Property News

Landlords will become ‘more selective’ if the government scraps Section 21

July 5, 2019

But-to-let landlords will have little alternative but to become more selective over what tenants they are willing to accept if the government removes Section 21.

Many landlords see the Section 21 ‘no-fault’ eviction process as their only safety net against unscrupulous tenants.

The National landlords Association (NLA) fears that some of the most vulnerable tenants on state benefits will be “the biggest casualties” of the controversial new initiative.

The NLA described the proposal to abolish Section 21 as “ill-thought-out” and urged the government to “think twice” before changing the rules on eviction in the private rented sector.

In a survey of landlords, the NLA found that of those who had sought to end a tenancy in the past five years, regardless of whether they used this no-fault process or specified they had grounds for eviction, 57% had done so because of rent arrears. 

Some 43% respondents said that if the government pressed ahead with its controversial plans, they would become more selective when choosing tenants for their property.

In a separate survey, the NLA found that 76% of landlords who let to Universal Credit tenants, 66% of those let to housing benefit tenants, while 63% of those who let to migrant workers experienced rent arrears in the last 12 months.

Richard Lambert, CEO of the NLA, commented: “Rent arrears are the biggest problem that landlords face, and the main reason why they use Section 21 to evict a tenant. So if the government removes what they see as their only safety net - Section 21 - they will have no option but to become more selective. That will hit people on Universal Credit, housing benefit and other state benefits which have fallen way behind rents. They will become the biggest casualties of this ill-thought-out government policy.

“It’s surely not right that the most vulnerable in our society should have to struggle to find accommodation because of the government’s failure to provide landlords with appropriate powers of eviction when faced with rent arrears.”

“We urge the government to think twice before taking this retrograde step.”


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Wide gap in regional rental prices, new figures show

July 5, 2019

The average rent increased in four of the eight regions monitored by Goodlord across England and Wales between May and June, the latest rental index from the PropTech firm shows.

The rental data reveals wide regional variations, with rents up by 6% in Wales and the South West, but dropping by 6% on average in the South East.

The average rent nationally stood at £907 per calendar month (pcm) in June, led by London where the average rent reached £1,621pcm.

The next highest region is the South East, at £980pcm.

The region with the lowest average rent in May was the North East, at £657pcm.

According to the index, the average rent in each region stands at:

London - £1,621pcm

South East - £980pcm

South West - £947pcm

Wales - £800pcm

East Midlands - £800pcm

West Midlands - £719pcm

North West - £758pcm

North East - £657pcm

Tom Mundy, COO and co-founder of Goodlord, commented: “It’s been another interesting month across the UK. We continue to see a range of market factors affecting average rental prices.

“Whilst London prices are holding fairly steady, we’ve seen a big drop across the South East as a whole. This contrasts sharply with a steady rise in rents for the South West and Wales.

“As we move into the summer - typically the busiest season for lettings - it will be interesting to see what the impact of student housing churn and the repercussions of the tenant fee ban have on rental costs and void periods.”


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Glasgow’s first major city centre Build to Rent development successfully delivered

July 5, 2019

Construction has been completed on the first major city centre Build to Rent development in Glasgow.

With young professionals flocking to the Merchant City scheme, Candleriggs Court has been fully-let within weeks, demonstrating appetite for city centre living.

Having been met with high levels of occupier demand, the entire 36-apartment complex was fully let within just six weeks of marketing by Tay Letting, the property investment, letting and management specialist.

The fully-let housing development now has a Gross Development Value (GDV) north of £10m.

Marc Taylor, director, Tay Letting, said: “Candleriggs Court is a unique development in Glasgow. It offers affordable accommodation in the heart of the Merchant City, while delivering a secluded community just minutes’ walk from the best bars and restaurants the city has to offer.

“This really resonated with potential tenants, and unprecedented demand allowed us to fully-let the development in a matter of weeks.

“Build to Rent developments will play an increasingly important role in Glasgow over the coming years. Tay Letting’s experience in successfully marketing Glasgow’s first major BTR scheme leaves the firm ideally placed to provide expertise and advice for the up and coming sector.”

Following on from the success of Candleriggs Court, which features a mix of one, two, and three-bedroom flats, plans are now progressing to deliver another city centre site next year.

Build to Rent will be crucial in sustaining the city’s accommodation needs going forward as house prices in Scotland are forecasted to rise by 17% by 2022, according to research from Savills.

Stephen McKechnie, managing director, Kelvin Properties, commented: “Kelvin Properties has a proven track-record of delivering developments of real quality, such as Sandringham Court in Newton Mearns and The Atrium in Broomhill. Candleriggs Court is another stellar addition to our growing portfolio.

“We want to help Glasgow flourish and thrive by creating quality housing in prime locations, that really enhance the urban fabric of the city and attract the very best talent to the city. Following the success at Candleriggs Court, we now plan to deliver more market-leading BTR developments across Glasgow.”


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Vida introduces new BTL products

July 5, 2019

Vida Homeloans has announced the release of a series of new specialist mortgage products, including buy-to-let deals.

The products include a 75% loan-to-value five-year fix buy-to-let offering at 3.59%, which includes a £3,495 fee, along with a 75% LTV five-year fix HMO or HUB deal at 3.79%. The former product includes a £3,495 fee.

Louisa Sedgwick, director of sales at Vida Homeloans, said: “At Vida, we are continuously looking at ways to add choice and variety for brokers and their clients.

“At a time when the traditional idea of the ‘perfect’ borrower is becoming increasingly unrealistic, specialist lending has been vital in supporting the modern mortgage market and enabling buyers to achieve that longed for first home or investment property.

“Innovative, creative and out the box thinking is a crucial element needed to drive the market forward and provide solutions for those underserved by the high street banks.”


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Four out of 10 landlords call for a fast track housing tribunal

July 4, 2019

Almost four out of ten adults would like to see the government introduce a fast track housing tribunal if the Section 21 ‘no-fault’ eviction process is scrapped, new research shows.

According to Paragon’s PRS Trends Report for Q2 2019, which surveys the views and experiences of over more than 200 landlords, 39% of landlords would like to see a fast track housing tribunal introduced if Section 21, introduced in The Housing Act 1988, is abolished as planned.

The government announced its intention to abolish Section 21 in April this year, which would mean that landlords could no longer give tenants two months’ notice of their intention to take possession of a property at any time after the initial fixed term of the tenancy agreement has expired.

In its place, the government proposes that landlords should follow the Section 8 process which requires them to demonstrate that tenants are in breach of their rental agreement when serving notice.

Alongside a fast track tribunal, almost 24% of respondents to Paragon’s survey said that they would like to see a shorter court process, 15% would like a guaranteed way to cover their costs, while 7% argued for the ability to submit evidence online.

 

 

Some 84% of landlords said they felt the maximum time from serving notice to taking possession should be no longer than eight weeks.

According to the MHCLG’s recent English Private Landlord Survey, the vast majority of tenancies end at the tenant’s request.

John Heron, director of mortgages at Paragon, said: “Some of the main concerns for landlords around a move to the Section 8 eviction process relate to the efficacy of the existing court process.

“What we see here is widespread support for a fast track housing tribunal that can deliver a fair and timely solution for both landlords and tenants.”


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Significant increase in the number of tenants registering in London – haart

July 4, 2019

There has been a sharp rise in the number of people living in private rental homes, owed in part to a lack of new stock to buy, according to haart

The independent estate agency reports that pent up demand has led to 28 buyers chasing every instruction across London, and 12 across England and Wales, and this has resulted in greater demand for private rental homes.

The number of tenants registering with haart increased by more than 30% on the year in London, the latest data shows.

Paul Smith, CEO of haart, said: “A lack of new homes to move into is also forcing large numbers into rental accommodation. In fact, we have seen a 30% increase in tenant demand on the year in London. Landlords who are considering selling up should bear this in mind.

“The reality is that tenant demand will always outstrip rental supply, and the yields to be gained are still far more favourable and a safer bet than the majority of other investment opportunities available.”


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Landlord ordered to pay almost £39k for putting tenants’ lives at risk

July 4, 2019

A private landlord who put the lives of his tenants at risk has been ordered to pay a £20,000 fine and £18,790 prosecution costs.

Graham Hammer, 68, was also handed a six month sentence suspended for 12 months with a two month curfew between 7pm and 6am.

No fewer than 16 tenants, including a number of vulnerable children, had to be evacuated from the Derby Court Hotel in Pole Street, Preston, when Lancashire Fire and Rescue Service carried out an inspection in February  last year.

Preston Crown Court heard that Hammer had inherited the building, which at the time was an amusement arcade, from his father in 1982, and converted it to a hotel. But in more recent years he has let out rooms as a house of multiple occupancy (HMO).

The Court was also told that the landlord took a “careless, if not cavalier approach to fire safety” putting his tenants at serious risk of danger.

Having already received a fine of £500 for fire safety breaches in 2016, Hammer was handed a number of action points from Lancashire Fire and Rescue Service.

But when officers visited the property to carry out a routine inspection, not only did they find a number of the tradesmen living on site on the top two floors of the building, but also discovered power tools left unsupervised and holes in ceilings and part of the ground floor used as a workshop for cutting wood.

Hammer also told officers there had been a recent issue with water escaping into the electrical systems , added that he did not think there was anything in the building that could cause a fire.

Recorder Philip Parry said: “If you genuinely didn’t think there was anything in this hotel which could burn or catch fire then it really was a cavalier attitude to fire safety.”

Inspection of the safety systems also found some fire doors were jammed, others did not fit properly, while the fire alarm was faulty.

Parry added: “In my judgement you displayed a casual, if not cavaler attitude to fire safety.

“Your failure to ensure the building was adequately protected can only be down to your wish to save money.”

Hammer, pleaded guilty to four fire safety breaches by failing to take general fire safety precautions by ensuring adequate separation; failing to complete an adequate risk assessment relating to maintenance, monitoring and fire drills; failing to maintain adequate means of escape and failing to maintain systems to prevent the risk of death or serious injury.

Hammer has now sold the Derby Court Hotel to a developer who plans to convert it into student accommodation.


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Local authorities ‘failing’ to stop agents that ‘poison’ landlord-tenant relationship

July 4, 2019

The National Landlords Association (NLA) is calling on local authorities to take much firmer action against rogue letting agents that tarnish the image of the private rented sector.

New research by the NLA found that more than half of local authorities did not prosecute a single letting agent in the four-year period from 2014/15 to 2017/18.

In a Freedom of Information (FOI) request to 20 local authorities, the NLA discovered that 53% of local authorities did not prosecute any letting agents. A further 32% prosecuted three or fewer.

Liverpool City Council was the outlier, prosecuting 13 letting agents. By contrast, Hammersmith and Fulham Council did not even bother to respond to the FOI.  Of the 20 Councils questioned, 13 had already introduced landlord licensing schemes.

The NLA expressed concern at the fact that some letting agents make unauthorised alterations to a landlord’s property, leading to a breakdown of trust between the tenant and the landlord.

In addition, they sometimes let out a landlord’s property to multiple tenants, effectively creating an illegal “house in multiple occupation” (HMO).

Given that the licensing laws on an HMO are stricter than those for a single occupancy property, this can leave the landlord liable to fines of up to £30,000 or even criminal charges.

Richard Lambert, CEO of the NLA, said: “It is clear that too many local authorities to failing in their duty to prosecute rogue letting agents. These bad ones can really poison the relationship between landlords and tenants. We want to see local authorities take much firmer action.

“We were shocked to find that so few letting agents are being prosecuted by local authorities. While many local authorities have introduced licensing schemes to crack down on rogue landlords, they seem to be allowing letting agents to get off scot-free. This must stop.

“In the meantime, landlords should make sure their chosen agent is reputable and is a member of a client money protection scheme that will safeguard their assets — rental money, deposit or other funds — if they misappropriate them or go bust.”


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Leeds BS scraps age limit for buy-to-let landlords

July 4, 2019

Leeds Building Society has removed the age limit completely on its buy-to-let mortgages, allowing more customers to borrow into retirement.

The lender has lifted age restrictions on when buy-to-let mortgages mature, continuing a trend of more mortgage providers being willing to lend to older borrowers.

Many buy-to-let lenders have lifted age limits on mortgages with a view to encouraging borrowers to stay in the market well into retirement.

Matt Bartle, director of products at Leeds Building Society, said: “We keep all our lending criteria and our product range under constant review and are always seeking out new ways to deliver on our mission to help more people have the home they want.

“This criteria change is the latest improvement we’ve made, supported by our understanding of customer need in this evolving market.”

He added: “Mortgage choice is always a highly personal decision and, for older borrowers in particular it’s essential that they take appropriate advice bearing in mind their financial position as a whole.”


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Half of private Landlords use rental property to supplement monthly income

July 3, 2019

A new survey by Precise Mortgages has found that 52% of buy-to-let landlords are using rental properties to supplement their employed income.

With savers receiving miserable returns, it is unsurprising to find that many investors are turning to the buy-to-let sector as a means of supplementing their income.

According the research, even landlords with bigger portfolios are still working full-time – 32% of those with 11 to 19 properties supplement earnings from a full-time job with letting income and nearly one in five - 18% - of those with 20-plus properties have other income in addition to rental earnings.

Across the market as a whole 33% of landlords earn their living purely from their property portfolios, rising to 47% among those with six to 10 properties.

Around one in six - 16% - landlords plan to add more properties in the year ahead with 71% funding purchases with a buy-to-let mortgage.

Alan Cleary, managing director of Precise Mortgages, said: “Given that the majority of landlords have other earnings that can be used to show they can meet underwriting standards, lenders need to reflect this in their product offering to support landlords accordingly.”

Precise Mortgages has enhanced its top slicing feature, which enables customers to use surplus portfolio or earned disposable income to prove they can meet any financial stresses on a new loan application rather than through the rental income of the property alone.

It is now accepting top slicing on all eligible personal ownership, limited company, portfolio, HMO, and holiday and student let applications. First-time buyers are excluded.

Cleary added: “Top slicing allows landlords to manage their properties in a way they choose and gives them greater access to the products and loan sizes they want and particularly for those who may have been restricted by ICR requirements in the past.”


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Tory leadership candidates urged to ‘encourage more investment’ in the PRS

July 3, 2019

Jeremy Hunt and Boris Johnson, the two men competing to become the next Conservative Party leader, are being to urged to support investment in the private rented sector, as research shows that landlords are fleeing the buy-to-let market.

Tax and regulation changes continue to have an adverse impact on the buy-to-let market, with many landlords selling their buy-to-let properties.

Mortgage interest relief changes, the scrapping of the ‘wear and tear’ allowance and the introduction of the 3% stamp duty surcharge have hit landlords’ profits over the past couple of years, which largely explains why so many people are exiting the buy-to-let market and thus reducing the supply of much needed private rented stock.

Many prospective tenants now face having to bid against each other, pushing rents up in the process, as a result of falling supply, caused primarily by the government’s draconian tax changes.

Government data shows that 10% of landlords representing 18% of all tenancies in the sector plan to reduce the number of properties they rent out whilst 5% of landlords representing 5% of tenancies plan to leave the sector altogether.

 

Recent Residential Landlords Association (RLA) research suggests that almost half - 46% - of landlords are planning to sell some or all of their properties.

With demand from tenants gathering pace, at a time when there has been a striking reduction in the number of new properties for renting, the Royal Institute of Chartered Surveyors (RICS) predicts that national rents could rise by as much as 15% between now and mid-2023.

The RLA is now calling on the leadership candidates to back its five point plan for the sector:

1: Pro-growth taxation to ensure enough homes to rent to meet growing demand.

2: A fair system for repossessing properties that protects tenants from unfair evictions whilst retaining the confidence of landlords to regain possession of their property where there is a legitimate need. This needs to be coupled with a dedicated, housing court to settle disputes swifter and easier.

3: Supporting vulnerable tenants by ending the Local Housing Allowance cap.

4: Rooting out criminal landlords by providing councils with more resources to better use the powers they already have.

5: Rejecting all forms of rent controls which serve only to dry up the supply of homes to rent, reducing choice for tenants and thereby increasing rents overall.

David Smith, policy director for the RLA, commented: “The new Conservative Prime Minister needs to reconsider the approach to the private rented sector. Otherwise the situation for tenants will just get worse as they face less choice and higher rents because of a growing shortage of properties.

“We need a raft of changes that will encourage more investment in high standard homes rather than efforts to scapegoat landlords for failures by successive governments to build enough homes.”


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Government urges Hull City Council to stop ‘unfairly penalising landlords’

July 3, 2019

Hull City Council has come under pressure for unjustly taking an aggressive stance against landlords after a sharp rebuke from the government.

The council has been unfairly penalising landlords whose tenants report them for an alleged failing in their property, serving them with enforcement notices before they have had the opportunity to address a tenant’s complaint.

However, the housing minister Heather Wheeler has now called on Matt Jukes, chief executive of Hull City Council, to “work with these landlords” after being told how badly they were being treated by the local authority at a meeting with the National Landlords Association (NLA) and Humber Landlords Association.

Hull City Council has introduced the Hull Accredited Landlords Scheme, whose members are given an exemption from an immediate council inspection following a report from a tenant.

However, the NLA explained to Wheeler that there is confusion over the entry criteria for the scheme, which is free to join and only requires the landlord to attend a one-day training course on housing health and safety.

In a letter to Jukes, Wheeler said: “I was extremely concerned to hear reports that many landlords in Hull are not fully aware of, or have misunderstood, the standards they must meet to become a member of the scheme. It is crucial that you work to bring landlords with you and are communicating effectively to do so.”

Gavin Dick, local authority policy officer at the NLA, commented: “Hull City Council has been unfairly penalising landlords. While it should penalise landlords who don’t provide safe, habitable homes, it isn’t right that good landlords should be punished before having the chance to fix any problems they weren’t previously aware of. The vast majority of landlords want to rectify issues as soon as they arise. Councils must not tarnish all landlords with the same brush.

“It’s unfortunate that we had to take this matter to the minister, but we are encouraged that our collective voices have been heard and Hull City Council now needs to take immediate steps to ensure all landlords in Hull understand the Hull Accredited Landlords Scheme.”


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The need for speed: fast broadband now considered ‘crucial’

July 3, 2019

With most of us using multiple digital devices and streaming everything from TV shows and music to computer games and powerpoint presentations, fast internet connectivity is now one of the first services that people look for in a new home.

Whether for work, study or entertainment reasons, a reliable and affordable broadband connection is something that may prospective renters simply cannot live without.

According to a new survey of 2,115 Brits, homeowners commissioned by broadbandchoices, a broadband, mobile, and TV comparison site, a fast broadband connection is the third most important factor for people when choosing an area to live in.

