Property News

Four in 10 homes bought under Right to Buy now owned by private landlords

December 11, 2017

Ever since Margaret Thatcher declared her belief in a ‘property-owning democracy’ and introduced Right to Buy in 1980, the UK was converted into a country that saw houses as something to make money from, not just to live in, as illustrated by the buy-to-let boom of recent years that has fed the stereotype that Brits are obsessed with property.

But very few people predicted that four in 10 homes acquired under the Right to Buy programme would now be owned by private landlords.

Fresh data obtained by Inside Housing, under Freedom of Information Act, reveals that 40.2% sold by local authorities under the scheme are now being rented out privately, with private tenants now paying more than twice as much as when the homes were owned by local authorities.

Although the study did not identify the precise amount of rent paid by current tenants, the trade magazine stated that average council rent in England is £88 per week, compared with £210 charged by private landlords.

The research shows that Milton Keynes has private letting levels of 70.9%, while several other councils, including Bolsover, Brighton & Hove, Canterbury, Stevenage, Cheshire West & Chester, and Nuneaton & Bedworth, have private letting levels of over 50% among their former council-owned homes.

Reflecting on the research, John Healey, Labour’s shadow secretary of state for housing, said: “We desperately need more genuinely affordable homes, but the Conservatives’ right-to-buy means council homes are being sold off and communities are losing out.

“Only one in five homes recently sold under the right-to-buy has been replaced. As this research shows, too often these homes become buy-to-let investments with higher rents costing the taxpayer millions more in housing benefit.

“Labour will invest in the biggest council housebuilding programme in more than 30 years, and to ensure that areas can build and retain council homes for local people we will suspend the right-to-buy, allowing councils to reinstate it only if they can prove a plan to replace homes sold one-for-one and like-for-like.”

A Department for Communities and Local Government spokesman commented: “More than 77,500 tenants have used right to buy to purchase their home over the last five years, helping more people own a property.

“There are restrictions on selling on a property bought under Right to Buy within five years, and under our reinvigorated scheme every additional home sold off must be replaced by another one, nationally.

“Councils should deliver these additional affordable homes within three years, and so far they have achieved this.”

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Accidental landlords add 80,000 rented homes to the market

December 11, 2017

A slower sales market in the south of England has revived the accidental landlord as more people chose to rent their properties out this year instead of waiting for a sale, according to the latest Countrywide plc Monthly Lettings Index show.

Around 80,000 homes that came onto the rental market in 2017 had been up for sale within the previous six months, led by London where 12.5% of homes coming onto the rental market had previously been up for sale.

With a stronger sales market outside the capital, would-be sellers across the rest of Great Britain are far less likely to put their home up for rent.

Compared with traditional landlords, accidental landlords tend to stay in the rental sector for a much shorter period of time.  While the average buy-to-let investor owns their rental property for 17 years, the typical accidental landlord rents out their home for an average of just 15 months, Countrywide said.

In fact, the property firm report that almost nine in 10 - 89% - of accidental landlords put their property back up for sale after the first tenant moves out, rather than looking for a new tenant.

According to Countrywide, the annual rate of rental growth picked up in November, with the cost of a new let across Great Britain increasing by 1.2% over the last 12 months, led by gains in the Midlands (2.8%) and Northern England (2.3%).

Johnny Morris, research director at Countrywide, said: “While most landlords are in the business by choice, the last three years have seen an increase in the numbers letting out a property they had previously tried to sell.  With mortgage rates remaining low, these discretional sellers can afford to let their home, while they wait and see what the future holds for the sales market. 

“Rental growth in London is once again positive.  Every region of Great Britain now has average rents higher than a year ago.  And it likely that relatively low numbers of rental homes coming onto the market will keep rental growth firmly in positive territory.  But growth remains well below the long run average, with November 2017 marking the second year anniversary of the date when rents last rose by more than 3%.”

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First-time buyers offered chance to get foot on the property ladder through BTL

December 11, 2017

First-time buyers will no longer have to own a residential property in order to access finance from Barclays to invest in the buy-to-let market, after the bank extended its buy-to-let range to enable applications from those acquiring their first property and non-owner occupiers.

The move is designed to provide first-time buyers with an alternative means of getting onto the property ladder, allowing those living in areas with high property prices, such as London, to buy a property to rent out as an investment in a more affordable part of the country.

Very few lenders currently lend to first-time buyers on buy-to-let.

Ray Boulger, senior technical manager at John Charcol, told the press: “It is certainly a helpful move, because it widens the opportunities for people who want to buy a property but either can’t afford to buy in the place where they want to live or perhaps don’t want to buy a place to live in because they anticipate not staying in one place long enough but want to have a stake in the property market.”

Non-owner occupiers seeking to re-mortgage an existing investment property have also been given access to the lender’s buy-to-let range.

A Barclays spokesperson said: “Barclays is a responsible lender and we’re always looking at ways to innovate and open up access to home buying.

“First-time buy-to-let will give someone who does not have a mortgage an opportunity to get onto the property ladder.”

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Coventry for Intermediaries reduces BTL two-year fixed rates by 0.2%

December 11, 2017

Coventry for Intermediaries has cut rates on its two-year fixed buy-to-let range by 0.2%, with rates now starting from 1.49%.

New two-year fixed rate deals include a 50% loan-to-value (LTV) deal at 1.49% and a 75% LTV deal at 2.05%.

Both products have early repayment charges payable until 30/04/20 and a £1,999 product fee.

Kevin Purvey, director of intermediaries, commented: “We’re very happy to reduce rates across our buy-to-let two year fixed range from 50% – 75% LTV. With competitive rates, a range of LTVs and a variety of fee options, this range is ideal for brokers’ clients looking to lock in a competitive rate for the short term.

“Plus, all of our products are application fee free and include a valuation of up to £700 for buy-to-let mortgages.”

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BTL landlords continue to benefit from ‘healthy capital growth and high yields’

December 8, 2017

Investment in buy-to-let continues to outperform most major asset classes, at a time of low saving rates and stock market volatility.

Despite the government’s decision to introduce a number of measures to curb the growth of buy-to-let landlords, many people believe that buy-to-let remains an attractive income investment. 

The introduction of higher stamp duty purchasing costs, the scrapping of the wear and tear allowance, the phasing out of landlords’ mortgage interest tax relief, and the fact that the average rental yield in the UK has eased, has not deterred many experienced buy-to-let investors as the returns from the returns routinely outperform those of other investments, thanks in part to capital growth, as reflected by the latest Halifax property price index.

The newly released house price figures suggest a housing market in remarkably good health, but low supply levels continue to distort the real picture.

The UK’s largest mortgage lender said that home prices increased by 3.9% in the year to the end of November, down from 4.5% in October.

According to the Halifax, the average residential property in the UK is now selling for £226,821.

“The overall increase of 3.9% year on year clearly demonstrates the stability of the UK market, particularly at a time of economic uncertainty,” said Graham Davidson, managing director of Sequre Property Investment. 

Whilst many outlets are reporting a slowdown of investment activity, this is not reflective of what Sequence is currently seeing in the marketplace.

The buy-to-let specialist added: “Buy-to-let investors are still benefiting from healthy capital growth and high yields, despite the numerous tax changes and new legislations introduced. This is something we feel will continue into 2018 as landlords prop up the rental sector due to the shortage of housing accommodation.

“Those who invest wisely can still benefit hugely from a buoyant market over the next 12 months.”

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BTL sector is becoming the preserve of experienced long-term investors

December 8, 2017

A combination of tax reform and stricter regulation for landlords is slowing the growth of the private rented sector (PRS), despite its value hitting a new high, according to the latest edition of Kent Reliance’s Buy to Let Britain report.

The value of the PRS has increased by 6.4% or £82.6bn over the past 12 months to hit almost £1.4trn, supported by a 4.2% hike in the average rental.

The report also reveals that the total number of households in rented accommodation is growing much more slowly.

There are almost 5.6m households across Great Britain in the private rented sector, just 2.2% more than a year ago. This is less than a third of the rate of increase seen in 2014.

Slower growth reflects landlords’ fragile confidence in the sector, although there has been a slight recovery in confidence among landlords since the second quarter of this year, with 41% of landlords assured by prospects for their portfolios.

But confidence remains historically low because of recent tax reform reducing the amount of mortgage interest that can be offset against tax, rising costs, and new mortgage rules that have tightened criteria.

Tenant demand is also growing more slowly. Just 5% more landlords reported rising tenant demand than those reporting it fall, the lowest balance in at least five years, which partly explains why rental inflation has been easing.

Average rents per property now stand at £895 per month across Great Britain. Although this is another new high, the typical rent increased by 1.5% annually, down from 2.4% a year ago, with sluggish growth in London weighing on the national average.

Rents are likely to continue to rising as 29% of landlords expect to increase rents over the next six months.

Andy Golding, chief executive of OneSavings Bank, which trades under the Kent Reliance and InterBay brands in buy-to-let, said: “Landlords are swallowing the unpleasant cocktail of higher taxation and tighter regulation, and this is undermining the expansion of the private rented sector.

“A fundamental shift in the landlord population is now underway, as buy-to-let moves from being a popular past-time for hundreds of thousands of British amateur landlords, to the preserve of committed long-term investors with experience and expertise. The pace of professionalisation will only increase following the PRA’s latest moves, and incorporation continues apace.

“Creating a more professional sector is no bad thing, but there is a limit to the amount of change the sector can absorb before we see a damaging reduction in supply – an outcome that would see rents increase for tenants and reduce their ability to save for a deposit for house purchase. Landlords’ confidence is better but still clearly fragile, and as the new tax reforms gradually come into force, any further financial burdens may prove to be a tipping point.” 

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New auction platform allows prospective tenants to bid for rental properties online

December 8, 2017

A new online property auction platform is launching that enables estate agents to add an auction element to both sales and letting.

LetsBid Property’s software is now available to all sales and letting agents and is ready to integrate with their websites, presenting applicants, including prospective tenants, with an opportunity to bid for rental properties, as well as those for sale, online.

The process of buying or letting a property is streamlined with LetsBid. Agents can set a guide and reserve price as well as the duration of the bidding process.

Agents can also access the full details of anyone making bids or downloading relevant documentation about the property.

LetsBid has teamed up with credit reference agency Lets Safe, to allow potential renters to be pre-referenced before making bids.

Rentberry, an online auction service in the U.S. launched last year and now lists around 100,000 properties on its site and claims it has more than 50,000 users.

But rather than target landlords direct, LetsBid will help agents generate more instructions from landlords and sellers.

“Lots of proptech seems intent on taking business away from agents but we believe they still have the biggest part to play in property so we’re backing them, which is why vetted agents are the only ones who can upload property to LetsBid, said Milton Rodosthenous, LetsBid’s founder and CEO. 

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Whopping fine should ‘serve as a warning to any other rogue landlords’

December 8, 2017

A rogue landlord in Newmarket who exposed tenants to ‘significant risk’ has been ordered to pay almost £33,000 after being found guilty in court.

Russell Wayne Price, 50, of Lisburn Road, Newmarket, was found guilty of 15 charges following prosecution by Forest Heath District Council.

Some 13 charges, which related to two Houses of Multiple Occupation (HMO) in Lisburn Road, Newmarket, were under the Housing Act 2004, with the other two charges related to the landlord’s failure to provide information about the properties when requested.

Ipswich Magistrates’ Court heard that both properties, which were inspected by housing officers a year ago, were subject to Prohibition Orders served in 2008 and 2010, banning them from being used as HMOs.

It was discovered that the properties featured several safety concerns, including a lack of sufficient fire detection and escape routes, a lack of gas or electrical safety certificates, and a loose electrical socket.

District Judge Timothy King, who ordered Price to pay charges, council costs and fines totalling £32,980, said: “There was a significant risk of harm to individuals.”

Cllr. Sara Mildmay-White, Forest Heath’s cabinet member for housing, insisted that this “should serve as a warning to any other rogue landlords across west Suffolk”.

She added: “Mr Price cut corners and didn’t provided safe accommodation to his tenants. In doing so he put their health and wellbeing at risk and jeopardised their safety.

“That is why I welcome the outcome of this case which sends a strong message to other rogue landlords.

“The safety of their tenants – our residents – is of paramount importance. They should not be exposed to inadequate fire safety, and the other health risks that this rogue landlord allowed.

“It is down to the hard work and perseverance of our housing enforcement team and the shared legal team, that we have achieved this result.

“I know that the vast majority of our landlords across west Suffolk are conscientious and work very hard to maintain housing standards for their tenants. That is why it is important that we take action against those few that don’t.”

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Heavy fines for illegal subletters

December 7, 2017

A property firm with assets in the Virgin Islands has paid a £8,000 civil penalty to Brent Council after two tenants illegally sublet one of its houses.

This is the first civil penalty to be issued by the Council following new powers voted in by the cabinet in September.

The unlicensed eight-bedroom semi-detached house in Willesden Green, north west London, was exposed after a neighbour complained to the Fire Brigade about overcrowding.

A team of enforcement officers raided the property and found two head tenants, Adam Trantu and Liliana Caragheorghe, and the landlord in breach of house in multiple occupation (HMO) management and licensing regulations.

The boyfriend and girlfriend head tenants, who were not living in the property, had been illegally placing tenants inside the property at a rate of more than £3,400 a month over a two-year period.

Adam Trantu and Liliana Caragheorghe, who were tried in their absence, were fined £12,000 at Willesden Magistrates Court, and were also each ordered to pay costs of £1,200 and a surcharge of £170 after being found guilty by the District Judge of profiting from chronic overcrowding.

Cllr Harbi Farah, cabinet member for housing and welfare reform, said: “Illegal subletters are a growing problem and we will see to it that their greed fails to prosper in Brent. A prosecution like this drives them out of the market because they no longer qualify to hold a property licence.

“Civil penalties are another way of bringing the message home to landlords who think that it won't cost them to turn a blind eye or ignore licensing laws.”

Landlords who rent out substandard accommodation in Brent can face civil penalty charges of up to £30,000.

If you are a Brent landlord who lets out shared accommodation, you can apply for a licence by clicking here

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Landlords face emergency repair price hike over Christmas period

December 7, 2017

Private landlords could be charged up to 50% more for an emergency repair call out over the Christmas period, compared to the rest of the year, a new report claims.

New research carried out by TheHouseShop.com, designed to get estimated costs for emergency callouts in the two weeks over Christmas and New Year, suggests that landlords requiring services such as window repair, tree surgery, boiler engineers, and plumbers, could see a price increase of between 20% and 50% for emergency repairs over the festive period.

“Not only would the 20% - 50% cost increase be a hindrance to landlords but they could also struggle to book an appointment because many businesses choose not to operate during Christmas and New year, as they prefer to spend time with their friends and families,” said Nick Marr, co-founder of TheHouseShop.com.

Stephen Jury, spokesperson for home services marketplace, Plentific.com, agrees that landlords are likely to pay a Christmas price increase, in the event of an emergency.

He said: “Over the holiday period, plumbers, electricians and other tradesmen will often charge more than their usual fees, especially for emergency callouts.

“With the cold snap here, December will be a busy month and there will be a higher demand for quick fixes. If you are unlucky enough to need a callout around Christmas, you’re likely to end up paying as much as 50% more.”

This is a major concern for landlords because not only could they be faced with higher costs for an emergency repair but it could become more expensive if the problem is more complex to fix, such as replacing a broken boiler.

Christopher Gaudiv, owner of LondonSashWindows.com, commented: “In my experience working as a window repair professional, even before running my own business, landlords will experience difficulty in getting an emergency repair booked in over the Christmas week.

“Many business owners like myself will struggle to find someone willing and able to work, especially over Christmas Eve and Christmas Day, so this is why our estimated costs could increase 50% from £320 + VAT to £480 + VAT, depending on the severity of the repair.”

 

TheHouseShop.com investigated further to find out how much landlords could expect to pay for minor maintenance work over Christmas. For services such as pest control, gardening, cleaning and waste removal, the price increase could be between 20% - 30%.

A spokeswoman for FantasticServices.com said: “Property maintenance issues don’t stop for Christmas so if a property manager or tenant needs something urgently fixed, their choice of service providers is practically non-existent.

“Here at Fantastic Services, we understand how difficult it is to get tradespeople to work over the Christmas period, and with that in mind, we are happy to provide all 25 of our services across all the bank holidays.

“For Christmas Day, Boxing Day and New Year’s Day, all services provided will carry an additional surcharge of around 20% to 30%, which, in our view, is nothing compared to knowing that we are there to help if something goes wrong and needs urgent attention.”

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Principality reduces mortgage rates to help ‘customers prosper’

December 7, 2017

Principality Building Society has reignited the mortgage rate war by reducing rates across some of its buy-to-let mortgage products.

The lender said it was shaving up to 0.1% from its current fixed buy-to-let products, which now range from 2.2% up to 60% loan-to-value (LTV) with no fee and 2% with a £895 fee.

The alterations made to the buy-to-let mortgage products form part of a wider selection of cuts across the lender’s residential, affordable housing and Help to Buy Wales ranges.

Shaun Middleton, head of regulated sales at Principality BS, commented: “We are reducing our rates to help our customers prosper in their homes and to provide our intermediaries with additional opportunities to engage with their clients to talk about their mortgage requirements.”

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Rents set to rise sharply

December 6, 2017

Rents are forecast to see strong growth between 2018 and 2022, according to the latest residential property forecast from Knight Frank.

The company predicts that national rents will rise by 1.2% this year, 2.5% in 2018, 2019 and 2020, then a 3% rise in 2021 and 2022 – a total rise of 14%.

In London, rents are expected to increase by 0.7% this year, by 3% in 2018, by 2.5% in 2019, followed by three years of growth at 3%, a cumulative 15%.

However, rental price growth in outer prime London rental market will see less robust growth.

The forecast in this sector is for rents to fall by 3.5% this year and by 1% next year before returning to growth with an increase of 1% in 2019, a rise of 2% in 2020, growth of 2.5% in 2021 and 3% in 2022, a total rise of 8%.

For those of you also keen to learn about prospects for actual home price growth, Knight Frank forecast that prices will rise by 1.5 this year, 1% in 2018, 2% in 2019, 3% in 2020, 3.5% in 2021, and 4% in 2022 – a cumulative 14.2%.

