Even though the average value of a Rotherham first-time buyer property has risen by 236.7% since 1989 to £112,780, the monthly payments Rotherham first-time buyers must make on their mortgages as a proportion of their take-home pay is 49.1% less today compared to 1989.

Today, according to the Nationwide Building Society…

the average Rotherham first-time buyer only needs to pay out 23.1% of their household take-home pay on their mortgage payments, compared to 45.4% in 1989 (i.e. just under a half less).

You might say 1989 was 33 years ago, a long time ago and not relevant to today. I would agree. 

So next, I looked a little closer to home, and in 2007…

the average Rotherham first-time buyer had to spend 38.9% of their household income on mortgage payments (i.e. 40.5% proportionally cheaper than today).

So why do I say all these things?

Last month, the Bank of England revealed that its Financial Policy Committee would be removing their mortgage market affordability test on people taking out mortgages in August. 

The test was introduced in 2014 to ensure the UK didn’t have a repeat of the 2008 Credit Crunch and particularly hit first-time buyers with what they could afford to buy.

This rule change means Rotherham property buyers could soon be able to borrow thousands of pounds more and purchase larger homes.

The decision to withdraw the affordability test certainly raised eyebrows in the press, primarily as the Bank of England has raised interest rates five times in the last six months to try and reduce rising inflation. Yet, as stated in the first part of this article, Rotherham first-time buyers are comfortably paying their mortgages compared to previous years – therefore everything should be ok with this rule change.

The old rules tested home buyers on mortgage repayments if interest rates rose to 6%/7%, yet the Bank thought that rule was too harsh. 

Not all rules have been changed, as the important Bank of England ‘loan to income ratio’ stays put. 

The Bank were keen to stress that the mortgage market was not going to turn into a free-for-all, as it did in the mid-2000s when the likes of Northern Rock were offering 125% mortgages, and a sixth of all UK mortgages were given without proof of income.

I believe it will have a progressive effect on the Rotherham property market.

Many Rotherham tenants who have been paying rents far more than actual mortgage payments for the same Rotherham home, but have failed affordability assessments regardless, will now be able to get on the property ladder.

The rule change should open the Rotherham property market up a little more and allow house prices to grow in Rotherham.

I advise anyone who has been refused a mortgage on affordability in the past to speak to a mortgage arranger. If you don’t know of one, drop a message to me, and I will give you details of mortgage arrangers you could talk to. 

Should you buy now or wait for the bargains?

• Many commentators believe we have seen the peak of the Rotherham property market.
• So, should savvy bargain hunters wait for Rotherham house prices to fall?
• Or could postponing your house buying for any anticipated Rotherham house price drop be a costly mistake?

Over the last two years, the Rotherham property market has been a rollercoaster ride of hyperactive demand together with the new sport of getting your offer accepted when you compete with 30 other bidders. 

Yet there are clouds on the horizon that the Rotherham property market could be at its peak.

Bank of England interest rates have increased four times in the last few months to try and combat inflation. Meanwhile many Rotherham households are finding it tough to counter the most significant drop in real incomes in a single year since records began in the mid-1950s, all at the same time as gas, heating oil and electricity prices are predicted to rise again in the autumn. 

Hence why some economists are predicting house price drops in the coming 18 to 24 months of 3% to 5%.

So, surely this is not the best time to buy a Rotherham property – and surely savvy buyers should wait for Rotherham house values to fall?

Is it realistic to see double-digit national house price growth? Certainly not.

The question is how far the Rotherham property market will slow and whether the slowing will drop into modest falls.

Let me look at household income first.

At best, the outlook is gloomy as real household disposable income is set to drop by 2.4% in 2022/23, the largest drop since records began in 1956. This is despite the £17.6 billion of financial support for British households revealed in Rishi Sunak’s Spring 2022 Statement with the National Insurance thresholds, energy bill support package and duty cut on petrol. Without these changes announced by the Chancellor, real household disposable income would have fallen by an additional 1% in 2022/23. 

Second, as interest rates increase, mortgage rates will increase in line, increasing mortgage costs, so surely that will curtail demand, meaning Rotherham house prices will drop, and buyers should wait to catch a bargain?

Finally, with inflation on the rise, the real value of people’s savings will decrease quicker, and the value of their deposits will diminish, meaning Rotherham prices will surely drop, and people should wait to buy?

Surely the Rotherham property market has peaked and buyers should wait for the bargains?

Well, I don’t think so, and these are the reasons why I say that.

