promised a guaranteed rental income to landlords, even if tenants failed to pay, has come under scrutiny from the Advertising Standards Authority (ASA). An advertisement running on the company website has been judged to be misleading following a complaint and has been banned from future use.

Always read the small print may be an overused phrase but it continues to be good advice, particularly when money is involved. Where this advertisement was concerned, the ASA judged that there was a particular problem with what wasn’t included in the small print.

Letting Agent Today reported this week that, in February, the website carried a banner stating: Relax while your rental income is guaranteed! Receive your rent on time, every month, even if your tenant fails to pay. That’s a guarantee that would make any landlord sit up and take notice. None of us wants to miss out on a good deal but was this promise really one that could be relied on?

In fact someone did query whether or not rent really would be guaranteed in all circumstances and asked the ASA to investigate the claims. The advert in question stated that landlords would be paid each month whether or not the property was tenanted and claimed to be “taking away the risk” for landlords. The key phrase used was “giving you confidence in your rental income so you can rely on it, whatever happens”. Landlords were referred to the Ts & Cs for further explanation of the service but on investigation the ASA ruled that the company did not make clear each significant limitation that applied to the promise of guaranteed rent.

Nor was it made clear to landlords that the guaranteed rent was based on an agreement through which the property manager became the tenant and then sub-let the landlord’s property to other tenants. The ASA determined that this information was likely to be critical to any decision whether or not to sign a contract and the advert was therefore in breach of the ASA’s advertising code.

There are important lessons to be learned here. First, when advertising a product or service, any limitations must be made absolutely clear in marketing communications otherwise they will be in breach of the ASA code. Second – and this is a lesson for life, not just for property – if something sounds too good to be true, it probably is!

Ensuring your home is fit to live in

Here’s an interesting situation. In a recent case that ended up in the High Court, a tenant had signed a two year tenancy on a house and paid £34,000 in rent for the full term of the contract. After the tenant moved in, part of the front garden wall collapsed, blocking a side passage. This caused internal damage to the house and as a result the tenant complained that the property was not habitable. A structural engineer’s report, obtained by the tenant, showed that part of the retaining wall could collapse at any time, posing a risk to the house. He concluded the property wasn’t safe to live in.

Most of us would assume that this would be enough to entitle the tenant to at least part of his rent back and for the landlord to immediately carry out the repairs needed to make the house safe. But under the law as it stands this isn’t necessarily the case. What is known as ‘significant disrepair’ is enough to make a case against your freeholder under section 11 of the Landlord and Tenant Act 1985, but – shocking though it sounds –  if a property is ‘not safe to live in’ that is not, at the moment, a basis for a claim.

In this particular case the tenant was lucky. The tenancy agreement contained a clause headed Premises uninhabitable, which stated,

“The rent or a fair proportion of the rent shall be suspended if the Premises or any part thereof shall, at any time during the tenancy, be destroyed or damaged by any risk insured by the landlord so as to be unfit for occupation and use…

After an appeal by the landlord, which was judged unreasonable, the tenant won. And rightly so but it was only the clause in the tenancy agreement that kept the law on the tenant’s side. In future we hope that tenants won’t have to rely on a clause like this to be treated fairly and to be reassured that their home is safe. The Homes (Fitness for Human Habitation) Bill is due for its second reading in the House of Lords on 23 November. If enacted, this new legislation will give tenants the right to take landlords to court if their home is unsafe. A recent report in The Guardian quoted figures from Shelter, revealing that more than a million homes are thought to pose a serious threat to the health or safety of the people living there. That’s a staggering one in six of the privately rented homes in the country.

This is nothing short of scandalous and change is badly needed. With cash-strapped local  councils responsible for chasing up any requests for repairs that are ignored by landlords, inspections by environmental health officers to investigate problems such as mould, damp and fire risk take far too long.

The changes set out in the Bill will make no difference to landlords’ existing obligations but will simply make it quite clear that rented property must meet certain standards. Let’s hope Parliament lends its support to a change in the law that is long overdue.

Wages and rents go up – but is that the whole picture?

Figures released today by the Office for National Statistics reveal that after almost a decade in the doldrums, wages are finally on an upward trend. Compared with a year earlier, says the BBC, wages excluding bonuses rose by 3.2%. This is the biggest rise since the end of 2008.