Knight Frank expects property price growth over the five-year period to be led by the Midlands, the East of England and the North West. 

Knight Frank’s outlook review report said: “Once the Brexit deal is completed, we forecast rising momentum across the market, with price growth reflecting this in many locations. The variations currently observed in the prime housing markets in London and beyond are set to continue.

“The UK may now be entering a period of interest rate rises but, even so, we expect rates to be low compared to long term norms by the end of the forecast period. While development levels are rising across the country, the shortage of new homes is unlikely to be fully reversed in the coming years and that will underpin pricing. On the other hand, factors such as deepening affordability pressures and property taxes, will continue to weigh on pricing.”

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‘I’m very sorry she’s my landlord’

December 6, 2017

Singer Lily Allen has sparked an angry online backlash after claiming on Twitter that she is set to be homeless for Christmas because her tenants refused to leave a flat that she owns in London.

After promising to rent out her £2m flat in Notting Hill to refugees last year, diplomats moved in, who, according to Allen are now refusing to leave.

Allen took to Twitter to complain about the fact that her diplomat tenants refused to vacate the property, having claimed “diplomatic immunity”.

On Monday morning she tweeted to her near 6 million followers: “Meant to be moving back into my flat this week, but my tenants just dropped that they can’t find anywhere to go up to their standards.

“Then they said they’re diplomats and have diplomatic immunity and there’s nothing I can do about it.

“So, who fancies a family of 3 for Xmas?”

The Tweet has now been deleted.

Lily Allen's tenant, Maria, told MailOnline that she is “very sorry” she has the singer as her landlord following the public spat, adding that she was “really astonished” by Allen’s claim that she and her three children were refusing to move out of her London flat.

She said: “I'm very sorry I had her as a landlord because all this has happened.

“We are still living here today but we are leaving.”

She added: “I’m really astonished. I don't know why she did this. We are diplomats. But I don't want to make trouble to our embassy. This is so stupid. I can't believe this.”

Asked if she had anything more to add, she said: “No because I would never sink so low.”

Allen's tweet resulted in a flurry of angry responses from her followers, with one branding her a ‘champagne socialist’ and others starting a ‘prayforLily’ hashtag.

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Portfolio BTL enquiries soar

December 6, 2017

There has been a significant increase in enquiries from portfolio landlords following the introduction of the new Prudential Regulation Authority (PRA) rules which have made the underwriting for landlords with four or more mortgaged properties much tougher.

According to bridging lender Octane Capital, enquiries from portfolio landlords during October and November were up 27% compared to the previous two months.

The vast majority of the enquiries being received by Octane are from smaller portfolio landlords, according to Jonathan Samuels, CEO of Octane Capital.

He said: “The PRA changes have placed a far greater emphasis on manual underwriting for portfolio landlords, which is something high street lenders simply don’t have in their DNA.

“The new stress-testing rules mean less box-ticking and more bespoke analysis of the way a portfolio is constructed, which not only requires a greater skill-set but is time-consuming, potentially squeezing margins.

“This is especially the case for non-standard borrowers, whose circumstances will often add even more complexity. As we see it, the PRA changes will trigger a paradigm shift within portfolio buy-to-let lending, moving the balance of power away from the high street to the growing ranks of specialist lenders who are more at ease with the type of underwriting now required. Just two months in since the new rules came into effect, and we are already seeing a clear uplift in enquiries from portfolio landlords.”

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The Cambridge reduce rates across its BTL range

December 6, 2017

The Cambridge has launched a new range of buy-to-let mortgages, as the lender battles to remain competitive.

Highlights include a two-year fixed rate buy-to-let mortgage at 2.29% up to 75% loan-to-value (LTV), a BTL five-year fixed rate at 2.99% up to 75% LTV.

All products come with £999 in fees.

The Cambridge’s mortgage services for buy-to-let mortgages are available on properties in Bedfordshire, Buckinghamshire, Cambridgeshire, Essex, Hertfordshire, Norfolk, Northamptonshire and Suffolk.

Dan Barker, product manager, commented: “These new products are the lowest rates we have ever offered on our buy-to-let and 5 Year Fixed ranges.

“These are available via our direct and intermediary channels and reinforce our commitment to supporting borrowers with fabulous deals going into 2018.”

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Landlords sell up as buy-to-let crackdown bites

December 5, 2017

The past few months have seen a number of buy-to-let investors sell up, and this is expected to place upward pressure on rents next year, bringing further misery to Britain’s growing army of renters, according to ARLA Propertymark (formerly the Association of Residential Letting Agents).

The supply of rental properties has fallen since January, owed largely to a rise in the number of buy-to-let landlords selling their properties, caused by a raft of ‘anti-landlord’ policies.

The introduction of the 3% stamp duty surcharge, the scrapping of the 10% ‘wear and tear’ tax allowance, and the fact that mortgage tax relief is currently being phased out, have prompted concern that there could be a net reduction of private rented properties next year, as more experienced landlords sell rather than buy.

“It was always going to be an interesting year, following the announcement of the letting agent fee ban in last November’s Autumn Statement,” said David Cox, chief executive, ARLA Propertymark.

Cox believes that buy-to-let landlords are becoming “more selective” about their property investments in light of last year’s stamp duty changes.

He added: “Mortgage interest relief is starting to bite which is why we saw an increased number of landlords selling up.

“It’s likely that as we move into 2018, tenants will continue to see rent increases as supply starts to reduce, demand continues apace, and legislative changes increase costs for landlords.”

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Landlords welcome changes to Universal Credit but ‘further reforms’ needed

December 5, 2017

Recent changes to Universal Credit have been broadly welcomed, which largely explains why more buy-to-let landlords are prepared to rent to tenants on Universal Credit, but more still needs to be done to ensure that landlords can recover arrears that can occur when tenants move across to the benefit, new research shows.

A fresh study by the Residential Landlords Association’s (RLA) research facility, PEARL, has found that 36% of private landlords have more confidence to rent to tenants on Universal Credit as a consequence of changes announced in the Budget.

But the survey also revealed that 73% of landlords still lack confidence that they would be able to recover potential arrears when tenants move across to Universal Credit.

The RLA is calling for action to ensure landlords can reclaim any rent arrears built by Universal Credit claimants who move out of their property, as currently there is no mechanism to do this.

The trade body says that private landlords should be treated the same as those in the social rented sector by ensuring they can access basic information such as whether and when a tenant is receiving Universal Credit, to help ensure that landlords are able to work with tenants to organise suitable rent payment schedules.

The RLA’s vice chair, Chris Town, said: “Ministers have clearly been listening to concerns and we welcome their reforms to Universal Credit which have given landlords more confidence in the system.

“That said, there are still problems around rent arrears and recent tax hikes mean that landlords are less able to cope with difficulties in collecting rents.

“Without further reforms we cannot say ‘job done’ on Universal Credit.”

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Buy-to-let mortgage rates are ‘shooting upwards’

December 5, 2017

The average two-year tracker buy-to-let mortgage rate has increased by 0.2% over the past month, following the Bank of England base rate hike, according to fresh data released by Moneyfacts.

The average two-year tracker for a landlord has risen from a record low of 2.23% in November to 2.43%, which is the highest monthly increase ever seen by Moneyfacts.

Fixed rates have also increased, albeit marginally, with a typical two-year deal now available at 2.93%, from 2.89% in November, the research has revealed.

Average Buy-to-let Rates Dec 2016 Jun 2017 Nov 2017 Today
Two Year Fixed 3.01% 2.94% 2.89% 2.93%
Two Year Tracker 2.40% 2.32% 2.23% 2.43%

 

Source: moneyfacts.co.uk

According to Nelson, the criteria changes for portfolio landlords, together with increasing SWAP rates in the run-up to the base rate announcement and then the base rate rise itself, “has proved a lethal cocktail for fixed rate BTL mortgages, with all this pressure leaving providers little choice but to review their range”.

The portfolio changes could already be starting to eat into the returns of landlords, and rising fixed and variable buy-to-let mortgage rates will only heighten the issue, “making many consider whether BTL is still the right option for them,” Nelson added. “With rates on the rise, it is important that BTL landlords weigh up their options carefully.”

However, given that savings rates remain low, Nelson does still believe that property “is still seen as a good option by many” and the lure of a higher return will continue to see many potential landlords “wanting to dip their toe into the buy-to-let waters”.

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Property manager jailed after stealing money from landlords

December 5, 2017

A crooked property manager who pocketed thousands of pounds in rental income which he failed to pass on to landlords has been jailed for 10 months. 

Scott Walker, 36, from Redcar, near Middlesbrough, stole money from landlords who responded to an advert he published on Facebook for S Walker Property Management.

Walker withheld rent from several clients, including one couple who were supposed to receive £550-a-month for their buy-to-let property in Redcar. In total, they lost out on £6,100 after he stole all the rent paid by the tenants, according to Gazette Live. 

The wife, who was at Teesside Crown Court to Walker sentenced, said in a statement: “This man has sat in my house telling me that the tenants were a month in arrears.

“It impacted on my marriage leading to tension and arguments with my husband.”

After the Crown court heard that Walker had also stolen rents from other properties, prosecutor Jenny Haigh said: “The Crown would say that this was an abuse of trust over a substantial period of time, aggravated by his previous record.”

 

Andrew McGloin, defending, said that Walker, 36, had some mental health issues and had become dependent on alcohol, following the death of his mother last year.

McGloin commented: “He tells me that he recognises the impact on his victim.

“He has attended bereavement counselling and he has been working with the probation service and he has been making progress.”

McGloin had offered to repay the money he stole at £100 a month from his benefits, but the judge said that the landlords would stand a better chance of recovering the stolen money if they applied to the County Court for an order of repayment in full.

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LSL launches new exclusive BTL deals with Leeds BS

December 5, 2017

LSL Group has launched two new five-year fixed rate buy-to-let products with Leeds Building Society

The products, with rates of 2.94% and 3.2%, will be available exclusively to members of The Mortgage Alliance (TMA) and appointed representatives of the First Complete and Pink networks.

The new buy-to-let products will be available for both purchase and remortgage applicants.

Upon completion, customers will receive £1,000 cashback, as well as benefit from a free standard valuation and fees assisted legal service.

Both products are available up to 70% loan to value (LTV) throughout England, Scotland and Wales, with the 2.94% product subject to a £999 arrangement fee, while the 3.2% product has no arrangement fee.

Rob McCoy, senior product and business manager at TMA, commented: “In the early part of 2018, we expect to see an increased amount of customer activity in the buy-to-let market. This is due to the volume of product maturities following the 2016 rush to avoid increased stamp duty, as well as landlords receiving HMRC letters following the first trading year under the new tax rules.”

During the week of the Bank of England base rate increase the market saw a 17% jump in buy-to-let applications, driven by remortgage activity, according to James O’Reilly, corporate account manager at Leeds Building Society.

“This was the highest level of application activity we’ve seen since November 2016, when underwriting standards were changed,” he said. 

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Landlord fined for putting ‘safety, well-being and lives’ of tenants at risk

December 4, 2017

A buy-to-let landlord has been ordered to pay almost £6,500 for renting out four houses in Nottingham without a license.

Dilip Gohil was penalised after failing to acquire HMO licenses for the properties, despite the fact that each house featured up to seven bedrooms.

Several health and safety issues were also uncovered at the properties, including one house which had no fire doors throughout the property, while the kitchen door did not have a handle and could not be closed.

At court, Gohil admitted seven breaches of the Housing Act, and received fines worth £4,750. He was also ordered to pay council costs of £1,519 and a government tax of £170, and was given three months to pay.

Under the terms of the conviction, Gohil may be denied licences for the four homes, ‘which would affect his income’, although the landlord was given credit for the guilty plea, as the punishment would ‘have been a lot more than that’, according to Joan Charlett, presiding magistrate.

Toby Neal, portfolio holder for community and customer services at the council, said: “We take licensing issues really seriously, since landlords who ignore them are putting the safety, well-being and lives of their tenants at risk. We will always prosecute where breaches are found as they were in this case.” 

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Database of rogue landlords and agents to be introduced in April

December 4, 2017

It has been confirmed that a database of rogue landlords and letting agents as well as new banning orders will be introduced on April 6, 2018.

The database, which was initially announced last year as part of the Housing and Planning Act 2016 to root out rogue landlords, is expected to come into effect once the regulations have been approved in the New Year.

The database will include information on landlords who have been served with a banning order or have been convicted of a banning order offence, preventing them from letting or managing a property.

The Department of Communities and Local Government (DCLG) has now released details of what offences could lead to a landlord receiving a banning order and being included on the new list.

The main issue are as follows:

+ Illegally evicting or harassing a residential occupier in contravention of the Protection from Eviction Act 1977

+ Using violence to secure entry under the Criminal Law Act 1977

+ Failure to comply with an Improvement Notice

+ Failure to comply with a prohibition order

+ Offences in relation to licensing of Houses in Multiple Occupation;

+ Offences in relation to licensing of houses under Part 3 of Housing Act 2004

+ Contravention of an overcrowding notice

+ Failure to comply with management regulations in respect of HMOs

+ Providing false or misleading information

It is not clear at this stage if the database of rogue landlords and agents will be made public.

For further details click here.

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Council is slammed for siding with landlord who ‘illegally’ evicted family

December 4, 2017

Maidstone Borough Council has been criticised by a government watchdog and ordered to pay in excess of £4,000 after a private landlord unlawfully evicted a family of homeless refugees.

The young family, including two children, had been living in temporary accommodation in Maidstone, arranged by the authority via a private landlord.

However, following a minor dispute, the family, which were granted asylum two years ago, were ordered to vacate the property because the landlord claimed that they had breached their tenancy agreement.

The landlord was unhappy that the family, who have not been named, caused damage to the property, which included marked walls, stains on the carpet and a broken lampshade.

During the eviction, last July, the landlord put the family’s belongings outside and denied them access to parts of the flat. 

The family were forced to move in to a B&B, where they remained for 11 weeks while alternative housing was found.

But the Local Government and Social Care Ombudsman said the family’s eviction was unlawful because they should have been given a written warning and were legally entitled to 28 days’ notice to vacate the property.

The Local Government and Social Care Ombudsman has now urged Maidstone Borough Council to apologise to the tenants and repay £2,170 for costs incurred, including a week’s B&B accommodation, and a further £2,000 for the distress and inconvenience caused.

Ombudsman Michael King said: “Maidstone council sided with the landlord and allowed him to unlawfully evict this family... without hearing the family's point of view.” 

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Shelter Scotland welcomes ‘reform of private renting’

December 4, 2017

The introduction of a new form of Scottish private residential tenancy has been welcomed by Shelter Scotland.

The new private residential tenancy (PRT), which was introduced last week, has replaced the previous assured tenancy regime for all future private sector tenancy lets.

Graeme Brown, director of Shelter Scotland, described the new tenancy, which the Scottish government insist is designed to improve security of tenure for tenants and provide appropriate safeguards for buy-to-let landlords, lenders and investors, as a “new dawn fir private renters”.

PRT, which was created by the Private Housing (Tenancies) (Scotland) Act, will limit rent increases to just one per year with three months’ notice, giving local authorities the ability to impose rent controls in areas where there are ‘excessive’ increases in rent, while also modernising and streamlining the grounds under which a landlord can repossess residential property.

The ‘no fault’ ground for repossession has also now been removed and replaced with 17 potential grounds for repossession, while any disputes between landlords and tenants will now be dealt with by the new housing and property tribunal chamber, rather than the sheriff court.

Brown commented: “We have campaigned passionately for ten years now for reform of private renting, ending with our Make Renting Right campaign, which had extensive support from the public and local and national politicians. We are delighted that all those voices were listened to and we support today’s changes in the law.

“Shelter Scotland is pleased to be working with the Scottish Government on a major awareness raising campaign to ensure everyone involved in private renting- from tenants and landlords to letting agents and housing professionals- understand their new rights and responsibilities.”

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Landlords adapting to controversial tax changes

December 1, 2017

But-to-let landlords are adapting to ongoing restrictions to tax relief on buy-to-let mortgage interest, with almost half of all landlords having already changed their investment plans based on recent tax changes. 

Landlords consider changes to tax relief as the biggest influence on their investment strategy, with 25% ranking it as their primary concern – above changes to capital gains tax and increased stamp duty, according to new research from Simple, the landlord insurance provider.

Taking into account all landlords’ concerns, including periods of unoccupancy - 12% - and tenant damage (10%), tax relief was the joint highest influence at 18%, alongside government legislation.

Despite this less than 10% of all landlords intend to reduce the size of their portfolios as a result of the revised tax regime. Some 4.4% of those owning at least two properties actually intend to invest, and almost two thirds - 63% - of this group said the changes had no effect on their plans.

The National Landlords Association estimates that the initial loss in tax relief this year alone would push over 440,000 lower-rate taxpayers, around 22% of the market, into a higher tax bracket. In total, it is estimated that 8.2 million people will be effected in England alone by the changes.

Many buy-to-let landlords will start to see firsthand the impact that the phased reduction of tax relief on mortgage payments, which came into play in April, is having on their income when they file their 2017 tax returns, as this will be the first to detail the impact of new rules forcing many of them to pay more tax.

Landlords can currently deduct 75% of mortgage interest payments against rental income, but this relief will fall to 50% in April 2018, then by a further 25% in 2019 before being eliminated the following year. It will be replaced by a tax credit of 20%, which some landlords may find is insufficient to offset the loss.

Alex Huntley, head of operations at Simple, said: “We know that landlords are adapting to the changes in the market, and are willing to embrace the challenges and find opportunities to develop more profitable and sustainable portfolios.

“Our research found that over one in three landlords [38%] owning at least two properties would consider forming a limited company, trust, limited liability partnership or a combination of these to lessen the impact of the tax reforms.

“There is no one solution or route, and landlords need to get expert advice tailored to their individual circumstances. But it’s heartening to see the majority of landlords remaining undeterred, and thinking about how to change with the market.”

It is a perspective backed by Tony Gimple, of Less Tax for Landlords, who added: "Rather than incorporating in what we often see as a knee-jerk reaction to Section 24 – take the time to fully understand the best legal structure for your portfolio given your personal situation.”