I believe, subject to no significant shocks in the world economy, Rotherham house price growth will be very slow in the next 18/24 months and go into low single digits (even the odd month dipping ever so slightly into the red), but not the 16% to 19% annual drop we saw in 2008/9.

Let me look at real household income. Every economist predicts growth in real household income in 2023/24 by around 1%.

If the two years are combined, the predicted effect on real household income in the next two years (2022/23/24) is a net loss of 1.4%, whilst in the credit crunch years 2010/11/12, the net loss was 2.7%.

I was looking at the increase in mortgage rates. 79% of owner-occupiers have fixed their mortgage costs and had their affordability stress-tested to Bank of England interest rates of 3% to 4% under the Mortgage Market Review rule changes in 2014. I believe the most significant impact of increasing interest rates will be at the point of taking on a new mortgage by first-time buyers (as opposed to servicing or the porting of an existing mortgage from one house to the next house).

The four successive Bank of England base rate rises, inflation and the rising cost of living are likely to bring more cautiousness over summer and autumn when it comes to people buying a property. Yet, there is still a massive imbalance of demand for property over the number of properties for sale to quench that demand.

The potency of the job market and the ongoing mismatch between the supply of properties on the market and demand for those properties will support property values.

Finally, the by-product of increasing inflation is that it makes buy-to-let more attractive. If there is a reduction in first-time buyers, this will be counterweighted by more landlords buying again, supporting the current level of Rotherham properties.

But what if Rotherham house prices do drop significantly?

So let’s assume that Rotherham house prices do fall, irrespective of the reasons above, it will not inevitably help Rotherham buyers.

If we have a house price crash, people tend to find their careers are at risk, and their salaries don’t rise as much. The younger generation (i.e. first-time buyers age range) often gets hit the toughest by recessions.

If first-time buyers wait until 2024 to buy and Rotherham property values drop by 10%, that will prove more expensive. 

In the last 2008/09 crash, lenders weren’t offering 5% deposit mortgages. The lowest deposit mortgage that first-time buyers could get was with a 10% deposit and even then, they were hard to come by.

When writing this article, first-time buyers can obtain a 5% deposit mortgage for a fixed rate of 2.66% for five years.

The typical first-time buyer terraced house in Rotherham sells for £109,800.

So, if they were to buy now, on this mortgage deal, the first-time buyer would have to stump up a £5,490 deposit and their mortgage payments would be £381.91 per month.

Yet, let’s say property values in Rotherham do drop by 10% in the next 18 months, the terraced house would now be worth £98,820, so a significant saving. Or is it?

Everyone believes interest rates will rise further, so let’s assume they go to 3% by the autumn of 2023. That means the mortgage rate for a 10% deposit mortgage will be in the early 5%’s, so let me assume 5.29% (because the banks tend to increase the gap between the base rate and the mortgage rate in recessions to allow for the extra risk).

The monthly mortgage payment on the 5.29% mortgage would be £465.44 per month, and you would need to double your deposit to £9,882.

So even if Rotherham’s house prices did drop by 10%, the first-time buyer would be £1,000 worse off a year in mortgage payments and would have to find double the deposit.

…and then there is the other cost of waiting.

You have two years’ worth of rent to pay. The average rent for a Rotherham property is £588 per month.

If you waited a couple of years for Rotherham house prices to drop by 10%, you would spend £14,112 in rent.

Choosing to buy a Rotherham property makes even more economic sense if it is a long-term choice, as homeowners can ride out any house price drops. 

Homeowners who plan to stay in a property can generally rely on getting their money back within six to ten years whilst not paying any rent.

Will Rotherham prices go up, or will they go down?

Remember, George Osbourne said house prices would drop by 18% in May 2016 if we voted to leave the EU, whilst many economists said they would drop by 5% to 10% when Covid hit in March 2020.

And we all know what happened.

If you think you will be better off owning your own Rotherham home rather than renting one, don’t bother to wait for the suggested house price drop that may never happen. 

These are my thoughts, what are yours? Let me know in the comments.

If you’re a landlord in Rotherham, you may be wondering whether your tenants have the right to refuse you entry to your own property. Here at Bricknells, we often meet landlords who are uncertain of their access rights, so here is our expert guide to help you understand your legal position.

It’s My Property – Surely I Can Enter It At Any Time?

This is a common mistake that many landlords make. While it’s true that you own the property, by entering into a rental agreement with a tenant, you’ve effectively handed over the rights to use and live in the property to your tenant.