This is great news after years of wage stagnation. But for renters, less encouraging is the news that rents have also increased. According to the latest figures from HomeLet, the average cost of renting a property outside London rose by 1.7% in the 12 months to October. And tenants in the capital faced an even bigger jump of 4%, according to the referencing firm.

HomeLet’s rental index is based on new rental contracts agreed by landlords and agents using its referencing service. It reveals that the average rent in the UK hit £928 per calendar month in October – up 2.1% on the same month in 2017. Outside London, the average rent in the UK is now £768pcm. Within Greater London tenants are paying an average monthly rental of £1,543pcm. Perhaps most surprising is that rents are increasing even faster than London in Northern Ireland and Scotland – which showed a 4.5% and 4.2% rise respectively over the last 12 months. The average rent in Northern Ireland is £653 pcm and £647pcm in Scotland.

However, rent rises are not the whole story. In the last 10 years the Consumer Price Index, which measures the average cost of goods and services, has overtaken rents, with the East of England and London the only areas where rental growth has outpaced inflation.  What this means is that in real terms, in most parts of the country, rental payments have actually become more affordable. According to Hamptons International, which monitors the rental market, in the last decade rents have actually risen 22% but inflation has risen by 24% over the same period.

Letting Agent Today reports that in the East of England, real rents have risen 7.5% during the last 10 years.  And in London, real rents are up a mere 0.5% since October 2008. However, inflation has outpaced rents in all other regions across Great Britain, resulting in negative real rental growth.

However, Aneisha Beveridge, Hamptons International’s head of research thinks this is only temporary, predicting that over the next few months inflation could begin to fade. Then rental growth will pick up pace.

If this is likely to be the case then ensuring your landlord is providing best value for money is paramount. Are your rental needs flexible or do you need to be in a particular area for work or schools? A good letting agent is always your first port of call to help you find the rental property that best meets your needs – and your finances.

Pay your rent on time – and boost your credit rating!


Do you always pay your rent on time? If so, your on-time payments could soon improve your credit rating in exactly the same way that homeowners benefit by keeping up their mortgage payments.

The Creditworthiness Assessment Bill, which is now going through Parliament, will enshrine this in law. The Bill requires certain matters to be taken into account when assessing a borrower’s creditworthiness and once enacted – hopefully in 2019 – for the first time, credit providers will have to include your rental and council tax payment history when calculating your credit score. At the moment, timely rental payments aren’t necessarily reflected in people’s credit reports but – hopefully – this is all about to change. The Bill, which was put forward by Big Issue founder Lord Bird, has cross-party backing in the House of Commons and had its second reading in October.

And the change won’t only work in tenants’ favour – it will be good news for landlords too. The Residential Landlords Association says 61% of landlords support the move; it believes including rent payments in your credit rating in this way will also make it easier for landlords to make a more accurate assessment of a prospective tenant’s credit and rent payment history. In turn that would make it more straightforward for people with a good credit record to find rental property quickly and easily.

This bill is long, long overdue. With rental and/or mortgage payments being the largest and arguably most important outgoing for UK households, it has always been unfair to tenants that they have been denied the ability to have their ‘rent worthiness’ to be taken into account.

Latest estimates show that around 5.4 million UK households rent, so once this legislation is enacted it stands to make a big difference to many people’s lives, whether they wish to prove their credit worthiness to a prospective landlord, buy a new car or take out a bank loan. It will open up fairer access to more affordable credit to a wider pool of responsible borrowers and prevent people from falling into the high-cost-credit poverty trap.

Your Move’s recent Landlord Survey, which polled 1,071 landlords and tenants to learn more about their portfolios, behaviours and attitudes towards tenants, agents and the lettings market, shows that landlords vote trustworthiness as the most important quality in tenants. Just over a quarter (26%) of landlords surveyed rate tenants who pay on time as the most important consideration.

PlanetRent created by the Ringley Group will soon be making rent worthiness data available to support tenants and landlords alike.  PlanetRent is lettings automated – for landlords who want paperless deals, advertising, landlord websites, compliance sorted, protection from fines and the whole audit trail completely taken care of.  To find out more, go to