Property News

Landlords can get up to 21% more rent for a furnished property, research shows

September 21, 2018

While the cost difference between furnished and unfurnished rentals varies across the country, generally speaking you can typically expect to receive more in rent for a furnished place, according to research from OnTheMarket.com (OTM).

The property website has found that landlords renting out a two-bedroom furnished property can achieve up to 21% more per month in rent than renting an unfurnished property of the same size in the same area.

The data gathered uses average monthly rental prices based on two-bedroom flats across nine major UK cities, to determine the average difference in cost between renting a furnished or an unfurnished property.

The study found that renting a two-bedroom furnished property in the city of Sheffield costs tenants an average of £726 compared to £598 for an unfurnished property of the same size, which is a 21% increase in price – more than anywhere else in the UK.

In Newcastle upon Tyne the difference is £85 more – a 14% difference, Birmingham (£127 more – a 20% difference), Sheffield (£128 more – a 21% difference), Manchester (£101 more – a 15% difference), London (£128 more – a 9% difference), Leeds (£128 more – a 19% difference), Glasgow (£86 more – 13% more), Coventry (£102 more – 15% more) and Cardiff (£50 more – 7%).

Helen Whiteley, commercial director at OTM, said: “Ultimately this research suggests it’s worth calculating the cost of furniture to decide whether the initial financial outlay can be off-set over time during the rental period.

“Spread throughout a 12 month tenancy, these costs become around £150 per month meaning it is worth prospective tenants giving serious consideration to whether or not they are embarking on a long term let. That said, there are clear benefits and a level of convenience of walking into a ready-to-live-in property when weighed against the alternative of buying everything yourself.”

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New HMO rules to cost landlords an extra £79m

September 21, 2018

Changes to mandatory Houses in Multiple Occupation (HMO) licensing coming into force in England on 1 October 2018 will collectively cost buy-to-let landlords in the region of £79m, according to new research.

The study, carried out by the Centre for Economics and Business Research (Cebr) on behalf of This is Money, has revealed that licence fees alone will hit landlords in England with an average bill of £1,027 each - £495 per property.

Under the new rules, mandatory HMO licensing is being extended to almost all HMOs that are occupied by five or more people and where there is some sharing of facilities, and that is expected to affect more than 160,000 properties, with 77,194 landlords being expected to apply for the new licence.

The licensing scheme was previously restricted to properties that were three or more storeys in height.

The move will mean councils can take further action to crack down on the small minority of landlords renting out substandard and overcrowded homes.

The Cebr estimates that local authorities stand to receive around £243,070 on average from the new license fees.

It also believes that landlords will have to spend about three hours per property applying for licences, familiarising themselves with legislation and taking time out to facilitate property inspections.

New rules will also come into force setting minimum size requirements for bedrooms in HMOs to prevent overcrowding, while landlords will also be required to adhere to council refuse schemes to reduce problems with rubbish.

The government predicts that 87,000 HMOs will be impacted by additional rules around waste disposal, which the Cebr projects will collectively cost landlords an extra £95m.

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Government’s housebuilding plans are insufficient to tackle housing crisis

September 21, 2018

The government remains committed to building more new homes, but their target of 300,000 a year is unlikely to be met.

Sky-high house prices, fundamentally caused by a chronic housing shortage, have created a broken housing market which makes the cost of living in many parts of the UK harder than ever.

The failure to construct enough homes means that Britain’s housing shortage has reached crisis point as the number of prospective buyers, albeit currently at an historic low, continues to outweigh the volume of homes on the market, placing upward pressure on house prices, which is leaving many people with little alternative but to turn to the PRS for accommodation.

Given the supply-demand imbalance in this country, it is clear that we are faced with a crisis, and that is why Theresa May this week delivered a speech at the National Housing Federation conference about erasing the stigma attached to social housing and the need to boost the supply of low-cost homes.

The prime minister has pledged to provide housing associations with £2bn in new funding to help them build more affordable homes.

She told the conference of the National Housing Federation, which represents housing associations, that “the most ambitious” providers will be able to bid for government money to last them until 2028-29.

Ben Denton, managing director of Legal & General Affordable Homes, commented: “We are pleased that the government has announced increased funding towards affordable housing today. This will help to deliver more homes at levels that residents can afford in areas which need it most.”

The government’s pro-housebuilding stance has helped push up the number of new homes registered across the UK, and this latest announcement by the PM should help further increase the number of new build properties, helping to ease high demand for housing.

But the volume of new homes being delivered remains significantly below the government target of 300,000 new homes a year.

Knight Frank’s latest annual Housebuilding report states that 86% of housebuilders believe construction of 250,000 additional homes a year is the maximum achievable amount by 2022.

Just 1% of respondents, which include more than 100 developers that account for almost three quarters of all newly-built homes across the country each year, think surpassing 300,000 additional homes each year is possible by 2022.

David Fenton, head of regional land at Knight Frank, commented, “Nationwide, housebuilding looks set to increase, underpinned by more evenly distributed house price growth and high levels of employment in regional cities.

“However, our survey indicates that scepticism prevails among housebuilders over whether it’s possible to deliver 300,000 additional homes a year, and ultimately they will only build what they can sell.”

There is plenty of speculation that house prices will fall, owed in part to Brexit, and yet the latest data from the Office for National Statistics (ONS) shows that UK property prices grew from June to July, albeit at a reduced rate of 1.2%.

The reality is that the fundamentals that drove house prices higher remain the same, with demand continuing to outweigh supply.

With housebuilders failing to deliver anywhere near the number of homes needed in this country, property prices - and rents - will inevitably rise further in the medium- to long-term, even if there is a dip in the short-term. 

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TPO expels agent that treated rent and tenant deposits as their own money

September 21, 2018

A letting agency in Isleworth, West London, which was recently penalised for a number of offences, has been expelled from The Property Ombudsman Scheme (TPO).

The Drake Lawson Limited, trading as Alexander Reed, a sales and lettings agent in Isleworth, West London, was ordered to pay compensation to two buy-to-let landlords and a tenant after unlawfully withholding the tenant’s holding deposit, withdrawing a tenancy deposit from a government-approved tenancy deposit scheme without consent, and failing to pass rent on to a separate landlord. But the company has now been expelled from the TPO for non-payment of the compensatory awards.

The Ombudsman supported three cases against Alexander Reed, one complaint from a tenant and the other two from landlords, after the agent failed to co-operate with the investigation and failed to provide proof that they had met their obligations under the TPO Code of Practice.

The first complaint was raised by a tenant concerning the holding deposit which he paid. Having failed referencing, the tenant requested a refund, but the agent refused saying that the deposit was non-refundable in the event that he failed the application process, something the tenant maintained he had never received any documentation for.

The Ombudsman made an award of £300, a full refund, to reflect the fact that the agent couldn’t demonstrate that they had notified the tenant in writing of the circumstances in which the holding deposit would be forfeited, as required under paragraph 9k of the Code.

One landlord’s complaint concerned a number of issues including the unauthorised withdrawal of the tenant’s tenancy deposit from a recognised tenancy deposit scheme, a delay in the payment of rental income and the agent’s complaints handling system.

Not only did the agent withdraw the deposit, but it also failed to re-protect it, leaving the landlord exposed to the risk of his tenant taking him to court, failing to address payments with the tenant at an earlier point in time and not recording, acknowledging, investigating or responding to complaints, in accordance with Section 18 of the Code. An award of £500 was made.

The second landlord complaint related to the transferring of rent which was irregular. When the tenancy came to an end, it was apparent that the landlord had not received the remaining four months of rent, which the tenant had paid to the agent before vacating. The Ombudsman made an award of £3,946 which included the money owed and £200 compensation.

The agent, like all members of TPO, is obliged to comply with awards made by the Ombudsman, and yet it failed to respond to the TPO or pay any of the three awards.

The Ombudsman referred the agent to the scheme’s independent Compliance Committee which recommended the firm should be expelled from TPO and registration for redress.

Gerry Fitzjohn, non-executive director and chair of TPO’s finance committee, said: “All members of TPO are obliged to comply with awards made by the Ombudsman as well as co-operate with investigations, which Alexander Reed failed to do on all counts.

“It appears that the agent is not currently trading. There is no active website and no active Rightmove or Zoopla accounts, but as part of TPO’s role to provide better consumer protection, we feel it is important to raise awareness to cases such as these, in the event that Alexander Reed is still trading.”

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Agent fined £50k for breaching safety regulations in unlicensed property

September 21, 2018

SDV HQ Limited, trading as Sterling de Vere, has been ordered to pay more than £50,000 after letting an overcrowded flat with no heating, a leaking boiler and a lack of fire precautions.

The firm, based in Poplar, east London, were fined £46,620 and ordered to pay £7,000 in costs after pleading guilty at Thames Magistrates Court for failing to apply for a landlord licence and breaching safety regulations.

Officers at Tower Hamlets Council visited the flat in Benson House, Ligonier Street in Shoreditch last year, following a number of complaints by residents in relation to their living conditions.

The flat, originally a three-bedroom council property, had been converted into a five-bedroom unit, occupied by six people, without consent.

To increase the rent that could be charged, the landlord had converted the living room into a bedroom and split one room into two.

The court heard that SDV were receiving £3,250 per calendar month in rent from the tenants occupying the property.

When inspecting the flat, officers found a leaking boiler, inadequate fire precautions, a lack of bins, and broken window cords.

“This case shows our determination to prosecute even the biggest landlords who flout the rules,” said Tower Hamlets’ mayor John Biggs.

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Lib Dems want to introduce mandatory licences for private landlords

September 19, 2018

The Liberal Democrats once again called for the introduction of mandatory licensing for PRS homes as well as a publicly available database of rogue landlords at its party conference yesterday.

Aside from licensing, the Liberal Democrats also called for the promotion of longer private tenancies, with inflation or wage linked rents, a ‘right to buy’ for sitting tenants when a landlord sells, a cap on upfront tenant deposits, as well as a ban letting agents’ fees.

The Lib Dems also pledged to address the housing crisis by building 300,000 new homes a year to meet the current demand for property, while also addressing the backlog.

The party is also keen to focus on improving existing homes in this county, with a view to maximising housing stock and at the same time, meet the UK’s ambitious carbon reduction targets.

While many people will welcome the Lib Dems pledge to tackle the growing housing crisis in this country, others, including most landlords, will not welcome the party’s call for mandatory licensing for PRS homes.

Ahead of last year’s general election, RLA chairman Alan Ward warned that the Lib Dems’ proposals for the PRS could force some landlords out of the market altogether if the party was elected.

He said: “As we have seen in Wales, compulsory licensing schemes simply do not work.

“The Rent Smart Wales registration and licensing scheme is an absolute shambles, with ineffective enforcement, contradictory advice, and little consistency.  Landlords have been left in limbo.

“As we have said time and time again the PRS needs effective enforcement, not more regulation. Mandatory licensing would merely punish good landlords who would be hit with hefty licence fees, while the criminals continue to operate under the radar.”

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Almost half of private tenants would prefer deposit-free renting

September 19, 2018

Close to half of private renters would like to see tenant deposits scrapped and replaced with deposit protection insurance, according to a YouGov survey.

The research found that 43% of renters would prefer to rent deposit-free with deposit protection insurance as an alternative to a traditional deposit, which looks set to be capped at the equivalent of six weeks’ rent by the government, as part of the Tenant Fees Bill.

A deposit-free insurance policy, which pays for any damages to the property at the end of a tenancy, provides an alternative to paying a large sum upfront, with tenants typically required to pay into it either through a one-off payment, such as a week’s rent, or a monthly fee.

“Currently many people are simply unable to enter the rental market due to the need for a large upfront deposit to be provided before they move in,” said Professor Brian Sturgess, author of ‘Down with Deposits’.

Robert Colvile, director of the Centre for Policy Studies, is calling on the government to get behind zero deposit renting in order to “rectify an unfair system which polling shows is unpopular with hard-pressed tenants”.

He commented: “By endorsing an insurance-based model as an alternative to a rental deposit, the government would rectify an unfair system which polling shows is unpopular with hard-pressed tenants.”

Despite growing enthusiasm for deposit-free renting, a high number of tenants – and landlords – are not in favour of seeing traditional tenant deposits replaced with deposit protection insurance.

Dan Wilson Craw, director of Generation Rent, pointed out that tenants who do not make a claim at the end of a tenancy will effectively lose any money paid to the insurer.

He said: “The tenancy deposit is a significant sum of money to find before you can move into a new home, and the system sorely needs to be made more affordable.

“Unfortunately proposals to replace it with an insurance policy will make participating tenants worse off, because they get nothing back when they move out.

“Even if you borrowed the money for a deposit and paid it off over a few months, the interest involved would still be less than the premium you'd pay for deposit replacement insurance.”

He added: “Instead of introducing a new poverty premium, we should make the existing system better by finding ways to allow payment by instalments, investing deposits so that tenants get a decent return on their money, and passporting them between tenancies.”

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Landlord ordered to pay £4,000 and do 100 hours community service

September 19, 2018

A buy-to-let landlord has been handed a two-year suspended sentence, ordered to pay more than £4,000 and given 100 hours of community service after failing to maintain gas appliances at a rental property in King’s Lynn.

Norwich Magistrates’ Court heard how the property was inspected last year by the Housing Standards team at the Borough Council of King's Lynn & West Norfolk, following a complaint from a tenant concerning a faulty gas boiler and gas oven. Both were found to be in a poor state of repair and considered unsafe, and so the matter was reported to the Health and Safety Executive (HSE).

Inspectors from the HSE and Gas Safe Register later inspected the property where they found a gas oven to be at risk and the gas central heating boiler to be unsafe to use.

The landlord, Steven Ladell, had failed in his duty to have the gas appliances regularly inspected or maintained, and failed to provide a Landlords Gas Safety Certificate for a number of years, all of which are legal requirements.

Additionally, the landlord failed to comply with an Improvement Notice issued on 13 July 2017 which required he take action to deal with these issues.

Ladell of Great Harwood, Blackburn, pleaded guilty to breaching an Improvement Notice served by the HSE under the Health and Safety at Work Act 1974 as well as two regulations of the of the Gas Safety (Installation and Use) Regulations 1998.

He received a 20-week sentence, suspended for two years, and was ordered to carry out 100 hours of unpaid community work as well as pay full costs of £4,146.34.

Speaking after the hearing, HSE inspector Paul Unwin said: “Landlords must ensure gas appliances at their tenanted properties are checked by a Gas Safe Registered engineer at least every 12 months, and are maintained in a safe condition.

“HSE will not hesitate to take appropriate enforcement action against those that fall below the required standards.”

Cllr Adrian Lawrence was keen to point out that the various regulations concerning the private rented sector are there to “ensure tenants’ safety in their homes”.

He commented: “This case very clearly demonstrates the seriousness of the breaches and is a reminder to private sector landlords of their obligation to ensure gas appliances they provide are checked and inspected on an annual basis.

“A copy of the Landlords Gas Safety Certificate should be handed to the tenant and copies kept for a minimum of two years.”

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Growing number of landlords using low-cost referencing app

September 19, 2018

We all know that landlords must carry out a series of vigorous checks on prospective tenants before letting a property, as this is standard best practice which safeguards their property business.

A high quality, detailed reference offers landlords clarity and essentially confidence that their property will be well looked after. It provides all the background information on prospective tenants, helping landlords and letting agents make an educated choice about who they are letting their property to, what a tenant does for a living, a previous landlord recommendation, crucially their right to rent in the UK, and importantly - their financial position, including their ability to pay the rent on time each month.

There are different levels of referencing available to landlords and letting agents, from a very basic package to a more a comprehensive service, but it would appear that many buy-to-let landlords are now saving significant sums of money by using a relatively new low-cost referencing app to vet tenants and ensure that they are all they seem.

Vouch, which costs £5 per full reference, claims to have saved landlords and letting agents an estimated £1m on tenant reference checks since launching at the end of last year.

The platform automates much of the referencing process and estimates savings of up to 85% against the cost of a typical reference.

Vouch also has a built-in capacity for income generation from utilities and broadband, providing a valuable service to tenants by helping them get moved in quicker and providing agents with an additional revenue stream.

Simon Tillyer, director of Vouch, said: “Vouch offers agents and landlords a fully automated, web-based system delivering significant cost savings, via a comprehensive, time-saving solution.

“Technology and applicants perform the tasks, meaning that agents simply monitor progress. Vouch creates efficiency in the tenant application process and improves business-wide productivity and profitability.

“In addition, Vouch can also help agents and landlords supplement their revenue by providing them with commission on a range of media and utility packages, offered to all tenants signing new leases. 

“We designed Vouch to simplify the tenant application process and help agents and landlords save money and benefit from a passive income stream.”

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Less than two weeks until new HMO rules are introduced

September 19, 2018

Buy-to-let landlords must prepare for new licensing laws for Houses in Multiple Occupation (HMOs) to ensure that they do not fall foul of the rules. 

New licensing laws for landlords, designed to further protect tenants in HMOs from poor living conditions, come into effect in less than two weeks. 

From 1 October 2018, any landlord who lets a property to five or more people – from two or more separate households – must be licensed by their local housing authority.

The move, which the government estimates will affect around 160,000 houses in multiple occupation (HMOs), will mean councils can take further action to crack down on the small minority of landlords renting out substandard and overcrowded homes.

New rules will also come into force setting minimum size requirements for bedrooms in HMOs to prevent overcrowding.

 

The minimum bedroom space will be 6.51sqm for a single bedroom and 10.22sqm for rooms occupied by two adults.

Rooms housing children aged ten or below will need to be a minimum size of 4.64sqm.

Landlords will also be required to adhere to council refuse schemes, to reduce problems with rubbish.

The guidance document, which you can access by clicking here, includes further details on extending mandatory licensing to smaller HMOs and introducing minimum bedroom sizes as government continues to rebalance the relationship between tenants and landlords.

Fines for non-compliance with HMO licensing rules are unlimited, while failure to comply with minimum bedroom sizes could see a landlord fined up to £30,000.

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Gas Safety Week: Tips for staying gas safe

September 18, 2018

Landlords are being reminded this week that they are responsible for the safety of their tenants, as part of Gas Safety Week.

The annual event, which takes place 17-23 September, aims to raise awareness of gas safety and reminds us to have our gas appliances safety checked annually by a qualified Gas Safe registered engineer.

A number of organisations across the country will be working together alongside the Gas Safe Register to raise awareness of the dangers of poorly maintained gas appliances, and responsibility for safety of tenants is something that all landlords should be aware of.

Here are some tips from the Gas Safe Register to keep your tenants safe and warm in your property.

+ Only use a Gas Safe registered engineer to fit, fix and service your appliances. You can find and check an engineer at GasSafeRegister.co.uk or call 0800 408 5500.

