There are many landlords and property owners who are not quite sure that renting out flats at high rents can provide them with enough legal security. This has led to a severe shortage of affordable housing in London.
The Housing Act in London, which came into effect in 1988, has brought about the buy to let boom. London has led this boom and also has borne the brunt of the law. The new tenancy agreement enables private landlords to get back their property once the tenancy agreement comes to and end, without practically any legality involved. The AST (Assured Short hold Tenancy) encouraged the rental market to private investors.
The AST has brought about a balance by providing security to the tenants and also making rented accommodation economical. Once the rental agreement has been entered between the tenant and landlord, the landlord cannot repossess the property within the first six months of the agreement. He can do so only if he produces enough proof that he has been forced to take such steps. If the evidence provided is fair, then he can go ahead with repossession.
The AST involves legalities that need to be fulfilled by the landlord. Under the AST the property needs to be a self-contained property. The flat or property cannot be rented out to companies or organisations, but only individuals. The property should be the tenant’s main home. The rent paid annually cannot surpass Â£25,000. This annual rent amount is overlooked by many landlords, especially in London where the rentals for week are charged that exceed Â£480 per week. About five tenants stay in such an apartment and the rental amount would definitely exceed Â£480 per week, which does not satisfy the terms put forth by the AST and it definitely goes beyond the statutory minimum.
When a dispute arises between the tenants and landlord, things may be difficult to get sorted. Ideally, the Government should increase the Â£25,000 limit, as there have been amendments made to the Housing Act 1988 from the time it has come to force. However, the rents for residents in London have doubled since then, and hence stating the limit is not going to be of great benefit. Many people have been fleeced by property owners in London.
If you looking for affordable housing in London, then make sure you identify someone who offers you value and service for the money you pay. There has been a drop in buyer confidence, thanks to the financial downturn. There has been a steep fall in the purchase of homes, thanks to the increase in job cuts. This could be another reason for the increasing demand for rental accommodation. London’s housing transactions were cut by fifty three percent as compared to the previous year, which is a result of poor financial markets.
It has been established that credit conditions are pretty tight and hence people are not opting for new homes. Unemployment and lower income growth ratios are prime factors that affected the financial markets and indirectly the housing market. Frank Knight, the prestigious London property owner, has stated that London has seen the second biggest drop of about 3.6 percent. As thing improve, the affordable housing scene in London will also come back on track.