Thus, while you’re the property’s owner, the tenant has rights too. The “covenant for quiet enjoyment” is a legal term that basically means your tenant can live in your rental accommodation without you (or your letting agent) hassling them.

Furthermore, once you’ve granted the tenancy, you can’t expect to legally treat your property as your own. With this in mind, it may appear that you are unable to enter the property if your tenant refuses to admit you. However, there’s a lot more to be considered.

The Landlord’s Right Of Entry

Your tenants may have an entitlement to “quiet enjoyment” of your rental property, but you do still have the right of entry in certain circumstances. There are three reasons you can enter the accommodation:

• To inspect it.
• To carry out repairs or address an emergency such as a fire, flood, criminal activity, or structural damage.
• To provide a service such as gardening or cleaning (these instances must be covered within your tenancy agreement).

Must I Give The Tenants’ Notice?

In general, you must let your tenants know that you (or your representative) will be entering the property at least 24 hours before you do so. However, you can enter your property legally with no permission or notice in an emergency.

Can The Tenant Refuse Me Entry?

A tenant can refuse to let you into the property, but in most cases, if you offer them the opportunity to change the date and time, the problem can be solved quickly and easily. Occasionally, though, landlords may encounter a tenant who refuses access repeatedly. If this occurs, landlords have a few options open to them.

• Negotiate. The first course of action any landlord should take is to talk to their tenant and try to arrange an alternative day and time. Sending emails is the best way to ensure you have digital evidence should the matter escalate.
• Tell the tenant they’ll be liable for costs if there is a deterioration of the property’s condition due to the denied access. The tenant should also be told that the landlord will no longer take responsibility for any damage to the tenant’s property or injuries to the tenant themselves if it is caused due to the refused access.
• Take legal action. If the above efforts fail, the next step is to seek advice from a solicitor. In a worst-case scenario, a court order can be obtained to evict the tenant.

Why Can’t I Just Enter My Property Even If The Tenant Refuses?

It’s very unwise to enter your rental property if the tenant hasn’t permitted you to do so since it would represent an abuse of your tenant’s trust. You could also be putting yourself at risk of an accusation of property damage or theft which could be very difficult to disprove.

At Bricknells, we’re highly experienced in rental property management in Rotherham.

Don’t hesitate to get in touch with us at enquiries@bricknells-rentals.co.uk or on 01709 365584 to find out more about how we can help with renting out your property.

Looking at the recently introduced White paper we have broken it down into the following 12-points.

• Require all homes to meet the Decent Homes standard.
• Introduction of a series of pilot schemes with selected local authorities to explore ways of enforcing standards.
• Abolish section 21 – no fault evictions.
• Reform the grounds for possession; expedite landlord’s ability to evict for antisocial behaviour, rent arrears and sale of the property.
• Limit rent increase to once per year, end rent review clauses and improve tenants ability to challenge excessive rent increases. 
• Introduce a new Ombudsman where tenants can hold their landlord to account.
• Work with the Justice system to target delays in court proceedings, strengthen mediation and alternative dispute resolution.
• Introduce a new information property portal for tenants, landlords and local councils, with the possibility of a rogue landlord database.
• Strengthen local councils enforcement powers.
• Make blanket bans on renting to families with children or in receipt of benefits illegal.
• Give tenants the right to have a pet in their property.
• Work to develop innovative methods of providing security deposits.

So that’s the essence of the White paper and it’s probably now a good time to take stock of any tenancies you manage.

Why not download our ‘Tenancy Compliance Health Checklist’ just to check that you have everything in place??

Rotherham Rental Homes Nightmare

• Rotherham needs 420 additional private rented properties per year to keep up with current and future demand from Rotherham tenants.

• Yet over the last 5 years, Rotherham has lost 368 private rented homes.

• What are the 5 reasons the supply of private rental properties in Rotherham are falling? What does this mean for tenants and landlords in Rotherham?

There has been a rise in demand for rental properties and an 8.9% fall in the number of Rotherham private rented properties, which has caused Rotherham rents to rise by 7.8% in the last year, a new all-time high.

The National Residential Landlords Association asked the respected economics think tank Capital Economics, to carry out research on the UK rental market. It found that if the current trends in the property market in terms of growth of the population, Brits living longer, the lack of new homes building, the reduction in social housing (aka council housing), then demand for homes in the private rented sector needs to increase by 227,000 homes per year.

So, based on those numbers, Rotherham needs to have an additional 420 private rented properties per year.

