Generation rent - priced out

The headline in the I - newspaper yesterday was "Generation Rent"- blocked from the property ladder.

Clearly, the I are speaking to some of their core readers.

The claims
Research commissioned by PricedOut an interest group aimed at campaigning for more affordable housing allowing more people to buy suggest that over half a million people have been priced out of the housing market since the Help to Buy scheme was launched.

The Government had to act
I do have sympathy for the increasing number of renters who have been squeezed out of the market because of price and affordability.  Initiatives such as the Help to Buy scheme along with historically low interest rates have been successful at propping up a housing market and house prices that naturally should have fallen massively after the 'credit crunch' and are clearly still over priced.  The economic fall out of a collapsing housing market would have caused an economic Tsunami of the likes we have not seen since the 1930s, hence the Governments need to act and meddle in the housing market.  Unfortunately, this has only reinforced the belief that housing is the ultimate investment in bad & good times which further delays the time that prices and affordability are more naturally aligned.

Generation rent would have faced far worse
One thing, I would say is if this action hadn't been taken I suspect that many of 'Generation Rent' who are complaining that they can't afford to buy would have been facing a very different scenario.  Houses would have been very much cheaper after a massive house price crash but with the associated economic melt down many would have not had a job and be in a position to even consider buying.  Then with this kind of massive fall in value would have resulted in many borrowers facing a lifetime of negative equity.  The illusion of ever rising house prices would have been truly shattered for ever.  How many of 'Generation Rent' would have been so keen to climb on housing ladder that clearly was no longer a one way bet?

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IDS announces Universal Credit roll out

The Work and Pensions Secretary, Ian Duncan Smith has announced that Universal Credit will be rolled out to all Jobcentres and local authorities across the country from early next year.

Iain Duncan Smith has announced that -

"We are going to accelerate the delivery of Universal Credit from the new year, bringing forward the national rollout through 2015/16 to every single community across Great Britain. Secure national delivery, yet at the same time, delivering that life change at a local level; strengthening community partnerships, helping vulnerable households. Not just helping the economy but reducing child poverty as well."

My mouth has fallen open, aghast....

Read the full announcement of the accelerated roll out of Universal Credit

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FPC ask for controls on lending ratios

The Bank of England’s Financial Policy Committee (FPC) have announced their recommendations for HM Treasury to grant them increased powers over the mortgage lending market.

The FPC want to be enabled to insist prescribed limits of lending by regulated lenders on residential mortgage lending, for both owner-occupied and buy-to-let, whenever they see fit.

These requested powers would include prescribing maximum Loan-to-Value Ratios and Debt-to-Income Ratios, including Interest Coverage Ratios in respect of buy-to-let lending.

The FPC is calling for these powers to enable them to tackle any future risks to the countries financial stability in relation to future booms in housing market.

Read more and download the Financial Policy Committee statement from its policy review September 26th.

The announcement underlines the increasing political risk to landlords

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Blackpool landlord not 'fit and proper'

Blackpool landlord, Raymond Owen Baguley, 58, was fined £750 and ordered a to pay £350 alongside a £75 victims surcharge for not obtaining the required license for a rental property in the South Shore area of the town.

South Shore comes under a selective licensing scheme introduced by the council.

Baguley's failure to obtain a licence means the landlord will lose his “fit and proper person” status preventing him from renting out property in the area.

Mr Baguley did not attend the hearing at Blackpool Magistrates Court.

Tim Coglan, Blackpool Council’s head of public protection and enforcement, said: “Almost all properties in South Beach are licensed but there are a handful of landlords who have flouted the law. Selective Licensing is making an enormous difference in the area and is helping to start to drive up management standards and to address issues of anti-social behaviour through our inspection schedule and work with landlords."

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Middle income housing benefit claimants

According to research from the National Housing Federation, middle income households, those earning between £20,000 and £30,000, are becoming increasingly reliant on housing benefit.

The report says that two thirds of the housing benefit claims made during the last six years have come from households in that middle income bracket.

Chief Executive of the National Housing Federation, David Orr, says "Our shortage of affordable housing is now leaving families on a decent wage unable to cover the cost of their homes," 

The data comes as part of the NHF's report Broken Market, Broken Dreams

Rental maintenance bills

Like most landlords I'm not keen on maintenance bills. They are however, as inevitable as death I'm afraid. Particularly as a landlords portfolio matures with age. You might refurbish a property or buy a shiny off the peg buy-to-let and for the first few years repair bills should be low to minimal. After 5 and certainly 10 years the bills will just start to roll in.  The good news is that you should be able to off set them against your rental profits...so less tax to pay.

My maintenance to do list
My latest list is a mixed a varied bunch: sash windows that needed the rotten bottom rail replacing, an external redecoration, replacement of rotten windows with a set of replacement upvc windows, a partly collapsed boundary wall caused by an over exuberant dog, a minor bathroom leak, need I go on!

Landlords need a good team
The essence is that you need a good team of people you can rely on to do the work and not rip you off or cause even more problems. Then the situation is entirely manageable which is all a landlord can ask for as their portfolio grows. What a landlord needs to remember....there is no gain without pain.

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