Simple has provided the following tips on how to deal with Section 24:

+ One possibility could be the creation a limited company, which is exempt from Section 24. However, landlords should take time to consider their options, and should bear in mind that transferring properties to a limited company is likely to incur stamp duty and capital gains tax - as well as remortgage fees and early repayment penalties from lenders. And then in addition to paying corporation tax on profits, landlords will be taxed when they withdraw money from the company.

+ Investing in a commercial property is another means of avoiding section 24, so diversifying the portfolio as always remains a good option.

+ Forming a company trust or changing to a limited liability partnership to include a spouse or partner who occupies a lower tax bracket are other ways to reduce your potential tax burden and in some cases, such as with a limited liability partnership hybrid structure, eliminate some taxes altogether while improving financing options.

+ Other avenues include offsetting the additional tax by remortgaging or shrinking your portfolio, or increasing rent while ensuring you avoid moving into a lower tax bracket. Options here can also include increasing pension contributions or charitable donations.

+ With stricter requirements in place from the PRA, it is more crucial now than ever to develop a coherent business plan that will allow you to maintain optimum cash flow and secure additional lending, should it be required.

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New tool to help landlords comply with licensing schemes

December 1, 2017

A new online platform designed to help landlords keep on top of new licensing schemes and consultations has been launched by the National Landlords Association (NLA) and app developer GetRentr.

NLA Licensing 365 allows landlords to monitor local licensing schemes in all UK postcodes for up to 16 properties with alerts sent to them directly if the licensing status in an area changes.

The platform will alert landlords when new licensing schemes are being consulted on or due to be introduced and, importantly, whether their properties will be affected.

Richard Lambert, CEO of the National Landlords Association, said: “The number of licensing schemes in England has increased from just over 10 in 2010 to 67 schemes now, with a further 10 currently in consultation, so NLA Licensing 365 has been created to make life easier for all landlords.

“This tool will help ensure you never miss important information about potential new licensing schemes, and that you can be prepared to make your properties meet any new licence requirements.

“It also allows you to view the licensing requirements for prospective properties, which is beneficial for those looking to expand their portfolios into new areas where they may not be familiar with the local regulations.”

Orla Shields, CEO and Co-Founder of GetRentr, added: “Our mission is to use data and technology to ensure good agents and landlords can easily comply with regulation, rogue landlords are exposed and no tenant has to live in unsafe, substandard accommodation again. Our partnership with the NLA ensures we reach private landlords who may not use agents.”

For more information about NLA Licensing 365, click here

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Things to check when choosing landlord home emergency cover

December 1, 2017

Working as a landlord involves dealing with the occasional less-than-calm phone call in the middle of the night about a broken boiler or toilet. It’s an unpleasant part of the job. But what if you didn’t have to be the person who sorted these emergencies out?

Landlord Home Emergency Cover could be the solution to your problems. This cover will provide emergency assistance to your tenants 24/7, 365 days of the year. Tenants will no longer need to call you about an emergency and can instead contact the company providing the cover directly. This limits the inconvenience for both you and the tenant.

If you think this sounds like the cover for you, it’s wise to shop around before buying. Here are a few things to consider before choosing your landlord home emergency cover policy.

+ Check the company background

Before you choose a Landlord Home Emergency policy, be sure to check the quality and strength of the insurance provider. After all, you need to be sure you can place your trust in the company you choose to protect your property. Things to check when doing your company research include company star rating, call our response time and reviews.

+ Read through the key facts and wording policy documents

Every good Landlord Home Emergency Cover should include documents stating the policy details and restrictions. Therefore, before you buy you should be sure to check the small print on the policy.

The restrictions could include anything from the fabric on your roof or the age of your boiler. It is important to be sure your property is suited to the Landlord Home Emergency Cover policy you choose. Some policies are far more lenient when it comes to the material of your property or age of your boiler, so be sure to choose the right cover!

+ Check the level of cover provided and any excess

A quality Landlord Home Emergency Cover will provide a high level of cover at an affordable price.  To ensure you’re getting the most out of your cover, make sure it provides at least £500 of cover per claim with as little restrictions as possible. Emergencies are unexpected and can happen at any time, so a policy with lower excess and higher number of callouts included is the best solution.

Each landlord home emergency cover will provide cover for claims up to the sum you decide on, which could be anything from £500 to £4,000 per repair. This cost covers the parts and the labour included in the repair. Therefore, the question to ask is how much do you really think damage within your property will cost?

A policy with a higher level of cover will naturally charge you a higher premium, so try looking for a policy with a more realistic claim amount. A policy claim amount of around £1000 is perhaps the best way to keep costs down whilst also providing adequate cover. 

 

 

+ Check boiler & heating restrictions

It is important to check the restrictions on boiler age and type before you purchase Landlord Home Emergency Cover. Some insurers may only provide boiler cover if the boiler within your property is below a certain age and is a certain type.

If you have an older boiler, this can become quite difficult when it comes to choosing a policy. Some polices may only provide cover for gas-powered boilers or just electric boilers, so be sure your cover is suitable for your appliance. This will avoid any nasty-shocks further down the line.

+ Check the home restrictions

Some Landlord Home Emergency Cover policies will only cover properties that are a certain type or build. The roof of the property is the most common area that may cause a problem when it comes to finding cover. If the roof of the property is thatched or flat, you may not be eligible for cover as this presents a higher risk of emergency situations.

It is worthwhile to also check that the material your property is made out of is covered within the policy too. Some less common building materials may not be covered in your chosen policy either.

+ Check the price is suitable

As is the way with most things, price is a determining factor when it comes to choosing Landlord Home Emergency Cover. You don’t want to overspend causing yourself money troubles, and you don’t want to underspend, as this may lead to low-quality cover. Be sure to remember that the lowest price isn’t always the best price.

Be sure to take note of the excess you’ll have to pay per claim, the number of claims per year and the level of coverage when looking at prices. A quality 5-star product is the best quality coverage you can buy. It may cost slightly extra, but for peace of mind and no disgruntled calls at 4 in the morning, it will be worth the money. 

Richard Harry is the managing director of Best Price Financial Services

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Four in five tenants deterred by a bad property advert or viewing

December 1, 2017

Some 80% of prospective tenants have been put off renting a property through a letting agent due to a misleading property advert or because of a bad experience when viewing the property, new research claims.

Upad, which conducted the study, questioned 33,000 tenants on what they wanted and expected when looking for a new rental, as well as the most bizarre or deceptive things that they had experienced in a property advert or during a viewing.

The online letting agent suggests that the findings from the research highlight what it describes as ‘a disconnect between what tenants want and what letting agents offer them’, implying that there remains a tendency to ‘oversell on the part of letting agents’, when, in reality, ‘tenants would prefer realism and honesty’.

Key findings from Upad’s research show that tenants are put off by unappealing property photos, while tenants are commonly finding adverts where the size of properties, and particularly bedrooms, were wildly overstated.

James Davis, CEO of  Upad, said: “These results show that not only are there still elements of overbearing and downright misleading salesmanship going on in the private rental market, but that tenants still aren’t buying it. It’s quite frightening that there are 20% of tenants who still move into a property having had an experience such as this, as they may feel they have no choice but to choose from the best of a bad bunch.

“Even just doing the basics and catering to what tenants are looking for, could make a huge difference. As landlords, tenants are our customers after all. Any other business that doesn’t work to meet its customers’ needs will fail, and being a landlord is no different.

“While there are large numbers of letting agents and landlords out there who do an exceptional job, I'd encourage anyone involved in renting out properties to consider their approach. By trying to oversell, all letting agents and landlords are doing is keeping properties empty for longer.” 

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Letting fees crackdown may deter many landlords from using agents

November 30, 2017

The government’s plan to ban letting agents in England from charging fees to tenants will deter up to 30% of buy-to-let landlords from using an agent to rent out their property, fresh research shows.

Tenants can currently be charged fees for a range of administration, including reference, credit and immigration checks, as well as the drawing up of tenancy agreements, with fees varying widely. But many landlords fear that if tenant fees are banned, these costs will simply be passed on to landlords, and that is likely to discourage use of letting agents, according to Paragon’s latest Private Rented Sector (PRS) Trends report, based on interviews with a panel of over 200 experienced landlords, 

Ultimately landlords do not profit from tenant fees, and with landlords already facing a tax and mortgage squeeze, they are likely to see any major hike in fees as a catalyst to move their business elsewhere, or to simply ditch letting agents and go it alone.

The study by Paragon found that 73% of landlords currently use an agent or third party to let some or all of their properties. Of those, 12% said they would ‘definitely’ be discouraged from doing so if landlord fees were to increase as a result of a ban on tenant fees, with 18% answering ‘probably’.

The majority of landlords who use an agent or third party said they would not be discouraged from doing so.

The report also revealed 27% of landlords do not use an agent or third party to let any of their properties. Of those, 84% do not charge any tenant fees, whilst just 16% do.

The most common fees charged by landlords when letting a property without the involvement of an agent or third party are: credit check (60% of landlords), inventory (55%), referencing (54%) and tenancy agreement (42%), with 33% of landlords charging for other, unspecified fees.  

John Heron, managing director - mortgages at Paragon, said: “In the midst of ongoing turbulence in the Private Rented Sector, landlords have already had to navigate through challenging policy changes, and rethink their strategies accordingly.

“An increase in landlord costs as a result of a ban on tenant fees would be the latest in a succession of challenges and it’s unsurprising to learn that a substantial number of landlords might consider altering their approach to letting out their properties in that circumstance.” 

 

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Major PRS changes in Scotland

November 30, 2017

A new form of Scottish private residential tenancy will be introduced tomorrow.

The new private residential tenancy (PRT) will replace the existing assured tenancy regime for all future private sector tenancy lets.

The new tenancy is designed to improve security of tenure for tenants and provide appropriate safeguards for buy-to-let landlords, lenders and investors, according to the Scottish government.

Brian Moran, letting director at Your Move Scotland, commented: “Changes to legislation means landlords will be required to register new leases in line with the Private Residential Tenancy by the 1st of December. This will not affect landlords with live Short Assured Tenancy Agreements as these leases will remain the same until either party gives notices or it runs to its natural end date.”

PRT was created by the Private Housing (Tenancies) (Scotland) Act, the main provisions of which will also come into force tomorrow. These include limiting rent increases to only one per year with three months’ notice, giving local authorities the ability to impose rent controls in areas where there are ‘excessive’ increases in rent and modernising and streamlining the grounds under which a landlord can repossess residential property.

The removal of the 'no fault' ground for repossession, which will be replaced with 17 potential grounds for repossession, is among the biggest changes the Private Housing (Tenancies) Scotland Act makes.

Any disputes between landlords and tenants will now be dealt with by the new housing and property tribunal chamber, rather than the sheriff court.

Brian Gilmour, director of Indigo Square Property, said: “This is really a tenant focussed piece of legislation.The main benefit to the landlord is that the proposals are to make evictions a smoother and swifter process.”

“The concept is to try and make the whole process simpler. There will be only one piece of paper when a tenant is to leave the property,” he added. 

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Welsh housing minister to address Future Renting Wales conference today

November 30, 2017

The Welsh minister for housing and regeneration, Rebecca Evans AM, will address the RLA’s Future Renting Wales conference in Cardiff today. 

The Future Renting Wales conference, which will aim to provide landlords with everything they need to know about the future of the sector, is being organised by the Residential Landlords Association (RLA) and hosted by BBC Wales Today presenter Lucy Owen.

 

It will help landlords understand increasingly complex new laws and regulations, including the Rent Smart Wales scheme; the introduction of new standard tenancy agreements and new safety and minimum property standards on the horizon.

 

Commenting ahead of her speech, Rebecca Evans, said: “This is an exciting time to be taking up the Housing and Regeneration portfolio and I was delighted to be asked to join the RLA for their Future Renting Wales conference. 

 

“On taking up the post I asked my team how we can work more closely with the private sector to help meet our housing needs, creating a new relationship with you and moving towards greater parity across sectors. 

 

“There is a positive future for renting in Wales and I want that to be a fair future for everyone concerned.

 

“I am keen to get the balance right between protecting tenants and ensuring that we protect good landlords and I want to work with the sector to make that a reality.”

 

Other speakers at the event include RLA policy director David Smith - legal adviser to the Assembly’s Renting Homes Bill committee, Anne Rowland of Rent Smart Wales, Leah Whitty – Welfare Reform Manager at Cardiff Council, RLA Director for Wales Douglas Haig and other high-profile names from the sector.

 

The conference is at Jury’s Inn, Cardiff and welcomes anyone with an interest in private rented housing, from landlords with just one property, to those with larger portfolios, letting agency owners, Assembly Members, local authority councillors, journalists, and housing charities.

 

Tickets are still available to buy here and will also be available on the door.

 

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The Melton reaffirms its ‘support for the buy-to-let market’

November 30, 2017

An interest coverage ratio of 130% against a stressed interest rate of 5.5% for pound-for-pound buy-to-let remortgages has been introduced by the Melton, as part of its ongoing commitment to the buy-to-let market.

The change applies to its business buy-to-let range for individuals, but it is worth pointing out that the society will only lend to landlords with a portfolio of a maximum three properties.

The society will lend up to £500,000 at up to 75% loan-to-value.

Nicola Alvarez, director of sales and marketing, the Melton, commented: “We have long experience of this type of finance and this enhancement reaffirms our support for the buy to let market.”

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Scottish rental market continues to outperform the rest of the UK

November 29, 2017

Rental price growth north of the border continued to outstrip the rest of the UK with an annual rise of 2.5% in October, according to the latest Your Move buy-to-let index.

The average property let for £572 per calendar month (pcm) on a seasonally adjusted basis, which is up 2.5% compared with October 2016 and in line with last month.

The latest growth rate in Scotland was higher – in percentage terms – than that achieved in England and Wales last month, with the average rent up 2.4% year-on-year, although rents remain much higher down south, at an average of £845pcm.

Four of the five Scottish regions saw rents increase in the year to October, led by growth in the Highlands & Islands where prices are 6.4% higher year-on-year, hitting an average of £613pcm, which is up from £610pcm a month earlier.

The Edinburgh & Lothians regions remain the most expensive in Scotland, with the average price standing at £669 per month.

Glasgow & Clyde was the only region to see a year-on-year price fall, with average rents in October hitting £543pcm, which is down 5.3% year-on-year.

According to Your Move, landlords in Scotland achieved a 4.8% yield on average on their properties, which although the same as September is lower than the 5% at the same point last year.

In comparison, the average yield achieved across England and Wales remained at 4.4% in October, the Your Move data found.

“As we approach the end of the year, the Scottish rental market continues to perform strongly when compared with other parts of the UK. With an average return of 4.8%, landlords have been rewarded with good returns throughout 2017,” said Brian Moran, lettings director at Your Move Scotland.

“Yet landlords need to be aware that some key legislation changes are on the horizon and they should be making,” he added. 

Moran is urging all landlords in Scotland to prepare for upcoming changes in legislation.

He explained: “Changes to legislation means landlords will be required to register new leases in line with the Private Residential Tenancy by the 1st of December. This will not affect landlords with live Short Assured Tenancy Agreements as these leases will remain the same until either party gives notices or it runs to its natural end date.

“The Letting Agent Code of Practice also launches in the new year, which means landlords should start preparing for these changes in good time.”

From 31 January 2018 the Letting Agent Code of Practice will come into force and agents will have to declare themselves compliant with this new legislation.

Letting agents will be required to join a Register of Letting Agents and Your Move Scotland is urging all landlords and property investors to enquire with their current agent to ensure they will be compliant with the new rules.

Letting agencies must have submitted an application to join the code of practice by 30 September 2018. From that point it will be a criminal offence to conduct letting agency work if you are not on the register.

Those breaking the rules, which is intended to increase professionalism in the sector and make sure that agents are properly able to handle money received from both tenants and landlords, could face a fine of up to £50,000 and up to six months imprisonment.

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Landlord who rented out an illegally converted property is jailed

November 29, 2017

A landlord who failed to provide his tenants with adequate living conditions has been sent to jail.

Majid Saniinejad, of Stoke Newington, and his company Hertford (UK) Limited, had been letting out a property in Maxted Road, SE15, despite breaching both planning laws and unfair trading regulations.

The ground floor property had been illegally converted into two self containing flats in Peckham, east London, which provided cramped living space for his tenants.

The result followed a joint investigation by Southwark Council’s trading standards and planning enforcement teams, and has now landed the 56-year old landlord a 155-day prison sentence.

The rogue landlord was initially found guilty of ‘misleading omissions’ when he entered into one tenancy and renewed another. These omissions are an offence under the Consumer Protection from Unfair Trading Regulations 2008.

The defendant was also prosecuted at Croydon Magistrates Court in April 2015, for breaching a planning notice and trading standard offences under the Town and Country Planning Act 1990 after ignoring the council’s warning to return the two flats back into one unit.

Saniinejad was initially fined a total of £2,500, with costs of £16,885.70, while a Confiscation Order under the Proceeds of Crime Act was later issued for the recovery of rents totalling £24,000. 

But after failing to pay the confiscation order that looked to recover his criminal gains, generated from renting out the two illegal flats, Saniinejad was finally ordered last week to be detained at Her Majesty’s pleasure.

A District Judge concluded the hearing by activating the default jail sentence, ruling that: “According to the assets listed you were well able to pay the entire amount and you have wilfully refused to pay. I am not satisfied that you have made sufficient efforts to pay. I find culpable neglect.”

Cllr Barrie Hargrove, cabinet member for communities & safety at Southwark Council, said: “It is deplorable that some landlords are forcing people to live in substandard, cramped conditions, purely so they can line their pockets.

“However, Southwark Council is working tirelessly to find unlicensed and rogue landlords and bring them to justice, as is clear with our successful prosecution of Mr Saniinejad and the resulting custodial sentence. I would urge you to contact us if you can help us to identify a rogue landlord.”

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Tenants union targets rogue landlords

November 29, 2017

We all know that buy-to-let landlords have a bad reputation, which is largely undeserved, but a growing anti-landlord movement would have people believe otherwise.

The BBC’s Victoria Derbyshire show yesterday spoke with housing activists actively encouraging tenants to take ‘direct action against bad landlords’ by encouraging them to somewhat worryingly ‘take the law into their own hands’.

The show featured disgruntled tenants who were living in appalling conditions in a one-bedroom flat in Bristol that is covered in black mould, has no lockable main front door, boiler problems and no electricity in the bedroom.