The problem is the number of private rented properties in Rotherham has reduced from 6,895 in 2017 to 6,527 in 2021, a net loss of 368.

So, why has supply of private rented homes in Rotherham reduced?

1. Section 24 Income Tax

Section 24 was introduced in 2017 to level the playing field on the taxation of property between homeowners and landlords. Section 24 stops landlords from offsetting their buy-to-let mortgage costs against the profits from their rental property. Interestingly, no other kind of UK business is affected by the Section 24 taxation. In other words, whatever other form of business you might be in, be it butcher, baker or candlestick maker, every other business can offset their finance costs against their profits, except buy-to-let.

The issue caused by Section 24 Tax is that some landlords ended up paying more income tax than they really made in profit after paying their buy-to-let mortgages. Meaning on the back of rising Rotherham house prices in the last five years, some Rotherham landlords have sold their buy-to-let investments.

2. 3% More Stamp Duty for Landlords

When someone buys a property, they normally must pay a tax to the Government for the privilege. This tax is called Stamp Duty. Yet landlords must pay an additional 3% stamp duty supplement on top of that when they purchase a Rotherham buy-to-let property. Evidence suggests some Rotherham landlords have decided to hold off or scale back buying additional buy-to-let properties for their portfolio because of the thousands of extra pounds that landlords have to pay to buy the rental property.

3. Holiday and AirBnb Lets

Some Rotherham landlords are converting their long-term rental properties into short-term furnished holiday and AirBnB properties. Whilst the hassle, stress and service levels are much higher, these types of properties do tend to make more money and aren’t as heavily taxed as normal lets. When properties convert to short-term lets, it removes another Rotherham property out of the general supply chain of long-term rental properties.

4. Greater Legislation for Rental Properties

With more than 150 pieces of legalisation, and new laws being added each year, the burden on landlords is huge. On the horizon is the Renters Reform Bill which will remove the no fault evictions. Also, all rental properties with an Energy Performance Certificate (EPC) rating of below a ‘C’ will have to be improved (i.e., money spent on them) by the landlord. This could be more than £10,000 per property. Hence, why some Rotherham landlords have been selling their rental properties with low EPC ratings in the last 18 months.

5. Accidental Landlords Selling Up

There are some Rotherham landlords who are classed as ‘Accidental Landlords’. In 2008/9, with a slowing property market and house price values dropping in the order of 16% to 19% (depending on the type of property) some Rotherham homeowners decided to let their home out as opposed to selling it at a loss. Yet, with the price booms of the last 18 months, many decided to cash in on the higher property prices and sell – again taking another private rental property out of the system.

So, why is demand of private rented homes in Rotherham increasing, even though more people own their home in Rotherham than 5 years ago?

Even with better provision of affordable social housing and higher rates of owner occupation in Rotherham (rising from 57.32% of homes in Rotherham being owner occupied in 2017 to 59.42% in 2021), demand for private rental property continues to outstrip supply.

There are many reasons behind this including:

1. People are living longer, meaning not so many properties are coming back into the mix to be recycled for the younger generation.

2. Net migration to the UK has continued at just over a quarter of a million people a year since 2017, meaning we need an additional 115,000 households to house them alone.

3. For the last two years, one in six of the owners of properties that have been sold have moved into rented accommodation instead of buying on because of the lack of properties to buy.

So, what is the outcome of the imbalance between supply and demand on Rotherham rental properties?

Quite simply – Rotherham rents have rocketed. They are 7.8% higher today than the spring of 2020 … and that’s on the back of rents being 6.4% higher in spring 2020, compared to spring of 2019.

The severe shortage of housing in the private rented sector is pushing up rents in Rotherham as demand continues to grow. Many Rotherham people are finding it hard work to find appropriate accommodation at a reasonable rent, and with mounting numbers of tenants predicted to continue, this situation will only get worse unless more houses are built.

My heart goes out to those Rotherham tenants struggling with the cost-of-living crisis, only to then be hit by higher rents.

Yet, these higher rents are now enticing new landlords back into the Rotherham buy-to-let market because of the higher returns.

With higher inflation, property investment has been seen in the past a safe harbour to invest one’s money in. With the bonus of rising yields (because of the increase in rents) together with the nervousness of the Bank of England to increase interest rates too much because of the issues in Eastern Europe, this could be the start of a second renaissance in the Rotherham buy-to-let market.

If you have concerns about the issues in legislation and taxation, then the advantage of employing a letting agent, with the choice of property, what you pay for it and how it’s managed, will go a long way to mitigate them.