The study found that 69% of people consider fast broadband connection an important factor when choosing a new area to live in.

Additionally, 78% said that a good internet connection is important to them due to accessing streaming services such as Netflix, Amazon Prime and Now TV.

Respondents claimed that a fast and reliable broadband connection was more important than living close to good nurseries and schools (57%), friends and relatives (38%) and shops and amenities (35%).

The poll found that accessing streaming services is the main reason people need a good internet connection, followed by communicating via social media, WhatsApp and email (62%), online shopping (57%) and being able to work from home (25%).

Mark Pocock, home communication expert at broadbandchoices, said: “Moving to a new house can be a problematic and stressful time, and these results emphasise how crucial a reliable and fast broadband connection can be to reduce any further needless roadblocks in the way of a smooth transition to a new area.

“Without an internet connection, many can feel disconnected and inconvenienced.”

He added: “The broadbandchoices regional speed checker is a useful tool to assist in this before you move, helping to discover the best deals for broadband in your area, and hopefully avoiding any additional disruption to the homeowners moving experience.”


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Landbay refreshes its range for professional landlords and cuts rates

July 3, 2019

Landbay has revamped its range of buy-to-let mortgage products for professional landlords and reduced rates in a bid to win more business.

The buy-to-let mortgage marketplace lender has reduced its rates by up to 0.6% and cut fees by up to 0.5%.

Landbay’s fixed and tracker products across standard properties, small and large HMOs/multi-units, and expat lending are available to all buy-to-let landlords via their brokers, as well as accessible through Landbay’s network and club partners.

Landbay is also launching an exclusive lending update for its packager partners, available at up to £2m.

The changes follow the increase of the maximum loan term earlier this year from 25 to 30 years.

Landbay’s managing director of intermediaries, Paul Brett, commented: “In the ever changing world of buy-to-let, brokers and landlords alike need access to a wider offering and more flexibility than ever before.

“Landbay prides itself on putting its intermediary partners front and centre, attending broker events around the country to ensure we’re meeting the requirements of the market.

“This product revamp is designed to help brokers support more of their landlord clients. The increased loan size and reduced rates will ensure we remain competitive in the market. This is especially the case in more unusual cases, which are becoming ever more commonplace in the specialist world of buy-to-let.”


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Labour plans to cap rent rises in crackdown on landlords

July 2, 2019

Private landlords would be banned from above-inflation rent rises if Labour wins power after the next general election, according to a new report. 

The proposed draconian restrictions on buy-to-let property owners would aim to help ‘generation rent’ by restricting rent rises at the rate of inflation or growth in earnings.

It is reported that Labour would also seek to gain greater control on landlords and their ability to evict renters ‘on spurious grounds’. This could include ending a landlord’s automatic right to sell

The new proposals feature in a radical report, commissioned by the party, which calls on Labour to try to stabilise residential property prices.

The report, Land for the Many, calls for measures to be introduced to end what it referred to as the ‘buy-to-let frenzy’.

The Land for the Many report said: ‘Tenancies should be open-ended, and landlords should lose their power to evict a tenant who has not broken the terms of the tenancy agreement for the first three years of the tenancy agreement, and should have to provide grounds for eviction after that point.

‘There should be a cap on annual permissible rent increases, at no more than the rate of wage inflation or consumer price inflation (whichever is lower). Buy-to-let mortgages should be more firmly regulated and restricted.’

Many leading commentators agree that rent controls would ultimately destroy much needed investment in housing, which is clearly Labour’s aim.

The report said the restrictions on private rent were needed to ‘discourage the use of homes for speculation and rent extraction’ and to ‘reduce the amount of unearned windfall gains that are privately captured’.

Rent controls and an end to no-fault evictions are already party policy.

A spokesman for Labour said: “We welcome this independent report by a group of experts. As the report makes clear, Britain is a deeply unequal country and we need to start addressing that.

“Rent controls and tighter restrictions on the ability of landlords to evict renters on spurious grounds are essential to rebalance a rental market which often leaves tenants powerless. House price stabilisation is not Labour policy, but with home ownership at a 30-year low, it is clear there is a desperate need to tackle runaway house prices.”


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Number of deals available to first-time landlords has ‘boomed to a record high’

July 2, 2019

The choice of first-time landlord buy-to-let products has increased to an all-time high, according to the latest research from Moneyfacts.co.uk.

The data reveals that the number of deals available to first-time landlords has risen sharply over the past five years, up from 645 deals in 2014 to its existing rate of 1,405.

In the past year alone, product numbers have increased by 137.

Rachel Springall, finance expert at Moneyfacts.co.uk, commented: “Entering the buy-to-let market hasn’t been without its hurdles, and almost two years since the PRA introduced rules expected to tighten lending, the move doesn’t seem to have shaken up lenders attitudes to attract first-time landlords. In fact, the number of deals available to these individuals has now boomed to a record high.”

Fixed rates for first-time landlords currently start from less than 1.5% on a two-year fixed deal, but Moneyfacts.co.uk advises prospective borrowers to carefully consider the associated upfront product fees.

Buy-to-let market analysis – First-time landlord products

 

Jul 2014

Jul 2017

Jul 2018

Jul 2019

Average two-year fixed rate

4.01%

2.85%

2.83%

2.97%

Average five-year fixed rate

4.68%

3.63%

3.94%

3.52%

Number of overall products

645

1,034

1,268

1,405

Source: Moneyfacts.co.uk

 

Springall points out that borrowers must ensure they weigh-up the true cost of any deal before they commit; for example, choosing the lowest two-year rate in the market from Barclays Mortgage at 1.46% would cost £20,901 in repayments after the first two years, which includes its £1,795 product fee, based on £200,000 repayment mortgage over a 25-year term.

However, if they opted for a deal with a lower fee, such as the mortgage from Post Office Money priced at 1.48% with a £1,495 product fee, they would have saved £255, as the repayment would be £20,646 over two years.

She added: “First-time landlords concerned about potential rate rises may instead consider a five-year fixed deal, and thankfully rates have fallen in this sector since 2014. In fact, the average five-year fixed rate for first-time landlords has fallen by 1.16% since July 2014, down from 4.68% to 3.52% today.

“As the market is awash with economic uncertainties and regulatory adjustments, consumers would do well to first seek independent financial advice if they are considering a buy-to-let investment, not just to find the best product, but to also review these impacting influences.”


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Over-65s have gained £5.5bn of property wealth over past 12 months

July 2, 2019

Retired homeowners have gained £1,165 each on average in property wealth over the last year despite uncertainty in the property market, analysis from over-55s financial specialist Key shows.

New data from the independent equity release advisor reveals that in the 12 months to June, retired homeowners saw an increase of £5.445bn.

While total property wealth owned by over-65s who have paid off mortgages is valued at £1.096 trillion, this is actually down from the £1,118 trillion recorded in February 2019, according to Key’s Pensioner Property Equity Index.

Since 2010, retired homeowners have benefited from growth of 41% - a total of more than £316bn - earning them gains of £67,000 each in almost a decade. 

Will Hale, CEO at Key, commented: “The ongoing uncertainty in the property market and the economy as a whole is having an impact on house prices but overall retired homeowners have still gained an average of more than £1,000 from their houses in the past year.”

The biggest winners over the past 12 months have been the over-65s in the West Midlands who are almost £7,500 better off than a year ago with retired homeowners in Wales (£6,560) and the North West (£6,297) also recording strong gains in the past 12 months.

Retired mortgage-free homeowners in London, however, have lost more than £1,000 a month in the past year while over-65s in the South East and East Anglia have also seen property wealth values drop. Scottish retired homeowners saw property wealth slip slightly.

London and the South East still account for 35% of all property wealth held by retired homeowners despite the recent falls.

Hale added: “Some parts of the country have experienced even bigger gains with the West Midlands, North West and Wales continuing to perform strongly. 

“The basic fact is that no matter what happens month to month to house prices millions of over-65s will continue to hold considerable property wealth which can transform their standard of living in retirement and enable them to address a wide range of financial issues.

“Increasingly equity release customers are able to help their adult children or even grandchildren to pay for house deposits while also being able to sort out their own finances whether it is clearing debts or even paying off mortgages. 

“Equity release is not right for everyone but it is clear that if your home is your largest asset you should take some time to assess what role property wealth can play in retirement planning. Speaking to a specialist adviser is key to making smart choices.”


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NatWest introduces new products and reduces rates

July 2, 2019

NatWest has launched a selection of new buy-to-let products at reduce rates designed to appeal to landlord borrowers.

Borrowing rates have been reduced by up to 0.18% on buy-to-let deals.  

Among the highlight of the new range is a 2.45% five-year fixed rate buy-to-let exclusive for purchases. It is available at 70% loan-to-value (LTV) and comes with a £995 product fee.

Mark Bullard, head of sales at NatWest, said: “We have taken this opportunity to reaffirm our commitment to the buy-to-let market by offering reductions on our two- and five-years deals across our exclusive and core ranges.”

NatWest has also launched a simplified buy-to-let calculator, designed to make the initial affordability discussions brokers have with customers quicker and simpler for most cases.

Those eligible for it include landlords remortgaging from another lender to repay their existing outstanding mortgage on a like for like basis, small landlords, those with three or less buy-to-lets and portfolio landlords, those with four or more.

Bullard added: “We are happy to be launching the simplified buy-to-let calculator, on the strength of feedback we’ve received from brokers.

“We have reviewed our policy and are pleased we’re now be able to provide the market with an alternative lender option, signifying our intent to grow our market share in this sector.”


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Landlords in Hertsmere praise new incentive scheme

July 2, 2019

Private landlords have praised a new scheme in Hertsmere, which offers financial incentives and support for those looking to rent out property in the local borough in Hertfordshire.

Since its launch in April, landlords have commented on the Landlords’ Forum how easy the Let with Hertsmere scheme is to use as well as how efficient the team are to work with.

The Landlords’ Forum, which provides an opportunity to meet and network, received a presentation on the Let with Hertsmere scheme last week.

Cllr Jean Heywood, responsible for housing at Hertsmere Borough Council, commented: “Landlords have praised our new scheme and have said how easy it is to use as well as how efficient the team are. Let with Hertsmere provides a financial incentive or a rent deposit scheme, and helps support local people in housing need.”

There are two schemes with a range of incentives.

The council’s ‘Cash Incentive Scheme’ includes a cash incentive on signing up a new tenant and support from the local authority’s team to secure a tenancy.

The council’s ‘Rent Deposit Scheme’ includes two months’ deposit placed in a bond, with the first month’s rent in advance, landlord insurance for two-year tenancies, along with support from the local authority’s team through the life of the tenancy.

Landlord, Sue Gallagher, said: “We were very quickly found tenants and all the financial and suitability checks were carried out for us. We received the payment direct to our bank account in advance and a bond was put in place to protect us financially should the tenants prove to be problematic.

“Since then all rent payments have been paid on time and the tenants have settled in to our property without any problems. Our Let with Hertsmere representative remains accessible and involved in the tenancy should any future problems arise. I am very happy to recommend this service to other landlords."


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Couple falsely claim £50,000 from DWP by pretending to be landlord and tenant

July 1, 2019

A couple from Barry in Vale of Glamorgan, Wales, have been handed suspended prison sentences for benefit fraud after being convicted of conning almost £50,000 in benefits by pretending one was the other one’s landlord.

Cardiff Crown Court heard that Lace Eileen Perrett, 56, claimed both Employment and Support Allowance (ESA) and housing benefit between March 2013 and November 2017 from the Department for Work and Pensions (DWP) and her local authority, the Vale of Glamorgan Council.

But despite claiming that she lived on her own and was unable to work her partner, it transpired that her partner, Leon Ronald Harris, 58, who was registered as a Perrett’s landlord, was actually living with her.

On a form dated Monday 30th January 2017, both Perrett and Harris signed to claim benefits stating that Harris was the landlord and Perrett was the tenant.

In total the pair received in £47,111 between August 2013 and November 2017 in benefits they were not entitled to.

Prosecutor Thomas Roberts told Cardiff Crown Court: “She [Perrett] was maintaining a common household with Harris [from August 2013]. That change in circumstance was never reported.”

The court was informed that the couple went on at least three holidays between August 2013 and November 2017, enjoying trips to Bulgaria, Spain, and Greece.

However, the couple came under investigation following an anonymous online tip was reported to the DWP.

Perrett was charged with two counts of dishonestly failing to notify a change in circumstance of entitlement to social security benefit and one count of dishonestly making a false statement to obtain a benefit.

Harris was charged with one count of dishonestly making a false statement to obtain a benefit after the declaration on the form in January 2017.

 

Both pleaded guilty to the charges at Cardiff Magistrates Court.

The couple, which are currently paying the overpayment in monthly instalments, have both been handed suspended 12-month prison sentences suspended for 20 months.

In addition, Perrett was ordered to undertake 20 sessions of rehabilitation activities and Harris was ordered to undertake 150 hours of unpaid work.

When handing down her sentence, Judge Nicola Jones said: “This is entirely out of character for both of you and I accept you both have genuine remorse. I doubt very much either of you will commit an offence again.”


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Buy-to-let is a ‘lucrative business’ that continues to appeal to investors

July 1, 2019

Residential property is currently the best long-term investment when compared to all other asset classes, according to buy-to-let investors.

Benham and Reeves surveyed more than 5,000 buy-to-let investors on everything from the current volatility of buy-to-let investments, confidence in the market, the impact of Brexit, other government changes to the industry and short and long-term investment intentions.

The research found that 73% of those asked considered the sector to be the best, least volatile long-term investment.

But in the wake of a number of government changes to the sector, many investors are understandably more cautious about investing in property.

Changes to property and investment laws on the horizon are proving particularly problematic, with 80% of those asked admitting to being unfamiliar with the latest changes to the buy-to-let market. 

Opinion is divided over changes to buy-to-let tax relief and whether the sector still provided a good investment as a result, with 49% believing it is and 51% no longer sure.

However, with buy-to-let always requiring a long-term investment outlook, this increased to 37% of investors feeling very confident that they will see an adequate return over the next ten years, with a further 6% stating they were extremely confident and 51% not as confident. 

Some 83% of investors stated it was either unlikely or very unlikely that they would sell their property over the next year, with the majority (58%) staying put for five years. 

But with market uncertainty still hanging over the sector, just 21% of investors would consider investing in a property in the next 12 months, although half of those asked would consider expanding their portfolio within the next five years. 

Director of Benham and Reeves, Marc von Grundherr, said: “The government has really gone to war with buy-to-let investors of late and a consistent string of detrimental changes to the sector through stamp duty increases, tax relief changes and a ban on tenant fees has had the desired impact of denting industry sentiment and dampening appetite for future investment due to a reduction in profitability. 

“However, for the institutional buy-to-let investor, this is but a mere blip on a much longer timeline and the overwhelming overtones are that while Brexit poses a challenging obstacle for the immediate future, the market remains the investment option of choice with many confident on a return further down the line. 

“This is a testament to the durability of buy-to-let bricks and mortar in the UK as, despite a government-backed clamp down, it remains a lucrative business and one that continues to gain the backing of those that are on the frontline.”


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Landlords urged to carefully consider the ‘dramatic’ impact of the new tax deadline

July 1, 2019

Buy-to-let landlords, property investors and second home owners are being urged to beware of a ‘dramatic change’ to the existing capital gains tax regime which will come into effect in April next year.

From April 2020, HMRC will enact legislation requiring UK residents to submit capital gains tax returns, as well as paying any CGT due within 30 days of completion of the sale of residential property.

Currently, individuals under self-assessment can instead report the sale and pay across their liability through their tax return.

Hilesh Chavda, a legal tax specialist in Royds Withy King’s Private Wealth team, is urging owners of more than one property to carefully consider the impact that this might have.

He commented: “A dramatic change to the payment of tax on residential property gains will come into force on 6 April 2020.

“Capital gains tax [CGT] in relation to residential property will need to be paid within 30 days of completion, which is a marked change from the current position. 

“At the moment, the CGT deadline is 31 January following the end of the year in which the sale was made which, in some cases, could be as long as 22 months. 

“Where CGT is due, the change could mean that sellers have to get funds in place to cover the CGT liability before the sale is completed as 30 days is not very long at all.  This could be a particular issue where there are large historic gains.”


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Scotland’s fastest growing rental market unveiled

July 1, 2019

Rents rose in most areas of Scotland during the month of May, the latest figures from Your Move Scotland show, as demand in the market increased.

The research shows that Glasgow and Clyde posted the fastest rent rises in Scotland, with rents increasing by 1.9% between April and May, leaving the average monthly rent standing at £597 per calendar month (pcm).

On a yearly basis, prices in Scotland grew by 1.7%, buoyed by strong price growth in the Highlands and Islands. The average rent north of the border now stands at £582pcm.

Growth in the Highlands and Islands, where prices are up by 0.6% month-on-month to hit £692pcm, saw the region regain its position of most expensive place to rent in Scotland. This follows an average price rise of 3.8% in the last year, faster than anywhere else.

On an annual basis, four of the five regions surveyed saw prices rise. In the East of Scotland prices grew by 2.7% to reach £544pcm while in Edinburgh and Lothians annual growth of 1.9% left prices standing at £689pcm.

The South, which remains the cheapest place to rent a property in the country, was the only region to see prices fall, with the typical rental property now let for £542pcm, down 0.9% year-on-year.

Brian Moran, lettings director at Your Move Scotland, commented: “Although the property purchase market may have slowed in some areas, demand for rented homes continues to outstrip supply.

“This was seen most strongly in the Highlands and Islands region, where prices have leapt in the past year.

“Scotland’s major cities of Edinburgh and Glasgow showed impressive monthly figures, demonstrating the enduring popularity of these areas.”

According to Your Move, landlords in Scotland achieved a 4.7% yield on average on their properties, the same level since March, which is a higher return than the average yield of 4.3% in England and Wales.

The only two regions to offer returns higher than the Scottish average in May were the North East at 5% and the North West at 4.8%.

Moran added: “With landlord returns remaining strong once again, May was a positive month for the Scottish rental market.”


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Investment in Build to Rent sector hits all-time high

July 1, 2019

Investment into the Build to Rent sector reached a record high in 2018, as corporate landlords continued to tap into healthy demand for rented property in the UK.

Almost £4bn of new funds was allocated to the Build to Rent sector last year, according to Bidwells Build to Rent Summer 2019 Analysis.

The analysis had found almost two-fifths of these transactions were forward funded as investors seek scale in key investment locations.

Bidwells has indicated the total funds committed over the past two years will be brought up to £6bn.

Recent research by Savills predicted the Build to Rent market will soon account for a third of the private rental market.

