More Filipinos choosing to rent–not buy–homes

More Filipino families were choosing to rent spaces rather than own homes, a “notable shift” that was more common among households in the urban jungle of Metro Manila as high costs and slow wage growth dash homeownership ambitions.

That was according to the 2021 results of the Consumer Finance Survey released by the Bangko Sentral ng Pilipinas (BSP), which conducts the nationwide triennial poll to check the financial condition of Filipino households.

Results of a survey of 16,212 families between March and December 2022 showed 11.3 percent of respondents preferred rental accommodations in 2021—the year when the economy slowly reopened from pandemic-led lockdowns that threw the Philippines into a recession.

That was higher than the 10.2 percent recorded in the previous survey round in 2018.

By area, renting or leasing was more common in the National Capital Region (NCR) at 34.9 percent, followed by Balance Luzon at 10.6 percent. But it was less popular in Visayas and Mindanao, where homeownership rates are particularly high.

Nevertheless, survey data showed seven in every 10 families in the country owned or co-owned a house.

Homeownership in areas outside of NCR was at 73.9 percent, much higher than the 43.9 percent rate for the densely populated Metro Manila, where sluggish wage growth may not keep up with rising home prices.

Even during the pandemic, BSP data showed residential property prices in the country grew by 4.9 percent in the final quarter of 2021.

Article continues after this advertisement

Apart from the shifts in the mode of home acquisition, the latest BSP survey also provided other insights into the financial condition of Filipino families.

Data showed nonfinancial assets continued to form the foundation of Filipino household wealth portfolios, with home appliances and equipment still being the most commonly owned assets at 96.6 percent.

Within the appliance category, mobile phones (92.8 percent) continued to surpass televisions (81.1 percent) as the most common household item.

Residential properties (69.9 percent) were the second most commonly owned nonfinancial asset of households, followed by vehicles (35.3 percent). Among vehicles, motorcycles (61.7 percent) continued to be the most popular.

The composition of financial assets revealed interesting patterns of financial behavior. Deposit accounts recorded the highest ownership rates at 35.3 percent, followed by traditional cash savings kept at home (28.7 percent) and the rapidly growing category of e-money accounts (24.3 percent).

CFS_2021.pdf

Download PDF • 9.92MB

Source: Inquirer

Understanding the Rent Control Act in the Philippines

For anyone renting or planning to rent a property in the Philippines, understanding the Rent Control Act is crucial. This law aims to protect tenants from unreasonable rent increases while ensuring landlords can still fairly profit from their properties. Let’s break down the key aspects of this act to help both tenants and landlords navigate their rights and responsibilities. 

What is the Rent Control Act? 

The Rent Control Act of the Philippines refers to Republic Act No. 9653, also known as the "Rent Control Act of 2009", as extended by subsequent regulations. It governs rental pricing, increases, and disputes for residential units within specific rent ranges, particularly in urban areas. 

The law primarily covers: 

- Residential units with a monthly rent of up to ₱10,000 in Metro Manila. 

- Units with a monthly rent of up to ₱5,000 in other cities and municipalities. 

 Key Provisions 

1. Limit on Rent Increases 

   Landlords cannot increase rent by more than 7% annually for covered properties, provided the same tenant occupies the unit. 

2. Protection Against Eviction 

   Tenants cannot be evicted except under specific circumstances, such as: 

   - Non-payment of rent for three consecutive months. 

   - Subleasing without the landlord’s consent. 

   - The landlord needing the property for personal use or renovations. 

3. Advance Payments and Deposits 

   - Landlords are allowed to collect up to one-month advance rent and two months’ deposit. 

   - Deposits must be returned to the tenant upon moving out, minus any deductions for damages. 

4. Rental Contracts 

   Both tenants and landlords are encouraged to have a written rental agreement specifying the terms and conditions of the lease, including rent, duration, and responsibilities. 

 Who Benefits from the Rent Control Act? 

The act primarily benefits low- to middle-income families, students, and employees who rent affordable housing. It ensures they are not priced out of their homes due to sudden, excessive rent increases. 

 What the Rent Control Act Doesn’t Cover 

The Rent Control Act does not apply to: 

- Commercial properties. 

- Residential units rented out for over ₱10,000 per month in Metro Manila and ₱5,000 per month in other areas. 

- New leases not covered by existing agreements. 

 Recent Updates 

While RA 9653 officially expired, the Philippine government often extends similar provisions to address housing affordability. As of today, tenants and landlords should stay updated with the latest housing and rental policies implemented by the Housing and Land Use Regulatory Board (HLURB) or other government bodies. 

 Tips for Tenants 

- Always sign a written agreement and understand its terms before moving in. 

- Keep records of your payments and communications with your landlord. 

- Report any violations of the Rent Control Act to local housing authorities or barangay offices. 

 Tips for Landlords 

- Familiarize yourself with the Rent Control Act to avoid legal disputes. 

- Clearly communicate rental terms and increases with tenants in writing. 

- Maintain the property to ensure tenants receive value for their rent. 

 Final Thoughts 

The Rent Control Act is a critical safeguard for renters and a guide for landlords in managing rental properties. Whether you’re a tenant or landlord, understanding this law can foster a fair and harmonious rental relationship. 

Stay informed about changes to rental policies and consult legal or housing experts for specific concerns. After all, a well-informed rental community benefits everyone. 

Source: Zigguratrealestate.ph

UK landlords sell in a hurry amid fears of capital gains tax increase

The proportion of former rental properties for sale is the highest on record, an increase that may be driven by landlords’ fears of an increase in capital gains tax in the budget, according to Rightmove. Eighteen per cent of properties for sale were previously on the rental market, compared with 8 per cent in2010.

The property website said that landlords’ fears that the budget on October30 would result in an increase in capital gains tax — a tax on the profit made when an asset is sold — could be behind the surge.

London has emerged as a hotspot, with 29 per cent of homes for sale having previously been rental properties. Scotland and the northeast follow, with a proportion of 19 per cent. The percentage has been slowly increasing for months. The previous five year average for homes switching from the rental market to the sales market is14 per cent, according to Rightmove. Tim Bannister, its property expert, noted that while the trend was increasing, it did not signal a “mass exodus of landlords”.

The number of new properties entering the sales market has risen by 14 percent compared with a year ago, a period when the market was subdued by high inflation and peak mortgage rates.

Compared with 2019, the last year before the pandemic, the number of homes for sale this year has increased by 3 per cent. Bannister said: “In recent years it has become more attractive for some landlords to leave the rental sector rather than to continue to invest in it, due to rising costs, taxes and legislation.

We’ve seen over the last few years how the supply and demand imbalance can contribute to rising rents, so there is a worry that without encouragement for landlords to stay in rather than leave the rental sector it is tenants who will pay the price.” Sir Keir Starmer has warned that the budget will be “painful” and that those with “the broadest shoulders should bear the heaviest burden”.

Rachel Reeves, the chancellor, has declined to rule out an increase in CGT. At present CGT is levied at rates of between 10 and 28 per cent. An increase could lead to a “significant rise” in the tax burden, Marc von Grundherr, director of the estate agent Benham &Reeves, said. “This would be yet another blow to those who provide vital housing stock that is sorely needed within the rental sector, following a string of legislative changes already introduced in recent years to dent profitability

Source: The Times