The tenants, Callum Hay and his partner Zena, have stopped paying their £510-a-month rent - including electricity and water - because, they say, they are not getting even the basics, which at one point included no electricity after it had been cut off because the landlord had not paid the bill.

“My partner then snapped at him, [saying] if he didn't get it put back on there's going to be hell to pay.

“He [the landlord] turned round and said ‘I hope you die in here’,” Callum told the Victoria Derbyshire programme.

The unnamed landlord denied the claim, adding that he has been trying to do work to fix the flat but contractors have said it is too dirty to work in there.

He also claims he offered to put Callum in a bed and breakfast for a week so he can carry out work, but Callum will not agree to this.

Callum sought the help of Acorn, the tenants union and anti-poverty organising group, which has about 15,000 members. 

After Bristol City Council gave the landlord 28 days to pay his electricity bill, an activist from Acorn went round to the landlord's house to demand he did it sooner.

“We said we would keep coming round until it was resolved. That was on a Friday, and on the Monday the electricity was turned back on,” said Nick Ballard, one of the union’s full-time employees.

Aside from help Callum restore electricity in his home, Acorn’s main concerns are increasing rents, poor conditions and evictions.

It organises protests, goes to landlords’ homes with demands and publicly shames them by telling the landlords’ friends and neighbours about the conditions in which their tenants live.

The Department for Communities and Local Government added to yesterday’s BBC report by trying reassure viewers that it is planning reforms to the private rented sector to ensure everyone has a safe place to live, thus giving the impression that the majority of landlords provide substandard living conditions, when in actual fact it is the minority.

A spokesman said: “This government is also cracking down on rogue landlords - either forcing them to improve and raise their standards or to leave the sector entirely.”

Let’s face it – nobody expects the BBC to be pro-landlord, but the mainstream media appears to be going too far in vilifying all buy-to-let landlords, including those who provide much needed, good quality and affordable properties to millions of people across the country. 

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The UK remains ‘one of the best places in the world to buy property’

November 29, 2017

International investors’ interest in the UK buy-to-let market is starting to increase once more, according to a new Liquid Expat Mortgages report, mainly because of the weak value of the pound.

The company, which works with clients in over 30 countries, claims that there has been a 20% year-on-year rise in the number of expats and foreign nationals in UAE who are buying property in the UK, with the vast majority targeting property outside London and the South East, where values are generally cheaper and rental yields significantly higher.

According to Liquid Expat Mortgages, the growth in investors from UAE is partly down to the availability of a wider selection of mortgages designed for working expats and foreign nationals, which offer interest rates as low as 2.74%. 

In addition, many international investors are also attracted by the UK’s robust legal system for property acquisition, which makes it one of the easiest places in the world to buy property.

“There is plenty of legislation in the UK to protect property buyers and the process is straight forward, compared with many other parts of the world,” said Stuart Marshall, managing director of Liquid Expat Mortgages.

“There has never been a better time to buy a property in the UK,” he added. “Think tanks are suggesting that the scrapping of stamp duty for first-time buyers will push up prices. It is uncertain if this will be a reality, but whatever happens, the UK remains one of the best places in the world to buy property.”

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Foundation Home Loans increases BTL portfolio limits to £3m

November 29, 2017

Foundation Home Loans has announced that it has increased the maximum total borrowing limits on its buy-to-let range from £2m to £3m, further supporting advisers and their portfolio landlord clients.

The specialist lender already has no limit on the number of properties a buy-to-let landlord may own, subject to this increased new maximum total limit of £3m.

Foundation’s aim is to provide portfolio landlords with an easy to use system to secure funds and does not ask for business plans or asset and liability statements.

“With our pragmatic approach, we strive to make things as easy as possible for advisers and their landlord clients by having no limit to the number of properties a portfolio landlord may have with us, subject to the new £3m limit,” said Jeff Knight, marketing director at Foundation Home Loans.

There is also no requirement for potential clients to submit onerous business plans or asset and liability statements,” he added. “By increasing our portfolio limit to £3m we hope to enhance our proposition even further.”

Earlier this month, Foundation Home Loans launched a new set of products across its entire buy-to-let range, in order to offer greater choice to both non portfolio and portfolio landlords.

The new products, which you can read about by clicking here, are available across its standard, specialist, HMO and first time landlord range. 

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Rental supply falls in October as letting agents predict price rises

November 28, 2017

The supply of rental properties fell by 3.7% during October when compared to the previous month, according to fresh data from the Association of Residential Letting Agents (ARLA Propertymark).

ARLA Propertymark’s latest Private Rental Sector Report reveals that the average letting agency branch managed 182 properties in October, down from 189 in September.

The number of properties managed by the average agent last month was the lowest figure recorded so far this year. In fact, the figure has not been so low since October 2016, when agents managed 180 on average.

Demand for rental homes also dropped last month to just 69 prospective tenants registered per branch, down from 79 a month earlier.

The number of tenants experiencing rent increases fell to the lowest level since December 2016. Just over a fifth - 22% - of agents witnessed landlords hiking rent costs, down from 27% in September, and a high of 35% in August.

But David Cox, ARLA Propertymark’s chief executive, warns that rents are likely to rise once the market picks up after the festive period, unless there is a sudden surge in the supply of rental homes coming on to the market.

He said: “While this time of year is one of the busiest for people buying and selling properties, it’s typically slower for the rental market. A large number of tenancies are agreed over the summer, meaning both supply and demand are usually lower in the Autumn. However, a lot are also agreed in the New Year and if stock remains low, competition for properties among prospective tenants will increase, which will in turn push rents up, so we must see an increase in supply over the next two months.

“With that in mind, it’s good news that the recent spate of rent increases we’ve seen seems to have slowed, but 22% is still high. The cost of living continues to rise and for many, the dream of homeownership is too far out of reach.

“Last week’s news that stamp duty will be cut for first-time-buyers will mean consumers feel more positive and will hopefully go some way towards helping more people get onto the housing ladder. But if rent costs continue to rise, it will forever be an unreachable aspiration for many.”

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Sharp rise in buy-to-let remortgaging activity

November 28, 2017

Remortgaging activity has increased significantly in recent months, helped in no small part by record low mortgage rates and continued house price rises across some parts of the country.

This combination is helping homeowners, including buy-to-let landlords, remortgage to a lower loan-to-value (LTV) and save huge amounts on repayments in the process, so it is no wonder remortgaging has reached record levels, surging to 39% of all mortgages, according to The Mortgage Hut.

The proportion of buy-to-let remortgages has risen by 8% over the last 12 months, thanks to a sharp increase in mortgages available for landlords, presenting them with an opportunity to switch mortgage firms to find more attractive rates. 

Remortgaging overall is up almost 10% year-on-year, supported in part by the fact that lenders have launched some new products widening criteria to more niche markets, helping to drive remortgaging.

Chris Schutrups, managing director of The Mortgage Hut, said: “Many homeowner and landlords who have been saddled with lenders on less than competitive interest rates, or stuck on higher standard variable rates, have been able to switch to new lenders.

“Rising property prices has also had an impact on remortgage growth, especially in London and the South East. Many homeowners have chosen to reinvest in their property, by putting on an extension or refurbishing the property, rather than moving, which can be much more expensive. For example, home owners moving to a £600,000 property need to find £24,000 for the stamp duty, plus removal costs and estate agents’ fees that could exceed £7,000. However, a single story extension can cost between £25,000 and £85,000, and a loft conversion from £35,000 to £60,000. 

“Homeowners are seeing some down valuations creep into the market as confidence from recent good times have been met by some caution by surveyors who have generally err on the side of caution.

“We expect to see the demand for remortgaging continuing to rise in 2018, especially if there are further rate rises. There is likely to be a shift towards more consumers considering five year fixed rates, as the risk of rate rises remain for the time being.”

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Paragon abolish fees for portfolio landlords

November 28, 2017

Paragon has scrapped valuation and application fees on all buy-to-let products for portfolio landlords.

The removal of the standard application fee of £150 and the valuation fee is for a limited period only, and follows the launch of four two-year fixed portfolio products.

The new products being offered by Paragon start at 2.99% at 75% loan to value (LTV) for single, self-contained units and 3.2% for houses in multiple occupation (HMO) or multi-unit blocks (MUB).

“It’s important to us that our buy-to-let products represent the very best value and choice to our landlord customers and intermediary partners,” said John Heron, managing director for mortgages at Paragon.

“This offer, whilst only available for a limited time, does just that and we hope it will be a welcome piece of good news for landlords in an otherwise challenging market of late,” he added. 

Paragon recently extended its portfolio and regular buy-to-let product ranges.

Four new products have been added to its buy-to-let portfolio range, starting at 2.99% at 75% LTV.

Each of the new portfolio products have no application or valuation fee. The extended range caters for limited companies, limited liability partnerships and single self-contained (SSC) units, as well as specialist property types of HMO and MUB.

Paragon has also launched two limited edition remortgage products, starting at 1.99% at 75% LTV. Both these edition products are remortgage only applications catering for SSC units, mortgaged in the individuals name.

Applications for the limited edition products must have an offer issued by 11 December 2017 and complete by the end of the calendar year 2017.

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Almost 3,800 landlords could face fines for illegally renting out properties

November 27, 2017

There is growing concern that thousands of buy-to-let landlords could face fines and possibly even prosecution for failing to sign up to a registration and licensing system in Wales.

It has now been two years since the Welsh government's Rent Smart Wales scheme became law, and yet an estimated 3,762 private landlords in Wales have still not signed up to the scheme, which could mean that they are letting out properties illegally.

Rent Smart Wales (RSW), the new registration and licensing system in Wales, which went live on 23 November 2015, has led to a major change for the private rental sector in the principality.

The scheme requires all landlords and letting agents to register their properties and undergo training to obtain a licence if they wish to self-manage their rental investment.

According to Rent Smart Wales, eight landlords have been successfully prosecuted and 162 fixed penalty notices of up to £250 have been issued.

The figures were released by Cardiff council, which is administering the scheme for the whole of Wales.

The Rent Smart Wales scheme is designed to drive up the quality of rented accommodation in Wales through training courses for landlords and by giving local councils a better understanding of where properties are situated. But while the Residential Landlords Association (RLA) in Wales said it supported the scheme’s ‘ideals’, it has raised concerns about its effectiveness.

Douglas Haig, RLA vice-chairman and director for Wales, told the press: “Valuable resources continue to be directed into yet another bureaucratic scheme that does little to actually improve the quality of housing in Wales.”

For further information about Rent Smart Wales – click here

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Rental price growth slows as market starts to feel a chill

November 27, 2017

The average rent in England and Wales hit £845 a month in October, up 2.4% year-on-year, which is down from 4.8% in October 2016, according to the latest Your Move buy-to-let index.

Rents in the East of England, which contain many rural areas, commuter towns and major cities, including Cambridge and Norwich, has outstripped all other regions, rising by 6% over the past 12 months. The average rent in the region now stands at £887 per calendar month (pcm).

Other areas posting strong price increases were the North West, where rents grew by 3.1% to reach £633pcm and the East Midlands, which saw 3.2% year-on-year growth to reach an average of £648pcm.

London was one of two areas to see prices fall year-on-year, as the focus of the rental market continues to shift away from the capital and the South East.

The other region to see a decline in rents was the North East, which remains the cheapest place to rent a property, with the average residential property being let for £535pcm, while the capital continues to be the most expensive at £1,276pcm in October.

In both London and the North East prices have dropped by 1% in the last 12 months.

The yields achieved by buy-to-let investors stabilised in October, with the typical yield in every surveyed region remaining flat between September and October, which meant the average yield across England and Wales remained at 4.4% in October, the Your Move data found.

But when compared with 12 months ago, properties in every region are generating a smaller return. In October 2016 the England and Wales average was 4.8%. 

Buy-to-let investors in the North East of England continue to enjoy the highest return at an average of 5.1%.

At the other end of the scale, London properties delivered the lowest yield, at just 3.2% in October.

Martyn Alderton, national lettings director at Your Move and Reeds Rains, said: “As we approach winter, the heat has been taken out of the rental market and price growth has slowed.

“While prices in most areas have continued to rise, it has been at a slower pace than we had been used to in recent years.

“Across England and Wales, rents have grown by 2.4% in the last year although some areas, such as the East of England, have performed above that level.”

 

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Unlicensed landlord ordered to pay almost £7K

November 27, 2017

Action from Hertsmere Borough Council has left a landlord with a bill of close to £7,000 for letting an unlicensed property in Potters Bar.

Appearing at St Albans Magistrates Court last week, the landlord, Andrew Harvey, was fined £5,542 and ordered to pay £1,319.29 in costs, plus a £125 victim surcharge, after being found guilty of operating a licensable House in Multiple Occupation (HMO) without a licence in Oakfield Close from March 2012 until June 2017.

The court was told that Harvey, 50, of Manchester Close in Stevenage, failed to respond to several emails and correspondence from the borough council over the five years.

When an inspection of the property took place in June, the council’s private sector housing officer discovered five veterinary students living in the property.

Cllr. Jean Heywood, portfolio holder for housing, said: “Everybody has a right to live in decent accommodation, and the council takes its responsibilities to enforce basic living standards very seriously.

“As a landlord, you are responsible for the welfare of your tenants and there are strict rules in place to ensure certain conditions and duties are met. This is for the protection of all.

“The vast majority of landlords are happy to work with us to ensure they are managing their properties and looking after their tenants according to the letter of law.

“However, we will not hesitate to take other landlords who deliberately fail in their duties to court, where they could receive unlimited fines.”

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3mc and Precise launch BTL exclusive

November 27, 2017

A new two-year fixed rate buy-to-let mortgage deal, which is funded by Precise Mortgages, has been launched by mortgage distributor 3mc.

The mortgage is available from 3.49% up to 75% loan-to-value (LTV) and is suitable for those making fresh acquisitions or remortgaging multi-tenanted units and HMOs, including limited company HMOs.

Alan Cleary, managing director of Precise Mortgages, said: “We’re delighted to be working with 3mc to offer this two-year fixed rate buy-to-let product to brokers and their clients.

“We’re experiencing significant demand for funding for HMOs and limited company HMOs and I have no doubt this exclusive deal will prove to be very popular.”

The product has an ICR from 125% based on customer circumstances, a £995 arrangement fee and ERCs of 4% in year one and 3% in year two.

The deal is available to all intermediaries and through 3mc’s network partners The Right Mortgage and Protection Network, Sesame, Stonebridge Network, Home Loan Partnership and to directly authorised members of the PMS Mortgage Club.

Doug Hall, director of 3mc, commented: “We continue to receive an increasing number of enquiries about HMOs, including limited company HMOs, and this exclusive product funded by Precise Mortgages gives brokers access to a very competitive deal. Brokers are guaranteed to receive a fast and professional service from 3mc.”

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Chancellor Philip Hammond is blasted for failing to act on ‘punitive tax changes’

November 24, 2017

Chancellor Philip Hammond has been slammed by Belvoir for failing to address taxes on buy-to-let landlords imposed by his predecessor George Osborne.

Despite pressure from the property industry, including landlords, housebuilders, as well as estate and letting agents, to reverse some deeply unpopular tax reforms introduced by the previous Chancellor George Osborne, Hammond chose to largely ignore the issues.

The only real good news is the fact that Hammond did not introduce any new property taxes for private landlords in his Budget statement. 

But Dorian Gonsalves, chief executive officer of Belvoir Lettings, said he was disappointed there was no action on what he described as “punitive tax changes” introduced by Osborne in the 2015 Budget. 

Gonsalves said: “Lack of a deposit and affordability are certainly not the only factors that are driving tenant demand and yet in many ways this Budget seemed almost to put an unhealthy emphasis on homeownership.

“Many young people simply do not want the commitment of a 25-30 year loan.

“Also many young tenants are students, or prefer the flexibility of renting to enable them to work in different locations.” 

Hammond revealed government plans to review whether landlords should be offered ‘incentives’ to offer tenants longer tenancy agreements.

But while some buy-to-let investors are supportive of longer-term tenancies, many are disappointed that the Chancellor failed to address calls for tax incentives for landlords

“We presume a new white paper will be published in the new few months, which will address these measures and demystify the Chancellor’s comments about long-term tenancies,” Gonsalves added.

 

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Buy-to-let demand continues to slow

November 24, 2017

A series of fiscal and regulatory changes aimed at private landlords and challenging lending conditions are taking their toll on the buy-to-let market.

There has been a notable slowdown in the number of landlords acquiring properties for investment purposes, according to Paragon.

The challenger bank, which specialises in lending to landlords, has reported just a marginal increase in profits, owed in part to weaker demand from buy-to-let investors.

It noted that there was “dampening demand in the sector” this year, as tax and regulatory changes made the property market tougher for smaller investors.

Paragon said that it has had little alternative but to focus on professional landlords to help support growth in its buy-to-let business.

Paragon said 71% of applications in its core buy-to-let business were from professionals as of the end of September, rather than amateur investors renting out a couple of properties.

A number of tax and regulatory changes over the past 18 months or so have deterred small-scale landlords, enabling larger institutions to increase market share.

“These changes disrupted the level of market activity during the year, dampening demand in the sector at an aggregate level. Against this backdrop the group’s performance has been strong,” Paragon said in a statement. 

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Landlords welcome Universal Credit changes

November 24, 2017

Buy-to-let landlords receiving rent from tenants in receipt of Universal Credit will continue to be paid housing benefit directly, rather than via their tenants, it has been confirmed.  

Work and Pensions Secretary David Gauke announced the government U-turn yesterday, answering concerns over increasing personal debt.

“Those people who already have an alternative payment arrangement, the presumption will be that will continue and the money will therefore go to the landlord rather than the tenant,” Gauke said in a statement to the Commons.

The policy change, which comes with an opt-out for claimants who may wish to receive rent directly, comes in addition to an alteration announced in this week’s Budget statement which will see housing benefit paid for an additional two weeks after an individual starts their Universal Credit claim.

The latest data reveals that almost a third of all housing benefit claimants have their rent paid directly to landlords, which is the equivalent to some 1.3 million people.

Residential Landlords Association’s (RLA) vice chair, Chris Town, has welcomed the announcement.

He said: “This is a welcome change and will mean that tenants who choose, can be secure that their rent has been paid and landlords have the confidence to rent out housing to those claiming benefits.