A separate study by ideal flatmate, which looked at the cost of Build to Rent compared to the buy-to-let market, found that the average cost of renting a room in a Build to Rent development is 15% higher than the cost of renting in the buy-to-let market - £868 per calendar month (pcm) on average compared to £752pcm.

Of those Build to Rent developments that are more expensive, costs range from 4% to 44% more than their comparative local rental markets.

But ideal flatmate points out that the cost renting in a Build to Rent development often includes bills, gym memberships, parking, among other benefits.

Co-founder of ideal flatmate, Tom Gatzen, said: “Build to rent provides a great solution when it comes to providing more homes at scale and while change will always be met by a degree of criticism by the industry, we must surely focus on the need of the tenant first and embrace anything that helps provide more roofs over heads.”

 


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Buy-to-let ‘still represents a great investment opportunity for landlords’

June 28, 2019

With savers continuing to receive poor returns from banks and building societies, thousands of people unsurprisingly continue to turn to residential property as a means of supplementing their income, supported by record-low mortgage borrowing rates, solid demand from tenants and stable yields, as buy-to-let consolidates itself as the investment of choice. 

Despite a challenging time for the market, characterised by tax and regulatory changes, investment in buy-to-let continues to outperform most major asset classes, as demand for rental homes continues to grow.

“The property market still represents a great investment opportunity for landlords across the country,” said Martyn Alderton, national lettings director at Your Move.

According to the latest Your Move rental tracker released today, the average property across England and Wales was let for a monthly rent of £863 in May, representing a 0.2% rise when compared to both the previous month and May 2018’s figure.

The West Midlands was the fastest growing area this month, with price growth of 4.1% year-on- year taking the average rent in the region to £643 per calendar month.

Other regions to see strong price growth were the South West, where prices grew 2.8% to hit £701pcm, and the North West, which saw a price rise of 2.4% to £648pcm.

London remains the most expensive place to rent in the country, with an average price of £1,265pcm.

The capital was one of only two regions to post an annual fall in rental prices. The other was the East of England, where rents dropped by 2% in the last 12 months. The average rent in this region is now £874pcm.

However, while rents in London are slightly down compared to a year ago, there are green shoots of recovery for the market as prices grew 0.2% between April and May.

In addition to London, both the West Midlands and Wales saw prices grow by 0.2% on a monthly basis.

Alderton continued: “The West Midlands was once again the star performer in the regional lettings market, with price growth of 4.1% in the last year.

“This helped the rental market grow overall, given rents in London and the East of England have fallen in the same period. However, strong monthly growth in the capital shows the London market may have turned a corner.”


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The next chancellor must reverse ‘tax changes impacting private landlords’

June 28, 2019

The Tory leadership contest is well underway with just two candidates - Boris Johnson and Jeremy Hunt - left in the race. But while the two are vying to succeed Prime Minister Theresa May, with the result due on July 23, speculation is growing over who could be the UK’s next Chancellor?

Whoever replaces Philip Hammond as Chancellor of the Exchequer will almost certainly look to hold an emergency budget with a view to offering a change of fiscal direction, and this an opportunity to reverse punitive tax policies in order to increase much needed housing supply the private rental sector.

Paul Sloan, operations director for haart, said: “With a new Chancellor, we will repeat our calls for changes to current policy to support improvements in the PRS.

“In particular, the taxation changes impacting private landlords have been relentless. We would suggest that a rethink on those taxes would be a very good place to start.”

Draconian tax changes applying to buy-to-let investors has left a number of private landlords with little alternative but to evict tenants and sell properties en masse or simply increase rents for tenants.

There is plenty of evidence to suggest that some landlords have not been able to cope with punitive tax hikes introduced by former Chancellor George Osborne, including the phasing out of mortgage interest relief.

Many private landlords have also had to endure the scrapping of the ‘wear and tear’ allowance for furnished properties, the launch of the 3% stamp duty surcharge, as well as the introduction of stress tests for buy-to-let mortgages.

Sloan continued: “Whether it’s the additional Stamp Duty Land Tax levied on purchasers’ second and subsequent homes, the phased reduction in tax relief allowable against mortgage payments, or the loss of the wear and tear allowance, life has grown significantly harder for landlords over the past few years.

“We must ensure that private landlords who are providing homes for millions of households across the UK feel able to remain in this sector.

“With the appointment of a new prime minister and Chancellor, we will be redoubling our efforts to act as the voice of private landlords across the country.

“For the time being though, we can only wait and see what the next few weeks and months have in store for the sector.”

 


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Renters could transfer deposit from one landlord to the next under new proposal

June 28, 2019

Tenants could be permitted to transfer rental deposits directly between landlords instead of having to pay up for their next property while waiting for a refund on the last under new plans being proposed by the government.

Ministers are considering the scheme, known as deposit “passporting”, after James Brokenshire, the housing secretary, put forward the proposal yesterday at the Chartered Institute of Housing conference in Manchester.

The planned scheme is designed to ease the pressure on millions of renters who typically need up to five weeks rent to fund a deposit for a new rental home while having money tied up with an existing landlord.

According to the Deposit Protection Service, the average rental deposit is £1,040 in England and Wales, while tenants in London face paying around £1,750 when moving property.

Passporting would allow a direct transfer of funds from the previous landlord to the new one on the day of the move.

 

The previous landlord would still be able to claim part of the deposit for any damages, and the tenant could top up the deposit if necessary.

But while the deposit passporting has potential, it should not be made compulsory, according to the National Landlords Association (NLA).

The organisation quite rightly points out that care will need to be taken with any form of passporting to ensure the previous landlord can cover any costs for damages.

NLA research reveals that 33% of landlords had to withhold at least part of a deposit in the last 12 months to cover unpaid rent or damage to their properties.

Chris Norris, director of policy and practice at the NLA, said: “The idea of deposit passporting has been around for a while now, so it comes as no surprise that the Government is considering it. Mr Brokenshire acknowledges that if this is to be implemented it must be done “thoughtfully”, but we must make sure that adequate thought is given to the needs of both tenants and landlords. 

“Everyone agrees that moving between tenancies should be made easier and cheaper, but we also need to recognise why landlords take deposits. A deposit protects against damage or default, so landlords must be confidence their costs are covered before releasing the tenants’ money.”


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Significant increase in the number of older renters

June 28, 2019

There has been a sharp rise in the number of older renters over the last year, according to new research from Hamptons International.

The company reports that the number of older renters has risen by 61% since 2012, up 8% in the past 12 months alone, with around a third of these being retirees.

Hamptons International says that many retirees are choosing to swap homeownership to beat high levels of stamp duty, free up cash to help family members onto the property ladder and turn their home into a source of income.

Reflecting on the research, Jamie Turnbull, business director of Girlings Retirement Rentals, said: “Selling up and renting can be great way to free up capital in a property which can then be invested to fund retirement or help family out. Renting also saves on stamp duty. Often people are downsizing, but even smaller homes can command high stamp duty costs.

“Renting avoids this and gives people access to all the capital in their house, rather than spending some of it buying a new home. Many baby boomers are sitting on a lot of equity because of rising property prices over the past twenty years and want access to it now so they can really make the most out of their retirement.”

Girlings Retirement Rentals is among a number of firms that has also witnessed a growing trend towards renting in retirement and expect this will continue as people recognise it can be a good financial option.

Turnbull added: “Most of our properties come with assured or ‘lifetime’ tenancies, so people have the same security of tenure they would have if they owned their own home.

“This can be a big factor when deciding to rent and is why many of our residents have chosen to rent through us in a specialist retirement development.”


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Landlords becoming more professional as amateurs give up on buy-to-let

June 27, 2019

A two-speed market has emerged in the buy-to-let sector as most smaller landlords have stopped adding to their portfolios, while their large scale counterparts continue to make targeted investments, according to Paragon.

The buy-to-let mortgage provider reports that large scale landlords are currently almost three times more likely to buy property than investors with smaller portfolios.

Less than one in 20 - 4% - smaller scale landlords are considering a property purchase in the next quarter, compared with 11% of larger scale landlords.

Paragon’s latest quarterly survey, which tracks the experience of more than 200 seasoned landlords, shows that landlords now have an average of 13.1 properties in their portfolio, up from 12.8 properties three months ago.

Growth has been fuelled primarily by landlords with between 11 and 20 properties, which have grown as a proportion of the survey population from 14% to 18%.

Consequently, average portfolio values are getting higher – rising from £1.68m in the first quarter of the year to a record high of £1.76m this time round.

Given that HMO property (House in Multiple Occupation) offer some of the most profitable rental yield returns in the UK, it is perhaps unsurprising to find that there has been a significant increase in those considering buying HMO property, up from just 5% to 20%.

The findings suggest that landlords are looking to add higher yielding properties into their portfolios perhaps to offset some of the pressure from rising tax costs.

Despite the higher activity levels among larger scale landlords, overall landlord sentiment remains subdued with just 13% of landlords feeling optimistic about the future.

The study also found that more landlords are taking steps to bolster their financial position with debt still barely over one third of average portfolio value and mortgage payments as a proportion of rent down from 27% to 25%.

John Heron, director of mortgages at Paragon, commented: “Professional landlords with larger portfolios make up the backbone of the UK’s Private Rented Sector and it’s encouraging to see them continue to build their property portfolios.

“However, with a heightened interest in higher yielding property types and an increasingly prudent approach to financial management, it’s clear that landlords are proceeding cautiously as they seek to head off the twin challenge of higher tax and growing economic uncertainty.”


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Landlord ordered to pay more than £66k for ‘gross mistreatment’ of tenants

June 27, 2019

A rogue landlord in north London has been ordered to pay more than £66,000 after being found guilty of making tenants' lives a misery through licensing breaches.

The fine is the largest financial penalty Brent Council has secured to date and is a reflection of the truly appalling conditions tenants were living in.

The council decided to take action against Hugo Pulqueiro, after the landlord sent in the heavies to remove the belongings of one of his tenants and change the locks to kick her out after she complained of the deteriorating conditions inside the overcrowded flat she was sharing with six other tenants in High Road, Willesden, north west London.

Council enforcement officers raided the property after seeing a shocking video filmed by the victim who found herself homeless and her belongings damaged outside the flat one freezing winter's night in February.

Willesden Magistrates Court heard that the tenant had been evicted from her home because Pulqueiro had not wanted his tenants to complain about their horrific exploitation.

 

Inside the four-bedroom flat, Pulqueiro of Park Avenue, Willesden Green, created a partition wall down the middle of two single rooms to create two illegal micro rooms that he then rented out to more tenants.

He failed to give his tenants written agreements, depriving them of their rights, and sent over different strangers to collect their rent in cash at irregular times during the week.

His tenants told officers that they had never even met their landlord and that they did not know how many people had keys to their home.

Pulqueiro also neglected to protect his tenants’ deposits, failed to meet fire safety regulations and ignored his responsibility to maintain the property to a liveable standard.

The fire brigade was called to the property to put out a fire a week before the enforcement officers' raid.

Cllr Eleanor Southwood, cabinet member for Housing and Welfare Reform, commented: “This is an absolutely shocking case and it’s appalling that Mr Pulqueiro believed he could get away with such gross mistreatment of his tenants.

“No renter in Brent should be forced to endure what these tenants went through. We will never stop fighting for decent living conditions and are using our licensing schemes to drive up standards in the private sector.

“We will do all we can to ensure that slum landlords like Mr Pulqueiro feel the full force of the law.”


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Two-thirds of rental applicants deemed unsuitable

June 27, 2019

Landlords now face the prospect of two unsuccessful tenant applications on average for every successful one, resulting in an increase in the length of time it takes to fill a property, according to online letting agent, MakeUrMove.

The letting agency has seen 67% of tenant applications rejected since the Tenant Fees Act was introduced.

These unsuitable applications could include tenants applying for a property they cannot afford, or not disclosing the possession of a CCJ or previous history of bankruptcy.

MakeUrMove managing director, Alexandra Morris, believes that the impact could lead to landlords having to increase rents in order to cover the cost of properties sitting empty for long.

She said: “What was intended to offer a fairer solution to tenants is seemingly leading to an increase in individuals trying their luck when it comes to applying for a rental property. The investment and risk once associated with applying for rental property have been completely removed, meaning many landlords are now left with rising costs and the prospect of empty properties for longer.

“The housing market in general needs an overhaul, but with the Tenant Fees Act now in place, it’s clear the referencing process is also an area which needs to be revamped. We need to learn from the processes used in online banking and create a tech solution which allows landlords and letting agents to conduct an instant financial check, which looks at a prospective tenant’s income as well as their past rental payments.”

Morris has also warned the government against plans to ban of Section 21 as this will almost certainly adversely affect many buy-to-let investors, leading to a potential mass landlord exodus from the market.

Morris continued: “While we support the government in making the private rental sector fairer for all, many of the new laws favour tenants over landlords. The government risks landlords leaving the market altogether as a result of the increased costs. This would then lead to a lack of supply, and the knock-on effect of rising rents as a result of the increase in demand for rental properties.

“We urge the government to take into account the impact that’s already being felt by landlords as a result of the newly introduced Tenant Fee Act, and ensure that they continue to support landlords under the new legislation.”


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No end to increasing demand for rented homes

June 27, 2019

Demand for rented homes looks set to increase in the coming years as new data suggests that many people who do not yet own property will not do so for quite some time.

The gap between income and house prices has sky-rocketed in recent years with various reports suggesting that a growing number of younger people are giving up the idea of ever owning their own home.

According to the latest Zoopla UK Cities House Price Index released today, the average income required for a first-time buyer to purchase a home has grown 9% since 2016 and stands at an average of £54,400.

Based on the data supplied by Zoopla, this is over £4,500 more than the amount needed three years ago.

The average deposit required for first-time buyers to purchase in a major UK city is currently £38,418.

The findings show that the range in incomes for first-time buyers to purchase property across the country is £26,000 to £84,000.

Weak price growth means affordability has improved in the three most expensive cities in the UK, which are Oxford, Cambridge and London.

The average income to buy a property in a UK city is up 9% since 2016, and yet this has dropped 4% in London over the same period.

However, the first-time buyers in London now need an average household income of £84,000 to purchase a home, which is unaffordable for most would-be purchasers, although it is worth pointing out that this is the lowest figure recorded since 2015.

Liverpool has the lowest income required for first-time buyers to buy at £26,000 and leads on property price growth which is 5% year-on-year.

Overall, residential property prices in UK Cities increased by 1.8% over the 12 months to May 2019.

Richard Donnell, research and insight director at Zoopla, commented: “Weakening city house price growth is a result of market fundamentals. Specifically, changing affordability dynamics for home buyers and the impact of successive tax changes since 2015. Together, these have impacted household buying power, and demand for housing, hitting high priced cities more than others.

“First-time buyers are an important group accounting for more than one in three sales. While the average household income to buy a typical home across UK cities has grown 9% since 2016, weaker price growth and recent price falls have led to a 5% reduction in the income to buy across the most expensive cities. It will come as a modest relief for would-be buyers although the income to purchase still remains relatively high. While it is a factor behind weaker house price growth it supports underlying demand for rental homes.

“Affordability remains attractive in many regional cities where house prices have not registered the gains seen in south eastern England. Liverpool has the lowest income required to buy and has the highest rate of price growth at 5%. We expect prices to continue to increase in cities where housing is in reach of those on average incomes.”


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A high number of private renters living in ‘hazardous homes’ – Citizens Advice

June 27, 2019

Citizens Advice has called for more regulation of the private rented sector after research revealed that hundreds of thousands of tenants in England are living in hazardous homes with problems such as mould or faulty fire alarms.

The charity argues that “weak and confusing” rules are to blame for the fact that so many people are living in unsafe homes.

The study, conducted by ComRes on behalf of Citizens Advice, found that almost one in three tenants surveyed said their property did not have a carbon monoxide alarm despite requiring one, while three-fifths of tenants identified disrepair in their home during the last two years that was not caused by them and that their landlord was responsible for fixing.

Part of the problem is that many landlords do not understand their legal obligations and renters are unaware of their rights, according to the survey.

Citizens Advice is calling for the introduction of a rental watchdog to enforce a “home MOT” and to determine a “fit-and-proper-person” test for landlords.

Gillian Guy, chief executive of Citizens Advice, said: “Too many private renters live in hazardous homes – often with potentially fatal flaws.

“Weak and confusing regulation means landlords can struggle to understand their legal obligations, while tenants find it hard to get problems in their homes resolved.

“The government must establish a national housing body to ensure landlords let property that meet legal standards and gives renters the support they need when they do not.”

But the Residential Landlords Association (RLA) has rejected calls by Citizens Advice for a national body to set standards in private rented housing.

David Smith, policy director for the RLA, commented: “There are already well over 150 laws containing 400 regulations affecting the private rented sector. The powers are already there for councils to tackle and root out criminal landlords who cause misery for their tenants.

“What is lacking are both the will and the resources to properly use them.

“We fail to see how establishing a new body of this kind will help to address this.”


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Landlord left in tears after nightmare tenant leaves house in an awful state

June 26, 2019

A landlord in Cardiff was reduced to tears after discovering her house in a shockingly dire state.

The tenant is said to have fled the house in Rumney, leaving the property in an unbelievable state.

Hundreds of alcohol cans and bottles, old newspapers, used tinned food cans, plastic carrier bags, crushed boxes, plastic bottles, were among the shocking mess left behind by the tenant.

Aside from the rubbish piled throughout the property, the walls were covered in stains, marks and spider webs, while the  toilet appeared to be smeared with poo.

When the landlord discovered the mess she broke into tears.

The house had to undergo an extreme clean afterwards and the property has been gutted and renovated.

The landlord said: “No landlord should have to walk in to see a property like that.

“It has broken my heart to see my property like this.

“I did everything to make sure the property was fit for a tenant.

“I just don't understand why anyone would do this?”

She added: “The floors, skirting boards, kitchen has all been ripped out and it's cost me thousands of pounds.

“I just can't understand why anyone would do this.”


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Which area has the highest number of landlords avoiding tax on rental income?

June 26, 2019

 

When you rent a property to a tenant, you are required to pay tax on any profit you make from rental income that is not covered by your personal allowance, which is set at £12,500 for the 2019-2020 tax year, and yet fresh research conducted by accountancy firm UHY Hacker Young has found that many buy-to-let landlords are avoiding paying rental income tax.

In Nottingham (NG postcode area), for instance, the percentage of landlords admitting to not paying tax on their rental income has increased 245% over the past year, according to the study.

On a list of the highest concentration areas across the UK of buy-to-let landlords admitting to rental income tax avoidance, Nottingham is ranked third, following Leicester at second and Birmingham in first place.