If you are considering getting into the Rotherham buy-to-let market for the first time or expanding your property portfolio (whether you are a client of Bricknells or not) please do not hesitate to give us a call and we can discuss these matters further.

01709 365584

Whether you already have a property you’re looking to rent out in Rotherham or you’re thinking of investing in a buy-to-let, it’s vital that you know your legal responsibilities and requirements as a landlord, both to protect yourself and your tenants.

Here are our 10 top legal tips for landlords.

1. Take Out Landlord Insurance

It’s vital that you take out specialist landlord insurance, as your standard buildings and contents insurance won’t cover you and may be invalidated if you’re renting your property out.

The right landlord insurance policy will cover you for damage to the property, loss of rent and legal expenses, so it’s worth having.

2. Draw up a Tenancy Agreement

This document will set out the terms of the tenancy between you and the tenant and will help to protect both parties in the event of a dispute.

Ensure that a new agreement is drawn up with each new tenant, as tweaking an old agreement could mean you miss important legal changes that have occurred in the meantime.

3. Arrange Regular Inspections – But Don’t Just Drop in!

It’s important to check your property every so often to ensure it’s being looked after. However, you should be aware that it’s illegal to just enter the property without the tenant’s permission.

It’s advised to give them a minimum of 24 hours’ written notice. This should be stipulated in your tenancy agreement.

4. Obtain an Energy Performance Certificate (EPC)

Landlords have a legal responsibility to serve tenants with an EPC, which must have a minimum rating of E.

You can provide this along with the tenancy agreement and have the tenant sign to confirm receipt.

5. Obtain a Gas Safety Certificate

If your property has gas appliances, then you’re required to have them checked by a Gas Safe Registered engineer.

They’ll be able to provide you with a certificate that will need to be renewed annually. A copy of this should be given to your tenants along with their tenancy agreement.

6. Carry Out Electrical Safety Checks

You’ll need to have the electrical system checked every 5 years by a qualified electrician. It’s also a good idea to have any appliances in the property PAT tested, but this isn’t legally required.

Smoke alarms will also need to be fitted on each floor and these need to be tested on the first day of the tenancy.

It’s also strongly advised to have carbon monoxide detectors fitted and tested too.

7. Check if You Need a License

Some local authorities will require you to have a license before you can rent out a property, so you’ll need to check before proceeding.

This often applies to HMOs and student accommodation, so get in touch with your local council to find out if it applies to you.

8. Protect Your Tenants’ Deposit

If you’ve taken a deposit from your tenants then this will need to be protected in a Government authorised tenancy deposit protection scheme.

There are three to choose from:

• Deposit Protection Service (DPS)
• MyDeposits
• Tenancy Deposit Scheme (TDS)

You’ll need to protect the deposit within 30 days of receiving it and provide your tenants with a deposit protection certificate and prescribed information such as the amount of the deposit, address of the property and details of the tenancy deposit scheme where it’s held.

You will also need to provide your tenants with a copy of the Government’s How to Rent guide.

If you fail to take these steps, you won’t be able to evict your tenant and you could be fined up to three times the value of the deposit. It’s also unlikely that you will be able to make any deductions from your tenants deposit at the end of their tenancy if you need to claim any money back for damages to the property.

9. Carry Out Tenant Checks

You need to know who you’re renting your property out to, and by law you need to make sure that your prospective tenants have the right to rent property.

It’s also a good idea to carry out a referencing check. This will confirm important details, such as employment status and whether or not the tenants have had issues paying rent previously.

10. Keep the Property Maintained

While your tenants have a duty to keep the property in good condition, it is your responsibility to ensure that it’s well maintained, and any issues are fixed promptly.

It’s helpful to have a good relationship with your tenants, and if they contact you about a problem then you should make every effort to ensure it’s rectified as soon as possible.

Bricknells are your local property management experts for the Rotherham area. Landlords – call us on 01709 365584 or email enquiries@bricknells-rentals.co.uk to chat with a member of our friendly and experienced team.

Everyone should be doing their bit to help reduce the UK’s carbon footprint on the globe – yet the question is, is that burden being put too much on the shoulders of Rotherham landlords with potential bills of £7,600+ in the next four years?

The background – the UK has obligated itself to a legally binding target to be carbon neutral by 2050. One of the biggest producers of greenhouse gasses is residential homes.