+ Check both sides of your engineer’s Gas Safe Register ID card. Make sure they are qualified for the work you need doing. You can find this information on the back of the card.

+ Have all your gas appliances regularly serviced and safety checked every year. Make sure are able to provide your tenants with a copy of the current Gas Safety Record, upon request.

+ Make sure your tenants know the six signs of carbon monoxide (CO) poisoning – headaches, dizziness, breathlessness, nausea, collapse and loss of consciousness. Unsafe gas appliances can put your tenants at risk of CO poisoning, gas leaks, fires and explosions.

+ Check gas appliances for warning signs that they are not working properly e.g. lazy yellow flames instead of crisp blue ones, black marks or stains on or around the appliance and too much condensation in the room.

+ Fit an audible carbon monoxide alarm. This will alert your tenants if there is carbon monoxide in your property.

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More landlords are using social media to screen prospective tenants

September 18, 2018

A growing number of landlords are turning to social media to garner more information about rental applicants, according to the latest sentiment research from Foundation Home Loans. 

From looking at past tenancies to issuing a credit check, it is important to take your time to research potential tenants, but the study shows that 11% of landlords now check Facebook and other social media accounts to screen tenants to help make an educated choice about who they let properties to.

Delving into the worlds of Facebook, LinkedIn, Twitter and Instagram may seem like far more of a personality report than necessary, but it could enable a landlord to get to know a tenant before making a decision to rent their properties to them

Depending on the accounts available, information that could be gathered from social media could include everything from job and career history right through to friends and lifestyle.

The research also found that almost a third - 29% - of landlords choose to interview potential tenants to help decide whether they are right for the property, as part of the screening process.

Personal references are chosen by 34% as a happy medium, allowing them to understand personalities whilst maintaining a reasonable distance.

Employer references and previous landlord references are also requested by a number of landlords.

When it comes to preferences for tenant types, Foundation Home Loans report that middle-aged couples are favoured by 21% of landlords, with the view that they are less likely to damage the property. This is followed by families with children (16%) as they are more likely to stay in the property for the long-term, and young singles (8%) for the same reason.

Jeff Knight, marketing director at Foundation Home Loans, said: “Buy-to-let is a business, so it’s only natural that landlords would want to vet their potential tenants just as an employer would a potential employee.

“While Facebook and social media accounts may not be the best source of information if used in isolation, they can offer valuable insight when set against other checks such as personal references and credit checks.

“After all, maintaining a good rental income is a priority and void periods can be particularly damaging, so it’s important to ensure this is not a risk when new tenants move in.”

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IPSE calls on government to halt Universal Credit rollout

September 18, 2018

The Association of Independent Professionals and the Self-Employed (IPSE) is the latest organisation to call on the government to immediately pause its rollout of Universal Credit for the good of people in most need of support.

There is growing concern that the continued rollout of the government’s new welfare system will cause people, including private renters, to lose access to vital funds, including their rent.

Hundreds of thousands of people are claiming the new benefit, but cuts to funding, IT problems, late payments and a lack of support in navigating the complex claim process has seen significant hardship for many, pushing some renters to the brink of homelessness.

Earlier this year, the Liberal Democrat Department for Work and Pensions (DWP) spokesperson, Stephen Lloyd, warned that Universal credit could cause up to 1.3 million evictions from privately rented homes.

Lloyd said delays in payments meant more tenants were in rent arrears, and this could lead to a significant increase in benefit claimants in the private rented sector being evicted, and potentially made homeless.

The MP, like many housing experts, would like to see universal credit's rent element paid directly to landlords. 

Almost three-quarters - 73% - of landlords still lack confidence in renting to tenants on Universal Credit due to uncertainty that they will be able to recover rent arrears, according to the Residential Landlords Association.

Imogen Farhan, IPSE’s Policy and External Affairs Officer, commented: “The widespread condemnation of Universal Credit is clear and damning evidence of how damaging the policy has been.

“IPSE urges the government to urgently halt the reform’s rollout and address its flaws before its damage can be manifested further.

“Nowhere is Universal Credit’s damaging impact felt more clearly than on the self-employed. The self-employed lose out due to monthly reporting because it does not take into account of the fact the income of the self-employed varies hugely from month to month.”

Farhan added: “The reforms damage entrepreneurship and cost self-employed people thousands of pounds a year.

“The government cannot bury its head in the sand about Universal Credit’s failures any longer. It must urgently rectify the problems rather than pretending they do not exist.”

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Council plans to clampdown on rogue landlords

September 18, 2018

Great Yarmouth Borough Council has vowed to clampdown on rogue landlords who allow tenants to live in poor housing standards in the Nelson Ward by introducing a Selective Licensing Scheme for private landlords in the local area.

Following a consultation period, which closed last month, the council plans to introduce the scheme covering parts of the Nelson Ward, with a view to improving housing and social conditions for private sector tenants in this area, while tackling unethical landlords.

A recommendation report on Selective Licensing has now been published by the council, announcing the scheme will come into effect at the start of next year and run for five years.

Under the proposed scheme, landlords of private rented housing within the local area would be legally obliged to apply for a licence requiring them to meet certain conditions around health and safety and standards.

A standard application fee will be £90, with a reduction to £70 for either an ‘Early application reduced fee’ (an application made within the first three months of designation), or Selective Licence applicants who are accredited by the National Landlords Association (NLA).

There will be financial penalties for landlords who break conditions or simply fail to apply for a licence. 

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Barclays reduces buy-to-let fees

September 18, 2018

Barclays hopes to attract new business from landlords by remaining competitive in their buy-to-let pricing.

The bank, which has reduced rates across its buy-to-let – and residential – ranges, has also has also reduced all £1,950 buy-to-let fees to £1,795 and is removing the ERCs on the majority its fee based tracker products.

Barclays recently cut its buy-to-let rates, with two-year fixed rate deals now starting from 1.5% up to 60% loan-to-value (LTV).

There is also a 75% LTV two-year deal available at 1.79%, which like the 60% LTV deal comes with a £1,950 arrangement fee.

Buy-to-let investors looking for a longer term deal will find that there are also five-year fixed rate products available at 2.19% to 60% LTV and 2.57% to 75% LTV, both with a £1,950 fee.

These buy-to-let products are available for both purchase and remortgages.

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New rents edge up throughout the UK

September 17, 2018

Rental prices continued to rise in August, albeit marginally, new figures show.

The average rent agreed on a new tenancy signed last month was £947 per calendar month (pcm), up from £937 a month earlier, the data from the insurance firm reveals.

Rents increased in August by an average of 0.9% compared to the corresponding month last year ago.

But the rate of growth, in percentage terms, actually increased to 1.3% year-on-year when London is excluded, with the average rent in the UK, without the capital, now stood at £786pcm. However, this remains significantly lower than the UK consumer price index of 2.3% recorded last month.

Average rents in London remain the most expensive in the UK, at an average of £1,632pcm, but the region with the largest year-on-year increase is Scotland, showing a 5.6% increase between August 2017 and August 2018.

Scotland also saw the largest month-on-month increase, up by an average of 2% between July and August 2018.

Rents in Scotland have increased by an average of 2.4%, or £17pcm, compared to the same month a year ago, with the average monthly rent stood at £892 in January 2017.

Rents in August increased in all 12 of the regions monitored by HomeLet, on a month-on-month basis, but on an annualised basis, they dipped in the North East, South West, Wales and the East of England.

Martin Totty, chief executive at HomeLet, said: “In contrast to house prices, which show more noticeable cyclical variations over time, especially in areas of the country where the imbalance between demand and supply is more pronounced, UK-wide rents in August increased around 1% compared with both the prior month and the same month last year.

“Our data demonstrates that the rental sector is showing a return to the long-term trend of steady, often below-inflation price growth. This makes the private rental sector an attractive alternative to the risk of entering, or exiting, property ownership at the wrong point of the cycle for tenants, landlords and lenders.”

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More tenants are renewing their contracts instead of moving

September 17, 2018

Tenants are adopting a longer-term view to renting property, with more private renters looking to renew their existing contracts, new research by Hamptons International shows.

As the nature of the rental market continues to change, it would appear that both tenants and landlords are benefitting from longer tenancy agreements.

In August there were 2.5% more tenancies renewing across Great Britain than last year, with rental growth on renewed tenancies rising by 2.8%, which is the highest level in 10 months. 

This is particularly true in London, where the number of tenancy renewals has risen 3.7% so far this year compared with the same period in 2017.

Renewal rents in London have risen for the last three months, reaching 3.2% year-on-year in August.

The findings are unsurprising given that tenants want to feel settled and landlords want to reduce tenant void periods in their rental property.

With less stock available on the open market to choose from, Hamptons International reports that average rents on newly let properties is also increasing.

Across Great Britain, the average rent of a new let rose to £975pcm in August 2018, led by gains in the Midlands and Wales with rents on new lets up 3.3% year-on-year and 4.4% respectively.

However, London rents on newly let homes fell for the third consecutive month, down 0.8% year-on-year. 

The capital remains the only region across the UK where rents are falling. 

Aneisha Beveridge, analyst at Hamptons International, said: “Despite low stock levels, rents on newly let properties fell in London for the third consecutive month.  Moving is costly for both tenant and landlord.  In a period of uncertainty, where tenants’ incomes and landlords’ yields are squeezed, more tenancies are being renewed.

“With affordability stretched and less choice available on the open-market, more tenants are choosing to stay put.  And with landlord yields under pressure from high property prices and tax changes, fewer landlords want to run the risk of looking for a new tenant and suffering void periods.

“But rents outside London continue to rise.  Wales and the Midlands have driven rental growth outside the capital to increase 2.0% year-on-year, the strongest growth in nine months.”

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Rental market is in recession, says The DPS

September 17, 2018

The UK rental market is in recession for the first time since the global financial crisis, according to The Deposit Protection Service (The DPS).

The latest figures from The DPS Rent Index reveal that during the second quarter of 2018, average monthly UK rent decreased for a second consecutive quarter for the first time since 2009, falling £7 or 0.97% from £771 to £764 per month.

Average rent also fell year-on-year for the first time since the financial meltdown, falling £10 or 1.3% from £774 per month.

The average rent was lower during Q2 2018 than Q2 2017 in every UK region except Northern Ireland, Scotland and the South West.

Yorkshire experienced the greatest percentage decline in average rent between Q2 2017 and Q2 2018 by 2.95% or £17 from £567 to £550.

London experienced the greatest value decline in average rent between Q2 2017 and Q2 2018 by £36 or 2.73% from £1,326 to £1,289.

Julian Foster, managing director at The DPS, said: “Following almost a year of low growth, the UK rental market is now in recession in almost every part of the country.

“On top of this, our prediction last quarter that rents would decline year-on-year in Q2 for the first time since 2009 have proven accurate.

“There are clearly long-term issues with the sector that are having a substantial effect on growth, particularly in the capital, and it’s difficult to see this negative trend ending any time soon.”

 

Region

Average rent in Q2 2018

Change since Q1 2018

% change since Q1 2018

London

£1,289

-£36

-2.73%

South East

£868

-£5

-0.56%

South West

£724

£2

0.31%

East

£801

-£7

-0.89%

East Midlands

£583

-£8

-1.38%

West Midlands

£616

-£9

-1.43%

Yorkshire

£550

-£17

-2.95%

North West

£595

-£1

-0.15%

North East

£532

-£3

-0.48%

Scotland

£646

£9

1.36%

Wales

£577

-£2

-0.39%

Northern Ireland

£542

£18

3.37%

UK

£764

-£10

-1.30%

The DPS’ outlook contrasts with HomeLet, which reports that rental prices continued to rise in August

 

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Airbnb property management firm expands beyond London

September 17, 2018

Airbnb property management firm, Air Agents, has expanded from London into Bristol and Bath.

With almost three million tourists visiting Bristol and Bath every year, Air Agents is looking to help homeowners capitalise on the growing short-stay market.

Having achieved rapid growth since launching in London three years ago and investment from BBC Dragons Touker Suleyman and Tej Lalvani, Air Agents clearly thinks that now is the right time to expand into new markets and cities.

Fran Milsom, co-founder of Air Agents, said: “With such a high tourist population, Bristol and Bath are ideal destinations for homeowners who might want to capitalise on the growing sharing economy.”

Milsom reports that the average nightly rate in Bristol and Bath is £135, and the occupancy rate is 86% and growing compared to the industry average of 70%. 

He claims that his firm can help improve homeowners’ rental returns by up to 40%.

Milsom added: “We take away all the stress for landlords by vetting potential guests, organising cleaning and linen, checking in guests, handling any issues during their stay and everything in-between.

“We feel Bristol and Bath could really benefit from this service and we look forward to helping landlords to make the most out of their properties.”

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More than a third of tenants don’t know how to claim their deposit back

September 17, 2018

A high number of private tenants do not know how to claim their deposit back, a new survey has revealed.

Research by SafeDeposits Scotland found that 36.4% of tenants do not know how to claim their deposit back after moving out of privately rented accommodation, with more than half - 55.8% - of renters unaware that they can use a free service to challenge any deductions landlords make from their deposit.

The survey, the largest of its kind, with more than 4,500 Scottish tenants taking part, also revealed that over a quarter - 26.8% - did not initially know that their tenancy deposit had to be legally protected in a government-backed scheme.

The Scottish Household Survey, published by the Scottish government in September 2018, reported that there are roughly 280,000 households in the private rented sector. The average deposit protected by SafeDeposits Scotland is £723.

Victoria Smith, chief operating officer at SafeDeposits Scotland, said: “Scottish law on tenancy deposits is particularly robust and makes it a legal requirement for landlords to protect their tenants’ deposits.

“It’s also in the legislation that, if things don’t run smoothly, there’s a process to resolve disputes.

“Our survey is the biggest one of its kind ever done in Scotland since tenancy deposit legislation was implemented in 2012 and the figures show that a considerable number of tenants don’t know what’s in place to make sure that not only is their money protected, but there’s recourse if there are any problems.”

SafeDeposits Scotland is now planning to step up its efforts to ‘educate’ tenants, as well as landlords and letting agents, across the country, to help make them aware of their rights and responsibilities in terms of tenancy deposit protection.

Smith added: “Tenants who don’t know what’s in place to make sure their deposit money is protected could be left out of pocket by landlords or agents who don’t comply with the legislation, or who make unsubstantiated claims. The majority of landlords abide by the law but there is a small group who disregard their legal responsibilities.

“If a landlord or agent fails to protect a tenant’s deposit within 30-days of the lease starting, they could be liable for up to three times the deposit value in compensation.

“The recently-introduced First-tier Tribunal, which makes decisions on such cases, has already adjudicated on 40 cases and reprimanded landlords.”

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MP calls for action over rent-for-sex cases

September 14, 2018

The government is once again being urged to introduce fresh legislation to outlaw the ‘despicable’ practice of sex-for-rent deals.

Speaking in the House of Commons yesterday, Wera Hobhouse, the Liberal Democrat MP for Bath, asked what discussion ministers have had with Cabinet colleagues on increasing the number of successful prosecutions of people that offer rent-free accommodation in return for sex.

The MP pointed out that the practice of offering rent-for-sex is illegal but continues to occur.

She wants to see the government consider the creation of a code of conduct or binding legislation to prevent websites from hosting these adverts.

In response, Equalities Minister Edward Argar said that the practice is “despicable” and “preys on vulnerable people” seeking affordable accommodation.

He said that his department has been working to ensure the availability of the offence to prosecute this behaviour.

The Ministry of Justice says this is illegal and even placing an advert is breaking the law and could result in a seven year jail term.

But various adverts still appear online offering accommodation in return for sex.

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Housing fund plans to invest heavily in the PRS

September 14, 2018

The Multifamily Housing REIT, a regional UK private rented sector (PRS) property group, is planning to compete against buy-to-let landlords in the private rental market by raising £175m to invest in the sector.

The closed-ended real estate investment trust, set up by Harwood Capital’s real estate arm, intends to raise the money by issuing shares at £1 each and joining the stock exchange later this month.

Nick Jopling, a non-executive chairman of The Multifamily Housing REIT, said: “The provision of, and access to, good quality and affordable privately rented accommodation has been lacking in the UK and it remains one the most undersupplied and fragmented, yet fastest growing, parts of the housing market.”

The PRS is starting to attract a greater level of institutional investment, with the likes of Legal & General and M&G primarily focused on Build to Rent developments. But The Multifamily Housing REIT is the first listed vehicle to focus exclusively on pre-built rental homes.

The Multifamily Housing REIT is planning to use just over £70m of the cash to buy an initial seed portfolio of 658 PRS homes and five commercial premises across 22 housing blocks, mostly in the north of England, the Midlands and the south-west.

Jonathan Whittingham, CEO of Harwood Real Estate Asset Management and non-executive director of The Multifamily Housing REIT, said: “This is a hugely exciting opportunity for investors, as we look to capitalise on the favourable supply-demand dynamics supporting investment into the PRS sector, an addressable market believed to be valued at over £900bn, and build out the UK’s first significant built stock platform to meet the demands of renters for genuinely affordable, well-located accommodation.

“With a significant pipeline of good-quality, high occupancy properties identified, we are well placed to deliver the 10% income focussed target return, as the first REIT to offer investor access to the existing PRS market on an institutional scale.”

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Agent fined more than £32k over unsafe tiny room

September 14, 2018

A managing agent has been fined more than £30,000 for allowing a tenant to occupy an unsafe tiny room behind a kitchen.

Viviane Almieda, of Falcondale Court, Lakeside Drive in Park Royal, north-west London, ignored warnings from enforcement officers that a room behind the kitchen was not safe to rent out because it was a fire hazard.

The room in a converted three-bedroom property on Redfern Road in nearby Harlesden also measured less than 6.5 square metres - the minimum legal requirement for a single bedroom.

The agent pleaded guilty to breaching HMO licensing conditions, including failing to comply with the council’s amenity and space standards as well as obstructing the council's investigation, in Willesden Magistrates Court.

Almieda, whose agency My London Services Ltd, was fined £30,000 and ordered to pay £2,090 in court costs and a £170 victim surcharge. 

Cllr Eleanor Southwood, cabinet member for Housing and Welfare Reform, said: “Housing tenants in rooms that are too small and hazardous to fire risks is illegal.

“There’s no excuse for it. Landlords, agencies or subletters who exploit tenants will pay heavily in court. Every resident in Brent has the right to a decent standard of living.”

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Landlord ordered to pay £5k for failing to improve condition of BTL property

September 14, 2018

A buy-to-let landlord has been fined £5,000 for letting a property with a number of hazards that could have endangered the safety of the tenants.

Landlord Shabaz Ali Hussain, of Chorley Old Road in Bolton, was instructed to make improvements to the condition of a buy-to-let property he let out to a family and remove waste accumulated in the back yard, but he chose to ignore repeated warnings to make improvements.

