Being a Tenant is Changing, The Future of Tenancies

Being a Tenant is Changing

For many and for many years, getting on the property ladder has been a dream shared by the masses. It still is a dream for many, but for some a dream to not be fulfilled.

There are many reasons why someone would want to have their own property and get on the property ladder:

* No more Landlords

* Your own home to do with what you wish

* You gain equity usually in a property, which can be used later, possibly for retirement

* You build up your credit rating as a mortgage loan is for many the largest loan they will ever take out

While there are many positive aspects of owing your own home, there are some other sides that need to be explored and thought of as well as a homeowner:

* You are now responsible for all repairs and maintenance

* If for any reason you cannot pay the mortgage you could have the property repossessed

* You need to qualify for a mortgage and save a deposit

* If property values drop, you could be in a negative equity situation, owing more on a proerty than what it is valued at

* If you move frequently for work, selling your property, and buying another one can take time and be tricky, especially in a “chain” situation

Even looking at the cons of home ownership, the majority of us will still opt to get on the property ladder.

Hurdles to Getting on The Property Ladder

If we want to admit it or not, there are some hurdles thrown in our way in the attempt to grasp the first rung of the property ladder, and one of those is the housing crisis here in the UK.

Many feel there is no crisis, “crisis, what crisis?”.

However, the crisis front has two sides:

* In some areas there are housing shortages

* The cost of properties

* Getting a mortgage and saving up a deposit

In some parts of the country, there is a shortage of affordable housing, and this is in the rental markets as well. You can be on waiting lists for Council housing, or Housing Associations properties for years.

Currently property sales are down, in part many say due to the Brexit. Buyers are on hold at the moment, which causes a “supply and demand” issue to crop up.

Sellers are selling, but buyers are not buying, so sellers reduce their prices.

Then there is the issue of saving for a deposit, which if 10% or 20% of the sale price of a property, can easily be £20,000, more or less

Being able to afford and repay a mortgage loan is one thing, saving £20,000 is another.

However, even with these hurdles, the powers that be are looking to continue supporting the dream of being a homeowner:

* There are areas where new and affordable houses are being built

* Sellers are reducing their prices to entice more buyers

* Mortgage lenders are developing new mortgage products that require little or no deposit to aid buyers in getting a mortgage

These “hurdles” are being addressed and dealt with by Councils, builders, developers, banks, mortgage lenders, all in the hope of keeping us buying properties, which keeps them all in business.

However, there is one aspect of the home ownership, and getting on the property ladder all these “powers that be”, have not taken into consideration…..and that is us. Us as buyers, consumers, we are changing, and for many, being a tenant is fine.

Digression: The Future of Cars and Driving

In the past, getting your drivers licence and buying a car was a rite of passage. We could not wait for the day.

Then just as with home buying, some hurdles were tossed in the way of having your own set of wheels, and not waiting for the bus or train all day.

Things like:

* Insurance costs rising

* Maintenance costs and not being able to do your own repairs

* Congestion charges

* Parking fees

The cost of insurance alone is prohibitive for many drivers in trying to own their own cars.

Now if you toss into the mix, taxis and apps to hail taxies, and now self-driving autonomous cars, in the future we may not need to own a car.

Car ownership may go by way of the Dodo.

Extinct, something in the past.

Why buy a car and have all that expense, when you can:

* Tap an app for a tax

* Self-driving cars to pick you up

* Long-term car hire services

You only pay for what you need and use.

This theory could be applied to home ownership.

New Tenant Fees Ruling

In the long and distant past when you wanted to let a place to live, be it a flat or house, you went to an Estate Agent or property management company, or directly to a Landlord, and applied to let the property.

You may have been asked/required, to pay an application fee, a credit check fee, an approval fee, a moving in fee, an admin fee, a fee for this, a fee for that, and a fee just to pay a fee.

It sounds far fetched, and I am joking to a degree, but there are a lot of fees, many unnecessary, that we as tenants have paid over the years, just to try and let a place to live.

You could spend hundreds of pounds and not get the place to let, and not get a refund of any money paid.

This is all to change this June 2019, with the new Tenancy Fees Act.

Many of the current fees charged to new tenants, or potential tenants are to be banned.

This changes tenancy here in the UK.

In the past it was almost as easy to save for a deposit on a property, as it was to pay the fees to rent a place, in addition to the four (4) or six (6) weeks rent required as a deposit.

As Tenants We Are Changing

Just as the future of driving and car ownership is changing, so is the future of home ownership, and us as tenants.

Many view being a tenant and renting not a bad thing, the perspective is one of liberation, and not being tied down to one property.

Some changes we are seeing and may see more of are:

* Broadband speed being an important consideration of where we live

* We are moving around more for work and our careers, so renting makes moving easy

* Location, location, location, will become more important as we won’t be owning a car and driving, we will want close and good public transport links

* Tenants will vet Landlords in a way similar to how Landlords vet tenants, we want a good landlord

As to some more changes we are seeing and may see more of, are ways to not have to pay a huge deposit to the landlord, and purpose built “built-to-rent” properties.

Deposit Insurance Schemes: Some landlords, especially for HMO’s/house in multiple occupations, use an insurance programme or scheme to allow tenants to move in with no deposit. No 4-6 weeks rent in advance.

