How EU Migration has changed the Stoke on Trent Property Market

 

The argument of migration and what it does, or doesn’t do, for the country’s economic wellbeing is something that has been hotly contested over the last few years. In my article today, I want to talk about what it has done for the Stoke on Trent Property market.

Before we look at Stoke on Trent though, let us look at some interesting figures for the country as a whole. Between 2001 and 2011, 971,144 EU citizens came to the UK to live and of those, 171,164 of them (17.68%) have bought their own home. It might surprise people that only 5.07% of EU migrants managed to secure a council house. However, 676,091 (69.62%) of them went into the private rental sector.  This increase in population from the EU has, no doubt, added great stress to the UK housing market.

Looking at the figures, the housing market as a whole is undoubtedly affected by migration but it has been the private rented housing sector, especially in those areas where migrants come together, that is affected the most.  Indeed, I have seen that many EU migrants often compete for such housing not with UK tenants but with other EU migrants. In 2001, 3.68 million rented a property from a landlord in the UK.  Ten years later in 2011, whilst EU migration added an additional 676,091 people renting a property from a landlord, there were actually an additional 4.14 million people who became tenants and were not EU migrants, but predominately British!

As a landlord, it is really important to gauge the potential demand for your rental property, especially if you are a landlord who buys property in areas popular with the Eastern European EU migrants.  To gauge the level of EU migration (and thus demand), one of the best ways to calculate the growth of migrants is to calculate the number of people who ask for a National Insurance number (which EU members are able to obtain).

In Stoke on Trent, migration has risen over the last few years. For example, in 2008 there were 1,873 migrant national Insurance cards (NIC) issued and the year after in 2009, 1,738 NIC cards were issued. However, in 2014, this had increased to 2,291 NIC’s. However, if the pattern of other migrations since WW2 continues, over time there will be an increasing demand for owner occupied property, which may affect the market in certain areas of high migrant concentration. On the other hand, over time some households move into the larger housing market, reducing concentrations and pressures.

In essence, migration has affected the Stoke on Trent property market; it couldn’t fail to because of the additional 19.040 working age migrants that have moved into the Stoke on Trent area since 2005. However, it has not been the main influence on the market. Property values in Stoke on Trent today are 10.9% lower than they were in 2005. According to the Office of National Statistics, rents for tenants in the West Midlands have only grown on average by 0.75% a year since 2005 .... I would say if it wasn’t for the migrants, we would be in a far worse position when it came to the Stoke on Trent property market. This was backed up by the then Home Secretary Theresa May back in 2012 - more than a third of all new housing demand in Britain is caused by inward migration and there is evidence that without the demand caused by such immigration, house prices would be 10% lower over a 20 year period.  

If you want to know more about the Stoke on Trent property market, then for more articles like this, please visit the Stoke on Trent Property Blog http://stokeontrentproperty.blogspot.co.uk/

 

 

Legal and Compliance Update, 28.10.15

Good afternoon everyone, I usually prefer to put interesting facts about the Stoke-on-Trent property market or buy to let opportunities that catch the eye on here but due to the plethora of recent changes affecting the private rented sector, I thought it would be useful to add a brief roundup of some recent legislative changes and those due to come in soon.

Introduced 1st October 2015

 

Smoke and Carbon Monoxide Alarm (England) Regulations 2015 As from 1st October 2015 for every existing tenancy there must be a smoke alarm on each floor of the property and a carbon monoxide detector in rooms containing an appliance that burns solid fuel.  All alarms must be checked they are in working order at the start of a new tenancy (these check must also be carried out when there is a change of sharer but is not required upon renewal of tenancy).   It is the tenant’s responsibility to check that the alarms are in working order during the course of their tenancy and change the battery if required, however, should an alarm become faulty during the tenancy the landlord is responsible for replacing them. As mentioned in previous communications most of the properties we manage through the Stoke-on-Trent and Newcastle under Lyme offices already have the requisite number of smoke alarms and we are checking again as we do our property inspections. Additionally we have written to tenants asking then to also check and to remind them about their responsibilities and to encourage them to check smoke alarms on a regular basis.  Where we identify smoke detectors are required we have a stock of free ones supplied by the local fire brigade and have negotiated a price with local contractors to fit them where needed. If you have any questions, please refer to this explanatory booklet: https://www.gov.uk/government/publications/smoke-and-carbon-monoxide-alarms-explanatory-booklet-for-landlords

The Deregulation Act 2015

As from 1^st October 2015, there were important changes introduced as to when a Section 21 notice can be served.

Section 21 Notices cannot be served unless it can be proven that tenants have been provided with the following information:

• A valid Gas Safety Certificate
• The property’s Energy Performance Certificates (EPC), except where a property is not required to have an EPC – such as where the landlord is letting a room on a single AST in a House in Multiple Occupation (HMO)
• The DCLG document “How to Rent – The Checklist for renting in England”.

We serve these at the start of each tenancy and again at renewal time if we have been asked to prepare a new fixed term agreement and we would serve them again should we need to serve a section 21 notice

Landlords will no longer be able to seek possession using section 21:

• During the first four months of a tenancy;
• Where the landlord has not provided the documentation detailed above;
• Where the landlord has not complied with the tenancy deposit legislation, or;
• Where the landlord is prevented from retaliatory eviction under Section 33 or the Deregulation Act 2015
• Where a property requires a license but is unlicensed. 

Landlords cannot validly serve a Section 21 Notice in the first four months of a tenancy. However, where a tenancy has been renewed the landlord will be able to serve a Section 21 Notice at any point during a renewed tenancy.

The notice does not need to expire on the last day of a rental period, unless the tenancy started on a periodic basis.

Section 21 Notices will only be valid for six months from the date of issue.

Right to Rent (Immigration Act 2014)

As of 1^st February 2016 ID checks will have to be made on all adult tenants across England by landlords or their agents (the legislation also applies to sub-letters and lodgers).

Evidence will need to be obtained that each tenant has a right to remain in the UK via appropriate documentation such as a passport or biometric residence permit.

There is a 28 day rule regarding how far in advance the checks can be carried out i.e. checks must be carried out within 28 days of the eve of the start of the tenancy.

There is also a legal requirement for ongoing checks.

Please see the following links for further information:

https://www.gov.uk/government/news/right-to-rent-checks-what-they-mean-for-you

The penalties for non-compliance are severe and could include fines of up to £3,000 per illegal migrant.

Upcoming Legislation affecting Lettings and Sales The Bill will apply to England Only with some exceptions – Clause 88 (Estate Agents) extends to England, Wales, Scotland and Northern Ireland

 

Housing and Planning Bill 2015-2016 This new Bill has just been introduced to Parliament and aims to: Create a legal duty on councils to guarantee 200,000 starter homes offered to First Time Buyers at a 20% discount; Give the Government powers to ensure councils get Local Plans in place by 2017; Ensure social housing tenants on higher incomes pay rent in accordance with their ability to pay; Introduce automatic planning permission on brownfield sites; Introduce reforms supporting small builders; Introduce measures to tackle rogue landlords and letting agents; Ensure the effective management of high value council-owned assets. For further information, please see the following link: https://www.gov.uk/government/news/historic-housing-and-planning-bill-will-transform-generation-rent-into-generation-buy