Bolton Magistrates Court heard that Bolton Council officers first visited the property in December 2016 following a complaint to the Housing Standards Team, followed by a second visit six months later.

On each of the occasions the council stepped in to carry out the emergency work instead of Hussain because he had ignored a number of reminders and warnings to fulfil his legal duties.

The court found that the landlord had failed to comply with both an Abatement Notice under the Environmental Protection Act 1990 issued in July 2017. He had also failed to comply with a Housing Act Improvement Notice served in August the same year.

The landlord was fined £2,500 for each offence and ordered to pay a £250 victim surcharge as well as £940.81 in costs.

Cllr Nick Peel, executive cabinet member for housing at Bolton Council, commented: “Nobody should have to live in unsafe or unsuitable accommodation.

“Whenever possible, we try to work in partnership with private landlords to make sure their properties meet the required legal standards.  But when landlords refuse to co-operate, we will not hesitate to take the strongest possible action.

“This decision sends a clear message that we will not tolerate landlords who ignore their responsibilities and make their tenants’ lives a misery.”

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Buy-to-let lenders adjust rates ‘upwards’ following Bank rate increase

September 13, 2018

A number of lenders have now passed on the recent interest rate hike to mortgage customers, which means that borrowers, including buy-to-let landlords, will see their bank’s standard variable rate (SVR) increase.

Since the Bank of England hiked the base rate to 0.75% in August, most lenders have made plans to increase not just their SVR, but also their buy-to-let mortgage rates, according to fresh research by Property Master.

By using algorithms to match the requirements of individual private landlords against the entire buy-to-let mortgage market, the online mortgage broker reports that average standard variable rates for buy-to-let mortgages saw the biggest month-on-month increase with the cost of an interest-only loan of £150,000 jumping from £603 per month to £620 per month. 

For average five-year fixed rates loans, increasingly popular with private landlords in light of increasing interest rates, the cost of a similar loan rose from £348 per month to £350 per month if the customer was looking to borrow 65% of the value of the property, and from £423 per month to £425 per month if 75% of the property’s value was required.

The news comes as the Monetary Policy Committee prepares to meet again today.

Angus Stewart, Property Master’s chief executive, said: “The move by the Bank of England to normalise borrowing rates following the last market crash seems to be truly underway and it is beginning to feed through to buy-to-let mortgage rates which up and until now have been relatively stable. 

“The MPC meets again [today] but market commentators are not yet expecting another rate rise quite so soon.”

Private landlords, especially those on standard variable rates that have seen a big jump in cost month-on-month, should really be carefully evaluating their finance requirements, according to Stewart.

He added: “Whilst increased competition has helped to keep costs down to some extent the trend is now upwards and we would expect keenly priced fixed rates to be snapped up.”

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Government’s tax changes have led to the ‘sledgehammering of the BTL industry’

September 13, 2018

Activity in the buy-to-let market dropped further in July as a result of government interventions and a wider housing slowdown, new mortgage lending figures show.

Remortgages have continued to drive lending which, owed in part to increased interest rates and sustained uncertainty deterring homeowners from selling and moving, according to the latest data and analysis from UK Finance, but the figures also reveal a further decline in buy-to-let lending.

Suchit Sethi, the founder of cashbackremortgages.co.uk, said: “It is little surprise that the residential remortgaging market had the strongest July in a decade, as savvy homeowners looked to lock in the best rate ahead of August’s interest rate rise.”

But the fact that new homeowner mortgages are down again compared to last year paints a “concerning picture of the state of the UK housing market”, according to Sethi.

He added: “Buy-to-let mortgages are also down, further evidence that the government’s tax changes have led to the sledgehammering of the BTL industry - arguably perpetuating the housing crisis at the worst possible time.

“The crucial question is will we see any kind of recovery in the housing market before the country gets real clarity over Brexit? Seeing as that might not come until late March, the situation could be grave.”

With tax and regulation changes continuing to have an adverse impact on the buy-to-let market, separate data provided by the Bank of England also shows that the value of mortgages taken out by landlords is falling.

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Trading standards looking to clamp down on rogue landlords and letting agents

September 13, 2018

Trading Standards services in London are warning landlords and letting agents to ensure that they comply with the law and not overcharge tenants after several agents in the capital were found to be non-compliance with the requirement to display fees and other information.

The warning comes during LTS (London Trading Standards) Week, which takes place 10 – 14 September, with a view to promoting and raising awareness about the wide range of work carried out by Trading Standards Services across London.

A recent survey of 137 letting agent websites carried out by London Trading Standards (LTS) revealed that many letting agents in London are not being transparent about their fees and how they will protect tenants’ money.

The LTS found that more than half - 53% - were not displaying a Client Money Protection (CMP) statement, 37% were not displaying landlord fees, and 31% were not displaying tenant fees, despite the fact that providing this information became a legal requirement three years ago.

Despite housing and private sector renting being the number one issue for London residents, LTS report that there is a  low level of reporting of problems with letting agents.

Housing Minister Heather Wheeler MP said: “Working with trading standards teams in London and across the country, we are stopping rogue landlords and agents in their tracks.”

“The new measures in our Tenant Fees Bill will save renters around £240 million a year by banning unfair letting fees and capping tenancy deposits.”

“On top of this, new regulations will keep renters’ money safe by only allowing letting agents that join a Government-approved client money protection scheme handle their money.”

LTS is advising those who experience or know of a letting agent acting unfairly to report it to the Citizens Advice Consumer Service on 03454 040506, who will pass it on to the relevant Trading Standards Service.

Martin Harland, chair of LTS’ Lettings Group said: “Rental costs in the capital are high and for too long a significant number of letting agents and landlords have been getting away with rip-offs.

“To help us get the big picture and start tackling the rogues, we need to know who is causing problems in the London market. So please ‘report it to help sort it’ by contacting the Citizen Advice Consumer Service on 03454 040506.”

Landlords are reminded that anyone looking for a place to rent can help themselves by using any of the following:

+ ‘Pat’s Flat’ poster produced by the Consumer Empowerment Alliance - illustrates what to look for when renting a flat

+ ‘How To Rent’ guide, recently updated by the Ministry of Housing - an invaluable resource to help stop tenants from being ripped-off

+ Mayor of London Rogue Landlord and Agent Checker – a tool unique to London which lists enforcement action taken by London Boroughs against landlords and letting agents, helping people to avoid using them.

James Murray, deputy mayor for housing & residential development, commented: “There are 2.4million renters in London, and it’s vital their rights are upheld and that they are protected from the few rogue landlords and agents who operate in London.

“In order to truly improve the private rented sector we need much more wide-ranging reform. In the meantime, the Mayor will continue to stand up for London renters by working in partnership with Boroughs and London Trading Standards on improving standards, enforcing transparency around letting agent fees, and helping renters to access information on rogue landlords.”

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BTL landlords continue to see ‘the worth in property investment’

September 13, 2018

The number of buy-to-let landlords acquiring new properties continues to tumble as recent tax changes bite, but property remains a viable and safe investment model, according to Paul Smith, CEO of haart estate agents.

Many people believe that the attraction of buy-to-let has faded following the phasing out of mortgage interest relief and the introduction of the 3% stamp duty surcharge for those buying additional homes, including rental properties. But Smith is confident that property remains a good investment, and believes that many buy-to-let landlords share his view, as reflected by the latest mortgage data.

Despite the slowdown in new buy-to-let mortgage approvals in July, UK Finance’s mortgage lending data, released yesterday, shows that there were 14,700 new buy-to-let remortgages completed in the month, some 7.3% more than in the corresponding month last year.

The rise in new buy-to-let remortgages suggests that appetite for buy-to-let is still strong despite market pressures, according to Smith.

He said: “It is fantastic to see that buy-to-let investors have not been deterred by the recent tax changes and are continuing to see the worth in property investment.”

Smith is advising buy-to-let landlords to head north to invest in properties for the best chance of achieving high annual rental yields.

He added: “Although the London bubble has burst, UK cities such as Nottingham, Leicester and Manchester are experiencing yields as high as 7% - far more favourable than cash savings, and a much safer bet than the current stock market.”

The estate agent also pointed out that after eight months of considerable growth, the first-time buyer market is beginning to slow down, as rising rents and the unknown future of Help to Buy “present significant challenges for aspiring homeowners”, which is likely to place upward pressure on rental demand moving forward.

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Rogue landlord banned from renting out property that lacked ‘basic standards’

September 13, 2018

An unscrupulous landlord whose tenants were living in degrading and hazardous conditions has been banned from renting out his property.

Several complaints were made about notorious landlord, Robert Crow, who let 19 Devereux Road in Southend, SS1.

Water leaking through lights, a filthy shared kitchen, repulsive bathroom facilities, and a lack of washing facilities, were among some of the major issues uncovered during an inspection of the property.

Tenants at the property also found that their tiny bedrooms were cluttered with the landlord’s personal belongings when they moved in to the property.

Unfortunately, anti-social behaviour was not uncommon in the property, which was also the scene of a stabbing in October last year.

Magistrates found Crow guilty of 18 offences relating to the dangerous, insanitary and substandard conditions of the property, which he shares with his tenants.

The landlord was fined £36,000, ordered to pay costs of £7,865.10 and a victim surcharge of £170.

Crow was also served a Criminal Behaviour Order preventing anyone from entering the property other than himself and his immediate family. Breaching the order could result in up to two years’ imprisonment.

Crow has now been ordered to pay close to £90,000 in fines and costs over the past couple of years due to a number of offences relating to his property in Southend.

Cllr Tony Cox, cabinet member for adults and housing, welcomed the prosecution.

He commented: “This landlord has knowingly been putting his tenants at undue risk and failed to provide even the most basic standards of habitation.

“We have tried to work with the landlord to bring the property up to standard for several years but he has taken little to no action, yet continued to cash in his rent.

“Anyone who sees the photographs taken at this house would be rightly disgusted and would immediately understand why we have taken such firm action in this instance.

“The property was not fit to be rented out and this prosecution ensures that Mr Crow won’t be able to in future.

“The justifiably high price he is now paying for his reckless neglect should serve as a warning shot to other landlords who think it is acceptable to rent out severely substandard properties.”

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Buy-to-let lending continues to fall as landlords back out of market

September 12, 2018

Tax and regulation changes continue to have an adverse impact on the buy-to-let market, with the value of mortgages taken out by landlords once again falling in the second quarter of this year, when compared to the corresponding period in 2017.

Buy-to-let lending has dropped sharply since tax changes in 2016, including the introduction of a 3% stamp duty surcharge, the phasing out of mortgage interest relief, the scrapping of the 10% ‘wear and tear’ allowance, as well as tougher affordability checks on landlords looking to take out a buy-to-let mortgage.

The latest data released yesterday by the Bank of England shows that there was a decline in both fresh buy-to-let lending and remortgaging by landlords, despite the fact that the outstanding value of all residential loans continued on its upward trajectory, increasing in Q2 2018 to £1,417.2bn, which is up 3.8% year-on-year.

New loan commitments agreed to advance in the coming months during the second quarter of this year were at their highest level since Q1 2008, according to figures from the Bank of England.

But the overall proportion of remortgaging and buy-to-let loans in particular have dropped of late, the statistics show, with new lending for which buy-to-let accounted falling to just 13.1%, owed mainly to recent regulatory and tax changes in the sector.

Ross Boyd, founder of mortgage platform Dashly.com, commented: “Where homeowners tread, landlords are continuing to choose not to follow. For investors it’s more of the same, with the decline in buy-to-let lending since the first quarter firmly against the run of play.

“It’s more evidence of a slowdown precipitated by hostile tax changes in recent years that have left landlords licking their wounds.”

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New blockchain database to track changes in the PRS

September 12, 2018

Citylets has adopted blockchain technology to help track and store rental data in Scotland.  

The Scottish property rental portal has teamed up with blockchain technology specialists Wallet.Services to offer what is thought to be the first blockchain-enabled private rented sector (PRS) database.

Letting agents and local authorities north of the border will now be able to contribute data to and receive analysis of mid tenancy rent changes on a modern, inherently trustworthy technology platform.

The system has been developed in response to new Scottish PRS legislation which allows local councils to apply to the Scottish government to designate all or any part of their local authority area as Rent Pressure Zones, or RPZs.

The criteria by which any applications are to be made handed down by Scottish government are very detailed but a predominant feature is that applications must be data-led including market evidence that rent increases to tenants under the new Private Residential Tenancies introduced in December 2017 are excessive.

Citylets founder Thomas Ashdown said: “The key here is trust. We are a private company looking to create a ledger of the rent changes experienced by the tenants of Scotland that can be utilised by all stakeholders within the private and public sectors.

“Ultimately, this will become a resource both for the lettings industry and local councils who have new powers to apply for rent pressure zones but lack the data to underpin applications to the Scottish Government.

“Blockchain tech was chosen to put the dataset beyond reproach. It is a highly secure, immutable technology.”

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‘Ask The Landlord’ platform launched to provide tenants with ‘help’ and ‘advice’

September 12, 2018

Private landlords are offering their expertise to the increasing number of renters in this country, as part of a new campaign designed to promote the beneficial role landlords play in the property market and address misconceptions around their practices.

The ‘Ask The Landlord’ scheme, which is supported by the National Landlords Association and endorsed by property forum PropertyTribes.com, is intended to bridge the gap between renters and landlords, making both individuals’ lives easier.

The relationship between landlord and tenant is occasionally inhospitable, owed in part to general misunderstandings between the two parties, and that is where this new initiate, launched by Ideal Flatmate, the flatmate matching site, is designed to help.

The ‘Ask The Landlord’ scheme, based on monthly AMA (ask me anything) sessions in which one of Ideal Flatmate’s top landlords answers questions live online and across the Company’s social media platforms, will aim to provide renters with the very best advice and expertise on rental living.

It will leverage Ideal Flatmate’s extensive base of landlords who have agreed to offer their time to answer questions any renter may have on a prospective or current property.

Whether a renter has a question on what to do if they have lost their keys, concern about a party that got out of hand, or how best to renew a contract, ‘Ask The Landlord’ aims to help all renters navigate the often confusing world of renting.

Tom Gatzen, co-founder of Ideal Flatmate, said: “As an organisation that bridges the gap between renters and landlords, we’ve witnessed so many landlords genuinely take a great care and interest over who is in their property and how they can support them.

“We wanted to provide a platform for renters to take advantage of some of these great landlords and ask for any help or advice.

“It’s important we do as much as we can to help the rising number of renters who are often unsure about the confusing and complex elements to rental living.”

The platform also aims to promote the often forgotten beneficial and supportive role landlords play in the property market.

There has been a longstanding misconception that most landlords are looking to take advantage of and profiteer from the rising number of renters, fuelled by unrepresentative media reports.

Ideal Flatmate also says that it wants to promote the countless number of decent landlords it works with who are willing to go the extra mile for their tenants and genuinely take an interest in their wellbeing.

Chris Norris, director of policy and practice at the National Landlords Association (NLA), said: “The majority of landlords are good at what they do and provide decent homes for their tenants. However, they’re not the ones you normally hear about.

“We’re extremely pleased to support Ideal Flatmate’s launch of Ask The Landlord and look forward to seeing it showcase the large number of decent landlords in the market.”

Vanessa Warwick, landlord and co-founder of PropertyTribes.com, commented: “I was delighted to learn of Ideal Flatmate’s initiative to engage with tenants and landlords and assist them in making wiser choices when renting.

“The vast majority of landlords are decent and honest people who want to provide a safe, ethical, and compliant service for their tenants, so anything that assists in connecting good tenants with professionally-minded landlords is a very positive thing.

“This campaign comes at a time when the spotlight is very firmly on the private rented sector and it is very clear that the government is intent on raising standards. 

“Property Tribes whole-heartedly supports education of both tenants and landlords, as it makes the private rented sector a better experience for everyone involved.”

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New PRS scheme aimed at buy-to-let investors

September 12, 2018

Buy-to-let landlords potentially interested in investing in the Midlands may wish to check out a new PRS investment scheme being launched by Belvoir Telford.

The company has teamed up a couple of major housebuilders who are looking to develop tailored properties designed specifically for the private rental market.

The new build schemes are set to range in size from 500 to 1,500 housing units across key towns in the Midlands, with significant opportunities for PRS investment for BTL landlords looking for what has been described by Belvoir Telford as “healthy returns”.

Simon Bell, managing director of Belvoir Telford, said: “This is a very exciting PRS initiative, which is the result of some key research of rental income and appropriate housing mix that Belvoir has conducted over the seven years that we have operated in the Telford area.

“As a result of this research we have identified several Build to Rent opportunities within key growth towns and cities in the Midlands.”

A site in Telford has already been identified as suitable for this PRS scheme, with the potential to deliver a phased development of 170 units.

Belvoir Telford is now actively seeking entrepreneurial investors who are interested in purchasing the first tranche of 50 homes.

Bell added: “I would encourage any investor, whether they have previously considered investing in the property market or not, to contact us for further information on this opportunity to purchase new build homes with low asset management costs, specifically built for the PRS, which would be fully managed by awarding winning Belvoir Telford.”

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The RLA’s next Future Renting Conference takes place tomorrow

September 12, 2018

The Residential Landlords Association’s (RLA) next Future Renting Conference takes places in London tomorrow.

The one-day conference, which will be held at Imperial College London, starting at 10am, will follow on from successful events in Wales and Manchester.

The conference, at the college’s Kensington campus, will include a packed programme (see below) featuring a range of expert speakers who will address delegates on issues including legislation changes, tax, welfare reform, licensing and fire safety.

There will also be the opportunity to meet other landlords and agents, share your experiences and pick up advice, support and offers from a range of exhibitors.

Among the speakers confirmed are the deputy director the private rented sector in the Ministry of Housing, Anne Frost, property expert Kate Faulkner, Katrine Sporle, Ombudsman at The Property Ombudsman, as well as Dr David Smith, partner at Anthony Gold Solicitors and RLA policy director.

The conference is designed for anyone with an interest in private rented housing, including buy-to-let landlords, letting agency owners, local authority councillors and officers, journalists and housing charities.

Tickets, which are priced at £60 for RLA members and £75 for non-members, including lunch and refreshments, are available to buy here.