The figures show that the total number of landlords in Nottingham admitting to tax avoidance on rental income is up to 324 in 2018/19 from 94 in 2017/18.

Simon Browning, partner in charge of UHY’s Nottingham office, said: “Nottingham’s buy-to-let market has continued to soar in recent years, making it a popular choice for investors with the rental yields achieved some of the highest in the country.

“However, these figures show that HMRC sees the buy-to-let market as a source of hundreds of millions of pounds of unpaid tax. The amounts collected just from landlords coming in from the cold suggests they may not be too far wrong with those estimates.

“Mounting pressure on buy-to-let landlords from HMRC’s Let Property Campaign has driven this sharp increase. The Let Property Campaign aggressively mailshots buy-to-let landlords that are suspected of avoiding paying tax on their rental income warning them of the consequences of tax evasion.

“Buy-to-let landlords have been prosecuted and jailed both for under declaring rental income and for failing to pay CGT on the sale of buy-to-let properties. Considering the risks of big fines and criminal prosecutions landlords are doing the right thing by coming forward to HMRC and declaring unpaid taxes.

“While establishing and prosecuting a tax fraud involves a lot of hard work by HMRC they’ve made it clear that this is a route they will go down. The paper trail that exists with most property lettings makes it relatively simple for HMRC to show when tax is not being paid.”

Top 10 areas in the UK with the highest number of landlords admitting to avoiding tax on rental income

 


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Selective Licensing Review will fail to ‘root out the bad landlords’

June 26, 2019

The National Landlords Association (NLA) has slammed the government’s Selective Licensing Review for failing to listen to landlords.

The report, which was released yesterday, failed to take into consideration the NLA’s suggestion of requiring local authorities to conduct an annual assessment to demonstrate the effectiveness of the schemes against the rationale for their introduction.

Currently, although it is considered best practice to complete this assessment, few local authorities do so.

The NLA says that it supports the proposal for standardised requirements for property conditions, which local authorities can enforce against. But the recommendations fail to include anything to close the loopholes which currently allow those who fail the ‘fit and proper’ person test to continue operating in other areas or through a letting agent.

Richard Lambert, CEO of the NLA, commented: “Far too often we see local authorities failing to live up to their side of selective licensing. It’s shameful that the Review has ignored our call for regular reporting against schemes’ published objectives, which would be easy to implement and would actually hold councils to account. 

“The majority of selective licensing schemes are introduced without any thought having been given to their implementation, funding and enforcement, leading to good landlords paying for effectively nothing. For the most part, selective licensing has failed to root out the bad landlords and the recommendations in the report will do very little to change that.

“The suggestion to introduce a national registration of landlords and a property MOT would be a viable alternative to selective licensing, but would need to be well thought out and proportionate to avoid an unnecessary burden on good landlords.” 


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Build to Rent homes cost 15% more than other private rentals

June 26, 2019

Investor demand from corporate landlords, often backed by institutional finance, is growing and that is pushing up rental values across some parts of the UK, new research suggests.

These large companies operating Build to Rent blocks promise professionalism, high-level services and stable pricing designed to promote long-term renting, but at what cost to the tenant?

New research by ideal flatmate has looked at the cost of Build to Rent compared to the buy-to-let market and found wide cost disparities.

On average, the cost of renting a room in a Build to Rent development is 15% higher than the cost of renting in the buy-to-let market - £868 per calendar month (pcm) on average compared to £752pcm.

Of those build-to-rent developments that are more expensive, costs range from 4% to 44% more than their comparative local rental markets.

However, ideal flatmate points out that the cost renting in a Build to Rent development often includes bills, gym memberships, parking, among other benefits.

Co-founder of ideal flatmate, Tom Gatzen, said: “Build-to-rent has come under scrutiny due to the higher rental costs but when you consider the additional benefits there is a very strong argument that these developments provide much better value for money.

“For a start, they are new builds so the quality is very good and they have a much more professional management structure in place to support tenants when compared to the traditional communication chain of the tenant, letting agent and landlord.

“They also offer a lot more for your money in terms of amenities included in the price, with many providing wifi, bills and a gym as standard. This comes on top of other benefits such as parking and private gardens and while you pay more as a lump rental sum for these benefits, the convenience of paying for everything in one go is something that appeals massively to today’s generation of tenants.”

Recent research by Savills predicted the build-to-rent market will soon account for a third of the private rental market.

Gatzen added: “We are crying out for more rental stock across the UK and the number of us reliant on the private rental sector is only going to increase.

“Build to rent provides a great solution when it comes to providing more homes at scale and while change will always be met by a degree of criticism by the industry, we must surely focus on the need of the tenant first and embrace anything that helps provide more roofs over heads.”


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Rogue landlord ordered to pay £10,000 for renting out poor quality housing

June 26, 2019

A rogue landlord has been ordered to pay a fine of £10,000 after being convicted for renting out two unlicensed properties in Cricklewood, north west London, that were deemed unsafe.

Brent Council issued Hassan Elaadouli with two civil penalty notices, totalling £7,500, in relation to a pair of unlicensed flats he owned on Ivy Road, NW2.

Brent enforcement officers discovered a family living on the ground floor where the front right corner of the building and the rear extension were falling away. 

There was also an issue with a leaking corrugated iron roof, exposed wires and not enough power sockets.

The property was deemed a serious hazard and the family were moved into a hostel as a consequence.

Elaadouli, of Wandsworth, pleaded guilty to failure to license at Willesden Magistrates Court and ordered to pay a fine of £8,000 and £2,000 in court costs.

Cllr Eleanor Southwood, Brent’ head of housing, commented: “No family should have to live in this way and we will pursue rogue landlords like this all the way to court when we need to.”


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Landlords optimistic about buy-to-let despite tax changes and Brexit

June 25, 2019

Most landlords feel optimistic about the existing UK buy-to-let environment, fresh research suggests.

The study by Cambridge and Counties Bank showed that 64% of landlords felt positive about their position in the current economic and political climate despite Brexit.

Cambridge and Counties Bank’s landlord sentiment found the general outlook to be confident, despite stricter regulatory and tax changes in recent years, including the phasing out of mortgage interest relief, introduction of a 3% surcharge on second properties and the launch of more stringent affordability rules and stricter underwriting guidelines for portfolio landlords.

Cambridge and Counties Bank found that 13% of landlords surveyed were “very” optimistic when it comes to investment growth and yields.

Almost one in five - 19% - are reportedly looking to increase their portfolios by a third, while 11% wish to double their portfolio over the next three years.

However, Brexit is a major cause for concern for many landlords, with 40% of those surveyed conceding that it is top of their list of concerns.

Simon Lindley, chief commercial director, Cambridge & Counties Bank, commented: “Cambridge & Counties Bank has seen a steady stream of borrowers switching from other lenders, often recommended by the intermediaries and brokers we work closely with on a daily basis.

“We are actively focussed on becoming the bank of choice for professional property investors and landlords.”

 


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Buy-to-let landlords struggling to keep up with recent legislative reforms

June 25, 2019

A high number of landlords are struggling to keep up with new policy reforms, new research suggests.

Market Financial Solutions has surveyed more than 400 landlords to find out just how aware they are of new legislative and regulatory reforms that have been introduced.

The study found that 30% do not understand the changes to House in Multiple Occupation (HMO) licensing, which came into effect in October 2018 to stipulate on the minimum sizes of rooms.

In addition, 28% of respondents admitted to not fully knowing what the abolition of Section 21 means, while 27% of landlords were unaware of letting fees ban

When it came to tax, there was also major confusion, with 28% not understanding the reforms to inheritance tax that have changed the tax-free allowance on properties being passed down.

A quarter - 25% - did not know about the reforms affecting tax relief on mortgage repayments, which were implemented in April this year.

The majority of landlords said they were not in favour of these reforms.

Paresh Raja, CEO of Market Financial Solutions, commented: “The legislation and regulation governing the UK’s rental market is constantly evolving, and today’s research clearly shows that landlords are struggling to keep pace with the change.

“From HMO regulations to the abolition of Section 21, these are significant reforms that, for the most part, are rightly designed to protect tenants.

“Nevertheless, there’s evidently frustration among landlords who feel they are being unfairly targeted, particularly when it comes to the stricter taxes being introduced.

“It’s essential that anyone renting out a property – even if they would not consider themselves a landlord – understands all the new reforms and takes action to ensure their properties meet the necessary standards and their finances are structured in line with the new reforms.”


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Cowardly man who stabbed his landlord sentenced to over six years in prison

June 25, 2019

A man has been jailed for a six years and three months for stabbing his landlord in an unprovoked attack.

Ainars Jozans, 29, knifed his landlord in the chest shortly after paying him the rent that he owed.

The landlord was giving Jozans a lift to The Water Gardens shops in Harlow, West Essex, when the tenant produced the blade, hidden up his sleeve, before the attack.

But after bravely fighting off Jozans, the victim managed to drive himself to hospital for treatment, having suffered a small puncture wound.

Jozans, of Pyenest Road, in Harlow, pleaded guilty to wounding with intent and possession of a knife at Chelmsford Crown Court, and was handed a prison sentence of five years and three months for the first charge, and 12 months’ imprisonment for possessing a weapon, with both sentences ordered to run concurrently.

Sergeant Michael Orr, of Harlow CID, said: “Jozans willingly paid his landlord rent and he asked for a lift to the town centre.

“The victim went out of his way to help him, only to be stabbed to the side to the chest.

“He suffered a small puncture wound but bravely fought off his attacker and escaped.

“Jozans has never revealed why he carried out his unprovoked attack and he has now been locked in prison for a number of years.”


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A national register of landlords would add ‘unnecessary’ layer of bureaucracy – RLA

June 25, 2019

The recommendation for a national register of landlords in the government’s review of selective licensing published today would prove ‘unnecessary’ and ‘costly’, according to the Residential Landlords Association (RLA).

The association, which represents more than 35,000 landlords, fears that the proposed national register of landlords would add another bureaucratic layer to a private rented sectors that is already laden with administration.

 John Stewart, policy manager for the RLA, commented: “Ministers have repeatedly made clear that a national register of landlords would become an unnecessary and costly additional layer of bureaucracy.

“We agree. All it would become is a list of good landlords which brings us no closer to finding the crooks that operate under the radar.”

Smith believes that selective licensing has become a replacement for lost central government funding and provides no assurances to tenants about the quality of accommodation.

He added: “Properties do not need to be inspected before a landlord is given a licence and the RLA has found that many councils are charging eye-watering sums of money for almost nothing in return.

“Local authorities need the will and the resources to put real effort into finding the criminal landlords who never come forward to make themselves known.

“That means using a range of information they can already access including council tax returns, information on tenancy deposits and benefit data to root out the minority of landlords who bring the sector into disrepute.”


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BTL landlord ordered to pay £3k for trying to avoid paying council tax

June 25, 2019

A buy-to-let landlord in Telford has been fined £1,000, ordered to pay £2,183 costs and a £100 victim surcharge after pleading guilty to creating false tenancies to avoid paying council tax on vacant properties.

Satinderjit Singh Thiara, who co-owns letting agency First 4 Let (Telford) Ltd, produced two false tenancy documents for a property in Burtondale, Brookside; one for a tenant who had left, the other for someone who did not exist.

He also submitted a 12-month tenancy agreement for a property in Dallamoor, Hollinswood, in the name of a couple after they had left.

The idea behind the false tenancy agreements was to make the people who were illegally named in the documents liable for council tax that he should have paid.

Cllr Richard Overton, Telford & Wrekin Council’s cabinet member for enforcement, commented: “Council tax evasion is very serious.

“I commend our investigation team within our audit and governance department for their hard work and diligence in bringing this case to court.

“Let this be a warning to anyone else thinking of doing it in the future.”


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Tory leadership candidates urged to scrap controversial Right to Rent scheme

June 24, 2019

The two candidates for Conservative leader are being urged to make a public commitment to abolishing the controversial Right to Rent scheme.

Boris Johnson and Jeremy Hunt, the two candidates, are facing calls from a coalition of organisations made up of the Residential Landlords Association (RLA), the Joint Council for the Welfare of Immigrants (JCWI) and the3million, which represents EU citizens in the UK, to scrap Right to Rent, which forces landlords to undertake immigration checks on prospective tenants.

The Home Office recently announced that it plans to reassess its Right to Rent scheme after the High Court ruled in March that the legislation is discriminatory and breaches human rights laws.

The Right to Rent scheme, introduced in England in 2016 following an initial pilot scheme in the West Midlands, requires landlords to check the immigration status of tenants.

The Home Office wants to roll the scheme out in Scotland, Wales and Northern Ireland, but judges said that this will now not be possible without further evaluation, as the evidence “strongly showed” that the existing policy is causing landlords to discriminate against potential tenants because of their nationality and ethnicity.

The challenge was brought by the JCWI, which has long maintained that the policy could lead to indirect discrimination, with landlords forced to act as what it describes as ‘border police’.

In a statement to the House of Commons, the minister of state for immigration, Caroline Nokes MP, said her department disagreed with the High Court judgement handed down on 1 March, which found that rolling the legislation out to devolved territories without further evaluation would breach the Equality Act.

Nokes said the ruling had no immediate effect on the policy and that landlords in England must still abide by the existing rules, which means they must continue to conduct Right to Rent checks.

However, she said the Home Office was “looking at options for a further evaluation of the operation of the scheme”.

In the meantime, the Home Office has been given consent to appeal ‘all aspects of the judgement’, as stated in Nokes’ statement.

Chai Patel, legal policy director of the JCWI, said: “The Home Office is now arguing in its appeal that it is justified in causing racial discrimination against British ethnic minority families struggling to find a home. It is arguing that black and brown British people’s dignity, humanity, and rights can be tossed aside to pursue Theresa May’s hostile environment.  

“That cannot be acceptable in modern Britain. The new Prime Minister must commit to ending landlord immigration checks and the discrimination they cause”.  

Recent research by the RLA found that, as a result of the scheme, 44% of landlords are now less likely to rent to someone without a British passport for fear of prosecution for getting things wrong. 

David Smith, policy director for the RLA, commented: “The Right to Rent has been a failure. No one has been prosecuted under the scheme but it has created a great deal of anxiety for landlords who do not want to go to prison for getting it wrong.

“Landlords should not be used to cover for the failings in the UK Border Agencies.”

In a sign of the uncertainty caused by Brexit, one in five landlords say that are less likely to consider letting property to EU or EEA nationals, up from 17% in 2017.

Nicolas Hatton, CEO of the3million, said: “Two-thirds of EU citizens in the UK live in private rented housing and will be affected if this failed scheme continues.  

“We are already seeing that landlords are less likely to rent to anyone without a British passport, and uncertainty about Brexit added to the hostile environment will only increase the discrimination EU citizens are facing. We urge the UK government to scrap this scheme and end the discrimination.”


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Do more to inform tenants of their rights, NLA urges government

June 24, 2019

The government needs to do more to provide tenants with better information on their rights and responsibilities if it is to avoid a breakdown of trust between renters and their landlords, according to the National Landlords Association (NLA).

Fresh research, commissioned by the NLA, found that more than three quarters - 79% - of tenants need better information about what they should expect from their landlords or letting agents.

The NLA also found that more than two thirds - 67% - of tenants were not aware of the government’s How To Rent guide that is designed to help them understand their rights and responsibilities.

The guide provides tenants with key information on what to look out for before renting, living in a rented home, what happens at the end of a tenancy, and what to do if things go wrong.

The survey, conducted by Dynata on behalf of the NLA, also revealed that most tenants have a good relationship with their landlords, with 68% of tenants stating that they never had any cause to complain to their landlord. A further 12% said that when they had complained, the problem was solved to their satisfaction.

But the NLA is concerned that tenants’ failure to fulfil their responsibilities will undermine their relationship with landlords.

Richard Lambert, CEO of the NLA, commented: “It is alarming that so few tenants seem to know about the government’s flagship guide on their rights and responsibilities. It’s clear that compelling landlords to give tenants copies of the How to Rent Guide has made little impact. 

“Unless the government tackles this problem quickly, there is a danger that there will be a breakdown of trust between landlords and tenants at a time when this relationship is already coming under strain because of overregulation in the PRS.”


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Rogue landlord fined almost £60,000 for putting vulnerable bedsit tenants at risk

June 24, 2019

A rogue landlord has been fined £55,000 and ordered to pay court costs of £2,989.67 as well as a victim surcharge of £170 after putting vulnerable bedsit tenants at risk.

Heather Jackson, 55, allowed tenants to occupy bedsits in Southport, despite the fact that the building had leaking roof and faulty fire alarms.     

Jackson, who acquired the property in 2013, created 16 bedsits in total.

But when council inspectors visited the property with police in December last year they discovered that Jackson did not have a license for such housing. She also failed to provide evidence of gas safety records.

Council inspectors found the fire alarms had been deactivated, and escape routes were blocked, a fire exit corridor had been converted into a makeshift kitchen, while a fire door had been locked shut. 

Jackson pleaded guilty to 12 housing standards offences at South Sefton magistrates court.

A spokesman for Sefton Council said: “HMO legislation is put in place to help protect tenants and also serves to ensure landlords comply with all rules and regulations.

“As seen today, this was clearly not the case and we welcome the outcome at court and the substantial fines imposed.

“We want to send a clear message to the small number of landlords who compromise the safety of their tenants that this is not acceptable and can end up in a court case.

“As proved today, large fines will be imposed by the courts and we will always act to protect our residents.”


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How the tenant fee ban is changing buy-to-let

June 24, 2019

The tenant fee ban is new to most of the UK, but has been in place in Scotland since 2012. Advocates of extending the ban throughout the rest of the UK pointed to the fact that rents in Scotland have not risen significantly in the intervening years.

While this may be true (depending on your definition of significantly), there are many differences between the housing market in Scotland and the housing market in the rest of the UK, particularly England.

Because of this, it might actually be easier and more accurate to set aside the Scottish housing market when considering what the tenant fee ban could mean for other parts of the UK.

The practicalities of extending the tenant fee ban

Not only does England have a larger population than Scotland, but, in much of the country, it also has much greater population density. This leads to increased demand for housing, especially rental housing and thus buy-to-let property investors who do remain in the market could well have more flexibility to raise rents than their northern counterparts.

They may also have more motivation to do so because one of the major differences between the Scottish housing market and the English one is that Scotland is exempt from the Right to Rent legislation, hence landlords can be more relaxed about setting up tenancies themselves and then using lettings agents for day-to-day property management.

Landlords in England, however, still have to think much more seriously about the personal liability they face if they either take in a tenant who does not have the “Right to Rent” or breach the Equality Act when undertaking “Right to Rent” checks. This may provide a compelling argument for continuing to use lettings agents and passing the cost on to tenants.

