Three in 10 property purchases fall through

New research from Which? Mortgage Advisers reveals that three in ten (28%) homebuyers have had a house purchase fall through after their offer was accepted, and on average homebuyers were left nearly £3,000 out of pocket as a result.

The survey of 2,000 homebuyers – who bought their home in the previous two years – found that it takes over 4.5 months on average, from starting a property search to having an offer accepted. However, 28% of purchases fell through after that point.

The main reasons for a property purchase falling through were:

  •     The seller decided not to sell their home after all (27%)
  •     The buyer pulled out, as their own property sale had fallen through (21%)
  •     The buyer found somewhere else to buy (21%)
  •     The buyer was ‘gazumped’ (21%)

Of those who had lost money and knew how much they were out of pocket, the average loss was £2,899. This included conveyancing, survey, mortgage valuation or brokerage fees paid and not recovered.

Many homebuyers experience failed transactions due to problems in the ‘property chain’ – the line of buyers and sellers linked together because each is selling and buying a property from another.

For more advice on managing a property chain and keeping things moving, visit Which

Research reveals nearly five million renters at risk

Research reveals nearly five million renters at risk

Results from a survey by YouGov, commissioned by Royal London, reveal almost five million renters in the UK have no plans in place to cover their rent if they became too ill to earn for three months or more, even though recent cuts to housing benefits could leave them at risk.

This is despite the fact that over a quarter of renters in paid employment (27%) said they knew someone who had struggled in this situation.

More than one in three renters in paid employment (34%) admit they don’t know how long they could survive, and six in ten people (60%) who had some idea said they could only survive on their savings for three months or less.  Their first port of call would be to apply for state benefits (53%), followed by reducing their household expenses (47%) and then dipping into their savings (39%).

Worryingly, fewer than one in ten (7%) renters in paid employment have ever consulted a financial adviser. The most common place people turn to for financial advice is their family and friends.

Debbie Kennedy, Head of Protection for Royal London Intermediary, said:

“Renters who assume that housing benefit will be there when they need it could find the reality is very different.  A series of cuts to housing benefit means that more people would not get their rent paid in full if their income fell unexpectedly.

“It would be bad enough to be taken ill without the added anxiety of getting behind with the rent and facing possible eviction.  Income protection may be more affordable than people realise and can provide a financial safety net and enable people to focus on getting better.”

Economists predict over the next ten years the UK will experience falling levels of home ownership and rising levels of private renting.  In ten years’ time, 59% of 20-39 year olds will rent privately, up from 45% in 2013. A further 15% are in social housing, renting from housing associations or local authorities.

Source: Royal London

(Read more)

Help with housing costs isn’t aligning with rent for private tenants, says CIH

New research from Chartered Institute of Housing (CIH) reveals tenants face an increasingly widening gap between the Local Housing Allowance (LHA) they receive to help with their housing costs and the actual rent they pay.

Analysis conducted by CIH looked at LHA rates since 2012 and found that in some parts of the UK, people are only able to afford to rent in the bottom five or 10% of the private rented sector (PRS) market. However, the LHA rates were originally intended to ensure that people could access 30% of the market. The situation is set to worsen as LHA rates freeze for four years from April 2016.

The cash shortfall affects tenants across the UK, the study has found. In Aberdeen, Scotland, there are very severe cash shortfalls in every LHA category, and in Northern Ireland, 80% of LHA rates have already fallen below the bottom 30% of the market – second only to England. In Newport, South Wales, the LHA shared accommodation rate would need to be set at £29 per week more for people under 35 to be able to afford the whole of the lowest 30% of the market. In England, the LHA rate for Chesterfield’s broad rental market area is even lower than the lowest rent that the rent officer could find in their market evidence data – in other words, there’s no shared accommodation available at the LHA rate.

CIH chief executive Terrie Alafat CBE said: “We are becoming more and more concerned by the lack of correlation between LHA rates and rents, and our research shows that people are going to find it difficult to continue renting in the PRS.”

She added: “CIH is calling on the government to review LHA rates for all categories of accommodation, to make sure everyone is able to access a safe, affordable home.

(Read more)

Storm damage is most common buy-to-let insurance claim

Storm damage is most common buy-to-let insurance claim

Storm damage represents the most common insurance claim on buy-to-let properties by UK landlords, according to an analysis of 100,000 insurance policies by Simple Landlords. The average cost of this type of claim is £1,500, the survey showed.

A burst pipe was the second most common claim with an average claim value of £4,500 followed by damage from a break-in (average claim value £2,300), vandalism (£1,900) and accidental damage (£2,200).

“Weather-related damage can be significantly higher and more expensive to repair if your property is not maintained to a high standard,” Simple Landlords warned in the report. “It may also result in a claim being rejected due to poor maintenance. Most insurance companies measure storms with the Beaufort wind force scale and consider that wind speeds below those classed as a storm (52mph) would not damage a well-maintained property.”

It also warned that buildings with special features such as a conservatory can be especially badly hit. “While you never know where a storm will hit, certain features can make properties particularly vulnerable to harsh weather conditions. Properties with conservatories attached and dormer windows are especially likely to be damaged by high winds and excessive rain during a storm,” the report said.

For the full report, visit: www.simplelandlordsinsurance.com