The insurance scheme is where the tenant pays a fee, £100 or more, to an insurer set-up by the landlord or management company. This fee, pays for an insurance policy to cover any damages done by the tenant during their residency at the property.

The fee is a fee, non-refundable, and paid upfront, but it much cheaper than 4-6 weeks rent.

There are also insurance schemes where the tenant pays the premium for the policy monthly, as a part of their rent.

It is a win-win situation for both landlords and tenants, as tenants no longer need to save up for a deposit.

Chief Executive of Upad, a letting agent, James Davis said, “Alternatives to paying one-off deposits are always welcome, and these schemes are a great idea.”

Immediately, tenants will be free of the struggle of having to raise a deposit for a new rental before they have got their existing deposit back, and those who are unable to raise a deposit at all, or have no means of borrowing the money, could find themselves able to rent a far wider range of properties than they previously could.”

I am definitely in favour of such schemes and hope in the coming months a greater proportion of landlords will also take this point of view.

Build-to-Let: These are purpose built flats or houses, that include broadband, utilities, and even a concierge in some instances, included in the rent.

Some may even be furnished, so basically, you just move in.

Many offer no deposit, or may use an insurance scheme to protect the landlord(s), but an easy way to just pack up and move anytime you want.

No ties.

The future of being a tenant, and tenancy in general is changing, just as is home ownership, driving our cars, how we shop more online, and our lives in general.

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<strong>What is Our Criteria For Applying?</strong> 
Every lender on our website has their own specific criteria by the basics are mentioned below and you must have a guarantor to be eligible. Simply select the lender of your choice and you will be taken directly to their website where you can apply. You will be required to submit your details including:<li style=”text-align: center;” data-mce-style=”text-align: center;”>Name (must be over 18 as the borrow, 21 or 25 as the guarantor)</li><br /><li style=”text-align: center;” data-mce-style=”text-align: center;”>Residence (your chances will improve if your guarantor is a homeowner)</li><br /><li style=”text-align: center;” data-mce-style=”text-align: center;”>Employment status (must be employed or on a pension)</li><br /><li style=”text-align: center;” data-mce-style=”text-align: center;”>Income (earning at least £600 per month and able to make repayments)</li><br /><li style=”text-align: center;” data-mce-style=”text-align: center;”>Monthly expenses (not have too many loans open or in major debt)</li>
You will then be asked to include the details of your guarantor and as mentioned above, this is usually someone who you know and trust and wants to help you with your personal finances. Ideally, a guarantor with good credit will maximise your chances of being approved based on the idea of ‘if someone with good credit trusts you, well we can too.'<strong>How Much Can I Borrow From Guarantor Loans?</strong>Guarantor Loans gives applicants the chance to borrow £500 to £15,000 depending on the lender. Some lenders we feature like Buddy Loans only have a maximum loan value of £7,500 and TFS Loans is the only lender that stretches up to £15,000.Factors that can influence the amount you can borrow revolve around having a good guarantor. One that is a homeowner, with solid employment, income and good credit rating will maximise your chances of borrowing the largest drawdown possible.The lenders featured on Guarantor Loans see a homeowner as someone who has already gone through the rigorous process of credit checking and affordability and if they can afford a house, they should be able to act as a guarantor for you.By comparison, having a guarantor that is not a homeowner offers slightly less security and means that amount you can borrow is slightly less too.Higher amounts may be available to those who already have a better than average credit rating, are homeowners themselves and a repeat customer with the lender who has already paid their loan on time. To apply directly with your lender of choice see <a href=”” data-mce-href=””>direct lenders</a>.<strong>What Does The Guarantor Have To Do?</strong>Upon completing an application, the lender will typically send you a <a href=”” data-mce-href=””>pre-contract loan agreement</a> and SECCI (Standard European Consumer Credit Information form) which will highlight the terms of your loan. You and your guarantor will be required to review the terms of the loan, including the loan drawdown, fees, repayment dates and responsibilities – and this can be signed via an online verification process using your email and mobile phone.The lender will usually carry out an individual phone call with you and your guarantor to ensure that you both understand the responsibilities and what is required of you – notably that if you cannot make repayment, your guarantor will be required to pay on your behalf. Further to some additional credit and affordability checks, funds can typically be transferred within 24 to 48 hours (or sometimes on the same day).<strong>Are Guarantor Loans Available For Bad Credit Customers?</strong>Yes, even if you have a history of adverse credit, <a href=”” data-mce-href=””>CCJs</a>, bankruptcy or IVAs several years ago, you can still be eligible. The idea is that you are using your guarantor and their financial history to ‘back you up’ and give your loan extra security. However, it is noted that your guarantor should have a good credit score and consent to co-signing your loan agreement.<strong>How Soon Can I Receive Funds?</strong>Guarantor Loans works with lenders that can facilitate funds within 24 to 48 hours of approval, or sometimes on the same day.When your funds are successfully transferred, most lenders working with Guarantor Loans will send the full amount to the guarantor’s debit account first. This is a standard security measure carried out by lenders to ensure that the funds are going to the right person and confirms the involvement of the guarantor. The guarantor usually has a ‘two week cooling off period’ where they can decide to pass on the money to the main borrower or they can change their mind and return the funds with no extra charges.