Conference schedule: 

08:30

Registration, breakfast, networking and exhibition

10:00

Welcome - Douglas Haig, RLA Vice Chair

10:10

Keynote Address - Anne Frost, Deputy Director PRS, MHCLG

10:40

Tenants in control? Consumer Protection in the PRS - Katrine Sporle, Property Ombudsman, Karen Buck, MP and David Cox, ARLA Propertymark

11:20

How to sleep at night – keeping your tenants safe as houses - Ian Halton, NAPIT

11:40

Market Prospects – the Future of Your Portfolio - Kate Faulkner, Property Market Analyst & Commentator, Designs on Property

12:00

Lunch, networking and exhibition

13:30

LA Law – the relentless march of local authority property licensing - Richard Tacagni, London Property Licensing

14:00

Law and Disorder? New legislation in the private rented sector - David Smith, RLA Policy Director

14:30

Building the evidence for change - Dr Tom Simcock, RLA Pearl

14:50

Welfare Reform – managing Universal Credit - Sherrelle Collman, Caridon Landlord Solutions

15:20

Taxing concerns – mitigating the impact of property tax reform - Sean Hughes, Comprehensive Tax Planning

15:50

Closing remarks - Clive Bull, LBC & Andrew Dixon, Chief Executive, RLA

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Landmark report criticises government’s failed PRS policies

September 11, 2018

The government’s private rented sector policies are failing tenants, mainly because they are ‘not joined up or thought through’, a new landmark review has said.

The report, compiled by Dr. Julie Rugg and David Rhodes who conducted similar research commissioned by the government in 2008, found that a significant number of homes do not meet the Decent Homes Standard.

The Evolving Private Rented Sector: it’s Contribution and Potential, a landmark review of the PRS in England blamed successive governments for poor policies lacking an “overarching vision” for the sector, forcing many vulnerable tenants to live in substandard conditions.

The existing regulations in the sector, described as “confused and contradictory”, are “failing at multiple levels”, according to the report.

The report also suggested that changes to welfare reform are creating a “slum tenure” at the bottom end of the market, while policies like Build to Rent are increasingly focused on helping higher and middle-income tenants priced out of ownership, with little or no help for those on low incomes.

Dr. Rugg, the co-author of the report and senior research fellow at the University of York’s Centre for Housing Policy, said: “Since our first review was published, declining homeownership and a shortage of social rented homes have led to a surge in the number of people privately renting – particularly families with young children.

“Unfortunately, in its current form the private rental market isn’t providing a suitable alternative, and in the absence of an overarching vision from any government we’ve seen reams of policies and regulations which are not joined up or thought through.

“We need to see a fundamental rethink of the role that private renting plays in our housing market and a comprehensive strategy to ensure it meets the needs of every renter.”

To help combat poor property management in the PRS, the report called for an MOT-style system for checking and licensing private rented sector homes to be introduced.

Dr Rugg added: “A property MOT would give people confidence before they sign a tenancy that the property is fit for purpose, and that standards won’t lapse in the future, while for landlords, it offers greater clarity and protection against prosecution.”

Reflecting on the report, Leigh Pearce, the chief executive of the Nationwide Foundation, commented: “The private rented sector too often fails to provide decent and affordable homes, particularly for those on low incomes.

“It’s time for the government to end piecemeal policymaking and, instead, to develop a strategy for the private rented sector that makes it clear what role the sector plays in the wider housing market. We hope this review will be the start of a cross-party and cross-stakeholder conversation.”

The National Landlords Association (NLA) has welcomed the review and believes the sector would benefit from a more strategic approach from government.

NLA CEO, Richard Lambert, commented: “Everyone calls for ‘evidence-based policy’, but too often we have policy-based evidence. This report clearly states to case for better understanding of landlords, their motivations and their business plans, recognising that neither landlords nor tenants are a homogenous group.

“Understanding the customer is vital to ensure that private rented sector meets the needs of tenants and it’s essential that landlords develop a stronger consumer focus.

“At the same time, it’s important to recognise that the overwhelming majority of tenancies pass successfully for both landlords and tenants, and policy interventions to address those that don’t must be strategic and targeted.

“The government must reflect what we as a society want to see from the private rented sector, and we urge the Ministry of Housing, Communities and Local Government, and Housing Ministers, to lead, advocate and coordinate across government.

“We’ll only get that if there is some stability in the person in government who’s actually responsible – so we need a Minister who stays in post for more than a year at a time.”

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Fire safety regulations: are you aware of your responsibilities as a landlord?

September 11, 2018

As a landlord, it goes without saying that you must keep the property you provide your tenants with safe and free from health hazards, and that obviously includes fire safety. But when it comes to fire regulations, are you actually aware of your obligations?

With research showing that people who live in rented or shared accommodation are seven times more likely to experience a fire, Allsaved’s fire safety expert Harry Woodage is urging landlords to be aware of the dangers and be proactive in taking measures to prevent fires, and avoid potential fines and criminal proceedings.

As a landlord, you must follow safety regulations, and that includes providing a smoke alarm on each storey and a carbon monoxide alarm in any room with a solid fuel burning appliance, such as a coal fire or wood burning stove.

You must also check you have access to escape routes at all times, ensure the furniture and furnishings you supply are fire safe, provide fire alarms and extinguishers if the property is a large house in multiple occupation (HMO).

Woodage offers the following tips:

Assessing the risk

Knowing what’s legally required can be confusing, so landlords may benefit from conducting a thorough fire risk assessment. These professional reviews, carried out by fire safety experts, help the landlord to carry out practical measures to reduce the risk of fire, and of a fire spreading if it does break out. Regulations vary depending on whether properties are purpose-built flats, bedsits or converted flats, and a fire risk assessment will help to establish which laws are applicable in each scenario.

Raising the alarm

Following a consultation on property conditions in the private rented sector, legislation was introduced which required landlords to install working smoke and carbon dioxide alarms in their properties or face fines of up to £5,000.

Smoke alarms must now be fitted on every floor of a building and a carbon monoxide alarm in any room with a solid fuel burning appliance, such as a coal fire or wood-burning stove. Alarms need to be tested at the start of every tenancy.

Landlords must also ensure that if a fire develops tenants should have access to an escape route at all times.

Electrical safety

Faulty electrics pose the risk of causing electric shocks, but they can also be responsible for sparking fires. Latest figures from the Home Office show that faulty appliances and leads caused 16% of all accidental fires in the home.

Landlords are responsible for the safety of the appliances they supply and must make sure that they are regularly PAT (Portable Appliance Testing) tested. This means that appliances such as microwaves, kettles and toasters are checked for faults by experts.

Along with electrical equipment, landlords need to ensure that sockets and light fittings are safe, as well as all wiring, fuses and circuit breakers.

Furniture and furnishings

Every item of furniture provided in a rented property must be fire resistant. This includes sofas, beds, headboards, nursery furniture, cushions, seat pads and garden furniture that is used indoors.

If the furniture was bought from a reputable trader after 1988 it should be fire safe. To check, look for the permanent label, which should be stitched somewhere out of sight. The exceptions are mattresses, divans and bed bases, which are covered by the British safety standard BS 7177. Landlords should look out for this number on these items.

Future outlook

The recent government-commissioned Hackitt review concluded that the UK’s building regulations were not ‘fit for purpose’ and leave room for fire safety ‘shortcuts’.

The government has pledged to deliver reforms, so it’s highly likely that more stringent legislation to ensure tenants are afforded the highest level of protection possible will be introduced.

Landlords may have to deliver more thorough safety measures and face stiffer penalties if they fail to comply. They would be well advised to acquaint themselves with their obligations before any reforms are put in place.

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Rogue landlords ‘have no place in the market’, says RLA

September 11, 2018

Councils must do more to root out unscrupulous landlords that give the sector a bad name, according to the Residential Landlords Association (RLA).

The association said it is time local authorities showed strong political leadership and used powers already at their disposal to tackle the ‘rogues’ that have ‘no place in the market’.

The RLA has welcomed the publication of the University of York’s report on private rented housing yesterday.

David Smith, policy director for the RLA, said that all though satisfactions rates are high, according to the English Housing Survey 2016/17, there is still room for improvement.

He commented: “Whilst the government’s own data shows that 84% of private tenants are satisfied with their accommodation, no one should have to face living in sub-standard accommodation.

“With RLA research showing that there are well over 100 Acts of Parliament regulating the sector, the problem is with the enforcement of these laws.

“We are calling on councils to provide the political leadership needed to use the extensive powers they have to find and root out the minority of landlords who are criminals and have no place in the market.”

With concerns about the complexity of the legislation surrounding the market, Smith believes that greater clarity is required to help tenants, landlords and local authorities understand their roles, responsibilities and the powers available to tackle poor housing.

He added: “A root and branch review of all regulations affecting the sector needs to be carried out to understand if they are achieving what was originally intended.

“There is no point passing new laws and regulations if the existing ones are not being enforced properly.”

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Keystone relaunches as a specialist BTL lender

September 11, 2018

Keystone Property Finance has relaunched its specialist buy-to-let offering and is now well placed to lend to landlords borrowing both personally and through a variety of corporate structures, including individuals, SPVs, LLPs and trading limited companies, with borrowing rates starting from 2.99%.

It has already established itself as a leading lender for landlords with complex borrowing requirements and for those looking to finance higher-yielding properties such as HMOs and multi-units.

David Whittaker, CEO of Keystone Property Finance, said: “The step up to full lender status corroborates our performance so far. Over the last six years we have successfully originated more than £400m of loans via intermediaries, networks and mortgage clubs and we have made a name for ourselves as true specialists willing to go the extra mile. 

“With the support of our new funding partner, we are delighted to offer competitive rates starting at 2.99%.”

The intermediary-only lender, which recently added to its team of BDMs, underwriters and case managers to cope with more business, allows brokers to submit and track applications using a new cloud-based platform called MyKeystone.

Whittaker added: “As the buy-to-let market realigns to the new tax and regulatory landscape, it is important that as a lender Keystone provides products and systems to enable brokers to support their landlords through this period of change.

“We are particularly proud to be the first lender to incorporate The Buy to Let Hub which allows brokers to shape, analyse and report on landlord portfolios to an ever-increasing number of specialist buy to let lenders.”

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My London Home’s lettings book to rebrand as Stirling Ackroyd

September 11, 2018

If you own a house or flat in London, there is a fair chance that you may have heard of, and may have even used the services provided by My London Home to rent out and manage your property, but the company is about to undergo a brand transformation.

The lettings book of My London Home, which was acquired by Stirling Ackroyd in March, will be absorbed into the Stirling Ackroyd portfolio and rebranded between the end of October and early November this year.

Consisting of almost 1,000 managed properties, the portfolio spans from Fulham, the Royal Borough through Westminster, Nine Elms, Southbank, Tower Bridge and into Docklands.

Nick Dunning, managing director of Nick Dunning Associates, said: “Stirling Ackroyd has a strong presence in central and east London and is an established high street brand.

“Since our acquisition of the business in July 2017, the new management team has put in place robust plans to grow the lettings and commercial divisions, and the absorption and rebranding of the  portfolio plays a key role in this.”

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Where is the strongest performing BTL market in prime central London?

September 10, 2018

Rental yields in prime central London are typically among the lowest in the UK, but that does not mean that there are not attractive returns to be achieved in the heart of the capital.

 

Fresh data from Knight Frank reveals that rents in Mayfair have increased by 5% over the past 12 months – more than anywhere else in prime central London.

 

Public realm improvements and a series of high-quality new-build developments have led to increased demand in the area, according the property firm.

 

The latest research from the company also reveals that the average length of tenancies in prime central London has risen to more than 16 months over the last two years, owed in part to the fact that continuing uncertainty in the sales market around the trajectory for price growth means tenants are more prepared to commit to longer tenancy periods.

The number of tenancies agreed per Knight Frank office in prime outer London rose to a three-year high in July, thanks partly to strengthening demand among corporate tenants.

The report from Knight Frank supports separate data from Strutt & Parker which reveals that take up of new rental tenancies in prime central London in the second quarter of this year rose significantly compared with the corresponding period last year.

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More than half of landlords optimistic about the future of the BTL market

September 10, 2018

Going by press headlines, it would be easy to imagine that buy-to-let landlords in the UK are struggling to keep going and possibly only in the buy-to-let market because they haven’t found a way to exit it.

 

But in actual fact, research from estate and lettings agency Your Move shows that over half of UK landlords feel optimistic about market conditions with a further third being indifferent to them. When you look beyond the headlines, there are solid reasons for this.

 

Legal changes cannot overturn the age-old law of supply and demand

 

Over recent years, it’s hard to escape the impression that governments have been eager to be seen to be “doing something” in the housing market. As a result, they have brought in measures which may look good to impressionable younger adults, looking to “get on the housing ladder”, for example adding a stamp-duty surcharge to investment purchases, while making it less likely that first-time buyers will pay stamp duty on purchases.

 

The simple fact remains, however, that the UK housing market, like every other market, is driven by the laws of supply and demand and it is no secret that there is a shortage of residential housing in the UK, both to buy and to rent.

 

Even if this imbalance is addressed, there is still the fact that the UK has a substantial percentage of people who are natural renters, for example, young adults, which is likely to fuel demand for rental property long into the future.

 

Brexit may slow housebuilding projects a lot more than it reduces demand

 

Only a third of landlords cited Brexit as a major concern. It may be that these landlords had their properties in areas where there is a significant population of EU citizens.

 

Overall, however, it is entirely possible that the main impact of Brexit on the property market will be to reduce the rate at which new homes can be built far more than it decreases the demand for residential property.

 

Since the A8 accession in May 2004, the UK’s construction industry has become used to having access to labour, both skilled and unskilled, from these A8 countries, later joined by Bulgaria, Romania and Croatia. If this pool of labour dries up, then property developers will be forced to work at a slower pace.

Property is an investment class for people who think and act long-term

 

Perhaps the slew of financial and regulatory changes in the buy-to-let market will actually be of long-term benefit to committed property investors by shaking out people who understand that there’s profit to be made in property, but who don’t really have any great interest in buy-to-let itself. These would include, for example, so-called “accidental landlords” and other casual investors. This has the dual benefit of reducing competition between landlords and making for a more professional environment, which reassures both the public and regulators and could make it easier for landlords to make their voices heard.

 

At the same time, those exiting buy-to-let as landlords could find other opportunities to invest in the property market, or even continue to participate in buy-to-let through buying shares in companies active in the market.

 

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

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Where in the UK are the most vegetarian friendly properties to rent?

September 10, 2018

There has been a sharp rise in vegans and vegetarians in this country in recent years, with more people than ever before choosing to enjoy a plant-based life.

Perhaps unsurprisingly, many vegetarian and vegans prefer to live with other non-meat eaters, with a growing number of people actively choosing vegetarian-friendly households.

According to a recent survey undertaken by Fasthomes.org, 67% of respondents said they had problems finding a vegetarian-friendly home, giving reasons such as a lack of properties available (51%) and other tenants not respecting the foods they can’t eat (35%).

Consequently, the online housing agents investigated the rental market for individuals who are vegetarian and perhaps looking for a property or room that accommodates their dietary requirements by extracting figures data from Spareroom.co.uk at the start of last month, to assess just how many properties available to rent per London borough and the 20 most populated towns and cities in the UK are ‘vegetarian friendly’.

The study found that in London, Harrow (55 properties advertised) has the highest number of vegetarian friendly households to rent, while outside of the capital, Manchester (31 properties advertised) is far and away the best city outside London to live in if you want to rent a vegetarian-friendly home.

Birmingham and Bristol are next, with 20 properties advertised.

The boroughs in London to advertise the highest number of vegetarian friendly households to rent were:

Harrow (55), Waltham Forest (26), Newham (19), Hackney (18) and Redbridge (14).

The London boroughs with just one  property listed to rent as vegetarian only were:

Bexley, Havering, Islington, Tower Hamlets and Wandsworth.

Simultaneously, the top 20 cities and towns outside of London that have the highest number of properties or rooms to rent that are veggie friendly were:

Manchester (31), Birmingham (20), Bristol (20), Glasgow (20) and Reading (17).

The towns and cities analysed that have just a single property/room to rent that is classified as ‘vegetarian friendly’ were:

Birkenhead, Newport, Bradford and Belfast.

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Accord reduces rates on BTL products

September 10, 2018

Accord has cut its buy-to-let mortgage rates by up to 0.25% in an effort to attract more business from landlords, particularly those looking to remortgage.

Among the highlights, the intermediary lending subsidiary of Yorkshire Building Society has reduced its five-year fixed rate mortgage at 75% loan-to-value (LTV) from 3.19% to 2.94%, and is available to landlords either adding to or remortgaging their portfolio, subject to free standard valuation, £1,000 cashback and a fee of £195.

But the majority of changes being made will appeal to refinancing landlords with exclusive mortgages available on two-, three- and five-year initial-deal terms.

The intermediary-only lender has also launched a 75% LTV two-year mortgage product with a 2.6% rate and £500 cashback, along with a 75% LTV five-year product at 2.62%, with £250 cashback and a £1,495 fee.

A 75% LTV two-year remortgage with a rate of 1.51% and free standard valuation and a fee of £1,995 has also been introduced.

Chris Maggs, commercial manager at Accord Buy To Let, said: “We’ve made a number of changes to our mortgage range to give landlords choice when managing their portfolios.

“As well as reducing rates, we’ve added a competitive new mortgage and kept a number of additional features including cashback, free standard valuation and free legal fees in our range to help landlords with the upfront cost of remortgaging.

“We hope this selection of mortgages will really appeal to brokers and their clients looking for solutions to their buy-to-let requirements.” 

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London letting agent partners with Vue Cinemas offering landlords free tickets

September 10, 2018

Throughout September, Draker in partnership with Vue Cinemas will be offering two free cinema tickets to all the letting agency’s landlords.

There are three ways that landlords can qualify for free tickets and that is by requesting a valuation online with the prime central London agency, referring a friend with a property for valuation or if Draker lets a property at any time during September.

Clients will receive their offer in the form of an e-code which can then be used to book tickets online and at the Box Office but not by telephone.

Landlords working with Draker will be able to redeem their offer at any Vue location in the UK, excluding the West End and Leicester Square. This offer can only be redeemed once per person.

Draker’s managing director, Tim Hassell, said: “Our Draker Hub, which is our digital marketing platform, allows us to provide advice to our clients as well asbring fun and give back in engaging ways.  

“The recent success of our charity film screening showed us that our clients enjoy the movies as much as we do. 

“This partnering with Vue to offerfree tickets, gives the Draker team a huge kick of positivity and energy.  We will take care of a client’s property – while they go to the movies on us!”

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Rents record biggest month-on-month rise in over two years

September 7, 2018

Rents have had their biggest monthly increase for 28 months, led by gains in the East Midlands, according to the latest Landbay Rental Index.

The average rental value increased by 0.13% in August, the biggest month-on-month rise since April 2016, with the East Midlands, at an average of 0.32%, posting the highest monthly rise for an English region in 40 months.

The increase pushes the average rent paid for a property in the UK up to £1,209 per month, dropping to £767pcm if London is excluded.