“It is good to know that ministers have clearly listened to the concerns of landlords and tenants.”

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Government fails to offer landlords tax relief for offering longer-term tenancies

November 23, 2017

Buy-to-let landlords avoided a further tax clampdown in the Budget yesterday, while the Chancellor Philip Hammond revealed government plans to review whether landlords should be offered ‘incentives’ to offer tenants longer tenancy agreements.

The government wants to offer greater support to those who rent, as the number of people who do not own their own home continues to grow.

Tim Walford-Fitzgerald, private client tax partner at the chartered accountants HW Fisher & Company, commented: “Buy-to-let landlords could be forgiven for pinching themselves. For once they’ve not been the whipping boys of a Budget.”

But while some buy-to-let investors are supportive of longer-term tenancies, many are disappointed that the Chancellor failed to address calls for tax incentives for landlords. 

Perks could have included clawing back tax relief that is currently being phased out of mortgage interest tax relief for buy-to-let.

David Smith, of the Residential Landlords Association, commented: “The Budget could have acted on proposals to provide tax relief for landlords prepared to do offer longer tenancies and taking action against mortgage lenders who block them being granted.

“Instead we have yet another consultation adding to the 15 already ongoing which relate to the private rented sector. Tenants cannot live in consultations.”

Jeremy Leaf, a north London estate agent, welcomed the government’s decision not to increase the rate of tax on buy-to-let investors.

“This would have had a detrimental effect on the supply of affordable property to rent as investors have been in retreat for some time,” he said. 

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Council tax discount for landlords may be scrapped

November 23, 2017

Buy-to-let landlords could soon be hit with an empty homes tax after the Chancellor Philip Hammond yesterday gave local councils the ability to increase the council tax premium on empty homes from 50% to 100%.

The move is the latest in a long line of anti-landlord measures introduced in recent Budgets by the existing government, including the 3% stamp duty surcharge, the scrapping of the 10% ‘wear and tear’ tax relief, and the phasing out of mortgage tax relief.

Hammond said: "It can’t be right to leave property empty when so many are desperate for a place to live."

Danielle Cullen, managing director of rental listings business ClickTenant, described the empty homes tax as yet another “crippling” announcement by the Chancellor for private landlords.

She said: “Landlords have been completely paralysed by Conservative announcements recently, with the UK moving down 10 places in the list of best European countries to invest in buy-to-let property in recent months.” 

Cullen pointed out that Hammond offered no greater clarity over the proposed ban on tenant letting fees.

“We’re also still no more informed on the tenant lettings fee ban, which is also set to increase rental costs for landlords, as many agents have outlined they will have to pass over the costs,” she added. 

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Tax relief is abolished for landlords who own properties within a company

November 23, 2017

 

Buy-to-let landlords who own homes within a company will face a higher tax bill when they eventually sell their properties.

Yesterday’s Budget included the scrapping of corporation tax relief on capital gains linked to ­inflation, although the effects are unlikely to be felt for a number of years.

Companies do not currently pay corporation tax on profits from capital gains driven by inflation. The relief meant businesses were only taxed on real gains.

The business capital gains regime will be brought into line with the rules for individuals, in a move designed to discourage the use of companies as investment vehicles, particularly by large buy-to-let landlords.

Tim Walford-Fitzgerald, private client tax partner at HW Fisher & Company, said: “The CGT avoidance technique of using a company that holds UK property instead of selling the property itself looks set to be shut down.”

Another key change in the Budget also targets buy-to-let landlords who have set up as business enterprises, by freezing the indexation tax relief.

The indexation relief applied to landlords who have owned a property for many years, and allowed gains to be reduced based on the length of ownership.  But this will be frozen from January 2018.

Genevieve Moore, of accountants Blick Rothenberg, said: “The proposed freezing of indexation allowance for companies is not unexpected and will have most impact on companies that own properties which they have owned for many years.

“Although this is a proposal for freezing indexation allowance, businesses should be prepared for an eventual abolition of the relief in the future and plan accordingly.”

The clampdown could be the beginning of an attack on assets held in companies, according to Ray Abercromby, of accountants Smith & Williamson.

He said: “Recent buy-to-let reforms have resulted in a more commercial housing industry with many of the smaller holders leaving the market and larger holders incorporating.”

 

 

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Autumn Budget: Key points at-a-glance

November 23, 2017

The Chancellor Philip Hammond has delivered his Autumn Budget. Here are the key points of his speech impacting private landlords and the private rented sector (PRS).

+ Individual landlords operating property businesses, on a voluntary basis, will be permitted to use mileage rates to reduce the administrative burden for these businesses.

+ Around £20m of funding for schemes designed to support people at risk of homelessness will be introduced to enable them to access and sustain tenancies in the PRS.

+ The government will attempt to encourage landlords to offer longer tenancies, with Hammond announcing that he will be launching a consultation on the issue.

+ In an attempt to bring empty homes back into use, local authorities are being given the power to increase the council tax premium from 50% to 100%.

+ From February 2018 the government will remove the seven-day waiting period so that entitlement to Universal Credit starts on the first day of application.

+ The corporate indexation allowance will be frozen from 1 January 2018

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Philip Hammond urged to scrap stamp duty

November 22, 2017

The Chancellor Philip Hammond should scrap stamp duty because it would encourage more buy-to-let landlords to invest in the private rented sector, which in turn would boost the supply of much needed housing to rent, a leading trade body has recommended.

The introduction in April 2016 of the 3% stamp duty surcharge on buy-to-let and second homes has deterred many people from investing in the PRS.

The initial findings of a survey of over 3,000 landlords carried out by the Residential Landlord Associations’ (RLA) Private Renting Evidence, Analysis and Research Lab (PEARL) finds that 68% of private landlords were being put off purchasing any additional homes to rent as a result of the 3% stamp duty levy.

The measure was introduced by the now former Chancellor George Osborne to create what he at the time described as a “level playing field” between landlords and those buying homes to live in.

However, the extra stamp duty has left many landlords with little alternative but to pass costs onto tenants by pushing up rents, at a time when demand for private rented housing is only likely to increase, according to the RLA.

The RLA is calling on the Chancellor to use the Budget statement today to scrap the stamp duty levy.

RLA policy director, David Smith, said: “The previous Chancellor introduced the stamp duty levy to support first time buyers, yet the figures show this simply is not happening.

“Many of those looking for a place to live are facing a perfect storm – good landlords not prepared to invest in new homes to rent, whilst those same people are unable to access home ownership sectors.

“It is clear that the stamp duty levy is hurting but not working for anyone. It is time to scrap it.”

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Fewer people living in rented accommodation

November 22, 2017

There has been a notable decline in the number of people living in rented accommodation, new research suggests.

An independent study carried out by Usurv, on behalf of Cover4LetProperty, found that 31% of the adult population were living in private or social rented property last month, down 7% since April 2017.

The study also revealed that 28% of private renters said their last rental rise was over a year ago, while just 8% said their last rent increase was within the last six months.

Many of the anti-landlord policies introduced over the last two years are now starting to impact private landlords, leaving many with little alternative but to increase rents. This partly explains why 29% of renters reported that at their last rent rise, the amount increased by up to 5%, while 11% saw a hike of between 6% and 10%.

The research also revealed that slightly more women (34%) live in rented accommodation compared to men (28%), 8% of Brits live with friends and family, 6% of respondents had recently moved back home citing “financial reasons”, while 22% of Britons living at home do not pay rent.

Richard Burgess, director at Cover4LetProperty, said: “While we hear about ever -increasing costs of living, property pricing and rent rises, it is interesting that our survey shows that it is not strictly the case with nearly a third of people surveyed saying they had not had a rent increase for over a year. And of those that did, again these were small rental increases. This tells us that landlords are working with tenants and not simply using them as a way to pass on increases in taxation like some commentators suggest”

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Is the new Electronic Communications Code a hazard for landlords?

November 22, 2017

Many property owners agree to electronic communications operators, such as mobile phone companies, installing aerials and other equipment, for example on the roofs of their buildings. This can provide a useful source of income, although there has always been a downside to such arrangements. Forthcoming changes will reduce landlords’ revenue from these agreements and also leave them with less control over their properties.

What is the current position?

The Electronic Communications Code, contained in the Telecommunications Act 1984 (and amended in 2003) (“the old Code”), sets out rules governing the installation and removal of electronic communications apparatus by specified electronic communications operators. The old Code grants certain protections to telecommunications operators which can make it difficult for landlords to require operators to remove their apparatus from the landlord’s property, even where the contractual term has come to an end. Many argue that the old Code has not kept up with developments in technology and it has been criticised as being ill-thought through and incoherent.

What’s happening?

The old Code is going to be replaced by a new Code (of the same name) contained in the Digital Economy Act 2017. The new Code seeks to reflect the ever-increasing importance of electronic communications in our everyday lives by giving greater freedom to operators and is therefore more beneficial to operators, granting them even further protection than they enjoy under the old Code. Therefore landlords need to be aware of the impact this will have on them - in particular, they can expect to receive significantly less income from operators under the new Code, while retaining less control over their properties.

How are rights under the Code created?

A landowner or occupier may enter into an agreement allowing an operatorto install electronic communications apparatus on its land, or operators may obtain a court order compelling entry into a Code agreement. Importantly, it is not possible to exclude the rights conferred by the Code from an agreement. Furthermore, rights conferred by the Code in general will bind future owners and occupiers of the land.

What are the key changes landlords need to be aware of?

Reduced payments to landlords / “No scheme” valuations

Where assessing the value of land for a Code agreement, its use for electronic communications purposes will be ignored. The site value will be assessed based on its value to the landowner. This is aimed at putting electronic communications operators on a similar footing to other utilities. In addition, any impact on value of the rights granted by the Code will not be taken into account. This is likely to significantly reduce the levels of compensation landowners receive under new Code agreements, compared with old Code agreements.

Less control for landlords - sharing and assignment rights

The new Code gives operators an automatic right to share sites with other operators, provided certain conditions are met. This means that once a landlord has entered into a Code agreement with one operator, it generally cannot prevent that operator sharing its space with others. Furthermore, operators will have the right to assign their agreement to other electronic communications operators, subject to certain conditions. This means landlords will have less control over who occupies their land than under the old Code.

Less control for landlords - upgrade rights

Operators will have an automatic right to upgrade their apparatus on a site provided certain conditions are complied with. An operator could install further apparatus on a site during the term of a new Code agreement, without needing to seek consent from the landowner.

Recovering possession

It was not clear how protection for operators under the old Code tied in with security of tenure under the Landlord and Tenant Act 1954 (LTA 1954). The new Code clarifies that where the primary aim of an agreement is to grant Code rights, LTA 1954 security of tenure rights do not apply. Less welcome will be that under the new Code, landowners will have to give notice much further in advance if they want to regain possession. 

They must also comply with a specified termination process and then a further removal process. Landlords looking to redevelop land that is subject to Code rights should take early legal advice to maximise their chances of obtaining possession when they need it.

When will the changes come into force?

The government has indicated that the new Code is likely to take effect in December 2017.

What happens to old Code agreements?

Existing agreements under the old Code will remain in force. These will be “Code agreements” for the purposes of the new Code but will not include the new rights to share the site, assign the agreement to other operators or to upgrade apparatus. On that basis, it may be beneficial for landlords currently negotiating Code agreements to try to conclude these before the new Code comes into force. On the other hand, electronic communications operators may seek to delay entry into agreements where possible until the new Code comes into force, so they can benefit from increased rights and reduced payments under the new Code.

Jonathan Cope is an associate and Louise Kellaway is a professional support lawyer in the real estate department of Stevens & Bolton LLP.

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Newcastle Intermediaries reduces BTL rates

November 22, 2017

Newcastle Intermediaries has cut rates across its buy-to-let ranges.

The new buy-to-let remortgage deals are available at 2.85% for two years or 3.35% for five years, both up to a maximum 75% loan-to-value (LTV).

Both products come with no reservation or completion fees, free standard valuation and legal fees.

Newcastle has also reduced rates on mortgages exclusively for self-employed borrowers who have been trading for up to two years.  

Two-year fixed rate products are available from 1.9% and free valuations on properties up to and including £500,000 are available through all its key account distributors.

“We have reassessed rates across our range to offer even better flexibility and support, especially to our self employed borrowers,” said Steve Carruthers, head of Mortgage Distribution at Newcastle Intermediaries.

“Additionally, our free valuation feature and low fee alternatives are ideal for those in the remortgage market,” he added. 

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Buy-to-let landlords must take tenant affordability into account

November 21, 2017

While demand for rental property remains strong, landlords always have to be mindful of tenants’ ability to pay higher prices, according to the Scottish Housing Regulator.

Returns achieved by landlords in Scotland remain highly competitive when compared to other asset classes, the latest figures show.

The average monthly rent in Scotland hit £574 in September, the latest data from Your Move Scotland reveals. However, with rental price inflation running ahead of general inflation as measured by the consumer price index, buy-to-let landlords are being urged to recognise that tenants have, or are, reaching an affordability ceiling. 

Speaking at the Glasgow and West of Scotland Forum of Housing Associations’ (GWSF) annual conference last week, George Walker, the Scottish Housing Regulator’s chair, reflected on the impact of the recent inflation figures.

He said: “You’ll know that inflation rose recently to 3%, the highest rate for more than five years. Most tenants in employment have seen earnings rise at rates either below inflation or indeed, not at all. Tenants on benefits have had to manage freezes on the uplift in benefit rates and the introduction of caps.”

Walker pointed to feedback from the Regulator’s National Panel of Tenants and Service Users, noting that two thirds of the Panel have concerns about future rent affordability.

He offered the following advice to landlords: “We look for you to consider tenants’ ability to keep paying rent in the longer term when setting rents. You should demonstrate transparency on costs and a vigorous pursuit of value for money to us and to tenants.

“We expect you to give tenants genuine options and choices during rent consultations and have a dialogue about costs versus service levels. Be clear on how you will take tenants’ views into account. And vitally, be clear on what is affordable for your tenants now and in the future.”

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Tax breaks for landlords needed to keep them in the market

November 21, 2017

A raft of ‘anti-landlord’ policies introduced by the government have prompting concern that buy-to-let landlords with low profit margins could end up making a loss as a result of various tax changes, which will push some out of the market altogether.

The introduction of the 3% stamp duty surcharge, the scrapping of the 10% ‘wear and tear’ tax relief, and the fact that mortgage tax relief is currently being phased out, means that landlords simply need a break a tax break, according to Paul Shamplina, founder, Landlord Action.

He explained: “Many of the anti-landlord policies introduced over the last two years are now starting to impact private landlords, leaving many to consider selling up or increasing rents, both of which will be detrimental to tenants. The market needs to increase not decrease the supply of housing and the only way to do that is to offer incentives to landlords.

“Tax breaks for landlords who offer longer-term tenancies would be welcomed.  However, landlords will also need greater assurances that if their tenant breaks the terms of their agreement, landlords can evict them more efficiently than the present system allows.”

But Sarah Bush, director, Cheffins is concerned that the Chancellor Philip Hammond may be planning to introduce further caps on second homeownership.

“After having been in the spotlight for many months now, the letting industry could also come under fire,” she said.

Communities Secretary Sajid Javid suggested at the Conservative Party Conference in September that the Chancellor might launch incentives for landlords to offer 12 month tenancies, along with a new housing court, making letting contracts fairer for both parties.

“Whilst these would be helpful in principle, landlords are being weighed down by new taxation and costs and the government needs to consider breaks and incentives to keep private landlords in the marketplace,” Bush added.

But instead of offer landlords a tax break, speculation is growing that the Chancellor will actually take measures to stop buy-to-let investors purchasing property via companies.

One way round the mortgage interest relief loss has been to set up as a company. Mortgage interest can be offset against tax where the borrower is a corporate structure, and the number of landlords incorporating has rocketed.

Although the rules would be difficult to draw up and apply, it is possible that Hammond could extend the loss of tax relief on mortgage interest to incorporated buy-to-let investors. This would naturally have wider consequences for tenants and the housing market.

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The effects of the Manchester city centre housing boom

November 21, 2017

A continuous increase in the number of cranes, hoardings and skyscraper frames around Manchester’s inner ring road is visual proof of the current Manchester City Centre housing boom. As London has seen a housing market flat line, Manchester has seen nothing short of a market boom, following economic growth and millions of pounds of investment over recent years. Whilst many will see this as a huge plus point for the city and success for the city’s leaders, others have demonstrated their lack of positivity.

Residents of the Manchester area are struggling to comprehend increases to rent and overseas investor returns, as well as the ‘investor-only’ properties that prevent first time buyers from buying homes. Manchester’s Labour leaders are unsure on what is best for the region, and housing has become a hot topic in Westminster following the frustration shown by younger voters.

Who is benefiting from the housing boom?

At present, there are 10,000 apartments currently being or set to be built within the city centre, catering for young professionals coming to work in the city. Because of this, property prices have risen by 15% in the last year, with rents increasing 6.5% over the same period of time.

Property investors are seeing a real boost to the finances of their property portfolio, especially those that have owned properties for several years, even before the recent boom. Not only are they able to charge higher rental fees each month, but the value of their property has significantly increased.

The young professionals flocking to the city are also amongst those that are benefiting from the recent housing boom, despite being the ones paying the increased prices. With Manchester being a great city for business and seeing economic growth, young professionals are seeing the opportunity to live and work in Manchester as a much cheaper alternative to London. They get to experience the same business lifestyle with good quality jobs, all at a much cheaper living price and a less intimidating environment when compared to London.

Why do some not appreciate the housing boom?

Although the rental market is surging and is in a better position than ever before, the reasons for the boom are having a significant impact on the ability to buy a house as a first-time buyer. Despite having a healthy deposit to contribute towards buying their house, many first-time buyers are facing real troubles when trying to buy their home, even where money isn’t the issue in hand. 

A lot of current properties for sale are set as an ‘investor only’ property or are being marketed directly to buy-to-let investors, and therefore those looking to buy their first home are being completely cancelled out.

Another issue is that with anybody already renting a property, they are likely to see increases to their monthly rental fees as a result of the housing market boom.

Landlords and investors are aware that the current market allows for them to charge higher amounts for their property, and so they do this wherever possible. As well as this, any landlords operating with short-term contracts have the ability to make regular increases to the rent, simply increasing the price when current contracts expire.