To hit that carbon-neutral target (as one-fifth of the UK’s carbon output comes from residential property), every UK home will need to achieve a minimum grade of ‘C’ on their Energy Performance Certificate (EPC) by 2035. Each EPC has a rating between ‘A’ and ‘G’ – ‘A’ being the best energy rating and ‘G’ the worst – like an energy rating on a fridge or washing machine.

All UK rental properties have required an EPC. Yet, from April 2020, the Minimum Energy Efficiency Standards (MEES) regulations have required all private rental properties (including rental renewals) to have a minimum EPC rating of ‘E’ or above.

Yet new legislation being discussed by the Government’s Climate Change Committee has suggested that landlords should play their part and increase the energy efficiency of their private rented homes. Sounds fair until you dive into the details.

The Government is muting the idea that all new tenancies (i.e. when a new tenant moves in) in private rented properties should be at an EPC rating of ‘C’ or above by 2025 (and all existing tenancies by 2028). The issue is …

69.82% of all private rented properties in Rotherham

have an EPC rating of ‘D’ or below.

The problem is some Rotherham landlords will find it very expensive, neigh impossible, to improve the energy efficiency of their Rotherham rented properties, especially those Rotherham landlords who hold older housing stock such as terraced properties built in the 1800s. These Victorian terraced houses never perform well on EPC ratings as they have solid walls.

Now, of course, you can improve the EPC rating of a terraced house by improving roof insulation, boiler replacement, solar heating, and high-grade uPVC windows. Yet, with some terraced houses, there will come the point where you will be unable to get to the haloed ‘C’ rating without installing external or internal wall insulation, sometimes even floor insulation.

With wall insulation costing between £5k and £15k and floor insulation around £5k …

the bill to improve all Rotherham’s private rented

properties will be a minimum of £52,242,320.

But before I talk about what the options are for Rotherham landlords, here’s the weird part of EPC’s. An EPC rating is calculated on the cost of running a property and not the carbon output or energy efficiency, despite its name.

My advice to Rotherham landlords – although it’s correct to create a future strategy, all I can say at this point is ‘more haste less speed’. These rule changes are only a discussion paper, and it remains open for consultation by any member of the British public until 30^th December 2021. That means the Government’s strategies and tactics may change.

Given that 57% of private rented properties are below a ‘C’ EPC grade, it is hard to believe the Government could achieve this without making big cash grants available.

For example, there is presently a cap of £3,500 for energy improvements that Rotherham landlords have to spend to get it to the existing EPC ‘E’ target grade on private rented homes (i.e. if you have a privately rented home at an ‘F’ or ‘G’ EPC rating, you only need to spend a maximum of £3,500 as a landlord on improving your EPC rating and still being legal even if those £3,500 don’t get you to the current ‘E’ rating minimum). So, if the current rules allow an exemption to the EPC renting rules, if a Rotherham landlord can’t improve their Rotherham property enough, conceivably, could this be extended?

So, what are Rotherham landlord’s options?

One thing you could do is put your head in the sand and hope it all goes away!

Another thing some savvy Rotherham landlords do (be they my client, clients of other letting agents in Rotherham or even self-managing landlords) is to sit down and plan a strategy for their Rotherham rental portfolio. I print off all the EPC’s of their rental portfolio, look at the recommendations, then discuss a plan to ensure they are covered whatever the Government decides to make the new EPC rules. Like all things in life, plan for the worse and hope for the best.

If your agent isn’t offering that service, please drop me a line because I would hate for you to miss out on the advice and opinion that so many Rotherham landlords have already had from me. The choice is yours.

The Government’s scheduled publication of their White Paper for the Renter’s Reform Bill, which incorporates proposals to forbid Section 21 evictions and introduce ‘Lifetime Deposits’, has been suspended until 2022.

The additional time is required to give a chance to create a level playing field to reforms for both landlords and tenants in the private rented sector in England.

In this article, I want to look at these lifetime deposits. How could the Lifetime Deposit Scheme work, and how could they benefit both Rotherham landlords and tenants?

When a tenant moves between rented homes, they need the deposit for their new home before being released from their old home.

The average deposit for a Rotherham rented

home stands at £693.

This means finding that amount of money at the time of moving home can be difficult for many tenants; thus, they become stuck in their existing rental.

Therefore, Westminster wants to propose in this White Paper a new deposit choice for tenants. A deposit is transferred from the old landlord (letting agent) to the new landlord (letting agent), thus making life simpler as the tenant doesn’t need to save for an additional new deposit every time they move home.

Now, of course, it’s vital that any new ‘deposit scheme’ does not dissuade Rotherham landlords from making valid claims for damage to properties. Landlords cannot be expected to give up their right of recourse to a security deposit until such time that they are satisfied there will be no need to claim it.