Rental growth on an annual basis also showed signs of a sustained recovery, with rents across the UK increasing to 0.97%, the highest level seen since May 2017.

Rental growth in London continued to show a marked uplift last month, having been in negative territory for more than a year before the first positive movement in April 2018.

Rents in the capital increased at the fastest pace in almost two years, rising to 0.44% in the year up to August 2018. However, it is still some way off the average annual growth rate of 1.36%.

At a London borough level, rents have risen in 27 of the 33 boroughs over the course of the last 12 months.

Four of the London boroughs exceeded the average annual rental growth rate, including the City of London (2.25%), Bexley (1.48%), Southwark (1.48%) and Lambeth (1.44%)

John Goodall, CEO and co-founder of Landbay said: “The figures point to a possible start of sustained rental rises in the UK. Following a slowdown in rental growth the changes are likely influenced by a number of regulatory and tax changes introduced over the past two years.

“As landlords begin to feel the pinch from these changes, combined with a reduction in the supply of new homes, the inevitable consequence is an upward pressure on prices.

“The government must start to see landlords as a vital part of the UK housing market, rather than an easy target for raising the coffers. Any further changes to regulation or taxation will only end up on the tenant’s door.”

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Landlord fined £177,000 for putting tenants at risk

September 7, 2018

A neglectful landlord, who allowed his tenants to occupy a property without working smoke alarms, a lack of sufficient fire doors and an external escape route that was in a poor state of repair, even after repeated warnings from the local council, has been fined £177,000 for serious breaches of fire safety regulations.

Philip Anthony Brotherton, the owner of Cresctcourt Properties Ltd, accepted that he put the lives of his tenants at risk by not having sufficient fire safety measures in place when he appeared before Reading Magistrates' Court.

Brotherton pleaded guilty to four charges under the Regulatory Reform (Fire Safety) Order 2005.

Officers from Royal Berkshire Fire and Rescue Service found a number of serious issues, including various failings, when they inspected a property in Waylen Street, Reading, occupied as a house of multiple occupation.

Assistant Chief Fire Officer, Simon Jefferies, said: “Our priority is to ensure the safety of the people of Berkshire. We will always work with landlords to maintain fire safety standards in premises and prosecution is the last resort.

“However, we hope that the significant level of this fine will send a clear message to all property owners that they have a duty to keep our communities safe and if they put anyone at risk by breaking the law, we won’t hesitate to prosecute.”

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Letting agent disappears owing landlords thousands of pounds in rent

September 7, 2018

A letting agent in Newmarket has disappeared owing landlords thousands of pounds in rent.

The head of Smart Residential, Frank Smart, was last seen in July and is, according to reports in the local press, not responding to calls from clients, some of whom he owes several months of rent from properties he manages on their behalf.

Some tenants who have rented property through Smart have also expressed concern at the fact that their deposits do not appear to have been put in a government-backed tenancy deposit scheme.

The office in Wellington Street closed in July, without prior notice, with a sign on the door informing people that a move to new premises had been ‘delayed due to unforeseen circumstances’.

According to the Newport Journal, Smart took to social media to let customers know that he is “still alive”.

He wrote: “Yes I am still alive and no I have not gone on a cruise (sadly). However, I have had no choice but to close the office this week due to a major glitch with the planned move to the new office premises.”

But with Smart not responding to any efforts to contact him, a Facebook group, which has more than 40 members, has been set up by the agent’s clients, many of which are also concerned that aside from owe them money, he still has keys to their properties and personal information relating to tenants.

One landlord, who had two properties with Smart, told the Journal: “He owes me nearly three months’ rent on one and a month’s rent on the other.

“I have now switched my properties to another agent and don’t hold out much hope of getting any of my money back.

“As landlord I could also be liable for any deposits paid by tenants which have disappeared.”

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Over-65s have gained £45.7bn of property wealth in a year

September 7, 2018

Retired homeowners have gained £9,744 each on average in property wealth over the past 12 month despite uncertainty in the property market, analysis from over-55s financial specialist Key reveals.

New data from the independent equity release advisor shows that the average retired homeowner gained £812 a month as pensioner property wealth remained above £1 trillion.

Over-65s in the East Midlands have seen the greatest gains, with their property wealth increasing by almost £1,170 a month.

Pensioners in West Midlands (£1,002), Scotland (£989) and East Anglia (£973) have also seen significant gains. No areas have recorded price falls.

Dean Mirfin, chief product officer at Key, said: “Retired homeowners continue to see the benefits of property investment with average gains of £9,741 in the past year. Whatever the short-term changes in house prices, many over-65s have considerable property wealth which can make a huge contribution not only to their standard of living in retirement but also the financial wellbeing of family members.

“We are seeing an increasing number of customers choosing to gift some or all of the proceeds of equity release to help loved ones in a variety of ways, for some this is helping children or grandchildren take their first step on the housing ladder, for others to pay for expenses such as weddings.

“In many cases though, it is just to help them with money at a time when they need it most. Equity release is increasingly benefitting the whole family.”

The table below shows the detailed picture across Great Britain with all areas experiencing growth.

 

Region

Average change in value of home equity for homeowners aged 65+ (between May 2017 and May 2018 index)

Combined change in value of home equity for homeowners aged 65+ (between May 2017 and May 2018 index

South East

Up £10,582

+£6.942 billion

London

Up £7,111

+£2.603 billion

South West

Up £11,655

+£7.303 billion

North West

Up £7,281

+£4.886 billion

East Anglia

Up £11,681

+£5.513 billion

East Midlands

Up £14,003

+£6.038 billion

West Midlands

Up £12,029

+£4.311billion

Yorks/Humbs

Up £9,360

+£2.701 billion

Scotland

Up £11,865

+£3.346 billion

Wales

Up £1,148

+£303.760 million

North East

Up £6,382

+£1.755 billion

GREAT BRITAIN

Up £9,373

+£43.972 billion

 

The table below shows over-65s in the North West are most likely to own outright with 671,000 having paid off mortgages compared with 656,000 in the South East. However nearly a fifth of all property wealth held by retired homeowners is in the South East.

 

 

Region

Estimated property equity in homes owned outright by people aged 65+ (May 2018)

Estimated percentage of total value of property equity belonging to people aged 65+ (May 2018)

Number of households in the region owned outright by people aged 65+

South East

£211.295 billion

19.21%

656,000

London

£175.260 billion

15.93%

366,000

South West

£157.826 billion

14.35%

626,600

East Anglia

£136.317 billion

12.39%

472,000

North West

£105.703 billion

9.61%

671,000

East Midlands

£82.021 billion

7.46%

431,200

West Midlands

£68.928 billion

6.27%

358,400

Yorks/Humbs

£45.878 billion

4.17%

288,600

Scotland

£42.019 billion

3.82%

282,000

Wales

£39.397 billion

3.58%

264,600

North East

£35.387 billion

3.22%

275,000

GREAT BRITAIN

£1.100 trillion

 

4,691,400

 

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Here are some useful tips when doing an end of tenancy clean yourself

September 7, 2018

Having a cleaning checklist to ensure your property is in a good condition is important for both landlords and tenants.

End of tenancy cleaning is the single biggest cause of deposit deductions, as indentified by the statistics released this week by The Deposit Protection Service (The DPS).

When a tenant moves out of their rental property, they are required to leave it in the same condition that they moved into it in. This means that it must be cleaned to a professional standard.

But while it is strongly advised that you use a professional cleaning company, some landlords do prefer to do the end of tenancy cleaning themselves.

Alexandra Coghlan-Forbes, head of adjudication at The DPS, offers her ‘top five’ cleaning tasks that landlords must undertake after tenants leave the property based on a decade of adjudication.

Top five most common cleaning tasks at end of tenancy:

1. Ovens – Coghlan-Forbes says that she is “always amazed” at how many tenants have lived in a property for maybe a year or so but say they have “never” used the ovens.

2. Extractors – not cleaning or replacing filters is a very common issue.

3. Toilets – some of the images Coghlan-Forbes has seen “could turn your stomach!”

4. Kitchen sinks – it’s usually the sort of dirt and discolouration that builds up over time (food stains, water marks etc) if not cleaned regularly, especially with light coloured sinks. 

5. Skirting boards and light switches – these just often seem to get overlooked, according to head of adjudication at The DPS.

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Government scraps plans to introduce three-year tenancies

September 6, 2018

The government appears to have scrapped proposals that will give tenants a minimum three-year contract.

According to an article in The Sun yesterday, the Treasury blocked the plans due to concerns that it could deter people from investing in the buy-to-let sector.

The idea behind the plan was to offer private tenants greater security and enable them to put down roots. But a number of buy-to-let landlords feared that the risks may far outweigh the benefits.

Aside from make it harder for landlords to deal with problematic tenants as they would be locked into a longer term agreements, there were also concerns that three-year tenancies could potentially make it harder for buy-to-let landlords to finance their property purchases.

The move to scrap three-year tenancies has been described by Simon Heawood, CEO and founder of Bricklane, as a “baffling turnaround by the government”.

Heawood is in favour of three-year tenancies as he believes that they are “better” for both landlords and tenants.

He commented: “Forward thinking landlords like us are already offering three-year tenancies as standard, for commercial reasons.

“Giving tenants more security is not only right, but also generates better financial returns for investors.

“Our customers value the fact that tenants are able to feel at home, without compromising investment returns, or having the responsibilities of being a landlord themselves.”

However, a recent study by online letting agent MakeUrMove has found the overwhelming majority of tenants do not want three-year tenancies, instead preferring 12 month contracts.

The research found that 30% of tenants want tenancies to last 12 months, and a further 20% want tenancies to last for no more than two years.

These findings show many tenants prefer flexibility and freedom when it comes to tenancies, with 31% saying flexibility was the most important factor when looking at the length of their tenancy.

Some 29% of tenants stated that they would actually like a tenancy to last significantly longer than three years, and 43% of the tenants questioned had spent more than five years in their current rental property.

MakeUrMove managing director, Alexandra Morris, said: “Many tenancy agreements are currently set at twelve months with a six months break clause and we’ve found nearly a third of tenants are happy with this length.

“Our findings reinforce that the majority of people want either the flexibility of a shorter rental, or the security of a much, much longer term.”

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Landlords face losing millions as government cracks down on letting fees

September 6, 2018

Landlords are set to lose out on millions of pounds through a clampdown on rental fees after the government yesterday announced further protections for tenants against letting fees, as part of the Tenant Fees Bill.

Under the new default fee provision, a landlord or agent will only be able to recover reasonable incurred costs, and must provide evidence of these costs to the tenant before they can impose any charges.

The move is designed to ensure that tenants in the private rented sector are not made to pay excessive fees for what is perceived to be ‘minor’ damages.

Other amendments to the Bill brought forward by the government include taking steps to ensure tenants get their money back quickly by reducing the timeframe that landlords and agents must pay back any fees that they have unlawfully charged.

The Bill, which will cap tenant deposits at a maximum of six weeks, is expected to save tenants around £240m a year.

Minister Rishi Sunak MP commented: “Tenants across the country, whatever their income, should not be hit with unfair costs by agents or landlords.

“This government is determined to make sure our housing market works and this new provision in the Tenant Fees Bill will make renting fairer and more transparent for all.”

But figures produced by the Department for Communities and Local Government earlier this year suggested that the proposed changes could result in landlords losing a collective £166m per year and letting agents up to £184m.

David Cox, chief executive, ARLA Propertymark, said: “We’re disappointed but unsurprised the Tenant Fees Bill has passed the House of Commons. 

“Over the summer, we worked with Daniel Kawczynski MP on his amendment to allow agents to charge up to £300. Although the amendment was unsuccessful, this shows that members involved in ARLA Propertymark’s campaign have helped MPs understand the unintended consequences of the tenant fee ban; with some MPs listening to the legitimate concerns of the industry.

“As the Bill moves into the House of Lords we will continue working to ensure parliamentarians understand the impact the ban will have on the whole private rented sector.”

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Cleaning is still the biggest cause of deposit disputes

September 6, 2018

Cleaning has once again been identified as the most common cause of a tenancy deposit dispute in the private rented property sector, according to new research.

Fresh data released by The Deposit Protection Service (The DPS) reveals that cleaning tops the list of reasons why a deduction was made to the tenancy deposit.

Over the past 12 months, 63% of landlords that entered The DPS’ Dispute Resolution Service cited cleaning amongst their reasons for a claim. 

Damage caused by tenants is the second most cause of disputes at 53%, followed by the need to redecorate at 37%, and rent arrears at the end of a tenancy at 23%.

Other costs cited by landlords include gardening (16%), replacing missing items (16%) and outstanding bills (4%).

Julian Foster, Managing Director at The DPS, said: “These statistics give an indication of the types of issues that landlords can face when tenants move out – and of the need for a system of tenancy deposits to protect both parties.

“Many of the problems that lead to deductions can be avoided when both tenant and landlord are aware of their responsibilities and stay in regular communication throughout the tenancy.

“Around 98% of tenancies end without any dispute between landlord and tenant over the deposit, but in the rare occasions they cannot agree, access to a free, impartial dispute resolution process helps ensure that everyone is treated fairly.”

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Kent Reliance cuts rates on 5-year fixed rate BTL products

September 6, 2018

Kent Reliance has reduced the cost of its five-year fixed rate buy-to-let mortgages in an effort to attract more business from landlords.

New five-year products offered by the buy-to-let specialist, part of mortgage provider and retail savings group OneSavings Bank plc, start from 3.79% for those looking to borrow up to 75% loan-to-value (LTV).

Borrowers with a 20% deposit can secure a five-year deal from 4.39% at 80% LTV.

These products are available for wide range of buy-to-le types, including large loan standard and specialist, fee assisted, and further advance standard and specialist.

Adrian Moloney, sales director at OneSavings Bank, commented: “We’ve listened to broker feedback for mortgage lenders to continue to provide landlords with products that give financial certainty over the longer term. 

“With a rising interest rate market we’re delighted to announce this rate reduction to support our broker partners and their client’s needs.”

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Zoopla and OTM’s rental listings are now available to view on Facebook

September 5, 2018

With the majority of people’s property searches beginning online, most landlords would naturally expect to see their rental properties listed on the main property websites, dominated these days by Rightmove, Zoopla, and OnTheMarket.com (OTM), but how about Facebook?

In a bid to attract the widest possible range of prospective tenants, Zoopla and OnTheMarket have done just that.

As of this afternoon, the rental listings listed by letting agents on the two property portals are now available to view on Facebook Marketplace.

People searching for property on Facebook Marketplace will be able to filter by property type, price range and bedrooms to browse the rental listings provided by Zoopla and OnTheMarket.

Charlie Bryant, managing director of the ZPG Property Services, which owns Zoopla, said: “This is great news for our agent members who will now get wider distribution of their listings as well as increased brand exposure with people looking for property to rent on Facebook Marketplace.

“This integration extends our position as the best value digital marketing partner in the UK for agents. We will continue to provide our agent partners with maximum exposure for their listings and brands along with the widest range of services to help them generate additional leads and revenues.

“We’re pleased to be working with Facebook and look forward to the value this integration will bring to our partners.”

John Milsom, brand director of OnTheMarket plc, also expressed his delight to be working with Facebook Marketplace and to be a listing partner.

He said: “OnTheMarket is the UK’s agent-backed property portal with a mission to connect active property-seekers with its property-advertising agent customers.

“We believe the quality of OnTheMarket agents’ property content integrated with the considerable scale and reach of Facebook Marketplace’s brand and service is a perfect fit.

“Today, people can search Facebook Marketplace in the UK and connect with our agents, who update their listings data frequently to ensure accurate availability and pricing.

“We look forward to working with Marketplace to create world-class value for property-seekers and value for both of our businesses.”

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Top 10 student buy-to-let hotspots

September 5, 2018

Student property remains one of the most lucrative investments available to landlords, with sky-high yields of almost 12% currently on offer.

With students heading back to university over the next few weeks, demand for student housing is currently high, but where can buy-to-let landlords investing in the student property sector achieve the highest yields?

New research from online letting agent Urban.co.uk highlights which UK universities offer the best rental yield surrounding the campus.

According to the study, Birmingham has the best return for price of the property compared to rental prices.

The UK’s second largest city is home to both Aston University and Birmingham City University in outcode B4, which share the same rental yield of 11.66%, with an average annual rental price of £15,672. 

Teeside University in Middlesbrough (TS1) offers the third highest rental yield at an average of 10.73%.

LS2 in Leeds, where both the Leeds Art University and the University of Leeds are located, is home to a rental yield of 9.22%.

The University of Edinburgh in EH8 has the sixth highest rental yield at 8.61%, closely followed by Nottingham Trent University in NG1 with an 8.41% rental yield and Bangor University in LL57 with 8.1%.

Buy-to-let landlords can expect a rental yield of 7.65% near Edinburgh Napier University in EH11 and 7.55% when investing in property surrounding De Montfort University in Leicester LE1.

In order to calculate the rental yield surrounding each UK university, Urban used the local outcode to find the average property and rental prices of the area and divided the annual average rental cost by the average property price, giving the percentage of the rental yield of that outcode.

The best ten university buy-to-lets

University

Town

Outcode

Monthly Rent

Annual Rent

Rental Yield

Aston University

Birmingham

B4

£1,306

£15,672

11.66%

Birmingham City University

Birmingham

B4

£1,306

£15,672

11.66%

Teesside University

Middlesbrough

TS1

£482

£5,784

10.73%

Leeds Arts University

Leeds

LS2

£897

£10,764

9.22%

University of Leeds

Leeds

LS2

£897

£10,764

9.22%

University of Edinburgh

Edinburgh

EH8

£1,564

£18,768

8.61%

Nottingham Trent University

Nottingham

NG1

£1,081

£12,972

8.41%

Bangor University

Bangor

LL57

£1,079

£12,948

8.10%

Edinburgh Napier University

Edinburgh

EH11

£1,167

£14,004

7.65%

De Montfort University

Leicester

LE1

£803

£9,636

7.55%

The research also identified the worst university buy-to-lets in terms of rental yields.

Unsurprisingly, the lowest three areas for rental yield surrounding universities are all in prime central London.

South Kensington’s Heythrop College in W8 has a 2.49% rental yield, making it the least profitable place in the UK for a buy-to-let property near a university in the UK, excluding capital growth.

The average rental yield near the University of Westminster in London’s W1B is just 2.67% and the Institute of Cancer Research in SW7 has only a slight edge of 2.7%.

Properties near the University of Cambridge in CB2 have an average rental yield of 2.87%, while Anglia Ruskin University in CB1 sits at 2.92%. Despite the similar rental yield in both, CB2 has a higher annual rental average (£19,092), compared to £13,704 in CB1.

The only northern university to make the lowest rental yield list is Leeds Trinity University in LS18 at 2.93%.