Landlords in England are selling up - sometimes fast

It’s also worth noting that many former buy-to-let property investors have exited the market over recent years and it seems likely that more will do so in future. While this exodus may not have been entirely caused by the prospect of the ban, it does have the impact of reducing the supply of rental property and/or reducing competition amongst landlords.

 

New research from Sellhousefast.uk looked at 10 of the UK’s key buy-to-let markets, namely Birmingham, Canterbury, Colchester, Coventry, Enfield, Luton, Manchester, Peterborough, Stockport and Wolverhampton.

It found that the area in which properties sold most slowly was Wolverhampton, but even here, the average sales time was just 138 days.

The area in which properties sold most quickly was Stockport, where sales took an average of just 104 days and this was closely followed by Coventry where the average sale took 124 days.

This is hardly surprising given that popular buy-to-let locations, by definition, are places where there is strong demand for property. What is, however, currently unclear, is whether these properties have been bought by residential buyers or by committed buy-to-let investors looking to expand their portfolios as, one way or another, this could have a significant impact on the housing market.

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


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Newcastle Intermediaries extends buy-to-let products to Scotland

June 24, 2019

Newcastle Intermediaries is now offering its buy-to-let mortgage range to borrowers in Scotland.

It comes over three years after the firm, which is the intermediary arm of the Newcastle Building Society, entered the buy-to-let market in England and Wales.

The range is available with both two and five year fixed rates, with products starting at 2.25% available at up to 75% loan-to-value (LTV).

The lender’s Interest Coverage Ratio on their five year rate products is assessed to 145%, at 4%, with assessment of rental cover calculated on an interest-only basis.

The lender’s products are offered at a maximum loan value of £500,000, no maximum age at the end of the term, and all the cases are individually underwritten.

Stuart Miller, customer director at Newcastle Intermediaries, commented: “We are pleased to be extending into Scotland after serving England and Wales for more than three years.

“As we already lend there on a residential, self-build and a custom build basis, it made sense to extend the offering of our BTL proposition into Scotland.”


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Tenant from hell shamelessly destroys rented property causing £20,000 damage

June 21, 2019

A private landlord in the Staffordshire was left horrified after nightmare tenants trashed her property and turned it into a drugs den.

Jean Fox had to spend £20,000 on repairs and cleaning the property after it took five months to get the nightmare tenant evicted.

The tenant, who had stopped paying rent for several months, left the property in a filthy state with rubbish and belongings in every room, graffiti on the walls, holes in doors and mouldy walls.

Fox, who lived in the property in Bentilee with her late husband Clive before deciding to rent it out in 2014, said: “It was a beautiful house and I was watching it being destroyed.

“The disrespect was disgusting, it was a cesspit. Every door and every wall was bashed. Everywhere was filthy and it stank. There was damp and mildew and graffiti on the walls.

“The front door was held together by bits of wood because it had been broken by police doing raids. There were cannabis pots and a tent, bongs and other drugs paraphernalia left.

“The electricity meter was tampered with, the kitchen and the bathroom were wrecked. It made me physically sick.

“I had to completely redo the whole house.”

Several neighbours complained about the tenant because he often played loud music, with various people visiting the property at all hours.

Drugs were often discovered during police raids and the landlord was advised to report the tenant to the council.

Fox continued: “Neighbours told me about all sorts of things going on in the house – drugs, fighting, cars always coming and going, people going in and out at all hours.

“There were police raids as well as loud music, banging, shouting and screaming inside the property.

“I went to the police who said I should go to the council because it was anti-social behaviour.”

But regaining possession of the property was not straightforward and Fox had to go to country court to get the man, who is currently serving a prison sentence for motoring offences, evicted.

She continued: “The system needs to be shaken up.

“People always talk about nightmare landlords but it needs to be highlighted that this is what can happen to good landlords.

“It was a living nightmare and it pushed me to the limit.

“Why was he allowed to flout the law?

“I gave the police all the information but nothing was done.”

 

 


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Why the government’s scapegoating of landlords for the rental crisis must end

June 21, 2019

Earlier this month the Tenant Fee Ban was introduced, after much fanfare from the Government. However, it is not the only piece of regulation and policy change set to affect the landlord market this year. It joins what can only be described as a slew of restrictive government policies – including tax changes, tougher HMO requirementsand the recent announcement / threat to ban ‘no fault’ evictions– whichmany would agree amount to an unfair and sustained attack on the landlord market.

It is clear the government seems to have forgotten landlords are oftenjust ordinary, hardworking people and savvy investors,who have saved to buy an additional property as a nest egg or source of income. A report from the Institute of Economic Affairs (IEA) recently criticised the government’s approach, concludinglandlords are unfairly being discriminated against and scapegoated for the rental housing crisis.

By squeezing profit margins and pushing landlords to exit the market, there is a very real danger that the recent government policies will start to undermine the UK rental sector altogether. The fact of the matter is, the rental market is growing, and landlords fulfil an incredibly important role in providing essential property stock. Instead of increasing red tape and making it harder for landlords to turn a profit, the government should be supporting and encouraging the sector.

Appropriate planning is now incredibly important to ensure you avoidany financial, practical or legal ramifications of new and upcoming legislation. So, as a landlord, what should you be doing to navigate this new regulatory landscape and make sure your assets are protected?

As most will know, the Tenant Fee Ban means the only payments that can now be levied at tenants by landlords or agents are rent, dilapidation deposits and default fees, with the deposit limit reduced from 6 weeks to 5.However, the biggest danger for landlords is the removal of an agent’s ability to charge for tasks like reference checks. Nightmare tenants can wipe out profit through property damage or failure to pay rent. It is therefore vital to commit to paying for reference checks and a rent guarantee to ensure all parties are fully protected. Alternatively, make sure you are using a reputable agent who will continue to carry out these tasks properly, potentially by using deposit replacement schemes that include these as standard.

Another significant change has been to HMO licenses, traditionally required in any property where five or more people live over three floors but are not part of the same family. Non-compliance can result in unlimited fines, a criminal record and a ban from acting as a landlord in the future. What many don’t realise is that HMO rules can be different for each borough, and numerous councils are getting much stricter about enforcement (encouraged by the fact they now profit from any fines!). For example, in Camden, London, HMOs are now required for any property with three unrelated persons, and also within properties on a single floor. Tenants are also being invited to report non-compliance, encouraged by the fact that landlords can be forced to repay all rent to tenants for the length of their contract. In just one of the London boroughs, there have been 1,200 prosecutions of landlords and agents for HMO breaches in the last five years, so ensuring you are HMO compliant by checking your borough’s specific rules is an absolute must.

On 20th March this year, the Homes Act 2018, or ‘Fitness for Human Habitation Act’, also came into effect. While not entirely new, rather a clarification and bringing into line of previous legislations, it is harsher in a number of ways. There are now 29 hazards that landlords are responsible for monitoring – including damp, mould, cold, asbestos, heat, and radiation to name a few. Tenants can take landlords to court and sue if it is found they have failed to maintain standards in one of these areas. The problem here is that it can be incredibly difficult, as an independent landlord, to both have the necessary knowledge on these matters and make sure you are compliant. This is where a knowledgeable and reliable agent or advisor is key.

Finally, the government have also announced that they intend to end ‘no fault evictions’, by removing the Section 21 notice. Although their proposals presently lack any real detail, this will make it even harder for landlords to get rid of disruptive tenants. Their current suggestion that Section 8 notices should be used instead, by which grounds such as failure to pay rent must be provided for eviction, are little comfort thanks to a backlogged court system thatwith three-to four-month delay in hearings can make this an incredibly lengthy and costly option. Given the lack of detail, there might still be opportunity to adjust this law, and so lobbying MP’s and Parliament members on this could provide some relief.

Rental yields are improving and buy-to-let can still prove to be a good investment for many, so you should not necessarily be put off. However, it is vital to remember the onus is now on you to put the necessary precautions in place to protect both your property and rental income.

Information and education are key – to this end I will also be hosting a number of round table events aimed at helping local landlords understand and navigate recent policy changes. Attendees will be able to ask questions, gain insight and discuss their experiences with experts from Martyn Gerrard, ARLA and local councils. For more information and to register your interest click here or email HO@martyngerrard.co.uk.

Simon Gerrard is the managing director of Martyn Gerrard.


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Britain’s holiday rental market looks set to boom this summer

June 21, 2019

The holiday rental market in this country looks set for another busy summer as the weak pound persuades millions to opt for a staycation.

The fall in the UK pound since the Brexit vote three years also means Britons get less for their money abroad.

Meanwhile, more tourists than ever before are visiting the UK. VisitBritain figures show that 2018 was a good year for inbound tourism to the UK, with spending by overseas visitors to the UK reaching almost £27bn.

The strength of the UK tourist industry is paying dividends for holiday property owners, according to Bournemouth-based holiday letting agency, Bournecoast Holiday Agents, which reports that holiday lets are on the rise.

 It has been known for a long time that owning a holiday let can be very advantageous in the holiday letting industry. Not only can it provide a potentially lucrative additional income for buy-to-let landlords, but it also offers certain tax advantages to holiday let owners.

There are specific requirements a property needs to meet in order to be classed as a furnished holiday let, such as its availability, actual bookings and level of furnishings.

Capital allowances can be claimed on a furnished holiday let property. This means the cost of kitting out a holiday property to a luxury standard (and in return, increasing the potential rental income) can be deducted from pre-tax profits. This is not an option available for long-term rental properties.

Income generated from a furnished holiday let property is classed as ‘relevant earnings’ which means a landlord can also make tax-advantaged pension contributions.

If the landlord should come to sell the furnished holiday let property, they may be able to claim certain Capital Gains Tax reliefs. These are unavailable to long-term rental properties and include Entrepreneur’s Relief, Roll-over Relief and Hold-over relief.

If a landlord shares the ownership of the furnished holiday let with their husband or wife, profits can be flexibly distributed between them both for tax purposes.

With long-term rental properties, profits would be distributed according to the official ownership split (e.g. if they owned 50% of the property, they would share 50% of the profits). With a FHL property, they can portion the profit however they decide.

A self-catering property which is available for short-term lettings for more than 140 days in any given year, is subject to Business Rate property tax. Since all furnished holiday let properties must be available to let for a minimum of 210 days, they fall into this category. However, this isn’t necessarily bad news as the landlord can claim Small Business Rate Relief, which can be up to 100%, dependent on what area you are in.

Des Simmons, Bournecoast’s managing director, said: “The holiday let market has gained considerable momentum over the past year, as evidenced by the growing number of lenders now offering mortgages suitable for this type of investment.”

Phil Wadham, director of Elite Financial, added that “the range of products for holiday letting is improving and more borrowers are thinking it’s a market to look at.”


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Two free tickets to this year’s Homebuilding & Renovating Shows

June 21, 2019

Following on from the successful Glasgow Homebuilding & Renovating Show that took place at the SEC Centre earlier this month, the event’s organiser is reminding readers that there are a further five shows nationwide this year, and you can claim a free pair of free tickets for each event.

Visitors to each show will be able to speak to a wide range of exhibitors and access free advice sessions, seminars and masterclasses on essential topics which can tackle any problem, from implementing the latest intelligent security systems to funding a remodelling project.

Regardless of your stage in the building or renovating process, a visit to this event will provide you with inspiration to help create your project. Gain insider knowledge from versatile property experts, find out how to source the most suitable products for your home or start from scratch with a guide to planning permission.

Through a wide range of free daily seminars and masterclasses, key topics include self-build, renovating, innovative products, extensions, conversions, and home DIY alongside tailored advice about your project. 

Take advantage of all show days to discover both national and local exhibitors presenting hundreds of innovative and exciting products.

Choose the dates and locations which work best for you:

Southern – Sandown Park – Surrey – 29 – 30 June 2019

London – ExCeL – London – 4-6 October 2019

Scottish – RHC – Edinburgh – 19-20 October 2019

Northern – HCC – Harrogate – 1-3 November 2019

South West – Bath & West Showground – Somerset – 16-17 November 2019

Looking ahead to 2020, there are shows already planned in Birmingham and Glasgow.


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Pepper Money reduces buy-to-let rates

June 21, 2019

Pepper Money has cut rates on a range of residential and buy-to-let mortgage products.

The limited edition summer special offer means that buy-to-let rates offered by Pepper now start at 3.48%.

Paul Adams, sales director at Pepper Money, commented: “At Pepper Money, we are always reviewing our products to ensure they provide value and we are pleased that we have been able to identify this opportunity to launch a limited edition summer special.”

Aside from revise rates across its buy-to-let and residential products, Pepper Money, which also offers reasonable mortgage borrowing rates for clients who have had credit problems within the last two years, recently reduced the cost of valuation fees and reduced some valuations by £200.

Customers now have the option of a £0 completion fee.


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Rogue landlord jailed for illegally converted flats and failing to repay £130k

June 20, 2019

A rogue landlord who made almost £130,000 in illegal rent after converting his three-bedroom house in east London into two flats without planning consent has been jailed after failing to pay back the money.

Akram Hussain, 57, converted the family home in Glenny Road, Barking, into a one-bedroom flat and two-bedroom flat without obtaining planning consent.

Snaresbrook Crown Court last year that Hussain, of Bedford Road in Walthamstow, received £129,755.15 in rental fees.

Hussain was sentenced and fined £5,000, under Section 179 of the Town and Country Planning Act 1990.

He was told that if he had six month to pay back the £129,755.15 his tenants paid in rent. It was made clear that failure to pay the money within three months would result in 12 months in prison.

Having failed to stump up the cash, the 58-year old landlord was sentenced at Westminster Magistrates’ Court to 280 days for failing to pay a confiscation order, which was originally issued in 2017.

The confiscation order, for the sum of £129,755.15, remains in place until it is paid in full.

Cllr Margaret Mullane, cabinet member for Enforcement and Community Safety, said: “We will continue to pursue rogue landlords and take action against the small minority who put profit ahead of people.

“The council will always take a stand against those who look to exploit residents.”


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Growing number of property owners in London turning homes into short lets

June 20, 2019

With demand for short term rental accommodation growing, an increasing number of landlords and homeowners in prime London areas are offering their homes as short term rentals 

In Wimbledon, for instance, a number of property owners are actively looking to profit from a lucrative short-term lettings market in June and July, while the Wimbledon Tennis Championships take place in SW19.

With such high demand for accommodation during the Wimbledon matches, many landlords and homeowners are actively looking to offer their homes as short term rentals for tennis, according to Knight Frank.  

“A growing number of property owners are taking inspiration from the Wimbledon tennis tournament by letting out their property on a short-term basis”, said Stevie Walmesley, head of luxury short-lets at Knight Frank.

While the political backdrop causes uncertainty in a sales market that appears otherwise ready to strengthen, short term lets enable owners to keep their options open, according to Walmesley.

“Short term lets are an effective and flexible way of providing income while remaining on the market,” said Walmesley. “The busy time of the year is between March and May and this year the number of enquiries we had over those three months rose by more than 30% compared to last year.”

Wimbledon property owners typically achieve the equivalent of one month’s rent in a single week during the tennis tournament, which starts on 1 July.

“Your property needs to be set up for a short term let,” said Oliver Cooper, head of letting at Knight Frank in Wimbledon. “For Wimbledon, that means a full maid service, working Wi-Fi and a full TV sports package.”

“Demand centres on the roads in SW19 within a 10 to 15 minute walk of the club,” he added. “The top players base themselves on Home Park Road, Lancaster Road and Marriot Road in properties large enough to host their family and perhaps one or two smaller places nearby for their entourage. Houses on these roads rent on a short-term basis for about £15,000 per week.”

Cooper continued: “Southfields is also popular, where three or four-bedroom terraced houses can host several umpires for about £3,000 per week.

“For the lower seeded players, you are looking at two or three bedroom flats for around £2,000 or £3,000 per week. The players pay the rent upfront regardless of how long they stay in the tournament.”


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Tenants found living inside garden shed during dawn raid

June 20, 2019

Brent Council in north London discovered three tenants living inside a shed in the garden of a three-bedroom semi-detached house in Dollis Hill during the early hours of yesterday morning.

The council's enforcement team raided the converted property shortly after 6am following tip-offs from neighbours.

They found 16 people crammed inside the unlicensed House in Multiple Occupation (HMO), including three tenants packed inside a shed in the back garden.

One family of four people informed officers that they were paying the landlord almost £200 a week to live in a single windowless room.

The tenants said that they had no written tenancy agreement from their landlord or any cash receipts for their rent payments.

The council estimates that the landlord is earning £68,400 a year through exploiting the people living in this property.

Cllr Eleanor Southwood, cabinet member for housing and welfare Reform, said: “The landlord of this property faces a hefty fine for breaking the licencing laws around houses in multiple occupation.”

The property also lacked a working fire alarm system, good maintenance and ventilation. Fly-tipping and the constant coming and going of different people from the property had led neighbours to complain to Brent Council's enforcement team.  

Southwood added: “We will do everything in our power to protect vulnerable tenants from this kind of gross exploitation. Every renter in Brent deserves to live in a home that is safe and maintained to a decent standard.”


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ONS: Rents increased by 1.3% in the UK in the year to May 2019

June 20, 2019

Rents in the UK’s private rented sector increased by 1.3% in the 12 months to May 2019, up from 1.2% in April, ONS’s Index of Private Housing Rental Prices has found.

In England rents increased by 1.3%, in Wales by 1.2%, and in Scotland by 0.8%, the data shows.

Northern Ireland’s annual growth rate has remained broadly consistent at around 2% since 2018.

Growth in rental prices means that affordability continues to be stretched and that is bad news for tenants, according to Tom Gatzen, co-founder of ideal flatmate.

He commented: “We’ve seen a notable increase in the number of UK households in the private rental sector over the last 10 years in particular and this growing dependence has been the driving factor behind a consistent increase in rental costs, as demand continues to outstrip the supply of suitable properties available.  

“This hasn’t been helped by changes to the sector which have deterred buy-to-let investment to a degree, and the latest introduction of a tenant fee ban could see rents climb higher as letting agents pass lost revenue costs onto the landlord.”

According to the figures from the ONS, growth in private rental prices paid by tenants in the UK has generally slowed since early 2016, fuelled primarily by a slowdown in London. But there are signs that rental growth in the capital and other parts of the country are starting to pick up.

London private rental prices rose by 0.9% in the 12 months to May 2019, up from 0.5% in April 2019, according to data from the ONS.

“We do not see it as a coincidence that several rental indices are show that, following a protracted period of softness, average rents in London are once again increasing,” said Kate Davies, executive director at the Intermediary Mortgage Lenders Association. 