Mark Burns is the managing director of property investment firm, Hopwood House.

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InventoryBase supporting mandatory landlord inventories

November 21, 2017

InventoryBase has announced that it is supporting the Association of Independent Inventory Clerks (AIIC) in their bid for mandatory inventories for all private residential tenancies.

An independent inventory ensures that there is no room for ambiguity during the check-in and check-out procedures, which in turn dramatically reduces the number of deposit disputes, according to InventoryBase, which provides cloud-based property inspection software.

A new petition, which has been created by the AIIC, aims to encourage the government to consider the benefits of mandatory inventory reporting as part of its plans to increase regulation of the Private Rented Sector.

Alongside the ongoing high-profile consultation on the leasehold and management sector, there is currently a review into improving the quality of the sector being carried out by an all-party Communities & Local Government Select Committee of MPs.

“It’s clear the government is keen to increase regulation and professionalism in the letting sector and we see no reason why mandatory inventory reporting should not be a part of this movement,” said Danny Zane, joint chair of the AIIC.

Compulsory tenancy deposit protection was introduced in 2007, but there has never been any additional legislation concerning the documentary evidence required to enable adjudicators to adequately arbitrate on disputes.

Steve Rad, managing director of InventoryBase, commented: “We think it’s great that The AIIC have decided to take a step forward in making such a needed change within the industry. We deal with many different providers of lettings and see the importance every day of having reports of a good standard for the benefit of both tenant and landlord.”

You can review and sign the petition by clicking here

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Mixed month for the UK lettings market

November 20, 2017

October produced mixed results for the UK rental market as data for new listings ‘to let’ rose, while figures for properties ‘let’ dropped for a third consecutive month, according to the latest HomeLet Rental Index.

The figures show that the average monthly cost of a new tenancy increased by 7.2% year-on-year, while figures for properties ‘let’ fell for a third consecutive month at -4.9%. 

But looking back over the Property Activity Index’s historical records year-on-year comparisons showed the overall decline in properties ‘let’ to be marginally less than 12 months previous.

Looking at performance across the UK, 11 of the 12 regions recorded by the Property Activity Index reported increases in properties ‘to let’ and only two recorded increases in properties ‘let’.

The market was particularly buoyant in central England, recording increases in both new listings at 13.7% and properties ‘let’ at 5%.

The largest increase in this month’s Index was reported in the North East. figures for new listings ‘to let’ sat at 17.8% but in contrast the region also recorded largest decline in properties ‘let’ sitting at -14.90%.

The only region in this month’s Index to record a fall in both new listings and properties ‘let’ was the South West. Figures for new listings fell from 8.4% in September to -0.7% and figures for properties ‘Let’ fell for a third consecutive month at -2.3%.

Stephen Watson, managing director of Agency Express, said: “As we look back at historical data recorded by the Property Activity Index we can see that a decline in ‘let’ properties is characteristic for October.

“However, we have seen an early slowdown in ‘let’ board movements and if trend dictates it will continue until the New Year. So, while year on year figures are still relatively on par the end of year figures may look somewhat different.”  

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Are you assured of compliance?

November 20, 2017

There is a lot for landlords to consider when letting a property and what is required often relates to the date a tenancy was granted and the area the property is in. However, assuming most tenancies have been granted post October 2015 and on the basis that this article should not be taken as, nor relied upon as specific advice but as a guide for landlords only, I set out below a list of some of the matters that should be considered before or upon letting out a property, some legal, some practical. 

Who are you letting to? 

• Is the tenant, or all the tenants over the age of 18 and do they have a right to remain in UK indefinitely? As a landlord you must check that a tenant (whether named in the agreement or not) has a right to rent in England. If the tenant is only allowed to stay in the UK for a limited time, you need to do the check in the 28 days before the start of the tenancy. To this end, you need to check the ID of the tenants and their right to remain in England. 

• Have you undertaken any credit checks? Are references from previous landlords available? If the tenant has failed a credit check, or statements show that they may struggle to pay the rent then you have to consider the commercial reality that may face you in months to come. If a tenant is not in full time employment, perhaps you could consider a Guarantor, so as to protect your position. 

• How long do you want to rent the tenancy for, and is there a break clause?

Is the property safe?  

You must make sure any gas equipment is safely installed and maintained by a Gas Safe registered engineer and ensure that a registered engineer do an annual gas safety check on each appliance and flue – a certificate must be issued and provided to the tenant before they move in, or within 28 days of the check.

In relation to fire safety, you should provide a smoke alarm on each storey and a carbon monoxide alarm in any room with a solid fuel burning appliance and make sure the furniture and furnishings they supply are fire safe. Make sure that there are means of escape in the event of a fire. 

If the property is large, or a House of Multiple Occupation, then fire alarms and extinguishers should be installed at the property.  

If the property is not safe, or even is in disrepair then the Local Authority could become involved and serve notices in respect of works. Failure to comply with such a notice could be deemed a criminal offence and prevent any possession proceedings. 

Do you need a Licence?

• Is your property in an area where the Local Authority requires the Landlord to have a licence in order to privately rent the property? The same is true if the property is let as a House of Multiple Occupation. Check the website of the Local Authority in which the property is. 

Deposit 

• Are you taking a deposit? If so, it must be protected ina government approved deposit scheme within 30 days or receipt AND you must provide the ‘prescribed information’ in respect of the deposit to the tenants. 

Eleanor Grindley is a solicitor in the property dispute resolution department at SA Law

https://salaw.com/

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Coventry for Intermediaries unveils new Flexx for Term BTLs

November 20, 2017

Coventry for Intermediaries has launched new Flexx for Term buy-to-let mortgages at 50%-75% loan-to-value (LTV).

The new range includes a 1.82% rate with a £1,999 fee and a 2.2% rate with a £999 fee, both at 50% LTV.

Kevin Purvey, director of intermediaries at Coventry for Intermediaries, said: “We’re delighted to launch new buy-to-let Flexx for Term mortgages. These products offer competitive rates, the ability to make unlimited overpayments and further borrowing at the same rate [subject to lending criteria].

“We’re also reducing rates for buy-to-let two and five-year fixed products from 70% to 75% LTV and on selected residential products, so there are options for a wide range of clients. Plus, all of our products include a standard valuation of up to £670 for residential and £700 for buy-to-let.”

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A £5 raffle ticket could win you a £315k house in West Midlands

November 20, 2017

Thousands of people are being offered the chance to win a three-bedroom house in the West Midlands

The bungalow in Halesowen, which is worth around £315,000, is being raffled off by company RaffleMyHouse.

Company director Raj Roma confirmed that the draw, which will be pre-recorded and aired on Sky channel 198, will take place once RaffleMyHouse achieve 325,000 entries.

He told the Birmingham Maill: “The way things are going, there will be a house given away.

“We want a winner no matter what their background, but it would be particularly great if it went to someone that might not otherwise have the opportunity to own one.”

To be in with a chance of winning, click here.

Last month, a buy-to-let landlord failed in his attempt to raffle off a three-bedroom house in the Leicestershire town of Wigston which is worth in the region of £145,000.

The landlord, Amit Sehgal, would only hold the draw if he sold 60,000 raffle tickets at £5 each, which would have raised £300,000 – more than the value of the property. 

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The UK’s top buy-to-let property hotspots unveiled

November 17, 2017

Buy-to-let landlords can still expect to achieve double-digit yields when investing up north, fresh research shows.

A new survey by TotallyMoney provides both an interesting insight into the market and a useful tool for buy-to-let landlords, revealing that the north of England, and in particular Liverpool, currently offers the highest rental yields.

The research, which analysed more than 500,000 properties that were marketed for sale online in October 2017 across over 2,700 postcodes, once again reveals a clear geographical divide between the north and the south of the country with northern regions coming out on top and the South East in particular showing particularly poorly. This is illustrated by the fact that not one region in the South East features in the top 25 UK postcodes in terms of yields for investors.

Top 25 BTL Hotspots Postcode Postcode Town Properties for Rent Median Rental Value Properties for Sale Median Asking Price Avg.Yield
1 L7 Liverpool 177 £1,224 79 £116,259 12.63%
2 L6 Liverpool 217 £959 133 £108,898 10.57%
3 L15 Liverpool 227 £1,214 241 £141,566 10.29%
4 PL4 Plymouth 334 1,315 271 £155,437 10.15%
5 TS1 Cleveland 146 £541 81 £64,507 10.06%
6 PR1 Preston 431 £1,027 586 £122,695 10.04%
7 DY5 Dudley 53 £1,145 96 £143,527 9.57%
8 NG1 Nottingham 79 £1,258 125 £169,521 8.91%
9 BD1 Bradford 226 £478 82 £64,903 8.84%
10 L1 Kirkcaldy 105 £892 368 £124,254 8.61%
11 L3 Liverpool 167 £1,035 716 £146,712 8.47%
12 NE6 North East 425 £826 229 £117,863 8.41%
13 HD1 Huddersfield 127 £724 151 £104,394 8.32%
14 M6 Manchester 130 £1,035 94 £150,550 8.25%
15 LS6 Leeds 1128 £1,482 43 £217,154 8.19%
16 S2 Sheffield 238 £702 122 £104,376 8.07%
17 NE1 North East 308 £1,152 115 £172,225 8.02%
18 L5 Liverpool 45 £574 145 £86,245 7.99%
19 M14 Manchester 279 £1,335 78 £200,852 7.98%
20 SR1 Sunderland 107 £539 32 £82,125 7.87%
21 L8 Liverpool 169 £841 168 £135,323 7.45%
22 CF37 Cardiff 128 £844 209 £136,267 7.43%
23 G3 Glasgow 37 £1,178 30 £192,032 7.36%
24 AB11 Aberdeen 198 £762 31 £125,125 7.30%
25 NE2 North East 555 £1,250 118 £205,479 7.30%

 

25 BTL Coldspots Postcode Town Properties for Rent Median Rental Value Properties for Sale Median Asking Price Avg.Yield
1036 NW7 London 171 £1,948 309 £1,010,503 2.31%
1037 SW8 London 576 £2,685 1185 £1,403,592 2.29%
1038 N20 London 90 £2,442 185 £1,284,812 2.28%
1039 BN3 Brighton 167 £1,665 313 £876,105 2.28%
1040 N10 London 200 £1,747 222 £923,278 2.27%
1041 NW5 London 184 £2,088 179 £1,111,065 2.25%
1042 HD9 Huddersfield 35 £679 222 £364,310 2.23%
1043 SO41 Southampton 47 £1,286 350 £695,635 2.21%
1044 HP23 Hemel Hempstead 35 £1,092 138 £593,300 2.20%
1045 EN6 Enfield 75 £1,304 320 £710,537 2.20%
1046 SL8 Slough 35 £1,425 52 £778,236 2.19%
1047 KT20 Kingston upon Thames 32 £1,702 189 £967,397 2.11%
1048 HA6 Harrow 129 £1,736 190 £987,810 2.10%
1049 GL53 Gloucester 40 £877 55 £516,842 2.03%
1050 LS18 Leeds 42 £512 45 £302,086 2.03%
1051 BR7 Bromley 31 £1,414 132 £854,160 1.98%
1052 B15 Birmingham 83 £963 75 £587,683 1.96%
1053 NW11 London 498 £2,456 282 £1,523,534 1.93%
1054 EX8 Exeter 38 £717 139 £448,774 1.91%
1055 SL1 Slough 381 £1,071 499 £674,362 1.90%
1056 BH14 Bournemouth 81 £1,293 229 £831,035 1.86%
1057 N6 London 172 £2,899 197 £1,971,822 1.76%
1058 B70 Birmingham 52 £633 82 £450,639 1.68%
1059 N2 London 230 £3,702 186 £2,994,317 1.48%
1060 BH13 Bournemouth 72 £1,714 202 £1,456,539 1.41%

Joe Gardiner, head of brand and communications at TotallyMoney, said: “Realising a decent return on a buy-to-let rental property is becoming increasingly difficult. Property prices continue to rise steadily, albeit more slowly, and rule changes have made lenders more cautious.

“Prospective landlords need to go into property investment armed with the facts: they need to be on top of their credit report, compare the market for the best buy-to-let mortgage rates and focus on property investment in areas that can give them the highest yield.

“The buy-to-let hotspots postcode map pinpoints postcodes and gives landlords a solid steer towards the opportunities that university city student lets offer.”

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Rent Smart Wales needs full compliance to raise standards in the PRS

November 17, 2017

First introduced in November 2015, The Welsh government’s Rent Smart Wales (RSW) scheme was designed to drive up standards in the private rented sector and root out rogue landlords and agents.

 

Under the scheme all private rented properties in Wales and their landlords have to be named on a central public register.

 

The legislation allowed a year for people to comply without repercussion, but since November last year it has been a legal obligation for all landlords and property managers with properties in Wales to register.

 

Offending landlords are at risk of receiving a fixed penalty fine, renting stopping orders and having their license removed.

 

According to October 2017 figures, while 107,533 user accounts have been created, only 85,265 landlords are registered and only 16,716 are actually licensed. Although full compliance across the sector within two years was an unrealistic expectation, the non-compliance figure is still much higher than hoped after a year of enforcement.

 

As a lettings agency, we have supported the scheme from the beginning, as we believe once full compliance is achieved it will create more transparency in the sector and encourage good practice. It is good to see Wales leading the way in this regard and we would like to see the other UK administrations follow suit to make the private rented sector a more secure and regulated space.

 

Anyone can be a landlord and for many it is not their main profession, therefore a high proportion are unlikely to avidly follow industry news or have much engagement with their local council. As most marketing for the scheme was done through landlord and agency events and direct mail, unless you are an actively engaged landlord it is possible you haven’t heard of RSW.

 

It is also possible that the scale of the rental sector in Wales was not fully appreciated before the scheme was introduced; there are no exact figures for the number of landlords in Wales, for example, with estimates ranging from between 100,000 to 130,000.

 

There are also a large number of landlords living elsewhere in the UK with properties in Wales who must register their properties but are possibly unaware of the legislation.

The easiest and cheapest way to register is online; all landlords have to do is create an account on the RSW website then link to their licenced managing agent. Self-managing landlords also need to undergo the training to obtain a licence. Ideally, all landlords with a property in Wales would be registered with RSW by this time next year. However as the exact number of landlords is still unknown this could be an unrealistic target.

 

Rent Smart Wales has said that although the majority of landlords and agents in Wales are now “fully compliant” with legislation, there are some who continue to operate illegally.

It has warned that it will take action to make landlords comply, including issuing fixed penalty notices of up to £250 and taking forward prosecutions where necessary.

 

Its simple message to all those affected is to come forward and comply now. As an agency that’s a message we can get behind, and as a responsible sector it is one we should strongly endorse.

 

To start your application click here.

 

Emily Samuel is letting agency manager for Newport-based Serenliving.

 

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Rogue landlords urged to ‘take notice’ after hefty fine is issued in Bucks

November 17, 2017

A landlord has been handed a £10,000 fine after failing to properly maintain his rental property, leaving tenants living in substandard conditions.

The landlord Piara Singh Sehajpal, of Honeysuckle Road Buckinghamshire, was issued an improvement notice after several ‘serious problems’ were unearthed in the three-bedroom rental property, including a ceiling that was not fixed after a leak.

After ignoring the improvement notice, the landlord was charged with failing to comply with the improvement notice and last week was found guilty at Lavender Hill Magistrates court.

The landlord was fined £10,000 plus ordered to pay costs to the council of £1,500 and a victim surcharge of £170. 

Cllr Mark Boyle, cabinet member for housing, public health and community safety, said: “The council is committed to ensuring families in our borough have access to safe, warm, and dry housing and protecting them from sub-standard landlords.

“This landlord was instructed to fix the issues at the property by a council environmental health officer to ensure the families in these properties, which included young children, were living in a safe and healthy home.

“Rogue landlords should take notice that the council will not hesitate to exercise all options available to it in seeking solutions to sub-standard housing, this case makes that clear.”

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‘Earn money in your sleep’ by investing in property, says ex-footballer

November 16, 2017

Football legend turned property magnate Robbie Fowler, estimated to be worth more than £30m, is behind free advice on how to become a successful buy-to-let landlord.

Fowler, who owns a large property portfolio, is encouraging the public to take a £1,000-a-head ‘property academy’ course to become, like him, a multi-millionaire landlord.

His property empire once led Manchester City fans to sing “We all live in a Robbie Fowler house” to the tune of The Beatles’ Yellow Submarine during his time playing for the club.

The Robbie Fowler Property Academy, which is run by Legacy Education Alliance, is offering free two-hour workshops on property investing in the south of England this month.

Events will be held in London, Hounslow, Slough, Colchester, Bishops Stortford, Brentwood and Stansted Airport.

On the Property Academy website, Fowler said: “Investing in property can give you the chance to earn money in your sleep. If you train with trusted experts, your 'sleeping' or passive income can be as big or small as you want - whether you want a bit of extra cash or a completely new career.

“Whatever your professional or personal circumstances, to be successful in any aspect of your life requires confidence and the right mental attitude. LEA training not only provides you with trusted expertise built over 10 years in the UK market but also the correct mindset for success. ”

For a full list of the workshops taking place this month, click here.

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More than 450 landlords attend show in London

November 16, 2017

Over 450 buy-to-let landlords and property investors attended the Olympia Conference Centre in London last week where they were able to obtain free expert advice to help guide them with their investments.

The National Landlord Investment Show attracted a diverse range of existing and prospective buy-to-let investors, with visitors able to attend seminars and stands covering all the biggest industry issues from the phasing out of mortgage interest relief to Brexit and its impact on the private rented sector.

The show featured a series of expert property panel discussions, including guest speaker Iain Duncan Smith (IDS), former Secretary of State for Work and Pensions 2010-2016. 

A number of topics were discussed, including universal credit, the Autumn Budget, market trends and interest rates.

IDS said that he had been lobbying the chancellor Phillip Hammond in advance of the publication of his first Autumn Statement on 22 November, and urged landlords to write to him with their thoughts and fears.

IDS also spoke further about Universal Credit, tax changes and which conditions can work in the favour of the landlord now and in the future.