The worst university buy-to lets

University

Town

Outcode

Monthly Rent

Annual Rent

Rental Yield

Heythrop College

South Kensington

W8

£5,512

£66,144

2.49%

University of Westminster

Westminster

W1B

£4,674

£56,088

2.67%

Institute of Cancer Research

Kensington

SW7

£5,512

£66,144

2.70%

University of Cambridge

Cambridge

CB2

£1,591

£19,092

2.87%

Anglia Ruskin University

Cambridge

CB1

£1,142

£13,704

2.92%

Leeds Trinity University

Leeds

LS18

£708

£8,496

2.93%

University of Bristol

Bristol

BS8

£1,276

£15,312

3.00%

St Mary's University

Twickenham

TW1

£2,052

£24,624

3.05%

Buckinghamshire New University

Wycombe

HP11

£1,000

£12,000

3.17%

University of Buckingham

Buckingham

MK18

£994

£11,928

3.20%

Adam Male, founder of Urban.co.uk, commented: “The buy-to-let market will always be a profitable business close to the nation’s university campuses despite the impositions that have been forced on the buy-to-let market of late, as thousands of students are in desperate need for accommodation every year.

“For those looking to get on the rental ladder, looking to invest near a university guarantees an annual income and one that is often footed by the Government via student loans. While it does have its negatives and can result in higher upkeep costs, investing near to one of these universities can make a great sense financially.

“Although the housing market is stronger in London and the South East in terms of actual prices, the Midlands and further north provides a much more attractive proposition in terms of rental yields and these areas are also home to some of the UK’s top universities. These are the sort of factors that buy-to-let landlords need to consider in the current landscape when looking to invest.” 

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New homes desperately needed for growing number of life-long renters

September 5, 2018

While most private renters in the UK aspire to buy property, the reality is that many people simply cannot afford to get a foot on the housing ladder due to high house prices, with many people, particularly millennials, set to rent for the rest of their lives.

With the number of new homes being built across the UK still significantly below the level needed to meet demand from buyers, Britain’s housing shortage has now reached crisis point, with the number of prospective renters also dramatically outweighing the volume of homes on the market.

The latest figures from ARLA Propertymark show that the supply of homes available to rent dropped last month, while demand from renters hit a near 12-month high, and this trend looks set to continue moving forward, as reflected by the slump in the UK home ownership rate, owed largely to fast rising house prices and pitifully meagre wage growth since the financial crisis.

Owner occupiers in the 35-44 age group, for instance, has fallen from 71.6% to 52.4% over the last 11 years, while private renters have increased from 11.4% to 28.5% over the same period. Social renters in this age group have risen slightly over the same period from 17.0% to 19.1%.

But the housing market is simply not prepared for the growing numbers of life-long renters as the number of new-builds coming onto the market remains significantly below the rate required to meet demand, according to DJ Alexander.

Aside from the low number of new homes coming onto the market, the property management firm points to the fact that many buy-to-let landlords are contemplating leaving the property market due to recent government changes to the financing and regulation of the sector, which is also having an adverse affect of rental supply.

If the private rented market shrinks while social housing growth remains relatively flat there is a risk that the much larger number of life-long renters may find their options limited by a lack of housing stock.

David Alexander, managing director of DJ Alexander Ltd, said: “The BTL market has become much tougher in recent years with changes to affordability, access to finance, and a reduction in the tax benefits of property investment.

“All of this has led to a softening of the market and the option for many landlords of either leaving or contemplating leaving the marketplace.

“The result is potentially a fall in the number of private rental properties available although this will be different across the UK with some rental markets stronger than others.

“Therefore, many life-long renters, of whom there are a growing number in their thirties and forties, may find their choice limited by a smaller marketplace.”

With a growing number of life-long renters emerging there is going to be an increasing need for more social housing, more private renting, and more affordable homes across the country, according to Alexander.

He added: “The government and local authorities need to work together with the private sector to ensure that we have a sufficient housing stock to serve the changing needs of the UK population.”

“This means the freeing up of more land in areas where demand is high for property development, a steady and continuing programme of social house building, the encouragement of the private sector to build more homes in areas of greatest need, and the encouragement of a strong and vibrant private rented sector.”

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Buy-to-let landlords divided over their future

September 5, 2018

Investors have long turned to residential property as a means of supplementing their income, supported by strong demand from tenants and stable yields.

But buy-to-let is no longer the investment of choice for many people, mainly due to tax and regulatory changes over the past couple of years, which largely explains why landlords in this country are now divided over their future.

New research by Octopus Choice has revealed that while 56% of buy-to-let investors want to keep or acquire more rental properties, 44% are looking to sell.

The study found that the majority of landlords still view buy-to-let as a money-making asset class but think it will be on the decline in the future.

As the market consolidates, buy-to-let owners are polarized across the country, with tough decisions to make on whether to stay or leave the sector.

For those looking to exit the market, 24% blamed falling yields and 23% tax changes, while 19% identified cooling house prices. Some 60% say that property management had become a burden and 61% undervalued the costs involved.

The research suggests that some people who are planning to sell their portfolio still want exposure to property as an asset class, with over a quarter - 27% - of those surveyed planning to invest the money into their main property.

Sam Handfield-Jones, head of Octopus Choice, said: “Brits still have an incessant love affair with bricks and mortar – but the hassle and cost of buy-to-let is a source of growing frustration, and some landlords may find that their once reliable day-to-day income is becoming harder and harder to come by.

“But this isn’t the case across all parts of the market, with money still to be made from the right property in the right region.”

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New partnership enables tenants to add rental payments to their credit history

September 5, 2018

CreditLadder has joined forces with Bud to help tenants use rental payment history in credit scoring, with a view to helping customers become more creditworthy and get on the property ladder. 

The partnership between rent reporting service CreditLadder and financial network provider Bud is designed to allow tenants to add rental payments directly to their credit history via their bank’s mobile phone apps.

Bud offers a connected network that helps banks to collaborate with fintechs on creating new experiences for their customers. It is a service that Bud has developed and piloted with HSBC/First Direct since February 2018.

The partnership will allow customers to access the CreditLadder service directly from within their banking apps via the Bud platform, enabling customers who are tenants to have their monthly rental payments added to their credit history.

Alan Walsh, Network & Partnerships at Bud, said: “About 80% of our team rent their homes, it’s their biggest monthly outgoing and they have long histories of making those payments on-time, month after month.

“It was just wrong that this data couldn’t be used to help them achieve what they wanted in life so it’s great to be working with the team at CreditLadder to address the situation.”

The new partnership takes advantage of the recently-introduced Open Banking initiative, which enables bank customers to share their spending data with third parties should they wish to,  and access a wider range of appropriate financial products and deals.

CreditLadder CEO Sheraz Dar commented: “There is huge momentum within both the banking and tech sectors at the moment to help a greater number of people access more affordable credit, and our partnership with Bud is a ground-breaking initiative that builds on this.”

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Mortgages for Business now automating BTL applications

September 5, 2018

Mortgages for Business is now automating the buy-to-let application submission process with lenders Kent Reliance and Paragon.

The broker’s advisors will no longer do things manually, but rather adopt robotic technology to generate an ‘agreement in principle’, after which, if good to go, proceeding with a full mortgage application.

Mark Ryan, IT director, said: “Recent advancements in robotics have helped us overcome some of the challenges we previously faced when trying to automate application submissions, particularly with lenders’ legacy systems.

“We’ve invested heavily and have been working collaboratively with Extra Technology, the intelligent automation experts since last December.

“Five staff members are now certified Advanced Automation Anywhere professionals but all of our BTL advisers are successfully using the technology to submit applications to both Kent Reliance and Paragon.”

Initially Mortgages for Business engaged with Kent Reliance to develop and test the technology which extrapolates, manipulates and deposits data directly from the firm’s CRM database into Kent Reliance’s submission system.

Adrian Moloney, sales director of OneSavings Bank, which owns the Kent Reliance brand, commented: “Automation improves the accuracy of information being input because it reduces the opportunities for human error. This means we can process applications much faster.”

While testing was taking place, Mortgages for Business approached other buy-to-let lenders to ascertain interest in adopting the technology and Paragon was first to respond.

John Heron, managing director of Mortgages at Paragon, said: “We are keen to exploit opportunities to improve the customer journey for our intermediaries and their customers. Therefore, when the opportunity to work with Mortgages for Business on robotic processing arose, we joined with enthusiasm.

“Roll-out was quick and straightforward, with the implementation highlighting the huge potential for enhanced technology to improve customer experience in our industry.”

Mortgages for Business is now working to roll out the process with Precise Mortgages.

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Landlord handed suspended sentence after failing to maintain gas appliances

September 4, 2018

A landlord from Blackburn has been fined after failing to maintain gas appliances at his rental properties in Norwich.

Norwich Magistrates’ Court heard how inspectors from the Health and Safety Executive (HSE) and Gas Safe Register inspected a property at Kings Lynn in Norfolk in 2017 where they found a gas oven to be ‘at risk’ and the gas central heating boiler to be unsafe to use.

An investigation by the HSE found the landlord, Steven Ladell, not only failed in his duty to have the gas appliances regularly inspected or maintained, but he also failed to provide his tenants with a Landlords Gas Safety Certificate.

The landlord also failed to comply with an Improvement Notice issued in July last year, which required he take action to deal with these issues.

Ladell pleaded guilty to breaching Section 21 of the Health & Safety Work etc. Act 1974 and breaching Regulation 36(2) and Regulation 36(3) of the Gas Safety (Installation and Use) Regulations 1998.

He was given a 20-week prison sentence suspended for 24 months, ordered to carry out 100 hours of unpaid community work and to pay full costs of £4,146.

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Landlords and letting agents turn to SAL to cope with regulation changes

September 4, 2018

There has been a significant increase in the number of landlords and letting agents joining Scotland’s largest membership organisation for landlords.

The Scottish Association of Landlords (SAL) said membership numbers have increased by almost 20% in the last 12 months among private landlords, letting agents and businesses, with the organisation attributing the growth to a raft of new regulations affecting the private rented sector north of the border, with landlords and letting agents wanting to ensure they comply with the new rules.

Deposit protection, electrical safety, water safety, and the registration and training of letting agents, are among just some of the new rules regulations introduced for PRS in Scotland over the past couple of years.

A new type of tenancy, the private residential tenancy, also came into force in December last year.

Reflecting on the increase in demand for its services, SAL chief executive John Blackwood said: “We have seen membership increase, an increase in calls to our helpline, full rooms at our regular branch meetings, sold out training sessions and a record number of downloads of the resources we provide on our website.

“We hope that this activity will ensure that landlords and letting agents are fully up to date with changes to the rules and are able to continue to provide high quality accommodation across Scotland.”

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House of Commons briefing paper on tenancy deposit schemes published

September 4, 2018

A briefing paper on tenancy deposit schemes has been published by the House of Commons ahead of the Report Stage and Third Reading of the Tenant Fees Bill tomorrow.

Amendments can be made to the Bill at Report Stage, with the Amendments to be considered selected by the Speaker of the House of Commons.

The briefing paper on tenancy deposit schemes explains the duty on private landlords to protect tenants’ deposits and summarises how the schemes operate, including ongoing issues, such as non-compliant landlords; the length of time it can take to resolve disputes; and the persistent loopholes and abuses of the schemes.

The tenancy security deposits that tenants leave with landlords or their letting agents look set to be capped at a maximum of six weeks rent, because the government believes that they cause a significant affordability problem for tenants.

The existing tenant deposit system was recently described by Which? as “broken” and in desperate need of reform after a report revealed that one in six tenants are forced to wait more than four weeks to get their deposit back.

The study by the consumer group found that over half of tenants who did not get their money back challenged the decision and 31% had to pay a new security deposit before having their previous one returned.

Which? is now calling on the government to open up a review of the three approved deposit adjudication schemes operated by mydeposits, Deposit Protection Service (DPS) and the Tenancy Deposit Scheme (TDS).

The organisation wants to see landlords forced to register with local authorities, with information logged on a publicly available database and linked to the existing register of rogue landlords and agents established in April 2018.

It is also calling for the creation of an independent regulator for lettings and management agents with a mandatory, legally binding code of practice and strong penalties for rogue operators.

But last month, the chief executive officer of mydeposits, Eddie Hooker, defended the existing system of deposit protection schemes following criticisms from Which?.

Hooker said that since the introduction of tenancy deposit protection schemes 12 years ago, operators in the sector have consistently delivered a good service for the majority of tenants.

He commented: “Whilst I recognise that the systems and processes of deposit protection may need updating to deal with today’s rental market, having carried out extensive research I do not believe that overhauling the current system in favour of, for example, no deposit insurance alternatives, offers any greater protection for tenants.”

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RLA launches new training academy for landlords

September 4, 2018

The Residential Landlords Association (RLA) has launched a new training academy to help landlords better manage their property portfolios.

There are various new courses on offer to those who sign up to the academy, designed to help landlords, agents and property professionals ensure they are on top of all regulatory changes in the PRS.

Among the various benefits, the new training academy, which can be accessed by clicking here, will improve access to the association’s comprehensive digital learning offer, with various new and improved eLearning courses accessible from more devices and browsers.

According to the RLA, the custom-built system will be easier to use, with simpler navigation and a more attractive layout.

Kitty Speakman, the RLA’s training manager Kitty Speakman, said: “Our eLearning offer has been increasing year on year and more and more landlords are opting to take courses in this way.

“With eLearning landlords can study at a time and place that suits them, and do not need to take time out of their schedule to attend.

“And of course, lower overheads mean that we are able to offer these courses at very competitive prices.

“The introduction of the new system will make training with us easier, faster and more enjoyable, with the rebranded pages also designed to be easier on the eye.”

The academy is also introducing three new course programmes – essentially bundles of courses specifically designed for different customers, including a landlords programme, a Houses in Multiple Occupation landlords programme and an agents programme.

Each will include four different courses relevant to that particular customer – and will be available at a discounted rate, making it cheaper than buying each individually.

Agents will also be given the opportunity to buy courses for their staff in bulk.

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Magellan Homeloans introduces buy-to-let products

September 4, 2018

Magellan Homeloans has extended its range of products with the launch of new buy-to-let mortgages.

The new BTL mortgage products, which are initially only available through a limited selection of UK intermediaries, are tailored for individuals and limited companies, with up to four applicants/shareholders, covering a wide range of properties including shared houses, studio flats, new build property, HMOs and multi-units.

Magellan is also offering joint landlords with different tax rate a bespoke Income Cover Ratio (ICR) test, starting at 125%.

The lender’s buy-to-let product range offers two- and five-year fixed rates plus trackers, with rates starting from 2.69%.

There are no Early Repayment Charges for the five-year product.

The lender has also developed a ‘buy-to-let guarantor’ option, which enables experienced landlords to support first-time landlords such as spouses or dependants get into property investment and inexperienced landlords invest in alternative types of property, without having the tax liability that comes with being a joint owner.

Simon Read, Magellan’s managing director, said: “We believe that being a landlord in today’s housing market is complicated enough – getting a mortgage shouldn’t be. We’ve been developing our buy-to-let products over quite some time which has enabled us to really take account of the changing requirements and demands placed on landlords.

“It’s important to remember that what’s key for today’s landlord is how to maximise their profitability within the current tax and regulatory frameworks. We’ve designed our buy-to-let mortgages in ways that help them achieve this within a simplified process.

“We have built a dedicated buy-to-let team who average almost a decade’s worth of experience in this sector. We’re passionate about this market, and believe we have a range of mortgages designed for landlords, by landlords.

“We’re excited to be working with our selected intermediaries for the launch phase which will allow us to monitor these products and learn from their feedback. All of which will be used to support the plans to expand this range which are already in development.”

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Landlord fined heavily for allowing tenants to live in atrocious conditions

September 3, 2018

A rogue landlord has been ordered to pay more than £37,000 for allowing tenants to live in what inspectors described as being the worst property they had seen in the last decade.

David Greene, 64, of Brooke Lane, Billesley in the West Midlands, had been letting a three storey property at 129 College Road, Moseley, Birmingham, which included ten self-contained flats.

But he has now been prosecuted for several breaches of HMO regulations, including smoke detectors that were hanging off the ceiling, insecure front and rear doors, no hot water and heating, broken windows, some of which were boarded up, as well as poorly fitted fire doors and fire escapes that were blocked.

The landlord was contacted by Birmingham City Council on a number of occasions and repeatedly warned that he had to resolve the poor conditions which included those designed to protect tenants in the event of a fire.

However, Greene, who has been a landlord for more than 30 years, ignored the advice and was eventually handed a £35,000 fine after pleading guilty at Birmingham Magistrates Court, while costs were also awarded at £1,941 and a victim surcharge of £170.

Cllr Sharon Thompson, cabinet member for Homes and Neighbourhoods at Birmingham City Council, said: “Mr Greene has shown a callous disregard for his responsibilities as a landlord.

“This fine sends out a message to all landlords who ignore the law that Birmingham City Council will pursue anyone who lets out substandard accommodation.”

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Are landlord licensing schemes actually a good idea?

September 3, 2018

Licensing schemes can serve purposes which are indisputably genuine and valid. They can, however, also be used as money-making schemes, particularly during times when regulatory authorities are strapped for cash. Licensing schemes can, therefore, often be controversial, especially in situations when there are arguments on both sides. Landlord licensing schemes are a case in point.

 

The argument for landlord licensing

 

What we would now call rogue landlords have existed for hundreds if not thousands of years.  You only need to take a look at classic literature to see fictional examples of them, which were presumably modelled on real-world people. There is no doubt that they exist today or that their ranks are supplemented by landlords who might not, technically, be rogue in the sense of deliberately bad, but unprofessional due to laziness, incompetence or general lack of interest in their tenants’ welfare.

 

A well-implemented licensing scheme, could, in principle, turn up the heat on landlords who fail to manage their properties in a reasonable manner and either encourage or force them to leave the market, to be replaced either by more professional landlords or by residential buyers. This is certainly the point of view taken by housing charities such as Shelter who have expressed themselves in favour of licensing schemes, seeing them as a way to protect vulnerable tenants.

 

The argument against landlord licensing

 

Perhaps it would be better to say the argument against landlord licensing in its current form. Any form of licensing is only as effective as its enforcement and at this point in time landlord licensing is reliant on landlords coming forward and identifying themselves to their local council. This raises the obvious question of whether genuinely rogue landlords will choose to do so if they know that they are highly unlikely to be granted a license and instead will put themselves at risk of losing a lucrative source of income. 

In principle, by failing to register, they face the risk of criminal prosecution, but, this will only happen if they get caught, which therefore raises the question of how likely it is that their operation will be discovered. The simple truth of the matter is that we can never know how many landlords manage to avoid getting caught by licensing agents for the simple reason that they do not get caught. 