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Barclays introduces new products and reduces rates

June 20, 2019

Barclays has cut rates on a number of products across its residential, buy-to-let and Reward ranges.

The buy-to-let range includes a 2.35% five-year fixed, available at 75% loan-to-value (LTV), which is subject to a £1,795 product fee. 

The deal is available to those looking to secure a minimum loan of £35,000 and a maximum loan of £1m.

Barclays has launched a range of fee-free buy-to-let mortgage products in recent weeks.

Rate reductions in the buy-to-let range for purchases and remortgages have included a two-year fixed rate with a £1,749 product fee at 75% loan-to-value, reduced from 1.77% to 1.68%.

There is also a fee-free two-year product available at 75% LTV which has been cut from 2.56% to 2.47%, and within its premier choice range there is a 2.55% two-year fix without a fee at 75% LTV which has been cut from 2.55% to 2.46%.

Meanwhile, the lender’s five-year fixed buy-to-let rate has been reduced to 2.04% at 60% LTV with a £1,795 fee, while five-year fixed rates start at 2.35% up to 75% LTV with a product fee, or 2.73% with no fee.

Within its remortgage range Barclays has increased its cashback offered on its great escape products from £300 to £400.

There are also two two-year fixed rate deals available without a fee, one at 60% LTV which has been cut from 1.97% to 1.95% and one at 75% LTV which will be reduced from 1.99% to 1.97%.


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Berlin-style rental rate freeze could send UK property market ‘into meltdown’

June 19, 2019

Germany’s rent controls place strong restrictions on in-tenancy rent increases, while the ‘rent brake’ introduced a couple of year ago makes it harder for landlords to charge higher rents when re-letting a property. But would a similar system work as far as the UK’s rent control system is concerned?

Last week the German finance minister Olaf Scholz voiced his support of a controversial five-year rent freeze to tackle the increasing cost of living in the city.

The aim, according to Scholz, is to ensure that Berlin does not ‘end up like London’.

In the last five years, London rents have increased from an average of £1,530 a month to £1,679 – an increase of 2.44% annually.Should this growth trend persist for a further five years, it would push the average rent in the capital to £1,894 a month. 

However, the implementation of a five-year rental rate freeze would see London tenants save a total of £7,620 in rental costs, according to the research.

Tenants in Newham stand to save the most, with rents increasing by 6.95% on average in the borough over the last five years, an increase of £329 in the monthly rent. If this continues, the average rental price could hit £1,977 a month in five years, but a freeze would see tenants save a notable £19,413 as a result.

A five-year rental rate freeze would also see a five-figure saving for tenants in Barking and Dagenham, Hackney, Waltham Forest, Tower Hamlets, Redbridge, Kensington and Chelsea, the City of London, Havering, Lewisham, Southwark, Enfield and Ealing.

 

While London is home to the highest rental costs in the UK and would remain the least affordable over the next five years, higher rental growth rates in other major regional cities mean that tenants outside of the capital could also stand to save big due to a rental rate freeze.  

Oxford tenants would benefit with a rental freeze saving totalling £17,746 over the next five-years. The average rent in Oxford over the last five years has increased at an average of 7.3% a month, second only to Manchester at 8%, which could see Oxford’s rental costs hit £1,741 a month.

Bristol has also seen a sharp increase in rental prices, up 6.75% annually over the last five years. A similar growth trend would see the average monthly rent hit £1,489 however, a five-year rental freeze would save tenants a total of £14,294. Tenants in Manchester, Oxford, and Newcastle would also enjoy a five-figure saving.  

Tom Gatzen, co-founder of ideal flatmate, said: “The figures suggest that should such a rental rate freeze be introduced in London and the wider country, the saving for tenants could be considerable. This saving could go some way towards a mortgage deposit and a foot on the ladder, while at the same time helping to alleviate some of the pressure on the rental sector.

“Any pro-tenant initiative can, of course, be viewed as a positive, but the mere suggestion of a rental rate freeze in Berlin seems to have sent the property market into meltdown. There is every chance that the same could happen here as a recent string of government changes to the buy-to-let sector have already diminished landlord confidence levels.

“This further dent on profitability could see more opt to invest elsewhere, however, the meteoric rise of the build-to-rent sector is providing a viable alternative to traditional stock supply and could therefore be the answer, stomaching a static rate of rental growth far better without any detriment to the tenant.”


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BTL landlord fined £7k for allowing garden to become ‘extensively’ overgrown

June 19, 2019

A landlord has been ordered to pay £7,000 for neglecting the garden at one of his properties and allowing to become severely overgrown, having not cut the grass for seven years.

Leighton Dowding, 45, acquired the property in Downend, Bristol, in 2012, but given that he lives 150 miles away in Brighton, he left the house completely empty and failed to maintain the grounds.

Fly-tipped waste began to pile up next to a dilapidated shed in the front garden, whilst weeds cluttered the long back garden.

The 45-year-old landlord was served with a Community Protection Notice (CPN) in August 2017, and a subsequent Remedial Order in May 2018, ordering him to clear all the overgrown vegetation.

But none of the work was ever started at the mid-terraced house and Bristol Magistrates’ Court ordered Dowding to pay a £4,800 in fine and £2,200 in costs to South Gloucestershire Council.

Cllr Steve Reade, South Gloucestershire Council cabinet member for planning, transport and strategic environment, said: “We are working to bring long-term empty properties in our area back into use to help meet the local housing need.

“Before following this course of action, we had previously written to and contacted the owner several times about their property and repeatedly offered advice and assistance, without any continuing response.

“Where necessary, we will use enforcement powers to bring empty properties back into use which require an owner to maintain the property in reasonable condition if it is adversely affecting the locality.

“Allowing empty properties to continue to have a detrimental effect on the local neighbourhood will not be tolerated.”


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New online platform aims to help landlords ‘keep their costs down’

June 19, 2019

An e-commerce platform battling construction waste by enabling businesses to sell surplus materials to builders, renovators and DIY enthusiasts, claims that it can also help landlords keep costs to a minimum.

Builders Bay believes that it has come up with a unique way to save landlords money and help the environment with its online marketplace, Buildersbay.co.uk.

Landlords can use the site to purchase products at reduced prices for their housing projects while doing their bit for the environment at the same time.

Buildersbay.co.uk was launched with a view to tackling the issue of excessive construction waste by enabling nationwide suppliers to sell surplus products to builders, renovators and DIY enthusiasts.

Products offered on buildersbay.co.uk are up to 45% cheaper than anywhere else on the internet.

Builders Bay co-founder, Michael Chapman, said: “There’s hundreds of millions of surplus materials and products on sites, in stores and from supply chains which literally just go into landfill and it’s been an ongoing problem for these businesses. One supply chain is actually building their own incinerator to get rid of surplus materials!

“Builders Bay is the perfect solution for the supply chain that also benefits landlords looking to keep their costs down. It is the first service of its kind and we recommend it as the go-to marketplace in 2019.”


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Octane Capital passes £500m lending milestone

June 19, 2019

Having completed loans primarily to professional landlords, property investors and developers, Octane Capital has passed the £500m lending milestone, just over two years since launching in May 2017.

Known for its speed, offering much faster time to completion than many high-street lenders, the buy-to-let, bridging and development lender has helped a number of landlords add to their property portfolios by providing crucial funding a purchaser needs to acquire property.

Research shows that the main reason borrowers turn to specialist lenders is to avoid delays with their long term mortgage, which can result in a potentially lucrative investment opportunity being missed. 

Jonathan Samuels, chief executive of Octane Capital, commented: “We launched Octane with a vision of shaking up the specialist finance sector and hopefully, with our product-less approach to lending, we have managed to achieve that.

“We would clearly like to extend special thanks to our valued broker partners, who have played a pivotal role in the growth of our business.”


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Property buyers in southern England are ‘seeking out value for money’

June 18, 2019

More than a third of residential properties in southern England are in property markets experiencing house price falls as the slowdown ripples out of London, new figure show.

The latest report from Zoopla reveals that 36% of homes in southern England are in property markets experiencing house price falls, as London property market trends spreads out into the commuter areas and further afield in southern England, which includes the South East, Eastern and South West regions.

But despite the recent dip in values, Zoopla’s resrach department predicts that price falls in southern England will be short-lived when compared to London and by the second half of next year forecasts that the scale of price falls to be much lower.

The average price of a property in south as a whole stands at £323,910, up 0.6% year-on-year

Region

Average price

 

% annual average house price increase

Proportion of markets registering price falls

Southern (whole)

£323,910

+0.6%

36%

South East

£362,520

+0.2%

47%

South West

£265,571

+1.5%

20%

East

£313,556

+0.4%

42%

Source: Zoopla Research and Hometrack House Price Indices

The report finds a clear link between house prices and whether markets are registering a softening in prices. In broad terms high value markets are more likely to be registering price falls than lower value, more affordable areas.

In the South East region, the weakest annual growth can be seen in the likes of Woking (-2.3%), Epsom (-2.3%),Basingstoke (-1.9%) and Maidenhead (-1.6%) – all archetypal commuter towns.

Whereas Dover (+3.4%), Hastings (+2.9%) and Shepway (+2.3%) on the coast, lower value areas which are less commutable to London, are performing relatively well.

In the South West, again, it is generally the higher value areas where price increases are lowest. Prime examples are Bathwhere the average price is £345,575 and prices are up +0.3% annually; the Cotswolds £365,630 (+0.7% annually) and Poole £307,667 (+0.3% annually).

The lowest value areas which still have further scope for price growth such as Gloucester andTaunton are experiencing annual house price growth of 3.2% and 4.6% respectively and house prices are well below the regional average.

Richard Donnell, research and insight director at Zoopla, commented: “The London housing market is coming to the end of what can be described as a three to four repricing process where many areas have experienced small, single digit price falls. This is not surprising given the speed of price growth between 2010 and 2016. The year of peak sales activity in terms of actual recorded sales was 2014. 

“Multiple tax changes and growing affordability pressures reduced demand, evidenced by a 25% drop in sales between 2014 and 2018. Prices have been adjusting since 2016 which is more a result of market fundamentals than Brexit which we see as a compounding factor.

“Late last year we reached the peak in terms of proportion of local markets experiencing small annual house price falls. Since then the proportion of markets registering declines has fallen, as the three year re-pricing process approaches the end phase.”

Donnell added: “The trends in London and southern England are all part and parcel of the unfolding housing cycle. There remains plenty of demand for housing in southern England but there are fewer buyers who are more cautious, seeking out value for money.


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Are you entitled to a stamp duty rebate following landmark court case?

June 18, 2019

Primas Law is urging landlords and property developers to seek legal advice about potential stamp duty rebates on ‘uninhabitable’ second properties after a landmark tribunal case.

A recent ground-breaking case, between P N Bewley Ltd and HMRC, held that properties that are not immediately habitable at the time of completion do not constitute as a “dwelling” for the purpose of the Finance Act 2003.
 
This finding could have major implications for the UK housing market, according to Primas Law, as the decision meant that P N Bewley was not liable to pay the additional 3% stamp duty surcharge applicable to second homes. 

It could mean that those who have paid stamp duty on similar uninhabitable properties – including potentially thousands of landlords and developers – may have paid an inappropriate level of tax and could seek to reclaim them.
 
Consequently, Primas Law is being instructed to act for a large and growing number of landlords and developers seeking to recover stamp duty paid for properties that, potentially, should not have attracted the additional tax.
 
Daniel Thomas, Head of Litigation at Primas Law, said: “To provide more context to this particular case, the property that P N Bewley purchased was a bungalow and a plot of land in Western-super-Mare.

“The company’s intention was to demolish the bungalow and build a new dwelling on the land with planning permission already being granted. The bungalow was essentially a derelict building that had been unoccupied for around three years.
 
“The tribunal was provided with photographs of the derelict building and these demonstrated the heating system, radiators, floorboards and pipework had been removed, and that the property – both internally and externally – was in a very poor condition.
 
“It was also provided with reports from surveyors that concluded asbestos was present in the property and urgently needed removing.”
 


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Planning for retirement: wealth ‘intrinsically linked to bricks and mortar’

June 18, 2019

With fresh analysis revealing that national property wealth has surpassed £4 trillion, a growing number of older homeowners are now factoring property into their retirement plans.

A new report from the Equity Release Council has found that just over half - 51% - of homeowners aged 45-plus now see money invested in property as part of their financial plans for later life.

This comes as the World Economic Forum reports that the average person in the UK will live 8.5 years longer than their retirement savings will last, highlighting the need for alternative sources of finance in later life to supplement traditional retirement income.

The study found that older households depend the most on property as a source of finance - making up 40p in every £1 of over-65s’ wealth and 47p among over-75s.

Some 68% of homeowners see property as the most important contributing factor to their financial comfort in later life, while 56% feel they can benefit from its financial value while they still live there.

Those who are currently aged 45-64 are less likely than their older counterparts to see property as something to leave behind as an inheritance, according the research. Instead, they are more likely to think of it as a multi-purpose financial tool that can support their own financial plans (55%), be used as a nest egg to meet unexpected expenses (49%) or help family members (25%).

 

Some 44% of over-45 homeowners feel taking out a mortgage or loan to access property wealth in later life is becoming a more common way to manage money, while 40% see it as a “reality” of ageing.

Just 34% feel they have no need to consider this option either now or in future, including just 30% of those aged 45-64.

David Burrowes, chairman of the Equity Release Council, said: “The UK’s ageing population and changing retirement landscape means people are increasingly thinking of property as a multi-purpose financial asset – particularly those aged 45 to 64, the retirees of tomorrow. Property is often a person’s single largest asset and makes a significant contribution to homeowners’ personal finances as well as providing a place to live.

“Changing attitudes to property are significant given the financial challenges facing our ageing population as they seek to live longer, healthier lives. Many people have made inadequate provision for their retirement and care needs, while others have younger family to support. Consequently, bricks and mortar have become a vital piece of the retirement funding jigsaw, to benefit people during their lifetime as well as their families.

“Our calls to action are underpinned by the core belief that – while drawing on property is not right for every circumstance and should not distract from encouraging long-term saving – it should be on every homeowner’s checklist to consider in later life, now more than ever. We urge industry and policymakers to evolve their thinking to reflect that of older homeowners to support this emerging demand.


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Landlords want tenants claiming benefits to be treated ‘fairly and equally’

June 18, 2019

The Scottish Association of Landlords (SAL) is calling for an urgent overhaul of how universal credit is paid, with most landlords north of the border wanting to see the housing element of the benefit paid directly to them instead of the tenant.

A new report of the Social Security Committee of the Scottish Parliament recommends that the default position should be that the housing portion of Universal Credit be paid directly to landlords, be that private or social.

The body said this would ensure that those on Universal Credit have equal access to accommodation as opposed to the current situation which sees some landlords reluctant to rent to those on Universal Credit because of potential delays in rent being paid.

But unfortunately the Scottish government refuses to support the measure which most experts believe would increase the availability of private rented homes for those on Universal Credit.

John Blackwood, chief executive of SAL, said: “As the Cabinet Secretary for Social Security and Older People stated during her evidence, we agree that social security is a human right. This is why we support any measure which ensures those receiving Universal Credit are treated equally and have the same access to housing as everyone else.

“The reluctance of the Scottish government to support a simple measure which would help achieve that is deeply disappointing.

“What we are proposing, and the committee report agrees with, is that the default position would be that the housing component of Universal Credit is paid directly to the landlord, private or social, but the tenant would still be able to opt-out if they wanted. This would reduce the risk to landlords of renting to those on Universal Credit and ensure those in receipt of benefits are treated fairly and equally as they deserve to be.

“The government is expected to formally respond to the Social Security Committee’s report over the summer and I hope they will reflect on their conclusions and join private and social landlords as well as charities and others who support this measure so together we can persuade the UK government of our case.”


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Shelter urged to go back to drawing board on tenancy proposal

June 18, 2019

The Residential Landlords Association (RLA) has urged Shelter to go back to the drawing board after calling for England to adopt Scotland’s model of indefinite tenancies in the private rented sector.

Shelter released a report yesterday suggesting that England should follow Scotland’s lead and provide private tenants with indefinite security of tenure, meaning "no-fault" evictions will no longer be possible.

The private residential tenancy rules introduced north of the border in December 2017 brought an end to fixed-term rentals, meaning leases will effectively be open-ended.

These new laws have led to unprecedented security of tenure to private renters, with landlords in Scotland now needing a good reason to evict tenants.

But Shelter has failed to recognise key differences between England and Scotland, according to David Smith, policy director for the RLA.

Responding to Shelter’s report, Smith said: “The only reason the Scottish model has worked is because a properly funded and staffed housing court was established to cope with the dramatic increase in repossession cases needing to be heard.

“Across England and Wales it takes an average of over five months for landlords to repossess properties through the courts. This is not good enough.

“We call on Shelter to back the RLA’s plans for a dedicated housing court that can process repossession claims in legitimate circumstances without frustrating landlords. Simply tinkering with the existing courts will not work.”

Smith criticised Shelter for claiming that changes in Scotland have not affected the supply of homes for rent.

“Shelter has used figures from before the changes were introduced,” he added. “As the latest data from the Royal Institution for Chartered Surveyors notes clearly, whilst the demand for new homes to rent has increased considerably in Scotland, new landlord instructions have fallen, providing less choice for tenants.”


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Sharp rise in the number of people with additional properties

June 17, 2019

The buy-to-let boom over the past 20 years has contributed significantly to the number of people who own second homes.

More than one in 10 people in Britain own second homes, buy-to-let and overseas properties worth a total of £941bn, a study has found.

Research by the Resolution Foundation think tank, funded by the Nuffield Foundation, said the latest data, compiled for the years 2014 to 2016, shows that the proportion of adults who live in a family with property other than their main residence increase 7.9% from 3.6 million people in 2001 to 11.2%, or 5.5 million people.

Buy-to-let property is now the most common form of property wealth, having grown by 58% since 2006-08, the report found.

Buy-to-let property accounts for the largest group of additional property owners - 1.9 million people. This is followed by second homes (1.4 million), and then overseas property (970,000 people).

Looking at change over time, the biggest component of the increase in additional property ownership from 2008-10 to 2014-16 was in buy-to-let properties, the report found.

The number of people owning buy-to-let property rose by more than 50% over this eight-year period.

According to the report, the number of buy-to-let mortgages has increased 15 times since 2000.

Three major reasons for owning additional property were providing rental income, giving security in retirement and passing on wealth to younger relatives.

“The sheer scale of additional property wealth is an important driver of rising wealth gaps across Britain,” said George Bangham, policy analyst at the Resolution Foundation.

But the research suggests that only wealthy people can now afford a second home - a sign, according to the foundation, that property wealth is not distributed fairly across the country.