So how would Lifetime Deposits work?

There would need to be some form of system safeguarding that the new Rotherham landlord is protected by a whole deposit, even if the deposit on the old Rotherham home comes into dispute.

This will be critical and central to Rotherham landlords having conviction in the Lifetime Deposit Scheme. That could be something like an interest-free loan for the tenant on the crossover between the properties.

Another advantage to the scheme is that ‘lifetime deposits’ could be used for tenants to build a deposit for a house for the future.

What about the existing system of deposits?

The rules regarding the amount of deposit held by a Rotherham landlord were changed a couple of years ago, where only five weeks’ worth of rent can be held as a deposit.

The deposits Rotherham tenants have had to save for certainly raises the cost of renting a home.

Some say this extra burden puts another nail in the coffin of the dream of homeownership for many Rotherham renters. To give you an idea of the level of deposits held for Rotherham rental properties …

The total of all the tenants’

deposits in Rotherham is £3,750,580.

Yet the other side of the argument contends that if the Rotherham tenant misses more than one month’s worth of rent, the landlord is immediately out of pocket, even before they’ve got the costs of solicitors and any improvement works from the tenant trashing the place.

Does a deposit of just over one month provide Rotherham landlords with a decent level of protection against unpaid rent or damage to the property? When you consider …

The total value of all the privately rented properties

in Rotherham is £869,397,984.

Before I conclude my thoughts to the initial question of ‘lifetime deposits’, the need for decent landlord insurance to ensure you are adequately covered as a Rotherham landlord is vital.

So, what are my thoughts on ‘Lifetime Deposits’?

It is my opinion the common need for Rotherham tenants to stump up a ‘two-fold deposit’ is not helping many Rotherham renters when moving home. It’s clear the standard cash down deposit is not fit for purpose for the 21^st Century.

One might suggest the Government’s quest for the ‘lifetime deposit’ could open the door to other deposit alternatives that have come onto the market for tenants in the last few years.

Some landlords don’t require a deposit yet are compensated by asking the tenant to pay a higher rent to cover the risk. Also, there are companies that offer insurance backed deposits where the tenant pays one week’s rent to an insurance firm, and the insurance firm pays out if a loss is incurred by the landlord.

Interestingly, other countries are already offering deposit loans and guarantee schemes. Could this be something for the British Government to contemplate?

We must wait until at least the spring of 2022 for the Renter’s Reform White Paper to be published. Then every stakeholder involved (tenants, landlords and agents, et cetera) can look at it in the cold light of day and decide how this will affect the way they view the landlord/tenant/agent relationship.

Many will say the bigger issue isn’t ‘Lifetime Deposits’ in the White Paper, but the removal of no-fault Section 21 evictions. The removal of Section 21 is something the current Government have pledged to bring in during this parliamentary cycle (i.e. before Q4 2024).

I am not concerned about removing no-fault Section 21 evictions, but what will replace it to ensure there is suitable redress for landlords if the tenant doesn’t pay the rent?

Of course, a handful of Rotherham landlords will decide to sell their rental portfolio because of the White Paper. The same happened in 2016 when the increase in landlord taxes were announced.

However, this will reduce the supply and availability of Rotherham rental properties, meaning rents will rise (classic textbook supply and demand), thus, landlords return and yields will rise.

Yet, because tenants still can’t afford to save the deposit for a home and we are all living longer, the demand for rental properties across Rotherham will continue to grow in the next twenty to thirty years. The reason being we are still not building enough homes to accommodate our growing and ageing population. This means we will turn to more European ways where the norm is to rent rather than buy in their 20s and 30s.

This means new buy-to-let landlords will be attracted into the market, buy properties for the rental market in Rotherham and enjoy those higher yields and returns. Isn’t it interesting that things mostly always go full circle?

With Rotherham Tenants Deposits Totalling £3,750,580, How Will ‘Lifetime Deposits’ Change the Rotherham Rental Market?

The Government’s scheduled publication of their White Paper for the Renter’s Reform Bill, which incorporates proposals to forbid Section 21 evictions and introduce ‘Lifetime Deposits’, has been suspended until 2022.

The additional time is required to give a chance to create a level playing field to reforms for both landlords and tenants in the private rented sector in England.

In this article, I want to look at these lifetime deposits. How could the Lifetime Deposit Scheme work, and how could they benefit both Rotherham landlords and tenants?