 

We do know, however, that at present time the significant increase in local authority licensing schemes has not resulted in a corresponding increase in prosecutions for breaches of the housing act.  For example, out of the 26 prosecutions brought by Thanet Council in 2016, only three were for breaches of the housing act, the other 23 (that’s 88%) were for failure to hold the correct license. 

 

Croydon, by contrast, only made one prosecution in the whole of 2017, the cost of which should have been more than covered by the £6m it collected in licensing fees - licensing fees which, ultimately, would have been paid by the tenants of licensed landlords as a part of their rent.

 

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

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Rented housing chief confirmed as speaker at landlord conference

September 3, 2018

The deputy director the private rented sector in the Ministry of Housing, Anne Frost, has been confirmed as one of the main speakers at the Residential Landlords Association’s (RLA) Future Renting conference that will take place in London on Thursday 13th September.

As the government’s lead civil servant for private rented housing, Anne Frost has overall responsibility for forming and implementing government policy and feeding opinion from stakeholders, including landlords, back to government ministers.

The event, which will be hosted by LBC Radio’s Clive Bull, will feature a number of prominent speakers, including Property Ombudsman, Katrine Sporle, and Karen Buck MP.

Buck’s Homes (Fitness) For Human Habitation Bill is currently passing through Parliament.

Other speakers include property expert, Kate Faulkner, who will be delivering a session on market prospects and Richard Tacagni of London Property Licensing who will give delegates the lowdown on local licensing schemes.

The conference is open to all landlords, letting agency owners, local authority councillors and officers, journalists, and housing charities.

John Stewart, RLA policy manager, commented: “The wide range of speakers at the conference, particularly the government’s lead official on private rented housing, will offer insight into what MHCLG is thinking and possible legislative changes.

“It will be an important opportunity for landlords and agents to ask questions and share their views on the considerable changes being faced by the sector.”

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Landlord fined for spying on his tenants

September 3, 2018

A buy-to-let let landlord in Glasgow who used CCTV cameras to spy on his tenants has been fined.

Abtin Ossatian used CCTV cameras to keep an eye on the tenants who had lived in his properties at 335 and 370 Great Western Road.

But the landlord was later told that he may be breaching their human rights, following claims that the CCTV cameras were looking into bedroom windows in one of the properties.

The police got involved when the father of a tenant at 335 Great Western Road complained to them about the intrusive CCTV cameras, which were said to face into the front door, the kitchen and the bedrooms.

However,  the landlord denied that he had been spying on his tenants, instead claiming that they were installed for security purposes in order to prevent any potential for break-ins at his properties.

But Ossatian was ordered by a Sheriff to pay a total of £5,400 in compensation to three of the tenants.

Licensing committee member Aileen McKenzie commented: “What this looks like to me is not just a breach of privacy but it’s a breach of their human rights.

“No one should be spying on them and no-one should be spying on their guests that they are taking back.”

The landlord has been told that his Houses in Multiple Occupation (HMO) licence for both properties will be revoked, while he also looks set to lose his landlord registration and be prevented from letting properties in Glasgow.

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Buyer activity remains ‘pretty depressed’ as more people look to rent

August 31, 2018

There has been a further decline in the number of people looking to buy property, as reflected by the Bank of England’s latest money and credit report.

The Bank of England figures reveal that there was a drop in the number of home loans approved for new property acquisitions in July, with £12.1bn worth of home loans for house purchases issued, down from £12.2bn the previous month.

The data also reveals a major decline in remortgaging activity in July, with a total of £8bn approved for remortgaging, down on the £8.6bn approved in June.

John Eastgate, sales and marketing director at OneSavings Bank, said: “Buyer activity remains pretty depressed as the market comes to terms with economic uncertainty on top of existing obstacles of a lack of supply and increasing affordability challenges.

“With heightened fears that a turbulent Brexit and a slower economy might impact job security and property prices, consumers are naturally putting the brakes on home buying decisions.”

North London estate agent Jeremy Leaf concurred: “These figures are a little disappointing in that they reflect a period when we would have expected a pick-up in the market over the spring buying season.

“Buyers and sellers are still engaged in a stand-off, and a lack of energised demand has meant there is often very little urgency to complete deals, even when terms have been agreed.”

But while fewer people are buying property, the latest figures from ARLA Propertymark, released earlier this week, revealed that the number of prospective tenants looking for new homes to rent in July increased to the highest level for almost a year.

David Cox, chief executive at ARLA Propertymark, said: “An average of four landlords took their properties off the market per branch, up from three this time last year – and as supply falls, competition among tenants increases, which pushes up rent costs.”

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Security advice for student landlords

August 31, 2018

As a new intake of students look forward to starting university, the Master Locksmiths Association (MLA) has issued new advice to landlords of student property.

With recent research by Direct Line revealing that around a quarter of students are burgled whilst at university, with in the region of £25m lost to thieves since 2014, the trade association of the locksmithing profession, is warning student landlords to improve security measures across all student accommodation.

Dr Steffan George, managing director of the MLA, said: “Student properties have always been prone to break ins but with students increasingly looking for accommodation with more facilities and a higher finish, the cost of any potential damage and repairs could be higher than ever for landlords.

“Repairing damage to doors and windows caused by a burglary or forced entry can cost in the region of £600 alone, which can significantly affect the bottom line of any rental investment.”

Dr George is urging student landlords to be more security aware and to take a number of simple proactive measures to reduce the risks.

He offers the following advice for student landlords:

 + Know who has access to your property: Would-be thieves don’t always need to force their way into your property. Workmen, letting agents and past tenants may still have keys to your property. Even if you ask for all keys to be returned, there’s no guarantee that they don’t have copies. A patented lock system is a simple, cost effective way to limit the number of keys in circulation and prevent keys from being cut without proof of ownership.

+ Think like a burglar: Before new students move in, take the opportunity to review security on your property. Remove any large objects or debris outside that could potentially be used to gain entry and repair any broken doors or windows. Be sure to take a look at other similar properties nearby and look for anything different on your property that could make it obvious it is student accommodation.

+ Discuss security: Your new tenants may never have had the responsibility of securing a property alone before, so walk them through what you expect of them when they first move in.  Perform routine visits to the property to ensure your tenants are correctly maintaining security and regularly testing the burglar alarm.

+ Install preventative measures: Dusk-till-dawn security lights around the property will help deter thieves from attempting to gain access and alert your neighbours to any attempt to gain access. Interior light timers can also give the impression that someone is in.

+ Invest in good-quality security fixtures: Quality locks and security measures not only reduce the likelihood of theft, the increased lifespan of the products will save money in the long term. For a list of rigorously tested security products, visit www.soldsecure.com.

+ Don’t be tempted to DIY: If you have concerns about the security of your property, hire a professional - the average cost of fixing botched DIY jobs is £323[4]. Your local MLA-approved locksmith will be able to provide a thorough and independent safety and security assessment, offering advice and installation services on all security upgrades necessary to meet insurance requirements.

+ Security and Safety: Equally as important as security is safety. It’s very easy for the wrong kind of door hardware to be installed or fitted to an individual property, especially in homes of multiple occupation (HMO). In addition to this, HMO licencing could be in for some changes and landlords could be held directly responsible in an emergency situation - so advice from a trained professional from organisations such as the MLA are essential to prevent issues such as entrapment.

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Selective licensing being considered in Stoke-on-Trent

August 31, 2018

People in Stoke-on-Trent are being invited to have their say on city council plans to designate 14 areas under ‘selective licensing laws’ for private landlords, as part of its plans to tackle poor property conditions and management practices in areas with high levels of private rented accommodation.

Following a recent consultation and feedback received, a number of changes are being made to the selective licensing proposals, including changes to the fees and payment arrangements, removing some of the selective licensing conditions, as well as changes to the ‘fit and proper person’ criteria.

Cllr Randy Conteh, Stoke-on-Trent City Council’s cabinet member for housing, communities and safer city, said: “We have received an incredible amount of feedback about the selective licensing proposals and officers have been working hard to analyse it.

“We want people to know that the feedback is being considered very carefully, and we have suggested a number of changes to the proposals as a result – showing that we are listening to those who have taken the time to contact us.

“Some poor condition properties – leading to low demand and unsettled communities can along with other social and economic problems seriously undermine any efforts to build a thriving and prosperous city.

“This is why we are considering the introduction of selective licensing in these areas which have high levels of private rented accommodation and experience poor housing conditions and other issues. However, at this stage the decision as to whether or not to adopt the scheme has not been decided and ultimately Cabinet members will be making the final decision.”

For further information, click here

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Barclays cuts buy-to-let rates

August 31, 2018

Barclays has reduced its buy-to-let rates, with two-year fixed rate deals now starting from 1.5% up to 60% loan-to-value (LTV).

There is also a 75% LTV two-year deal available at 1.79%, which like the 60% LTV deal comes with a £1,950 arrangement fee.

Buy-to-let investors looking for a longer term deal will find that there are also five-year fixed rate products available at 2.19% to 60% LTV and 2.57% to 75% LTV, both with a £1,950 fee.

These buy-to-let products are available for both purchase and remortgages.

Despite the recent Bank of England base rate rise, lenders, including Barclays, are desperately trying to remain competitive in their buy-to-let pricing in order to attract fresh business.

David Hollingworth, associate director at London & Country Mortgages, told the press: “Although the base rate increased in August, the level of competition in the market continues to offer landlords the opportunity to protect against any future increases through well priced fixed rate options.

“The base rate increase had been widely expected so has not forced rates to spike and indeed the fiercely competitive market continues to see lenders rethinking their pricing and often sharpening up the mortgage deals on offer.”

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Dudley BS increases maximum loan amount on expat products

August 31, 2018

Dudley Building Society has increased maximum expat loan-to-values to 70% on its buy-to-let product with a rate of 3.99%.

Early repayment charges can be waivered during the three year period if the customer returns to the UK and wants to transfer to a retention product with the society.

Sam Ward, head of lending at Dudley, said: “Our guide will help to support our intermediaries with their expat cases.

“Over the last few months, we have made a number of improvements to our products and criteria in this area and we understand the difficulties our intermediaries face to stay on top of what lenders are offering – hopefully this will help.”

Dudley, which has also increased the maximum LTV on its residential expat product to 80% with a rate of 3.84%, will launch an expat guide to provide more guidance on product and criteria information.

Ward added: “The guide will act as a reminder of our key criteria points such as the wide range of countries we consider for UK citizens currently living abroad, excluding those found on the sanctioned list.

“We cater for borrowers that may have complex income or employment situations, where we often combine a number of our areas such as interest only, self-employed, self/custom build and later life lending to arrive at real solutions for our partners.”

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More than £1,000 of rent recovered from rogue landlord in landmark case

August 30, 2018

An unscrupulous landlord who forced a tenant to live in appalling conditions has been ordered to repay more than £1,000 in rent received in a landmark case for Thurrock Council.

Landlord Tobe Ayandare was fined for failing to comply with an improvement notice under the Housing Act 2004 back in March. But he has now been ordered repay the rent that had been paid to him.

Officers at Thurrock Council found no fewer than ten different health and safety hazards, including rotten and insecure window frames and doors, an untested and leaking boiler and a rodent infestation, at the property in South Ockendon.

After Ayandare was prosecuted in March, Thurrock Council sought to recover the housing benefit payments paid to Ayandare during the ten week period he had failed to comply with the improvement notice.

A rent repayment order application was made to the Eastern Residential Property First Tier Tribunal under the Housing and Planning Act 2016, with £1,071.12 now successfully awarded.

Cllr Barry Johnson, portfolio holder for Housing at Thurrock Council, said: “We believe everyone should have a good quality place to live and will not tolerate landlords exploiting their tenants by taking rent, or taxpayers’ money in the form of housing benefit, while forcing them to live in unacceptable conditions.

“This is a landmark case for the council. I am delighted that not only have we been able to prosecute and ensure the necessary improvement works are carried out at the landlord’s expense, but also to recover rent for the very first time.” 

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New Forest council calls on private landlords to help reduce homelessness

August 30, 2018

Rough sleeping in England has sadly increased for the seventh consecutive year, official figures show, and now New Forest District Council (NFDC) is calling for greater support from private sector landlords, as part of its efforts to reduce homelessness.

NFDC wants private landlords to work with them by joining the ‘Private Sector Lease Scheme’ as part of its work under the Homelessness Reduction Act.

Across the district there are already 117 properties in the scheme, but the council hopes to attract significantly more private rented homes with a view to renting them to vulnerable people who need accommodation in the district.

Cllr Jill Cleary, NFDC portfolio holder for housing, said: “Becoming homeless is a devastating thing to happen. And it is not just the stereotype of rough-sleepers this national issue affects; losing your home could happen to anyone, often through no fault of their own.

“We work to help anyone who doesn’t have a roof over their head.”

Cllr Cleary believes that the scheme has benefits for landlords as well as people who need accommodation.

Landlords who join the scheme receive a fixed term lease over a number of years and guaranteed monthly rental income for the whole of the lease period, including any times when the property is vacant, while all repairs are carried out by the council’s maintenance team.

Cllr Cleary added: “We are working hard to meet the requirements of the new Homelessness Reduction Act head-on and in its first few months helped 63 households who were facing the imminent loss of their homes to secure alternative accommodation and avoid homelessness. But we can’t do this alone.

“We need more properties and believe what we offer landlords who join the private sector lease scheme is hassle-free with many mutual benefits.”

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Landlord ordered to pay more than £10k for illegally evicting tenant

August 30, 2018

A private tenant was shocked when he returned home to find the locks to his rental property had been changed and his belongings removed.

The man, who was living at the property in The Crescent, Bridlington, with another tenant, was given just one week’s notice to vacate.

The landlord, Fiddlers Investment Ltd, was warned by East Riding of Yorkshire Council that it had not followed correct eviction proceedings by serving just one week’s notice and would be investigated for a criminal offence, unless they followed the correct steps.

But the company opted to ignore the warning and pressed ahead anyway.

After the resident refused to leave the property, which was a HMO, with such short notice, the landlord changed the locks and removed his belongings.

An East Riding of Yorkshire Council spokesman said Fiddlers’ directors, Tracy Hollwarth and Barrie Craven, along with its regional manager, Sheridan Brown, refused to accept they had done anything wrong in the eviction, which happened in September 2016.

The company was charged with two offences of unlawful eviction, which the two directors and regional manager pleaded guilty to at a hearing at Beverley Magistrates Court last week.

Fiddlers Investment Ltd was ordered to pay £10,865.15, including a fine of £4,000 and costs of £6,865.

Chris Dunnachie, private sector housing and safety manager at East Riding of Yorkshire Council, commented: “The council has a duty to protect tenants to make sure they are safe from illegal evictions.

“Some landlords fail to accept that, despite being their property, each and every room or flat within that property is a person’s home and they have no right of entry without the tenant’s agreement, and must follow clear legal procedures to ensure their tenants are given appropriate notice to leave.

“We will deal with any landlord, letting agent or property company who does not abide by the law. It was disappointing that in this case, Fiddlers Investments Ltd chose not to take officer’s advice.”

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RLA hires new chief executive

August 30, 2018

Andrew Dixon, formerly of Tesco, Boots and Procter & Gamble, has joined the Residential Landlords Association (RLA) as the organisation’s new chief executive.

Dixon, who has worked across the globe for various companies, was responsible for leading the Tesco Clubcard and Boots Advantage Card loyalty and insight programmes.

Dixon, who has been interim chief operating officer of Uchumi Supermarkets PLC in Kenya since November 2017, said: “I believe the RLA has developed a great service for its members and this is reflected in the doubling of its membership over the last five years.

“I look forward to bringing some additional experience to the team which I hope will extend the offer and further grow the membership.”

Alan Ward, RLA chairman, is delighted that Dixon has joined the landlords’ body.

He commented: “Andrew brings a wealth of experience in gaining and retaining customers and we look forward to him applying this to the RLA.

“It is more important than ever that private landlords have support to provide high standard accommodation and Andrew will ensure that membership of the RLA provides this to more landlords.”

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NatWest reduces BTL rates by 0.5%

August 30, 2018

NatWest has cut rates across its buy-to-let ranges by up to 0.5%.

Two-year fixed rate buy-to-let products now start from 2.77% at 60% loan-to-value (LTV), while its 70% LTV products now start from 3.02% at 70% LTV and 3.07% up to 75% LTV.

Five-year rates are now available at 3.04% up to 60% LTV, 3.48% to 70% LTV and 3.57% to 75% LTV.

A recent survey by NatWest revealed that almost two-fifths of landlords are feeling positive about the future of the rental market, and are thinking about buying more properties to rent.

The study found that portfolio landlords are generally keenest to expand with almost half - 48% - of landlords surveyed with three properties and 41% of landlords with four properties wanting to invest more in buy-to-let.

Landlords in the North-East and North-West were more likely to affirm they were looking for more buy-to-let properties, with 51% in the North-East and 44% in the North West. This compared with just 30% of South East landlords.

For those of you that may be interested, NatWest also reduced rates across its residential products, with two-year fixed rate residential deals now starting from 1.59% up to 75% LTV, 1.78% at 80% LTV, 1.88% at 85% LTV and 2.2% up to 90% LTV.

Mark Bullard, head of sales at NatWest, said: “We have taken this time to reposition our portfolio to reflect the current market conditions and balance our mix of business. This includes reductions of up to 50bps in selected two and five-year deals.”

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Rental demand continues to increase, but supply dwindles

August 29, 2018

The number of prospective tenants looking for new homes to rent has increased to the highest level seen since September 2017, the latest PRS report from ARLA Propertymark shows.

The data reveals that the number of new prospective tenants registered per letting agent branch increased from 71 in June to 79 in July.

Demand is up 13% year-on-year, but the supply of available properties is down, falling from 191 in June to 184 last month

In June, the number of tenants experiencing rent hikes increased to 35%, but this fell marginally in July, to 31%.

David Cox, chief executive at ARLA Propertymark, said: “Buy-to-let investors are being pushed out of the market by increasing costs and continued regulatory change, and new landlords are being deterred from entering.

“Last month, an average of four landlords took their properties off the market per branch, up from three this time last year – and as supply falls, competition among tenants increases, which pushes up rent costs.

“Almost a third saw their rents rise last month, and although this figure was down from June, it’s still far too high.

“To put tenants back in the driving seat, we need more homes available to rent, and the only way this will be achieved is if the government makes the market more attractive for BTL investors.”

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Government urged to stop ‘penalising’ BTL landlords

August 29, 2018

The government must move now to start supporting those that invest in the private rented sector or risk seeing significantly more landlords exit the buy-to-let market, resulting in an inevitable decline in much needed rental property listings, according to haart estate agents.