Additional properties accounted for 15.8% of the total £6tn of overall property wealth held by households in Great Britain in 2014-16.

Additional property wealth is accumulated over time and is most common among older generations, said the report.

Around one-in-six baby boomers - those born in the 1950s - had additional property wealth in their family in 2014-16.

Bangham added: “As the huge stock of second homes, buy-to-let and overseas properties starts to be passed on to younger generations, Britain risks becoming a country where getting ahead in life depends as much on what you inherit, as what you earn.”


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Significant increase in the number of over-50s living in rented homes

June 17, 2019

There has been a sharp rise in the number of over 50s renting homes, according to new research from Hamptons International.

Some 15% of rented households so far this year are made up of people aged 50 and over currently rent, up from just 11% in 2012, according to the findings.

The research surveyed more than 13,700 people aged 50 and above from across the UK.

Hamptons International, part of the Countrywide Group, estimate that this year over 50’s rented 791,580 homes in Great Britain, 61% more than the 490,450 recorded in 2012.

Number and % of rented households over 50 across Great Britain

Year

Number of rented households with tenants over 50

% of renters over 50

Total rent paid by over 50’s (rounded £bn)

2012

490,450

11%

£        5.1

2013

548,290

12%

£        5.6

2014

641,850

13%

£        6.9

2015

630,260

13%

£        7.0

2016

684,410

13%

£        7.7

2017

741,080

14%

£        8.5

2018

731,340

14%

£        8.5

2019 (YTD)

791,580

15%

£        9.2

Source: Hamptons International & EHS

High property prices and divorce rates could be partly behind the numbers of over-50s starting life afresh in rented homes, and a result, over 50’s will pay £9.2bn on rent this year, up from £8.5bn last year and just £5.1bn in 2012. 

The highest proportion of older renters can be found in the South East, where 19% of tenants are over 50. The South West (16%), North West (16%) and Wales (15%) follow. 

Meanwhile, the East of England, London and Yorkshire and Humber (11%) have the lowest proportion of tenants over 50.

% of homes rented by over 50’s in each region

Region

% of homes let by over 50’s

South East

19%

South West

16%

North West

16%

Wales

15%

North East

15%

West Midlands

14%

East Midlands

13%

Scotland

12%

Yorkshire and the Humber

11%

London

11%

East of England

11%

Source: Hamptons International

During the last 12 months the average tenant over 50 paid £1,000 per calendar month (pcm) on rent, £30pcm more than other tenants in Great Britain, according to Hamptons International’s Monthly Letting Index published today.

Most tenants over 50 live in two-bedroom properties (44%), with 26% choosing a three-bedroom and 19% living in a one-bedroom home. 

Across Great Britain 48% of tenants over 50 live alone.

The average cost of a new let in Great Britain rose to £977pcm, a 2.6% year-on-year increase, fuelled primarily by rising rents in the South.  The South West recorded the strongest annual rental growth of 4%. 

Meanwhile, rents in Greater London increased 3.1% year-on-year, however this is compared with a short period of weak average rents back in May 2018. 

The East and Wales were the only regions to record negative rental growth, with average rents falling -0.5% and -0.1% respectively year-on-year.

New lets (pcm)

 

May-19

May-18

YoY Rental Growth

Greater London

£    1,716

 £    1,664

3.1%

South East

£    1,061

 £    1,036

2.4%

South West

£       814

 £       783

4.0%

East

£       945

 £       950

-0.5%

Midlands

£       686

 £       675

1.6%

North

£       628

 £       621

1.1%

Wales

£       666

 £       667

-0.1%

Scotland

£       651

 £       631

3.2%

Great Britain

£       977

 £       952

2.6%

Great Britain (Excluding London)

£       782

 £       770

1.6%

Source: Hamptons International

Aneisha Beveridge, head of research at Hamptons International, said: “The number of over 50’s renting in Great Britain has reached a record high. With younger generations much less likely to be homeowners, tenants are getting older, and an ever more diverse group of people are calling the rented sector home.

“Rising rents in the South drove rental growth in Great Britain in May. The South West recorded the strongest rental growth, with rents rising 4% year-on-year. Wales and the East were the only regions to record small rent falls.”


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Buy-to-let investors urged to use a mortgage broker

June 17, 2019

Buy-to-let landlords looking to add to their property portfolios are being encouraged to use a specialist mortgage broker as they could “make a difference to maintaining profit”.

Research shows that fewer buy-to-let investors are actively looking to commit to investing in buy-to-let property following the stamp duty and income tax crackdown, resulting on a squeeze on many landlords’ profits.

But many landlords could boost profits simply by cutting their outlay on mortgage interest payments, and the best way to do that is to have a conversation with a specialist buy-to-let mortgage broker, according to Andrew Turner, chief executive at Commercial Trust Limited.

Landlords are feeling the effects of tax changes as the government continues to target buy-to-let, and that is why many private landlords are considering abandoning the sector as the costs begin to outweigh the benefits.

In order boost the supply of much needed homes in the private rented sector, more needs to be done to incentivise people to invest in the buy-to-let sector, and that is where a broker with access to a wide range of historically low mortgage borrowing rates could potentially help.

Turner said: “The value to landlords of utilising a broker working with a wide breadth of lenders has never been greater.

“Buy-to-let landlords have seen enormous changes in the tax regime and a progressive set of rules which are professionalising the industry, adding further cost along the way.

“Renting property is a business, so like any other, landlords want to operate at a profit.

“The changes that have taken place mean that research and meticulous planning are essential to doing so.”

The number of buy-to-let mortgage products on the market is currently at a 12-year high, according to the latest figures.

The data, taken from the latest Moneyfacts report, shows that the number of BTL products has increased by 21% in the past year to a total of 2,396, which is the highest figure since October 2017 when there were 3,305 products available.

The research showed that brokers have access to six times more products compared to going directly through a lender.

Turner continued: “Competition is healthy and has raised the game in terms of the amount of choice available to borrowers.

“But one-size does not fit all, in terms of borrower circumstances. That is where a broker can save time and money.”

According to mortgage sourcing platform Twenty7Tec, brokers have access to 12,000 products across the whole mortgage spectrum, while just 2,000 are available directly from lenders.

Furthermore, each lender will only offer you their own products, vastly reducing this number on a case by case basis.

A report by Legal and General shows strong support for using brokers, with 98% of borrowers finding the help they received ‘valuable’ and 95% saying they would recommend using a broker to friends or family.

“An increasing array of choice definitely favours investors, but as is demonstrated in the statistics above, using a broker can be invaluable in finding the wood amongst the trees,” Turner added.


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Landlord ordered to pay more than £5k for safety breaches

June 17, 2019

A buy-to-let landlord in South Yorkshire has been fined £4,000 and ordered to pay costs of £1,121 as well as a victim surcharge of £100 after being found guilty in his absence for failing to carry out crucial safety works on his properties - including work to rectify fire hazards.

Sheffield Magistrates heard that Hanif Mohammed Khan, who owns properties in the Eastwood selective licensing area, ignored improvement notices served on him by Rotherham Borough Council instructing him to carry out works, which included dealing with hazards relating to fire safety and damp.

In the in the case of one property on Selborne Street at Eastwood, S65, the kitchen was in a dire state and needed replacing, but this only done on the morning of the court hearing a year later.

The 54-year old landlord who lives on Broom Lane in Broom, S60, was convicted of three offences of breaching improvement notices and one breach of his selective licence for failing to provide a valid gas safety certificate.

Cllr Dominic Beck, Rotherham Borough Council’s cabinet member for housing, said: “Although the majority of private landlords are law abiding, we will continue to take action through the courts against the small minority who fail to act on their responsibilities and ensure that their tenants have a decent standard of housing.”


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Insurance provider offers ‘protection solutions which landlords’ value’

June 17, 2019

Tenant referencing and lettings insurance provider, Barbon Insurance Group, has teamed up with flatfair to co-market the two companies’ products and services.

Barbon, best known for its HomeLet and Rentshield Direct brands, hopes to enhance the new technology-based solution to tenancy deposit alternatives offered by flatfair.

The aim is to provide letting agents with a ‘one-stop-shop’ solution to seeking a comprehensive range of protection solutions for their landlords across referencing, insurance and deposits.

Vicky Quinn-Campbell, HomeLet’s head of sales, said : “Our HomeLet and Rentshield Direct teams are there to help arrange solutions which contribute to keeping our customers competitive and supporting them as they serve their existing landlords as well as trying to secure new instructions.

“An ability to source a comprehensive range of protection solutions which landlords’ value is now an essential part of the ‘marketing mix’.”

As well as the recent launch of a range of products combining referencing, rent insurance and legal services which are aimed at helping agents secure more revenue from each let, HomeLet and Rentshield Direct are embarking on a co-marketing arrangement with flatfair to cross-promote each other’s products and services and provide agents with convenient access to a wider range of solutions, saving them time and effort in the arranging of these important components of their landlord proposition.

Franz Doerr, founder and CEO of flatfair, said: “We’re thrilled to partner with the UK’s leading tenant referencing and insurance brand. The future of renting is evolving and one of flatfair’s key priorities is to help streamline all things deposits for landlords and managing agents, whilst offering a better customer experience. Our partnership with Barbon is a huge step in the right direction.”


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New mortgage data shows the BTL sector is ‘holding its head above water’

June 14, 2019

Buy-to-let mortgage activity increased slightly in April, with landlord investors taking out 5,100 new buy-to-let home purchase mortgages, up from 5,000 a month earlier, the latest figures from UK Finance show.

The data also reveals that there were 14,400 remortgages in the buy-to-let sector – unchanged month-on-month.

According to the trade body, there was a significant increase in homemover mortgages, as well as first-time buyer deals.

There were 25,450 homemover mortgages completed in April, while the number of first-time buyer deals hit 27,370.

Richard Pike, Phoebus Software sales and marketing director, commented: “It appears from these latest figures from UK Finance that the mortgage market is, for the most part, in good health. Even the buy-to-let sector is holding its head above water which, given the regulatory and tax changes that landlords have had to withstand, is somewhat surprising. 

“Although there are many investors holding fire in the commercial world, the same cannot be said for consumer confidence. And, as we head into the summer months, when historically we expect to see an uplift in the housing market, I can see the current trend continuing.”

But despite the slight improvement in buy-to-let lending, it is hard to ignore the fact that buy-to-let mortgage lending has plummeted in recent years.

Simon Heawood, CEO and co-founder of Bricklane.com, said: “The number of new buy-to-let mortgages has fallen off a cliff over the last few years, with the total down 50% since 2016. Based on the stagnant numbers, we shouldn’t expect that trend to change in the near future.

“The rental market has become increasingly difficult for new and existing landlords to navigate. In addition to a raft of tax penalties, the recent introduction of the Tenant Fees Act and the proposed scrapping of ‘no fault’ evictions show that the market is moving in a pro-tenant direction.

“Landlords will soon be expected to provide a higher standard of service and, faced with diminishing profits and an increasing workload in the buy-to-let market, we expect to see more and more individuals revaluating their portfolios, with many then looking at alternative routes to invest in this asset class.”


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New guidance to help landlords protect themselves against major risks

June 14, 2019

Buy-to-let landlords need to minimise potential risks that make the difference between ‘profitable calm’ and ‘money-pit worry’ to help ensure that investing in the PRS proves worthwhile, and to help landlords protect themselves against three of the main risks they may face, haart, a leading independent letting and estate agency group, has released the following guidance.

Paul Sloan, operations director for haart, commented: “There is a spectrum of landlords. At one end are business landlords with scores of homes in property portfolios; at the other end there are an increasing number of ‘accidental landlords’, who have decided to rent out a single family home they inherited.

“But wherever you fall on the spectrum – professional, accidental or somewhere in between – it’s crucial that you are aware of, and have sufficient protection for, these three risks.”

Risk 1: Unreliable tenants

To reduce the risk of having unreliable tenants, you should use a professional tenant referencing service.  It’s a process of screening and background checks which weeds out tenants with a problematic history, or who are unlikely to be in a position to afford the rental payments.

However, even the most comprehensive reference can’t remove the risk of a tenant defaulting altogether. To limit the loss, you can take out a rental guarantee.

There are a many different policies and services available, but they will usually provide cover for any unpaid rent, together with covering the costs of evicting the tenant.

Risk 2 – Repairs / damage to your property

Obviously, an old property is more likely to need repair than a new one. Some experts even advise buying rental properties less than 15 years old.

If you do spot any issues, be sure to fix them quickly so they don’t turn into bigger problems. Make sure tenants know to report any problem straight away. If you have your property managed, make sure your agent inspects the property regularly. If you don’t have your property managed, then you will need to do this yourself.

If your tenant leaves your property with major damage, then there is a risk the security deposit may not always cover the costs of making the repairs.

But won’t your house insurance cover that?  It depends.

Sloan said: “Some insurance policies will only cover you if you are the occupier of the property – a fact some landlords find out too late. Make sure your insurance is right for your rental properties.

“Landlords should also bear in mind that if they don’t repair something which becomes damaged, such as loose stair carpets or tiles, and this results in an injury to a tenant, then they can make a claim against you.  However, a specialist landlord insurance policy which includes Landlord or Public Liability cover could protect you in these circumstances.”

Risk 3 – The time between lets

Again, a nice house in a pleasant area will tend to keep your tenants longer.

But any property can become vacant. The cost of vacant properties includes lost rental income – which is where a professional letting agent can help find new tenants, faster – reducing the impact of void periods between lets.

Sloan added: “We urge any landlords to speak to us so that we can help you navigate any pitfalls and make sure that your investment works for you consistently.”


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Skipton launches new buy-to-let products

June 14, 2019

Five new buy-to-let intermediary-only mortgage products have been introduced by Skipton Building Society.

Among the new products for purchase or remortgage, which include free valuations, is a 60% loan-to-value (LTV) five-year fixed rate product at 1.79% with a £2,995 arrangement fee.

In addition, the lender has launched a 60% LTV five-year fixed rate deal at 2.16%, as well as a 75% LTV five-year fix at 2.51%. Both products include a £495 fee.

A 60% LTV five-year fix at 2.54% and a 75% LTV five-year at 2.92% have also been released. The two deals have no fees and £1,000 cashback.

It is also worth pointing out that free legals are offered on remortgage products with fees.

Alex Beavis, head of mortgage products at Skipton Building Society, commented: “We are delighted to introduce these new intermediary-only buy-to-let products.

“All five products will land in the ‘best buy’ tables offering great value for purchasers of BTL property and for those wishing to remortgage their portfolio.”


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Is your tumble dryer one of 500,000 to be a ‘fire risk’?

June 14, 2019

Thousands of households, including many of those renting privately, could still be at risk from faulty Whirlpool tumble dryers as the government issues a fresh warning to unplug any unmodified appliances.

The call comes from the Office for Product Safety and Standards (OPSS) as Whirlpool is in the process of replacing or repairing 3.8million appliances.

Whirlpool estimates that there are between 300,000 and 500,000 fire-risk tumble dryers potentially in people's homes.

A number of machines under its Hotpoint, Indesit, Creda, Swan and Proline brands were identified as requiring a fix to make them safe to operate.

Whirlpool is urging anyone with an unmodified machine to contact them.

A spokeswoman said: “Safety is our number one priority and we remain committed to resolving any affected tumble dryers that have not yet been modified.

“The crucial message to anyone who still owns an affected dryer and has not already had it modified by Whirlpool is to contact us immediately on 0800 151 0905.

“In the meantime, anyone with an affected dryer that has not been modified should unplug it and not use it until the modification has been completed.”


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BTL landlord fined more than £1,600 for assaulting a council officer

June 13, 2019

A private landlord in Doncaster has been found guilty of pushing a council officer down stairs during an inspection of his rented property.

A court heard that Brian Goodwin of Thealby Gardens, DN4, prevented two City of Lincoln Council private housing officers from carrying out their legal duty to determine whether his property was safe to licence by the council as a House in Multiple Occupation (HMO) in July last year.

During the officers’ inspection of the house on Union Road in Lincoln, the landlord told both officers to vacate the property before assaulting one of them which prevented them from continuing their safety inspection.

The court was told that Goodwin seized one of the officers from behind in a bear hug before attempting to physically kick him out of the property, which led to the officer being forcefully pushed down the stairs.

City of Lincoln Council prosecuted the landlord as agents for the Crown Prosecution Service following a police investigation into the assault and battery, which resulted in grazed and bruised elbows, as well as abdominal bruising.

Goodwin was also ordered to pay a fine of more than £1,600 for assaulting the officer, along with £50 in compensation to the official he had assaulted.   

Sara Boothright, environmental health & corporate safety manager at City of Lincoln Council, commented: “We are pleased with the magistrates’ verdict and happy that justice has been served. Under the circumstances, it was the right and proper outcome. The landlord’s behaviour was completely unacceptable and these prosecutions send out a strong message that we do not tolerate this kind of behaviour against our staff.

“The bench increased the fine because Mr Goodwin’s actions were directed at representatives of the council who were in the course of carrying out their duties. The prosecutions highlight the importance of treating our staff with respect and letting them carry out our safety inspections.”


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Scottish government urged to protect tenants’ rights

June 13, 2019

The Scottish government is being encouraged to acknowledge that some landlords north of the border are breaking the law by letting property and declaring them to be holiday lets to avoid long term tenancy rights.

David Alexander, joint managing director of Apropos, wants to see the Scottish government acknowledge tenants’ rights for tenure, even when landlords and letting agents use holiday lets as the basis for their renting agreement with a view to shirking many of the tenants’ rights for tenure.

As many of you will know, tenants’ rights become legally binding if the property they occupy is their principal place of residence regardless of the contract which was signed at the start of the tenancy, and Alexander wants the Scottish government to publically recognise this fact.

He said: “Many landlords and agents see holiday lets as a means of letting properties whilst ignoring the recent legislative changes in Scotland on the rights of the tenant. However, this is incorrect as tenants’ rights apply if it can be shown that the property is being used as a home, rather than for short term holiday purposes.

“Even if no contract is signed, the tenancy automatically defaults to a Private Residential Tenancy Agreement if both parties have knowingly entered into a long term, residential arrangement.

“The only area of ambiguity comes in the definition of what is a holiday let and whether the tenant and landlord, at the time of letting, believes this will be the tenants’ home or simply a temporary place to live for a limited period.”

Alexander insists that there is no legal loophole being exploited as the law already protects tenants in these circumstances.

He continued: “If they live in a property which is advertised as a holiday let, but it is viewed as their permanent residence then they have the same rights as any long-term tenant.”

Alexander added: “It is very disappointing that many landlords and agents still believe that providing stronger rights for tenants is a bad thing.