When a tenant moves between rented homes, they need the deposit for their new home before being released from their old home.

The average deposit for a Rotherham rented home stands at £693.

This means finding that amount of money at the time of moving home can be difficult for many tenants; thus, they become stuck in their existing rental.

Therefore, Westminster wants to propose in this White Paper a new deposit choice for tenants. A deposit is transferred from the old landlord (letting agent) to the new landlord (letting agent), thus making life simpler as the tenant doesn’t need to save for an additional new deposit every time they move home.

Now, of course, it’s vital that any new ‘deposit scheme’ does not dissuade Rotherham landlords from making valid claims for damage to properties. Landlords cannot be expected to give up their right of recourse to a security deposit until such time that they are satisfied there will be no need to claim it.

So how would Lifetime Deposits work?

There would need to be some form of system safeguarding that the new Rotherham landlord is protected by a whole deposit, even if the deposit on the old Rotherham home comes into dispute.

This will be critical and central to Rotherham landlords having conviction in the Lifetime Deposit Scheme. That could be something like an interest-free loan for the tenant on the crossover between the properties.

Another advantage to the scheme is that ‘lifetime deposits’ could be used for tenants to build a deposit for a house for the future.

What about the existing system of deposits?

The rules regarding the amount of deposit held by a Rotherham landlord were changed a couple of years ago, where only five weeks’ worth of rent can be held as a deposit.

The deposits Rotherham tenants have had to save for certainly raises the cost of renting a home.

Some say this extra burden puts another nail in the coffin of the dream of homeownership for many Rotherham renters. To give you an idea of the level of deposits held for Rotherham rental properties … The total of all the tenants’

deposits in Rotherham is £3,750,580.

Yet the other side of the argument contends that if the Rotherham tenant misses more than one month’s worth of rent, the landlord is immediately out of pocket, even before they’ve got the costs of solicitors and any improvement works from the tenant trashing the place.

Does a deposit of just over one month provide Rotherham landlords with a decent level of protection against unpaid rent or damage to the property? When you consider … The total value of all the privately rented properties in Rotherham is £869,397,984.

Before I conclude my thoughts to the initial question of ‘lifetime deposits’, the need for decent landlord insurance to ensure you are adequately covered as a Rotherham landlord is vital.

So, what are my thoughts on ‘Lifetime Deposits’?

It is my opinion the common need for Rotherham tenants to stump up a ‘two-fold deposit’ is not helping many Rotherham renters when moving home. It’s clear the standard cash down deposit is not fit for purpose for the 21st Century.

One might suggest the Government’s quest for the ‘lifetime deposit’ could open the door to other deposit alternatives that have come onto the market for tenants in the last few years.

Some landlords don’t require a deposit yet are compensated by asking the tenant to pay a higher rent to cover the risk. Also, there are companies that offer insurance backed deposits where the tenant pays one week’s rent to an insurance firm, and the insurance firm pays out if a loss is incurred by the landlord.

Interestingly, other countries are already offering deposit loans and guarantee schemes. Could this be something for the British Government to contemplate?

We must wait until at least the spring of 2022 for the Renter’s Reform White Paper to be published. Then every stakeholder involved (tenants, landlords and agents, et cetera) can look at it in the cold light of day and decide how this will affect the way they view the landlord/tenant/agent relationship.

Many will say the bigger issue isn’t ‘Lifetime Deposits’ in the White Paper, but the removal of no-fault Section 21 evictions. The removal of Section 21 is something the current Government have pledged to bring in during this parliamentary cycle (i.e. before Q4 2024).

I am not concerned about removing no-fault Section 21 evictions, but what will replace it to ensure there is suitable redress for landlords if the tenant doesn’t pay the rent?

Of course, a handful of Rotherham landlords will decide to sell their rental portfolio because of the White Paper. The same happened in 2016 when the increase in landlord taxes were announced.

However, this will reduce the supply and availability of Rotherham rental properties, meaning rents will rise (classic textbook supply and demand), thus, landlords return and yields will rise.

Yet, because tenants still can’t afford to save the deposit for a home and we are all living longer, the demand for rental properties across Rotherham will continue to grow in the next twenty to thirty years. The reason being we are still not building enough homes to accommodate our growing and ageing population. This means we will turn to more European ways where the norm is to rent rather than buy in their 20s and 30s.

This means new buy-to-let landlords will be attracted into the market, buy properties for the rental market in Rotherham and enjoy those higher yields and returns. Isn’t it interesting that things mostly always go full circle?