Without greater incentives for buy-to-let landlords, many will simply not be willing to offer longer tenancies and leave the market, adding to the growing supply-demand imbalance in the PRS that is starting to place upward pressure on rental values across many parts of the country.

The government’s decision to restrict mortgage interest relief to the basic rate of income tax and add a 3% levy on stamp duty for the purchase of additional homes is having an adverse impact on the PRS, and the estate agency fears that this will lead to a sharp rise in rents.

The latest data from UK Finance shows that gross mortgage lending rose by 7.6% to £24.6bn in July 2018 year-on-year ahead of this month’s base rate rise, and yet activity in the buy-to-let sector remained broadly flat.

Paul Smith, CEO of haart estate agents, commented: “Mortgage lending jumped a huge 8% on the year in July as existing homeowners sought to seal themselves into a lower rate ahead of the Bank of England’s interest rate hike.”

However, he said that landlords are still “feeling the pinch” with 12% fewer landlords buying property than the same time last year.

He added: “The buy-to-let sector is a fundamental part of the UK property market, and with fewer landlords, we are seeing rents rise.

“The government must stop penalising those who are willing to invest in the rental market and stop its needless crackdown on the sector.”

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Home ownership is the ‘ultimate goal’ for young adults

August 29, 2018

The chances of a young adult owning a home in this country has dropped dramatically over the past two decades due to high house prices, which partly explains why rental demand continues to grow, but home ownership still remains the “ultimate goal” for Generation Rent, according to a new report from law firm Collyer Bristow.

The report, which will be conducted annually, is called the ‘Home Ownership Attitudes and Aspirations’ and is based on the hopes of a panel of 20 to 44-year old men and women in London and the South East living in rented accommodation and in their own homes.

The report found that 73% of men and 57% of women hope to buy their own home within the next five years, while 29% report that home ownership in the same timeframe is unrealistic, with just 9% saying they have no aspiration to buy a home at all.

Younger adults, aged 20-24 year, are most hopeful of being able to one day acquire property, while just 59% of 25-34 year olds surveyed and 63% for 35-44 year olds said that they hope to buy property.

Alex O’Connor, partner in commercial real estate at Collyer Bristow, said: “We all know that there is a housing crisis in the UK and that it is particularly acute in London and the South East.

“We have seen developers bring forward new tenures, such as dedicated Build-to-Rent schemes, but home ownership remains the ultimate goal.

“It is interesting that all of our panel’s 20-24 year olds say that they will own their own home, only for those hopes to be dashed when the reality of buying a property hits home. That picks up slightly, perhaps as our panel start to marry and think about starting a family.”

The study found that price (77%) trumps location (61%) when buying property, while alternative property tenures are growing in popularity, particularly in Greater London.

O’Connor added: “The home market is changing rapidly with new tenures emerging and institutional money looking to change the rental market for the better.

“Whilst our panel might choose to rent for longer, home ownership remains the ultimate goal. The housing crisis is not going to disappear any time soon.”

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Tenants sub-let house in west London for £835-a-night without landlord’s consent

August 29, 2018

The owner of a three-bedroom house in west London has not received a penny in rent despite her property being sub-let, without consent, to as many as eight tenants at a time for a cost of £835 a night.

Cheryl Roux, the ex-wife of Michellin star chef Albert Roux, has now moved out of her house after a decision to rent out part of her home turned sour.

Roux decided to rent out the top two storeys of her mews house, but the tenants turned out to be bogus, and have since June, Roux claims, been illegally sub-letting the three-bedroom property.

Roux was advised to move out of the property by the police to avoid confrontation, but they are unwilling to intervene in the dispute over the property, insisting that it is a matter for the civil court.

Roux told the press: “I’m clearly a victim of crime but the police do nothing and these crooks are still renting out my home.

“They changed the locks so I couldn't get in and nailed shut the garage doors. I'm at my wits’ end.”

Airbnb has removed the property listing from its platform, but it remains on Zoopla, with a spokesman for the property portal insisting that it is a “legitimate listing”.

“We have spoken to Hamptons, the agent who are instructed to rent it out, and they have confirmed this,” said the spokesman.

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Rent guarantee insurance provide landlords with ‘peace of mind’

August 29, 2018

Unpaid rent and rent arrears are a constant concern for landlords as they can cause major financial problems.

 

To help safeguard landlords from losing out on rental yield, various insurance providers offer a rent guarantee service that pays out if tenants are unable to pay the rent.

 

Rent guarantee insurance will often see a landlord reimbursed for any unpaid rent while a tenant or ex-tenant is still in the residential property.

 

A landlord can generally make a claim once the rent has been overdue for at least one calendar month, while some insurance products will also contribute to the cost of repairing damage once the landlord has regained possession of the property.

“The guarantor covers all aspects of the tenant’s liability, not just a rent guarantee,” said Terry Mason, group operations director of Housing Hand, which has seen a sharp rise in tenant applicants over the last 12 months.

The company reports that it has seen an 80% rise in the number of tenant applicants over the past year, owed in part to rising numbers of international students and working professionals looking for UK guarantors.

The rise also comes as a result of the fact that Housing Hand has significantly increased its landlord, letting agent and university partners this year, with the firm now working with more than 4,000 accommodation providers.

Mason commented: “Landlords and letting agents are unable to purchase rent guarantee insurance for tenants who fail their referencing checks, such as those that are on a zero-hour contract, self-employed, contractors, international working professionals and individuals with poor credit history.

“Accommodation providers that work with us have access to a wider pool of tenants and we have seen a huge increase in applications for our UK guarantor service.  We have also received great feedback from landlords and letting agents who have used Housing Hand, as it offers protection for the whole period of the tenancy.”

Housing Hand’s service as the guarantor also covers legal costs for tenant eviction and damage to the property.

Mason added: “Housing Hand fees are paid by the tenants and there is no additional cost to the letting agent or landlord, just peace of mind.

“Over the last six years we have been standing as the guarantor for numerous tenants, many of which have defaulted. We have met all defaults and paid all monies owed to the landlord.”

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Landlords need to be able to ‘regain their property’ when things go wrong

August 28, 2018

A proposal to scrap Section 21 of the Housing Act 1988, the clause which allows landlords to evict tenants without cause, would be a fundamental mistake that could potentially deter many people from investing in the private rented sector, according to Residential Landlords Association (RLA).

As the nature of the rental market continues to change, many tenants are now adopting a longer-term view to renting property, which is great news for landlords, but rent arrears remain a real concern for a number of landlords across the UK, especially as it can have a significant impact on their ability to pay their mortgage.

Thankfully, landlords keen to regain possession of their properties can currently issue tenants with a Section 21 notice, giving them at least two months to leave. But Generation Rent’s campaign to end section 21 appears to be gaining momentum.

Citizens Advice is the latest organisation to claim that Section 21, dubbed ‘no fault’ evictions, is not working and that a “new fix is needed” to offer private tenants greater stability in their homes and the means of complaining about sub-standard housing without the fear of being evicted.

It claims that private renters who formally complain about issues such as damp and mould have an almost one-in-two - 46% - chance of being given an eviction notice within six months.

Any landlord who evicts a tenant solely for this reason should be slammed according to the RLA, but it points out that this not the practice of the vast majority of responsible landlords, and should therefore not result in a ban on ‘Section 21’ notices.

The landlord body refers to government data which reveals that just 11% of tenancies are ended by the landlord and, of these, almost two thirds regained their property because they wanted to sell it or use it.

In other cases landlords have sought possession because of tenants committing anti-social behaviour or failing to pay their rent. The fact that a tenant may have complained about disrepair is often not the reason for the eviction.

In this minority of cases landlords either have to seek a ‘Section 8’ notice which new RLA research shows takes on average six months and costs over £2,500 for landlords to regain possession their property.

The alternative is to wait until the end of the contract and use a Section 21 notice without having to give a reason. This has led to section 21 notices being used because Section 8 is not fit for purpose.

The RLA says that what is needed is a new ‘housing court’ to speed up access to justice for both tenants and landlords when things do go wrong. The government is currently considering this.

David Smith, the RLA’s policy director, said: “No good landlord will want to evict a tenant unless there is a major issue around rent arrears or anti-social behaviour. That’s why the average length of a tenancy is now four years.

“But where things do go wrong, landlords need to have confidence that they can regain their property.

“This is why we believe a new process, a dedicated ‘housing court’, needs to be established to speed things up and why there needs to be a six month break clause in the proposed three year tenancy.”

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BTL landlords offload almost 4,000 properties a month

August 28, 2018

Landlords are selling close to 4,000 buy-to-let properties a month resulting in the first recorded fall in the number of rental properties in 18 years, fresh figures show.

Official data from the Ministry of Housing report reveals that about 3,800 buy-to-let properties are being sold by landlords each month, as mortgage interest relief changes continue to have a negative impact on the market.

A number of other tax and regulatory changes have also hit landlords’ profits over the past couple of years, including the scrapping of the ‘wear and tear’ allowance and the introduction of the 3% stamp duty surcharge.

David Cox, chief executive of letting agent trade body ARLA Propertymark, said: “The barrage of legislative changes landlords have faced over the past few years has meant the buy-to-let market is becoming increasingly unattractive to investors.

“Landlords are either hiking rents for tenants or choosing to exit the market altogether to avoid facing the increased costs incurred.” 

The “exodus of landlords” is causing a chronic shortage of available properties to rent in some parts of the country, particularly in London.

Jatin Ondhia, CEO of Shojin Property Partners, commented: “As a result of the government’s increase in stamp duty, it is now much more costly to acquire a buy-to-let property. A £250,000 investment property will incur stamp duty of £10,000 compared to £2,500 for an owner occupier.

“Many landlords have seen their profits eroded by the increased burden of taxation and regulation. They are also facing poor buy-to-let yields especially in London for example, where they are between just 2-3%, while nationwide the average yields are between 6-8%.”

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Tenants who complain almost twice as likely to be evicted, says Citizens Advice

August 28, 2018

Private renters who complain to their landlord about problems at their rental property, including issues such as damp and mould, are almost twice as likely to be evicted within six months compared to those that say nothing, according to a new report by Citizens Advice.

The charity estimates that about 141,000 tenants have been affected since laws attempting to ban revenge evictions were introduced in 2015.

Gillian Guy, chief executive of the charity, believes that the “well-intentioned laws” created to put an end to ‘revenge evections’ have failed and that “a new fix is needed”.

A fresh study by Citizens Advice found that tenants who had received a Section 21 “no-fault eviction” notice were five times more likely to have gone to their local authority and eight times more likely to have complained to a redress scheme.

A government consultation on proposals to introduce minimum three-year tenancies in the private rental sector closes at the end of the month, and Citizens Advice supports the idea.

It wants three-year tenancies to include limits on rent rises to prevent landlords from effectively evicting tenants through pricing them out, no break clause at six months, and allowing tenants to leave contracts early if the landlord does not uphold legal responsibilities.

Guy commented: “The chance of a family being evicted from their home for complaining about a problem shouldn’t carry the same odds as the toss of a coin.”

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Longer tenancy plans appear to be a ‘political move’ aimed at the renter vote

August 28, 2018

The National Landlords Association (NLA) has once again voiced its opposition to plans to introduce mandatory three year tenancies.

Responding to the overcoming barriers to longer tenancies consultation, which seeks views on a proposed three year tenancy model, the NLA has strongly objected the proposals.

The NLA’s response outlines:

+ the increased risk associated with longer term tenancies for landlords, particularly with regard to removing tenants who breach the terms of their tenancy

+ the urgency of reforming court processes so that tenants can be removed where there is a breach of tenancy without undue delay or cost before any longer tenancies can be introduced

+ the importance of maintaining Section 21

+ the importance of flexibility in lengths of tenure, to  account for the needs of different tenants and landlords

+ the risk that break clauses and regulated annual increases in rent will lead to landlords changing behaviour to end tenancies before they enter into the longer fixed period and enforce rent increases more regularly than under the current system

+ the value of using incentives to encourage behaviour change, rather than enforcing a mandatory approach, which will not be suitable for either landlords or tenants

+ the danger that, should a mandatory approach be enforced, landlords will choose to leave the market rather than take on additional risk.

The NLA’s chief executive officer, Richard Lambert, said: “In his speech to the Conservative Party conference last October, Sajid Javid announced plans for a consultation on how to encourage longer tenancies. That's been the tone of the discussion ever since - consultation and encouragement. Frankly, right now, I feel we've been misled.

“This is supposed to be about meeting the needs of the consumer. NLA research with tenants finds consistently that around 40% of tenants want longer tenancies, but 40% do not. More than 50% consistently say that they are happy with the tenancy length they were offered, and 20% tell us that when they asked for a longer tenancy, they got it.

“We would accept that the flexibility of the current Assured Shorthold Tenancy isn’t used as effectively as it could be, and that we should be looking to find ways to ensure that tenants are offered the kind of tenancies they need at the time they need them. That means thinking about how to modernise a model devised 30 years ago, to take account of the changes in the people who are renting and the way they live their lives. How will that be achieved by moving to a more rigid system, more reminiscent of the regulated model the current system replaced?

 

“It's like urging someone to update their 1980s brick-style mobile phone, but instead of giving them a smartphone, offering them a Bakelite dial phone plugged into the wall.

“This is a policy which the Conservatives derided when it was put forward by their opponents in the past two general election campaigns. It's hard not to see this as more of a political move aimed at the renter vote than a genuine effort to improve how the rented market works for all those involved.”

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Landlords maintain BTL ‘portfolio sizes’ – Foundation Home Loans

August 28, 2018

The UK housing market continued to slow last month as reflected by a drop in new mortgage lending, with many buy-to-let landlords opting to “maintain the size of their portfolios”, rather than add to them, according to Foundation Home Loans. 

The number of new mortgages approved for new house purchases dropped by 4.3% in July to 39,584 compared with the same month a year ago, industry body UK Finance said last week.

Overall, gross mortgage lending increased by 7.6% year-on-year, to £24.6bn in July, fuelled primarily by remortgaging as borrowers, including buy-to-let landlords, locked into attractive deals in anticipation of the recent base rate rise.

 

Jeff Knight, marketing director for Foundation Home Loans, commented: “The anticipation of a rate rise certainly would have encouraged a spike in activity, and while the purchase market is still less inflated – particularly for first-time buyers – it’s remortaging activity that is helping to maintain momentum and overall growth.

 

“This is certainly the case in buy-to-let as landlords choose to maintain the size of their portfolios, waiting for a more opportune time to build on it.” 

But separate research suggests that rather than ‘maintain’ the size of their existing portfolios, many buy-to-let landlords are actually selling up.

Official data from the Ministry of Housing report shows that about 3,800 buy-to-let properties are being sold by landlords each month, as mortgage interest relief changes continue to have a negative impact on the market.

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BTL landlords selling up in droves, says Belvoir

August 24, 2018

There has been a significant increase in the number of buy-to-let landlords selling up, along with a notable reduction in the volume of people investing in the Private Rental Sector (PRS), according to Belvoir.

The letting agency reports in its Q2 rental index that landlords are exiting the market mainly due to punitive tax changes.

Belvoir’s findings compliment various reports that suggest landlords are leaving the market in large numbers.

According to the latest residential property forecast from the Royal Instituted of Chartered Surveyors (RICS), rents are forecast to see strong growth over the next five years as a consequence of the reduction in the number of new properties available for renting.

The trade body predicts that national rents could rise by as much as 15% between now and mid-2023.

RICS warns that many prospective tenants now face having to bid against each other, pushing rents up in the process, as a result of falling supply caused by a jump in the number of buy-to-let landlords exiting the PRS, due to the government’s draconian tax changes.

Belvoir CEO Dorian Gonsalves commented: “Although government policies such as a loss of mortgage tax relief, and increased stamp duty on second homes is hurting landlords, they still have a choice as to how to invest their money, whereas tenants have little or no choice of where to rent due to a reduction in supply.

“Belvoir’s Q2 rental index revealed just a slight increase in average rental inflation across the UK, with a similar number reporting static rents, but if landlords continue to sell up because their business model in the PRS is being continually attacked, it will undoubtedly result in a further shortage of properties, and inevitable increases in rents, as predicted in the latest RICS report, which stated that rents are likely to rise by 15% over the next five years.”

Concerns about the possibility of mandatory three-year tenancies may also deter people from investing in the BTL sector, and this could genuinely lead to an increase in homelessness, according to Gonsalves.

Although many landlords are not actively against three-year tenancies, Gonsalves pointed out landlords do understandably need reassurance that they can gain possession of their property when needed, and will be “protected against tenants who do not pay their rent, or abuse a property or indulge in anti-social behaviour”.

Belvoir is urging the government to do more in the Autumn Budget to address stock shortages in the UK, by incentivising the new build sector with low maintenance homes through more Help to Buy and Buy to Rent schemes to provide more homes to own.

Gonsalves continued: “Landlords also need rewards and incentives to encourage them to remain in the PRS, such as reversing current tax increases and introducing tax breaks, as well as initiatives such as tax incentives for landlords who buy large properties and turn them into several affordable and low maintenance flats suitable for the rental sector.

“It is anticipated that more landlords will make a decision about whether to retain their portfolio in 2019, when tax bills have been calculated and the true extent of any further erosion to their profits is seen.

“The Autumn Budget is the perfect time for the government to introduce the incentives that landlords who offer good quality properties at a reasonable rent really need.”

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Major regional difference in landlord ‘experience and buying habits’

August 24, 2018

Buy-to-let landlords in the Midlands continue to invest in the sector on the back of a ‘positive outlook’, but elsewhere in the country, landlords are generally scaling back, particularly in London, new figures show.

Fresh data from UK Finance reveals that buy-to-let mortgages for property purchase have dropped by around 40% overall since 2015 following the announcement of tax and regulatory changes for the sector.

But a recent survey of over 680 landlords carried out by BDRC on behalf of Paragon found that landlords in the Midlands seem to be bucking the trend, boosted by strong economic growth in the region, a thriving higher education sector and continued, successful regeneration of Britain’s second city, Birmingham.

Landlords are still picking up property in the East and West Midlands, despite a significant drop in purchase activity in central London and more modest reductions across the rest of the country, thanks to high rental returns in the region, with East Midlands landlords currently achieving a 6.7% average rental yield, while those in the West Midlands are achieving yields of 6.2%.

Some 42% of landlords in the East Midlands and 33% in the West Midlands said tenant demand was increasing, compared with just 24% of all landlords who indicated rising demand.

Landlords operating in central London were least likely to be buying property, with a net 16% saying they had sold some property in the last quarter.

John Heron, managing director of mortgages at Paragon, commented: “These findings highlight a big regional difference in landlord experience and buying habits.

“Some central London landlords appear to be scaling back a little while landlords in the Midlands continue to invest on the back of a positive outlook.”

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