“Landlords and agents must realise that they are providing a home and you need to treat people as you would anyone in their home.

“Greater clarity on letting lengths would be useful to define what is a holiday let but clearly there are not many people booking a holiday home for six or even three months, especially if they have no other address, so the law should regard these lettings as the home of the tenant and protect their rights accordingly.”


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National Landlord Investment Show to address key issues today

June 13, 2019

Buy-to-let landlords and property enthusiasts will once again descend on the Olympia Conference Centre in London today where they will be able to obtain free expert advice to help guide them with their investments.

With so much change and uncertainty in the market, the National Landlord Investment Show is a must-visit for all existing and prospective buy-to-let investors, with visitors able to attend seminars and stands covering all the biggest industry issues from the phasing out of mortgage interest relief to Brexit and its impact on the private rented sector.

The show will feature a series of expert property panel discussions, including ex-London mayor, Ken Livingstone, who will take part in the Future of the UK Housing Market Debate.

The panels are free to attend for visitors that register their interest online and are on a first-come, first-served basis.

In addition to the property panels, there are more than 40 additional complimentary seminar sessions, covering the entire spectrum of buy-to-let, as well as over 100 exhibitors.

Registration is complimentary. Click here for more information.


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Letting agent discovers cannabis farm at rented flat in Lancashire

June 13, 2019

A shocked letting agent found a cannabis farm in of one of his landlord’s houses while filming for a Channel 5 documentary.

During filming for a new episode of Nightmare Tenants, Slum Landlords, letting agent Paul Ainsworth-Lord, who is based in Darwen, discovered dozens of cannabis plants at the property, as well as growing equipment.

The letting agent came across the plants when he visited the property looking for the tenant, Dermott Donegan, who had not paid rent in four months and owed around £3,000.

Donegan was arrested by police, but he denied cultivating at least £30,000 worth of cannabis at his rented property and claimed the plants belonged to a sub-tenant.

The house was subsequently handed back to the landlord after Donegan handed over the keys.

The letting agent said specialist cleaners were called in to restore the house, as well as replace the carpets and damaged wallpaper.

Total costs, including the unpaid rent, have increased to £5,500.

On the show, the landlord said: “I did not expect to see it on a street in Darwen, in my property, that's the shocking thing.

“It's a professional job, they might have been doing it for as long as they've been here.”


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Coventry reduces fixed rates on standard buy-to-let products

June 13, 2019

Coventry for intermediaries has cut rates on its three- and five-year fixed rates and standard buy-to-let products by up to 0.2%.

The move follows on from the lender’s decision last month to enhance the number of buy-to-let mortgages permitted with the group from three to five.

The Coventry also doubled the maximum aggregate loan limit allowed on all rental properties from £1m to £2m, increased the maximum loan amount at 50% to 75% loan-to-value (LTV) from £500,000 to £750,000, while also improving the income threshold for 125% interest cover ratio from less than £42,500 to less than £49,000.

In addition, the society introduced a mortgage range aimed specifically at BTL landlords with four or more mortgaged buy-to-let properties in total, either together or separately.

“It’s good news for landlords,” said Kevin Purvey, director of intermediaries at Coventry Building Society. “We’ve reduced fixed rates on standard buy-to-let products.”


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Metro Bank is the latest lender to remove restrictions on letting to DSS tenants

June 12, 2019

Metro Bank has announced that it will no longer prevent buy-to-let landlords from letting property to tenants in receipt of benefits.

The move comes after other lenders caved in to mounting industry pressure in recent months by lifting restrictions on buy-to-let landlords renting to DSS tenants.

In October last year, NatWest’s lending practices came under attack after the bank told one landlord that she would either have to evict her tenant of two years or take her mortgage business elsewhere, after a blanket ban by the bank on benefit claimants.

But now many renters could benefit from changes to mortgage rules announced by Metro Bank yesterday, following a roundtable at Downing Street.

This announcement is the latest pledge from the industry, including big names such as Rightmove and Zoopla, to end potentially discriminatory practices which deny private rented accommodation to those on benefits – such as ‘No DSS’ adverts.

“It’s encouraging that we’re already seeing positive changes being made in the industry, and we continue to encourage landlords and agents to consider tenants on an individual basis,” said Will Quince, minister for family support, housing and child maintenance.

 

As part of the government’s work against the stigma experienced by tenants on benefits, housing minister Heather Wheeler yesterday met with leading industry bodies and companies at Downing Street to work on a solution.

Leading firms in the industry joined Metro Bank and government at the event, coming together to improve access to the private rented sector.

Wheeler commented: “Regardless of financial circumstances, everyone should have the same opportunity when looking for a home and I have been determined to end the discrimination those on benefits face.

“The meeting was yet another step forward; marking an important shift in making the private rented sector fairer for all – and I am thrilled that Metro Bank have decided to join us in ending the stigma surrounding tenants on housing benefit.

“I am grateful to those companies for taking the time to discuss this issue, and look forward to us continuing to work together.”


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BTL landlord ordered to pay more than £13k for fire safety breaches

June 12, 2019

A buy-to-let landlord in north London has been ordered to pay more than £13,000 after breaching fire safety regulations and failing to carry out necessary repairs at a property in Newington Green.

An environmental health officer inspected the flat on Petherton Road, N5, following complaints from a neighbour, and found four unrelated inhabitants sharing a kitchen and bathroom - making the property a house in multiple occupation (HMO).

The property also did not have a mains wired smoke alarm system, or a fire door to the kitchen, as required by HMO licencing. There was also a poorly repaired kitchen window.

The officer issued an Improvement Notice, instructing Simons to fix these problems and provide an Electrical Installation Condition Report.

But despite committing to carrying the works out, the landlord failed to get the jobs done.

Landlord David Simons was found guilty of failing to comply with an Improvement Notice and fined £12,400 at Highbury Corner Magistrates'. He was also ordered to pay costs of £600 along with a victim surcharge of £175.

Cllr Diarmaid Ward, Islington’s housing chief, commented: “Everyone has the right to a safe, genuinely affordable home and we will not tolerate dodgy operators taking advantage of people's desperate need for a home. Where we find unacceptable conditions we will act to protect tenants.”


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Have your say on Brent landlord licensing scheme

June 12, 2019

Members of the general public are being offered the opportunity to have their say on Brent’s landlord licensing scheme.

Brent Council wants to know whether the landlord licensing scheme should be renewed in some areas and extended in other wards. It has launched a borough-wide online consultation that will last for ten weeks, allowing anyone to have their say on landlord licensing in the borough.

Three types of licensing schemes operate in Brent: mandatory, additional and selective licensing.

People are being asked whether they are in favour of renewing the selective licensing scheme in Harlesden, Willesden and Wembley Central.

They are also being asked about renewing the additional licensing scheme for houses in multiple occupation (HMOs) with three or more unrelated tenants sharing a home.

In addition, people are being asked if they support extending the selective licensing scheme to other wards in Brent.

There are ten wards being considered for the extension of selective licensing in Brent: Queensbury, Fryent, Brondesbury Park, Barnhill, Welsh Harp, Northwick Park, Preston, Tokyngton (excluding Wembley Park), Alperton and Sudbury.

Selective licensing already applies in the wards of Queens Park, Kensal Green, Kilburn, Dudden Hill and Mapesbury.

Cllr Eleanor Southwood, cabinet member for housing and welfare reform, said: “A third of people in Brent rent in the private sector; whilst most landlords provide safe and decent homes, sadly that isn't always the case.

“Licensing has helped keep renters safe. Since we introduced landlord licensing in 2015, we've driven up housing standards, reduced overcrowding and tackled anti-social behaviour. Where landlords have fallen short, we have been relentless in taking action and will not hesitate to throw the full-force of the law at rogue landlords”

Have your say in the licensing consultation by clicking here.


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TMW reduces rates for limited company and HMO BTL products

June 12, 2019

The Mortgage Works (TMW) has cut limited company and HMO buy-to-let mortgage rates.

TMW is offering a two-year fixed limited company mortgage at 75% loan-to-value (LTV) at 2.84% with a £1,995 fee, or a fee-free deal at 3.29%.

As far as limited company HMO mortgages are concerned, a two-year fix is available at 3.49% to 75% LTV with a £1,995 fee, while a five-year fix is priced at 3.74%.

In addition, TMW has launched a range of two-year fixed rate BTL mortgage deals with a £1,995 fee, with rates starting at 1.64% to 65% LTV, available with £250 cashback.

There are also fresh options in the large portfolio range.

Paul Wootton, managing director of TMW, commented: “This range of changes is designed to support landlords, including those looking for limited company and HMO options as well as those with large portfolios.

“By offering competitive rates and a wider choice of products to help manage their cashflow, we are demonstrating TMW’s continued commitment to supporting intermediaries and landlords.”


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BLP Insurance awarded Mustard Wharf Build to Rent contract

June 12, 2019

BLP Insurance has been awarded a new contract with Legal & General to underwrite the Mustard Wharf Build to Rent (BTR) development in Leeds.

The Leeds site was acquired from U+I in partnership with CTP in 2017, and has consent for the construction of 247 homes, 8,640 sq ft of commercial and amenity space, along with commercial and amenity space for offices, restaurants, and other leisure facilities.

Located at Granary Wharf, an established riverside location in the Holbeck area of the city, the Mustard Wharf development by Legal & General is currently under construction, with completion expected in Q4 2020.

The BTR market has played a key role in boosting the residential construction sector in recent months, with a 34% year-on-year rise in completed homes in Q1 2019, according to Savills.

Dan Batterton, head of Build to Rent at LGIM Real Assets, said: “We’re looking forward to seeing the completion of this exciting regeneration project at Granary Wharf and its contribution to the local community.” 

The Mustard Wharf development with Legal & General marks one of many national BTR schemes being underwritten by BLP Insurance.

Phil Harris, director of sales at BLP Insurance, commented: “The Mustard Wharf project is a shining example of how the UK BTR market is thriving across all regional urban hubs.

“BTR projects successfully combine a reliable business model with secure financing that is attractive for investors and provide much needed homes to the market. We’re pleased to be playing a role in the Mustard Wharf development and the growth of the BTR sector.”


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Property prices set to rise by 4.8% over the next six months

June 11, 2019

The vast majority of homeowners in Britain expect residential property prices to rise over the next six months, Zoopla’s latest ‘Housing market sentiment survey' has found.

Confidence in the market is growing, with some 81% expecting home values in their area to increase before the end of the year, which is good news for buy-to-let investors looking for a combination of capital growth and rental income.

Confidence in the market was particularly high in Yorkshire and Humber and the North West, where 91% of respondents said they anticipated house prices to increase over the next six months, the property website said.

At the other end of the spectrum, London is the least confident region, with just 67.2% expecting growth.

On average, those expecting price rises predict a 4.8% increase over the next six months.

But this level of anticipated growth is lower than the 5.2% increase in property prices recently recorded by Halifax in the year to May.

When it comes to the rate at which homeowners think local house prices will increase in value in their area, those in Scotland are the most confident, with homeowners who believe there will be a price increase predicting properties in their area to rise in value by 5.5% over the next six months.

Of those who do believe there will be a price increase, homeowners in the North East are the second most confident, followed by the West Midlands, with the regions expecting properties to grow in value by 5.4% and 5.1% respectively. The lowest house price growth is expected in the North West, where homeowners anticipate an increase of 4.45%.

Region

% who believe there will be an increase

% who believe there will be a decrease

Average % increase

Average % decrease

Yorkshire and Humber

91.0%

9.0%

4.5%

-6.8%

North West

90.5%

9.5%

4.5%

-8.5%

Scotland

90.3%

9.7%

5.5%

-7.8%

Wales

89.5%

10.5%

4.7%

-6.4%

West Midlands

87.4%

12.6%

5.1%

-6.4%

East Midlands

85.0%

15.0%

5.1%

-7.0%

East of England

83.2%

16.8%

4.9%

-5.4%

South West

82.3%

17.7%

4.7%

-5.9%

North East

77.8%

22.2%

5.4%

-8.3%

South East

73.9%

26.1%

4.7%

-6.1%

London

67.2%

32.8%

4.5%

-6.7%

Grand Total

81.2%

18.8%

4.8%

-6.5%

Laura Howard, spokesperson for Zoopla, said: “Despite evidence of a slowing housing market and ongoing political uncertainty, homeowners remain optimistic about the future of property prices.

“Zoopla’s latest UK Cities House Price Index showed that house price growth slowed to 1.7%  across the country’s 20 major cities in the 12 months to April, and to 2.2% across the UK as a whole. Yet, 81% of homeowning Brits expect property values to increase in their area over the next six months at the higher rate of 4.8%.

“A staggering 91% of homeowners in Yorkshire and Humber expect prices to rise in their region by the end of the year, at an average rate of 4.5%. This mirrors the pace of the markets in native Sheffield and Leeds which registered rises of 4.4% and 3.5% respectively, according to Zoopla’s Cities Index.

“Conversely, it’s no surprise that London homeowners are the least confident with prices in the capital falling by an average 0.5% compared to 12 months ago – the largest fall across all 20 cities. However, still more than two-thirds (67%) of London homeowners expect to see rises in the next six months – and of a considerable 4.5%.

“Whether or not these forecasts prevail, consumer sentiment plays a crucial role in the health of the housing market. A feeling of stability means buyers are more likely to start actively looking for their next home, confident that now is the right time to make a purchase. And, in turn, an active pool of buyers will encourage sellers to list their homes for sale.

“This not only brings buoyancy to the housing market, but also offers an opportunity for agents. Vendors fuelled with optimism for house price growth will need to listen carefully to the advice of their estate agents when looking to sell their homes, relying on agent’s local market expertise and experience to accurately price their properties. Consumer positivity must be channelled to ensure that pricing is correct from the outset, this is vital for a swift sale at a price that’s as near to asking as possible.”

 


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Scottish parliament consults on introducing rent controls

June 11, 2019

The Scottish government is consulting on introducing rent controls north of the border with a view to protecting private sector tenants from increasing rents.

A proposal for a Bill to protect private sector tenants by introducing measures to limit rent hikes and to increase the availability of information about rent levels has been introduced by Scottish Labour.

Proposed by Pauline McNeill MSP, the party said its Mary Barbour Bill will see the introduction of a new points-based system to enforce fair rents.

The main proposal is to cap rent at 1% above inflation, with provisions to allow ministers to adjust this index if interest rates were to suddenly increase.

Respondents are also being asked to consider whether the rent officer should be restricted to only decreasing or maintaining existing rent when tenants lodge an appeal as opposed to the existing practice of being able to increase rents.

The consultation also proposes that the rent being charged should be a mandatory disclosure to the landlord registration scheme and any changes should be updated.

Speaking at Scottish First Minister's Questions last week, Scottish Labour leader Richard Leonard said: “We have seen the return of private landlordism and rents have soared whilst wages have stagnated. “According to the Scottish Government’s own figures, over forty per cent of all children, living in the private rented sector are now living in poverty. That is 60,000 children.”

He added: “We think that private rent rises should be capped and controlled. So Nicola Sturgeon has a choice, will she take the side of rogue landlords and a broken housing market – or she can back Labour’s plans, and back our Mary Barbour Bill.”

The consultation will run until 6 August 2019.


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Pair fined more than £5,000

June 11, 2019

Two landlords in Staffordshire have been ordered to pay more £5,000 after allowing their tenants to live in poor conditions  

Brian Kite was fined £256 and ordered to also pay £2,378 in costs and a victim surcharge of £30, while Beryl Kite was fined £207 and ordered to also pay £2,378.88 in costs and a victim surcharge of £30 – a total of £5,279.88, after pleading guilty at North Staffordshire Justice Centre to providing their tenants at their property in Main Street, Stapenhill, Burton-on-Trent, with substandard living conditions.

Environmental Health officers found that the flat had no working heater, hot water or smoke detectors, while broken windows were boarded over.

Brian and Beryl Kite were given time by the council to remedy the situation, but the pair made just a few minor repairs and did not address the major issues in the property.

The pair were given the option of renovating the property, carrying out essential repairs or evicting the tenant to safeguard their health and safety.

However, the Kites allowed their tenant to remain living in the flat and had not carried out any further repairs.

Cllr Bernard Peters, deputy leader for regulatory services and community support, commented: “East Staffordshire Borough Council's Environmental Health team will not tolerate landlords who rent sub-standard properties to tenants.

“They are also working hard to ensure landlords either improve the conditions of their properties or face the consequences.”


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The number of buy-to-let mortgage products hits 12-year high

June 11, 2019

Consumer choice of buy-to-let (BTL) mortgage products has reached a 12-year high, according to new figures.

The data, taken from the latest Moneyfacts report, shows that the number of BTL products has increased by 21% in the past year to a total of 2,396, which is the highest figure since October 2017 when there were 3,305 products available.

Despite the increase in competition, the average BTL mortgage rates have risen over the past 12 months, with the average two-year BTL fixed rate mortgage increasing by 0.17% from 2.88% in June 2018 to 3.05% this month, while the average five-year BTL fixed rate has risen by 0.11% to 3.54%, compared to 3.43% in June 2018.

But both rates are still much lower than in October 2007, when the average two-year BTL fixed rate stood at 6.36% and its five-year counterpart stood at 6.39%.

The table below highlights how much the market has improved in the last year alone.

  All available BTL products Two-year fixed rate BTL mortgage Two-year fixed rate BTL mortgage Five-year fixed rate BTL mortgage Five-year fixed rate BTL mortgage
  Product numbers Product numbers Average rate Product numbers Average rate
Oct-07 3,305 409 6.36% 181 6.39%
Jun-18 1,929 678 2.88% 637 3.43%
May-19 2,253 739 3.02% 730 3.53%
Jun-19 2,396 802 3.05% 785 3.54%

Darren Cook, finance expert at Moneyfacts, commented: “The BTL market has experienced a number of regulatory changes during recent years, however, it seems that product competition within this specialised mortgage area is continuing to grow. A 21% increase in availability to 2,396 products over the past 12 months indicates that providers are keen to offer potential BTL investors plenty of choice within the sector.

“Despite this increasing competition in terms of the total number of products available over the past year, average rates have unfortunately not fallen, and have instead followed suit, with the average two-year fixed rate increasing by 0.17% to 3.05% and the average five-year fixed rate increasing by 0.11% to 3.54% over the same period.

“The largest concentration of BTL product choice can be found at the maximum 75% loan-to-value (LTV) tier, where there are currently 352 (44%) two-year fixed rate products available and 374 (48%) five-year fixed rate products available. Coincidently, the average fixed rates at the 75% LTV tier for the two and five-year sectors are currently 3.05% and 3.55% respectively, equalling or near-equalling the average rates for both terms across all tiers.”


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