The event also saw over 100 Property related services exhibit, in addition 37 seminars on a broad range of subjects in PRS were delivered throughout the day including a packed auditorium with David Smith, economist editor of The Sunday Times, who delivered an outlook for landlords including, interest rates, Brexit and the Budget.

To access the 2018 dates, click here.

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Smoke and carbon monoxide alarms – have your say

November 16, 2017

The government’s decision to review the effectiveness of the Smoke and Carbon Monoxide Alarm (England) Regulations 2015 will have an impact on all private landlords, and that is why you should not refrain from offering your views on the matter.

Although the consultation, which you can see here, does not suggest any likely alterations in the existing regulations, it could yet form part of the post-Grenfell Tower building regulations review.

Under the terms of The Smoke and Carbon Monoxide Alarm (England) Regulations 2015, which came into force on 1 October 2015, Private sector landlords are required to have at least one smoke alarm installed on every storey of their properties and a carbon monoxide alarm in any room containing a solid fuel burning appliance (eg a coal fire, wood burning stove).

After that, the landlord must make sure the alarms are in working order at the start of each new tenancy.

You have until 9 January 2018 to respond with your views. 

You can view the regulations in full, or respond, by clicking here.

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Accord reduces buy-to-let remortgage rates

November 16, 2017

Accord Buy to Let has cut selected remortgage rates for buy-to-let landlords by up to 0.17%.

The intermediary-only lender, which is part of Yorkshire Building Society, is offering a 2.64% two-year fix rate deal at 75% loan-to-value (LTV) with a £450 product fee, £500 cashback on completion and free standard valuation.

Landlords looking to fix their rate for longer can take out a 3.09% five-year fix at 65% loan-to-value. This mortgage comes with a £450 product fee, free standard valuation and free legal fees.

Chris Maggs, commercial manager at Accord Buy To Let, commented: “We recently adjusted our house purchase range giving landlords looking to expand their portfolio a boost, and we’re pleased to be able to offer landlords a further helping hand with the upfront costs of remortgaging.

“We know there are differing views amongst landlords about choosing a conveyancer, so we have provided a choice of additional extras to suit different individual’s needs.”

 

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Landlords should look north for higher rental yields

November 15, 2017

Private rental prices paid by tenants in Great Britain rose by 1.5% in the 12 months to October, but this was slightly down from 1.6% in September, according to the latest ONS figures.

In England, private rental prices grew by 1.5%, Wales also saw growth of 1.5% while Scotland saw rental prices increase by 0.4% in the 12 months to October 2017.

London private rental prices grew by 0.8% in the 12 months to October 2017, that is, 0.7 percentage points below the Great Britain 12-month growth rate.

 

The ONS figures also reveal that house Prices are up by 5.4% in the year to September, led by gains in the North West of England, where values are up 7.3%.

The average UK house price was £226,000 in September 2017, which is £11,000 higher than the corresponding month last year.

Graham Davidson, managing director of Sequre Property Investment, commented: “With house prices still rising steadily, we can see the market remains in a promising position as we near the end of 2017. An annual increase of 5.4% is generally the level of growth we have predicted we would see at this point in the year.

“Whilst the overall growth is of importance, areas such as the North West which we have been championing for several years now are far surpassing other parts of the UK with a huge 7.3% growth to September this year. London continues to take a dip with growth of just 2.5% which we also predicted at the beginning of the year.

“For buy-to-let investors, the message could not be clearer. If you want high yields and capital growth, the north is best to invest.”

According to the ONS, property prices in Northern Ireland rose by 6% in the year to September, followed by a 5.7% increase in England, a 5.3% rise in Wales, and a 3.1% hike in Scotland.

High house prices are leaving many would-be buyers with little alternative but to rent long-term. The latest mortgage data from UK Finance, which shows that 31,100 loans were advanced to first-time buyers in September, down 10% on the previous month and 1% on the same month a year earlier.

John Goodall, CEO and co-founder of Landbay, commented: “House prices showed no signs of slowing down in September as they continued on in their upward climb. Up until this point, a combination of low mortgage rates and high rates of employment have helped balance out the squeeze on household incomes from stagnant wages and rising inflation. However, last week’s rate rise signalled the start of raised borrowing costs for the first time in a decade which is likely to curtail buyer activity in the coming months.

“As the Budget draws closer, we hope to see some ironclad commitments from the government on its plan for tackling the growing demand for housing. There may be no quick fix, but now more than ever the private rented sector will be relied upon by those unwilling or unable to buy a house outright.

“Without a radical housebuilding plan for both first-time buyer homes and purpose-built rental properties, prices will continue to rise over the coming decades.”

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Will longer tenancies restrict rent rises?

November 15, 2017

The forthcoming Autumn Budget is set to unveil the government’s plans to encourage landlords to offer longer tenancies of at least 12 months to those renting who want them, according to Andrew Turner, chief executive at Commercial Trust Limited.

He argues that on the face of it, this seems a very reasonable action, giving landlords the peace of mind of a longer-term contract from which they can derive rent, and in theory, eliminating the risk of the property remaining empty during the course of the coming 12-months.

Similarly, a 12-month tenancy agreement will better suit many tenants, offering a degree of certainty for the year ahead, without the turmoil of having to move home again.

However, Turner argues that landlords should plan for the limitations that a 12-month contract might impose upon them.

He commented: “Contracts which run for longer periods open up a greater probability of the unforeseen occurring, in this instance I refer to the landlords’ financial situation, specifically those who have a buy to let mortgage.

“As we have seen in the past few weeks, the 0.25% increase in the Bank of England base rate had an impact on those landlords who have variable or tracker rate products that follow the base rate, who will have experienced an increase in their monthly repayment amount.

“Of course there are no guarantees over future rate changes, but further increases could see a number of landlords needing to review the amount of rent that tenants pay, in order to cover their monthly mortgage repayments.

“This could prove to be a stumbling block, if landlords are locked into a tenancy agreement specifying a certain amount of rent will be payable for the next 12 months or longer.

“Landlords may face legal difficulties in increasing rent within this period, unless they have made suitable contractual provision for doing so.

“Over time, if the landlord is facing higher monthly payments but has their hands tied in terms of putting up rent for several months, this could have an impact upon the landlord being able to meet lender affordability criteria, should they wish to remortgage.” 

Communities Secretary Sajid Javid announced at the Conservative Party in September, that the government was all for longer tenancies and may provide incentives to landlords that offer them, stating: “All landlords should be offering tenancies of at least 12 months for those who want them…. That’s why, at the autumn Budget, we will bring forward new incentives for landlords who are doing the right thing.”

Doing the “right thing” however, might mean taking a much more careful approach to contract law and referencing would-be tenants, according to Tessa Shepperson from www.landlordlaw.co.uk.

Turner believes that there are two points that landlords should consider when contemplating 12-month tenancies.

He explained: “Firstly, to make sure that any fixed term contract contains a valid rent review clause.  Note that a clause allowing the landlord to increase the rent as he likes will normally be void under the unfair terms regulations.  Increases will need to be referable to something independent such as the RPI (Retail Price Index).

“Secondly, to make sure that the referencing is very carefully undertaken, as it is very hard to evict a tenant within the term of a 12-month tenancy.  Bearing in mind that the 'no fault' section 21 procedure can only be used to evict tenants after the fixed term has ended and evictions based on the various grounds for possession under the Housing Act Schedule 2 can be problematic.

“Be aware also that letting agents will normally take their commission for the whole fixed term up front which may prove expensive for landlords with a long fixed term if the tenants turn out to be unsatisfactory.  As always careful referencing and checking is key.”

Turner added: “Tessa is absolutely right. Whilst longevity between positive tenant/landlord relationships is beneficial for all, the risk to landlords is financial exposure if the maths stop adding up. This must be planned for, whilst remaining fair to all parties.”

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Many renters will ‘end up worse off’ unless the law is changed

November 15, 2017

The government’s proposal to cap tenancy deposits to six weeks’ rent will save many tenants money, given that a number of private landlords currently ask tenants for two months' rent as a deposit, and yet renting reform campaigner Ajay Jagota argues that renters will be worse off unless the government revises its plans.

Earlier this month, the government confirmed that it will extend a proposed cap on security deposits to six weeks’ rent instead of four after first announcing that they would introduce a cap along with a ban on charging tenants fees in the Autumn Statement last year.

Using average rent figures from Homelet, Jagota estimates that a tenancy deposits cap at six weeks rent would cost renters an average of £1,391.

Ajay Jagota, founder of deposit-free renting firm Dlighted, the insurance backed deposit-free renting solution, said: “This law is supposed to address the affordability of renting, but at this rate many renters are actually going to end up worse off.”

Jagota, who would ultimately like to see tenant deposits scrapped altogether, added: “Deposit free renting means landlords and agents renting without risk – the risk of empty properties, the risk of rocketing rent arrears and the risk of unaffordable repair costs or legal fees. It also makes it easier to actually find tenants.

“The government recently announced that 98.5% of cash deposits are returned without a deposit dispute, figures which are worse than the percentage of our tenancies ending in an insurance claim, so there’s little to no evidence that taking a cash deposit improves the behaviour of tenants or the outcome at the end of tenancies either.”

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Buy-to-let mortgage costs remain stable

November 15, 2017

The second phase of the Prudential Regulation Authority changes, coupled with the recent interest rate hike, appear to have had minimal impact on the cost of buy-to-let mortgages, according to fresh data from Mortgage Brain.

Despite going through another period of change and uncertainty, a number of mainstream buy-to-let mortgages are down in cost since August.

A similar trend can be seen in the cost of longer term products with Mortgage Brain’s latest data revealing a 2% decline in the cost of a 70% loan-to-value (LTV) three and five-year fixed buy-to-let mortgage, while the cost of a 60% LTV three and five-year fixed, and an 80% LTV three-year fixed, all remain unchanged when compared to August 2017.

Mark Lofthouse, CEO of Mortgage Brain, said: “With interest rates rising for the first time in just over 10 years, and further increases predicted, this could be one of the last times that our analysis reports reductions in the cost of mainstream buy-to-let mortgages.

“While our three, six and 12 month analysis all show potential cost savings for buy-to-let investors, we’re already starting to see ripples across the market following this month’s rate rise.

 

“Our most recent monthly data, for example, shows signs of a number of cost increases when compared to last month and it will be interesting to see how this develops in the coming months.”

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Thousands of landlords are unsure of their responsibilities, research shows

November 14, 2017

As a landlord do you know your rights and responsibilities? Well, it would appear that many people, including tenants, do not know where they stand when it comes to the rules and regulations governing the private rented sector.

Fresh research among more than 2,000 UK adults by LetBritain claims that many landlords and tenants across the country are unaware of the laws governing the rental market.

The study, which was commissioned by online letting agent LetBritain, has found that 16% of landlords do not realise that a tenant must be given at least two months’ notice under section 21 of the Housing Act 1988 if they wish to evict them.

Similarly, 12% of landlords do not know they must provide 24 hours’ notice before entering the property; 14% of landlords do not realise it is their responsibility to arrange and pay for any repairs to the exterior of a property; 12% of landlords do not know they should put tenants’ deposits in a tenancy deposit protection scheme; and 27% have no idea that tenants have the right to challenge the rent being charged if it is not comparable to similar properties in the area.

Tenants have their own issues when it comes to a lack of knowledge of the rules.

Some 34% of people living in rented accommodation do not know that they have the right for their deposits to be placed in a tenancy deposit protection scheme, while 37% do not realise that a tenant must be given at least two months’ notice if a landlord wishes to evict them.

Other regulatory issues that are widely unknown by renters included the fact that a landlord must provide an Energy Performance Certificate for the property (34% do not know this); a landlord should provide 24 hours’ notice before entering the property (28%); and tenants have the right to challenge rental prices if they are not comparable to similar properties in the area (50%).

Some 43% of private renters also do not know that tenants can challenge any excessive charges made by a landlord via an ombudsman.

Fareed Nabir, CEO of LetBritain, said: “It is clear that a huge proportion of UK renters – a population growing in size – do not truly understand the legislation and regulation in place to protect them. Likewise, a concerning number of landlords are also in the dark about exactly what rights and responsibilities they have.

“Such a lack of awareness increases the risk of renters and landlords being exploited – it must be addressed and letting agents certainly have a duty to better inform all their customers about the vital legislative framework governing the rental sector.”

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Politicians risk neglecting those who ‘face a lifetime of renting’, claims lobby group

November 14, 2017

High house prices, inadequate savings and longer life expectancies mean a number of people will never be able to get a foot on the housing ladder and secure their financial future, leaving them with little alternative but to carry on renting in retirement.

With ‘generation rent’ seemingly expanding, many people under the age of 40 could still be living in privately rented accommodation in 20 years, according to a new report by Generation Rent.

The campaign group estimates that there are 370,000 pensioner households currently living in the private rented sector, but forecast that this figure will almost treble to 995,000 by 2035-36 if housebuilding remains at existing levels.

Dan Wilson Craw, director of Generation Rent, said: “With most debates on housing focused on young adults, politicians risk neglecting the vast numbers of people who are already too old to get a mortgage and face a lifetime of renting.

“As they start retiring in greater numbers, the state will have to pick up the tab unless it makes some fundamental changes to the housing market.

“The answer is not further cuts to housing benefit, because that will only further immiserate people who have nowhere else to turn.

“Instead, we need years of investment in new homes to bring down rents and a transformation of the private rental market into a professional provider of long term homes.

“This means giving tenants protection from unfair evictions and putting a limit on rent rises.”

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Does your letting agent clearly display all their fees?

November 14, 2017

It is a statutory duty for letting agents to fully publicise the fees they charge to landlords and tenants, and yet there are still some agents that are breaking the law by not displaying their fees.

Under the Consumer Rights Act 2015, agents must prominently display a list of their fees at each of their offices as well as on their website, and to help ensure they do, the Property Ombudsman (TPO) scheme has launched phase three of its national campaign with the Chartered Trading Standards Institute (CTSI) to tackle agents that are not obeying the rules.

Having already targeted agents in Swansea and Dorset followed by Reading, Basingstoke and the surrounding areas, the next phase will see TPO contacting 117 letting agents in and around Plymouth.

The purpose of the campaign is to improve awareness of the current legislation that requires agents to display fee information, and ensure more firms are fully compliant to avoid fines of up to £5,000 being imposed by Trading Standards.

It has been reported that in the last three months, agents in London alone have been issued with fines from Trading Standards totalling as much as £370,000 for not displaying fees correctly.

The first two phases of the campaign saw 445 agents asked to submit photographic evidence, and 99% and 95% of agents were displaying fees correctly as a result of the campaign.

Katrine Sporle, Property Ombudsman, said: “We’ve had an excellent response in the regions the campaign has focused on so far, with the vast majority of agents demonstrating they are compliant.

“This campaign is about educating agents that are either failing to display the required information or are unwittingly breaching the law by not displaying it correctly, which is why our campaign is phased so we can offer agents additional guidance and support so they can put things right and avoid risking a fine from Trading Standards.”

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Colchester landlord ordered to pay almost £9k for poor property management

November 14, 2017

A buy-to-let landlord in Colchester has been fined for poor property management that left a family in Wimpole Road, CO1, living with roof leaks, rising damp and cold temperatures for more than a year.

In May, Colchester Borough Council served a Housing Act Improvement Notice requiring works to repair leaks, damp-proof and insulate the house, and repair an unsafe chimney.

However, the landlord, Simon Weir, who is also a director of Michaels Property Consultants Ltd, the company which was managing the rental property, refused to carry out the required works despite several warnings from the council.

Instead, he instructed his letting agent to serve the tenants, a mother and four children privately renting, who had first reported water leaks and dampness – affecting rooms on the ground floor – to the agent in autumn 2015, with an eviction notice, putting the family at risk of becoming homeless.

The agent claimed that works could not be done safely in an occupied property. However, no alternative accommodation was offered to the family by them. The repairs were not carried out within the four-month time limit of the notice and further legal investigation work resulted in the case going to Colchester Magistrates Court.

During the hearing, the tenant’s evidence revealed that it was so cold inside the property that the children had to be taken upstairs to bed at 6pm during the winter.

Because rain was pouring in through the loft hatch and soaking the light fittings, the mother was too afraid to turn on the upstairs light and was forced to take the children up to bed using the light from her mobile phone.

After hearing the evidence, the landlord was found guilty and issued with a fine of £5,000 and ordered to pay £3,700 in costs and a £170 victim surcharge.

Cllr Tina Bourne, portfolio holder for housing and communities, said: “We expect landlords and letting agents to follow their own industry guidance which requires them to let homes that are safe and deal quickly with any problems that arise.

“This case shows that the Council will not tolerate poor management practices or poor housing conditions that make residents' lives a misery and put them at risk of becoming homeless.” 

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Cash buyers make up record 65% of buy-to-let purchasers

November 13, 2017

The proportion of landlords acquiring properties in cash has reached an all-time high of 65%, according to fresh data from Countrywide.

The highest proportion of cash transactions came in the North East of England, where 78% of buy-to-let investors paid in cash over the last 12 months, seemingly reflecting cheaper house prices.

In contrast, 42% of buy-to-let investors paid in cash in London, where property values are much higher.

Johnny Morris, research director at Countrywide, said: “Landlords have increased their housing wealth considerably over the last 10 years. This means cash purchases are steadily becoming a bigger part of the market.  But a landlord buying with cash will often have a mortgage either on their personal home or other properties in their portfolio. 

“Rising prices have allowed landlords to take equity out of both their personal or other rental homes to expand their portfolios.” 

Value and volume of cash landlord purchases

Source: Countrywide

 

 

Value of volume of cash and mortgaged landlord purchases

 

 

Cash investors by number

Cash investors by value

Value of cash investor purchases

Value of mortgaged investor purchases

2007

40%

34%

£15,906,637,239

£30,621,093,887

2008

45%

34%

£7,123,021,165

 £14,058,335,527

2009

53%

55%

£9,033,503,229

 £7,512,847,910

2010

58%

57%

£9,822,264,742

 £7,472,528,153

2011

60%

59%

£12,523,438,427

 £8,607,602,932

2012

59%

58%

£12,965,860,135

 £9,424,657,460

2013

57%

55%

£15,752,388,746

 £12,847,355,436

2014

56%

54%

£19,723,785,342

 £16,690,792,162

2015

56%

52%

£20,796,624,136

 £19,236,317,264

2016

59%

55%

£20,804,696,172

 £16,936,388,079

Last 12 months

65%

61%

£21,030,987,287

 £13,355,841,389

 Source: Countrywide

 

 

Regional volume and value of cash landlord purchases (GB) – last 12 months

 

 

Cash investors

Amount spent by cash landlords for every £1 spend by mortgaged landlords

North East

78%

£3.17

Scotland

71%

£2.31

North West

70%

£2.12

West Midlands

66%

£1.96

Yorkshire & Humber

66%

£1.95

South West

65%

£1.96

East Midlands

63%

£1.65

Wales

62%

£1.68

South East

59%

£1.47

East of England

57%

£1.23

London

42%

67p

Great Britain

65%

£1.57

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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World’s ‘most successful’ Airbnb landlord earns £11.9m a year in London

November 13, 2017

The world's ‘most successful’ Airbnb landlord is based in London and currently makes £11.9m a year in rental income, renting out 881 properties in the city, fresh research shows.

The figure represents the most made in revenue by any owner who rents out properties on the short-term rental website in the past year.

A landlord was not too far behind, raking in £11.8m through 504 properties in Bali over the corresponding period.

The data from Airbnb analysts AirDNA reveals how the website has shifted from flat-sharing to property management, with single operations turning over huge sums of money.

“Airbnb is no longer a community just for individuals renting out their space or properties on their own,” AirDNA CEO Scott Shatford told the Telegraph.

He added: “We’re seeing traditional property management companies operating as many as 1,000 listings.

“These numbers don’t show a multimillionaire sitting on a gold mine. These are businesses that have emerged in this new economy, with hundreds of employees, managing other people’s second homes.”

While London is home to the biggest earning individual landlord, the figures show that earnings are highest in the Indonesian holiday island of Bali, where average revenue per user is £31,294, compared to an average of £16,003 in London. 

According to AirDNA, 65% of hosts using the site are individuals, adding that 35% are management companies. However, the ratio is shifting rapidly in favour of the latter, according to the Telegraph.

An Airbnb spokesperson told the newspaper: “The vast majority of Airbnb hosts are regular people who share their homes - typically their greatest expense - to boost their income and support their families.

“The Airbnb model is unique and empowers regular people, boosts local communities and is subject to local tax. It also makes Airbnb fundamentally different to companies that take large sums of money out of the places they do business.”

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Landlords welcome report that will ‘improve safety in rental housing’

November 13, 2017

The publication of a new report to ministers on electrical safety has been warmly welcomed by the Residential Landlords Association (RLA).

The report, produced by a working group which included the RLA, recommends that the installation of Residual Current Devices (RCDs) by landlords ‘should be encouraged as good practice and set out in guidance’, which was a key suggestion by the trade body.

RCDs are safety devices designed to prevent people from getting a fatal electric shock from faulty appliances and wiring.

The working group agreed that there is a need to support the creation of specific private rented sector trained electricians in recognition of the unique electrical challenges in many rental properties, especially homes which can often have multi people in them using a large number of devices at the same time.

“We welcome the publication of the working group’s report and the focus it has rightly given on the importance of electrical safety,” said RLA vice chairman, Chris Town, who sat on the working group.

He added: “It is pleasing that the final report contains a number of recommendations put forward by the RLA, and we look forward to working with Ministers to ensure adoption of sensible and pragmatic changes that will improve safety in rental housing.”

 

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The annual rate of rental growth slows

November 13, 2017

Annual rental price growth slowed between September and October with the cost of the average new let in Great Britain increasing by 0.5% over the last year to hit an average of £958 per calendar month, fresh data shows.

But when excluding London, where rental growth actually dipped back into negative territory, rents increased 1.2% over the last 12 months. 

Rental price growth was once again led by the Midlands and Wales, where rents rose 2.2% and 2.6% respectively over the last year.

Johnny Morris, research director at Countrywide, commented: “Rental growth across Northern England has slowed under pressure from record numbers of new landlords.  But it’s a different story across the Midlands and parts of the South where rents are once again nudging upwards. 

“It looks like the last effects of the investor stamp duty surcharge have finally worked their way through the system.”

Separate figures released last week by HomeLet also revealed that rental price growth in the UK had slowed on an annual basis.

New lets 

 

Average rent Oct 17

Average rent Oct 16

YoY

Greater London

£1,690

 £1,706

-0.9%

South East

£1,020

 £1,012

0.8%

East of England

£929

 £926

0.3%

South West

£791

 £778

1.6%

Midlands

£677

 £663

2.2%

North

£635

 £629

1.0%

Wales

£658

 £642

2.6%

Scotland

£653

 £647

1.0%

Great Britain

£958

 £953

0.5%

Source: Countrywide

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TMW pilots limited company BTL range

November 13, 2017

The Mortgage Works (TMW) has launched a new limited company buy-to-let mortgage product range for professional landlords.

There are five products being piloted through brokers Mortgage Intelligence and The Buy to Let Business, with plans for a wider roll-out if the pilot phase proves successful.

The lender’s two-year fixed rate products start at 2.99% to 75% loan-to-value (LTV) and its five-year fix starts at 3.64% to 75% LTV, both subject to a £1,995 arrangement fee.

Nationwide’s buy-to-let arm has also made a separate product available for those seeking funding to invest in HMOs.

The key criteria for limited company lending remains unchanged for personal buy-to-let borrowing and will be available for purchase and remortgaging.

Paul Wootton, managing director of TMW, commented: “Having previously offered limited company products and with the long-term expertise to support professional landlords, TMW is now looking to return to this market.

“By piloting a limited company buy to let mortgage through selected intermediary partners, we are aiming to respond to the potential demand in the market and further support those professional landlords for whom such products may be suitable. The targeted TMW limited company product range will offer competitive rates and a specialist underwriting team.

“Once we have analysed the response and quantified demand, we will assess if we can roll the range out more widely across our intermediary partners.”

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MPs call for carbon monoxide alarms to be fitted in all homes to let

November 10, 2017

Buy-to-let landlords across the UK should be responsible for the installation of carbon monoxide (CO) alarms, according to a new report.

Under existing regulations, landlords are legally required to provide CO alarms in all properties in Scotland, but in England and Wales landlords are only obliged to provide a CO alarm in properties with a solid fuel appliance, i.e. coal or wood burning stoves. But MPs want that to change.

MPs this week called on the government to make it illegal for a landlord not to install Co alarms in post-Grenfell Tower building regulations review.

With up to 1.6 million rental home believed to be at risk from CO poisoning, a new report on CO, launched by the All-Party Parliamentary Carbon Monoxide Group (APPCOG), recommends that the government introduce legislation requiring all landlords to fit CO alarms.

The All-Party Group’s report - entitled Carbon Monoxide Alarms: Tenants Safe & Secure in their Homes - suggest that there is a need for a ‘fundamental health and safety review’ following the tragic fire at Grenfell Tower.

Barry Sheerman MP, co-chair of the APPCOG, said: “Housing regulations have become a pressing issue – with pressures on housing market provision, more people moving into the rental market, and the population growing, we have to make sure that people are safe and secure in every home from CO.”

Eddie Hughes MP added: “Research, lived experiences and data all demonstrate that now is the time to take action to protect families where they live.

“This report is especially timely as the Government looks to achieve its commitment to safeguard the more vulnerable in our society.”

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Buy-to-let landlords face compulsory ombudsman scheme

November 10, 2017

In order to solve tenant disputes, landlords will soon be required to register with a redress scheme, helping to improve operating standards within the industry.

At the recent Conservative party conference, the scheme was announced alongside further plans to make checks into letting agents, as well as offering landlords incentives for providing longer term contracts with their tenants.

With the Budget speech set for November, it is thought that the proposals are to be outlined at that point.

Redress scheme requirement

Sajid Javid, the communities secretary, said that the government would “insist that all landlords are part of a redress scheme”, when speaking at the Conservative party conference last month.

Although the details of the scheme are yet to be released, this type of scheme usually consists of dispute resolution systems that are legally binding, and all members would have to follow a code of conduct.

It is believed that the introduction of this scheme will help renters and give them more power to challenge landlords on anything that they deem to be unreasonable.

In an explanation for the introduction of this scheme, Sajid Javid continued, saying: “For too long, tenants have felt unable to resolve the issues they’ve faced, be it insecure tenure, unfair letting agents’ fees or poor treatment by their landlord with little means of redress. We’re going to change that.”

Current redress schemes

It is not yet known whether or not the plans will be the launching of a new body, or if it will just be extended to an existing scheme. There aren’t yet any current ombudsman schemes that are functioning within the private landlords sector, but there are several voluntary organisations running.

National Landlords Association (NLA)

The NLA isn’t officially a redress scheme, but it does provide a code of practice for private landlords to follow, and they are expected to operate in a ‘fair, honest and respectable way’ throughout any dealings with their tenants.

Tenants can file complaints with the body if they have any ongoing issues with their landlord, and the issue will be resolved as soon as possible.

The membership of this association is voluntary and they aren’t a governing body with legally backed powers, but they do currently have 65,000 members.

The Property Ombudsman (TPO)

The Property Ombudsman (TPO) is specifically designed to handle complaints made by landlords and tenants against sales, and more typically against letting agents. TPO announced that in 2016, they oversaw 1997 disputes, with 56% related to the lettings sector and a total of £786,572 paid by letting agents as redress.

TPO also announced that 45% of the complaints were from landlords and 51% were from tenants, with some of the main areas of concern including communication, referencing, property management and complaints procedures.

The body said that it welcomes the introduction of a compulsory redress scheme for landlords, particularly because of a ‘redress gap’, of which they feel bans to letting fees may create.

The Housing Ombudsman Service (HOS)

Almost all members of the HOS are social landlords, including housing associations, as they are required to join and follow the HOS code of conduct. Private landlords are also able to join if they so wish to, however there are currently less than 100 voluntary members, according to the HOS’s 2016/17 report. The HOS closed 15,877 cases during the 2016/17 year, with a large proportion of complaints from tenants about property repairs.

Regulatory changes

The changes are set to be introduced following the budget speech in November, so it is a good time to familiarise yourself with some other changes affecting the private rented sector:

Mortgage interest tax relief – Landlords will no longer be allowed to offset any of their mortgage costs against their rental income by April 2020, with the amount being reduced year on year until that point.

Wear and tear allowance – Landlords are now only able to claim tax relief on actual expenditure when replacing household items, rather than the previous 10% allowance.

But to let stamp duty – Investors and those who buy a second home are to pay a 3% surcharge, additional to standard stamp duty bands.

Proposed letting fees ban – The Government are to ban letting fees to tenants in England, meaning that credit, right to rent and referencing checks would need to be paid for by the landlord.

Portfolio landlord lending restrictions – Portfolio landlords are to face stricter criteria when looking to remortgage a property or invest in a new one.

Mark Burns is the managing director of property investment firm, Hopwood House.

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Top tips to improve your properties’ EPC ratings

November 10, 2017

With less than six months until the new Minimum Energy Efficiency Standards (MEES) are introduced in April 2018, Mike Feely of E.ON offers simple suggestions on ways landlords can upgrade their properties.

The 2015 Energy Efficiency Regulations set out minimum energy efficiency standards for England and Wales. These regulations make it unlawful for landlords to grant a new lease for properties that have an energy performance certificate (EPC) rating below E, from 1 April 2018, unless the property is registered as an exemption.

According to E.ON’s research around one in five landlords (21%) expect to spend between £1,000 and £4,000 on energy efficiency improvements in their property over the next five years, but in reality improving the energy efficiency of a property to meet the new legislation does not need to incur such high costs.

For landlords who are worried about the potential costs of upgrading properties, financial support may also be available through the Energy Company Obligation if tenants meet certain qualifying criteria.

Here are Mike Feely’s top tips for landlords looking to improve their properties’ EPC ratings:

+ Don’t underestimate the importance of insulation in making a property more energy efficient. If the property was built before or around 1920, it most likely has solid walls. Solid wall insulation can be installed from either the inside or the outside. If the property was built after 1920 it’s likely to have cavity walls. These have a double external wall with a small gap between which can be filled with insulation.

+ Make a play of your energy savings standards – don’t just think of improving energy efficiency as something for meeting regulations, it’s a commercial decision too. Given most tenants are responsible for paying energy bills, some may be willing to pay more for properties that are energy efficient, so make sure you’re making the most of this as a selling point.

+ Without properly insulated windows, the property could be losing up to 10% of its heat. Double glazed windows make a big difference when it comes to lowering energy bills as well as reducing condensation and noise. Instead of double glazing you could install secondary glazing which involves fitting a pane of plastic or glass inside the existing window recess to create an insulating layer of air. Though not as effective as double glazing, secondary glazing still saves a significant amount of energy and allows you to maintain good kerb appeal by keeping original features such as sash windows.

+ EPC ratings look only at permanent improvements to the fabric of the building so think about long-term upgrades that will help to reduce heat and energy use. Simple things – sausage dog draught excluders and the like – will help keep heat in, but for the EPC you need to find permanent ways to fill the gaps to stop heat escaping through windows, doors, letterboxes and even keyholes. 

+ For those looking to bring their properties completely up to date, consider renewable technologies such as solar panels with an at-home battery to store electricity for use even when the sun goes down. Be aware these will contribute to your rating only if they’re helping to heat the house, rather than providing electricity for other uses.

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RLA welcomes new director to drive growth

November 10, 2017

The Residential Landlords Association (RLA) has appointed Paul Smee as a new director, as the trade body looks to accelerate growth plans.

Smee, one of the founders of the Association of Mortgage Intermediaries, left his last role as director General of the Council of Mortgage Lenders (CML) in July, after the organisation - now UK Finance - ceased to exist.

“I have been chief executive of three trade bodies over 20 years so I have a lot of experience of working with small businesses and I have a particular passion for making sure they are well represented,” said Smee.

“I understand regulation and the impact of regulation – and will be doing some horizon scanning for the RLA, spotting issues before they hit so the association is always one step ahead of the game, he added. “It was a great honour to be approached to join the board and I look forward to a long and successful working relationship.”

In addition to his wealth of experience working within trade associations, the RLA, which represents around 50,000 private sector residential landlords in England and Wales, hope that Smee, who is a co-opted non-executive director, will bring in-depth knowledge of fiscal and economic matters.

RLA chairman, Alan Ward, said: “Paul’s knowledge of the mortgage market and experience of large organisations, will be invaluable to the growth of the RLA. He adds a new dimension to the skills of the board.”

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Race row landlord told ‘no coloured’ policy is unlawful

November 9, 2017

The UK’s largest and arguably most controversial buy-to-let landlord who earlier this year banned ‘coloured people’ from renting any of his properties because ‘they make them smell of curry’ has been ordered to scrap the policy.

Having already barred battered wives and plumbers from occupying his homes, Fergus Wilson, who runs a property empire in Kent alongside his wife Judith, caused further controversy in March by turning his attention to another innocent social group.

In an email to letting agent Evolution Properties, which set out requirements for potential tenants, the 69-year-old wrote: “No coloured people because of the curry smell at the end of the tenancy.”

Given that refusing to rent or let a property based on a prospective tenant’s race is unlawful, the Equality and Human Rights Commission (EHRC) decided to apply for an injunction against the buy-to-let tycoon.

Wilson, of Boughton Monchelsea, finally appeared at Maidstone County Court to defend his letting policy, but in the end an injunction was issued against him.

Earlier this year, Wilson told the press that Britain is “getting overloaded with coloured people”, and explained that “those who consume curry” cause the biggest problems for landlords because of the smell and the fact that “it sticks to the carpet”.

“You have to get some chemical thing that takes the smell out. In extreme cases you have to replace the carpet,” he explained.

But yesterday, the landlord described the remarks in his email as “banter” – a claim that was rejected by the judge, Richard Polden.

He said: “I find that this policy clearly amounts to discrimination. I find that the policy is unlawful.”

Under the terms of the injunction issued, Wilson cannot apply a letting policy preventing Asian people renting his properties.

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Tenant had the ‘legal right’ to break back into landlord’s property, says council

November 8, 2017

Havering Council has defended its decision to advise a tenant to break back into a rental property that she had vacated 24 hours earlier because she, in the council’s view, ‘still had the right of occupation’.

Lewis Selt, the landlord of the two-bedroom flat in Romford, Essex, is now faced with a sitting tenant and having to start costly eviction proceedings, despite the fact that he has not received rent for several months.

Although he could take legal action against the tenant under a trespassing law, he has decided to serve a Section 21 notice and a Section 8 notice in a bid to get his property back and recover money owed as quickly as possible.

It is estimated that it will take up to eight weeks for a judge to grant a possession order and even then the tenant is unlikely to leave, based on advice by Havering Council.

A Havering Council spokesperson said: “The client reached out to staff at the Public Advice and Service Centre (PASC), where she was informed she still had a number of months in the property, as the landlord would need to follow the legal eviction process.

“The client then told staff she had handed the keys back to the Estate Agent and had put her belongings in storage. After speaking with the agents, it became clear that she had not handed back her keys, but had left them inside the property.

 “Council staff later advised her to return to the property as she still had the right of occupation. The agents were also reminded that as the case had not gone through the courts, the client had the legal right to remain in the property.

“Havering Council will always do its best to support vulnerable residents from becoming homeless, and we urge both private landlords and letting agents to act responsibly and follow the correct legal procedures.”

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New renting platform cuts ‘out the middle agent’ to ensure ‘happier tenancies’

November 8, 2017

A new online property letting website backed by newspaper publisher Trinity Mirror has been launched, offering to cut out the role of traditional letting agents and the fees which they charge tenants.

HomeRenter, which puts landlords and tenants directly in touch with each other, aims to create an Airbnb-style marketplace for the private rental sector without levying traditional estate agent fees.

The new business intends to make money by tapping the estimated 2 million landlords who own fewer than three properties by charging them an annual membership cost of £99.99 to showcase properties on its websites, as well as limited-period access to other portals such as Rightmove, Zoopla and PrimeLocation.

“High fees and poor service on offers from traditional agents created the momentum to build HomeRenter,” HomeRener’s chief executive, Will Handley, told Reuters.

“We firmly believe that through the digital means you can cut out the middle agent and create a world in which landlords and tenants enjoy happier tenancies,” he added.

Check out the new HomeRenter website by clicking here

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